Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 225

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 2
Chunk 225
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 position with respect to the terms of the agreement
and intent of the parties is supported by the Backstop Agreement and the facts and circumstances under which it was entered into. Further,
given the early stage of this matter and the uncertainty inherent in litigation and investigations, the Company does not currently believe
it is (i) probable to incur losses or (ii) possible to develop estimates of reasonably possible losses (or a range of possible losses)
for this matter.

Refer
to Note 3, Business Combination and Backstop Agreement, in our condensed consolidated financial Statements included elsewhere
in this Report for further detail on the Backstop Agreement and Note 4, Fair Value Measurements, for further detail around the
valuation of the Fixed Maturity Consideration and Backstop Put Option Liability.

Sponsor
Promissory Notes and Ayrton Convertible Note Financing

Sponsor
Promissory Notes

Upon
consummation of the Business Consummation, we assumed two of AHAC’s loans, totaling $2.1 million, one of which accrued interest
at 8% per annum and the other accrues interest at 15% per annum. Both were due within five days of Closing. $0.5 million was paid down
at Closing, with the remaining paid down in May 2023 via the proceeds received from the initial Note under the Ayrton Convertible Note
Financing, discussed below.

In
connection with the assumption of AHAC’s loans and pursuant to the terms of the Business Combination Agreement described above,
we issued 1,365,000 shares of our common stock to the Sponsor as consideration for providing the loans to us (the “Sponsor Extension
Shares”). In addition, pursuant to the terms of an amendment entered into prior to the paydown of the loans, we issued a total
of 200,000 shares of our common stock in exchange for extension of the maturity date of one of the loans.

We
recognized a loss on extinguishment of debt of $1.2 million in our consolidated statements of operations for the nine months ended September
30, 2023 for the 200,000 shares issued in exchange for extensions of the maturity date, based on the grant date fair value of the shares
issued. In addition, we recognized a loss on extinguishment of debt of $13.6 million in our condensed consolidated statements of operations
for the nine months ended September 30, 2023 for the issuance of the Sponsor Extension Shares, based on the grant date fair value