Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 1536

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 10
Chunk 1536
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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 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 be remeasured at each reporting period and the Company will record any changes to other
income/(expense) on the consolidated statement of operations. Based upon the closing price of the Company’s common stock at
December 31, 2023, the Company increased the liability for the post-closing true-up to $3.6
million and reflected and expense of $0.8
million for the change in the fair value of the Virion Contribution Liability in other income (expense) on its consolidated
statement of operations.

In
September 2024, the Company entered into an amendment to the Contribution Agreement with Virion, which was ratified and approved by the
Board of Directors of the Company on October 11, 2024. In the amendment, the Company agreed to contribute up to $9.0 million in cash
and/or shares of the Company’s common stock (the “Aggregate Capital Contribution”) in exchange for additional limited
liability company units in an amount sufficient to cause the Company’s ownership interest in Virion to equal 22% of Virion’s
issued and outstanding membership units, on a fully diluted basis. The Aggregate Capital Contribution will be credited for: a) $1.0 million