Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 144

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1B
Chunk 144
---
ion from the proceeds of the sale of the Company’s shares of common stock (the “Actual Contributions”) does not
equal the Aggregate Capital Contribution as of April 1, 2025 (the “Final Contribution Date”), the Company shall have the
option, but not the obligation, to make additional capital contributions to Virion, up to an amount equal to the difference between the
Aggregate Capital Contributions and the Actual Contributions (the “Final Contribution Amount”). The Final Contribution Amount
may be paid, at the Company’s election, in cash, through the issuance of additional shares of the Company’s common stock
or a combination of both and shall be made no later than 1 business day following the “Final Contribution Date”). The ownership
interest of Virion held by the Company shall be determined based upon the Actual Contributions made, plus any Final Contribution paid
to Virion as of the date such calculation is made.

Prior
to the 2024 amendment to the Contribution Agreement, the investment in Virion was accounted for as an equity method investment under
ASC 323 as the Company had significant influence over the investee. For the fiscal year ended December 31, 2023, Virion incurred a net
loss of approximately $6.8 million. The Company recorded its share of this loss of approximately $0.8 million for its prorated share
of the net loss from the date of initial contribution agreement thru December 31, 2023. For the nine months ended September 30, 2024,
the Company decreased the liability for the post-closing true-up by $0.2 million and reflected a gain of $0.2 million for the change
in the fair value of the Virion Contribution Liability in other income (expense) on its condensed consolidated statement of operations.

Based
upon the terms of the 2024 amendment to the Contribution Agreement, the Company no longer had significant influence over the investee.
As a result, the investment in Virion is accounted for under the cost method effective with the ratification of the 2024 amendment to
the Contribution Agreement and the remaining liability for the post-closing true-up under the Contribution Agreement was reduced to zero
and is reflected in other income (expense) on the Company’s consolidated statement of operations for the fiscal year ended December
31, 2024.

    F-28

Stock
Options

2022
Stock Option and Incentive Plan

The
Company’s Board of Directors (“the Board”) approved and adopted the