Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 1670

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 11
Chunk 1670
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21.0% 
     21.0%
  
    Permanent items 
     (5.4)% 
     (18.7)%
  
    Change in valuation allowance 
     (15.6)% 
     (2.3)%
  
    Income tax provision (benefit) 
     0.0% 
     0.0%

Deferred
tax assets and valuation allowance

Deferred
tax assets reflect the tax effects of net operating losses, tax credit carryovers, and temporary differences between the carrying amounts
of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2024 and 2023,
the Company’s deferred tax assets are the tax effects of amortization of organization and start-up costs, U.S. federal and state
NOL carryforwards, and stock-based compensation.

The
significant components of the net deferred tax assets are as follows (in thousands):

 Schedule of Net Deferred Tax Assets

    December 31, 2024  
    December 31, 2023 
  
    Deferred tax assets: 

    Organization and start-up costs 
    $38  
    $42 
  
    Net operating loss carryforwards 
     7,642  
     5,962 
  
    Stock-based compensation 
     14,884  
     14,728 
  
    R&D tax credits 
     28  
     28 
  
    Total deferred income tax assets 
     22,592  
     20,760 
  
    Valuation allowance 
     (22,592) 
     (20,760)
  
    Deferred tax asset, net of allowance 
    $—  
    $— 

The
Company may be entitled to claim additional federal and state income tax credits for its 2023 and 2024 R&D activities, but these
amounts have not yet been determined. Any R&D Credits generated by the Company in 2023 and 2024 would result in an additional deferred
tax asset that would be subject to a full valuation allowance. Future changes in ownership may limit the utilization of net operating
loss carryforwards and R&D Credits due to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar provisions.

The
Company has non-capital losses of $28.8
million as of December 31, 2024, which can