Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 84

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 84
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 pay the related-party loans and certain accrued expenses. We consummated the closing
of the sale of the initial Note on May 25, 2023 for approximately $6.1 million, net of expenses and issuance costs, which we used to
pay the remainder of our existing related-party loans and a portion of our existing short-term loans, totaling $1.6 million. In July
2024, we borrowed $1.0 million under the new 2024 Convertible Note. As of September 30, 2024, the principal of our remaining
short-term loans outstanding was $15.6 million.

There
is an economic disincentive for the Backstop Parties to sell shares of our common stock that are subject to the restrictions set forth
in the Backstop Agreement unless our common stock is trading above $10.34 per share (as it relates to certain of the Backstop Parties)
or $8.00 per share (as it relates to one of the Backstop Parties), which means that we need to assume that no cash will be returned to
us pursuant to any sales under the Backstop Agreement unless our common stock is trading above $8.00 and one or more of our Backstop
Parties are otherwise able to sell their shares. Based upon the level of funding that we receive from the foregoing sources, we will
determine the amount of accrued expenses and contingency payments that we will seek to have our vendors further defer and how much we
are able to spend on our operations. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our
available capital resources sooner than we expect, in which case, we would need to raise more capital and sooner than expected. We cannot
guarantee that we will be able to draw down additional loans under the Ayrton Convertible Note Financing or raise additional capital
on reasonable terms or at all, that our common stock will trade above $8.00, permitting one of the Backstop Parties to sell shares under
the Backstop Agreement, that our common stock will trade above $10.34, permitting the other Backstop Parties to sell shares under the
Backstop Agreement, that the Backstop Parties will sell any shares of our common stock held by them or elect to terminate the Backstop
Agreement in respect of those shares, or that our vendors will agree to further deferrals of payments due to them. Although the Common
Stock Purchase Agreement provides that we have the right, but