Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 50

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 50
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 Contribution Agreement (the “Contribution Agreement”)
with Virion Therapeutics, LLC (“Virion”) and Poseidon Bio LLC to provide financial, technical and operational assistance
to further the growth and development of Virion’s Intelligent and Adaptable CD8+ T cell-based Immunotherapy (“VIACT”)
platform. Pursuant to the Contribution Agreement, the Company acquired a 50% membership interest in Virion and purchased one membership
unit of Virion for an initial contribution of either a) $4.1 million in cash, or b) 750,000 shares of the Company’s common stock,
250,000 of which were transferred to Virion by Poseidon Bio LLC, with the remaining 500,000 shares issued by the Company on December
1, 2023. The Company elected to fund the initial contribution via the issuance of shares of its common stock. In the case of an initial
contribution in the form of shares of common stock, the Contribution Agreement provides for a post-closing true-up 18 months from the
closing date, whereby the Company would be required to make a true-up contribution. This post-closing true-up amount would be equal to
the difference between liquidation proceeds received by Virion from the sale of the 750,000 shares of common stock received in the initial
contribution and $4.1 million. The post-closing true-up amount is payable, at the Company’s discretion, in the form of additional
shares of the Company’s common stock, or cash. This investment has been reflected at the minimum amount to be contributed as of
the post-closing true-up, or $4.1 million and is reflected in non-current assets on the Company’s condensed consolidated balance
sheets as Investment in Virion. The Company initially recorded a liability of $2.8 million for the estimated amount of the post-closing
true-up, reflecting the $4.1 million reduced by the fair market value of the common stock issued pursuant to the Contribution Agreement
at the time of the contribution. The liability will remeasured at each reporting period and the Company will record any changes to other
income (expense) on the condensed consolidated statement of operations. Based upon the closing price of the Company’s common stock
at September 30, 2024, the Company increased the liability for the post-closing true-up to $3.4 million and reflected an expense of $0.2
million for the change in the fair value of the Virion