Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 1511

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 10
Chunk 1511
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466 shares of AHAC’s Class A common
stock for $10.56 per share (the “Recycled Shares”) and (ii) pursuant to Polar’s exercise of its right to purchase Additional
Shares, AHAC, Legacy Ocean and Polar entered into a subscription agreement pursuant to which Polar purchased 1,350,000 newly issued shares
of the Company’s common stock at a per share purchase price of approximately $10.56 (the “Polar Subscription”). Under
the Backstop Agreement, the Additional Shares are subject to the same terms as the Recycled Shares, including with regard to repayment
and repurchase.

Subsequent
to Closing, the Prepayment amount was equal to $51.6 million, consisting of $37.3 million for the Recycled Shares and $14.3 million for
the Polar Subscription shares. As the $14.3 million was a netted transaction between the Company and Polar, only $37.3 million was paid
out of the funds the Company received from AHAC’s trust account. This net impact from the payment outflow to Backstop Parties for
the Backstop Agreement of $51.6 million and the proceeds inflow from the issuance of common stock pursuant to the Backstop Agreement
and Polar Subscription of $14.3 million are reported in the Company’s consolidated statement of cash flows.

The
Backstop Agreement consists of two financial instruments that are accounted for as follows:

    (i)
    The
    in-substance written put option which is recorded in the Company’s consolidated financial statements as the “Backstop
    Put Option Liability” and treated as a derivative liability recorded at fair value with changes in fair value recognized in
    net loss. The Company measures the fair value of the Backstop Put Option Liability on a recurring basis, with any fair value adjustment
    recorded within other income/(expense) in the consolidated statements of operations. Refer to Note 4, Fair Value Measurements,
    for further detail.

    (ii)
    The
    “Fixed Maturity Consideration” representing the 8,000,000
    in maximum shares less the 4,885,466
    Backstop Shares multiplied by $2.50.
    The Company has elected to measure the Fixed Maturity Consideration using the Fair Value Option (“FVO”) under ASC 825,
    Financial Instruments. The Company measures the fair value of the Fixed Maturity Consideration on a recurring basis, with
    any fair value adjustment recorded within other income/(