Ocean Biomedical(OCEA)2025-04-08 14:11Financial Performance and Capital Requirements - The company has incurred significant net losses since inception and is expected to continue incurring substantial net losses for the foreseeable future[21] - The company requires substantial additional capital to finance operations, and failure to raise such capital may force delays or reductions in research and drug development programs[21] - The company may face increased regulatory costs and compliance requirements in drug development, impacting financial performance[17] - The company is subject to ongoing regulatory obligations and continued review, which may result in significant additional expenses[22] Operational Risks - The company relies on third-party manufacturing and supply vendors, which may lead to limitations or interruptions in the supply of development materials[21] - The market opportunities for the company's product candidates may be relatively small, targeting patients ineligible for or who have failed prior treatments[21] - The company has identified material weaknesses in internal control over financial reporting, which could affect the accuracy of financial condition reporting[22] - The company has entered into agreements that may impose obligations, and failure to comply could result in loss of important rights[21] Stock and Securities - The company is classified as an "emerging growth company," which may make its securities less attractive to investors[22] - The company may experience volatility in stock price and warrants, posing risks to investors[22] - Each new non-employee director is granted a one-time stock option to purchase 75,000 shares at a strike price of 3.73 per share, resulting in stock-based compensation expenses of 0.6 million for fiscal year 2023[885] - The Backstop Put Option Liability has an estimated future stock price range of 0.55, with an expected volatility of 147.5% and a risk-free rate of 4.17%[890] - The 2024 Convertible Note has an estimated volatility of 55%, a risk-free rate of 4.37%, and a probability range of 0% to 65%[892] - The SPA Warrants have an estimated volatility of 115%, a risk-free rate of 4.29%, and a probability range of 0% to 65%[892] - The fair value of the Ayrton Note Purchase Option was determined to be zero as of December 31, 2024, and 2023[893] Company Structure and Reporting - The company operates as one reportable segment focused on discovering and developing therapeutic products in oncology, fibrosis, infectious diseases, and inflammation[895] - The company has no off-balance sheet arrangements during the periods presented[896] - The company adopted ASU 2020-06 effective January 1, 2023, which simplifies accounting for convertible instruments[897] - The company is classified as a "smaller reporting company" with an expected market value of stock held by non-affiliates less than 100 million[901]