Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 233

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 2
Chunk 233
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 principally by the life of the warrant, the volatility of the underlying shares,
the risk-free interest rate, and expected dividends. Expected volatility is based on the historical share volatility of a set of comparable
publicly traded companies over a period of time equal to the expected term of the warrants. The risk-free interest rate is determined
by reference to the U.S. Treasury yield curve in effect at the time of grant of the warrant for time periods approximately equal to the
expected term of the warrant. Expected dividend yield is zero based on the fact that we have never paid cash dividends and do not expect
to pay any cash dividends in the foreseeable future. We expense the amount for warrants and stock-based awards within other income (expense)
and stock-based compensation, respectively, in our condensed consolidated statements of operations.

Recent
Accounting Pronouncements

In
August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, Debt — Debt with Conversion and Other
Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) — Accounting
for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments,
amends the guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted
earnings per share calculations as a result of these changes. The Company early adopted ASU No. 2020-06 as of January 1, 2023, using
a modified retrospective approach, noting the Company’s prior instruments would not be impacted by this adoption. The Company utilized
the updated derivative guidance when accounting for the 2023 Convertible Note (as defined in Note 7, Senior Secured Convertible Notes).

In
November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU
2023-07”). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses
that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss,
an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit
or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable