Item
1.01. Entry into a Material Definitive Agreement.
Amendment
to Loan Agreement with McKra Investments III
On
June 2, 2023, Ocean Biomedical, Inc., a Delaware corporation (the “Company”), and McKra Investments III, a
California general partnership (“McKra”), entered into that certain Amendment to Loan Agreement, dated June
2, 2023 but effective as of May 12, 2023 (the “McKra Loan Amendment”). The purpose of the McKra Loan Amendment
was to amend and supplement the Loan Agreement that the Company and McKra entered into on March 28, 2023 (the “McKra Loan
Agreement”), pursuant to which McKra made a single advance loan of $1,000,000 to the Company, which bears interest at a
rate of 15% per annum (the “McKra Advance”).
Under
the McKra Loan Amendment, the Company is required to:
| (1) | pay
McKra $175,000, which McKra will apply as payment towards any outstanding fees due under
the McKra Loan Agreement, upon the execution of the McKra Loan Amendment; |
| (2) | pay
McKra $500,000, which McKra will apply as partial payment towards the McKra Advance, within
five business days of the Company’s receipt of funds pursuant to that certain Securities
Purchase Agreement, dated May 15, 2023, between the Company and Alto Opportunity Master Fund,
SPC – Segregated Master Portfolio B, as amended by that certain Amendment No. 1 to
the Securities Purchase Agreement, dated May 25, 2023 (as amended, the “SPA”),
in connection with the first Additional Closing (as defined in the SPA) under the SPA; |
| (3) | pay
McKra $500,000 plus any accrued unpaid interest, which McKra will apply as payment in full
of the McKra Advance, within five business days of the Company’s receipt of funds in
connection with the second Additional Closing under the SPA; and |
| (4) | repay
the McKra Advance plus any accrued unpaid interest as promptly as possible using the proceeds
from any Capital Raise (as defined in the McKra Loan Amendment) that generates proceeds of
at least $25,000,000 for the Company. |
In
exchange for entering into the McKra Loan Amendment, the Company must issue 25,000 shares of the Company’s common stock, par value
$0.0001 per share (“Common Stock”; such shares of Common Stock, the “McKra Extension Shares”),
to McKra within five business days of the parties’ execution of the McKra Loan Amendment. No later than 30 days after such issuance,
the Company must file a registration statement for the McKra Extension Shares.
The
foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Amendment to
Loan Agreement, a copy of which is filed as Exhibit 10.1 hereto and is incorporated herein by reference.
Omnibus
Amendment to Loan Agreements with Second Street Capital, LLC
On
June 2, 2023, the Company and Second Street Capital, LLC, a California limited liability company (“Second Street Capital”),
entered into that certain Omnibus Amendment to Loan Agreements, dated June 2, 2023 but effective as of May 12, 2023 (the “Second
Street Loans Amendment”). The purpose of the Second Street Loans Amendment was to amend and supplement three loan agreements
between the Company and Second Street Capital (collectively, the “Second Street Loan Agreements”), pursuant
to which Second Street Capital made three advance loans totaling $1,700,000 to the Company, each of which bears interest at 15% per annum
(collectively, the “Second Street Advances”). The Second Street Loan Agreements consist of the following:
| (i) | Loan
Agreement, dated February 22, 2023, pursuant to which Second Street Capital made a single
advance loan of $600,000 to the Company (the “First Loan”), as
amended by a total of five amendments to such Loan Agreement, dated April 22, 2022, September
30, 2022, December 30, 2022, February 15, 2023, and March 31, 2023, which successively extended
the maturity date of the First Loan to May 31, 2023; |
| (ii) | Loan
Agreement, dated April 22, 2022, pursuant to which Second Street Capital made a single advance
loan of $200,000 to the Company (the “Second Loan”), as amended
by a total of five amendments to such Loan Agreement, dated September 30, 2022, December
30, 2022, January 10, 2023, February 15, 2023, and March 31, 2023, pursuant to which the
aggregate principal amount of the Second Loan was increased to $400,000 and the maturity
date of the Second Loan was successively extended to May 31, 2023; and |
| (iii) | Loan
Agreement dated March 29, 2023, pursuant to which Second Street Capital agreed to make advance
loans to the Company in the principal amount of $700,000. |
Under
the Second Street Loans Amendment, the Company is required to:
| (1) | pay
Second Street Capital $325,000, which Second Street Capital will apply as payment towards
any outstanding fees due under the Second Street Loan Agreements, upon the execution of the
Second Street Loans Amendment; |
| (2) | pay
Second Street Capital $500,000, which Second Street Capital will apply as partial payment
towards the Second Street Advances, within five business days of the Company’s receipt
of funds in connection with the first Additional Closing under the SPA; |
| (3) | pay
Second Street Capital $1,200,000 plus any accrued unpaid interest, which Second Street Capital
will apply as payment in full of the Second Street Advances, within five business days of
the Company’s receipt of funds in connection with the second Additional Closing under
the SPA; and |
| (4) | repay
the Second Street Advances plus any accrued unpaid interest as promptly as possible using
the proceeds from any Capital Raise (as defined in the Second Street Loans Amendment) that
generates proceeds of at least $25,000,000 for the Company. |
In
exchange for entering into the Second Street Loans Amendment, the Company must issue 25,000 shares of Common Stock (the “Second
Street Extension Shares”) to Second Street Capital within five business days of the parties’ execution of the Second
Street Loans Amendment. No later than 30 days after such issuance, the Company must file a registration statement for the Second Street
Extension Shares.
The
foregoing summary does not purport to be complete and is qualified in its entirety by reference to the full text of the Omnibus Amendment
to Loan Agreements, a copy of which is filed as Exhibit 10.2 hereto and is incorporated herein by reference.