Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 3403

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1A
Chunk 3403
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 us the FRG Licenses as described above, or the Upstream Brown FRG License. Brown and Elkurt, on behalf of Brown, retained the
rights to practice the intellectual property rights sublicensed to us for academic research, educational and scholarly purposes, and
to publish resulting scientific findings. Elkurt is a company formed by our scientific co-founders and members of our board of directors,
Jack A. Elias, M.D., former Dean of Medicine and current Special Advisor for Health Affairs to Brown University, and Jonathan Kurtis,
M.D., Ph.D., Chair of the Department of Pathology and Laboratory Medicine at Brown.

The
FRG License Agreement requires us to achieve future development milestones by certain dates. Recognizing the unpredictability of clinical
development, the agreement allows us to request amendments and/or extensions to these milestones by providing Elkurt with a reasonable
explanation for such requests along with plans for achieving the extended and/or amended milestones. Although Elkurt is obliged to reasonably
extend or amend those milestones, it may terminate the agreement for failure to achieve development milestones after giving us reasonable
opportunity to cure. The FRG License Agreement sets forth the following future development milestones: the filing of an IND within one
year after commencing IND-enabling studies; completion of a Phase 1 clinical trial within one year following the filing of an IND; completion
of a Phase 2 clinical trial within approximately four years following completion of a Phase 1 clinical trial; and completion of a Phase
3 clinical trial within three and a half years following completion of a Phase 2 clinical trial. Elkurt may also terminate the agreement
if we do not complete a $10 million equity or debt financing by 2025.

In
consideration for the rights conveyed by Elkurt under the FRG License Agreement and amendments, we are obligated to pay to Elkurt a non-refundable,
annual license maintenance fee. Beginning January 1, 2022, we are obligated to pay Elkurt an annual license maintenance fee of (a) $3,000
until January 1, 2027, and (b) thereafter, an annual license maintenance fee of $4,000. We are also obligated to pay to Elkurt low, single-digit
royalties, on net sales of any FRG Products that are commercialized by us or our sublicensees. If we grant any sublicenses under the
FRG Licenses, we are obligated to pay to Elkurt an initial sublicense fee that is either 10%