0001493152-24-047661 | 10-K | XBRL Viewer

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Schedule of Net Deferred Tax Assets (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Deferred tax assets:
Organization and start-up costs	$ 42	$ 46
Net operating loss carryforwards	5,962	1,338
Stock-based compensation	14,728	14,475
Losses-put option and warrant issuance		226
R&D tax credits	28
Total deferred income tax assets	20,760	16,085
Valuation allowance	(20,760)	(16,085)
Deferred tax asset, net of allowance

Short-term Loan Agreements (Tables)

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Short-term Loan Balances

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

Schedule of Short-term Loan Balances

Short-term loans:	2023		2022
(in thousands)	For the fiscal years ended
Short-term loans:	2023		2022
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		5,618		-
Poseidon Demand Note		650		-
Current loans payable		650		-
Less: issuance costs remaining to be amortized		-		(24	)
Short-term loans, net of issuance costs	$	12,118	$	776

Related Party Transactions (Details Narrative) - USD ($) $ in Thousands	Dec. 31, 2023	Oct. 11, 2023	Dec. 31, 2022
Related Party Transaction [Line Items]
Accrued liabilities - related party	$ 946		$ 445
Contribution Agreement [Member] \| Virion Therapeutics LLC [Member]
Related Party Transaction [Line Items]
Acquiring membership interest rate		50.00%
Founder and Executive Chairman [Member]
Related Party Transaction [Line Items]
Accrued liabilities - related party	100
Chief Accounting Officer [Member]
Related Party Transaction [Line Items]
Due to related party	$ 200		$ 200

Equity (Tables)

12 Months Ended

Dec. 31, 2023

Equity [Abstract]

Schedule of Stock Option Activity

The following table summarizes stock option activity during the fiscal year ended December 31, 2023:

Schedule of Stock Option Activity

	Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2023		--		--		--		--
Options granted		600,000	$	10.00		2.1		--
Options cancelled or forfeited		--		--		--		--
Outstanding at December 31, 2023		600,000	$	10.00		2.1		--

Schedule of Allocation of Stock-based Compensation

The stock-based compensation allocation was based upon the grantees’ vested interests and the amount of time spent in their respective operating department. The following table summarizes the allocation of stock-based compensation for the years ended December 31, 2023 and 2022:

(in thousands)	2023		2022
Research and development expense (1)	$	-	$	8,231
General and administrative expense (2)		1,205		4,147
Total stock-based compensation expense	$	1,205	$	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 was 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, which resulted in $0.6 million of stock-based compensation expense in 2023. 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.

Schedule of Allocation of Stock-based Compensation (Details) (Parenthetical) - USD ($) $ in Millions		12 Months Ended
	Mar. 31, 2023	Dec. 31, 2023
Non-employee Directors [Member]
Defined Benefit Plan Disclosure [Line Items]
Stock-based compensation expense	$ 0.6	$ 0.6

Organization, Description of Business, and Going Concern (Details Narrative) $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Business combination acquired description	Under the Business Combination Agreement, the Company acquired all outstanding capital stock of Legacy Ocean for approximately $240.0 million, 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	$ 4
Cash, cash equivalents, and restricted cash	1,000
Working capital	$ 27,900

Income Taxes

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

12. Income Taxes

Provision for income taxes

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. The reported amount of income tax expense for the period differs from the amount that would result from applying the federal statutory tax rate to net loss before taxes primarily because of the change in valuation allowance.

Schedule of Provision for Income Taxes

	December 31, 2023			December 31, 2022
	For the Year Ended
	December 31, 2023			December 31, 2022
Statutory federal income tax rate		21.0	%		21.0	%
Permanent items		(18.7	)%		0.0	%
Change in valuation allowance		(2.3	)%		(21.0	)%
Income tax provision (benefit)		0.0	%		0.0	%

Deferred tax assets and valuation allowance

Deferred tax assets reflect the tax effects of net operating losses, tax credit carryovers, and temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. At December 31, 2023 and 2022, the Company’s deferred tax assets are the tax effects of amortization of organization and start-up costs, U.S. federal and state NOL carryforwards, and stock-based compensation.

The significant components of the net deferred tax assets are as follows (in thousands):

Schedule of Net Deferred Tax Assets

	2023			2022
	December 31, 2023			December 31, 2022
Deferred tax assets:
Organization and start-up costs	$	42		$	46
Net operating loss carryforwards		5,962			1,338
Stock-based compensation		14,728			14,475
Losses-put option and warrant issuance		-			226
R&D tax credits		28			-
Total deferred income tax assets		20,760			16,085
Valuation allowance		(20,760	)		(16,085	)
Deferred tax asset, net of allowance	$	—		$	—

The Company may be entitled to claim additional federal and state income tax credits for its 2023 R&D activities, but these amounts have not yet been determined. Any R&D Credits generated by the Company in 2023 would result in an additional deferred tax asset that would be subject to a full valuation allowance. Future changes in ownership may limit the utilization of net operating loss carryforwards and R&D Credits due to Sections 382 and 383 of the Internal Revenue Code of 1986, as amended, and similar provisions.

- Definition

The entire disclosure for income tax.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section 50
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-Publisher FASB
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Reference 2: http://www.xbrl.org/2003/role/exampleRef
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Reference 3: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
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-Paragraph 12C
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12C

Reference 4: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147482685/740-10-50-12B

Reference 5: http://www.xbrl.org/2003/role/disclosureRef
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-URI https://asc.fasb.org/1943274/2147477891/740-270-50-1

Reference 6: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
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-Name Accounting Standards Codification
-Section S99
-Paragraph 1
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-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-1

Reference 7: http://www.xbrl.org/2003/role/disclosureRef
-Topic 946
-SubTopic 20
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-Section 50
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-Publisher FASB
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Reference 8: http://www.xbrl.org/2003/role/disclosureRef
-Topic 235
-SubTopic 10
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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08(h)(2))
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-URI https://asc.fasb.org/1943274/2147480678/235-10-S99-1

Reference 9: http://www.xbrl.org/2003/role/disclosureRef
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Reference 10: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 14
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-14

Reference 11: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 21
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-21

Reference 12: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section 50
-Paragraph 17
-Subparagraph (b)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482685/740-10-50-17

Reference 13: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 10
-Name Accounting Standards Codification
-Section S99
-Paragraph 2
-Subparagraph (SAB Topic 11.C)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147479360/740-10-S99-2

Reference 14: http://www.xbrl.org/2003/role/disclosureRef
-Topic 740
-SubTopic 30
-Name Accounting Standards Codification
-Section 50
-Paragraph 2
-Subparagraph (a)
-Publisher FASB
-URI https://asc.fasb.org/1943274/2147482603/740-30-50-2

+ Details

Senior Secured Convertible Notes (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended	12 Months Ended
	May 31, 2023	May 31, 2023	May 31, 2023	Dec. 31, 2023	Dec. 31, 2022	Nov. 22, 2024
Warrant intial exercise price						$ 0.01
Proceeds from convertible debt				$ 650
Cash				4	34
Other income (expense)	$ 600			(1)	5
Fair value of noncash stock issuance				$ 740
Investor [Member]
Number of shares of common stock				39,650
Fair value of noncash stock issuance				$ 200
Senior Secured Convertible Notes [Member]
Principal amount	$ 7,600	$ 7,600	$ 7,600
Warrants to purchase shares	552,141	552,141	552,141
Warrant intial exercise price	$ 10.34	$ 10.34	$ 10.34
Exercise term		5 years
Debt instrument, interest rate	8.00%	8.00%	8.00%
Proceeds from convertible debt	$ 8,600
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] \| 2023 Convertible Note [Member]
Principal amount				$ 7,600
Senior Secured Convertible Notes [Member] \| Affiliates and Other Related Parties [Member]
Ownership percentage	9.99%	9.99%	9.99%
Senior Secured Convertible Notes [Member] \| Maximum [Member]
Principal amount	$ 27,000	$ 27,000	$ 27,000
Warrant intial exercise price	$ 11.50	$ 11.50	$ 11.50
Debt instrument face amount	$ 10,800	$ 10,800	$ 10,800
Cash	3,000	3,000	3,000
Senior Secured Convertible Notes [Member] \| Minimum [Member]
Cash	1,500	$ 1,500	$ 1,500
2023 Convertible Note and SPA Warrant [Member]
Other income (expense)	$ 300

Schedule of Fair Value Backstop Forward Purchase Agreement Asset (Details) - Fair Value, Inputs, Level 3 [Member] $ in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($)
Backstop Put Option Liability [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balances as of January 1, 2023
Initial fair value measurement	(12,414)
Changes in fair value	(46,109)
Balance as of December 31, 2023	(58,523)
Fixed Maturity Consideration [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balances as of January 1, 2023
Initial fair value measurement	(3,166)
Changes in fair value	(957)
Balance as of December 31, 2023	(4,123)
2023 Convertible Note [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balances as of January 1, 2023
Initial fair value measurement	(5,628)
Changes in fair value	10
Balance as of December 31, 2023	(5,618)
SPA Warrant [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balances as of January 1, 2023
Initial fair value measurement	(1,932)
Changes in fair value	1,168
Balance as of December 31, 2023	(764)
Ayrton Note Purchase Option [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Balances as of January 1, 2023
Initial fair value measurement	(269)
Changes in fair value	269
Balance as of December 31, 2023

Basis of Presentation and Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 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 accompanying 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”).

The accompanying 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.

Use of Estimates

The preparation of financial statements in conformity with U.S. 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 (each as 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, 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.

Cash and Cash Equivalents

The Company considers all highly liquid investments with original maturities at the date of purchase of three months or less to be cash equivalents. Cash and cash equivalents are stated at fair value and may include money market funds, U.S. Treasury and U.S. government-sponsored agency securities, corporate debt, commercial paper, and certificates of deposit. The Company had minimal cash or cash equivalents as of December 31, 2023 and 2022.

Restricted Cash

The Company’s restricted cash is comprised of cash that is restricted as to withdrawal or use. Restricted cash as of December 31, 2023 was $1.0 million, 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. As of December 31, 2022, the Company’s cash balance was less than $0.1 million.

Concentrations of Credit Risk and Off-balance Sheet Risk

The Company has held minimal cash and cash equivalents since its inception and certain of its expenses have been paid for by the proceeds from the issuance of common stock and debt, and by the Company’s Founder and Executive Chairman.

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 could affect the Company’s future operating results and cause actual results to vary materially from expectations 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 was denied approval, if approval was delayed, if approval was unable to be maintained, it could have a materially adverse impact on the Company.

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 consist primarily of costs incurred for research activities, including the development of product candidates. Research and development costs are expensed as incurred. For the fiscal years ended December 31, 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

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. As of December 31, 2022, the Company had recorded $1.8 million of deferred offering costs. During the fiscal year ended December 31, 2023, the Company recognized offering costs of $2.0 million as a reduction to the Business Combination proceeds within additional paid-in capital and $7.6 million as a component of other income/(expense) in its consolidated statements of operations, as the amount of offering costs were in excess of the proceeds generated as a result of the Business Combination. As of December 31, 2023, there were no deferred offering costs.

Income Taxes and Tax Credits

Income taxes are recorded in accordance with FASB ASC 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 bases 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. In the event the Company were to determine that it would be able to realize some or all of 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 December 31, 2023 and 2022, the Company had no liability for income tax associated with uncertain tax positions. The Company would recognize any corresponding interest and penalties associated with its income tax positions in income tax expense. There was no income tax interest or penalties incurred for the fiscal years ended December 31, 2023 and 2022.

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

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

Backstop Put Option Liability and Fixed Maturity Consideration

Backstop Agreement

In connection with the execution of the Business Combination, AHAC and Legacy Ocean entered into an OTC Equity Prepaid Forward Transaction (as amended, the “Backstop Agreement”) with the Backstop Parties (as defined in Note 3, Business Combination and Backstop Agreement). The Backstop Agreement grants the Backstop Parties the right to purchase up to a maximum of 8,000,000 of the Company’s common stock on the open market for $10.56 per share (the “Redemption Price”). The Company agreed to purchase the unsold portion of the Backstop Shares from the Backstop Parties on a forward basis upon the “Maturity Date” (as amended, the third anniversary of the closing of the Business Combination, subject to certain acceleration provisions). The purchase price payable by the Company includes a prepayment in the amount of the redemption price per share (the “Prepayment”) from the proceeds released from the trust account related to those shares. Among the acceleration provisions is the Backstop Parties’ right to accelerate the Maturity Date if the Company’s stock price trades below a stipulated price per share for any 30 trading days during a 45 day consecutive trading-day period (in October 2023, this acceleration provision was amended with one Backstop Party providing it the right to accelerate the Maturity Date if the Company’s stock price trades below a stipulated price per share for any 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 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 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 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.

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 $27.0 million, 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 $7.6 million (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 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 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 consolidated statements of operations and are remeasured at each reporting period.

Comprehensive Loss

Comprehensive loss is defined as the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company has had no unrealized gains or losses for the fiscal years ended December 31, 2023 and 2022.

Emerging Growth Company and Smaller Reporting Company Status

The Company qualifies as an “emerging growth company” within the meaning of the Section 2(a)(19) of the Securities Act, as modified by the Jumpstart Our Business Startup Act (“JOBS Act”) of 2012. The JOBS Act 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 not to “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.

The Company is also a “smaller reporting company” and may continue to be a smaller reporting company if either (i) the market value of the stock held by non-affiliates is less than $250 million or (ii) the Company’s annual revenue was less than $100 million during the most recently completed fiscal year and the market value of the Company’s stock held by non-affiliates is less than $700 million. If the Company is a smaller reporting company at the time that it ceases to be an emerging growth company, the Company may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company, the Company may choose to present only the two most recent fiscal years of audited financial statements in its Annual Report on Form 10-K and, similar to emerging growth companies, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

Recent Accounting Standards

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).

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements under ASU 2023-07 are also required for public entities with a single reportable segment. ASU 2023-07 is effective for public business entities with fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The Company is currently evaluating the impact of adopting ASU 2023-07 on its consolidated financial statements and related disclosures.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures to enhance the transparency and decision usefulness of income tax disclosures. This standard is effective for the Company for fiscal years beginning after December 15, 2024 and can be applied on a prospective or retrospective basis. The Company is currently evaluating the effect that the adoption of this ASU may have on its Consolidated Financial Statements.

Schedule of Elements of Business Combination (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Offering costs from Business Combination	$ 7,578
Net cash provided by financing activities	10,399	$ 967
Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Cash from AHAC trust, net of redemptions	52,070
Offering costs from Business Combination	(2,049)
Net impact on total stockholders’ deficit	50,021
Non-cash offering costs	2,049
Net cash provided by financing activities	$ 52,070

Fair Value Measurements

12 Months Ended

Dec. 31, 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 December 31, 2023:


	Fair Value Hierarchy
(in thousands)	Level 1		Level 2		Level 3			Total
Financial liabilities:
Backstop Put Option Liability	$	-	$	-	$	(58,523	)	$	(58,523	)
Fixed Maturity Consideration		-		-		(4,123	)		(4,123	)
2023 Convertible Note ⁽¹⁾		-		-		(5,618	)		(5,618	)
SPA Warrant		-		-		(764	)		(764	)
Ayrton Note Purchase Option		-		-		-			-
Total financial liabilities	$	-	$	-	$	(69,028	)	$	(69,028	)

⁽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 consolidated balance sheets.

During the fiscal year ended December 31, 2023 there were no transfers between Level 1, Level 2 and Level 3. During the fiscal year ended December 31, 2022 there were no liabilities measured at fair value.

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 values of the Backstop Put Option Liability and Fixed Maturity Consideration were calculated as the average present value over 50,000 simulated paths. The Company measures the fair values at each reporting period, with changes in fair values recorded within other income/(expense) in its consolidated statements of operations.

Estimated

volatility

Expected future stock price

Risk-free rate

Backstop Put Option Liability and Fixed Maturity Consideration

100

$1.95 - $13.93

4.4

Valuation of the 2023 Convertible Note and SPA Warrant

The Company utilized a Monte-Carlo simulation 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 Company measures the fair values at each reporting period, with changes in fair values recorded within other income/(expense) in the Company’s 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

5% - 80%

5.3

SPA Warrant

100

5% - 80%

3.9

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 measures the fair value at each reporting period, with changes in fair value recorded within other income/(expense) in the Company’s consolidated statements of operations. As of December 31, 2023, it was determined that the fair value of the Ayrton Note Purchase Option was zero.

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

4.4%

The following table provides a roll forward of the aggregate fair values of the Company’s Backstop Put Option Liability, Fixed Maturity Consideration, the 2023 Convertible Note, SPA Warrant, and Ayrton Note Purchase Option for which fair values are 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	)		(5,628	)		(1,932	)		(269	)
Changes in fair value		(46,109	)		(957	)		10			1,168			269
Balance as of December 31, 2023	$	(58,523	)	$	(4,123	)	$	(5,618	)	$	(764	)		-

Business Combination and Backstop Agreement (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands							12 Months Ended
	Nov. 02, 2023	Oct. 02, 2023	Feb. 14, 2023	Feb. 13, 2023	Sep. 07, 2022	Aug. 31, 2022	Dec. 31, 2023	Oct. 04, 2023	May 23, 2023	Dec. 31, 2022
Business Acquisition [Line Items]
Common stock, shares issued							34,649,046			23,355,432
Common stock exercise price							$ 18.00	$ 9.00
Share price		$ 2.50
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 December 31, 2023, the Backstop Parties have sold 143,261 Backstop Shares, for which the Company has received net proceeds of $1.4 million, 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									$ 6,700
Reset price		$ 8.00
Aggregate gross purchase price							$ 676
Sale of stock price per share								$ 7.00
Short term loan							3,200
Loss on extinguishment of debt							1,200
Loss on extinguishment of debts							13,600
Interest expense							50
Payments for underwriting expenses							$ 3,200
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.
Interest expense							$ 300
Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Short term loan							2,100
Long term debt fair value							$ 500
Maximum [Member]
Business Acquisition [Line Items]
Deferred amounts bear interest							9.00%
Debt instrument interest rate effective percentage when default							24.00%
Maximum [Member] \| Sponsor [Member]
Business Acquisition [Line Items]
Other accrued interest rate							15.00%
Minimum [Member] \| Sponsor [Member]
Business Acquisition [Line Items]
Other accrued interest rate							8.00%
Backstop Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued			1,350,000
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
Common stock exercise price							$ 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
Common stock exercise price							$ 2.50
Backstop Forward Purchase Agreement [Member]
Business Acquisition [Line Items]
Backstop forward purchase agreement, value			$ 37,300
Share price			$ 10.56
Payment to backstop parties for backstop forward purchase agreement			$ 51,600
Fixed Maturity Consideration [Member] \| Maximum [Member]
Business Acquisition [Line Items]
Number of shares issued							8,000,000
Share price							$ 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	41,677						75,000
Aggregate gross purchase price	$ 64				$ 75,000
Fair value issuance							$ 500
Commitment costs							$ 500
Business Combination Agreement [Member]
Business Acquisition [Line Items]
Number of shares issued							1,365,000
Common stock in exchange for extensions							200,000
Common Stock [Member]
Business Acquisition [Line Items]
Additional shares issued to sponsor							1,365,000
Warrants exercisable			511,712
Exercise price			$ 8.06
Number of shares issued							350,000
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			$ 14,300
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
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
Common Class A [Member]
Business Acquisition [Line Items]
Common stock, shares issued			23,355,432
Payments to acquire businesses gross			$ 233,600
Conversion of stock shares converted			3,535,466
Common Class A [Member] \| Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Additional shares issued to sponsor			1,365,000
Purchase of common stock			1,200,000
Backstop forward purchase agreement, value			$ 12,700
Common Class B [Member] \| Aesther Healthcare Acquisition Corp [Member]
Business Acquisition [Line Items]
Conversion of stock shares converted			2,625,000
Common stock conversion basis			converted on a one-for-one basis into shares of AHAC’s Class A common stock

Schedule of Provision for Income Taxes (Details)	12 Months Ended
Schedule of Provision for Income Taxes (Details)	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Statutory federal income tax rate	21.00%	21.00%
Permanent items	(18.70%)	0.00%
Change in valuation allowance	(2.30%)	(21.00%)
Income tax provision (benefit)	0.00%	0.00%

Summary of Significant Inputs and Assumptions Used in Black-Scholes Merton Model (Details)	Dec. 31, 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	100
Measurement Input, Price Volatility [Member] \| 2023 Convertible Note [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	50
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	100
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	13
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	4.4
Measurement Input, Risk Free Interest Rate [Member] \| 2023 Convertible Note [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	5.3
Measurement Input, Risk Free Interest Rate [Member] \| SPA Warrant [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	3.9
Measurement Input, Risk Free Interest Rate [Member] \| Ayrton Note Purchase Option [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Derivative asset, measurement input	4.4

Schedule of Securities Excluded From Computation of Diluted Loss Per Share (Details) - shares	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive securities	600,000
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti dilutive securities	12,602,195	450,000

Business Combination and Backstop Agreement

12 Months Ended

Dec. 31, 2023

Business Combination, Asset Acquisition, and Joint Venture Formation [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 $233.6 million, 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 $12.7 million 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.

The following table reconciles the elements of the Business Combination to the consolidated statements of stockholders’ deficit and cash flows for the fiscal year ended December 31, 2023:

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

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

The Company identified certain errors in its previously issued quarterly financial statements that have been corrected in the consolidated financial statements as of and for the twelve months ended December 31, 2023. The errors primarily relate to improper presentation of liabilities assumed from AHAC upon closing of the Business Combination. Such amounts previously recognized as expenses have been properly presented within Additional paid-in capital. Management considered the quantitative and qualitative factors associated with these matters and concluded that the amounts were not material to the previously issued interim financial statements.

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 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 $80.0 million, 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 $51.6 million, consisting of $37.3 million for the Recycled Shares and $14.3 million for the Polar Subscription shares. As the $14.3 million was a netted transaction between the Company and Polar, only $37.3 million 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 $51.6 million and the proceeds inflow from the issuance of common stock pursuant to the Backstop Agreement and Polar Subscription of $14.3 million are reported in the Company’s consolidated statement of cash flows.

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 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 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 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 December 31, 2023, the Backstop Parties have sold 143,261 Backstop Shares, for which the Company has received net proceeds of $1.4 million, 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 $6.7 million, 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.

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. 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, one of the Backstop Parties, Polar had not designated a Maturity Date. Refer to above in this footnote for further detail around the purported Maturity Date for Vellar.

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 $75.0 million 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 $0.5 million upon issuance. The $0.5 million in commitment costs was recorded in other income/(expense) in the Company’s consolidated statements of operations for the fiscal year ended December 31, 2023.

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 thousand. This facility is now deemed terminated and will not be utilized although it has not been formally terminated.

Sponsor Promissory Notes

Upon consummation of the Business Combination, the Company assumed two of AHAC’s loans, totaling $2.1 million, 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. $0.5 million 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 $1.2 million in its consolidated statements of operations for the fiscal year ended December 31, 2023 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 $13.6 million in its consolidated statements of operations for the fiscal year ended December 31, 2023 for the issuance of the Sponsor Extension Shares, based on the grant date fair value. Further, the Company recorded interest expense of $50 thousand in its consolidated statements of operations for the fiscal year ended December 31, 2023.

Deferred Underwriting Commissions

At Closing, the underwriters for AHAC’s initial public offering (“IPO”) agreed to defer payment of $3.2 million of deferred underwriting discounts otherwise due to them until November 14, 2023, pursuant to the terms of a promissory note (the “Underwriter 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. As of December 31, 2023 the Company had not repaid the Underwriter Promissory Note and the outstanding balance of $3.2 million is recorded as a short-term loan in the consolidated financial statements. The Company recorded $0.3 million of interest expense on the outstanding balance in the Company’s consolidated financial statements for the fiscal year ended December 31, 2023.

Subsequent Events

12 Months Ended

Dec. 31, 2023

Subsequent Events [Abstract]

Subsequent Events

15. Subsequent Events

The Company has evaluated subsequent events through November 25, 2024, the date that these consolidated financial statements were issued. Except for the matters disclosed below, no additional subsequent events had occurred that would require recognition or disclosure in these consolidated financial statements.

2023 Convertible Note

Between March 4, 2024 and March 8, 2024, the holder of the Company’s 2023 Convertible Note sent Alternate Conversion Notices to the Company to convert the principal value and accrued and unpaid interest into shares of the Company’s common stock pursuant to the Alternate Conversion Price mechanism in the 2023 Convertible Note. The Company is currently evaluating the situation and working with the noteholder to arrive at an equitable resolution.

Effective July 23, 2024, the Company entered into further arrangements to fund up to an additional $7.7 million in additional secured notes (the “2024 Notes”) in conjunction with the 2023 Convertible Note. The first tranche of $1.1 million was funded to various vendors on behalf of the Company to address costs of the Company in preparing its 2023 financial statements and subsequent quarterly reporting requirements, among other things. The balance of the funds shall be released by the investor upon the Company reaching certain milestones over the next several months.

All prior defaults under the existing transaction documents have been deemed cured, and there is a late filing carveout until August 15, 2024. The current Notes have had an extension of the maturity date until December 15, 2024 and installment payments have been waived until the earlier of the date on which the Company’s 2023 Form 10-K is filed and September 1, 2024, with subsequent installments continuing to be due on the first of each month thereafter. No payments have been made.

The Company shall issue to the investor 3,844,466 restricted shares of its common stock in settlement of all past defaults and penalty shares to be issued in conjunction therewith, subject to a leak out of 15% of daily trading value unless the sales price of such shares is above $5.00 per share. The Company is also issuing the investor 1,332,806 warrants which shall be exchangeable on a one for one basis into restricted shares of common stock on or after August 1, 2024.

The Company also confirmed that the principal amount of the Existing Note is $9.7 million, after giving effect to the Event of Default Interest to date and Redemption Premium.

As part of the agreement, Chirinjeev Kathuria, the Company’s Chairman, and Poseidon Bio, LLC, an entity controlled by Dr. Kathuria, also agreed to grant a proxy on all of their shares of the Company’s common stock to an independent third party, to vote them as that party sees fit, until such time as the Notes are paid in full.

On November 22, 2024, the Company issued a Note to an institutional investor upon the same terms as those notes issued in the July 23, 2024 transaction. The principal amount of the Note is $2,712,214, and the purchase price is $2,511,225.70. In conjunction therewith, the Company also lowered the conversion price on $25,000 of its Existing Notes to $0.01 per share, and it issued a warrant to the investor for 1,580,975 shares of its common stock.

All securities are being issued in private placement transactions exempt from registration under Section 4(a)(2) under the Securities Exchange Act of 1934 as amended.

Amendment to Earnout Shares Agreement

Pursuant to the Business Combination Agreement, the Company’s premerger shareholders were to receive up to 19,000,000 shares of the Company’s common stock in three tranches over a three year period, assuming the Company reached certain milestones. The Company’s Board has amended this agreement so that the Earnout Shares are to be issued in restricted shares in three tranches of 6,000,000 shares each, with the first tranche to be issued in the near future (the “initial issuance”) and the remaining tranches to be issued on the first and second year anniversaries of the date of the initial issuance. Additionally, the Sponsor will be issued 1,000,000 shares of the Company’s stock for each issuance of Earnout Shares, as contemplated in the Business Combination Agreement.

All securities are being issued in private placement transactions exempt from registration under Section 4(a)(2) under the Securities Exchange Act of 1934 as amended.

Issuance of Shares in Payment of Note

In 2024, the Company entered into a settlement agreement with Second Street Capital and McKra Investments III with regard to $2.7 million principal amount of promissory notes, plus accrued and unpaid interest and fees. The Company will satisfy payment of past due loan fees by the issuance of 225,000 shares of restricted common stock. The Company will also satisfy the amount due for the principal amount of the notes and accrued and unpaid interest through (i) the issuance of $1.7 million worth of restricted common stock (at a price per share equal to the 30 day vwap of a share of Company common stock as of July 22, 2024), and (ii) payment of the remaining balance of $1.7 million in cash at the time of closing of the Company’s next financing with net proceeds to the Company of more than $10 million either in a public offering or private transaction, or if such a closing does not occur on or before September 30, 2024, in shares of restricted Common Stock of the Company (at a price per share equal to the 30 day vwap of a share of Company common stock as of September 30, 2024). Since the Company did not close a financing with net proceeds to the Company of more than $10 million prior to September 30, 2024, the Company did not pay the remaining balance of $1.7 million in cash.

All securities are being issued in private placement transactions exempt from registration under Section 4(a)(2) under the Securities Exchange Act of 1934 as amended.

Virion Agreement

In September 2024, the Company entered into an amendment to the contribution agreement with Virion. In the amendment, the Company agreed to contribute $9.0 million in cash and/or shares of the Company’s common stock (the “Aggregate Capital Contribution”) in exchange for additional limited liability company units in an amount sufficient to cause the Company’s ownership interest in Virion to equal 22% of Virion’s issued and outstanding membership units, on a fully diluted basis. The Aggregate Capital Contribution will be credited for: a) $1.0 million for amounts already received by Virion in connection with the original contribution agreement; and b) the aggregate proceeds actually received by Virion in connection with the sale of 500,000 shares of the Company’s common stock. If the actual cash received by Virion from the proceeds of the sale of the Company’s shares of common stock (the “Actual Contributions”) does not equal the Aggregate Capital Contribution as of April 1, 2025 (the “Final Contribution Date”), the Company shall have the option, but not the obligation, to make additional capital contributions to Virion, up to an amount equal to the difference between the Aggregate Capital Contributions and the Actual Contributions (the “Final Contribution Amount”). The Final Contribution Amount may be paid, at the Company’s election, in cash, through the issuance of additional shares of the Company’s common stock or a combination of both and shall be made no later than 1 business day following the “Final Contribution Date”). The ownership interest of Virion held by the Company shall be determined based upon the Actual Contributions made, plus any Final Contribution paid to Virion as of the date such calculation is made.

On November 13, 2024, the Company received a notice of default with regard to its 2023 promissory note with EF Hutton, which alleges that $2,076,223.64 is due under the promissory note.

Schedule of Warrants (Details) - $ / shares

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Number of Shares Issuable

12,602,195

450,000

Public Warrant [Member]

Lender name

Public Warrants

Number of Shares Issuable

^[1]

5,250,000

Exercise price

^[1]

$ 11.50

Expiration

^[1]

Feb. 14, 2028

Classification

^[1]

Equity-classified

Private Warrant [Member]

Lender name

Private Warrants

Number of Shares Issuable

^[1]

5,411,000

Exercise price

^[1]

$ 11.50

Expiration

^[1]

Feb. 14, 2028

Classification

^[1]

Equity-classified

SPA Warrant [Member]

Lender name

^[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

^[2]

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

^[4]

$ 7.47

$ 10.20

Expiration

^[4]

Sep. 30, 2026

Classification

^[4]

Equity-classified

Second Street Capital LLC Four [Member]

Lender name

Second Street Capital

Issuance Date

2023-02

Number of Shares Issuable

75,000

Exercise price

$ 10.34

Expiration

Feb. 15, 2028

Classification

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.

Consolidated Statements of Operations - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
OPERATING EXPENSES:
Research and development	$ 709	$ 8,409
General and administrative	9,505	7,712
Total operating expenses	10,214	16,121
OPERATING LOSS	(10,214)	(16,121)
OTHER INCOME (EXPENSE)
Change in fair value of 2023 Convertible Note, SPA Warrant and the Ayrton Note Purchase Option	1,171
Loss in connection with the Share Consideration shares	(12,676)
Loss in connection with Backstop Put Option Liability and Fixed Maturity Consideration	(62,646)
Fair value of warrant issuances	(2,301)
Fair value of non-cash stock issuances	(740)
Transaction costs	(8,732)
Loss on extinguishment of debt	(15,080)
Interest expense, including amortization of debt issuance costs	(1,762)	(1,243)
Net loss attributable to equity interest in Virion	(708)
Change in fair value of Virion Contribution Liability	(777)
Other	(1)	5
Total other income (expense)	(104,252)	(1,238)
NET LOSS	$ (114,466)	$ (17,359)
Weighted average shares outstanding, basic	26,292,438	23,355,432
Weighted average shares outstanding, diluted	26,292,438	23,355,432
Net loss per share, basic	$ (4.35)	$ (0.74)
Net loss per share, diluted	$ (4.35)	$ (0.74)

Organization, Description of Business, and Going Concern

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization, Description of Business, and Going Concern

1. Organization, Description of Business, and Going Concern

Description of Business

Ocean Biomedical, Inc. is a biopharmaceutical company that is focused on discovering and developing therapeutic products in oncology, fibrosis, and infectious diseases.

Business Combination Agreement

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 $240.0 million, 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 in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Under this method of accounting, AHAC, who is the legal acquirer, is treated as the “acquired” company for financial reporting purposes and Legacy Ocean is treated as the accounting acquirer. The net assets of AHAC are stated at historical cost, with no goodwill or other intangible assets recorded. All historical financial information presented in the 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 Business Combination is accounted for as the equivalent of a capital transaction in which the Company has issued stock for the net assets of AHAC. The net assets of AHAC are stated at historical cost, with no goodwill or other intangible assets recorded.

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.

The Company is subject to risks common to companies in the biopharmaceutical industry, including, but not limited to, risks related to the successful development and commercialization of product candidates, fluctuations in operating results and financial risks, the ability to successfully raise additional funds when needed, protection of proprietary rights and patent risks, patent litigation, compliance with government regulations, dependence on key personnel and prospective collaborative partners, and competition from competing products in the marketplace.

Going Concern

The accompanying 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 year ended December 31, 2023. As of December 31, 2023, the Company had cash of $4 thousand, restricted cash of $1.0 million and a working capital deficiency of $27.9 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 activity 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.

In response to these conditions, management’s plans include that 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, 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 SPA entered into in May 2023 (as defined in Note 7, Senior Secured Convertible Notes), the 2024 Notes (as defined in Note 15, Subsequent Events), 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 such 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. As a result, the Company has concluded that management’s plans do not alleviate substantial doubt about the Company’s ability to continue as a going concern.

The 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 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.

Cover - USD ($)	12 Months Ended
Cover - USD ($)	Dec. 31, 2023	Nov. 22, 2024	Jun. 30, 2023
Document Type	10-K
Amendment Flag	false
Document Annual Report	true
Document Transition Report	false
Document Period End Date	Dec. 31, 2023
Document Fiscal Period Focus	FY
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 Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
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 Public Float			$ 1
Entity Common Stock, Shares Outstanding		34,818,628
Documents Incorporated by Reference	None
ICFR Auditor Attestation Flag	false
Document Financial Statement Error Correction [Flag]	false
Auditor Firm ID	34
Auditor Name	Deloitte & Touche LLP
Auditor Location	Chicago, Illinois
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

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Period Type:

Equity

12 Months Ended

Dec. 31, 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 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 December 31, 2023, the Company had 300.0 million authorized shares with a par value of $0.0001 per share. As of December 31, 2022, the Company had 180.6 million authorized shares with a par value of $0.0001 per share.

Virion Contribution Agreement

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 either a) $4.1 million in cash, or b) 750,000 shares of the Company’s common stock, 250,000 of which were transferred to Virion by Poseidon Bio LLC, with the remaining 500,000 shares issued by the Company on December 1, 2023. The Company elected to fund the initial contribution via the issuance of shares of its common stock. In the case of an initial contribution in the form of shares of common stock, the Contribution Agreement provides for a post-closing true-up 18 months from the closing date, whereby the Company would be required to make a true-up contribution. This post-closing true-up amount would be equal to the difference between liquidation proceeds received by Virion from the sale of the 750,000 shares of common stock received in the initial contribution and $4.1 million. The post-closing true-up amount is payable, at the Company’s discretion, in the form of additional shares of the Company’s common stock, or cash. This investment has been reflected at the minimum amount to be contributed as of the post-closing true-up, or $4.1 million and is reflected in non-current assets on the Company’s consolidated balance sheets as Investment in Virion. The Company initially recorded a liability of $2.8 million for the estimated amount of the post-closing true-up, reflecting the $4.1 million reduced by the fair market value of the common stock issued pursuant to the Contribution Agreement at the time of the contribution. The liability will remeasured at each reporting period and the Company will record any changes to other income/(expense) on the consolidated statement of operations. Based upon the closing price of the Company’s common stock at December 31, 2023, the Company increased the liability for the post-closing true-up to $3.6 million and reflected and expense of $0.8 million for the change in the fair value of the Virion Contribution Liability in other income/(expense) on its consolidated statement of operations.

The investment in Virion is accounted for as an equity method investment under ASC 323 as the Company has significant influence over the investee. For the fiscal year ended December 31, 2023, Virion incurred a net loss of approximately $6.8 million. The Company recorded its share of this loss of approximately $0.8 million for its prorated share of the net loss from the date of Contribution Agreement thru December 31, 2023.

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 nonemployee 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 valuation used the following assumptions:

Expected volatility: 75%

Expected term: 6.5 years

Risk-Free Interest Rate: 4%

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 stock-based compensation expense recorded for the fiscal year ended December 31, 2023 was $0.6 million and was recorded within general and administrative expense in the Company’s consolidated statements of operations, as discussed below.

The following table summarizes stock option activity during the fiscal year ended December 31, 2023:

Schedule of Stock Option Activity

	Stock Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (in years)		Aggregate Intrinsic Value (in thousands)
Outstanding at January 1, 2023		--		--		--		--
Options granted		600,000	$	10.00		2.1		--
Options cancelled or forfeited		--		--		--		--
Outstanding at December 31, 2023		600,000	$	10.00		2.1		--

The aggregate intrinsic value in the above table is calculated as the difference between the fair value of the Company’s common stock as of December 31, 2023 and the exercise price of the stock options. As of December 31, 2023, the total unrecognized compensation related to unvested stock option awards granted was $1.6 million, which the Company expects to recognize over a weighted-average period of approximately 2.1 years. No stock options were exercised during the period.

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. No purchases were made as of December 31, 2023.

Profits 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 consolidated financial statements.

These profit interests grants to 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 December 31, 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-Based Compensation

The Company recognizes stock-based compensation costs for equity-based compensation awards granted to employees, nonemployees, and directors in accordance with U.S. 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 fiscal year ended December 31, 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 fiscal year ended December 31, 2022 solely consisted of costs related to the profit interests in Poseidon.

(in thousands)	2023		2022
Research and development expense (1)	$	-	$	8,231
General and administrative expense (2)		1,205		4,147
Total stock-based compensation expense	$	1,205	$	12,378

(1)

(2)

As of December 31, 2023, there was $1.6 million of unamortized stock-based compensation expense, to be recognized over a weighted-average period of approximately 2.1 years.

- Definition

The entire disclosure for equity.

+ References

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+ Details

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss	$ (114,466)	$ (17,359)
Adjustments to reconcile net loss to net cash used in operating activities:
Non-cash interest expense	762	929
Non-cash debt issuance costs	627
Non-cash stock issuances	667
Stock-based compensation	1,205	12,378
Loss on issuance of warrants	2,301	250
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	62,646
Net loss attributable to equity interest in Virion	708
Change in fair value of Virion Contribution Liability	777
Change in fair value of 2023 Convertible Note, SPA Warrant and the Ayrton Note Purchase Option	(1,171)
Non-cash transaction costs in excess of Business Combination proceeds	7,578
Changes in assets and liabilities:
Prepaid expenses	(519)
Accounts payable and accrued expenses	1,233	2,809
Accrued expenses - related parties	467
Net cash used in operating activities	(9,429)	(993)
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 2023 Convertible Note	650
Proceeds from short-term loans, net of issuance costs	8,258	735
Proceeds from Common Stock Purchase Agreement	64
Repayments of short-term loans	(2,100)
Expenses paid by related-party shareholder	35	232
Net cash provided by financing activities	10,399	967
Total change in cash and restricted cash	970	(26)
Cash and restricted cash at beginning of period	34	60
Cash and restricted cash at end of period	1,004	34
Supplemental disclosure of non-cash financing activities:
Offering costs not yet paid	2,049	1,808
Non-cash stock issuances	16,413
Non-cash investment in Virion	(1,272)
SPA warrant liability upon issuance	1,932
Warrants issued related to short term loans		1,074
Short term loans issuance costs not yet paid		$ 25

Related Party Transactions

12 Months Ended

Dec. 31, 2023

Related Party Transactions

14. Related Party Transactions

License Agreements with Elkurt, Inc.

Elkurt/Brown Licenses

The Company is party to the License Agreements between Elkurt and Brown and the License Agreements between Elkurt and Rhode Island Hospital (see Note 12 Licensing and Manufacturing Agreements above). 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.

Transactions with Legacy Ocean’s Founder and Executive Chairman

The Legacy Ocean founder and executive chairman had paid certain expenses on behalf of the Company. He is reimbursed when the Company has sufficient working capital to do so. As of December 31, 2023, the amount due for these expenses was $0.1 million. These amounts were recorded as accrued expenses – related party on the consolidated balance sheets.

Transactions with Chief Accounting Officer

The Company’s former Chief Accounting Officer previously provided consulting services to the Company with RJS Consulting, LLC, his wholly owned limited liability company through June 15, 2021, before becoming the Company’s Chief Accounting Officer. As of December 31, 2023 and 2022, the Company owed RJS Consulting, LLC $0.2 million. The amounts were recorded as accounts payable on the consolidated balance sheets and were expensed as accounting fees in general and administrative expenses in 2021.

Transactions with Virion

As discussed in Note 9 – Equity, the Company entered into the Contribution Agreement with Virion on October 11, 2023, resulting in the Company acquiring a 50% membership interest in Virion. As a result, Virion is considered a related party, however, as of December 31, 2023 the Company has not engaged in any transactions with Virion with the exception of the Contribution Agreement.

- 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
-Topic 946
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+ Details

Warrants (Tables)

12 Months Ended

Dec. 31, 2023

Warrants

Schedule of Warrants

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

Schedule of Warrants

		December 31, 2023
		Issuance Date	Number of Shares Issuable		Exercise Price		Classification		Expiration
Lender/Name
Second Street Capital (1) (2)	(1)	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		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.

Pay vs Performance Disclosure - USD ($) $ in Thousands	12 Months Ended
Pay vs Performance Disclosure - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure [Table]
Net Income (Loss)	$ (114,466)	$ (17,359)

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

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+ Details

License and Manufacturing Agreements

12 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

License and Manufacturing Agreements

13. 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 2022 and 2023. 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 nonroyalty sublicense income) shall be reduced by 50%. For the fiscal years ended December 31, 2023 and 2022, the Company recorded annual license maintenance fees of $12,000 in each year. For the fiscal year ended December 31, 2023, the Company recorded license fees of $0.3 million.

The Company is also required to 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 $0.3 million 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 consolidated statements of operations as incurred. For the fiscal years ended December 31, 2023 and 2022, the Company incurred reimbursed patent costs expenses to Brown University in the amount of $0.1 million and $0.2 million, respectively. As of December 31, 2023, the Company reflected a balance due of $0.1 million in accrued expenses – related parties on its consolidated balance sheet.

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 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) 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 also is required to pay Elkurt $0.1 million 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 is also required to 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 $0.3 million 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 $10.0 million 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) $0.1 million, 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, 2028.

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 nonroyalty 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 is also required to 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 $0.3 million for enrollment of the first patient in a Phase 3 clinical trial in the United States or the equivalent outside of the United States. For the fiscal years ended December 31, 2023 and 2022, the Company has incurred reimbursed patent costs expenses to Rhode Island Hospital in the amount of $0.1 million and $0.3 million, respectively. As of December 31, 2023, the Company reflected a balance due of $0.2 million in accrued expenses – related parties on its consolidated balance sheet.

The contract term for the Rhode Island License Agreement began January 1, 2021 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. For the fiscal years ended December 31, 2023 and 2022, the Company has incurred expenses under this agreement of $0.2 million and $0.1 million, respectively. These costs are reflected in research and development costs on the Company’s consolidated statement of operations.

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.

Senior Secured Convertible Notes

12 Months Ended

Dec. 31, 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 $27.0 million, 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 $7.6 million (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, $8.6 million in principal amount of Notes will be issued (the “First Additional Closing Date”) and $10.8 million 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. At December 31, 2023, the principal amount outstanding under the 2023 Convertible Note was $7.6 million.

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 $3.0 million 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 $1.5 million.

The Company has elected to account for the Notes at fair value under the fair value option, under which the Notes were initially measured at fair value and subsequently re-measured during each reporting period. Changes in fair value are reflected within other income/(expense) in the 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 $0.6 million recorded to other income/(expense) on the consolidated statements of operations. The Company reassess the classification of the SPA Warrant at each reporting period and records any changes to fair value to other income/(expense) on the consolidated statement of operations. 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 $0.3 million was recorded to other income/(expense) on the consolidated statements of operations for the fiscal quarter ended June 30, 2023. The liability is remeasured at each reporting period and the Company records any changes to other income/(expense) on the consolidated statement of operations. As of December 31, 2023, it was determined that the fair value of the Ayrton Note Purchase Option was zero.

The Company issued 39,650 shares of its common stock to the Investor during the fiscal year ended December 31, 2023 as interest payments. A total of $0.2 million was recorded as fair value of non-cash stock issuances on the consolidated statement of operations or the shares issued based on the grant date fair values.

As of December 31, 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.

Net loss Per Share (Tables)

12 Months Ended

Dec. 31, 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 fiscal years ended December 31, 2023 and 2022 is as follows (in thousands, except share and per share data):

	2023			2022
Numerator:
Net loss	$	(114,466	)	$	(17,359	)
Denominator:
Weighted-average shares of common stock outstanding, basic and diluted		26,292,438			23,355,432
Net loss per common share, basic and diluted	$	(4.35	)	$	(0.74	)

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
Stock options		600,000		-
Warrants to purchase common stock		12,602,195		450,000
Anti dilutive securities		12,602,195		450,000

Equity (Details Narrative) - USD ($)						12 Months Ended
Equity (Details Narrative) - USD ($)	Dec. 01, 2023	Oct. 11, 2023	Mar. 31, 2023	Feb. 15, 2023	Feb. 15, 2023	Dec. 31, 2023	Dec. 31, 2022	Feb. 14, 2023
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, shares authorized						300,000,000	180,564,262
Common stock, par value						$ 0.0001	$ 0.0001
Cash						$ 4,000	$ 34,000
Liability						96,264,000	12,661,000
Change in fair value of contribution liability						(777,000)
Net income loss						$ (114,466,000)	$ (17,359,000)
Option to purchase shares						600,000,000
Fair value of a non-statutory stock option per share						$ 10,000.00
Expected volatility				75.00%
Expected term				6 years 6 months
Risk free interest rate				4.00%
Dividend yield				$ 0
Unvested stock option awards granted						$ 1,600,000
Weighted average remaining contractual life, granted						2 years 1 month 6 days
Stock Issued During Period, Value, Stock Options Exercised						$ 0
Common stock, shares issued						34,649,046	23,355,432
Founder Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Voting interests percentage						100.00%
Non-employee Directors [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Fair value of a non-statutory stock option per share						$ 3.73
Share based compensation			$ 600,000			$ 600,000
Unamortized stock-based compensation						$ 1,600,000
Weighted average period						2 years 1 month 6 days
2022 Stock Option and Incentive Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-based compensation arrangement by share-based payment award, shares issued in period						4,360,000
Board of Directors [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Option to purchase shares					75,000	75,000
Class of warrant or right, exercise price of warrants or rights				$ 10.00	$ 10.00
2022 Employee Stock Purchase Plan [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Share-based compensation arrangement by share-based payment award, number of shares available for grant						2,180,000
Employee stock purchase plan percentage						85.00%
Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Shares issued in consideration pursuant to consulting agreement, shares						350,000
Net income loss
Class of warrant or right, exercise price of warrants or rights								$ 8.06
Virion Therapeutics LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Net income loss						$ 6,800,000
Contribution Agreement [Member] \| Virion Therapeutics LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Other accrued interest rate		50.00%
Cash		$ 4,100,000
Shares issued in consideration pursuant to consulting agreement, shares	500,000	250,000
Liability						2,800,000
Increase in liability						3,600,000
Change in fair value of contribution liability						800,000
Net income loss						$ 800,000
Contribution Agreement [Member] \| Virion Therapeutics LLC [Member] \| Common Stock [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Stock issued during period purchases of shares		750,000
Founder Shares [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Common stock, par value						$ 0.0001	$ 0.0001
Common stock, shares issued						17,454,542
Founder Shares [Member] \| Poseidon Bio LLC [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Ownership percentage						68.00%

Consolidated Balance Sheets (Parenthetical) - $ / shares	Dec. 31, 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	34,649,046	23,355,432
Common stock, shares outstanding	34,649,046	23,355,432

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
CURRENT ASSETS:
Cash	$ 4	$ 34
Restricted cash	1,000
Prepaid expenses	1,105
Deferred offering costs		1,808
Total current assets	2,109	1,842
Investment in Virion	3,392
TOTAL ASSETS	5,501	1,842
CURRENT LIABILITIES:
Accounts payable and accrued expenses	16,185	11,440
Accrued expenses-related party	946	445
Short term loans, net of issuance costs	12,118	776
SPA Warrant	764
Total current liabilities	30,012	12,661
NON-CURRENT LIABILITIES
Fixed maturity consideration	4,123
Backstop put option liability	58,523
Virion contribution liability	3,605
Total liabilities	96,264	12,661
STOCKHOLDERS’ DEFICIT:
Common stock, $0.0001 par value; 300,000,000 and 180,564,262 shares authorized as of December 31, 2023 and December 31, 2022, respectively, 34,649,046 and 23,355,432 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.
Additional paid-in capital	105,292	70,770
Accumulated deficit	(196,055)	(81,589)
Total stockholders’ deficit	(90,763)	(10,819)
TOTAL LIABILITIES AND STOCKHOLDERS’ DEFICIT	$ 5,501	$ 1,842

Warrants

12 Months Ended

Dec. 31, 2023

Warrants

Warrants

10. Warrants

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

Schedule of Warrants

		December 31, 2023
		Issuance Date	Number of Shares Issuable		Exercise Price		Classification		Expiration
Lender/Name
Second Street Capital (1) (2)	(1)	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		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 within operating expenses 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 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 within operating expenses, as applicable, in its 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 fiscal years ended December 31, 2023 and 2022, the Company recognized $1.5 million and $0.8 million, respectively, in other income/(expense) in its consolidated statements of operations to record the issuance of warrants based on the estimated fair value of the awards on the date of grant.

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 December 31, 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 of the warrant. During the fiscal year ended December 31, 2023, the Company recognized $0.8 million in other income/(expense) in its consolidated statements of operations based on the estimated fair value of the awards on the date of grant. As of December 31, 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 $0.6 million 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 consolidated statements of operations. As of December 31, 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 consolidated financial statements.

Additional Share Consideration

In connection with a 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 $0.1 million was recorded within other income/(expense) in the Company’s consolidated statements of operations.

Warrants (Details Narrative) - USD ($)
$ / shares in Units, $ in Thousands

3 Months Ended

12 Months Ended

Mar. 07, 2023

Mar. 31, 2023

Dec. 31, 2023

Dec. 31, 2022

Oct. 04, 2023

Feb. 14, 2023

Share issued price per share

$ 18.00

$ 9.00

Fair value adjustment of warrants

$ 2,301

Sale of stock price per share

$ 7.00

Redemption price per share

$ 0.01

Proceeds from issuance of common stock

$ 14,260

Marketing Services Agreement [Member]

Number of shares issued

13,257

Proceeds from issuance of common stock

$ 100

SPA Warrant [Member]

Exercise price

^[1]

$ 11.50

SPA Warrant [Member] | Accredited Investor [Member]

Number of shares issued

552,141

IPO [Member] | Public Warrant [Member]

Number of shares issued

5,250,000

IPO [Member] | Private Warrant [Member]

Number of shares issued

5,411,000

Special Forces F9 Warrant [Member]

Number of shares issued

150,000

Exercise price

$ 11.50

Special Forces F9 Warrant [Member]

Fair value adjustment of warrants

$ 600

Warrant [Member] | IPO [Member] | Minimum [Member]

Purchase of warrant shares

10,661,000

Common Stock [Member]

Number of shares issued

511,712

Exercise price

$ 8.06

Number of shares issued

350,000

Common Stock [Member] | IPO [Member]

Exercise price

$ 11.50

Sale of stock price per share

11.50

Common Stock [Member] | Special Forces F9 Warrant [Member]

Share issued price per share

$ 3.89

Second Street Warrants [Member]

Number of shares issued

1,039,054

Other income (expense)

$ 1,500

$ 800

Second Street Warrants [Member] | Warrant [Member]

Number of shares issued

200,000

McKra Investments III Warrant [Member]

Number of shares issued

200,000

Other income (expense)

$ 800

[1]	For further detail on the SPA Warrant, refer to Note 7, Senior Secured Convertible Notes.

Accounts Payable and Accrued Expenses (Tables)

12 Months Ended

Dec. 31, 2023

Payables and Accruals [Abstract]

Schedule of Accounts Payable and Accrued Expenses

Accounts payable and accrued expenses consisted of the following:


	For the fiscal years ended
(in thousands)	2023		2022
Accounting and legal fees	$	12,099	$	10,250
Vendor fees		2,517		646
Research and development		636		544
Other		933		-
Total accounts payable and accrued expenses	$	16,185	$	11,440

Schedule of Accounts Payable and Accrued Expenses (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Payables and Accruals [Abstract]
Accounting and legal fees	$ 12,099	$ 10,250
Vendor fees	2,517	646
Research and development	636	544
Other	933
Total accounts payable and accrued expenses	$ 16,185	$ 11,440

Business Combination and Backstop Agreement (Tables)

12 Months Ended

Dec. 31, 2023

Business Combination, Asset Acquisition, and Joint Venture Formation [Abstract]

Schedule of Elements of Business Combination

The following table reconciles the elements of the Business Combination to the consolidated statements of stockholders’ deficit and cash flows for the fiscal year ended December 31, 2023:

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

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

Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Net loss	$ (114,466)	$ (17,359)
Denominator:
Weighted average shares of common stock outstanding, basic	26,292,438	23,355,432
Weighted average shares of common stock outstanding, diluted	26,292,438	23,355,432
Net loss per common share, basic	$ (4.35)	$ (0.74)
Net loss per common share, diluted	$ (4.35)	$ (0.74)

- Definition

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

+ References

+ Details

- Definition

The amount of net income (loss) for the period available to each share of common stock or common unit outstanding during the reporting period and to each share or unit that would have been outstanding assuming the issuance of common shares or units for all dilutive potential common shares or units outstanding during the reporting period.

+ References

+ Details

- Definition

The portion of profit or loss for the period, net of income taxes, which is attributable to the parent.

+ References

+ Details

License and Manufacturing Agreements (Details Narrative) - USD ($)	12 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone	$ 709,000	$ 8,409,000
Accrued expenses - related party	$ 946,000	445,000
Initial Brown License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Purpose of agreement	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] \| General and Administrative Expense [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Reimbursement of patent costs	$ 100,000	200,000
Initial Brown License Agreement [Member] \| Investigational New Drug Application [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone	50,000
Initial Brown License Agreement [Member] \| Investigational New Drug Application [Member] \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone	$ 300,000
Initial Brown License Agreement [Member] \| Elkurt Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment terms	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 nonroyalty sublicense income) shall be reduced by 50%.
Annual maintenance fees	$ 12,000	12,000
License fee	300,000
Initial Brown License Agreement [Member] \| Related Party [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accrued expenses - related party	$ 100,000
Brown Anti PfGARP Small Molecules License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Terms of Agreement	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 $10.0 million in equity financing by then.
Brown Anti PfGARP Small Molecules License Agreement [Member] \| Investigational New Drug Application [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone	$ 50,000
Brown Anti PfGARP Small Molecules License Agreement [Member] \| Elkurt Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment terms	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 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) 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 also is required to pay Elkurt $0.1 million 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.
Rhode Island License Agreement [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Terms of 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 nonroyalty sublicense income are generated from know-how products, the amounts otherwise due (royalty or non-royalty sublicense income) shall be reduced by 50%.
Rhode Island License Agreement [Member] \| General and Administrative Expense [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Reimbursement of patent costs	$ 100,000	300,000
Rhode Island License Agreement [Member] \| Investigational New Drug Application [Member] \| Minimum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone	50,000
Rhode Island License Agreement [Member] \| Investigational New Drug Application [Member] \| Maximum [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Developmental and commercialization milestone	$ 300,000
Rhode Island License Agreement [Member] \| Elkurt Inc [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Payment terms	the Company was required to pay Elkurt (i) $0.1 million, 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, 2028.
Rhode Island License Agreement [Member] \| Related Party [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Accrued expenses - related party	$ 200,000
Development and Manufacturing Services Agreement [Member] \| General and Administrative Expense [Member]
Collaborative Arrangement and Arrangement Other than Collaborative [Line Items]
Incurred expenses	$ 200,000	$ 100,000

Net loss Per Share

12 Months Ended

Dec. 31, 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 fiscal years ended December 31, 2023 and 2022 is as follows (in thousands, except share and per share data):

	2023			2022
Numerator:
Net loss	$	(114,466	)	$	(17,359	)
Denominator:
Weighted-average shares of common stock outstanding, basic and diluted		26,292,438			23,355,432
Net loss per common share, basic and diluted	$	(4.35	)	$	(0.74	)

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
Stock options		600,000		-
Warrants to purchase common stock		12,602,195		450,000
Anti dilutive securities		12,602,195		450,000

Schedule of Stock Option Activity (Details) shares in Thousands, $ / shares in Thousands	12 Months Ended
	Dec. 31, 2023 USD ($) $ / shares shares
Equity [Abstract]
Stock options, outstanding \| shares
Weighted average exercise price, outstanding \| $ / shares
Weighted average remaining contractual life, outstanding	0 years
Aggregate intrinsic value, outstanding \| $
Stock options, granted \| shares	600,000
Weighted average exercise price, granted \| $ / shares	$ 10
Weighted average remaining contractual life, granted	2 years 1 month 6 days
Aggregate intrinsic value, granted \| $
Stock options, cancelled or forfeited \| shares
Weighted average exercise price, cancelled or forfeited \| $ / shares
Aggregate intrinsic value, cancelled or forfeited \| $
Stock options, outstanding \| shares	600,000
Weighted average exercise price, outstanding \| $ / shares	$ 10
Weighted average remaining contractual life, outstanding	2 years 1 month 6 days
Aggregate intrinsic value, outstanding \| $

Subsequent Events (Details Narrative) - USD ($)				1 Months Ended	12 Months Ended
Subsequent Events (Details Narrative) - USD ($)	Nov. 22, 2024	Sep. 26, 2024	Jul. 23, 2024	Sep. 30, 2024	Dec. 31, 2023	Dec. 31, 2024	Nov. 13, 2024	Oct. 04, 2023	Dec. 31, 2022
Subsequent Event [Line Items]
Sales price per share								$ 7.00
Warrants exchangeable					12,602,195				450,000
Principal amount	$ 2,712,214
purchase price	2,511,225.70
Conversion price value	$ 25,000
Conversion price per share	$ 0.01
Warrant to the investor	$ 1,580,975
Number of shares awarded					$ 676,000
Cash					$ 4,000				$ 34,000
Business Combination Agreement [Member]
Subsequent Event [Line Items]
Shares issued in consideration pursuant to consulting agreement, shares					1,365,000
Subsequent Event [Member] \| Business Combination Agreement [Member] \| Sponsor [Member]
Subsequent Event [Line Items]
Number of shares awarded			$ 1,000,000
Subsequent Event [Member] \| Settlement Agreement [Member]
Subsequent Event [Line Items]
Number restricted common stock shares issued			1,700,000
Value of restricted common stock shares issued			$ 1,700,000
Net proceeds from public offering			$ 10,000,000
Net proceeds from financing				$ 10,000,000
Cash				1,700,000
Subsequent Event [Member] \| Virion Agreement [Member]
Subsequent Event [Line Items]
Aggregate capital contribution				$ 1,000,000.0
Sale of common stock				500,000
Subsequent Event [Member] \| Virion Agreement [Member] \| Virion Therapeutics LLC [Member]
Subsequent Event [Line Items]
Cash				$ 9.0
Acquiring membership interest rate				22.00%
Subsequent Event [Member] \| Maximum [Member] \| Earnout Shares Amendment Agreement [Member]
Subsequent Event [Line Items]
Shares issued in consideration pursuant to consulting agreement, shares			19,000,000
Subsequent Event [Member] \| First Tranche [Member] \| Earnout Shares Amendment Agreement [Member]
Subsequent Event [Line Items]
Number restricted common stock shares issued			6,000,000
Subsequent Event [Member] \| 2024 Notes [Member]
Subsequent Event [Line Items]
Additional secured notes			$ 7,700,000
Number restricted common stock shares issued			3,844,466
Percentage of daily trading value		15.00%
Sales price per share		$ 5.00
Warrants exchangeable			1,332,806
Principal amount of the existing note			$ 9,700,000
Subsequent Event [Member] \| 2024 Notes [Member] \| First Tranche [Member]
Subsequent Event [Line Items]
First tranche payment			$ 1,100,000
Subsequent Event [Member] \| Promissory Notes [Member] \| Settlement Agreement [Member] \| Second Street Captial and McKra Investment III [Member]
Subsequent Event [Line Items]
Promissory notes						$ 2,700,000
Subsequent Event [Member] \| Promissory Notes [Member] \| Settlement Agreement [Member] \| Two Institutional Investor [Member]
Subsequent Event [Line Items]
Number restricted common stock shares issued			225,000
Promissory note alleges							$ 2,076,223.64

Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 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 December 31, 2023:


	Fair Value Hierarchy
(in thousands)	Level 1		Level 2		Level 3			Total
Financial liabilities:
Backstop Put Option Liability	$	-	$	-	$	(58,523	)	$	(58,523	)
Fixed Maturity Consideration		-		-		(4,123	)		(4,123	)
2023 Convertible Note ⁽¹⁾		-		-		(5,618	)		(5,618	)
SPA Warrant		-		-		(764	)		(764	)
Ayrton Note Purchase Option		-		-		-			-
Total financial liabilities	$	-	$	-	$	(69,028	)	$	(69,028	)

⁽¹⁾

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

4.4%

Schedule of Fair Value Backstop Forward Purchase Agreement Asset

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	)		(5,628	)		(1,932	)		(269	)
Changes in fair value		(46,109	)		(957	)		10			1,168			269
Balance as of December 31, 2023	$	(58,523	)	$	(4,123	)	$	(5,618	)	$	(764	)		-

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

100

$1.95 - $13.93

4.4

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

5% - 80%

5.3

SPA Warrant

100

5% - 80%

3.9

Schedule of Allocation of Stock-based Compensation (Details) - USD ($)
$ in Thousands

12 Months Ended

Dec. 31, 2023

Dec. 31, 2022

Total stock-based compensation expense

$ 1,205

$ 12,378

Research and Development Expense [Member]

Total stock-based compensation expense

^[1]

8,231

General and Administrative Expense [Member]

Total stock-based compensation expense

^[2]

$ 1,205

$ 4,147

[1]

[2]

Income Taxes (Tables)

12 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Schedule of Provision for Income Taxes

	December 31, 2023			December 31, 2022
	For the Year Ended
	December 31, 2023			December 31, 2022
Statutory federal income tax rate		21.0	%		21.0	%
Permanent items		(18.7	)%		0.0	%
Change in valuation allowance		(2.3	)%		(21.0	)%
Income tax provision (benefit)		0.0	%		0.0	%

Schedule of Net Deferred Tax Assets

The significant components of the net deferred tax assets are as follows (in thousands):

Schedule of Net Deferred Tax Assets

	2023			2022
	December 31, 2023			December 31, 2022
Deferred tax assets:
Organization and start-up costs	$	42		$	46
Net operating loss carryforwards		5,962			1,338
Stock-based compensation		14,728			14,475
Losses-put option and warrant issuance		-			226
R&D tax credits		28			-
Total deferred income tax assets		20,760			16,085
Valuation allowance		(20,760	)		(16,085	)
Deferred tax asset, net of allowance	$	—		$	—

Consolidated Statements of Stockholders' Deficit - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Total
Balances at Dec. 31, 2021		$ 57,567	$ (64,230)	$ (6,663)
Balance, Shares at Dec. 31, 2021	17,496,370
Retroactive application of recapitalization
Retroactive application of recapitalization, shares	5,859,062
Adjusted beginning balance		57,567	(64,230)	(6,663)
Adjusted beginning balance, shares	23,355,432
Stock-based compensation		12,378		12,378
Issuance of warrants		825		825
Net loss			(17,359)	(17,359)
Balances at Dec. 31, 2022		70,770	(81,589)	(10,819)
Balance, Shares at Dec. 31, 2022	23,355,432
Stock-based compensation		1,205		1,205
Issuance of warrants		2,301		2,301
Net loss			(114,466)	(114,466)
Pre-merger liabilities assumed		(942)		(942)
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 of loan shares to related party		13,595		13,595
Issuance of common stock for extension of loan shares to related party, shares	1,365,000
Issuance of common stock related to short-term loans		1,648		1,648
Issuance of common stock related to short-term loans, shares	289,650
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		558		558
Shares issued in consideration pursuant to the Common Stock Purchase Agreement, shares	116,667
Shares issued in consideration pursuant to consulting agreement		676		676
Shares issued in consideration pursuant to consulting agreement, shares	350,000
Shares issued in consideration pursuant to Virion Contribution Agreement		1,272		1,272
Shares issued in consideration pursuant to Virion Contribution Agreement, shares	750,000
Offering costs		(2,049)		(2,049)
Shares Issued for conversion of a portion of the outstanding principal due under the 2023 Convertible Note		7		7
Shares Issued for conversion of a portion of the outstanding principal due under the 2023 Convertible Note, shares	5,005
Balances at Dec. 31, 2023		$ 105,292	$ (196,055)	$ (90,763)
Balance, Shares at Dec. 31, 2023	35,249,046

Schedule of Short-term Loan Balances (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Dec. 31, 2022
Short-Term Debt [Line Items]
Current loans payable	$ 12,118	$ 776
Less: issuance costs remaining to be amortized		(24)
Short-term loans, net of issuance costs	12,118	776
Second Street Loan [Member]
Short-Term Debt [Line Items]
Current loans payable	600	600
Second Street Loan 2 [Member]
Short-Term Debt [Line Items]
Current loans payable	400	200
March Second Street Loan [Member]
Short-Term Debt [Line Items]
Current loans payable	700
McKra Loan [Member]
Short-Term Debt [Line Items]
Current loans payable	1,000
Underwriter Promissory Note [Member]
Short-Term Debt [Line Items]
Current loans payable	3,150
2023 Convertible Note [Member]
Short-Term Debt [Line Items]
Current loans payable	5,618
Poseidon Demand Note [Member]
Short-Term Debt [Line Items]
Current loans payable	$ 650

Fair Value Measurements (Details Narrative)	12 Months Ended
Fair Value Measurements (Details Narrative)	Dec. 31, 2023
Fair Value Disclosures [Abstract]
[custom:BackstopForwardPurchaseAgreementAssetDescription]	The values of the Backstop Put Option Liability and Fixed Maturity Consideration were calculated as the average present value over 50,000 simulated paths.

Basis of Presentation and Summary of Significant Accounting Policies (Details Narrative) - USD ($)			12 Months Ended
	May 25, 2023	Feb. 14, 2023	Dec. 31, 2023	Dec. 31, 2022	Oct. 04, 2023	Oct. 02, 2023	May 31, 2023
Property, Plant and Equipment [Line Items]
Restricted cash			$ 1,000,000.0
Cash balance				$ 100,000
Deferred offering costs				1,808,000
Income tax interest or penalties incurred			$ 0	0
Common stock exercise price			$ 18.00		$ 9.00
Share price						$ 2.50
Maximum [Member]
Property, Plant and Equipment [Line Items]
Stock held by non affiliates			$ 250	$ 700
Annual revenue of market value			$ 100
Backstop Agreement [Member]
Property, Plant and Equipment [Line Items]
Number of purchase of shares			4,885,466
Number of right to sell shares			4,885,466
Number of shares issued		1,350,000
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
Maturity Consideration [Member]
Property, Plant and Equipment [Line Items]
Number of purchase of shares			8,000,000
Common stock exercise price			$ 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
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							$ 27,000,000.0
Principal amount	$ 7,600,000
Warrant acquire	552,141
Exercise term	5 years
Other Income [Member]
Property, Plant and Equipment [Line Items]
Deferred offering costs			$ 7,600,000
Additional Paid-in Capital [Member]
Property, Plant and Equipment [Line Items]
Deferred offering costs			$ 2,000,000.0

Commitments and Contingencies (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands			1 Months Ended		12 Months Ended
	May 21, 2024	Apr. 19, 2024	Jun. 30, 2024	Feb. 29, 2024	Dec. 31, 2023	Nov. 03, 2023
Loss Contingencies [Line Items]
Share price						$ 4.00
General and Administrative Expense [Member]
Loss Contingencies [Line Items]
Contigent compensation					$ 900
First Cumulative Capital [Member]
Loss Contingencies [Line Items]
Cumulative capital payment					50,000
Contingent Compensation [Member]
Loss Contingencies [Line Items]
Cumulative capital payment					12,400
Contingent Vendor Payments [Member]
Loss Contingencies [Line Items]
Cumulative capital payment					1,000
IFRS Corporation [Member]
Loss Contingencies [Line Items]
Accounts payable and accured expenses					100
Subsequent Event [Member]
Loss Contingencies [Line Items]
Payments for legal settlements		$ 100
Legal fees	$ 30		$ 2,000
Loss contingency, damages awarded plaintiffs amount				$ 6,300
Subsequent Event [Member] \| Common Stock [Member]
Loss Contingencies [Line Items]
Legal fee, shares				$ 4,750,000,000
Jonathan Heller [Member]
Loss Contingencies [Line Items]
Accounts payable and accured expenses					$ 500

Schedule of Warrants (Details) (Parenthetical)	Feb. 28, 2022 USD ($)
Legacy Ocean [Member]
Warrant liabilities, fair value disclosure	$ 250,000
Second Street Capital LLC One [Member]
Warrant liabilities, fair value disclosure	$ 250,000

Accounts Payable and Accrued Expenses

12 Months Ended

Dec. 31, 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:


	For the fiscal years ended
(in thousands)	2023		2022
Accounting and legal fees	$	12,099	$	10,250
Vendor fees		2,517		646
Research and development		636		544
Other		933		-
Total accounts payable and accrued expenses	$	16,185	$	11,440

Commitments and Contingencies

12 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Litigation

From time to time, the Company may be subject to various legal proceedings and claims that arise in the ordinary course of its business activities, including the significant matters described below that could have a material impact on our results of operations and cash flows. In many proceedings, including the specific matters described below, it is inherently difficult to determine whether any loss is probable or even reasonably possible or to estimate the size or range of the possible loss, and accruals for legal matters are not recorded until a loss for a particular matter is considered probable and reasonably estimable. Given the nature of legal matters and the complexities involved, it is often difficult to predict and determine a meaningful estimate of loss or range of loss until we know, among other factors, the particular claims involved, the likelihood of success of our defenses to those claims, the damages or other relief sought, how discovery or other procedural considerations will affect the outcome, the settlement posture of other parties, and other factors that may have a material effect on the outcome. For such matters, unless otherwise specified, we do not believe it is possible to provide a meaningful estimate of loss at this time. Moreover, it is not uncommon for legal matters to be resolved over many years, during which time relevant developments and new information must be continuously evaluated.

Heller v. Ocean Biomedical, Inc. et al.:

On May 23, 2023, Jonathan Heller (“Heller”) filed a civil action against the Company, Poseidon Bio LLC, Dr. 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. On September 3, 2024, Defendants filed a Motion to Dismiss numerous Counts included in the claims on the grounds that the Counts fail to state a claim upon which relief may be granted. If successful, this Motion would remove Dr. Kathuria and Ms. Ng as named defendants and will reduce the number of claims against the Company to three. The Court has not provided a hearing date for this Motion. The Company has concluded that a loss is probable and has recorded a liability of $0.5 million as of December 31, 2023 within Accounts Payable and Accrued Expenses on the consolidated balance sheets.

IPFS Corporation v. Ocean Biomedical, Inc.

On January 4, 2024, IPFS Corporation (“IPFS”) filed an action against the Company in the U.S. District Court for the District of Delaware. IPFS claims amounts owed relating to financing provided to Aesther Healthcare Acquistion Corp for commercial insurance premiums in 2022, after the August 31, 2022 Merger Agreement but prior to closing of the Business Combination. IPFS filed a motion for a default judgment on February 16, 2024. Two default judgments have been entered in favor of IPFS; one entered April 19, 2024 related to the principal amount of $0.1 million and the other entered on May 21, 2024 related to costs and attorneys’ fees incurred in the amount of $0.03 million. Both judgments accrue interest until paid. The Company has concluded that a loss is probable and has recorded a liability of $0.1 million as of December 31, 2023 within Accounts Payable and Accrued Expenses on the consolidated balance sheets.

Entoro Securities LLC v. Ocean Biomedical, Inc.

In June 2024, Entoro Securities LLC (“Entoro”) filed an action against the Company in the Superior Court of Delaware. Entoro claims that its subcontractor introduced the Company to Aesther Healthcare Acquisition Corp. and claims that the Company is obligated to pay Entoro a finder’s fee as a result of the Business Combination. Entoro seeks a finder’s fee in the amount of $2 million and 4,750,000 shares of the Company’s common stock. Discovery is underway. Based on the Company’s investigation to date, the Company does not believe the allegations in the Complaint have merit. The Company has concluded at this time that a loss is not probable nor reasonably estimable, as such no liability has been recorded as of December 31, 2023.

Meteora Special Opportunity Fund I, LP, et al. v. Ocean Biomedical, Inc.

On May 22, 2024, Meteora Special Opportunity Fund I, LP, et al. (comprised of Meteora Special Opportunity Fund I, LP; Meteora Capital Partners, LP; and Meteora Select Trading Opportunities Master, LP, together “the Plaintiffs”), filed an action against the Company in the Supreme Court of the State of New York, New York County. The Plaintiffs claim that the Seller VWAP Triggering Event related to the Backstop Agreement as described in Note 2, Basis of Presentation and Summary of Significant Accounting Policies and Note 3, Business Combination and Backstop Agreement, occurred on November 3, 2023 when the Company’s stock price traded below $4.00 per share for 30 of the preceding 45 trading days. The Plaintiffs set a Maturity Date for February 2024, at which time the Plaintiffs allege the entire Maturity Consideration became due and owed to the Plaintiffs in the amount of $6.3 million. The Company filed its opposition to the motion on September 6, 2024 and cross-moved for an extension of its time to answer or otherwise respond to the Complaint. Discussions with the Plaintiffs and the Court are on-going. The Company has concluded at this time that a loss is not probable nor reasonably estimable, as such no liability has been recorded as of December 31, 2023.

Leases

As of December 31, 2023, the Company is not a party to any leasing agreements.

License Fees

The Company has 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 consolidated balance sheets as of December 31, 2023 and 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

Under the management employment agreements, we have salaries and bonuses that are contingently payable upon financing, collectively called contingent compensation, that are contingently payable based only upon our first cumulative capital raise of at least $50 million. As of December 31, 2023, we have contingent compensation and bonuses in the amount of $12.4 million to certain members of senior management.

We also have $1.0 million of contingent vendor payments, which are also contingently payable based only upon our first cumulative capital raise of at least $50 million.

These amounts will not be paid if the contingencies do not occur. Since the payment of obligations under these agreements are contingent upon these future events, which are not considered probable as such future events are deemed outside of our control, we have not included these amounts in our consolidated financial statements. During the fiscal year ended December 31, 2023, $0.9 million of contingent compensation was paid and recorded in general and administrative expenses on the Company’s consolidated statement of operations.

Short-term Loan Agreements

12 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Short-term Loan Agreements

6. Short-term Loan Agreements

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

Schedule of Short-term Loan Balances

Short-term loans:	2023		2022
(in thousands)	For the fiscal years ended
Short-term loans:	2023		2022
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		5,618		-
Poseidon Demand Note		650		-
Current loans payable		650		-
Less: issuance costs remaining to be amortized		-		(24	)
Short-term loans, net of issuance costs	$	12,118	$	776

Second Street Capital Loans

Second Street Loan

In February 2022, the Company entered into a Loan Agreement with Second Street Capital (the “Second Street Loan”), pursuant to which the Company borrowed $0.6 million. The Second Street Loan accrues interest at the rate of 15% per annum, with principal and interest due at maturity. The Company issued to Second Street Capital 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 $0.3 million. The Company was originally required to repay the Second Street Loan on the earlier of (i) 5 business days after the Company’s next financing or (ii) November 18, 2022. The Company recognized an expense of $0.3 million for the put option. 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”), pursuant to which the Company borrowed $0.2 million, which was later amended in January 2023 to borrow an additional $0.2 million. The Second Street Loan 2 accrues interest at the rate of 15% per annum, with principal and interest due at maturity. The Company issued to Second Street Capital a warrant to purchase 62,500 shares of the Company’s common stock, with an exercise price of $11.00 per share, exercisable until February 22, 2026. There is no put option associated with this loan. The Company was originally required to repay the Second Street Loan 2 on the earlier of (i) 5 business days after the Company’s next financing or (ii) November 18, 2022. The Company recognized an expense of $0.4 million for the warrants issued based on the estimated fair value of the awards on the date of grant. The accounting treatment for the warrants is discussed within Note 10, Warrants.

March Second Street Loan

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

Second Street Capital Loan Amendments

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

The most recent amendment, effective as of May 2023, included the following terms, with no conditions present as of December 31, 2023:

	(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 $0.5 million 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 $1.2 million towards its outstanding loans plus any accrued unpaid interest.
	(iv)	In the event the Company raises additional equity through financing arrangements of at least $25.0 million, 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 consolidated statements of operations as a loss on debt extinguishment.

Second Street Loans – Interest Expense

During the fiscal years ended December 31, 2023 and 2022, the Company recognized $0.7 million and $0.2 million of interest expense on the Second Street Loans, respectively, including $0.4 million and $0.1 million, respectively, related to the amortization of debt issuance costs.

McKra Loan

In March 2023, the Company entered into a Loan Agreement with McKra Investments III (“McKra”) pursuant to which the Company borrowed $1.0 million, which bears interest at 15% per annum (the “McKra Loan”). The Company is required to pay a $0.2 million 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 $0.5 million 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 $0.5 million towards its outstanding loans plus any accrued unpaid interest.
	(iv)	In the event the Company raises additional equity through financing arrangements of at least $25.0 million, the Company is required to use the proceeds to repay the remainder of its outstanding loans plus any accrued unpaid interest.
	(v)	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 consolidated statements of operations as a loss on debt extinguishment.

During the fiscal year ended December 31, 2023, the Company recognized $0.3 million of interest expense on the McKra Loan, including $0.2 million related to the amortization of debt issuance costs.

Poseidon Demand Note

On October 2, 2023, the Company issued a demand promissory note to its largest stockholder and related party, Poseidon Bio, LLC (“Poseidon”) for $0.7 million (the “Poseidon Demand Note”). The entire principal amount of the Poseidon Demand Note will be due and payable in full on demand, or on such earlier date the principal amount may become due and payable pursuant to certain triggering events (the “Maturity Date”). Interest accrues on the unpaid principal amount of the Poseidon Demand Note at a rate of 5% per annum and is payable on the Maturity Date. Interest expense related to the Poseidon Demand Note in the amount of $8 thousand is reflected in other income (expense) in the consolidated statement of operations for the fiscal year ended December 31, 2023.

See Note 3, Business Combination and Backstop Agreement, for information on the Underwriter Promissory Note and Note 7, Senior Secured Convertible Notes, for information on the 2023 Convertible Note.

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

Dec. 31, 2023

USD ($)

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

Backstop Put Option Liability

$ (58,523)

Fixed Maturity Consideration

(4,123)

2023 Convertible Note

(5,618)

^[1]

SPA Warrant

(764)

Ayrton Note Purchase Option

Total financial liabilities

(69,028)

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

(58,523)

Fixed Maturity Consideration

(4,123)

2023 Convertible Note

(5,618)

^[1]

SPA Warrant

(764)

Ayrton Note Purchase Option

Total financial liabilities

$ (69,028)

[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 consolidated balance sheets.

Short-term Loan Agreements (Details Narrative) - USD ($)				12 Months Ended
	Mar. 31, 2023	Apr. 30, 2022	Feb. 28, 2022	Dec. 31, 2023	Dec. 31, 2022	Nov. 22, 2024	Oct. 02, 2023	Feb. 14, 2023	Jan. 31, 2023
Debt Instrument [Line Items]
Warrants and rights outstanding						$ 1,580,975
Share based payment arrangement, expense				$ 1,205,000	$ 12,378,000
Short term debt				3,200,000
Interest expense				$ 50,000
Common Stock [Member]
Debt Instrument [Line Items]
Warrants to purchase shares								511,712
Warrants exercise price								$ 8.06
Number of shares of common stock				350,000
Second Street Capital LLC [Member]
Debt Instrument [Line Items]
Short term debt average outstanding				$ 500,000
Outstanding loans and accrued unpaid interest				1,200,000
Proceeds to repay the loans				$ 25,000,000.0
Number of shares of common stock				25,000
Interest expense				$ 700,000	200,000
Amortization of debt issuance costs				$ 400,000	$ 100,000
Second Street Capital LLC [Member] \| Common Stock [Member]
Debt Instrument [Line Items]
Warrants to purchase shares				225,000	75,000
McKra Investments III Loan [Member]
Debt Instrument [Line Items]
Short term debt average outstanding				$ 500,000
Outstanding loans and accrued unpaid interest				500,000
Proceeds to repay the loans				$ 25,000,000.0
Number of shares of common stock				25,000
Interest expense				$ 300,000
Amortization of debt issuance costs				200,000
Poseidon Bio LLC [Member]
Debt Instrument [Line Items]
Interest rate							5.00%
Short term debt							$ 700,000
Interest expense				8,000
Loans Agreement [Member] \| Second Street Capital LLC [Member]
Debt Instrument [Line Items]
Principal amount	$ 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			$ 300,000
Short term debt									$ 200,000
Loans payable	$ 1,000,000.0
Loan fee	100,000
Loans Agreement [Member] \| Second Street Capital LLC [Member] \| Maximum [Member]
Debt Instrument [Line Items]
Loan fee	$ 200,000
Loans Agreement [Member] \| Second Street Capital LLC [Member] \| Warrant [Member]
Debt Instrument [Line Items]
Share based payment arrangement, expense		$ 400,000
Loans Agreement [Member] \| Second Street Capital LLC [Member] \| Put Option [Member]
Debt Instrument [Line Items]
Share based payment arrangement, expense			$ 300,000
Loans Agreement [Member] \| McKra Investments III Loan [Member]
Debt Instrument [Line Items]
Interest rate	15.00%
Warrants to purchase shares	200,000
Warrants exercise price	$ 10.34
Loans payable	$ 1,000,000.0
Repayment of the loan				$ 200,000

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

12 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

Use of Estimates

Use of Estimates

Cash and Cash Equivalents

Cash and Cash Equivalents

Restricted Cash

Restricted Cash

Concentrations of Credit Risk and Off-balance Sheet Risk

Concentrations of Credit Risk and Off-balance Sheet Risk

Revenue

Revenue

Research and Development Expenses

Research and Development Expenses

Deferred Offering Costs

Deferred Offering Costs

Income Taxes and Tax Credits

Income Taxes and Tax Credits

Net Loss Per Share

Net Loss Per Share

Fair Value Measurements

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 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 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 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 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.

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

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

Comprehensive Loss

Comprehensive Loss

Emerging Growth Company and Smaller Reporting Company Status

Emerging Growth Company and Smaller Reporting Company Status

Recent Accounting Standards

Recent Accounting Standards

Insider Trading Arrangements	12 Months Ended
Insider Trading Arrangements	Dec. 31, 2023
Insider Trading Arrangements [Line Items]
No insider trading flag	true