Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 168

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 168
---
 certain field.

For
the Rhode Island License Agreement, the Company was required to pay Elkurt (i) $110,000, due within 45 days of an equity financing of
at least $10.0 million or November 1, 2023, whichever comes first, and (i) an annual maintenance fee of $3,000 beginning on January 1,
2022, which increases to $4,000 annually on January 1, 2029. As of the filing date of this Quarterly Report, next steps for the licensing
agreements are still being negotiated.

Upon
successful commercialization, under the terms of the agreement, the Company is also required to pay Elkurt (i) 1.5% of net sales and
(ii) 25% of all nonroyalty sublicense income prior to the first commercial sale, and 10% of non-royalty sublicense income thereafter,
in the event that the Company enters into sublicenses for the subject intellectual property. If net sales or non-royalty sublicense income
are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%. The
Company will also pay Elkurt developmental and commercialization milestone payments under the Rhode Island License Agreement, ranging
from $50,000 for the filing of an IND, or the equivalent outside of the United States, to $250,000 for enrollment of the first patient
in a Phase 3 clinical trial in the United States or the equivalent outside of the United States. For the nine month periods ended September
30, 2024 and 2023, the Company has incurred reimbursed patent costs expenses to Rhode Island Hospital in the amount of $0.1 million and
$0.3 million, respectively. As of September 30, 2024, the Company reflected a balance due of $0.2 million in accrued expenses –
related parties on its consolidated balance sheet.

The
contract term for the Rhode Island License Agreement began February 1, 2020 and will continue until the later of (i) the date on which
the last valid claim expires or (ii) fifteen years. Either party may terminate the Rhode Island License Agreement in certain situations,
and as discussed above, the next steps for the licensing agreements are still being negotiated. The Rhode Island License Agreement has
been sublicensed to the Company’s subsidiary, Ocean Sihoma Inc.

Refer
to Note 13, Related Party Transactions,