Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 65

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 65
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 until paid and (ii) an annual license maintenance fee of $3,000 beginning
on January 1, 2022, which increases to $4,000 on January 1, 2028. In addition, upon successful commercialization, the Company is required
to pay Elkurt (i) between 0.5% to 1.5% of net sales based on the terms of each of the Initial Brown License Agreements and (ii) 25% of
all non-royalty 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%. For the nine month
periods ended September 30, 2024 and 2023, the Company recorded annual license maintenance fees of $12,000. In addition, the Company
recorded license fees of $0.3 million for the nine months ended September 30, 2023. As of September 30, 2024, the Company reflected a
balance due of $0.1 million in accrued expenses – related parties on its consolidated balance sheet.

The
Company is also required to pay Elkurt developmental and commercialization milestone payments for each of the Initial Brown License Agreements
ranging from $50,000 for the filing of an Investigational New Drug Application (“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. The Company is also responsible for reimbursement of patent costs. The Company records reimbursement of patent
costs as general and administrative costs in the condensed consolidated statements of operations as incurred. For the nine month periods
ended September 30, 2024 and 2023, the Company incurred reimbursed patent costs expenses to Brown University in the amount of $0.1 million
and $0.2 million, respectively.

The
contract term for each of the Initial Brown License Agreements, as amended, continues until the later of (i) the date on which the last
valid claim expires or (ii) ten years. Either party may terminate each of the Initial Brown License Agreements in certain situations,
including