Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 115

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 115
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 of $20.9 million
was primarily driven by (i) a $18.1 million decrease in the changes in fair values of the Fixed Maturity Consideration and Backstop Put
Option Liability; (ii) $2.7 million increase in transaction costs; and (iii) $1.7 million of redemption premium on debt conversions,
partially offset by a $1.3 million change in fair value of the 2024 Convertible Notes and SPA warrants.

Liquidity and Capital Resources

Overview

Since our inception, we have
incurred significant operating losses. We have not yet commercialized any products and we do not expect to generate revenue from sales
of products for several years, if at all. We had no cash inflows from operating activities for the three months ended March 31, 2025.
Further, as of March 31, 2025, we had no cash and a working capital deficiency of $23.1 million.

To date, we have funded our operations
from the proceeds from the issuance of common stock and debt, proceeds from the Backstop Agreement and through self-funding by our founder
and have limited current cash on hand to fund our operations. Based on our current operational plans and assumptions, we expect that the
net proceeds from the Backstop Agreement, the Ayrton Convertible Note Financing and future debt and equity financings, as well as further
deferrals of certain of our accrued expenses and contingency payments due upon the closing of future financings, are required to fund
operations into the third quarter of 2025. As of March 31, 2025, we received $1.4 million in cumulative proceeds from the Backstop Agreement.

41

We borrowed $3.7 million in the
second half of 2024 and $1.0 million in the first quarter of 2025 from additional tranches under the Ayrton Convertible Note Financing,
the proceeds of which were used to fund working capital requirements. As of March 31, 2025, the principal of our remaining short-term
loans outstanding was $10.1 million.

As an emerging growth company,
we are dependent on outside capital in order to advance our research and development programs, operate our business, and meet our future
obligations as they come due. Our current operating plan indicates that we will incur losses from operations and generate negative cash
flows from operating activities, given anticipated expenditures related to research and development activities we lack revenue generating
ability