Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 2509

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1
Chunk 2509
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ation for the rights conveyed by Elkurt under the FRG License Agreement and amendments, we are obligated to pay to Elkurt a non-refundable,
annual license maintenance fee. Beginning January 1, 2022, we are obligated to pay Elkurt an annual license maintenance fee of (a) $3,000
until January 1, 2027, and (b) thereafter, an annual license maintenance fee of $4,000. We are also obligated to pay to Elkurt low, single-digit
royalties, on net sales of any FRG Products that are commercialized by us or our sublicensees. If we grant any sublicenses under the
FRG Licenses, we are obligated to pay to Elkurt an initial sublicense fee that is either 10% or 25% depending, respectively, on whether
we execute the sublicense after or before the first commercial sale of an FRG Product. We are also required to pay certain milestone
payments on an FRG Product-by-FRG Product basis upon the achievement of specified clinical and regulatory milestones, totaling up to
$0.7 million for each FRG Product. To the extent net sales or non-royalty sublicense income are generated from any FRG Products that
are commercialized by us or our sublicensees that incorporates or otherwise utilizes the FRG Know-How but is not covered by any FRG Patents,
we may reduce the applicable royalty rates and non-royalty income rates by half. These payment amounts are identical to the amounts owed
by Elkurt to Brown under the Upstream Brown FRG License Agreement, except that Elkurt is not obligated to pay any annual maintenance
fee amounts to Brown.

39

Under
the FRG License Agreement, Brown retains control of the preparation, filing, prosecution and maintenance of the FRG Patents. We are responsible
for reimbursing Elkurt for all documented, out-of-pocket expenses incurred in performing such patent-related activities during the term
of the FRG License Agreement. We are also obligated to reimburse Elkurt for all documented, out-of-pocket expenses incurred prior to
the effective date of the FRG License Agreement with respect to the preparation, filing, prosecution and maintenance of the FRG Patents.

Unless
earlier terminated, the FRG License Agreement, including the royalty bearing license, will terminate in its entirety upon the later of
(a) the expiration of the last to expire valid claim of the FRG Patents covering any FRG Product, or (b)