Company: OCEA
Filing Date: 2025-05-15
Form Type: 10-Q
Source: 0001641172-25-011080
Chunk: 60

Company: Ocean Biomedical, Inc.
Filing Date: 2025-05-15
Form: 10-Q
Item: Item 1
Chunk 60
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    Level 3—Unobservable inputs that are supported by little or no market activity that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques.

The
Company’s Backstop Put Option Liability and Fixed Maturity Consideration (both as defined below), 2024 Convertible Note, SPA
Warrant, and Ayrton Note Purchase Option, (each as defined and discussed in Note 7, Senior Secured Convertible Notes), are
carried at fair value, determined according to Level 3 inputs in the fair value hierarchy described above (see Note 4, Fair Value
Measurements). The carrying values of restricted cash, accounts payable, accrued expenses, and short-term loans approximate
their fair values due to the short-term nature of these liabilities.

    11

Backstop Put Option Liability and Fixed Maturity
Consideration

Backstop Agreement

In connection with the execution
of the Business Combination, AHAC and Legacy Ocean entered into an OTC Equity Prepaid Forward Transaction (as amended, the “Backstop
Agreement”) with the Backstop Parties (as defined in Note 3, Business Combination and Backstop Agreement). The Backstop Agreement
grants the Backstop Parties the right to purchase up to a maximum of 8,000,000 shares of the Company’s common stock on the open
market for $10.56 per share (the “Redemption Price”). The Company agreed to purchase the unsold portion of the Backstop Shares
from the Backstop Parties on a forward basis upon the “Maturity Date” (as amended, the third anniversary of the closing of
the Business Combination, subject to certain acceleration provisions). The purchase price payable by the Company includes a prepayment
in the amount of the Redemption Price per share (the “Prepayment”) from the proceeds released from the trust account related
to those shares. Among the acceleration provisions is the Backstop Parties’ right to accelerate the Maturity Date if the Company’s
stock price trades below a stipulated price per share for any 30 trading days during a 45 day consecutive trading-day period (in October
2023, this acceleration provision was amended with one Backstop Party providing it the right to accelerate the Maturity Date if the Company’s
stock price trades below a stipulated price per share for any 20 trading days during a 30 day consecutive trading-day period). On any
date following the closing of the Business Combination, the