Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 665

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 4
Chunk 665
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 which was ratified and approved by the
Board of Directors of the Company on October 11, 2024. In the amendment, the Company agreed to contribute up to $9.0 million in cash
and/or shares of the Company’s common stock (the “Aggregate Capital Contribution”) in exchange for additional limited
liability company units in an amount sufficient to cause the Company’s ownership interest in Virion to equal 22% of Virion’s
issued and outstanding membership units, on a fully diluted basis. The Aggregate Capital Contribution will be credited for: a) $1.0 million
for amounts already received by Virion in connection with the original Contribution Agreement; and b) the aggregate proceeds actually
received by Virion in connection with the sale of 500,000 shares of the Company’s common stock. If the actual cash received by
Virion from the proceeds of the sale of the Company’s shares of common stock (the “Actual Contributions”) does not
equal the Aggregate Capital Contribution as of April 1, 2025 (the “Final Contribution Date”), the Company shall have the
option, but not the obligation, to make additional capital contributions to Virion, up to an amount equal to the difference between the
Aggregate Capital Contributions and the Actual Contributions (the “Final Contribution Amount”). The Final Contribution Amount
may be paid, at the Company’s election, in cash, through the issuance of additional shares of the Company’s common stock
or a combination of both and shall be made no later than 1 business day following the “Final Contribution Date”). The ownership
interest of Virion held by the Company shall be determined based upon the Actual Contributions made, plus any Final Contribution paid
to Virion as of the date such calculation is made.

Prior
to the 2024 amendment to the Contribution Agreement, the investment in Virion was accounted for as an equity method investment under
ASC 323 as the Company had significant influence over the investee. For the fiscal year ended December 31, 2023, Virion incurred a net
loss of approximately $6.8 million. The Company recorded its share of this loss of approximately $0.8 million for its prorated share
of the net loss from the date of initial contribution agreement thru December 31, 2023. For the nine months ended September 30, 2024,
the Company decreased the liability for the post-closing true-up by $0.2 million and reflected a gain of $0.2 million