Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 664

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 4
Chunk 664
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ion’s Intelligent and Adaptable CD8+ T cell-based Immunotherapy (“VIACT”)
platform. Pursuant to the Contribution Agreement, the Company acquired a 50%
membership interest in Virion and purchased one membership unit of Virion for an initial contribution of either a) $4.1
million in cash, or b) 750,000
shares of the Company’s common stock, 250,000
of which were transferred to Virion by Poseidon Bio LLC, with the remaining 500,000
shares issued by the Company on December 1, 2023. The Company elected to fund the initial contribution via the issuance of shares of
its common stock. In the case of an initial contribution in the form of shares of common stock, the Contribution Agreement provides
for a post-closing true-up 18 months from the closing date, whereby the Company would be required to make a true-up contribution.
This post-closing true-up amount would be equal to the difference between liquidation proceeds received by Virion from the sale of
the 750,000
shares of common stock received in the initial contribution and $4.1
million. The post-closing true-up amount is payable, at the Company’s discretion, in the form of additional shares of the
Company’s common stock, or cash. This investment has been reflected at the minimum amount to be contributed as of the
post-closing true-up, or $4.1
million and is reflected in non-current assets on the Company’s consolidated balance sheets as Investment in Virion. The
Company initially recorded a liability of $2.8
million for the estimated amount of the post-closing true-up, reflecting the $4.1
million reduced by the fair market value of the common stock issued pursuant to the Contribution Agreement at the time of the
contribution. The liability will be remeasured at each reporting period and the Company will record any changes to other
income/(expense) on the consolidated statement of operations. Based upon the closing price of the Company’s common stock at
December 31, 2023, the Company increased the liability for the post-closing true-up to $3.6
million and reflected and expense of $0.8
million for the change in the fair value of the Virion Contribution Liability in other income (expense) on its consolidated
statement of operations.

In
September 2024, the Company entered into an amendment to the Contribution Agreement with Virion,