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

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 13
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The
Company capitalizes certain legal, professional accounting, and other third-party fees associated with equity financings such as the
Business Combination as deferred offering costs until such financings are consummated. After consummation of the equity financings, these
costs are recorded in stockholders’ deficit as a reduction of proceeds generated as a result of the offering. The Company recorded
deferred offering costs of $2.0 million as a reduction to the Business Combination proceeds into additional paid-in capital during the
first quarter of 2023. The Company recorded $7.6 million as a component of other income (expense) in its condensed consolidated statements
of operations for the nine months ended September 30, 2023 as the amounts were in excess of the proceeds generated as a result of the
Business Combination.

Income
Taxes and Tax Credits

Income
taxes are recorded in accordance with FASB Accounting Standards Codification 740, Income Taxes (“ASC 740”), which
provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the
expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and
liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted
tax rates in effect for the year in which the differences are expected to reverse, and net operating loss (“NOL”) carryforwards
and research and development tax credit (“R&D Credit”) carryforwards. Valuation allowances are provided, if based upon
the weight of available evidence, it is more likely than not that some or all of its deferred tax assets will not be realized. The Company
has recorded a full valuation allowance to reduce its net deferred income tax assets to zero. There is no provision for income taxes
because the Company has incurred operating losses and capitalized certain items for income tax purposes since its inception and maintains
a full valuation allowance against its net deferred tax assets. In the event the Company were to determine that it would be able to realize
some or all its deferred income tax assets in the future, an adjustment to the deferred income tax asset valuation allowance would increase
income in the period such determination was made. The Company accounts for uncertain tax positions in accordance with the provisions
of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit
would more likely than not be realized assuming examination by the taxing