Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 224

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 2
Chunk 224
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the “Prepayment”).

Subsequent
to Closing, the Prepayment amount was equal to $51.6 million, consisting of $37.3 million for the Recycled Shares and $14.3 million for
the Polar Subscription shares. As the $14.3 million was a netted transaction between us and Polar, only $37.3 million was paid out of
the funds we received from AHAC’s trust account. This net impact from the payment outflow to Backstop Parties for the Backstop
Agreement of $51.6 million and the proceeds inflow from the issuance of common stock pursuant to the Backstop Agreement and Polar Subscription
of $14.3 million are reported in our condensed consolidated statement of cash flows.

At
any time prior to the Maturity Date, the Backstop Parties may elect an optional early termination to sell some or all of the Recycled
Shares in the open market. If the Backstop Parties sell any shares prior to the Maturity Date, the pro-rata portion of the Prepayment
is due back to us. As of September 30, 2024, the Backstop Parties have sold 143,261 shares, for which we received net proceeds of $1.4
million, after paying related fees to the Backstop Parties. Depending on the manner in which the OTC Equity Prepaid Forward Transaction
is settled, we may never have access to the full Prepayment.

44

On
May 23, 2023 we received an Equity Prepaid Forward Transaction - Valuation Date Notice (“Notice”) from Vellar stating that,
due to our alleged failure to timely register the shares held by Vellar, Vellar has the right to terminate the Backstop Agreement as
to their portion of the shares and Vellar is claiming it is entitled to receive Maturity Consideration (as defined in the Backstop Agreement)
equal to $6.7 million, which at our discretion may be paid in cash or by offset to the shares currently held by Vellar. Management takes
issue with multiple aspects of the Notice including, but not limited to, Vellar’s right to terminate their portion of the Backstop
Agreement and their asserted Maturity Consideration calculation. As such, we are consulting with advisors and other parties and are considering
the potential resources and remedies we may elect to pursue, and intend to assert our rights should this matter not be resolved. After
a review of all applicable documents related to the Backstop Agreement, we believe our