Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 137

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 137
---
7 million, the loan fee of $0.1 million is due at maturity. The accounting treatment for the warrants is discussed within Note 10,
Warrants.

Second
Street Capital Loan Amendments

In
connection with amendments to the Second Street Loans, an additional 225,000 and 75,000 warrants to purchase the Company’s common
stock were issued to Second Street Capital in 2023 and 2022, respectively. The terms of the warrants and respective accounting treatments
are summarized in Note 10, Warrants.

The
most recent amendment, effective as of May 2023, included the following terms, with no conditions present as of September 30, 2024:

    (i)
    Upon execution of the amendment,
    the Company paid the remainder of outstanding fees due.

    (ii)
    Within 5 business days
    of the receipt of the first Additional Closing (as defined within the Securities Purchase Agreement, discussed in Note 7, Senior
    Secured Convertible Notes), the Company is required to pay $0.5 million towards its outstanding loans.

    (iii)
    Within 5 business days
    of the second Additional Closing (as defined within the Securities Purchase Agreement), the Company is required to pay $1.2 million
    towards its outstanding loans plus any accrued unpaid interest.

    (iv)
    In the event the Company
    raises additional equity through financing arrangements of at least $25.0 million, the Company is required to use the proceeds to
    repay the remainder of its outstanding loans plus any accrued unpaid interest.

    (v)
    In exchange for the amendment,
    the Company issued 25,000 shares of its common stock to Second Street Capital. The fair value of the shares issued are recorded in
    the Company’s condensed consolidated statements of operations as a loss on debt extinguishment.

Second
Street Capital Loans – Interest Expense

During
each of the three months ended September 30, 2024 and 2023, the Company recognized $0.1
million of interest expense on the Second Street Loans, respectively. During the nine months ended September 30, 2024 and 2023, the
Company recognized $0.2
million and $0.6
million of interest expense on the Second Street Loans, respectively, including $0.4
million, related to the amortization of debt issuance costs during the nine months ended September 30, 2023.

McKra
Investments III Loan