Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 500

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 3
Chunk 500
---
    $11.50  
     Equity-classified  
     2/14/2028
  
    Private Warrants 
    -(4) 
     5,411,000  
    $11.50  
     Equity-classified  
     2/14/2028
  
    SPA
    Warrant (3) 
    May 2023 
     552,141  
    $1.50  
     Liability-classified  
     5/25/2028

     12,602,195  

    (1)
    Upon
    Closing, and as discussed in Note 3, Business Combination and Backstop Agreement, Second Street Capital’s warrants issued
    from Legacy Ocean in 2022 were terminated in exchange for the Converted Ocean Warrants.

    (2)
    The
    Legacy Ocean warrant issued in February 2022 was issued with the right to put the warrant in exchange for a payment of $250,000.
    At the time of issuance, these warrants were recorded as a liability and as Second Street Capital had the intention to exercise the
    put option in the near-term, the Company determined that recording the liability at its fair value of $250,000 was appropriate.

    (3)
    For
    further detail on the SPA Warrant, refer to Note 7, Senior Secured Convertible Notes.

    (4)
    For
    further detail on the Public Warrants and Private Warrants, refer to the “Public and Private Warrants” discussion below.

    F-32

In
2022 and 2023, the Company entered into certain agreements with Second Street Capital, Special Forces F9, LLC (“Special Forces”),
and McKra for which it issued warrants exercisable to purchase the Company’s common stock. For each of the warrants issued, the
Company utilized the guidance within ASC 480, Distinguishing Liabilities from Equity¸ to determine whether the instruments
should be recorded as liabilities or as equity. For warrants that are fully vested upon issuance with a fixed life term, the instrument
is classified as equity and the Company recognizes the estimated fair value of the warrant within equity on the date of grant, with the
offset be recorded within (i) other income/(expense) for those issued in conjunction with loans and (ii) stock-based compensation within
operating expenses for those issued to advisors and consultants. Further, for any warrants that are issued