Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 3930

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 15
Chunk 3930
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 certain events of default, including, among other things, any breach of the covenants described in the SPA and any
failure of Dr. Chirinjeev Kathuria to be the chairman of the Company’s Board of Directors. In connection with an event of default,
the noteholders may require the Company to redeem all or any portion of the Notes, at a premium set forth in the SPA.

The
Company is subject to certain customary affirmative and negative covenants regarding the rank of the Notes, the incurrence of indebtedness,
the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions
or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with affiliates, among other customary matters.
The Company is also subject to financial covenants requiring that (i) the amount of the Company’s available cash equals or exceeds
$3.0 million at the time of each Additional Closing; (ii) the ratio of (a) the outstanding principal amount of the Notes, accrued and
unpaid interest thereon, and accrued and unpaid late charges to (b) the Company’s average market capitalization over the prior
ten trading days, not exceeding 35%; and (iii) at any time any Notes remain outstanding, with respect to any given calendar month (each,
a “Current Calendar Month”) (x) the available cash on the last calendar day in such Current Calendar Month shall be greater
than or equal to the available cash on the last calendar day of the month prior to such Current Calendar Month less $1.5 million.

The
Company has elected to account for the Notes at fair value under the fair value option, under which the Notes were initially
measured at fair value and subsequently re-measured during each reporting period. Changes in fair value are reflected within other
income (expense) in the consolidated financial statements, except for the portions, if any, related to the instrument specific
credit risk which would be recorded in other comprehensive income.

Further,
the Company concluded that the right to acquire additional Notes is separately exercisable from the 2023 Convertible Note and the SPA
Warrant. If and when the additional Notes are issued, the Company will evaluate whether to account for such additional Notes at (a) fair
value under the fair value option or (b) an amortized cost.

In
addition, the Company determined that the SPA Warrant was (i)