Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 82

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 82
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 the 2023 Convertible
Notes were valued at $7.1 million, consisting of the fair value of the 2023 Convertible Notes of $6.3 million, plus accrued and unpaid
interest of $0.8 million. The $9.7 million of 2024 Convertible Notes were valued at $6.8 million, resulting in a gain on exchange of notes
of $0.3 million. Similarly, the Company valued the SPA Warrants issued in 2023 at $1.6 million and the value of the SPA Warrants issued
in the exchange in 2024 at $2.0 million, resulting in a loss on exchange of notes of $0.4 million. The Company has recorded a net loss
on exchange of notes of $0.1 million as other income (expense) on its condensed consolidated statement of operations for the year ended
December 31, 2024.

As part of the agreement, Chirinjeev
Kathuria, the Company’s Chairman, and Poseidon Bio, LLC, an entity controlled by Dr. Kathuria, also agreed to grant a proxy on all
of their shares of the Company’s common stock to an independent third party, to vote them as that party sees fit, until such time
as the Notes are paid in full.

During the three months ended
March 31, 2025, the investor converted approximately $7.8 million of the 2024 Convertible Notes, along with $0.4 million of accrued interest
and a redemption premium of $1.7 million, into 125,964,905 shares of common stock of the Company. In addition, the investor exercised
its 1,332,806 warrants received in connection with the amendment.

    22

8. Commitments and Contingencies

Litigation

From time to time, the Company
may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities, including the significant
matters described below that could have a material impact on our results of operations and cash flows. In many proceedings, including
the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible
or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter
is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult