0001493152-24-014679 | 10-Q | XBRL Viewer

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2023	Dec. 31, 2022
Statement of Financial Position [Abstract]
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	300,000,000	180,564,262
Common stock, shares issued	34,087,201	23,355,432
Common stock, shares outstanding	34,087,201	23,355,432

Commitments and Contingencies	9 Months Ended
Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Commitments and Contingencies	8. Commitments and Contingencies *Litigation* Heller v. Ocean Biomedical, Inc. et al., Case No. 1:23cv212. On May 23, 2023, Jonathan Heller (“Heller”) filed a civil action against the Company, Poseidon Bio LLC, Chirinjeev Kathuria and Elizabeth Ng (collectively, the “Defendants”) in the District Court of Rhode Island. Heller has asserted claims alleging that he is entitled to earned salary and various other payments following his resignation from the Company. On July 27, 2023, Defendants filed their Answer and Affirmative Defenses. Defendants intend to vigorously defend against Heller’s claims. Given the early stage of this matter and the uncertainty inherent in litigation and investigations, the Company does not currently believe it is (i) probable to incur losses or (ii) possible to develop estimates of reasonably possible losses (or a range of possible losses) for this matter. *License Fees* The Company entered into license agreements with its academic research institution partners. Under these license agreements, the Company is required to make annual fixed license maintenance fee payments. The Company is also required to make payments upon successful completion and achievement of certain milestones as well as royalty payments upon sales of products covered by such licenses. The payment obligations under the license and collaboration agreements are contingent upon future events such as achievement of specified development, clinical, regulatory, and commercial milestones. As the timing of these future milestone payments are not known, the Company has not included these fees in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022. For further discussion on license fees recorded during the period, refer to Note 12, License and Manufacturing Agreements. *Contingent Compensation and Other Contingent Payments* The Company currently has approximately $14,590,121 in contingently issuable payments that are triggered upon its first cumulative capital raise of at least $50,000,000 and consists of $12,403,625 of contingent compensation and bonuses to certain members of senior management, $2,050,000 of contingent vendor payments, and $136,496 of related party expense. These amounts will not be paid if the contingencies do not occur. Since the payment of obligations under the employment agreements are contingent upon these future events, which are not considered probable as such future events are deemed outside of the Company’s control, the Company has not included these amounts in its condensed consolidated financial statements. *Directors and Officers Liability Insurance* On February 14, 2023, the Company obtained directors and officers liability (“D&O”) insurance that includes (i) a one-year run-off policy for AHAC’s directors and officers that provides coverage for claims that arise out of wrongful acts that allegedly occurred prior to the date of the Business Combination and (ii) a standard one-year policy for the Company’s directors and officers that provides coverage for claims made by stockholders or third parties for alleged wrongdoing. The total annual premiums for the policies are approximately $1,200,000 paid over twelve months. As of September 30, 2023, the Company has paid $1,076,936 of the premiums that is recorded as general and administrative expenses in its condensed consolidated financial statements.

Commitments and Contingencies

9 Months Ended

Sep. 30, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Litigation

Heller v. Ocean Biomedical, Inc. et al., Case No. 1:23cv212. On May 23, 2023, Jonathan Heller (“Heller”) filed a civil action against the Company, Poseidon Bio LLC, Chirinjeev Kathuria and Elizabeth Ng (collectively, the “Defendants”) in the District Court of Rhode Island. Heller has asserted claims alleging that he is entitled to earned salary and various other payments following his resignation from the Company. On July 27, 2023, Defendants filed their Answer and Affirmative Defenses. Defendants intend to vigorously defend against Heller’s claims. Given the early stage of this matter and the uncertainty inherent in litigation and investigations, the Company does not currently believe it is (i) probable to incur losses or (ii) possible to develop estimates of reasonably possible losses (or a range of possible losses) for this matter.

License Fees

The Company entered into license agreements with its academic research institution partners. Under these license agreements, the Company is required to make annual fixed license maintenance fee payments. The Company is also required to make payments upon successful completion and achievement of certain milestones as well as royalty payments upon sales of products covered by such licenses. The payment obligations under the license and collaboration agreements are contingent upon future events such as achievement of specified development, clinical, regulatory, and commercial milestones. As the timing of these future milestone payments are not known, the Company has not included these fees in the condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

For further discussion on license fees recorded during the period, refer to Note 12, License and Manufacturing Agreements.

Contingent Compensation and Other Contingent Payments

The Company currently has approximately $14,590,121 in contingently issuable payments that are triggered upon its first cumulative capital raise of at least $50,000,000 and consists of $12,403,625 of contingent compensation and bonuses to certain members of senior management, $2,050,000 of contingent vendor payments, and $136,496 of related party expense.

These amounts will not be paid if the contingencies do not occur. Since the payment of obligations under the employment agreements are contingent upon these future events, which are not considered probable as such future events are deemed outside of the Company’s control, the Company has not included these amounts in its condensed consolidated financial statements.

Directors and Officers Liability Insurance

On February 14, 2023, the Company obtained directors and officers liability (“D&O”) insurance that includes (i) a one-year run-off policy for AHAC’s directors and officers that provides coverage for claims that arise out of wrongful acts that allegedly occurred prior to the date of the Business Combination and (ii) a standard one-year policy for the Company’s directors and officers that provides coverage for claims made by stockholders or third parties for alleged wrongdoing. The total annual premiums for the policies are approximately $1,200,000 paid over twelve months. As of September 30, 2023, the Company has paid $1,076,936 of the premiums that is recorded as general and administrative expenses in its condensed consolidated financial statements.

Related Party Transactions	9 Months Ended
Sep. 30, 2023
Related Party Transactions [Abstract]
Related Party Transactions	13. Related Party Transactions *License Agreements with Elkurt, Inc.* Elkurt/Brown Licenses The Company is party to the four Initial Brown License Agreements with Elkurt and the Brown Anti-PfGARP Small Molecules License Agreement with Elkurt relating to the Elkurt licenses with Brown University. Elkurt is a company formed by the Company’s scientific co-founders Jack A. Elias, M.D., former Dean of Medicine and current Special Advisor for Health Affairs to Brown University, and Jonathan Kurtis, M.D., PhD, Chair of the Department of Pathology and Laboratory Medicine at Brown University. Dr. Elias and Dr. Kurtis are members of the Company’s Board. Under the Initial Brown License Agreements and the Brown Anti-PfGARP Small Molecules License Agreement, Elkurt grants to the Company exclusive, royalty-bearing licenses to patent rights and nonexclusive, royalty-bearing licenses to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in certain fields. License fees are expensed as incurred as research and development expenses. Patent reimbursement fees are expensed as incurred as general and administrative expenses. As of September 30, 2023, the Company has incurred a total amount of $408,661 for patent reimbursement expenses to Brown University, of which $379,221 has been paid. As of September 30, 2023, the amount due to Elkurt for the Initial Brown License Agreements and the Brown Anti-PfGARP Small Molecules License Agreement that is currently due to Brown University is $346,521 consisting of (i) license maintenance fees in the amount of $24,000, and (ii) initial license fees in the amount of $268,000 recorded as research and development costs, and (iii) other costs. The amounts were recorded as accounts payable-related party on the condensed consolidated balance sheets. Elkurt/Rhode Island Hospital License As discussed in Note 12, License and Manufacturing Agreements, under the Rhode Island License Agreement, Elkurt grants to the Company an exclusive, royalty-bearing license to patent rights and a nonexclusive, royalty-bearing license to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in a certain field. As of September 30, 2023, the Company has incurred $482,216 for patent reimbursement expenses, of which $229,393 has been paid. As of September 30, 2023, the Company recorded an expense for the annual license fee of $3,000 and the initial license fee of $110,000. *Transactions with Legacy Ocean’s Founder and Executive Chairman* To date, Legacy Ocean’s Founder and Executive Chairman had paid for certain general and administrative expenses totaling $93,769 on behalf of the Company. The amounts were recorded as accounts payable on the condensed consolidated balance sheets. As of September 30, 2023, the amount due was $92,919. The reduction of $850 was actually paid by the Company for state taxes in 2022. The amounts were recorded as accounts payable on the condensed consolidated balance sheets. *Transactions with Chief Accounting Officer* The Company’s Chief Accounting Officer previously provided consulting services to Legacy Ocean through RJS Consulting, LLC, his wholly owned limited liability company, through June 15, 2021, before becoming the Company’s Chief Accounting Officer. As of September 30, 2023 and December 31, 2022, the Company owed RJS Consulting, LLC $107,500 and $142,500, respectively. The amounts were recorded as accounts payable on the condensed consolidated balance sheets and were expensed as accounting fees in general and administrative expenses in 2021.

Related Party Transactions

9 Months Ended

Sep. 30, 2023

Related Party Transactions

13. Related Party Transactions

License Agreements with Elkurt, Inc.

Elkurt/Brown Licenses

The Company is party to the four Initial Brown License Agreements with Elkurt and the Brown Anti-PfGARP Small Molecules License Agreement with Elkurt relating to the Elkurt licenses with Brown University. Elkurt is a company formed by the Company’s scientific co-founders Jack A. Elias, M.D., former Dean of Medicine and current Special Advisor for Health Affairs to Brown University, and Jonathan Kurtis, M.D., PhD, Chair of the Department of Pathology and Laboratory Medicine at Brown University. Dr. Elias and Dr. Kurtis are members of the Company’s Board. Under the Initial Brown License Agreements and the Brown Anti-PfGARP Small Molecules License Agreement, Elkurt grants to the Company exclusive, royalty-bearing licenses to patent rights and nonexclusive, royalty-bearing licenses to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in certain fields. License fees are expensed as incurred as research and development expenses.

Patent reimbursement fees are expensed as incurred as general and administrative expenses. As of September 30, 2023, the Company has incurred a total amount of $408,661 for patent reimbursement expenses to Brown University, of which $379,221 has been paid. As of September 30, 2023, the amount due to Elkurt for the Initial Brown License Agreements and the Brown Anti-PfGARP Small Molecules License Agreement that is currently due to Brown University is $346,521 consisting of (i) license maintenance fees in the amount of $24,000, and (ii) initial license fees in the amount of $268,000 recorded as research and development costs, and (iii) other costs. The amounts were recorded as accounts payable-related party on the condensed consolidated balance sheets.

Elkurt/Rhode Island Hospital License

As discussed in Note 12, License and Manufacturing Agreements, under the Rhode Island License Agreement, Elkurt grants to the Company an exclusive, royalty-bearing license to patent rights and a nonexclusive, royalty-bearing license to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in a certain field. As of September 30, 2023, the Company has incurred $482,216 for patent reimbursement expenses, of which $229,393 has been paid. As of September 30, 2023, the Company recorded an expense for the annual license fee of $3,000 and the initial license fee of $110,000.

Transactions with Legacy Ocean’s Founder and Executive Chairman

To date, Legacy Ocean’s Founder and Executive Chairman had paid for certain general and administrative expenses totaling $93,769 on behalf of the Company. The amounts were recorded as accounts payable on the condensed consolidated balance sheets. As of September 30, 2023, the amount due was $92,919. The reduction of $850 was actually paid by the Company for state taxes in 2022. The amounts were recorded as accounts payable on the condensed consolidated balance sheets.

Transactions with Chief Accounting Officer

The Company’s Chief Accounting Officer previously provided consulting services to Legacy Ocean through RJS Consulting, LLC, his wholly owned limited liability company, through June 15, 2021, before becoming the Company’s Chief Accounting Officer. As of September 30, 2023 and December 31, 2022, the Company owed RJS Consulting, LLC $107,500 and $142,500, respectively. The amounts were recorded as accounts payable on the condensed consolidated balance sheets and were expensed as accounting fees in general and administrative expenses in 2021.

- Definition

The entire disclosure for related party transactions. Examples of related party transactions include transactions between (a) a parent company and its subsidiary; (b) subsidiaries of a common parent; (c) and entity and its principal owners; and (d) affiliates.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (SX 210.6-07(2)(g)(3))
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
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-Paragraph 1
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
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Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
-Subparagraph (a)
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-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 850
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-Name Accounting Standards Codification
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-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org//1943274/2147483326/850-10-50-1

+ Details

Net loss Per Share (Tables)

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The net loss per share for the basic and diluted earnings calculations for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands, except share and per share data):

	2023			2022			2023			2022
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Numerator:
Net loss	$	(14,087	)	$	(3,668	)	$	(97,610	)	$	(16,376	)
Denominator:
Weighted-average shares of common stock outstanding, basic and diluted		26,605,147			23,355,432			25,980,292			23,355,432
Net loss per common share, basic and diluted	$	(0.53	)	$	(0.16	)	$	(3.76	)	$	(0.70	)

Schedule of Securities Excluded From Computation of Diluted Loss Per Share

As noted above, the following securities were excluded from the computation of diluted loss per share in the periods presented, as their effect would be anti-dilutive:

	2023		2022		2023		2022
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock options		600,000		-		600,000		-
Warrants to purchase common stock		12,602,195		375,000		12,602,195		375,000

Summary of Significant Inputs and Assumptions Used in Black-Scholes Merton Model (Details)	Sep. 30, 2023
Measurement Input, Price Volatility [Member] \| Backstop Forward Purchase Agreement Asset [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	80
Measurement Input, Price Volatility [Member] \| 2023 Convertible Note [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	50.0
Measurement Input, Price Volatility [Member] \| 2023 Convertible Note [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	5
Measurement Input, Price Volatility [Member] \| 2023 Convertible Note [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	80
Measurement Input, Price Volatility [Member] \| SPA Warrant [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	80.0
Measurement Input, Price Volatility [Member] \| SPA Warrant [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	5
Measurement Input, Price Volatility [Member] \| SPA Warrant [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	80
Measurement Input, Price Volatility [Member] \| Ayrton Note Purchase Option [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	15
Measurement Input, Share Price [Member] \| Backstop Forward Purchase Agreement Asset [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	1.95
Measurement Input, Share Price [Member] \| Backstop Forward Purchase Agreement Asset [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	13.93
Measurement Input, Risk Free Interest Rate [Member] \| Backstop Forward Purchase Agreement Asset [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	4.6
Measurement Input, Risk Free Interest Rate [Member] \| 2023 Convertible Note [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	5.5
Measurement Input, Risk Free Interest Rate [Member] \| SPA Warrant [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	4.6
Measurement Input, Risk Free Interest Rate [Member] \| Ayrton Note Purchase Option [Member] \| Minimum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	4.0
Measurement Input, Risk Free Interest Rate [Member] \| Ayrton Note Purchase Option [Member] \| Maximum [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	5.0

Business Combination and Backstop Agreement (Details Narrative) - USD ($)						3 Months Ended	9 Months Ended
	Oct. 02, 2023	Feb. 14, 2023	Feb. 13, 2023	Sep. 07, 2022	Aug. 31, 2022	Sep. 30, 2023	Sep. 30, 2023	May 23, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Common stock, shares issued						34,087,201	34,087,201		23,355,432
Purchase price per share						$ 18.00	$ 18.00
Fixed maturity consideration description							At any time prior to the Maturity Date, and in accordance with the terms of the Backstop Agreement, the Backstop Parties may elect an Optional Early Termination to sell some or all of the Backstop Shares. If the Backstop Parties sell any shares prior to the Maturity Date, the pro-rata portion of the Prepayment amount is due back to the Company. As of September 30, 2023, the Backstop Parties have sold 143,261 Backstop Shares, for which the Company has received net proceeds of $1,443,854, after paying related fees to the Backstop Parties. Depending on the manner in which the Backstop Agreement is settled, the Company may never have access to the full Prepayment
Maturity consideration								$ 6,667,667
Aggregate gross purchase price							$ 494,000
Loss on extinguishment of debt						$ 224,000	1,208,000
Loss on extinguishment of debts							13,595,400
Interest expense						0	36,852
Payments for underwriting expenses							$ 3,150,000
Right ot pay underwriting description							The Company has a right to pay up to fifty percent (50%) of the principal and interest due on this promissory note using the common stock of the Company at a price per share of $10.56. The remaining fifty percent (50%) of the principal and interest due on this promissory note must be paid in cash.
Loan for debt interest						72,450	$ 180,338
Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Short term borrowings						2,100,000	2,100,000
Long term debt fair value						$ 500,000	$ 500,000
Maximum [Member]
Business Acquisition [Line Items]
Deferred amounts bear interest						9.00%	9.00%
Debt instrument interest rate effective percentage when default						24.00%	24.00%
Maximum [Member] \| Sponsor [Member]
Business Acquisition [Line Items]
Other accrued interest rate						15.00%	15.00%
Minimum [Member] \| Sponsor [Member]
Business Acquisition [Line Items]
Other accrued interest rate						8.00%	8.00%
Backstop Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued		1,350,000,000
Number of purchase of shares						4,885,466
Backstop Agreement [Member] \| Maximum [Member]
Business Acquisition [Line Items]
Number of purchase of shares						8,000,000
Purchase price per share						$ 10.56	$ 10.56
Meteora Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued	2,667,667		2,666,667
Maturity Consideration [Member]
Business Acquisition [Line Items]
Number of purchase of shares						8,000,000
Purchase price per share						$ 2.50	2.50
Backstop Forward Purchase Agreement [Member]
Business Acquisition [Line Items]
Backstop forward purchase agreement, value		$ 37,345,985
Share price		$ 10.56
Payment to backstop parties for backstop forward purchase agreement		$ 51,606,389
Fixed Maturity Consideration [Member] \| Maximum [Member]
Business Acquisition [Line Items]
Number of shares issued						8,000,000
Share price						$ 2.50	$ 2.50
Fixed Maturity Consideration [Member] \| Minimum [Member]
Business Acquisition [Line Items]
Number of shares issued						4,885,466
Common Stock Purchase Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued							75,000
Aggregate gross purchase price				$ 75,000,000
Fair value issuance							$ 493,500
Commitment costs							$ 493,500
Business Combination Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued							1,365,000
Common stock in exchange for extensions						200,000	200,000
Common Stock [Member]
Business Acquisition [Line Items]
Additional Shares issued to sponsor							1,365,000,000
Warrants exercisable		511,712
Exercise price		$ 8.06
Number of shares issued							75,000,000
Aggregate gross purchase price
Common Stock [Member] \| Polar Agreement [Member] \| Maximum [Member]
Business Acquisition [Line Items]
Number of shares issued			8,000,000
Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Business acquisition description of acquired entity					(a) in the event that the volume-weighted average price (the “VWAP”) of the Company’s common stock exceeds $15.00 per share for twenty (20) out of any thirty (30) consecutive trading days beginning on the Closing date until the 36-month anniversary of the Closing, the Legacy Ocean Stockholders shall be entitled to receive an additional 5,000,000 shares of the Company’s common stock, (b) in the event that the VWAP of the Company’s common stock exceeds $17.50 per share for twenty (20) out of any thirty (30) consecutive trading days beginning on the Closing date until the 36-month anniversary of the Closing, the Legacy Ocean Stockholders shall be entitled to receive an additional 7,000,000 shares of the Company’s common stock and (c) in the event that the VWAP of the Company’s common stock exceeds $20.00 per share for twenty (20) out of any thirty (30) consecutive trading days beginning on the Closing date until the 36-month anniversary of the Closing, the Legacy Ocean Stockholders shall be entitled to receive an additional 7,000,000 shares of the Company’s common stock. In addition, for each issuance of Earnout Shares, the Company will also issue to Sponsor an additional 1,000,000 shares of the Company’s common stock.
Aesther Healthcare Acquisition Corp [Member] \| Maximum [Member]
Business Acquisition [Line Items]
Number of shares issued					19,000,000
Aesther Healthcare Acquisition Corp [Member] \| Backstop Forward Purchase Agreement [Member]
Business Acquisition [Line Items]
Backstop forward purchase agreement, value		$ 14,260,404
Backstop agreement, shares		3,535,466
Share price		$ 10.56
Additional backstop forward purchase agreement, shares		1,350,000
New Ocean Biomedical [Member] \| Common Stock [Member]
Business Acquisition [Line Items]
Warrants exercisable		102,342,000
Exercise price		$ 7.47
Vellar Backstop Agreement [Member] \| Common Stock [Member]
Business Acquisition [Line Items]
Purchase of common stock					8,000,000
Purchase of common stock, value					$ 80,000,000
Common Class A [Member]
Business Acquisition [Line Items]
Common stock, shares issued		23,355,432
Payments to acquire businesses gross		$ 233,554,320
Common Class A [Member] \| Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Additional Shares issued to sponsor		1,365,000,000
Purchase of common stock		1,200,000,000
Common Class B [Member]
Business Acquisition [Line Items]
Conversion of stock shares converted		3,535,466,000
Common Class B [Member] \| Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Conversion of stock shares converted		2,625,000,000
Common stock conversion basis		converted on a one-for-one basis into shares of AHAC’s Class A common stock
Backstop forward purchase agreement, value		$ 12,675,912,000

Senior Secured Convertible Notes (Details Narrative) - USD ($)		1 Months Ended	3 Months Ended		9 Months Ended
	May 31, 2023	May 31, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Cash			$ 31,000		$ 31,000		$ 34,000
Other income (expense)	$ 626,600		(3,000)	$ 1,000	$ (6,000)	$ 7,000
Investor [Member]
Other income (expense)			$ 109,816
Number of shares of common stock			24,477
Senior Secured Convertible Notes [Member]
Principal amount	$ 7,560,000	$ 7,560,000
Warrants to purchase shares	552,141	552,141
Warrant intial exercise price	$ 10.34	$ 10.34
Debt term	5 years
Proceeds from convertible debt	$ 8,640,000
Debt instrument description	(i) 8% per annum and (ii) the greater of (x) 5% per annum and (y) the sum of (a) the “secured overnight financing rate,” which from time to time is published in the “Money Rates” column of The Wall Street Journal (Eastern Edition, New York Metro), in effect as of such date of determination and (b) 2% per annum
Percentage average market capitalization		35.00%
Senior Secured Convertible Notes [Member] \| Affiliates and Other Related Parties [Member]
Ownership percentage	9.99%	9.99%
Senior Secured Convertible Notes [Member] \| Maximum [Member]
Principal amount	$ 27,000,000	$ 27,000,000
Warrant intial exercise price	$ 11.50	$ 11.50
Debt Instrument, Interest Rate, Stated Percentage	8.00%	8.00%
Debt instrument face amount	$ 10,800,000	$ 10,800,000
Cash	3,000,000	3,000,000
Senior Secured Convertible Notes [Member] \| Minimum [Member]
Cash	1,500,000	$ 1,500,000
2023 Convertible Note and SPA Warrant [Member]
Other income (expense)	$ 461,000

License and Manufacturing Agreements

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

License and Manufacturing Agreements

12. License and Manufacturing Agreements

Elkurt/Brown License Agreements

In 2020, the Company entered into four separate Exclusive License Agreements (the “Initial Brown License Agreements”) with Elkurt, Inc.(“Elkurt”), a licensee of Brown University, which were subsequently amended in 2021 and 2022. Elkurt is a company formed by the Company’s scientific co-founders and members of our Board, Jack A. Elias, M.D., former Dean of Medicine and current Special Advisor for Health Affairs to Brown University, and Jonathan Kurtis, M.D., PhD, Chair of the Department of Pathology and Laboratory Medicine at Brown University. Under the Initial Brown License Agreements, Elkurt grants the Company exclusive, royalty-bearing licenses to patent rights and nonexclusive, royalty-bearing licenses to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in certain fields.

The latest amendment, executed on November 13, 2023, (i) extended the date after which Elkurt can terminate the license agreements if the Company has not raised at least $10.0 million in equity financing by May 1, 2024 and (ii) extended the dates of the commercialization plan of the license agreement to an additional three years.

For each of the Initial Brown License Agreements, as amended, the Company is required to pay Elkurt (i) a maintenance fee of $67,000 increased by interest at the rate of 1% per month from October 15, 2021 until paid and (ii) an annual license maintenance fee of $3,000 beginning on January 1, 2022, which increases to $4,000 on January 1, 2028. In addition, upon successful commercialization, the Company is required to pay Elkurt (i) between 0.5% to 1.5% of net sales based on the terms of each of the Initial Brown License Agreements and (ii) 25% of all non-royalty sublicense income prior to the first commercial sale, and 10% of non-royalty sublicense income thereafter, in the event that the Company enters into sublicenses for the subject intellectual property. If net sales or non-royalty sublicense income are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%. As of September 30, 2023, the Company recorded annual license maintenance fees of $24,000, and license fees of $268,000.

The Company will also pay Elkurt developmental and commercialization milestone payments for each of the Initial Brown License Agreements ranging from $50,000 for the filing of an Investigational New Drug Application (“IND”), or the equivalent outside of the United States, to $250,000 for enrollment of the first patient in a Phase 3 clinical trial in the United States or the equivalent outside of the United States. The Company is also responsible for reimbursement of patent costs. The Company records reimbursement of patent costs as general and administrative costs in the condensed consolidated statements of operations as incurred. As of September 30, 2023, the Company has incurred reimbursed patent costs expenses to Brown University in the amount of $408,661 of which $379,221 has been paid.

The contract term for each of the Initial Brown License Agreements, as amended, continues until the later of (i) the date on which the last valid claim expires or (ii) ten years. Either party may terminate each of the Initial Brown License Agreements in certain situations, including Elkurt being able to terminate the Initial Brown License Agreements at any time and for any reason after May 1, 2024, as discussed above. For the oncology programs, three of the license agreements have been sublicensed to the Company’s subsidiary, Ocean ChitoRx Inc, and for the fibrosis program, one license agreement has been sublicensed to the Company’s subsidiary, Ocean ChitofibroRx Inc.

Brown Anti-PfGARP Small Molecules License Agreement

On September 13, 2022, the Company entered into an additional Exclusive License Agreement (the “Brown Anti-PfGARP Small Molecules License Agreement”) with Elkurt. Under the Brown Anti-PfGARP Small Molecules License Agreement, Elkurt grants the Company an exclusive, royalty-bearing license to patent rights and a nonexclusive, royalty-bearing license to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in the field of malaria research.

For the Brown Anti-PfGARP Small Molecules License Agreement, the Company is required to pay Elkurt (i) an initial license fee of $70,000 which was paid during the second quarter of 2023 and (ii) an annual license fee maintenance fee of $3,000 beginning on September 13, 2023, which increases to $4,000 annually on September 13, 2028. Upon successful commercialization, based on the terms of the agreement, the Company is required to pay Elkurt (i) 1.25% of net sales and (ii) Elkurt 25% of all non-royalty sublicense income prior to the first commercial sale, and 10% of non-royalty sublicense income thereafter, in the event that the Company enters into sublicenses for the subject intellectual property. If net sales or non-royalty sublicense income are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%. The Company also is required to pay Elkurt $100,000 in the event that the Company or one of its sublicensees sublicenses this technology to a major pharmaceutical company or if the license agreement or any sublicense agreement for this technology is acquired by a major pharmaceutical company. A major pharmaceutical company is one that is publicly traded, with market capitalization of at least $5.0 billion and has been engaged in drug discovery, development, production and marketing for no less than 5 years.

The Company will also pay Elkurt developmental and commercialization milestone payments pursuant to the Brown Anti-PfGARP Small Molecules License Agreement ranging from $50,000 for the filing of an IND, or the equivalent outside of the United States, to $250,000 for enrollment of the first patient in a Phase 3 clinical trial in the United States or the equivalent outside of the United States. The Company is also responsible for reimbursement of patent costs.

The contract term for the Brown Anti-PfGARP Small Molecules License Agreement continues until the later of (i) the date on which the last valid claim expires or (ii) ten years. Either party may terminate the Brown Anti-PfGARP Small Molecules License Agreement in certain situations, including Elkurt being able to terminate the Brown Anti-PfGARP Small Molecules License Agreement at any time and for any reason after May 1, 2024 if the Company has not raised at least $10,000,000 in equity financing by then.

Refer to Note 13, Related Party Transactions, for further detail on the Company’s relationship to Elkurt.

Rhode Island License Agreement

In January 2021, the Company entered into an Exclusive License Agreement (the “Rhode Island License Agreement”) with Elkurt, a licensee of Rhode Island Hospital, as subsequently amended throughout that year. Under the Rhode Island License Agreement, as amended, Elkurt grants the Company an exclusive, royalty-bearing license to patent rights and a nonexclusive, royalty-bearing license to know-how, solely to make, have made, market, offer for sale, use, and sell licensed products for use in a certain field.

For the Rhode Island License Agreement, the Company was required to pay Elkurt (i) $110,000, due within 45 days of an equity financing of at least $10.0 million or November 1, 2023, whichever comes first, and (i) an annual maintenance fee of $3,000 beginning on January 1, 2022, which increases to $4,000 annually on January 1, 2029. As of the filing date of this Quarterly Report, next steps for the licensing agreements are still being negotiated.

Upon successful commercialization, under the terms of the agreement, the Company is also required to pay Elkurt (i) 1.5% of net sales and (ii) 25% of all nonroyalty sublicense income prior to the first commercial sale, and 10% of non-royalty sublicense income thereafter, in the event that the Company enters into sublicenses for the subject intellectual property. If net sales or non-royalty sublicense income are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%. The Company will also pay Elkurt developmental and commercialization milestone payments under the Rhode Island License Agreement, ranging from $50,000 for the filing of an IND, or the equivalent outside of the United States, to $250,000 for enrollment of the first patient in a Phase 3 clinical trial in the United States or the equivalent outside of the United States. To date, the Company has incurred total reimbursed patent costs expenses to Rhode Island Hospital in the amount of $485,216 of which $229,393 has been paid. As of September 30, 2023, the Company recorded an expense for the annual license maintenance fee of $3,000 and the initial license fee of $110,000.

The contract term for the Rhode Island License Agreement began February 1, 2020 and will continue until the later of (i) the date on which the last valid claim expires or (ii) fifteen years. Either party may terminate the Rhode Island License Agreement in certain situations, and as discussed above, the next steps for the licensing agreements are still being negotiated. The Rhode Island License Agreement has been sublicensed to the Company’s subsidiary, Ocean Sihoma Inc.

Refer to Note 13, Related Party Transactions, for further detail on the Company’s relationship to Elkurt.

Development and Manufacturing Services Agreement

In December 2020, the Company entered into a Development and Manufacturing Services Agreement with Lonza AG and affiliate Lonza Sales AG (“Lonza”). The Company engaged Lonza pursuant to the development and manufacture of certain products and services along with the assistance in developing the product OCX-253. The agreement outlines the pricing for services and raw materials as incurred and payment terms. Through September 30, 2023, the Company has incurred an aggregate of $598,663 in expenses under this agreement since its inception, all of which is included in accounts payable at September 30, 2023.

The Development and Manufacturing Services Agreement will terminate on December 31, 2025. Either party may terminate the agreement within 60 days after it becomes apparent to either party that it will not be possible to complete the services for a scientific or technical reason after a good faith effort is made to resolve such problems. The agreement may be terminated by either party, immediately for any uncured material breach, insolvency, or liquidation. In the event of termination, the Company will pay Lonza all costs incurred through the termination date.

Condensed Consolidated Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Operating expenses:
Research and development	$ 305,000	$ 1,858,000	$ 726,000	$ 8,248,000
General and administrative	2,350,000	1,315,000	10,148,000	6,935,000
Total operating expenses	2,655,000	3,173,000	10,874,000	15,183,000
Operating loss	(2,655,000)	(3,173,000)	(10,874,000)	(15,183,000)
Other income/(expense):
Change in fair value of 2023 Convertible Note, SPA Warrant, and the Ayrton Note Purchase Option	570,000		(589,000)
Loss in connection with Share Consideration shares			(12,676,000)
Loss in connection with Backstop Put Option Liability and Fixed Maturity Consideration	(11,373,000)		(45,404,000)
Fair value of warrant issuances		(435,000)	(2,301,000)	(1,074,000)
Fair value of non-cash stock issuances	(109,000)		(686,000)
Transaction costs			(8,732,000)
Loss on extinguishment of debt	(224,000)		(15,080,000)
Interest expense, including amortization of debt issuance costs	(293,000)	(61,000)	(1,262,000)	(126,000)
Other	(3,000)	1,000	(6,000)	7,000
Total other income/(expense)	(11,432,000)	(495,000)	(86,736,000)	(1,193,000)
Net loss	$ (14,087,000)	$ (3,668,000)	$ (97,610,000)	$ (16,376,000)
Weighted average shares outstanding, basic	26,605,147	23,355,432	25,980,292	23,355,432
Weighted average shares outstanding, diluted	26,605,147	23,355,432	25,980,292	23,355,432
Net loss per share, basic	$ (0.53)	$ (0.16)	$ (3.76)	$ (0.70)
Net loss per share, diluted	$ (0.53)	$ (0.16)	$ (3.76)	$ (0.70)

Commitments and Contingencies (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
	Feb. 14, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Loss Contingencies [Line Items]
General and administrative		$ 2,350,000	$ 1,315,000	$ 10,148,000	$ 6,935,000
Director and Officers [Member]
Loss Contingencies [Line Items]
Total annual premiums	$ 1,200,000
Director and Officers [Member] \| Premiums Receivable [Member]
Loss Contingencies [Line Items]
General and administrative				1,076,936
Contingent Payable Based On Company [Member]
Loss Contingencies [Line Items]
Contingent payments				14,590,121
First Cumulative Capital [Member]
Loss Contingencies [Line Items]
Contingent payments				50,000,000
Contingent Compensation [Member]
Loss Contingencies [Line Items]
Contingent payments				12,403,625
Contingent Vendor Payments [Member]
Loss Contingencies [Line Items]
Contingent payments				2,050,000
Related Party Expense [Member]
Loss Contingencies [Line Items]
Contingent payments				$ 136,496

Equity

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Equity

9. Equity

Common Stock

The holders of common stock of the Company are entitled to dividends when and if declared by the Company’s Board of Directors. The holders of common stock are entitled to one vote per share on all matters to be voted upon by the stockholders. As of September 30, 2023, the Company had 300,000,000 authorized shares of common stock with a par value of $0.0001 per share. As of December 31, 2022, the Company had 180,564,262 authorized shares of common stock with a par value of $0.0001 per share.

Profit Interests in Poseidon

Legacy Ocean’s founder and then sole stockholder was issued 17,454,542 shares of Legacy Ocean’s common stock (“Founders Shares”) upon the formation of Legacy Ocean on January 2, 2019. After inception and prior to the Business Combination, the majority of the Founders Shares were contributed to Poseidon Bio, LLC (“Poseidon”), with Poseidon subsequently granting Class A and Class B profit interests to Legacy Ocean’s founder and other certain executives and employees, respectively, and resulting in Legacy Ocean’s founder holding 100% of the voting power of Poseidon. Further, after inception and prior to the Business Combination, Legacy Ocean implemented reverse stock splits which are appropriately reflected as applicable to the condensed consolidated financial statements.

These profit interests grants in the Company’s controlling shareholder were deemed to be transactions incurred by the shareholder and within the scope of ASC 718, Stock Compensation. As a result, the related transactions by the shareholder were pushed down into the Company’s condensed consolidated financial statements. As of September 30, 2023, Legacy Ocean’s founder held 100% of the voting power and 68% of the equity interests in Poseidon. The related stock-based compensation recognized is discussed below.

Stock Options

2022 Stock Option and Incentive Plan

The Company’s Board of Directors (“the Board”) approved and adopted the 2022 Stock Option and Incentive Plan and Form of Non-Qualified Stock Option Agreement for Non-Employee Directors (the “Incentive Plan”) prior to the Closing of the Business Combination.

The maximum number of shares of common stock that may be initially issued or transferred pursuant to awards under the Incentive Plan equals 4,360,000 shares (the “Share Limit”). The Share Limit will automatically increase on the first trading day in January of each calendar year during the term of the Incentive Plan, with the first such increase to occur in January 2024, by an amount equal to the lesser of (i) three percent (3%) of the total number of shares of common stock issued and outstanding on December 31 of the immediately preceding calendar year or (ii) such number of shares of common stock as may be established by the Board.

The Incentive Plan authorizes stock options, stock appreciation rights, and other forms of awards granted or denominated in the Company’s common stock or units of the Company’s common stock, as well as cash bonus awards. The Incentive Plan retains flexibility to offer competitive incentives and to tailor benefits to specific needs and circumstances. Any award may be structured to be paid or settled in cash. Any awards under the Incentive Plan (including awards of stock options and stock appreciation rights) may be fully-vested at grant or may be subject to time- and/or performance-based vesting requirements.

The Incentive Plan does not limit the authority of the Board or any committee to grant awards or authorize any other compensation, with or without reference to the Company’s common stock, under any other plan or authority. The Board may amend or terminate the Incentive Plan at any time and in any manner. Stockholder approval for an amendment will be required only to the extent then required by applicable law or deemed necessary or advisable by the Board. Unless terminated earlier by the Board and subject to any extension that may be approved by stockholders, the authority to grant new awards under the Incentive Plan will terminate on the tenth anniversary of its establishment.

Stock Options to Non-Employee Directors

Under the Non-employee Director Compensation Policy, upon initial election or appointment to the Board, each new non-employee director will be granted under the Incentive Plan a one-time grant of a non-statutory stock option to purchase 75,000 shares of its common stock on the date of such director’s election or appointment to the Board, issuable under the incentive plan. These will vest in substantially equal monthly installments over three years, subject to the director’s continued service as a member of the Board through each applicable vesting date.

On February 15, 2023, 75,000 options were granted to each of the non-employee directors at a strike price of $10.00 per share.

The estimated fair value of a non-statutory stock option to purchase common stock on the grant date was $3.73 per share and was determined using the Black-Scholes Merton model. The stock-based compensation recorded for the three and nine months ended September 30, 2023 was $186,370 and $1,018,364, respectively, was recorded within general and administrative expense in the Company’s condensed consolidated statements of operations, as discussed below. The total unrecognized compensation related to unvested stock option awards granted was $1,801,936 which the Company expects to recognize over a weighted-average period of approximately 2.4 years.

2022 Employee Stock Purchase Plan

The Board approved and adopted the 2022 Employee Stock Purchase Plan (the “ESPP”) prior to the Closing of the Business Combination.

Subject to adjustment, 2,180,000 shares of common stock are available for purchase pursuant to the exercise of options under the ESPP. Shares to be delivered upon exercise of options under the ESPP may be authorized but unissued stock, treasury stock, or stock acquired in an open-market transaction. Subject to certain requirements and exceptions, all individuals classified as employees on the payroll records of the Company or its subsidiaries are eligible to participate in any one or more of the offerings under the ESPP.

The ESPP allows eligible employees to purchase shares of common stock during specified offering periods, with such offering periods not to exceed 27 months. During each offering period, eligible employees will be granted an option to purchase shares of common stock on the last business day of the offering period. The purchase price of each share of common stock issued pursuant to the exercise of an option under the ESPP on an exercise date will be 85% (or such greater percentage as specified by the administrator of the ESPP) of the lesser of: (a) the fair market value of a share of common stock date the option is granted, which will be the first day of the offering period, and (b) the fair market value of a share of common stock on the exercise date, which will the last business day of the offering period.

The Board has discretion to amend the ESPP to any extent and in any manner it may deem advisable, provided that any amendment that would be treated as the adoption of a new plan for purposes of Section 423 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) will require stockholder approval. The Board may suspend or terminate the ESPP at any time.

Stock-Based Compensation

The Company recognizes stock-based compensation costs for equity-based compensation awards granted to employees, nonemployees, and directors in accordance with GAAP. The Company estimates the fair value and the resulting amounts using the Black-Scholes option-pricing model. The fair value is recognized on a straight-line basis over the requisite service periods but accelerated to the extent that grants vest sooner than on a straight-line basis. Forfeitures are accounted for as they occur and requires management to make a number of other assumptions, including the volatility of the underlying shares, the risk-free interest rate, and expected dividends. Expected volatility is based on the historical share volatility of a set of comparable publicly traded companies over a period of time equal to the expected term of the grant or option.

Stock-based compensation for the three and nine months ended September 30, 2023 consisted of costs related to (i) stock options granted to non-employee directors in the first quarter of 2023 and (ii) warrants issued to advisors and consultants, as discussed below. Stock-based compensation for the three and nine months ended September 30, 2022 solely consisted of costs related to the profit interests in Poseidon. The following table summarizes the allocation of stock-based compensation for the stock options, warrants, and Class B profit interests for the three and nine months ended September 30, 2023 and 2022, respectively:

(in thousands)	2023		2022		2023		2022
	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Stock-based compensation:
Research and development ⁽¹⁾	$	-	$	1,859	$	-	$	8,231
General and administrative ⁽²⁾		186		1,075		1,018		4,147
Total stock-based compensation	$	186	$	2,934	$	1,018	$	12,378

	⁽¹⁾	As discussed above, certain executives and employees of the Company hold profit interests in Poseidon. The fair value of these profit interest were recorded on the grant dates at fair value utilizing an option-pricing model under which interests are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class, adjusted for a discount for the lack of marketability to account for a lack of access to an active public market. As of the end of fiscal 2022, the profit interests were fully amortized.
	⁽²⁾	In March 2023, the Company issued warrants to advisors and consultants as discussed below in Note 10, Warrants. Refer to discussion below for further detail. Also included in general and administrative expense is the stock-based compensation expense for the options awards to non-employee directors.

As discussed above, as of September 30, 2023, there was $1,801,936 of unamortized stock-based compensation, to be recognized over a weighted-average period of approximately 2.4 years.

- Definition

The entire disclosure for equity.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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Reference 2: http://www.xbrl.org/2003/role/disclosureRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
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Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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Reference 6: http://www.xbrl.org/2003/role/disclosureRef
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Reference 7: http://www.xbrl.org/2003/role/disclosureRef
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-Name Accounting Standards Codification
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Paragraph 1
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Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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-Paragraph 1
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Reference 10: http://fasb.org/us-gaap/role/ref/legacyRef
-Topic 505
-Name Accounting Standards Codification
-Publisher FASB
-URI https://asc.fasb.org//505/tableOfContent

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
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Reference 12: http://www.xbrl.org/2003/role/disclosureRef
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Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 505
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-Paragraph 13
-Subparagraph (i)
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Reference 14: http://www.xbrl.org/2003/role/disclosureRef
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Reference 15: http://www.xbrl.org/2003/role/disclosureRef
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Reference 16: http://www.xbrl.org/2003/role/disclosureRef
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Reference 19: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounting and legal fees	$ 12,816	$ 10,250
Vendor fees	2,471	646
Research and development	647	544
Other	114
Total accounts payable and accrued expenses	$ 16,048	$ 11,440

Description of Business and Going Concern Considerations

9 Months Ended

Sep. 30, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business and Going Concern Considerations

1. Description of Business and Going Concern Considerations

Description of Business

Ocean Biomedical, Inc. (“the Company”) is a biopharmaceutical company that is focused on discovering and developing therapeutic products in oncology, fibrosis, and infectious diseases.

Restatement of previously issued consolidated financial statements

Prior to filing its financial statements for the quarter ended September 30, 2023, presented in this Report, the Company reviewed its prior interpretation of the accounting guidance applicable to certain elements of the OTC Equity Prepaid Forward Transaction (the “Backstop Agreement”) and determined the prepayment amount of $51,606,389 (the “Prepayment”), previously recorded as a derivative asset on the condensed consolidated balance sheet, should be reclassified to the stockholders’ deficit section, and the remaining liability balance associated with the Backstop Agreement, including the Backstop Put Option Liability and the Fixed Maturity Consideration (both as defined in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, should be reflected as noncurrent in the condensed consolidated balance sheet.

Business Combination

On February 14, 2023, Aesther Healthcare Acquisition Corp. (“AHAC”) completed the acquisition of Ocean Biomedical Holdings, Inc. (“Legacy Ocean”) pursuant to the definitive agreement dated August 31, 2022, and as amended on December 5, 2022 (the “Business Combination Agreement”), by and among, AHAC, AHAC Merger Sub Inc., a wholly-owned subsidiary of AHAC, Aesther Healthcare Sponsor, LLC, Legacy Ocean, and Dr. Chirinjeev Kathuria (the “Closing”). Upon Closing, AHAC Merger Sub Inc. merged with and into Legacy Ocean, with Legacy Ocean surviving the merger as a wholly-owned subsidiary of AHAC. AHAC changed its name from “Aesther Healthcare Acquisition Corp.” to “Ocean Biomedical, Inc.” and is referred to herein as “the Company.” Unless context otherwise requires, reference to “AHAC” refers to the Company prior to Closing.

Under the Business Combination Agreement, the Company acquired all outstanding capital stock of Legacy Ocean for approximately $240,000,000, in aggregate consideration before transaction and other fees, which Legacy Ocean stockholders received in the form of shares of common stock of the Company (the consummation of the business combination and other transactions contemplated by the Business Combination Agreement, collectively, the “Business Combination”).

The Business Combination was accounted for as a reverse recapitalization with Legacy Ocean as the accounting acquirer and AHAC as the acquired company for accounting purposes. Accordingly, all historical financial information presented in the unaudited condensed consolidated financial statements represents Legacy Ocean and its wholly-owned subsidiaries as Legacy Ocean is the predecessor to the Company. The wholly-owned subsidiaries include: (i) Ocean ChitofibroRx Inc., (ii) Ocean ChitoRx Inc., (iii) Ocean Sihoma Inc., and (iv) Ocean Promise, Inc.

The Company’s common stock and warrants commenced trading on the Nasdaq Stock Market LLC under the symbols “OCEA” and “OCEAW,” respectively, on February 15, 2023. Refer to Note 3, Business Combination and Backstop Agreement, for additional details.

Going Concern Considerations

The accompanying condensed consolidated financial statements are prepared in accordance with U.S. GAAP applicable to a going concern, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company had no cash inflows from operating activities for the nine months ended September 30, 2023. As of September 30, 2023, the Company had cash of $31,008, restricted cash of $1,000,000, and a working capital deficiency of $29.8 million. The Company’s current operating plan indicates it will incur losses from operations and generate negative cash flows from operating activities, given anticipated expenditures related to research and development activities and its lack of revenue generating ability at this point in the Company’s lifecycle. These events and conditions raise substantial doubt about the Company’s ability to continue as a going concern within one year after the date the financial statements are issued.

The Company will need to raise additional funds in order to advance its research and development programs, operate its business, and meet its current and future obligations as they come due. Based on the Company’s current operational plans and assumptions, which may not be realized, the Company expects to use the net proceeds from the Backstop Agreement (as defined in Note 3, Business Combination and Backstop Agreement) and future debt and equity financings, including possibly under the Common Stock Purchase Agreement (as defined in Note 3, Business Combination and Backstop Agreement) and the SPA entered into in May 2023 (as defined in Note 7, Senior Secured Convertible Notes) as well as further deferrals of certain of its accrued expenses and contingency payments due upon the closing of future financings to fund operations. However, the Company’s ability to utilize certain of its in-place financing arrangements, such as the Backstop Agreement, or execute on new sources of liquidity are dependent on various factors outside of the Company’s control, including market conditions and the performance of the Company’s common stock.

There is no assurance that the Company will be successful in obtaining additional financing on terms acceptable to the Company, if at all, and the Company may not be able to enter into collaborations or other arrangements. If the Company is unable to obtain funding, the Company could be forced to delay, reduce, or eliminate its research and development programs, which could adversely affect its business prospects and its ability to continue operations.

The accompanying condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts or the amounts and classification of liabilities that might result from the outcome of this uncertainty.

Impacts of Market Conditions on Our Business

Disruption of global financial markets and a recession or market correction, including certain ongoing effects of the COVID-19 pandemic, the ongoing military conflict between Russia and Ukraine and the related sanctions imposed against Russia, the effects of Hamas’ attack of Israel and the ensuing war, and other global macroeconomic factors such as inflation and rising interest rates, could reduce the Company’s ability to access capital, which could in the future negatively affect the Company’s liquidity and could materially affect the Company’s business and the value of its common stock.

Schedule of Securities Excluded From Computation of Diluted Loss Per Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Earnings Per Share [Abstract]
Stock options	600,000		600,000
Warrants to purchase common stock	12,602,195	375,000	12,602,195	375,000

Business Combination and Backstop Agreement (Tables)

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Elements of Business Combination

The following table reconciles the elements of the Business Combination to the unaudited condensed consolidated statements of stockholders’ equity/(deficit) and cash flows for the nine months ended September 30, 2023:

(in thousands)
Cash from AHAC trust, net of redemptions	$	52,070
Issuance costs from Business Combination		(2,049	)
Net impact on total stockholders’ equity		50,021

Non-cash offering costs		2,049
Net impact on cash provided by financing activities	$	52,070

Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)			3 Months Ended	9 Months Ended
	May 25, 2023	Feb. 14, 2023	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022	Jun. 30, 2023	Mar. 31, 2023	Dec. 31, 2022
Property, Plant and Equipment [Line Items]
Prepayment amount				$ 51,606,000
Restricted cash			$ 1,000,000	1,000,000
Deferred offering costs								$ 1,808,000
Common stock exercise price			$ 18.00	$ 18.00
Other Income [Member]
Property, Plant and Equipment [Line Items]
Deferred offering costs			$ 7,578,000	$ 7,578,000
Additional Paid-in Capital [Member]
Property, Plant and Equipment [Line Items]
Deferred offering costs							$ 2,048,530
Backstop Agreement [Member]
Property, Plant and Equipment [Line Items]
Prepayment amount			$ 51,606,389
Remaining liability						$ 45,404,000
Number of purchase of shares			4,885,466
Number of right to sell shares			4,885,466
Number of shares issued		1,350,000,000
Backstop Agreement [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Number of purchase of shares			8,000,000
Common stock exercise price			$ 10.56	$ 10.56
Maturity Consideration [Member]
Property, Plant and Equipment [Line Items]
Number of purchase of shares			8,000,000
Common stock exercise price			$ 2.50	2.50
Fixed Maturity Consideration [Member] \| Maximum [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued			8,000,000
Share price			$ 2.50	$ 2.50
Fixed Maturity Consideration [Member] \| Minimum [Member]
Property, Plant and Equipment [Line Items]
Number of shares issued			4,885,466
Securities Purchase Agreement [Member]
Property, Plant and Equipment [Line Items]
Common stock exercise price	$ 11.50
Convertible debt	$ 27,000,000
Principal amount	$ 7,560,000
Warrant acquire	552,141
Exercise term	5 years

Subsequent Events

9 Months Ended

Sep. 30, 2023

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

Management has evaluated subsequent events to determine if events or transactions occurring through the filing date of this Quarterly Report on Form 10-Q require adjustments to or disclosures in the Company’s condensed consolidated financial statements. Aside from the items discussed below, the Company did not have any subsequent events that required recognition or disclosure in the condensed consolidated financial statements for the nine months ended September 30, 2023.

On October 2, 2023, Poseidon loaned the Company $650,000 pursuant to a demand loan.

On October 2, 2023, the Company entered into a Side Letter Agreement (the “Side Letter”) with Polar. The Side Letter amended certain terms of the Polar Agreement, as discussed in Note 3, Business Combination and Backstop Agreement. The Side Letter amended the definitions of “Seller VWAP Trigger Event” and “Reset Price” as used in the Backstop Agreement as it relates to Polar and the Polar Agreement. Per the amended definitions, the (i) “Seller VWAP Trigger Event” is an event that occurs if the VWAP price is below $2.50 per share for any 20 trading days during a 30 consecutive trading day-period thereafter and (ii) the “Reset Price” is defined as $8.00. The Side Letter did not amend any terms of the Backstop Agreement as it relates to the other Backstop Parties.

The “Seller VWAP Trigger Event” for Polar occurred in October 2023 and the other Backstop Parties in November 2023. The Company received written notice from Polar on November 6, 2023 acknowledging its right to designate any date as the Maturity Date from the date of the notice to, and including, the third anniversary of the Business Combination. As of the date of this filing, two of the Backstop Parties, Polar and Meteora had not designated a Maturity Date. Refer to Note 3, Business Combination and Backstop Agreement, for further detail around the purported Maturity Date for Vellar.

Effective October 4, 2023, the Company and White Lion entered into the first amendment of the Common Stock Purchase Agreement (the “Amendment”). The Amendment is intended to afford the Company greater flexibility and provide the Company an additional alternative to issue a fixed price “Purchase Notice” under the Common Stock Purchase Agreement [at $7.00 per share if the market price for the Common Stock exceeds $9.00 per share]. In addition, on November 2, 2023, White Lion purchased 41,677 shares of the Company’s common stock under the Common Stock Purchase Agreement for which the Company received approximately $64,000.

Also on October 4, 2023, the Company issued an additional 15,173 shares to the Investor of the SPA as interest payment.

On October 11, 2023, the Company entered into an Amended and Restated Contribution Agreement (the “Contribution Agreement”) with Virion Therapeutics, LLC (“Virion”) and Poseidon Bio LLC to provide financial, technical and operational assistance to further growth and development of Virion’s Intelligent and Adaptable CD8⁺ T cell-based Immunotherapy (“VIACT”) platform. Pursuant to the Contribution Agreement, the Company acquired a 50% membership interest in Virion and purchased one membership unit of Virion for an initial contribution of 750,000 shares of the Company’s common stock, 250,000 of which were to be transferred to Virion by Poseidon Bio LLC, with the remainder due from the Company on November 30, 2023, which still remains outstanding.

In October 2023, the Company’s market capitalization fell below $100,000,000 for 10 consecutive trading days, triggering the “Initial Installment Trigger Date” under the SPA, which per the terms of the SPA, requires the Company to pay installments to the Investor commencing on November 1, 2023, in shares of the Company’s common stock, if there had been no provided there has been no “Equity Conditions Failure” (as defined in the SPA) and in cash otherwise. As of November 1, 2023, when the first installment was due, an Equity Conditions Failure was also triggered due to the daily trading volume of Company shares falling below $1,500,000 during the 20 day period preceding the Initial Installment Trigger Date. The Investor elected to defer the first installment amount to December 1, 2023, and no amounts other than de minimis have been paid.

On November 6, 2023, the Company issued 5,005 shares of common stock to the Investor upon conversion of a portion of the outstanding principal due under the 2023 Convertible Note.

On November 9, 2023, the Company received information related to a view of the Staff of the U.S. Securities and Exchange Commission (the “SEC”) that the Company understands is applicable to SPAC-related companies that have entered into “forward purchase agreements,” “pre-paid forward transactions,” and/or “backstop agreements” (collectively, “Forward Purchase Agreements”). The view relates to the accounting and reporting for certain Forward Purchase Agreements for which the repurchase price has been partially prepaid; in particular, that the prepayment amount may not be reported as an asset.

On November 10, 2023, the Audit Committee of the Company, after considering the recommendations of management, concluded that the Company’s previously issued consolidated financial statements as of and for the quarters ended March 31, 2023 and June 30, 2023 (collectively, the “Previous Financial Statements”), included in the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2023, its Quarterly Report on Form 10-Q for the quarter ended June 30, 2023, its Registration Statement on Form S-1 (Registration No. 333-271392) effective June 22, 2023, and its Registration Statement on Form S-1 (Registration No. 333-272859) effective July 7, 2023, should no longer be relied upon. Similarly, any other previously filed or furnished reports, related earnings releases, guidance, investor presentations, or similar communications of the Company describing the Previous Financial Statements should no longer be relied upon.

The determination relates to the Company’s interpretation of the aforementioned accounting guidance applicable to the Backstop Agreement. The Company determined that the prepayment amount under the Backstop Agreement, currently recorded as the backstop forward purchase agreement asset in the condensed consolidated balance sheets of the Previous Financial Statements, should be accounted for in the Stockholders’ Deficit section of the condensed consolidated balance sheets, and that the value of the prepaid forward transaction, including the minimum maturity consideration, should be accounted for as liabilities in its condensed consolidated balance sheet for the relevant periods.

As a result of the foregoing, an event of default has occurred under the 2023 Convertible Note, although no action has been taken as a result.

On November 13, 2023, the Company and Elkurt amended the Initial Brown License Agreement, which (i) extended the date after which Elkurt can terminate the license agreements if the Company has not raised at least $10,000,000 in equity financing by May 1, 2024 and (ii) extended the dates of the commercialization plan of the license agreement to an additional three years.

On November 15, 2023, Ocean Biomedical, Inc. (the “Company”) filed a Notification of Late Filing on Form 12b-25 with the Securities Exchange Commission (the “SEC”), indicating that the filing of its Quarterly Report on Form 10-Q for the period ended September 30, 2023 (the “Form 10-Q”) would be delayed, after determining that it was unable, without unreasonable effort or expense, to file the Form 10-Q by the due date of November 14, 2023.

The Company received a notice (the “Notice”) on November 22, 2023, from the Nasdaq Listing Qualifications Department (“Nasdaq”) indicating that the Company remains in non-compliance with the timely filing requirement for continued listing under Nasdaq Listing Rule 5250(c)(1), which requires listed companies to timely file all required periodic reports with the SEC.

The Notice will have no immediate effect on the listing or trading of the Company’s common stock, although there can be no assurances that further delays in the filing of the Form 10-Q will not have an impact on the listing or trading of the Company’s common stock. Nasdaq indicated that the Company must: (i) no later than January 22, 2024, submit a plan to regain compliance with respect to the filing requirement; and (ii) on or before May 20, 2024, file the delinquent Form 10-Q. The Company intends to file the delinquent Form 10-Q as soon as practicable. The Plan of Compliance was submitted and accepted requiring filing by March 31, 2024.

Heller v. Ocean Biomedical, Inc. et al., Case No. 1:23cv212. On May 23, 2023, Jonathan Heller (“Heller”) filed a civil action against the Company, Poseidon Bio LLC, Chirinjeev Kathuria and Elizabeth Ng (collectively, the “Defendants”) in the District Court of Rhode Island. Heller has asserted claims alleging that he is entitled to earned salary and various other payments following his resignation from the Company. On July 27, 2023, Defendants filed their Answer and Affirmative Defenses. In January 2024, Plaintiffs filed a default judgment, and the Company has hired counsel and is vigorously defending against said default judgment. Furthermore, Defendants intend to vigorously defend against Heller’s claims. Given the early stage of this matter and the uncertainty inherent in litigation and investigations, the Company does not currently believe it is (i) probable to incur losses or (ii) possible to develop estimates of reasonably possible losses (or a range of possible losses) for this matter.

On September 22, 2022, counsel for John Solak, a shareholder of Aesther Healthcare Acquisition Corp. (n/k/a Ocean Biomedical, Inc.) sent a demand letter to AHAC’s board demanding that certain revisions be made to AHAC’s proxy statement. Following the Closing, Solak demanded a fee in the sum of $850,000 for the alleged corporate benefit his demand provided to AHAC. To this counsel’s knowledge, no further correspondence was received, and no complaint was filed.

On March 22, 2024, the Company received a letter from counsel to Meteora Fund in reference to: (1) that certain February 12, 2023 OTC Equity Prepaid Forward Transaction (the “Confirmation”) entered into as between Ocean Biomedical Inc. (“OCEA”) and Vellar Opportunity Fund SPV LLC – Series 3; together with (2) that certain Assignment and Novation Agreement, dated February 13, 2023, in favor of Meteora. Meteora demanded payment or delivery of the Maturity Consideration, as defined in the letter, on or before March 29, 2024. The Company is currently evaluating the validity of the demand.

As of September 30, 2023, the Company is in default of its obligations with respect to Ayrton LLC as a result of, among other things, its delinquent SEC filings.

On March 4, 2024, the Company converted the Convertible Portion into 169,582 restricted shares of its common stock.

Between March 4, 2024 and March 8, 2024, the holder of its May 2022 Note sent Alternate Conversion Notices to the Company to convert the principal value and accrued and unpaid interest under its Note with the Company into shares of Company common stock pursuant to the Alternate Conversion Price mechanism in the Note. The Company is currently evaluating the situation and working with the noteholder to arrive at an equitable resolution.

Business Combination and Backstop Agreement

9 Months Ended

Sep. 30, 2023

Business Combination and Asset Acquisition [Abstract]

Business Combination and Backstop Agreement

3. Business Combination and Backstop Agreement

Business Combination

On February 14, 2023, the Company consummated its Business Combination pursuant to the terms of the Business Combination Agreement.

Upon consummation of the Business Combination and other transactions (or immediately prior to, where indicated), the following occurred:

	●	AHAC changed its name from “Aesther Healthcare Acquisition Corp.” to “Ocean Biomedical, Inc.” and is referred to herein as “the Company.” Unless the context otherwise requires, references to “AHAC” herein refer to the Company prior to Closing.

	●	AHAC issued approximately 23,355,432 shares, with an aggregate value equal to $233,554,320, of AHAC’s Class A common stock to the holders of Legacy Ocean’s securities immediately prior to the Closing, in exchange for all of the issued and outstanding capital stock of Legacy Ocean. The aggregate value was adjusted as required by the Business Combination Agreement to take into account net working capital, closing net debt and Legacy Ocean transaction expenses.

	●	The 2,625,000 shares of AHAC Class B common stock held by Aesther Healthcare Sponsor, LLC (the “Sponsor”) were converted on a one-for-one basis into shares of AHAC’s Class A common stock immediately prior to the Closing.

	●	The Backstop Parties (as defined below within Backstop Agreement) purchased 3,535,466 shares of AHAC’s Class A common stock prior to the Closing that are subject to the Backstop Agreement (these shares, referred to as the “Recycled Shares,” and the “Backstop Agreement” are both further discussed and defined below).

	●	AHAC issued an additional 1,365,000 shares of Class A common stock to the Sponsor prior to the Closing in consideration for obtaining extensions beyond the September 2022 deadline to complete an initial business combination.

	●	The Backstop Parties purchased 1,200,000 shares of AHAC’s Class A common stock in the open market for an aggregate purchase price of $12,675,912 prior to the Closing (the “Share Consideration Shares”).

	●	The Company issued to Second Street Capital, LLC (“Second Street Capital”), Legacy Ocean’s lender, three warrants (the “Converted Ocean Warrants”) exercisable to acquire that number of shares of the Company’s common stock equal to the economic value of the Legacy Ocean warrants previously issued to Second Street Capital in exchange for the termination of the Legacy Ocean warrants. The Converted Ocean Warrants are exercisable for a total of 511,712 shares of the Company’s common stock at an exercise price of $8.06 per share and 102,342 shares of the Company’s common stock at an exercise price of $7.47 per share.

	●	The Company issued to Polar (as defined below within Backstop Agreement) 1,350,000 newly issued shares of its common stock that are subject to the forward purchase provisions of the Backstop Agreement.

	●	Each share of AHAC’s Class A common stock was automatically reclassified into one share of the Company’s common stock, including the remaining shares of AHAC Class A common stock that were not redeemed.

(in thousands)
Cash from AHAC trust, net of redemptions	$	52,070
Issuance costs from Business Combination		(2,049	)
Net impact on total stockholders’ equity		50,021

Non-cash offering costs		2,049
Net impact on cash provided by financing activities	$	52,070

Earnout Shares

In addition, pursuant to Business Combination Agreement, Legacy Ocean’s stockholders prior to the Closing (the “Legacy Ocean Stockholders”) are entitled to receive from the Company, in the aggregate, up to an additional 19,000,000 shares of the Company’s common stock (the “Earnout Shares”) as follows: (a) in the event that the volume-weighted average price (the “VWAP”) of the Company’s common stock exceeds $15.00 per share for twenty (20) out of any thirty (30) consecutive trading days beginning on the Closing date until the 36-month anniversary of the Closing, the Legacy Ocean Stockholders shall be entitled to receive an additional 5,000,000 shares of the Company’s common stock, (b) in the event that the VWAP of the Company’s common stock exceeds $17.50 per share for twenty (20) out of any thirty (30) consecutive trading days beginning on the Closing date until the 36-month anniversary of the Closing, the Legacy Ocean Stockholders shall be entitled to receive an additional 7,000,000 shares of the Company’s common stock and (c) in the event that the VWAP of the Company’s common stock exceeds $20.00 per share for twenty (20) out of any thirty (30) consecutive trading days beginning on the Closing date until the 36-month anniversary of the Closing, the Legacy Ocean Stockholders shall be entitled to receive an additional 7,000,000 shares of the Company’s common stock. In addition, for each issuance of Earnout Shares, the Company will also issue to Sponsor an additional 1,000,000 shares of the Company’s common stock.

The Company has concluded that the Earnout Shares represent a freestanding equity-linked financial instrument as the arrangement (i) can be indexed to the Company’s stock and (ii) meets all of the criteria for equity classification within ASC 815-40. The Company performed the two-step analysis described within ASC 815-40-15 to determine indexation and noted that while the arrangement does contain contingencies, these contingencies are based on the market for the Company’s stock and do not preclude indexation.

Upon Closing, the fair value of the Earnout Shares was accounted for as a deemed dividend as of the Closing date. Since the entries to recognize the fair value of the Earnout Shares offset within additional paid-in capital, there is no inherent impact to the condensed consolidated financial statements. Since the Earnout Shares are contingent on the Company’s stock price, there will be no impact to outstanding shares and will not represent participating securities until the time at which the contingencies have been met.

Backstop Agreement

As discussed in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, on August 31, 2022, AHAC and Legacy Ocean entered into the Backstop Agreement with Vellar in connection with the execution of the Business Combination Agreement. Pursuant to the terms of the Backstop Agreement and its subsequent amendments, Vellar agreed to purchase up to 8,000,000 shares of AHAC’s Class A common stock in the open market in exchange for up to $80,000,000, including from other stockholders that elected to redeem in connection with the Closing and subsequently revoked their prior elections to redeem their shares, following the expiration of AHAC’s redemption offer.

On February 13, 2023, AHAC, Vellar and Legacy Ocean entered into an assignment and novation agreement with Meteora Special Opportunity Fund I, LP, Meteora Select Trading Opportunities Master, LP and Meteora Capital Partners, LP (collectively “Meteora”) (the “Meteora Agreement”), pursuant to which Vellar assigned its obligation to purchase 2,666,667 shares of the Company’s common stock under the Backstop Agreement to Meteora. In addition, on February 13, 2023, AHAC, Vellar and Legacy Ocean entered into an assignment and novation agreement with Polar Multi-Strategy Master Fund (“Polar” and, collectively with Vellar and Meteora, the “Backstop Parties”) (the “Polar Agreement”), as amended on October 2, 2023, pursuant to which Vellar assigned its obligations to 2,667,667 shares of common stock of the Company to be purchased under the Backstop Agreement to Polar.

Further, the Backstop Agreement grants the Backstop Parties the right to purchase additional shares from the Company (the “Additional Shares” and, together with the Recycled Shares (defined below), the “Backstop Shares”) up to an amount equal to the difference between the number of Recycled Shares and the maximum number of shares of 8,000,000.

As further discussed in Note 2, Basis of Presentation and Summary of Significant Accounting Policies, the Company agreed to purchase the unsold portion of the Backstop Shares from the Backstop Parties on a forward basis upon the Maturity Date. The purchase price payable by the Company includes a Prepayment from the proceeds released from the trust account related to those shares. Upon the Maturity Date, the Company is obligated to pay the Backstop Parties an amount equal to the product of (i) the maximum number of shares of 8,000,000 less the number of Terminated Shares by (ii) $2.50, defined as the Maturity Consideration in the Backstop Agreement. The Company can pay the Maturity Consideration in cash or shares of the Company’s common stock if certain conditions are met.

On February 14, 2023, (i) pursuant to the Backstop Agreement, the Backstop Parties purchased 3,535,466 shares of AHAC’s Class A common stock for $10.56 per share (the “Recycled Shares”) and (ii) pursuant to Polar’s exercise of its right to purchase Additional Shares, AHAC, Legacy Ocean and Polar entered into a subscription agreement pursuant to which Polar purchased 1,350,000 newly issued shares of the Company’s common stock at a per share purchase price of approximately $10.56 (the “Polar Subscription”). Under the Backstop Agreement, the Additional Shares are subject to the same terms as the Recycled Shares, including with regard to repayment and repurchase.

Subsequent to Closing, the Prepayment amount was equal to $51,606,389, consisting of $37,345,985 for the Recycled Shares and $14,260,404 for the Polar Subscription shares. As the $14,260,404 was a netted transaction between the Company and Polar, only $37,345,985 was paid out of the funds the Company received from AHAC’s trust account. This net impact from the payment outflow to Backstop Parties for the Backstop Agreement of $51,606,389 and the proceeds inflow from the issuance of common stock pursuant to the Backstop Agreement and Polar Subscription of $14,260,404 are reported in the Company’s condensed consolidated statement of cash flows. The Prepayment amount was accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net purchase of the Backstop Shares.

The Backstop Agreement consists of two financial instruments that are accounted for as follows:

	(i)	The in-substance written put option which is recorded in the Company’s condensed consolidated financial statements as the “Backstop Put Option Liability” and treated as a derivative liability recorded at fair value with changes in fair value recognized in net loss. The Company measures the fair value of the Backstop Put Option Liability on a recurring basis, with any fair value adjustment recorded within other income/(expense) in the condensed consolidated statements of operations. Refer to Note 4, Fair Value Measurements, for further detail.
	(ii)	The “Fixed Maturity Consideration” representing the 8,000,000 in maximum shares less the 4,885,466 Backstop Shares multiplied by $2.50. The Company has elected to measure the Fixed Maturity Consideration using the Fair Value Option (“FVO”) under ASC 825, Financial Instruments. The Company measures the fair value of the Fixed Maturity Consideration on a recurring basis, with any fair value adjustment recorded within other income/(expense) in the condensed consolidated statements of operations. Refer to Note 4, Fair Value Measurements, for further detail.

The Prepayment is accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net purchase of the Backstop Shares and sales of shares to the Backstop Parties.

At any time prior to the Maturity Date, and in accordance with the terms of the Backstop Agreement, the Backstop Parties may elect an Optional Early Termination to sell some or all of the Backstop Shares. If the Backstop Parties sell any shares prior to the Maturity Date, the pro-rata portion of the Prepayment amount is due back to the Company. As of September 30, 2023, the Backstop Parties have sold 143,261 Backstop Shares, for which the Company has received net proceeds of $1,443,854, after paying related fees to the Backstop Parties. Depending on the manner in which the Backstop Agreement is settled, the Company may never have access to the full Prepayment.

On May 23, 2023 the Company received an Equity Prepaid Forward Transaction - Valuation Date Notice (“Notice”) from Vellar stating that due to the Company’s alleged failure to timely register the shares held by Vellar, Vellar had the right to terminate the Backstop Agreement as to their portion of the shares and Vellar claimed that it is entitled to receive Maturity Consideration (as defined in the Backstop Agreement) equal to $6,667,667, which at the Company’s discretion may be paid in cash or by offset to the shares currently held by Vellar. Management takes issue with multiple aspects of the Notice including, but not limited to, Vellar’s right to terminate their portion of the Backstop Agreement and their asserted Maturity Consideration calculation. As such, the Company is consulting with advisors and other parties and is considering the potential resources and remedies it may elect to pursue and intends to assert its rights should this matter not be resolved. After a review of all applicable documents related to the Backstop Agreement, the Company believes its position with respect to the terms of the Backstop Agreement and intent of the parties is supported by the Backstop Agreement and facts and circumstances under which it was entered into. Further, given the early stage of this matter and the uncertainty inherent in litigation and investigations, the Company does not currently believe it is (i) probable to incur losses or (ii) possible to develop estimates of reasonably possible losses (or a range of possible losses) for this matter.

Common Stock Purchase Agreement

The Company is subject to the terms and conditions of (i) a common stock purchase agreement, dated September 7, 2022, and as amended on October 4, 2023 (the “Common Stock Purchase Agreement”) and (ii) a registration rights agreement, dated September 7, 2022 (the “White Lion Registration Rights Agreement”), that AHAC entered into with White Lion Capital LLC (“White Lion”). Pursuant to the Common Stock Purchase Agreement, the Company has the right from time to time at its option to sell to White Lion up to $75,000,000 in aggregate gross purchase price of newly issued shares of the Company’s common stock (the “Equity Line Shares”), subject to certain limitations and conditions set forth in the Common Stock Purchase Agreement. These limitations stipulate, among other things, that the Company may not sell, and White Lion may not purchase, shares of the Company common stock that would result in White Lion owning more than 9.99% of the outstanding common stock of the Company. The Common Stock Purchase Agreement expires after two years.

In accordance with ASC 815, Derivatives and Hedging, the Company has determined that the right to sell additional shares represents a freestanding put option, and as such, the financial instrument was classified as a derivative asset with a nominal fair value.

In consideration for the commitments of White Lion to purchase Equity Line Shares, the Common Stock Purchase Agreement included 75,000 initial commitment shares to White Lion, which had a fair value of $493,500 upon issuance. The $493,500 in commitment costs was recorded in other income/(expense) in the Company’s condensed consolidated statements of operations.

Sponsor Promissory Notes

Upon consummation of the Business Combination, the Company assumed two of AHAC’s loans, totaling $2,100,000, one of which accrued interest at 8% per annum and the other accrued interest at 15% per annum. Both loans were due within five days of Closing. $500,000 was paid down at Closing, with the remaining paid down in May 2023 via the proceeds received from the initial Note under the Ayrton Convertible Note Financing. Refer to Note 7, Senior Secured Convertible Notes, for further detail on the Notes.

In connection with the assumption of AHAC’s loans and pursuant to the terms of the Business Combination Agreement described above, the Company issued 1,365,000 shares of its common stock to the Sponsor as consideration for providing the loans to the Company (the “Sponsor Extension Shares”). In addition, pursuant to the terms of an amendment entered into prior to the paydown of the loans, the Company issued a total of 200,000 shares of its common stock in exchange for extensions of the maturity date.

The Company recognized a loss on extinguishment of debt of $224,000 and $1,208,000 in its condensed consolidated statements of operations for the three and nine months ended September 30, 2023, respectively, for the 200,000 shares issued in exchange for extensions of the maturity date, based on the grant date fair value of the shares issued. In addition, the Company recognized a loss on extinguishment of debt of $13,595,400 in its condensed consolidated statements of operations for the nine months ended September 30, 2023 for the issuance of the Sponsor Extension Shares, based on the grant date fair value. Further, the Company recorded interest expense of $0 and $36,852 in its condensed consolidated statements of operations for the three and nine months ended September 30, 2023, respectively.

Deferred Underwriting Commissions

At Closing, the underwriters for AHAC’s initial public offering (“IPO”) agreed to defer payment of $3,150,000 of deferred underwriting discounts otherwise due to them until November 14, 2023, pursuant to the terms of a promissory note. The deferred amounts bear interest at 9% per annum and 24% per annum following an event of default under the promissory note. The Company has a right to pay up to fifty percent (50%) of the principal and interest due on this promissory note using the common stock of the Company at a price per share of $10.56. The remaining fifty percent (50%) of the principal and interest due on this promissory note must be paid in cash. The amount is recorded as a short-term loan in the condensed consolidated financial statements. The Company recorded $72,450 and $180,338 of interest expense on the outstanding balance in the Company’s condensed consolidated financial statements for the three and nine months ended September 30, 2023.

Warrants

9 Months Ended

Sep. 30, 2023

Warrants

Warrants

10. Warrants

As of September 30, 2023 and December 31, 2022, the following warrants to purchase common stock were outstanding:

Schedule of Warrants

	September 30, 2023
	Issuance Date	Number of Shares Issuable		Exercise Price		Classification	Expiration
Lender/Name
Second Street Capital (1) (2)	February 2023		426,427	$	8.06	(2)		3/8/2026
Second Street Capital (1)	February 2023		85,285	$	8.06	Equity-classified		4/22/2026
Second Street Capital (1)	February 2023		102,342	$	7.47	Equity-classified		9/30/2026
Second Street Capital (1)	February 2023		75,000	$	10.34	Equity-classified		2/15/2028
Second Street Capital	March 2023		200,000	$	10.34	Equity-classified		3/29/2028
Second Street Capital	March 2023		150,000	$	11.50	Equity-classified		3/31/2028
McKra Investments warrant	March 2023		200,000	$	10.34	Equity-classified		3/28/2028
Special Forces F9 warrant	March 2023		150,000	$	11.50	Equity-classified		3/7/2028
Public Warrants	(4)		5,250,000	$	11.50	Equity-classified		2/14/2028
Private Warrants	(4)		5,411,000	$	11.50	Equity-classified		2/14/2028
SPA Warrant (3)	May 2023		552,141	$	11.50	Liability-classified		5/25/2028
			12,602,195

December 31, 2022

Issuance Date

Number of Shares Issuable

Exercise Price

Classification

Expiration

Lender/Name

Second Street Capital (1) (2)

February 2022

312,500

11.00

(2)

3/8/2026

Second Street Capital (1)

April 2022

62,500

11.00

Equity-classified

4/22/2026

Second Street Capital (1)

September 2022

75,000

10.20

Equity-classified

9/30/2026

450,000

	⁽¹⁾	Upon Closing, and as discussed in Note 3, Business Combination and Backstop Agreement, Second Street Capital’s warrants issued from Legacy Ocean in 2022 were terminated in exchange for the Converted Ocean Warrants.

	⁽²⁾	The Legacy Ocean warrant issued in February 2022 was issued with the right to put the warrant in exchange for a payment of $250,000. At the time of issuance, these warrants were recorded as a liability and as Second Street Capital had the intention to exercise the put option in the near-term, the Company determined that recording the liability at its fair value of $250,000 was appropriate.

	⁽³⁾	For further detail on the SPA Warrant, refer to Note 7, Senior Secured Convertible Notes.

	⁽⁴⁾	For further detail on the Public Warrants and Private Warrants, refer to the “Public and Private Warrants” discussion below.

In 2022 and 2023, the Company entered into certain agreements with Second Street Capital, Special Forces F9, LLC (“Special Forces”), and McKra for which it issued warrants exercisable to purchase the Company’s common stock. For each of the warrants issued, the Company utilized the guidance within ASC 480, Distinguishing Liabilities from Equity¸ to determine whether the instruments should be recorded as liabilities or as equity. For warrants that are fully vested upon issuance with a fixed life term, the instrument is classified as equity and the Company recognizes the estimated fair value of the warrant within equity on the date of grant, with the offset be recorded within (i) other income/(expense) for those issued in conjunction with loans and (ii) stock-based compensation for those issued to advisors and consultants. Further, for any warrants that are issued in connection with a loan and are not fully vested upon issuance, the fair value of the debt issuance is amortized over the set term. The estimated fair value for the equity-classified warrants is determined utilizing the Black-Scholes Merton model, as described below. For the warrant with a put option, the Company recorded a corresponding liability in its condensed consolidated balance sheets as discussed above.

In addition, the Company has Public Warrants and Private Warrants that were assumed in connection with the closing of the Business Combination. They are treated as equity-classified instruments, as discussed below.

The use of the Black-Scholes Merton model requires management to make the following assumptions:

Expected volatility: The Company estimates volatility for warrants issued by evaluating the average historical volatility of a peer group of companies for a period of time equal to the expected term of the warrants.

Expected term: Derived from the life of the warrants issued and is based on the simplified method which is essentially the weighted average of the vesting period and contractual term.

Risk-Free Interest Rate: The risk-free interest rate is based on the implied yield currently available on U.S. Treasury zero-coupon issues, with a term that is equal to the warrants’ expected term at the grant date.

Dividend Yield: The Company has not declared or paid dividends to date and does not anticipate declaring dividends. As such, the dividend yield has been estimated to be zero.

The fair value is recognized on a straight-line basis over the requisite service periods but accelerated to the extent that grants vest sooner than on a straight-line basis. Forfeitures are accounted for as they occur and requires management to make a number of other assumptions, including the volatility of the underlying shares, the risk-free interest rate, and expected dividends. Expected volatility is based on the historical share volatility of a set of comparable publicly traded companies over a period of time equal to the expected term of the grant.

Prior to the Business Combination, Legacy Ocean estimated the fair value of its common stock considering, among other things, contemporaneous valuations for its common stock prepared by third-party valuation firms and prices set forth in Legacy Ocean’s previous filings with the SEC for a proposed IPO of its common stock that was not pursued by Legacy Ocean. Upon execution of the Business Combination Agreement in September 2022, the value of the Second Street Warrants was based on the closing price of AHAC’s Class A common stock as reported on the Nasdaq Global Select Market on the grant date.

Following the Closing of the Business Combination, the value of warrants issued by the Company was based on the closing price of its common stock as reported on the Nasdaq Capital Market on the grant date. The Company estimates the fair value, based upon these values, using the Black-Scholes Merton model, which is affected principally by the life of the warrant, the volatility of the underlying shares, the risk-free interest rate, and expected dividends. Expected volatility is based on the historical share volatility of a set of comparable publicly traded companies over a period of time equal to the expected term of the warrants. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the warrant for time periods approximately equal to the expected term of the warrant. Expected dividend yield is zero based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company expenses the amount for warrants and stock-based awards within other income/(expense) and stock-based compensation, as applicable, in its condensed consolidated statements of operations.

Second Street Warrants

In connection with the Second Street Loans discussed in Note 6, Short-Term Loan Agreements, the Company issued a total of eight warrants exercisable to purchase an aggregate of 1,039,054 shares of its common stock to Second Street Capital (including the Converted Ocean Warrants, as discussed above). During the three months ended September 30, 2023 and 2022, the Company recognized $0 and $435,075, respectively, in other income/(expense) in its condensed consolidated statements of operations to record the issuance of warrants based on the estimated fair value of the awards on the date of grant. During the nine months ended September 30, 2023 and 2022, the Company recognized $1,511,625 and $824,013, respectively, in other expense in its condensed consolidated statements of operations to record the issuance of warrants based on the estimated fair value of the awards on the date of grant.

Of the warrants issued to Second Street Capital, the warrant issued in connection with the March Second Street Loan, exercisable for 200,000 shares of the Company’s common stock, was treated as a debt discount and the respective fair value is being amortized over the life of the term of the loan. For those warrants issued in exchange for maturity extensions, the Company concluded that they met the accounting requirements for debt extinguishments and as such the fair values of the warrants, as well as related fees, were recorded in full to other income/(expense) in the period of issuance, with the offset to additional paid-in capital. As of September 30, 2023, all of the warrants remain outstanding.

McKra Investments III Warrant

In connection with the McKra Loan, discussed in Note 6, Short-Term Loan Agreements, the Company issued a warrant exercisable to purchase 200,000 shares of its common stock. The warrant is being treated as a debt discount and the fair value is being amortized over the life of the term. During nine months ended September 30, 2023, the Company recognized $789,400 in other income/(expense) in its condensed consolidated statements of operations based on the estimated fair value of the awards on the date of grant. There was no related expense recognized during the three months ended September 30, 2023. As of September 30, 2023, the warrant remains outstanding.

Special Forces F9 Warrant

In connection with a strategic advisory agreement, dated March 19, 2023, between the Company and Special Forces, the Company issued to Special Forces a warrant to purchase 150,000 shares of its common stock with an exercise price of $11.50 per share exercisable until March 7, 2028. Warrants issued to advisors and consultants are also considered stock-based compensation. The estimated fair value of the warrant to purchase common stock on the grant date was $3.89 per share and was determined using the Black-Scholes Merton model.

In the first quarter of 2023, the full amount of the $583,500 of the fair value of the warrant was recognized since the warrant was fully vested upon issuance. The fair value was recorded as stock-based compensation within general and administrative expense on the Company’s condensed consolidated statements of operations. As of September 30, 2023, the warrant remains outstanding.

SPA Warrant

In connection with the Ayrton Convertible Note Financing, the Company issued to an accredited investor a warrant exercisable for 552,141 shares of its common stock. Refer to Note 7, Senior Secured Convertible Notes, for further detail.

Public and Private Warrants

The Company has a total of 10,661,000 outstanding warrants to purchase one share of its common stock with an exercise price of $11.50 per share. Of these warrants, 5,250,000 were originally issued in AHAC’s IPO (the “Public Warrants”) and 5,411,000 were originally issued in a private placement in connection with the IPO (the “Private Warrants,” and together with the Public Warrants, the “IPO Warrants”).

Each whole IPO Warrant entitles the registered holder to purchase one share of common stock at a price of $11.50 per share, subject to adjustment as discussed within the underlying agreements, at any time commencing 30 days after the completion of the Business Combination. However, the IPO Warrants are not exercisable for cash unless the Company has an effective and current registration statement covering the shares of common stock issuable upon exercise of the IPO Warrants.

The Company may call the IPO Warrants for redemption, in whole and not in part, at a price of $0.01 per warrant:

	●	at any time after the warrants become exercisable;
	●	upon not less than 30 days’ prior written notice of redemption to each warrant holder;
	●	if, and only if, the reported last sale price of the shares of common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations), for any 20 trading days within a 30-trading-day period commencing after the warrants become exercisable and ending on the third business day prior to the notice of redemption to warrant holders; and
	●	if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying such warrants.

The right to exercise will be forfeited unless the IPO Warrants are exercised prior to the date specified in the notice of redemption. On and after the redemption date, a record holder of an IPO Warrant will have no further rights except to receive the redemption price for such holder’s warrant upon surrender of such warrant. If the Company calls the IPO Warrants for redemption as described above, its management will have the option to require all holders that wish to exercise warrants to do so on a “cashless basis.” In such event, each holder would pay the exercise price by surrendering the warrants for that number of shares of the Company’s common stock equal to the quotient obtained by dividing (x) the product of the number of shares of common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below) by (y) the fair market value. The “fair market value” for this purpose shall mean the average reported last sale price of the shares of common stock for the five trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

For accounting purposes, the Company accounts for the IPO Warrants (i) in accordance with the guidance contained in ASC 480-10-25-8 and ASC 815-40 and (ii) classified as an equity instrument. The fair values of the IPO Warrants were accounted for as deemed dividends. Since the entries to recognize the fair value of the IPO Warrants offset within additional paid-in capital, there is no inherent impact to the condensed consolidated financial statements.

Additional Share Consideration

In connection with the Marketing Services Agreement, dated March 7, 2023, between the Company and Outside The Box Capital (“OTBC”), the Company issued to OTBC 13,257 shares of its common stock as consideration, pursuant to the Marketing Services Agreement, in the second quarter of 2023. The fair value of this stock issuance of $83,121 was recorded within other income/(expense) in the Company’s condensed consolidated statements of operations.

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2023

Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]

Schedule of Fair Value of Assets and Liabilities

Financial liabilities measured at fair value during the year on a recurring basis consisted of the following as of September 30, 2023:

(in thousands)	Level 1		Level 2		Level 3			Total
	Fair Value Hierarchy
(in thousands)	Level 1		Level 2		Level 3			Total
Financial liabilities:
Backstop Put Option Liability	$	-	$	-	$	(41,579	)	$	(41,579	)
Fixed Maturity Consideration		-		-		(3,825	)		(3,825	)
2023 Convertible Note ⁽¹⁾		-		-		(6,201	)		(6,201	)
SPA Warrant		-		-		(1,466	)		(1,466	)
Ayrton Note Purchase Option		-		-		(482	)		(482	)
Total financial liabilities	$	-	$	-	$	(53,553	)	$	(53,553	)

⁽¹⁾

Refer to Note 6, Short-Term Loan Agreements, for a reconciliation of the fair value of the 2023 Convertible Note to the total short-term loans, net of issuance costs in the Company’s condensed consolidated balance sheets.

Summary of Significant Inputs and Assumptions Used in Black-Scholes Merton Model

The following table summarizes some of the significant inputs and assumptions used in the Black-Scholes Merton model:

		Estimated volatility				Risk-free rate
Ayrton Note Purchase Option			15	%			4.0%-5.0	%

Schedule of Fair Value Backstop Forward Purchase Agreement Asset

The following table provides a roll forward of the aggregate fair values of the Company’s Fixed Maturity Consideration, Backstop Put Option Liability, the 2023 Convertible Note, SPA Warrant, and Ayrton Note Purchase Option for which fair value is determined using Level 3 inputs:

Level 3 Rollforward (in thousands)	Backstop Put Option Liability			Fixed Maturity Consideration			2023 Convertible Note			SPA Warrant			Ayrton Note Purchase Option
Balances as of January 1, 2023	$	-		$	-		$	-		$	-		$	-
Initial fair value measurement		(12,414	)		(3,166	)		-			-			-
Changes in fair value		(15,606	)		(126	)
Balance as of March 31, 2023		(28,020	)		(3,292	)		-			-			-
Initial fair value measurement		-			-			(5,628	)		(1,932	)		(269	)
Changes in fair value		(2,462	)		(257	)		(448	)		(250	)		(192	)
Balance as of June 30, 2023		(30,482	)		(3,549	)		(6,076	)		(2,182	)		(461	)
Changes in fair value		(11,097	)		(276	)		(125	)		716			(21	)
Balance as of September 30, 2023	$	(41,579	)	$	(3,825	)	$	(6,201	)	$	(1,466	)	$	(482	)

Backstop Forward Purchase Agreement Asset [Member]

Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]

Summary of Significant Inputs and Assumptions Used in Black-Scholes Merton Model

Estimated

volatility

Expected future

stock price

Risk-free rate

Backstop Put Option Liability and Fixed Maturity Consideration

1.95-$13.93

4.6

2023 Convertible Note and SPA Warrant [Member]

Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]

Summary of Significant Inputs and Assumptions Used in Black-Scholes Merton Model

The following table summarizes some of the significant inputs and assumptions used in the Monte-Carlo simulation:

	Estimated volatility			Range of probabilities			Risk-free rate
2023 Convertible Note		50.0	%		5%-80	%		5.5	%
SPA Warrant		80.0	%		5%-80	%		4.6	%

Loan Agreements

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Loan Agreements

6. Loan Agreements

EF Hutton Note

On February 14, 2023, Aesther Healthcare Acquisition Corp. (predecessor to the Ocean Biomedical, Inc. (collectively, the “Company”) executed and delivered a $3.15 million principal amount promissory note (“Note”) to Benchmark Investments LLC (former name of EF Hutton LLC, “EFH”). The terms of the Note call for a 9% annual interest rate, with a 24% default interest rate. The Note matured on November 14, 2023 (with interest payable since that date at 24% per annum). Under the Note, the Company is required to pay EFH 50% of the principal amount and interest thereon in cash, and has the right to convert up to 50% of the principal amount and interest due thereon into Company common stock at a per share conversion price of $10.56 (the “Convertible Portion”).

The issue at hand is how to account for the Convertible Portion. Historically, the Company has recorded the entire amount as a debt instrument for $3.15M. This was accounted for as debt as a result of an analysis of the applicable accounting guidance. Under ASU2020-06, convertible debt shall be accounted for as debt unless either the convertible instrument contains features which require bifurcation as a derivative under ASC 815 or the instrument was issued at a substantial premium. The Note does not contain features which require bifurcation as a derivative under ASC 815.

On March 4, 2024, the Company converted the Convertible Portion into 169,582 restricted shares of its common stock.

Short-term Loan Agreements

As of September 30, 2023 and December 31, 2022, the Company had the following short-term loan balances:

(in thousands)

Schedule of Short-term Loan Balances

	September 30, 2023		December 31, 2022
Short-term loans:
Second Street Loan	$	600	$	600
Second Street Loan 2		400		200
March Second Street Loan		700		-
McKra Loan		1,000		-
Underwriter Promissory Note		3,150		-
2023 Convertible Note		6,201		-
Less: issuance costs remaining to be amortized		-		(24	)
Short-term loans, net of issuance costs	$	12,051	$	776

Second Street Capital Loans

Second Street Loan

In February 2022, the Company entered into a loan agreement (the “Second Street Loan”) with Second Street Capital, pursuant to which the Company borrowed $600,000. The Second Street Loan accrues interest at the rate of 15% per annum, with principal and interest due at maturity. In connection with the loan, the Company issued a warrant to purchase 312,500 shares of the Company’s common stock, with an exercise price of $11.00 per share, exercisable until February 22, 2026. For a period of 180 days from the closing of the Company’s next financing, Second Street Capital has the right to put the warrants to the Company in exchange for a payment of $250,000. The accounting treatment for the warrants is discussed within Note 10, Warrants.

Second Street Loan 2

In April 2022, the Company entered into a second loan agreement with Second Street Capital (the “Second Street Loan 2”) to borrow $200,000, which was later amended in January 2023 to borrow an additional $200,000. 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 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 $1,000,000 to pay certain accrued expenses. Of this amount, the Company borrowed $700,000. 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 $150,000 in loan fees at maturity. Since the Company only advanced $700,000, the loan fee of $105,000 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 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:

	(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 $500,000 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 $1,200,000 towards its outstanding loans plus any accrued unpaid interest.
	(iv)	In the event the Company raises additional equity through financing arrangements of at least $25,000,000, 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 the three months ended September 30, 2023 and 2022, the Company recognized $106,383 and $61,210 of interest expense on the Second Street Loans, respectively, including $41,216 and $25,556, respectively, related to the amortization of debt issuance costs. During the nine months ended September 30, 2023 and 2022, the Company recognized $592,000 and $126,164 of interest expense on the Second Street Loans, respectively, including $425,000 and $54,167, respectively, related to the amortization of debt issuance costs.

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 $1,000,000, which bears interest at 15% per annum (the “McKra Loan”). The Company is required to pay a $150,000 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.

The McKra Loan was amended, effective as of May 2023, including the following terms:

	(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 $500,000 towards its outstanding loans.
	(iii)	Within 5 business days of the second Additional Closing (as defined in Note 7, Senior Secured Convertible Notes), the Company is required to pay $500,000 towards its outstanding loans plus any accrued unpaid interest.
	(iv)	In the event the Company raises additional equity through financing arrangements of at least $25,000,000, the Company is required to use the proceeds to repay the remainder of its outstanding loans plus any accrued unpaid interest.
	(vi)	As consideration for entering into the amendment, the Company issued 25,000 shares of its common stock to McKra. The fair value of the shares issued are recorded in the Company’s condensed consolidated statements of operations as a loss on debt extinguishment.

During the three and nine months ended September 30, 2023, the Company recognized $52,072 and $252,917 of interest expense on the McKra Loan, respectively, including $13,739 and $175,000, respectively, related to the amortization of debt issuance costs.

Underwriter Promissory Note

For a discussion of an outstanding note due to the underwriters in AHAC’s IPO, see Note 3, Business Combination and Backstop Agreement.

Schedule of Warrants (Details) - $ / shares

9 Months Ended

12 Months Ended

Sep. 30, 2023

Dec. 31, 2022

Number of Shares Issuable

12,602,195

450,000

Public Warrant [Member]

Lender name

^[1]

Public Warrants

Number of Shares Issuable

^[1]

5,250,000

Exercise price

$ 11.50

Expiration

Feb. 14, 2028

Classification

Equity-classified

Private Warrant [Member]

Lender name

^[1]

Private Warrants

Number of Shares Issuable

^[1]

5,411,000

$ 11.50

Feb. 14, 2028

Equity-classified

^[2]

SPA Warrant

Issuance Date

^[2]

2023-05

Number of Shares Issuable

^[2]

552,141

Exercise price

^[2]

$ 11.50

Expiration

^[2]

May 25, 2028

Classification

Liability-classified

Second Street Capital LLC One [Member]

Lender name

^[3],[4]

Second Street Capital

Issuance Date

^[3],[4]

2023-02

2022-02

Number of Shares Issuable

^[3],[4]

426,427

312,500

Exercise price

^[3],[4]

$ 8.06

$ 11.00

Expiration

^[3],[4]

Mar. 08, 2026

Second Street Capital LLC Two [Member]

Lender name

^[4]

Second Street Capital

Issuance Date

^[4]

2023-02

2022-04

Number of Shares Issuable

^[4]

85,285

62,500

Exercise price

^[4]

$ 8.06

$ 11.00

Expiration

^[4]

Apr. 22, 2026

Classification

^[4]

Equity-classified

Second Street Capital LLC Three [Member]

Lender name

^[4]

Second Street Capital

Issuance Date

^[4]

2023-02

2022-09

Number of Shares Issuable

^[4]

102,342

75,000

Exercise price

$ 7.47

$ 10.20

Expiration

^[4]

Sep. 30, 2026

Classification

^[4]

Equity-classified

Second Street Capital LLC Four [Member]

Lender name

^[4]

Second Street Capital

Issuance Date

^[4]

2023-02

Number of Shares Issuable

^[4]

75,000

Exercise price

$ 10.34

Expiration

^[4]

Feb. 15, 2028

Classification

^[4]

Equity-classified

Second Street Capital LLC Five [Member]

Lender name

Second Street Capital

Issuance Date

2023-03

Number of Shares Issuable

200,000

Exercise price

$ 10.34

Expiration

Mar. 29, 2028

Classification

Equity-classified

Second Street Capital LLC Six [Member]

Lender name

Second Street Capital

Issuance Date

2023-03

Number of Shares Issuable

150,000

Exercise price

$ 11.50

Expiration

Mar. 31, 2028

Classification

Equity-classified

McKra Investments [Member]

Lender name

McKra Investments warrant

Issuance Date

2023-03

Number of Shares Issuable

200,000

Exercise price

$ 10.34

Expiration

Mar. 28, 2028

Classification

Equity-classified

Special Forces F9 Warrant [Member]

Lender name

Special Forces F9 warrant

Issuance Date

2023-03

Number of Shares Issuable

150,000

Exercise price

$ 11.50

Expiration

Mar. 07, 2028

Classification

Equity-classified

[1]	For further detail on the Public Warrants and Private Warrants, refer to the “Public and Private Warrants” discussion below.
[2]	For further detail on the SPA Warrant, refer to Note 7, Senior Secured Convertible Notes.
[3]	The Legacy Ocean warrant issued in February 2022 was issued with the right to put the warrant in exchange for a payment of $250,000. At the time of issuance, these warrants were recorded as a liability and as Second Street Capital had the intention to exercise the put option in the near-term, the Company determined that recording the liability at its fair value of $250,000 was appropriate.
[4]	Upon Closing, and as discussed in Note 3, Business Combination and Backstop Agreement, Second Street Capital’s warrants issued from Legacy Ocean in 2022 were terminated in exchange for the Converted Ocean Warrants.

Schedule of Short-term Loan Balances (Details) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
2023 Convertible Note	$ 12,051	$ 776
Less: issuance costs remaining to be amortized		(24)
Short-term loans, net of issuance costs	12,051	776
Second Street Loan [Member]
Short-Term Debt [Line Items]
2023 Convertible Note	600	600
Second Street Loan 2 [Member]
Short-Term Debt [Line Items]
2023 Convertible Note	400	200
March Second Street Loan [Member]
Short-Term Debt [Line Items]
2023 Convertible Note	700
McKra Loan [Member]
Short-Term Debt [Line Items]
2023 Convertible Note	1,000
Underwriter Promissory Note [Member]
Short-Term Debt [Line Items]
2023 Convertible Note	3,150
2023 Convertible Note [Member]
Short-Term Debt [Line Items]
2023 Convertible Note	$ 6,201

Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022
Numerator:
Net loss	$ (14,087)	$ (3,668)	$ (97,610)	$ (16,376)
Denominator:
Weighted average shares of common stock outstanding, basic	26,605,147	23,355,432	25,980,292	23,355,432
Weighted average shares of common stock outstanding, diluted	26,605,147	23,355,432	25,980,292	23,355,432
Net loss per common share, basic	$ (0.53)	$ (0.16)	$ (3.76)	$ (0.70)
Net loss per common share, diluted	$ (0.53)	$ (0.16)	$ (3.76)	$ (0.70)

- Definition

The amount of net income (loss) for the period per each share of common stock or unit outstanding during the reporting period.

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-URI https://asc.fasb.org//1943274/2147481175/810-10-55-4K

Reference 35: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1A
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1A

Reference 36: http://www.xbrl.org/2003/role/disclosureRef
-Topic 220
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 1B
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482790/220-10-45-1B

Reference 37: http://www.xbrl.org/2003/role/disclosureRef
-Topic 230
-SubTopic 10
-Name Accounting Standards Codification
-Section 45
-Paragraph 2
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147482740/230-10-45-2

Reference 38: http://www.xbrl.org/2003/role/disclosureRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Subparagraph (a)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481203/810-10-50-1A

Reference 39: http://www.xbrl.org/2003/role/disclosureRef
-Topic 810
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 1A
-Subparagraph (c)(1)
-Publisher FASB
-URI https://asc.fasb.org//1943274/2147481203/810-10-50-1A

+ Details

Description of Business and Going Concern Considerations (Details Narrative) - USD ($)	3 Months Ended	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2023	Sep. 30, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Prepayment amount		$ 51,606,000
Business combination acquired description		Under the Business Combination Agreement, the Company acquired all outstanding capital stock of Legacy Ocean for approximately $240,000,000, in aggregate consideration before transaction and other fees, which Legacy Ocean stockholders received in the form of shares of common stock of the Company (the consummation of the business combination and other transactions contemplated by the Business Combination Agreement, collectively, the “Business Combination”).
Cash	$ 31,008	$ 31,008
Cash, cash equivalents, and restricted cash	1,000,000	1,000,000
Working capital	29,800,000	$ 29,800,000
Backstop Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Prepayment amount	$ 51,606,389

Accounts Payable and Accrued Expenses (Tables)

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

(in thousands)	September 30, 2023		December 31, 2022
Accounts payable and accrued expenses:
Accounting and legal fees	$	12,816	$	10,250
Vendor fees		2,471		646
Research and development		647		544
Other		114		-
Total accounts payable and accrued expenses	$	16,048	$	11,440

Basis of Presentation and Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited condensed consolidated financial statements have been prepared in conformity with U.S. GAAP and stated in U.S. dollars. Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification and Accounting Standards Updates of the Financial Accounting Standards Board (“FASB”). Certain information and note disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to those rules and regulations. In the opinion of management, the unaudited condensed consolidated financial statements reflect all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the balances and results for the periods presented. A description of the Company’s significant accounting policies is included in the Company’s audited financial statements as of December 31, 2022. These unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and related notes in the Company’s 2022 Annual Report on Form 10-K, filed with the SEC on March 31, 2023, and Form 8-K, as amended, originally filed with the SEC on February 15, 2023.

The accompanying unaudited condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries after elimination of all intercompany accounts and transactions. The subsidiaries were formed to organize the Company’s therapeutic programs in order to optimize multiple commercialization options and to maximize each program’s value.

Prior to filing the Company’s third quarter financial statements on Form 10-Q, the Company determined that its prior interpretation of the accounting guidance applicable to certain elements of the Backstop Agreement was incorrect. As a result, the Company has revised the accounting treatment of the Backstop Agreement in its financial statements as of September 30, 2023 to reclassify the Prepayment (as defined below) of $51,606,389, previously recorded as a Backstop Forward Purchase Agreement Asset in the condensed consolidated balance sheet, to the stockholders’ deficit section of the condensed consolidated balance sheet. As this change was made as of inception, the Company restated the June 30, 2023 balances in its condensed consolidated statement of stockholders’ deficit. The remaining liability balance of $45,404,000 associated with the Backstop Agreement, including the Fixed Maturity Consideration and the Backstop Put Option Liability (both as defined below), are now reflected as noncurrent liabilities in the Company’s condensed consolidated balance sheet.

The Company restated its financial statements for the quarters ended March 31, 2023 and June 30, 2023 to be consistent with this accounting treatment.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosures of contingent assets and liabilities at the date of the financial statements and reported amounts of expenses during the reporting periods. Actual results could differ from those estimates. On an ongoing basis, the Company evaluates its estimates, as applicable, including those related to the fair values of the Company’s common stock and related stock-based compensation and the valuation of (i) the Backstop Put Option Liability and Fixed Maturity Consideration (both as defined below) and (ii) the 2023 Convertible Note, SPA Warrant, and Ayrton Note Purchase Option (all defined in Note 7, Senior Secured Convertible Notes). The Company bases its estimates using Company forecasts and future plans, current economic conditions, and information from third-party professionals that management believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying value of assets and liabilities and recorded amounts of expenses that are not readily apparent from other sources and adjusts those estimates and assumptions when facts and circumstances dictate.

The Company’s results can also be affected by economic, political, legislative, regulatory or legal actions. Economic conditions, such as recessionary trends, inflation, interest rates, changes in regulatory laws and monetary exchange rates, and government fiscal policies, can have a significant effect on operations. The Company could also be affected by civil, criminal, regulatory or administrative actions, claims, or proceedings.

Restricted Cash

Restricted Cash

The Company’s restricted cash is comprised of cash that is restricted as to withdrawal or use. Restricted cash as of September 30, 2023 was $1,000,000, consisting of the portion of proceeds received from the 2023 Convertible Note, as defined in Note 7, Senior Secured Convertible Notes, that is being held in an escrow account.

Concentrations of Credit Risk, Off-balance Sheet Risk and Other Risks

Concentrations of Credit Risk, Off-balance Sheet Risk and Other Risks

The Company has held minimal cash since its inception and certain of its expenses have been primarily paid for by the proceeds from the issuance of common stock and debt.

The Company has no significant off-balance sheet arrangements, as defined in the rules and regulations of the Securities and Exchange Commission. The Company’s future results of operations involve several other risks and uncertainties. Factors that affect the Company’s future operating results and cause actual results to vary materially from expectations could include, but are not limited to, uncertainty of results of clinical trials and reaching milestones, uncertainty of regulatory approval of the Company’s product candidates, uncertainty of market acceptance of the Company’s product candidates, competition from other products, securing and protecting intellectual property, strategic relationships and dependence on key employees and research partners. The Company’s product candidates require Food and Drug Administration (“FDA”) and other non-U.S. regulatory agencies approval prior to commercial sales. There can be no assurance that any product candidates will receive the necessary approvals. If the Company were denied approval, if approval were delayed, or if approval were unable to be maintained, it could have a materially adverse impact on the Company.

Revenue

Revenue

The Company has not generated any revenue from any sources since its inception, including from product sales. The Company does not expect to generate any revenue from the sale of products in the foreseeable future. If the Company’s development efforts for its product candidates are successful and result in regulatory approval, or license agreements with third parties, the Company may generate revenue in the future from product sales. However, there can be no assurance as to when revenue will be generated, if at all.

Research and Development Expenses

Research and Development Expenses

Research and development expenses consist primarily of costs incurred for research activities, including the development of product candidates. Research and development costs are expensed as incurred. For the three and nine months ended September 30, 2023 and 2022, research and development expenses consist of expenses recognized for stock-based compensation and incurred for initial license fees, annual maintenance license fees, and services agreements. Payments associated with licensing agreements to acquire exclusive licenses to develop, use, manufacture and commercialize products that have not reached technological feasibility and do not have alternate commercial use are expensed as incurred.

Deferred Offering Costs

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting, and other third-party fees associated with equity financings such as the Business Combination as deferred offering costs until such financings are consummated. After consummation of the equity financings, these costs are recorded in stockholders’ deficit as a reduction of proceeds generated as a result of the offering. The Company recorded deferred offering costs of $2,048,530 as a reduction to the Business Combination proceeds into additional paid-in capital during the first quarter of 2023. The Company recorded $7,578,000 as a component of other income/(expense) in its condensed consolidated statements of operations as the amounts were in excess of the proceeds generated as a result of the Business Combination.

Income Taxes and Tax Credits

Income Taxes and Tax Credits

Income taxes are recorded in accordance with FASB Accounting Standards Codification 740, Income Taxes (“ASC 740”), which provides for deferred taxes using an asset and liability approach. The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse, and net operating loss (“NOL”) carryforwards and research and development tax credit (“R&D Credit”) carryforwards. Valuation allowances are provided, if based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company has recorded a full valuation allowance to reduce its net deferred income tax assets to zero. There is no provision for income taxes because the Company has incurred operating losses and capitalized certain items for income tax purposes since its inception and maintains a full valuation allowance against its net deferred tax assets. In the event the Company were to determine that it would be able to realize some or all its deferred income tax assets in the future, an adjustment to the deferred income tax asset valuation allowance would increase income in the period such determination was made. The Company accounts for uncertain tax positions in accordance with the provisions of ASC 740. When uncertain tax positions exist, the Company recognizes the tax benefit of tax positions to the extent that the benefit would more likely than not be realized assuming examination by the taxing authority. The determination as to whether the tax benefit will more likely than not be realized is based upon the technical merits of the tax position as well as consideration of the available facts and circumstances. As of September 30, 2023 and December 31, 2022, the Company had no liability for income tax associated with uncertain tax positions.

Net Loss Per Share

Net Loss Per Share

Net loss per share is computed by dividing net loss attributed to common stockholders by the weighted-average number of shares of common stock outstanding during the period, less shares subject to repurchase, and, if dilutive, the weighted-average number of potential shares of common stock. For the purposes of the diluted net loss per share calculation, common stock warrants, common stock options outstanding, and contingently issuable Earnout Shares (as defined in Note 3, Business Combination and Backstop Agreement) are considered to be potentially dilutive securities for all periods presented, and as a result, diluted net loss per share is the same as basic net loss per share for those periods.

Fair Value Measurements

Fair Value Measurements

Certain instruments of the Company are carried at fair value under U.S. GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable:

	●	Level 1—Quoted prices in active markets for identical assets or liabilities.

	●	Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other 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 Convertible Note, 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, 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 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 20 trading days during a 30 day consecutive trading-day period). On any date following the closing of the Business Combination, the Backstop Parties also have the option to early terminate the arrangement in whole or in part by providing an optional early termination date notice to the Company (the “Optional Early Termination”). For those shares that are early terminated (the “Terminated Shares”), the Backstop Parties will owe the Company an amount equal to the product of (x) the number of Terminated Shares and (y) the Redemption Price, which may be reduced in the case of certain dilutive events (the “Reset Price”).

Upon the Maturity Date, the Company is obligated to pay the Backstop Parties an amount equal to the product of (i) the maximum number of shares of 8,000,000 less the number of Terminated Shares by (ii) $2.50 (the “Maturity Consideration”). The Company can pay the Maturity Consideration in cash or shares of the Company’s common stock if certain conditions are met.

The Backstop Parties have purchased a fixed total of 4,885,466 of the Company’s common stock, referred to herein as the “Backstop Shares.” The Backstop Parties’ Optional Early Termination economically results in the Backstop Agreement operating in substance to grant the Backstop Parties’ a put option with the right to sell all or a portion of the 4,885,466 Backstop Shares. Over the three-year maturity period, the Company is entitled to either a return of the Prepayment, the underlying shares, or a combination thereof, at the sole discretion of the Backstop Parties.

For further information regarding the Backstop Agreement, refer to Note 3, Business Combination and Backstop Agreement.

Backstop Put Option Liability and Fixed Maturity Consideration

The Backstop Agreement consists of two financial instruments that are accounted for as follows:

	(i)	The in-substance written put option which is recorded in the Company’s condensed consolidated financial statements as the “Backstop Put Option Liability” and treated as a derivative liability recorded at fair value with changes in fair value recognized in net loss. The Company measures the fair value of the Backstop Put Option Liability on a recurring basis, with any fair value adjustment recorded within other income/(expense) in the condensed consolidated statements of operations. Refer to Note 4, Fair Value Measurements, for further detail.

	(ii)	The “Fixed Maturity Consideration” representing the 8,000,000 in maximum shares less the 4,885,466 Backstop Shares multiplied by $2.50. The Company has elected to measure the Fixed Maturity Consideration using the Fair Value Option (“FVO”) under ASC 825, Financial Instruments. The Company measures the fair value of the Fixed Maturity Consideration on a recurring basis, with any fair value adjustment recorded within other income/(expense) in the condensed consolidated statements of operations. Refer to Note 4, Fair Value Measurements, for further detail.

The Prepayment is accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net purchase of the Backstop Shares and sales of shares to the Backstop Parties.

The Company restated its financial statements for the quarters ended March 31, 2023 and June 30, 2023 to reflect this accounting treatment.

2023 Convertible Note, SPA Warrant, and Ayrton Note Purchase Option

2023 Convertible Note, SPA Warrant, and Ayrton Note Purchase Option

As discussed within Note 7, Senior Secured Convertible Notes, in May 2023, the Company entered into a securities purchase agreement with an accredited investor for the sale of up to three Senior Secured Convertible Notes (each, a “Note” and collectively, the “Notes”), which Notes are convertible into shares of the Company’s common stock, in an aggregate principal amount of up to $27,000,000, in a private placement. On May 25, 2023, the Company consummated the closing for the sale of (i) the initial Note in the principal amount of $7,560,000 (referred to in this Report as the “2023 Convertible Note”) and (ii) a warrant to initially acquire up to 552,141 additional shares of the Company’s common stock with an initial exercise price of $11.50 per share of common stock, subject to adjustment, exercisable immediately and expiring five years from the date of issuance (the “SPA Warrant”).

The Company has elected to account for the Notes at fair value under the fair value option, under which the Notes are initially measured at fair value and subsequently remeasured during each reporting period. Changes in fair value will be reflected within other income/(expense) in the condensed consolidated financial statements, except for the portions, if any, related to the instrument specific credit risk which would be recorded in other comprehensive income.

Further, the Company concluded that the investor’s right to acquire additional Notes is separately exercisable from the 2023 Convertible Note and the SPA Warrant. If and when the additional Notes are issued, the Company will evaluate whether to account for such additional Notes at (a) fair value under the fair value option or (b) an amortized cost. Refer to Note 7, Senior Secured Convertible Notes, for further detail on the terms of the Notes and potential future issuances.

In addition, the Company determined that the SPA Warrant was (i) freestanding from the 2023 Convertible Note and (ii) classified as a derivative liability. Accordingly, upon issuance the SPA Warrant was measured at fair value with an offset to cash proceeds from the 2023 Convertible Note, with the remainder recorded to other income/(expense) on the condensed consolidated statements of operations. The Company reassess the classification of the SPA Warrant at each reporting period and record any changes to fair value as necessary. To date, there have been no changes in classification.

In addition to the liabilities recorded for the 2023 Convertible Note and the SPA Warrant, the Company also recorded a liability for the purchase option within the SPA in favor of the investor (the “Ayrton Note Purchase Option”), which gives the investor, at its option through 2025, the right to purchase from the Company additional Notes (up to the sum of the aggregate principal amount) at one or more additional closings. The initial fair value of the instrument was recorded to other income/(expense) on the condensed consolidated statements of operations and are remeasured at each reporting period.

Emerging Growth Company

Emerging Growth Company

The Jumpstart Our Business Startups Act of 2012 permits an “emerging growth company” to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies until those standards would otherwise apply to private companies. The Company has elected to not “opt out” of this provision and, as a result, the Company will adopt new or revised accounting standards at the time private companies adopt the new or revised accounting standard and will do so until such time that the Company either (i) irrevocably elects to “opt out” of such extended transition period or (ii) no longer qualifies as an emerging growth company.

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

In August 2020, the FASB issued Accounting Standard Update (“ASU”) No. 2020-06, Debt — Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging-Contracts in Entity’s Own Equity (Subtopic 815-40) — Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity, which simplifies the accounting for convertible instruments, amends the guidance on derivative scope exceptions for contracts in an entity’s own equity, and modifies the guidance on diluted earnings per share calculations as a result of these changes. The Company early adopted ASU 2020-06 as of January 1, 2023, using a modified retrospective approach, noting the Company’s prior instruments would not be impacted by this adoption. The Company utilized the updated derivative guidance when accounting for the 2023 Convertible Note (as defined in Note 7, Senior Secured Convertible Notes).

Senior Secured Convertible Notes

9 Months Ended

Sep. 30, 2023

Senior Secured Convertible Notes

Senior Secured Convertible Notes

7. Senior Secured Convertible Notes

Senior Secured Convertible Notes

In May 2023, the Company entered into a Securities Purchase Agreement (the “SPA”) with an accredited investor (the “Investor”) for the sale of up to three Senior Secured Convertible Notes (each, a “Note” and collectively, the “Notes”), which Notes are convertible into shares of the Company’s common stock, in an aggregate principal amount of up to $27,000,000, in a private placement (the “Ayrton Convertible Note Financing”). In May 2023, the Company consummated the closing for the sale of (i) the initial note in the principal amount of $7,560,000 (the “2023 Convertible Note”) and (ii) a warrant to initially acquire up to 552,141 additional shares of the Company’s common stock with an initial exercise price of $11.50 per share of common stock, subject to adjustment, exercisable immediately and expiring five years from the date of issuance (the “SPA Warrant”). Each Note will be sold at an original issue discount of 8%. Future issuances of Notes (“Additional Closings”) are subject to satisfaction of certain conditions. At the closing of the first Additional Closing, $8,640,000 in principal amount of Notes will be issued (the “First Additional Closing Date”) and $10,800,000 in principal amount of Notes will be issued at the closing of the second Additional Closing. So long as any Notes remain outstanding, the Company and each of its subsidiaries are prohibited from effecting or entering into an agreement to effect any subsequent placement involving a Variable Rate Transaction, as defined within the SPA, other than pursuant to the White Lion Common Stock Purchase Agreement.

The interest rate applicable to each Note is, as of any date of determination, the lesser of (i) 8% per annum and (ii) the greater of (x) 5% per annum and (y) the sum of (a) the “secured overnight financing rate,” which from time to time is published in the “Money Rates” column of The Wall Street Journal (Eastern Edition, New York Metro), in effect as of such date of determination and (b) 2% per annum. Each Note will mature on the first anniversary of its issuance.

All or any portion of the principal amount of each Note, plus accrued and unpaid interest is convertible at any time, in whole or in part, at the noteholder’s option, into shares of the Company’s common stock at an initial fixed conversion price of $10.34 per share, subject to certain adjustments and alternative conditions. A noteholder will not have the right to convert any portion of a Note, to the extent that, after giving effect to such conversion, the noteholder (together with certain of its affiliates and other related parties) would beneficially own in excess of 9.99% of the shares of the Company’s common stock outstanding immediately after giving effect to such conversion. Upon a change of control of the Company, noteholders may require the Company to redeem all, or any portion, of the Notes at a price stipulated by certain conditions as discussed within the SPA.

The Notes provide for certain events of default, including, among other things, any breach of the covenants described in the SPA and any failure of Dr. Chirinjeev Kathuria to be the chairman of the Company’s Board of Directors. In connection with an event of default, the noteholders may require the Company to redeem all or any portion of the Notes, at a premium set forth in the SPA.

The Company is subject to certain customary affirmative and negative covenants regarding the rank of the Notes, the incurrence of indebtedness, the existence of liens, the repayment of indebtedness and the making of investments, the payment of cash in respect of dividends, distributions or redemptions, the transfer of assets, the maturity of other indebtedness, and transactions with affiliates, among other customary matters. The Company is also subject to financial covenants requiring that (i) the amount of the Company’s available cash equals or exceeds $3,000,000 at the time of each Additional Closing; (ii) the ratio of (a) the outstanding principal amount of the Notes, accrued and unpaid interest thereon, and accrued and unpaid late charges to (b) the Company’s average market capitalization over the prior ten trading days, not exceeding 35%; and (iii) at any time any Notes remain outstanding, with respect to any given calendar month (each, a “Current Calendar Month”) (x) the available cash on the last calendar day in such Current Calendar Month shall be greater than or equal to the available cash on the last calendar day of the month prior to such Current Calendar Month less $1,500,000.

The Company has elected to account for the Notes at fair value under the fair value option, under which the Notes will be initially measured at fair value and subsequently re-measured during each reporting period. Changes in fair value will be reflected within other income/(expense) in the condensed consolidated financial statements, except for the portions, if any, related to the instrument specific credit risk which would be recorded in other comprehensive income.

Further, the Company concluded that the right to acquire additional Notes is separately exercisable from the 2023 Convertible Note and the SPA Warrant. If and when the additional Notes are issued, the Company will evaluate whether to account for such additional Notes at (a) fair value under the fair value option or (b) an amortized cost.

In addition, the Company determined that the SPA Warrant was (i) freestanding from the 2023 Convertible Note and (ii) classified as a derivative liability. Accordingly, upon issuance the SPA Warrant was measured at fair value with an offset to cash proceeds from the 2023 Convertible Note, with the remainder of $626,600 recorded to other income/(expense) on the condensed consolidated statements of operations. The Company reassess the classification of the SPA Warrant at each reporting period and records any changes to fair value as necessary. To date, there have been no changes to the classification of the SPA Warrant.

In addition to the liabilities recorded for the 2023 Convertible Note and the SPA Warrant, the Company also recorded a liability for the Ayrton Note Purchase Option, which gives the Investor, at its option through 2025, the right to purchase from the Company additional Notes (up to the sum of the aggregate principal amount) at one or more Additional Closings. The initial recognition of this liability was measured at fair value utilizing the Black-Scholes Merton model and the fair value of $461,000 was recorded to other income/(expense) on the condensed consolidated statements of operations. The liability is recorded within current liabilities on the Company’s condensed consolidated balance sheet as of September 30, 2023. The liability is remeasured at each reporting period and the Company records any changes to fair value as necessary.

The Company issued 24,477 shares of its common stock to the Investor during the third quarter of 2023 as interest payments. A total of $109,816 was recorded to other income/(expense) for the shares issued based on the grant date fair values.

Schedule of Common Stock Issued and Outstanding (Details) - USD ($)
$ in Thousands

3 Months Ended

9 Months Ended

Sep. 30, 2023

Sep. 30, 2022

Sep. 30, 2023

Sep. 30, 2022

General and administrative

$ 186

$ 2,934

$ 1,018

$ 12,378

Total stock-based compensation

186

2,934

1,018

12,378

Research and Development Expense [Member]

General and administrative

^[1]

1,859

8,231

Total stock-based compensation

^[1]

1,859

8,231

General and Administrative Expense [Member]

General and administrative

^[2]

186

1,075

1,018

4,147

Total stock-based compensation

^[2]

$ 186

$ 1,075

$ 1,018

$ 4,147

[1]

As discussed above, certain executives and employees of the Company hold profit interests in Poseidon. The fair value of these profit interest were recorded on the grant dates at fair value utilizing an option-pricing model under which interests are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class, adjusted for a discount for the lack of marketability to account for a lack of access to an active public market. As of the end of fiscal 2022, the profit interests were fully amortized.

[2]

In March 2023, the Company issued warrants to advisors and consultants as discussed below in Note 10, Warrants. Refer to discussion below for further detail. Also included in general and administrative expense is the stock-based compensation expense for the options awards to non-employee directors.

Schedule of Fair Value of Assets and Liabilities (Details) - USD ($)
$ in Thousands

Sep. 30, 2023

Dec. 31, 2022

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Backstop Put Option Liability

$ (41,579)

Fixed Maturity Consideration

(3,825)

2023 Convertible Note

^[1]

(6,201)

SPA Warrant

(1,466)

Ayrton Note Purchase Option

(482)

Total financial liabilities

(53,553)

Fair Value, Inputs, Level 1 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Backstop Put Option Liability

Fixed Maturity Consideration

2023 Convertible Note

^[1]

SPA Warrant

Ayrton Note Purchase Option

Total financial liabilities

Fair Value, Inputs, Level 2 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Backstop Put Option Liability

Fixed Maturity Consideration

2023 Convertible Note

^[1]

SPA Warrant

Ayrton Note Purchase Option

Total financial liabilities

Fair Value, Inputs, Level 3 [Member]

Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]

Backstop Put Option Liability

(41,579)

Fixed Maturity Consideration

(3,825)

2023 Convertible Note

^[1]

(6,201)

SPA Warrant

(1,466)

Ayrton Note Purchase Option

(482)

Total financial liabilities

$ (53,553)

[1]	Refer to Note 6, Short-Term Loan Agreements, for a reconciliation of the fair value of the 2023 Convertible Note to the total short-term loans, net of issuance costs in the Company’s condensed consolidated balance sheets.

Basis of Presentation and Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2023

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

2. Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation

The Company restated its financial statements for the quarters ended March 31, 2023 and June 30, 2023 to be consistent with this accounting treatment.

Use of Estimates

Restricted Cash

Concentrations of Credit Risk, Off-balance Sheet Risk and Other Risks

The Company has held minimal cash since its inception and certain of its expenses have been primarily paid for by the proceeds from the issuance of common stock and debt.

Revenue

Research and Development Expenses

Deferred Offering Costs

Income Taxes and Tax Credits

Net Loss Per Share

Fair Value Measurements

	●	Level 1—Quoted prices in active markets for identical assets or liabilities.

	●	Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other 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.

Backstop Put Option Liability and Fixed Maturity Consideration

Backstop Agreement

For further information regarding the Backstop Agreement, refer to Note 3, Business Combination and Backstop Agreement.

Backstop Put Option Liability and Fixed Maturity Consideration

The Backstop Agreement consists of two financial instruments that are accounted for as follows:

	(i)	The in-substance written put option which is recorded in the Company’s condensed consolidated financial statements as the “Backstop Put Option Liability” and treated as a derivative liability recorded at fair value with changes in fair value recognized in net loss. The Company measures the fair value of the Backstop Put Option Liability on a recurring basis, with any fair value adjustment recorded within other income/(expense) in the condensed consolidated statements of operations. Refer to Note 4, Fair Value Measurements, for further detail.

	(ii)	The “Fixed Maturity Consideration” representing the 8,000,000 in maximum shares less the 4,885,466 Backstop Shares multiplied by $2.50. The Company has elected to measure the Fixed Maturity Consideration using the Fair Value Option (“FVO”) under ASC 825, Financial Instruments. The Company measures the fair value of the Fixed Maturity Consideration on a recurring basis, with any fair value adjustment recorded within other income/(expense) in the condensed consolidated statements of operations. Refer to Note 4, Fair Value Measurements, for further detail.

The Prepayment is accounted for as a reduction to equity to reflect the substance of the overall arrangement as a net purchase of the Backstop Shares and sales of shares to the Backstop Parties.

The Company restated its financial statements for the quarters ended March 31, 2023 and June 30, 2023 to reflect this accounting treatment.

2023 Convertible Note, SPA Warrant, and Ayrton Note Purchase Option

Emerging Growth Company

Recently Adopted Accounting Pronouncements

Accounts Payable and Accrued Expenses

9 Months Ended

Sep. 30, 2023

Payables and Accruals [Abstract]

Accounts Payable and Accrued Expenses

5. Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:

(in thousands)	September 30, 2023		December 31, 2022
Accounts payable and accrued expenses:
Accounting and legal fees	$	12,816	$	10,250
Vendor fees		2,471		646
Research and development		647		544
Other		114		-
Total accounts payable and accrued expenses	$	16,048	$	11,440

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Cash flows from operating activities
Net loss	$ (97,610)	$ (16,376)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	799
Non-cash debt issuance costs	627
Non-cash stock issuances	577
Stock-based compensation	1,018	12,378
Loss on issuance of warrants	2,301	824
Loss on extinguishment of debt	15,080
Loss in connection with Share Consideration shares	12,676
Loss in connection with Backstop Put Option Liability and Fixed Maturity Consideration	45,404
Change in fair value of 2023 Convertible Note, SPA Warrant, and the Ayrton Note Purchase Option	589
Non-cash transaction costs in excess of Business Combination proceeds	7,578
Changes in assets and liabilities:
Accounts payable and accrued expenses	2,038	2,214
Accrued expenses - related party	360
Net cash used in operating activities	(8,563)	(960)
Cash flows from financing activities
Payment to Backstop Parties for Backstop Agreement	(51,606)
Payment to Backstop Parties for Share Consideration	(12,676)
Issuance of common stock pursuant to the Backstop Agreement and Subscription Agreement	14,260
Proceeds from Backstop Agreement	1,444
Proceeds from reverse recapitalization	52,070
Proceeds from short-term loans, net of issuance costs	8,168	789
Repayments of short-term loans	(2,100)
Expenses paid by related-party shareholder		227
Net cash provided by financing activities	9,560	1,016
Total change in cash and restricted cash	997	56
Cash and restricted cash at beginning of period	34	60
Cash and restricted cash at end of period	1,031	116
Supplemental disclosure of non-cash financing activities:
Offering costs not yet paid	2,049	1,018
Non-cash stock issuances	15,766
SPA warrant liability upon issuance	$ 1,932

Equity (Tables)

9 Months Ended

Sep. 30, 2023

Equity [Abstract]

Schedule of Common Stock Issued and Outstanding

(in thousands)	2023		2022		2023		2022
	For the Three Months Ended September 30,				For the Nine Months Ended September 30,
(in thousands)	2023		2022		2023		2022
Stock-based compensation:
Research and development ⁽¹⁾	$	-	$	1,859	$	-	$	8,231
General and administrative ⁽²⁾		186		1,075		1,018		4,147
Total stock-based compensation	$	186	$	2,934	$	1,018	$	12,378

	⁽¹⁾	As discussed above, certain executives and employees of the Company hold profit interests in Poseidon. The fair value of these profit interest were recorded on the grant dates at fair value utilizing an option-pricing model under which interests are valued by creating a series of call options with exercise prices based on the liquidation preferences and conversion terms of each equity class, adjusted for a discount for the lack of marketability to account for a lack of access to an active public market. As of the end of fiscal 2022, the profit interests were fully amortized.
	⁽²⁾	In March 2023, the Company issued warrants to advisors and consultants as discussed below in Note 10, Warrants. Refer to discussion below for further detail. Also included in general and administrative expense is the stock-based compensation expense for the options awards to non-employee directors.

Warrants (Tables)

9 Months Ended

Sep. 30, 2023

Warrants

Schedule of Warrants

As of September 30, 2023 and December 31, 2022, the following warrants to purchase common stock were outstanding:

Schedule of Warrants

	September 30, 2023
	Issuance Date	Number of Shares Issuable		Exercise Price		Classification	Expiration
Lender/Name
Second Street Capital (1) (2)	February 2023		426,427	$	8.06	(2)		3/8/2026
Second Street Capital (1)	February 2023		85,285	$	8.06	Equity-classified		4/22/2026
Second Street Capital (1)	February 2023		102,342	$	7.47	Equity-classified		9/30/2026
Second Street Capital (1)	February 2023		75,000	$	10.34	Equity-classified		2/15/2028
Second Street Capital	March 2023		200,000	$	10.34	Equity-classified		3/29/2028
Second Street Capital	March 2023		150,000	$	11.50	Equity-classified		3/31/2028
McKra Investments warrant	March 2023		200,000	$	10.34	Equity-classified		3/28/2028
Special Forces F9 warrant	March 2023		150,000	$	11.50	Equity-classified		3/7/2028
Public Warrants	(4)		5,250,000	$	11.50	Equity-classified		2/14/2028
Private Warrants	(4)		5,411,000	$	11.50	Equity-classified		2/14/2028
SPA Warrant (3)	May 2023		552,141	$	11.50	Liability-classified		5/25/2028
			12,602,195

December 31, 2022

Issuance Date

Number of Shares Issuable

Exercise Price

Classification

Expiration

Lender/Name

Second Street Capital (1) (2)

February 2022

312,500

11.00

(2)

3/8/2026

Second Street Capital (1)

April 2022

62,500

11.00

Equity-classified

4/22/2026

Second Street Capital (1)

September 2022

75,000

10.20

Equity-classified

9/30/2026

450,000

	⁽¹⁾	Upon Closing, and as discussed in Note 3, Business Combination and Backstop Agreement, Second Street Capital’s warrants issued from Legacy Ocean in 2022 were terminated in exchange for the Converted Ocean Warrants.

	⁽²⁾	The Legacy Ocean warrant issued in February 2022 was issued with the right to put the warrant in exchange for a payment of $250,000. At the time of issuance, these warrants were recorded as a liability and as Second Street Capital had the intention to exercise the put option in the near-term, the Company determined that recording the liability at its fair value of $250,000 was appropriate.

	⁽³⁾	For further detail on the SPA Warrant, refer to Note 7, Senior Secured Convertible Notes.

	⁽⁴⁾	For further detail on the Public Warrants and Private Warrants, refer to the “Public and Private Warrants” discussion below.

Fair Value Measurements (Details Narrative)	9 Months Ended
Fair Value Measurements (Details Narrative)	Sep. 30, 2023
Fair Value Disclosures [Abstract]
Backstop Forward Purchase Agreement Asset Description	The value of the Backstop Put Option Liability and Fixed Maturity were calculated as the average present value over 50,000 simulated paths.

Loan Agreements (Details Narrative) - USD ($)			3 Months Ended			9 Months Ended
Loan Agreements (Details Narrative) - USD ($)	Mar. 28, 2023	Feb. 14, 2023	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Mar. 29, 2023	Apr. 30, 2022	Feb. 28, 2022
Short-Term Debt [Line Items]
Interest expense			$ 0			$ 36,852
Common Stock [Member]
Short-Term Debt [Line Items]
Warrants to purchase shares		511,712
Warrants exercise price		$ 8.06
Number of shares of common stock						75,000,000
Restricted Stock [Member]
Short-Term Debt [Line Items]
Stock conversion		169,582
Second Street Capital LLC [Member]
Short-Term Debt [Line Items]
Short term debt average outstanding						$ 500,000,000
Outstanding loans and accrued unpaid interest			1,200,000,000			1,200,000,000
Proceeds to repay the loans						$ 25,000,000,000
Number of shares of common stock						25,000,000
Interest expense			106,383		$ 61,210	$ 592,000	$ 126,164
Amortization of debt issuance costs			$ 41,216		$ 25,556	$ 425,000	$ 54,167
Second Street Capital LLC [Member] \| Common Stock [Member]
Short-Term Debt [Line Items]
Warrants to purchase shares			225,000		75,000	225,000	75,000
Second Street Capital LLC [Member] \| Loans Agreement [Member]
Short-Term Debt [Line Items]
Principal amount				$ 700,000				$ 700,000	$ 200,000	$ 600,000
Interest rate				15.00%					15.00%	15.00%
Warrants to purchase shares								200,000	62,500	312,500
Warrants exercise price				$ 10.34					$ 11.00	$ 11.00
Warrants and Rights Outstanding										$ 250,000
Short-Term Debt									$ 200,000
Loans Payable				$ 1,000,000
Loan fees	$ 150,000
Loan fee due maturity				$ 105,000
McKra Investments III Loan [Member]
Short-Term Debt [Line Items]
Short term debt average outstanding						$ 500,000,000
Outstanding loans and accrued unpaid interest			$ 500,000,000			500,000,000
Proceeds to repay the loans						$ 25,000,000,000
Number of shares of common stock						25,000,000
Interest expense			$ 52,072			$ 252,917
Amortization of debt issuance costs						$ 13,739	$ 175,000
McKra Investments III Loan [Member] \| Loans Agreement [Member]
Short-Term Debt [Line Items]
Interest rate				15.00%
Warrants to purchase shares				200,000
Warrants exercise price				$ 10.34
Number of shares of common stock				1,000,000		150,000
Promissory Note [Member] \| Benchmark Investments LLC [Member]
Short-Term Debt [Line Items]
Principal amount		$ 3,150,000
Interest rate		9.00%
Default interest rate		24.00%
Maturity date		Nov. 14, 2023
Debt description		Under the Note, the Company is required to pay EFH 50% of the principal amount and interest thereon in cash, and has the right to convert up to 50% of the principal amount and interest due thereon into Company common stock at a per share conversion price of $10.56 (the “Convertible Portion”).
Conversion price		$ 10.56

Condensed Consolidated Statements of Stockholders' Deficit (Unaudited) - USD ($) shares in Thousands, $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2021		$ 57,567	$ (64,229)	$ (6,662)
Balance, Shares at Dec. 31, 2021	17,496,370
Net loss			(16,376)	(16,376)
Stock-based compensation		12,378		12,378
Retroactive application of recapitalization
Adjusted beginning balance		57,567	(64,229)	(6,662)
Adjusted beginning balance, shares	23,355,432
Issuance of warrants		824		824
Balance at Sep. 30, 2022		70,769	(80,605)	(9,836)
Balance, Shares at Sep. 30, 2022	23,355,432
Balance at Jun. 30, 2022		67,400	(76,937)	(9,537)
Balance, Shares at Jun. 30, 2022	23,355,432
Net loss			(3,668)	(3,668)
Stock-based compensation		2,934		2,934
Issuance of warrants		435		435
Balance at Sep. 30, 2022		70,769	(80,605)	(9,836)
Balance, Shares at Sep. 30, 2022	23,355,432
Balance at Dec. 31, 2022		70,770	(81,589)	(10,819)
Balance, Shares at Dec. 31, 2022	17,496,370
Net loss			(97,610)	(97,610)
Stock-based compensation		1,018		1,018
Issuance of common stock related to short-term loans		1,595		1,595
Issuance of common stock related to short-term loans, shares	274,477
Issuance of warrants		2,301		2,301
Retroactive application of recapitalization
Retroactive application of recapitalization, shares	5,859,062
Adjusted beginning balance		70,770	(81,589)	(10,819)
Adjusted beginning balance, shares	23,355,432
Effect of Business Combination including Backstop Agreement, net of redeemed public shares		52,070		52,070
Effect of Business Combination including Backstop Agreement, net of redeemed public shares, shares	7,654,035
Backstop Agreement Prepayment		(51,606)		(51,606)
Proceeds from Backstop Agreement		1,444		1,444
Issuance of common stock pursuant to the Subscription Agreement		14,260		14,260
Issuance of common stock pursuant to the Subscription Agreement, shares	1,350,000
Issuance of common stock for extension loan shares to related party		13,595		13,595
Issuance of common stock for extension loan shares to related party, shares	1,365,000
Shares issued in consideration pursuant to the Marketing Services Agreement		83		83
Shares issued in consideration pursuant to the Marketing Services Agreement, shares	13,257
Shares issued in consideration pursuant to the Common Stock Purchase Agreement		494		494
Shares issued in consideration pursuant to the Common Stock Purchase Agreement, shares	75,000
Offering costs		(2,049)		(2,049)
Balance at Sep. 30, 2023		103,975	(179,199)	(75,224)
Balance, Shares at Sep. 30, 2023	34,087,201
Balance at Jun. 30, 2023		103,455	(165,112)	(61,657)
Balance, Shares at Jun. 30, 2023	34,012,724
Net loss			(14,087)	(14,087)
Stock-based compensation		186		186
Issuance of common stock related to short-term loans		334		334
Issuance of common stock related to short-term loans, shares	74,477
Balance at Sep. 30, 2023		$ 103,975	$ (179,199)	$ (75,224)
Balance, Shares at Sep. 30, 2023	34,087,201

Schedule of Elements of Business Combination (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022
Business Acquisition [Line Items]
Issuance costs from Business Combination	$ 7,578
Net cash provided by financing activities	9,560	$ 1,016
Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Cash from AHAC trust, net of redemptions	52,070
Issuance costs from Business Combination	(2,049)
Net impact on total stockholders’ equity	50,021
Non-cash offering costs	2,049
Net cash provided by financing activities	$ 52,070

Net loss Per Share

9 Months Ended

Sep. 30, 2023

Earnings Per Share [Abstract]

Net loss Per Share

11. Net loss Per Share

The Company computes basic loss per share using net loss attributable to stockholders and the weighted-average number of the Company’s common stock shares outstanding during each period, less shares subject to repurchase under the Backstop Agreement. Diluted earnings per share include shares issuable upon exercise of outstanding stock options and stock-based awards where the conversion of such instruments would be dilutive. The Company’s potentially dilutive securities, which include stock options, earnout shares, and warrants to purchase shares of common stock, have been excluded from the computation of diluted net loss per share as the effect would be to reduce the net loss per share. Therefore, the weighted average number of common shares outstanding used to calculate both basic and diluted net loss per share attributable to the Company’s stockholders’ is the same.

The net loss per share for the basic and diluted earnings calculations for the three and nine months ended September 30, 2023 and 2022 is as follows (in thousands, except share and per share data):

	2023			2022			2023			2022
	Three Months Ended September 30,						Nine Months Ended September 30,
	2023			2022			2023			2022
Numerator:
Net loss	$	(14,087	)	$	(3,668	)	$	(97,610	)	$	(16,376	)
Denominator:
Weighted-average shares of common stock outstanding, basic and diluted		26,605,147			23,355,432			25,980,292			23,355,432
Net loss per common share, basic and diluted	$	(0.53	)	$	(0.16	)	$	(3.76	)	$	(0.70	)

As noted above, the following securities were excluded from the computation of diluted loss per share in the periods presented, as their effect would be anti-dilutive:

	2023		2022		2023		2022
	Three Months Ended September 30,				Nine Months Ended September 30,
	2023		2022		2023		2022
Stock options		600,000		-		600,000		-
Warrants to purchase common stock		12,602,195		375,000		12,602,195		375,000

As discussed in Note 3, Business Combination and Backstop Agreement, Legacy Ocean is also entitled to receive up to an additional 19,000,000 shares of the Company’s common stock, referred to herein as the Earnout Shares. These Earnout Shares are subject to certain performance conditions that expire on the 36 month anniversary of Closing. None of these conditions have been met as of September 30, 2023.

Equity (Details Narrative) - USD ($)		3 Months Ended		9 Months Ended
Equity (Details Narrative) - USD ($)	Feb. 15, 2023	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Common stock, shares authorized		300,000,000		300,000,000		180,564,262
Common stock , par value		$ 0.0001		$ 0.0001		$ 0.0001
Common stock , shares issued		34,087,201		34,087,201		23,355,432
Option to purchase shares		600,000		600,000
Non-employee Directors [Member]
Fair value of a non-statutory stock option per share				$ 3.73
Share based compensation		$ 186,370		$ 1,018,364
Unvested stock option, granted		$ 1,801,936		$ 1,801,936
Weighted average period				2 years 4 months 24 days
2022 Stock Option and Incentive Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Shares Issued in Period				4,360,000
Board of Directors [Member]
Option to purchase shares	75,000			75,000
Class of Warrant or Right, Exercise Price of Warrants or Rights	$ 10.00
2022 Employee Stock Purchase Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Number of Shares Available for Grant		2,180,000		2,180,000
Founder Shares [Member]
Limited Liability Company or Limited Partnership, Members or Limited Partners, Ownership Interest				100.00%
Founder Shares [Member]
Common stock , par value		$ 0.0001		$ 0.0001		$ 0.0001
Common stock , shares issued						17,454,542
Founder Shares [Member] \| Poseidon Bio LLC [Member]
Ownership percentage		68.00%		68.00%

Fair Value Measurements

9 Months Ended

Sep. 30, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

4. Fair Value Measurements

Financial liabilities measured at fair value during the year on a recurring basis consisted of the following as of September 30, 2023:

(in thousands)	Level 1		Level 2		Level 3			Total
	Fair Value Hierarchy
(in thousands)	Level 1		Level 2		Level 3			Total
Financial liabilities:
Backstop Put Option Liability	$	-	$	-	$	(41,579	)	$	(41,579	)
Fixed Maturity Consideration		-		-		(3,825	)		(3,825	)
2023 Convertible Note ⁽¹⁾		-		-		(6,201	)		(6,201	)
SPA Warrant		-		-		(1,466	)		(1,466	)
Ayrton Note Purchase Option		-		-		(482	)		(482	)
Total financial liabilities	$	-	$	-	$	(53,553	)	$	(53,553	)

⁽¹⁾

During the three and nine months ended September 30, 2023, there were no transfers between Level 1, Level 2, and Level 3.

Valuation of Backstop Put Option Liability and Fixed Maturity Consideration

The Company utilized a Monte-Carlo simulation to value the Backstop Put Option Liability and Fixed Maturity Consideration. The key inputs and assumptions used in the Monte-Carlo Simulation, including volatility, expected term, expected future stock price, and various simulated paths, were utilized to estimate the fair value of the associated derivative liabilities. The value of the Backstop Put Option Liability and Fixed Maturity were calculated as the average present value over 50,000 simulated paths. The Company measures the fair value at each reporting period, with subsequent fair values to be recorded within other income/(expense) in its condensed consolidated statements of operations.

Estimated

volatility

Expected future

stock price

Risk-free rate

Backstop Put Option Liability and Fixed Maturity Consideration

1.95-$13.93

4.6

Valuation of the 2023 Convertible Note and SPA Warrant

The Company utilized a Monte-Carlo simulation at inception to value the 2023 Convertible Note and SPA Warrant. The Monte-Carlo simulation is calculated as the average present value over all simulated paths. The key inputs and assumptions used in the Monte-Carlo Simulation, including volatility, estimated market yield, risk-free rate, the probability of various scenarios, including subsequent placement and change in control, and various simulated paths, were utilized to estimate the fair value of the associated liabilities. The value of the 2023 Convertible Note and SPA Warrant was calculated as the average present value over 50,000 simulated paths. The Company will continue to measure the fair value at each reporting period, with subsequent fair values to be recorded within other income/(expense) in the Company’s condensed consolidated statements of operations.

The following table summarizes some of the significant inputs and assumptions used in the Monte-Carlo simulation:

	Estimated volatility			Range of probabilities			Risk-free rate
2023 Convertible Note		50.0	%		5%-80	%		5.5	%
SPA Warrant		80.0	%		5%-80	%		4.6	%

Valuation of the Ayrton Note Purchase Option

The Company utilized the Black-Scholes Merton model to value the Ayrton Note Purchase Option. The key inputs and assumptions used in the Black-Scholes Merton model, including volatility and risk-free rate, were utilized to estimate the fair value of the associated liability. The Company will continue to measure the fair value at each reporting period, with subsequent fair values to be recorded within other income/(expense) in the Company’s condensed consolidated statements of operations.

The following table summarizes some of the significant inputs and assumptions used in the Black-Scholes Merton model:

		Estimated volatility				Risk-free rate
Ayrton Note Purchase Option			15	%			4.0%-5.0	%

Level 3 Rollforward (in thousands)	Backstop Put Option Liability			Fixed Maturity Consideration			2023 Convertible Note			SPA Warrant			Ayrton Note Purchase Option
Balances as of January 1, 2023	$	-		$	-		$	-		$	-		$	-
Initial fair value measurement		(12,414	)		(3,166	)		-			-			-
Changes in fair value		(15,606	)		(126	)
Balance as of March 31, 2023		(28,020	)		(3,292	)		-			-			-
Initial fair value measurement		-			-			(5,628	)		(1,932	)		(269	)
Changes in fair value		(2,462	)		(257	)		(448	)		(250	)		(192	)
Balance as of June 30, 2023		(30,482	)		(3,549	)		(6,076	)		(2,182	)		(461	)
Changes in fair value		(11,097	)		(276	)		(125	)		716			(21	)
Balance as of September 30, 2023	$	(41,579	)	$	(3,825	)	$	(6,201	)	$	(1,466	)	$	(482	)

Loan Agreements (Tables)

9 Months Ended

Sep. 30, 2023

Debt Disclosure [Abstract]

Schedule of Short-term Loan Balances

As of September 30, 2023 and December 31, 2022, the Company had the following short-term loan balances:

(in thousands)

Schedule of Short-term Loan Balances

	September 30, 2023		December 31, 2022
Short-term loans:
Second Street Loan	$	600	$	600
Second Street Loan 2		400		200
March Second Street Loan		700		-
McKra Loan		1,000		-
Underwriter Promissory Note		3,150		-
2023 Convertible Note		6,201		-
Less: issuance costs remaining to be amortized		-		(24	)
Short-term loans, net of issuance costs	$	12,051	$	776

Cover - shares	9 Months Ended
Cover - shares	Sep. 30, 2023	Feb. 27, 2024
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2023
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2023
Current Fiscal Year End Date	--12-31
Entity File Number	001-40793
Entity Registrant Name	OCEAN BIOMEDICAL, INC.
Entity Central Index Key	0001869974
Entity Tax Identification Number	87-1309280
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	55 Claverick St.,
Entity Address, Address Line Two	Room 325
Entity Address, City or Town	Providence
Entity Address, State or Province	RI
Entity Address, Postal Zip Code	02903
City Area Code	(401)
Local Phone Number	444-7375
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	true
Elected Not To Use the Extended Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		34,649,046
Common Stock, Par Value $0.0001 Per Share [Member]
Title of 12(b) Security	Common stock, par value $0.0001 per share
Trading Symbol	OCEA
Security Exchange Name	NASDAQ
Warrants, each Exercisable for One Share of Common Stock at an Exercise Price of $11.50 [Member]
Title of 12(b) Security	Warrants, each exercisable for one share of common stock at an exercise price of $11.50
Trading Symbol	OCEAW
Security Exchange Name	NASDAQ

- Details

Name:	us-gaap_StatementClassOfStockAxis=OCEA_WarrantsEachExercisableForOneShareOfCommonStockAtExercisePriceOf11.50Member
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Data Type:	na
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License and Manufacturing Agreements (Details Narrative) - USD ($)			1 Months Ended	9 Months Ended
	Sep. 13, 2022	Jan. 02, 2022	Jan. 31, 2021	Sep. 30, 2023	Sep. 12, 2022	Oct. 15, 2021
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License agreement description				the Company is required to pay Elkurt (i) between 0.5% to 1.5% of net sales based on the terms of each of the Initial Brown License Agreements and (ii) 25% of all non-royalty sublicense income prior to the first commercial sale, and 10% of non-royalty sublicense income thereafter, in the event that the Company enters into sublicenses for the subject intellectual property. If net sales or non-royalty sublicense income are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%
License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License agreement description				The latest amendment, executed on November 13, 2023, (i) extended the date after which Elkurt can terminate the license agreements if the Company has not raised at least $10.0 million in equity financing by May 1, 2024 and (ii) extended the dates of the commercialization plan of the license agreement to an additional three years
Initial Brown License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual license maintenance fee				$ 24,000
License fee				268,000
Patent expenses				408,661
Payment for patent expenses				379,221
Initial Brown License Agreement [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone payment				50,000
Initial Brown License Agreement [Member] \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone payment				250,000
Initial Brown License Agreement [Member] \| January One Twenty Twenty Eight and Thereafter [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual license maintenance fee		$ 4,000
Initial Brown License Agreement [Member] \| Elkurt Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Maintenance fee				67,000
Interest rate						1.00%
Annual license maintenance fee				3,000
Payment for patent expenses				379,221
Brown Anti PfGARP Small Molecules License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License maintenance fee	$ 70,000
Sublicensing fee					$ 100,000
Market capitalization				5,000,000,000.0
Brown Anti PfGARP Small Molecules License Agreement [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone payment				50,000
Brown Anti PfGARP Small Molecules License Agreement [Member] \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone payment				250,000
Equity finance				$ 10,000,000
Brown Anti PfGARP Small Molecules License Agreement [Member] \| September Thirteen Twenty Twenty Three To September Thirteen Twenty Twenty Seven [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual license maintenance fee	3,000
Brown Anti PfGARP Small Molecules License Agreement [Member] \| September Thirteen Twenty Twenty Seven And Thereafter [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual license maintenance fee	$ 4,000
Rhode Island Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
License agreement description				Either party may terminate the Rhode Island License Agreement in certain situations, and as discussed above, the next steps for the licensing agreements are still being negotiated
Annual license maintenance fee				$ 3,000
License fee				110,000
Patent expenses				485,216
Payment for patent expenses				229,393
License maintenance fee			$ 110,000
Equity finance			10,000,000.0
Rhode Island Agreement [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone payment			50,000
Rhode Island Agreement [Member] \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone payment			250,000
Rhode Island Agreement [Member] \| January One Twenty Twenty Eight and Thereafter [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual license maintenance fee			4,000
Rhode Island Agreement [Member] \| January One Twenty Twenty Two to January One Twenty Twenty Eight [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Annual license maintenance fee			$ 3,000
Development And Manufacturing Services Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Development and manufacturing expenses				$ 598,663

Related Party Transactions (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	Dec. 31, 2022
Related Party Transaction [Line Items]
Annual license fee			$ 3,000
Annual license fee			110,000
General and administrative expense	$ 2,350,000	$ 1,315,000	10,148,000	$ 6,935,000
Related Party [Member]
Related Party Transaction [Line Items]
Accounts payable current and noncurrent	92,919		92,919
Related Party [Member] \| Elkurt Inc [Member]
Related Party Transaction [Line Items]
Other liabilities	346,521		346,521
Initial license fees	268,000		268,000
Related Party [Member] \| Elkurt Inc [Member] \| General and Administrative Expense [Member]
Related Party Transaction [Line Items]
Patent expenses			24,000
Related Party [Member] \| Chief Accounting Officer [Member]
Related Party Transaction [Line Items]
Other liabilities	$ 107,500		107,500		$ 142,500
Board of Directors Chairman [Member]
Related Party Transaction [Line Items]
General and administrative expense			93,769
Increase decrease due to related parties			850
Initial Brown License Agreement [Member]
Related Party Transaction [Line Items]
Patent expenses			408,661
Payment for patent expenses			379,221
Initial Brown License Agreement [Member] \| Elkurt Inc [Member]
Related Party Transaction [Line Items]
Payment for patent expenses			379,221
Rhode Island Agreement [Member]
Related Party Transaction [Line Items]
Patent expenses			485,216
Payment for patent expenses			229,393
Patent reimbursement expenses			$ 482,216

Net loss Per Share (Details Narrative)	Aug. 31, 2022 shares
Aesther Healthcare Acquisition Corp [Member] \| Maximum [Member]
Restructuring Cost and Reserve [Line Items]
Shares issued in consideration pursuant to the Common Stock Purchase Agreement, shares	19,000,000

- Definition

Line items represent financial concepts included in a table. These concepts are used to disclose reportable information associated with domain members defined in one or many axes to the table.

+ References + Details

Warrants (Details Narrative) - USD ($)		3 Months Ended			9 Months Ended
Warrants (Details Narrative) - USD ($)	Mar. 07, 2023	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2022	Sep. 30, 2023	Sep. 30, 2022	May 15, 2023	Feb. 14, 2023
Share issued price per share		$ 18.00			$ 18.00
Redemption price per share		$ 0.01			$ 0.01
Proceeds from issuance of common stock					$ 14,260,000
Marketing Services Agreement [Member]
Number of shares issued	13,257
Proceeds from issuance of common stock	$ 83,121
SPA Warrant [Member] \| Accredited Investor [Member]
Warrants exercisable shares		552,141			552,141
McKra Investments III Warrant [Member]
Warrants exercisable shares		200,000			200,000
Other expenses					$ 789,400
Special Forces F9 Warrant [Member]
Warrants exercisable shares		150,000			150,000
Share issued price per share							$ 11.50
Special Forces F9 Warrant [Member]
Fair value adjustment of warrants			$ 583,500
Warrant [Member] \| IPO [Member]
Number of shares issued					5,411,000
Warrant [Member] \| IPO [Member] \| Minimum [Member]
Purchase of warrant shares		10,661,000			10,661,000
Warrant [Member] \| IPO [Member] \| Maximum [Member]
Number of shares issued					5,250,000
Common Stock [Member]
Warrants exercisable shares								511,712
Number of shares issued					75,000,000
Common Stock [Member] \| IPO [Member]
Sale of stock price per share		$ 11.50			$ 11.50
Common Stock [Member] \| Special Forces F9 Warrant [Member]
Share issued price per share							$ 3.89
Second Street Warrants [Member]
Warrants exercisable shares		1,039,054			1,039,054
Other expenses		$ 0		$ 435,075	$ 1,511,625	$ 824,013
Second Street Warrants [Member] \| Warrant [Member]
Warrants exercisable shares		200,000			200,000

Schedule of Fair Value Backstop Forward Purchase Agreement Asset (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands	3 Months Ended
	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023
Backstop Put Option Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance as of June 30, 2023	$ (30,482)	$ (28,020)
Initial fair value measurement			(12,414)
Changes in fair value	(11,097)	(2,462)	(15,606)
Balance as of September 30, 2023	(41,579)	(30,482)	(28,020)
Fixed Maturity Consideration [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance as of June 30, 2023	(3,549)	(3,292)
Initial fair value measurement			(3,166)
Changes in fair value	(276)	(257)	(126)
Balance as of September 30, 2023	(3,825)	(3,549)	(3,292)
2023 Convertible Note [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance as of June 30, 2023	(6,076)
Initial fair value measurement		(5,628)
Changes in fair value	(125)	(448)
Balance as of September 30, 2023	(6,201)	(6,076)
SPA Warrant [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance as of June 30, 2023	(2,182)
Initial fair value measurement		(1,932)
Changes in fair value	716	(250)
Balance as of September 30, 2023	(1,466)	(2,182)
Ayrton Note Purchase Option [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balance as of June 30, 2023	(461)
Initial fair value measurement		(269)
Changes in fair value	(21)	(192)
Balance as of September 30, 2023	$ (482)	$ (461)

Subsequent Events (Details Narrative) - USD ($)								1 Months Ended	9 Months Ended
Subsequent Events (Details Narrative) - USD ($)	Mar. 04, 2024	Nov. 13, 2023	Nov. 06, 2023	Nov. 02, 2023	Oct. 31, 2023	Sep. 22, 2022	Sep. 07, 2022	Oct. 31, 2023	Sep. 30, 2023	Oct. 04, 2023	Oct. 02, 2023
Subsequent Event [Line Items]
Common stock exercise price									$ 18.00
Stock issued during period value new issues									$ 494,000
Legal fees						$ 850,000
Common Stock Purchase Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued									75,000
Stock issued during period value new issues							$ 75,000,000
Subsequent Event [Member]
Subsequent Event [Line Items]
Debt amount											$ 650,000
VWAP price											$ 2.50
Reset price											$ 8.00
Share price										$ 7.00
Common stock exercise price										$ 9.00
Description of initial installment tirgger event								market capitalization fell below $100,000,000 for 10 consecutive trading days, triggering the “Initial Installment Trigger Date” under the SPA, which per the terms of the SPA, requires the Company to pay installments to the Investor commencing on November 1, 2023, in shares of the Company’s common stock, if there had been no provided there has been no “Equity Conditions Failure” (as defined in the SPA) and in cash otherwise. As of November 1, 2023, when the first installment was due, an Equity Conditions Failure was also triggered due to the daily trading volume of Company shares falling below $1,500,000 during the 20 day period preceding the Initial Installment Trigger Date. The Investor elected to defer the first installment amount to December 1, 2023
Subsequent Event [Member] \| Restricted Stock [Member]
Subsequent Event [Line Items]
Conversion of stock, shares converted	169,582
Subsequent Event [Member] \| 2023 Convertible Note [Member]
Subsequent Event [Line Items]
Number of shares issued			5,005
Subsequent Event [Member] \| Investor [Member]
Subsequent Event [Line Items]
Number of shares issued				15,173
Subsequent Event [Member] \| Common Stock Purchase Agreement [Member]
Subsequent Event [Line Items]
Number of shares issued				41,677
Stock issued during period value new issues				$ 64,000
Subsequent Event [Member] \| Contribution Agreement [Member] \| Virion Therapeutics LLC [Member]
Subsequent Event [Line Items]
Number of shares issued					750,000
Stock issued during period value new issues					$ 250,000
Other accrued interest rate					50.00%			50.00%
Subsequent Event [Member] \| Initial Brown License Agreement [Member]
Subsequent Event [Line Items]
License agreements description		(i) extended the date after which Elkurt can terminate the license agreements if the Company has not raised at least $10,000,000 in equity financing by May 1, 2024 and (ii) extended the dates of the commercialization plan of the license agreement to an additional three years

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2023	Dec. 31, 2022
Current assets:
Cash	$ 31	$ 34
Restricted cash	1,000
Deferred offering costs		1,808
Total current assets	1,031	1,842
Total assets	1,031	1,842
Current liabilities:
Accounts payable and accrued expenses	16,048	11,440
Accrued expenses – related party	804	445
Short-term loans, net of issuance costs	12,051	776
SPA Warrant	1,466
Ayrton Note Purchase Option	482
Total current liabilities	30,851	12,661
Noncurrent liabilities
Fixed Maturity Consideration	3,825
Backstop Put Option Liability	41,579
Total Noncurrent Liabilities	45,404
Total liabilities	76,255	12,661
Stockholders’ deficit
Common stock, $0.0001 par value; 300,000,000 and 180,564,262 shares authorized as of September 30, 2023 and December 31, 2022, respectively, 34,087,201 and 23,355,432 shares issued and outstanding as of September 30, 2023 and December 31, 2022, respectively.
Additional paid-in capital	103,975	70,770
Accumulated deficit	(179,199)	(81,589)
Total stockholders’ deficit	(75,224)	(10,819)
Total liabilities and stockholders’ deficit	$ 1,031	$ 1,842