Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 189

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 189
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Promissory Notes

Upon
consummation of the Business Consummation, we assumed two of AHAC’s loans, totaling $2.1 million, one of which accrued interest
at 8% per annum and the other accrues interest at 15% per annum. Both were due within five days of Closing. $0.5 million was paid down
at Closing, with the remaining paid down in May 2023 via the proceeds received from the initial Note under the Ayrton Convertible Note
Financing, discussed below.

In
connection with the assumption of AHAC’s loans and pursuant to the terms of the Business Combination Agreement described above,
we issued 1,365,000 shares of our common stock to the Sponsor as consideration for providing the loans to us (the “Sponsor Extension
Shares”). In addition, pursuant to the terms of an amendment entered into prior to the paydown of the loans, we issued a total
of 200,000 shares of our common stock in exchange for extension of the maturity date of one of the loans.

We
recognized a loss on extinguishment of debt of $1.2 million in our consolidated statements of operations for the nine months ended September
30, 2023 for the 200,000 shares issued in exchange for extensions of the maturity date, based on the grant date fair value of the shares
issued. In addition, we recognized a loss on extinguishment of debt of $13.6 million in our condensed consolidated statements of operations
for the nine months ended September 30, 2023 for the issuance of the Sponsor Extension Shares, based on the grant date fair value. Further,
we recorded interest expense of $18 thousand and $36 thousand in our condensed consolidated statements of operations for the three and
nine months ended September 30, 2023, respectively.

Ayrton
Convertible Note Financing

In
May 2023, we entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor (the “Investor”)
for the sale of up to three Senior Secured Convertible Notes (each, a “Note” and collectively, the “Notes”),
which Notes are convertible into shares of our common stock, in an aggregate principal amount of up to $27.0 million, in a private placement
(the “Ayrton Convertible Note Financing”).

In
May 2023, we consummated the closing for the sale of (i) the initial Note in the principal amount of