Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 230

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 2
Chunk 230
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 None of these were paid as of September 30, 2024.

Refer
to Note 12, License and Manufacturing Agreements, in Part I, Item 1. “Financial Statements” for further detail around
timing of license fees due.

Contingent
Compensation and Other Contingent Payments

Under
the management employment agreements, we have salaries and bonuses that are contingently payable upon financing, collectively called
contingent compensation, that are contingently payable based only upon our first cumulative capital raise of at least $50.0 million.
As of September 30, 2024, we have contingent compensation and bonuses in the amount of $14.8 million to certain members of senior management
as well as $1.0 million in contingent vendor payments. These amounts will not be paid if the contingencies do not occur. Since the payment
of obligations under the employment agreements are contingent upon these future events, which are not considered probable as such future
events are deemed outside of our control, we have not included these amounts in our condensed consolidated financial statements. None
of these were paid as of September 30, 2024.

47

Development
and Manufacturing Services Agreement

We
have entered and anticipate we will continue to enter into contracts in the normal course of business with external organizations such
as CMOs, CROs and other third parties for the manufacture of our product candidates and to support clinical trials and preclinical research
studies and testing. We expect that these contracts will be generally cancelable by us, and we anticipate that payments due upon cancellation
will consist only of payments for services provided or expenses incurred, including noncancelable obligations of our service providers,
up to the date of cancellation. We accrued CMO services in the amount of $0.6 million for the three and nine months ended September 30,
2024 and 2022 under the Development and Manufacturing Services Agreement with Lonza in developing the product OCX-253.

Cash
Flows

To
date, we have not generated any revenue. Cash flows to date have resulted from financing activities, including payments made on behalf
of the Company by related parties and net proceeds from issuance of shares of common stock consisting of friends and family of our employees
and short-term borrowings, including the initial Note from the Ayrton Convertible Note Financing. As of September 30, 2024, our unrestricted
cash balance was minimal and our restricted cash balance of $0.2 million is held in