Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 68

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 68
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urt (i) 1.5% of net sales and
(ii) 25% of all nonroyalty sublicense income prior to the first commercial sale, and 10% of non-royalty sublicense income thereafter,
in the event that the Company enters into sublicenses for the subject intellectual property. If net sales or non-royalty sublicense income
are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%. The
Company will also pay Elkurt developmental and commercialization milestone payments under the Rhode Island License Agreement, ranging
from $50,000 for the filing of an IND, or the equivalent outside of the United States, to $250,000 for enrollment of the first patient
in a Phase 3 clinical trial in the United States or the equivalent outside of the United States. For the nine month periods ended September
30, 2024 and 2023, the Company has incurred reimbursed patent costs expenses to Rhode Island Hospital in the amount of $0.1 million and
$0.3 million, respectively. As of September 30, 2024, the Company reflected a balance due of $0.2 million in accrued expenses –
related parties on its consolidated balance sheet.

The
contract term for the Rhode Island License Agreement began February 1, 2020 and will continue until the later of (i) the date on which
the last valid claim expires or (ii) fifteen years. Either party may terminate the Rhode Island License Agreement in certain situations,
and as discussed above, the next steps for the licensing agreements are still being negotiated. The Rhode Island License Agreement has
been sublicensed to the Company’s subsidiary, Ocean Sihoma Inc.

Refer
to Note 13, Related Party Transactions, for further detail on the Company’s relationship to Elkurt.

Development
and Manufacturing Services Agreement

In
December 2020, the Company entered into a Development and Manufacturing Services Agreement with Lonza AG and affiliate Lonza Sales AG
(“Lonza”). The Company engaged Lonza pursuant to the development and manufacture of certain products and services along with
the assistance in developing the product OCX-253. The agreement outlines the pricing for services and raw materials as incurred and payment
terms.

The
Development and Manufacturing Services Agreement will terminate on December 31, 2025. Either party may terminate the agreement within
60 days after it becomes apparent to either party that it will not be possible to