Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 155

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 8
Chunk 155
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 unpaid interest is convertible at any time, in whole or in part, at the noteholder’s option,
into shares of the Company’s common stock at an initial fixed conversion price of $10.34 per share, subject to certain adjustments
and alternative conditions. A noteholder will not have the right to convert any portion of a Note, to the extent that, after giving effect
to such conversion, the noteholder (together with certain of its affiliates and other related parties) would beneficially own in excess
of 9.99% of the shares of the Company’s common stock outstanding immediately after giving effect to such conversion. Upon a change
of control of the Company, noteholders may require the Company to redeem all, or any portion, of the Notes at a price stipulated by certain
conditions as discussed within the SPA. At March 31, 2024, the principal amount outstanding under the 2023 Convertible Note was $7.6 million.

The Notes provide for 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