Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 37

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 37
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    (i)
    Upon execution of the amendment,
    the Company paid the remainder of outstanding fees due.

    (ii)
    Within 5 business days
    of the receipt of the first Additional Closing (as defined within the Securities Purchase Agreement, discussed in Note 7, Senior
    Secured Convertible Notes), the Company is required to pay $0.5 million towards its outstanding loans.

    (iii)
    Within 5 business days
    of the second Additional Closing (as defined within the Securities Purchase Agreement), the Company is required to pay $1.2 million
    towards its outstanding loans plus any accrued unpaid interest.

    (iv)
    In the event the Company
    raises additional equity through financing arrangements of at least $25.0 million, the Company is required to use the proceeds to
    repay the remainder of its outstanding loans plus any accrued unpaid interest.

    (v)
    In exchange for the amendment,
    the Company issued 25,000 shares of its common stock to Second Street Capital. The fair value of the shares issued are recorded in
    the Company’s condensed consolidated statements of operations as a loss on debt extinguishment.

Second
Street Capital Loans – Interest Expense

During
each of the three months ended September 30, 2024 and 2023, the Company recognized $0.1
million of interest expense on the Second Street Loans, respectively. During the nine months ended September 30, 2024 and 2023, the
Company recognized $0.2
million and $0.6
million of interest expense on the Second Street Loans, respectively, including $0.4
million, related to the amortization of debt issuance costs during the nine months ended September 30, 2023.

McKra
Investments III Loan

In
March 2023, the Company entered into a Loan Agreement with McKra Investments III (“McKra”) pursuant to which the Company
borrowed $1.0 million, which bears interest at 15% per annum (the “McKra Loan”). The Company is required to pay a $0.2 million
loan and convenience fee due upon repayment of the loan. The Company issued a warrant to purchase 200,000 shares of the Company’s
common stock, with an exercise price of $10.34 per share, exercisable until March 27, 2028. The accounting treatment for the warrants
is discussed within Note 10, Warrants.