Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 3632

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 1A
Chunk 3632
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 market funds that are composed
of U.S. Treasury and U.S. Treasury-backed repurchase agreements or short-term U.S. Treasury securities. We do not believe that inflation,
interest rate changes, or exchange rate fluctuations had a significant impact on our results of operations for any periods presented
herein.

Critical
Accounting Policies and Significant Judgments and Estimates

Our
consolidated financial statements are prepared in accordance with generally accepted accounting principles in the United States of America,
or U.S. GAAP. The preparation of our consolidated financial statements and related disclosures requires us to make estimates and judgments
that affect the reported amounts of assets, liabilities, costs and expenses. We base our estimates on historical experience, known trends
and events, and various other factors that we believe are reasonable under the circumstances, the results of which form the basis for
making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. We evaluate our
estimates and assumptions on an ongoing basis. Our actual results may differ from these estimates under different assumptions or conditions.
While our significant accounting policies are described in more detail in Note 2 to our audited consolidated financial statements appearing
elsewhere in this 10-K, we believe that the following accounting policies are those most critical to the judgments and estimates used
in the preparation of our consolidated financial statements.

156

Stock
Options to Non-Employee Directors

Under
the Non-employee Director Compensation Policy, upon initial election or appointment to the Board, each new nonemployee director will
be granted under the Incentive Plan a one-time grant of a non-statutory stock option to purchase 75,000 shares of its common stock on
the date of such director’s election or appointment to the Board, issuable under the incentive plan. These will vest in substantially
equal monthly installments over three years, subject to the director’s continued service as a member of the Board through each
applicable vesting date.

On
February 15, 2023, 75,000 options were granted to each of the non-employee directors at a strike price of $10.00 per share.

The
estimated fair value of a non-statutory stock option to purchase common stock on the grant date was $3.73 per share and was determined
using the Black-Scholes Merton model. The stock-based compensation expense recorded for the fiscal years ended December 31, 2024 and
2023 was $0.7 million and $0.6 million