Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 226

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 2
Chunk 226
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. The Company measures the fair values
at each reporting period, with changes in fair values recorded within other income/(expense) in the Company’s consolidated statements
of operations.

The
following table summarizes some of the significant inputs and assumptions used in the Monte-Carlo simulation:

    Estimated volatility  
    Range of probabilities  
    Risk-free rate 
  
    2024 Convertible Note 
     55% 
     0% - 65%  
     4.37%
  
    SPA Warrants 
     115% 
     0% - 65%  
     4.29%

Valuation
of the Ayrton Note Purchase Option

The
Company utilized the Black-Scholes Merton model to value the Ayrton Note Purchase Option. The key inputs and assumptions used in the
Black-Scholes Merton model, including volatility and risk-free rate, were utilized to estimate the fair value of the associated liability.
The Company measures the fair value at each reporting period, with changes in fair value recorded within other income/(expense) in the
Company’s consolidated statements of operations. As of December 31, 2024 and 2023, it was determined that the fair value of the Ayrton Note
Purchase Option was zero.

The
following table summarizes some of the significant inputs and assumptions used in the Black-Scholes Merton model:

    Estimated volatility 
    Risk-free
rate
  
    Ayrton Note Purchase Option 
     13% 
     4.4%

158

Segments

We
operate and manage the business as one reportable and operating segment, which is the business of discovering and developing therapeutic
products in oncology, fibrosis, infectious diseases and inflammation. Our chief executive officer, who is the chief operating decision
maker, or CODM, reviews financial information on an aggregate basis for allocating and evaluating financial performance.

Off-Balance
Sheet Arrangements

We
did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined in the rules
and regulations of the SEC.

Recently
Issued Accounting Pronouncements

In
August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, Debt — Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) — Accounting