Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 36

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 1
Chunk 36
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2”) to borrow
$0.2 million, which was later amended in January 2023 to borrow an additional $0.2 million. The Second Street Loan 2 accrues interest
at the rate of 15% per annum, with principal and interest due at maturity. In connection with this loan, the Company issued a warrant
to purchase 62,500 shares of the Company’s common stock, with an exercise price of $11.00 per share, exercisable until February
22, 2026. There is no put option associated with this loan. The Company was originally required to repay the Second Street Loan 2 on
the earlier of (i) 5 business days after the Company’s next financing or (ii) November 18, 2022. The Company recognized an expense
of $0.4 million for the warrants issued based on the estimated fair value of the awards on the date of grant. The accounting treatment
for the warrants is discussed within Note 10, Warrants.

March
Second Street Loan

In
March 2023, the Company entered into a new loan agreement with Second Street Capital (the “March Second Street Loan” and
together with the Second Street Loan and Second Street Loan 2, the “Second Street Loans”) pursuant to which the Company could
borrow up to $1.0 million to pay certain accrued expenses. Of this amount, the Company borrowed $0.7 million. The loan bears interest
at 15% per annum. The Company issued a warrant to Second Street Capital for 200,000 shares of the Company’s common stock, exercisable
for five years at an exercise price of $10.34 and will pay up to $0.2 million in loan fees at maturity. Since the Company only borrowed
$0.7 million, the loan fee of $0.1 million is due at maturity. The accounting treatment for the warrants is discussed within Note 10,
Warrants.

Second
Street Capital Loan Amendments

In
connection with amendments to the Second Street Loans, an additional 225,000 and 75,000 warrants to purchase the Company’s common
stock were issued to Second Street Capital in 2023 and 2022, respectively. The terms of the warrants and respective accounting treatments
are summarized in Note 10, Warrants.

The
most recent amendment, effective as of May 2023, included the following terms, with no conditions present as of September 30, 2024: