Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 188

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 188
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 some or all of the Recycled
Shares in the open market. If the Backstop Parties sell any shares prior to the Maturity Date, the pro-rata portion of the Prepayment
is due back to us. As of September 30, 2024, the Backstop Parties have sold 143,261 shares, for which we received net proceeds of $1.4
million, after paying related fees to the Backstop Parties. Depending on the manner in which the OTC Equity Prepaid Forward Transaction
is settled, we may never have access to the full Prepayment.

44

On
May 23, 2023 we received an Equity Prepaid Forward Transaction - Valuation Date Notice (“Notice”) from Vellar stating that,
due to our alleged failure to timely register the shares held by Vellar, Vellar has the right to terminate the Backstop Agreement as
to their portion of the shares and Vellar is claiming it is entitled to receive Maturity Consideration (as defined in the Backstop Agreement)
equal to $6.7 million, which at our discretion may be paid in cash or by offset to the shares currently held by Vellar. Management takes
issue with multiple aspects of the Notice including, but not limited to, Vellar’s right to terminate their portion of the Backstop
Agreement and their asserted Maturity Consideration calculation. As such, we are consulting with advisors and other parties and are considering
the potential resources and remedies we may elect to pursue, and intend to assert our rights should this matter not be resolved. After
a review of all applicable documents related to the Backstop Agreement, we believe our position with respect to the terms of the agreement
and intent of the parties is supported by the Backstop Agreement and the facts and circumstances under which it was entered into. Further,
given the early stage of this matter and the uncertainty inherent in litigation and investigations, the Company does not currently believe
it is (i) probable to incur losses or (ii) possible to develop estimates of reasonably possible losses (or a range of possible losses)
for this matter.

Refer
to Note 3, Business Combination and Backstop Agreement, in our condensed consolidated financial Statements included elsewhere
in this Report for further detail on the Backstop Agreement and Note 4, Fair Value Measurements, for further detail around the
valuation of the Fixed Maturity Consideration and Backstop Put Option Liability.

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Promissory Notes and Ayrton Convertible Note Financing

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