Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2688

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1
Chunk 2688
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 and its securities
are trading on Nasdaq, it is expected that Ocean Biomedical is a “covered corporation” for this purpose, and it is expected
that Ocean Biomedical will be subject to the excise tax with respect to any redemptions of its shares in connection with the Business
Combination that are treated as repurchases for this purpose.

132

The
extent of the excise tax that may be incurred would depend on a number of factors, including (i) whether the redemption is treated as
a repurchase of stock for purposes of the excise tax, (ii) the fair market value of the redemption treated as a repurchase of stock in
connection with the Business Combination, (iii) the nature and amount of the equity issued in connection with the Business Combination,
and (iv) the content of forthcoming regulations and other guidance from the U.S. Department of the Treasury. Generally, issuances of
stock by a repurchasing corporation in a year in which such corporation repurchases stock would reduce the amount of excise tax imposed
with respect to such repurchase. The excise tax is imposed on the repurchasing corporation itself, not the shareholders from which shares
are repurchased, and only limited guidance on the mechanics of any required reporting and payment of the excise tax on which taxpayers
may rely has been issued to date. The imposition of the excise tax could reduce the amount of cash available to Ocean Biomedical to fund
operations and to make distributions to shareholders.

If
the number of securities redeemed exceeds the number of securities issued under the Business Combination Agreement, Backstop Agreement
and Common Stock Purchase Agreement, however, the amount of excise tax could be substantial. Consequently, the value of your investment
in our securities may decrease as a result of the excise tax.

We
may be the target of securities class action and derivative lawsuits which could result in substantial costs.

Securities
class action lawsuits and derivative lawsuits are often brought against public companies that have entered into merger or business combination
agreements. Additionally, our share price may be volatile and, in the past, companies that have experienced volatility in the market
price of their stock have been subject to securities litigation, including class action litigation. We may be the target of this type
of litigation in the future. Even if the lawsuits are without merit, defending against these claims can result in substantial costs and
divert management time and resources. An adverse judgment could result in monetary damages, which could have a negative impact