Company: OCEA
Filing Date: 2025-01-13
Form Type: 10-Q
Source: 0001493152-25-001880
Chunk: 184

Company: Ocean Biomedical, Inc.
Filing Date: 2025-01-13
Form: 10-Q
Item: Item 8
Chunk 184
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stop Agreement, the Ayrton Convertible Note Financing and future
debt and equity financings, including possibly under the Common Stock Purchase Agreement, as well as further deferrals of certain of
our accrued expenses and contingency payments due upon the closing of future financings, are required to fund operations into the third
quarter of 2024. As of September 30, 2024 we received $1.4 million in cumulative proceeds from the Backstop Agreement.

42

We
borrowed $13.5 million in the first half of 2023, including the proceeds from the initial Note under the Ayrton Convertible Note
Financing, the proceeds of which were used to pay the related-party loans and certain accrued expenses. We consummated the closing
of the sale of the initial Note on May 25, 2023 for approximately $6.1 million, net of expenses and issuance costs, which we used to
pay the remainder of our existing related-party loans and a portion of our existing short-term loans, totaling $1.6 million. In July
2024, we borrowed $1.0 million under the new 2024 Convertible Note. As of September 30, 2024, the principal of our remaining
short-term loans outstanding was $15.6 million.

There
is an economic disincentive for the Backstop Parties to sell shares of our common stock that are subject to the restrictions set forth
in the Backstop Agreement unless our common stock is trading above $10.34 per share (as it relates to certain of the Backstop Parties)
or $8.00 per share (as it relates to one of the Backstop Parties), which means that we need to assume that no cash will be returned to
us pursuant to any sales under the Backstop Agreement unless our common stock is trading above $8.00 and one or more of our Backstop
Parties are otherwise able to sell their shares. Based upon the level of funding that we receive from the foregoing sources, we will
determine the amount of accrued expenses and contingency payments that we will seek to have our vendors further defer and how much we
are able to spend on our operations. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our
available capital resources sooner than we expect, in which case, we would need to raise more capital and sooner than expected. We cannot
guarantee that we will be able to draw down additional loans