Company: OCEA
Filing Date: 2025-04-08
Form Type: 10-K
Source: 0001641172-25-003155
Chunk: 1855

Company: Ocean Biomedical, Inc.
Filing Date: 2025-04-08
Form: 10-K
Item: Item 13
Chunk 1855
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 inputs that are observable
    or can be corroborated by observable market data.

    ●
    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), 2023 and 2024 Convertible Notes,
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 cash, restricted cash, accounts payable, accrued expenses, and short-term loans approximate
their fair values due to the short-term nature of these liabilities.

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
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