Core Insights - SeaStar Medical Holding Corporation has published a manuscript detailing the successful use of its Selective Cytopheretic Device (SCD) in improving the clinical status of four critically ill patients with multiorgan failure prior to transplantation [1][2][3] - The SCD is designed to mitigate hyperinflammation by selectively targeting proinflammatory monocytes, which is crucial for patients to qualify for transplants [2][5] - The device has received Breakthrough Device Designation from the FDA for several conditions, including acute kidney injury and cardiorenal syndrome, indicating its potential significance in clinical settings [3][4] Company Overview - SeaStar Medical is a commercial-stage medical technology company focused on developing therapies that address excessive inflammation in critically ill patients [7] - The company employs innovative cell-directed extracorporeal therapies to target inflammatory cells, aiming to reduce tissue damage and improve patient outcomes [7] - The SCD integrates with continuous kidney renal therapy systems to promote a reparative state in proinflammatory cells, potentially leading to long-term organ recovery [5][7] Clinical Development Strategy - The company is actively collecting data to demonstrate the versatility of SCD therapy across multiple indications and is planning further clinical studies [3] - SeaStar Medical aims to publish results in peer-reviewed journals to support its clinical development strategy and facilitate market approvals [3] - The favorable outcomes from initial pilot cases provide a foundation for additional investigations into the SCD's efficacy [3]

Core Insights - SeaStar Medical Holding Corporation has published a manuscript detailing the successful use of its Selective Cytopheretic Device (SCD) in improving the clinical status of four critically ill patients with multiorgan failure prior to transplantation [1][2][3] - The SCD is designed to mitigate hyperinflammation by selectively targeting proinflammatory monocytes, which is crucial for patients to qualify for transplants [2][5] - The device has received Breakthrough Device Designation from the FDA for several conditions, including acute kidney injury and cardiorenal syndrome, indicating its potential significance in clinical settings [3][4] Company Overview - SeaStar Medical is a commercial-stage medical technology company focused on developing extracorporeal therapies that address excessive inflammation in critically ill patients [7] - The company aims to provide life-saving solutions through innovative technologies that target inflammatory cells responsible for organ damage [7] - The SCD employs immunomodulating technology to transition proinflammatory cells to a reparative state, potentially promoting long-term organ recovery [5][7] Clinical Development Strategy - The company is actively collecting data to demonstrate the versatility of SCD therapy across multiple indications and is planning further clinical studies [3][4] - The strategy includes securing breakthrough device designations and publishing results in peer-reviewed journals to facilitate market approvals [3][4] - The SCD has shown favorable results in initial pilot cases, forming a basis for further investigation [3]

PART I. FINANCIAL INFORMATION This section presents the unaudited condensed consolidated financial statements and management's discussion and analysis for the first quarter of 2024, along with disclosures on market risk and internal controls [Item 1. Condensed Consolidated Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Consolidated%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed consolidated financial statements for SeaStar Medical Holding Corporation, including the balance sheets, statements of operations, changes in stockholders' deficit, and cash flows, along with detailed notes explaining significant accounting policies, financial instrument activities, and other relevant disclosures for the period ended March 31, 2024 [Condensed Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Condensed%20Consolidated%20Balance%20Sheets%20(Unaudited)) This statement provides a snapshot of the Company's financial position, detailing assets, liabilities, and stockholders' deficit at specific points in time Condensed Consolidated Balance Sheets (in thousands) | ASSETS / LIABILITIES AND STOCKHOLDERS' DEFICIT (in thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------------------------ | :------------- | :---------------- | | Cash | $5,019 | $176 | | Total current assets | $6,537 | $2,308 | | Total assets | $7,740 | $3,513 | | Total current liabilities | $9,648 | $13,046 | | Total liabilities | $12,213 | $17,383 | | Accumulated deficit | $(127,431) | $(114,734) | | Total stockholders' deficit | $(4,473) | $(13,870) | - The Company's **cash significantly increased** from **$0.2 million** at December 31, 2023, to **$5.0 million** at March 31, 2024[10](index=10&type=chunk) - **Total stockholders' deficit improved** from **($13.9 million)** at December 31, 2023, to **($4.5 million)** at March 31, 2024[10](index=10&type=chunk) [Condensed Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20(Unaudited)) This statement outlines the Company's financial performance over a period, focusing on revenues, expenses, and net loss Condensed Consolidated Statements of Operations (in thousands) | Operating Expenses / Other Income (Expense) (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :------------------------------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $1,697 | $1,730 | | General and administrative | $2,253 | $2,851 | | Total operating expenses | $3,950 | $4,581 | | Loss from operations | $(3,950) | $(4,581) | | Total other income (expense), net | $(8,747) | $(2,515) | | Net loss | $(12,697) | $(7,096) | | Net loss per share, basic and diluted | $(0.19) | $(0.54) | | Weighted-average shares outstanding | 67,106,081 | 13,025,852 | - **Net loss increased** by **79%** to **($12.7 million)** for the three months ended March 31, 2024, compared to **($7.1 million)** for the same period in 2023[12](index=12&type=chunk) - **Total operating expenses decreased** by **14%** to **$4.0 million**, **primarily due to** a reduction in **general and administrative expenses**[12](index=12&type=chunk) [Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited)](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Deficit%20(Unaudited)) This statement details the changes in the Company's equity accounts, including common shares, additional paid-in capital, and accumulated deficit Condensed Consolidated Statements of Changes in Stockholders' Deficit (in thousands) | Stockholders' Deficit (in thousands) | Balance, December 31, 2023 | Issuance of shares - conversion of convertible notes | Issuance of shares - exercise of warrants | Issuance of shares - equity offering, net of issue costs | Stock-based compensation | Net loss | Balance, March 31, 2024 | | :----------------------------------- | :------------------------- | :--------------------------------------------------- | :---------------------------------------- | :------------------------------------------------------- | :----------------------- | :------- | :---------------------- | | Common Shares | 47,615,285 | 12,697,792 | 8,801,836 | 6,304,545 | — | — | 75,419,458 | | Additional Paid-In Capital | $100,859 | $9,389 | $3,959 | $8,309 | $434 | — | $122,950 | | Accumulated Deficit | $(114,734) | — | — | — | — | $(12,697) | $(127,431) | | Total Stockholders' Deficit | $(13,870) | $9,390 | $3,960 | $8,310 | $434 | $(12,697) | $(4,473) | - The **total stockholders' deficit improved** from **($13.9 million)** at December 31, 2023, to **($4.5 million)** at March 31, 2024, **primarily due to significant equity issuances**[15](index=15&type=chunk) - **Common shares outstanding increased substantially** from **47.6 million** to **75.4 million** during the quarter, **driven by conversions of convertible notes**, **warrant exercises**, and an **equity offering**[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This statement summarizes the cash inflows and outflows from operating, investing, and financing activities over a period Condensed Consolidated Statements of Cash Flows (in thousands) | Cash Flow Activities (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(3,488) | $(2,294) | | Net cash provided by financing activities | $8,331 | $2,972 | | Net increase in cash | $4,843 | $678 | | Cash, end of period | $5,019 | $725 | - **Net cash provided by financing activities significantly increased** to **$8.3 million** in Q1 2024 from **$3.0 million** in Q1 2023, **primarily from equity issuances and warrant exercises**[18](index=18&type=chunk) - The Company experienced a **net increase in cash** of **$4.8 million** in Q1 2024, resulting in an **end-of-period cash balance** of **$5.0 million**[18](index=18&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanations and disclosures supporting the condensed consolidated financial statements [Note 1. Description of Business](index=7&type=section&id=Note%201.%20Description%20of%20Business) This note describes the Company's core business, product development focus, and addresses its going concern status - SeaStar Medical Holding Corporation is engaged in the research, development, and commercialization of a platform medical device technology designed to modulate inflammation, **primarily targeting acute kidney injuries**[20](index=20&type=chunk) - The Company is in the **pre-revenue stage**, focused on product development[21](index=21&type=chunk) - As of **March 31, 2024**, the Company has an **accumulated deficit** of **$127.4 million** and **cash** of **$5.0 million**, which is **insufficient** to fund operations for at least 12 months, raising **substantial doubt** about its ability to continue as a **going concern**[26](index=26&type=chunk)[28](index=28&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the key accounting principles, estimates, and elections applied in preparing the financial statements - **Significant estimates** in financial statements include the **valuation of liability classified warrants**, prepaid forward purchase agreement derivative liability, provision for income taxes, convertible debt measured at **fair value**, and **stock-based compensation expense**[30](index=30&type=chunk) - The Company uses a Black-Scholes option pricing model to **fair value Warrants**, considering inputs like strike price, estimated volatility, time to maturity, and risk-free interest rate[33](index=33&type=chunk) - As an '**emerging growth company**,' SeaStar Medical has elected to use the extended transition period for complying with new or revised accounting standards[35](index=35&type=chunk) [Note 3. Accrued Expenses](index=9&type=section&id=Note%203.%20Accrued%20Expenses) This note details the composition and changes in the Company's accrued liabilities Accrued Expenses Summary (in thousands) | Accrued Expenses (in thousands) | March 31, 2024 | December 31, 2023 | | :------------------------------ | :------------- | :---------------- | | Accrued bonus | $671 | $501 | | Accrued director compensation | $519 | $427 | | Accrued research and development| $308 | $507 | | Accrued legal | — | $43 | | Accrued interest | $29 | $19 | | Other | $17 | $26 | | Total accrued expenses | $1,544 | $1,523 | - **Total accrued expenses slightly increased** to **$1.5 million** at March 31, 2024, from **$1.5 million** at December 31, 2023, **primarily due to** increases in accrued bonus and director compensation, offset by a decrease in accrued R&D and legal expenses[37](index=37&type=chunk) [Note 4. Notes Payable](index=9&type=section&id=Note%204.%20Notes%20Payable) This note provides information on the Company's outstanding debt obligations, including payments and maturities Notes Payable Summary (in thousands) | Notes Payable (in thousands) | Balance as of December 31, 2023 | Payments | Amortization of costs | Balance as of March 31, 2024 | | :--------------------------- | :------------------------------ | :------- | :-------------------- | :--------------------------- | | LMFA | $296 | $(296) | — | — | | LMFAO | $1,128 | $(1,128) | — | — | | Maxim | $2,771 | $(181) | — | $2,590 | | Insurance Financing | $565 | $(208) | — | $357 | | Unamortized deferred financing costs | $(52) | — | $27 | $(25) | | Total | $4,708 | $(1,813) | $27 | $2,922 | - The Company **fully paid off** its Senior Secured LMFA and LMFAO **Notes Payable** during Q1 2024[40](index=40&type=chunk)[41](index=41&type=chunk) - Future maturities of **notes payable** as of **March 31, 2024**, include **$0.4 million** remaining in 2024 and **$2.6 million** in 2025, **primarily from the Unsecured Maxim Note Payable**[39](index=39&type=chunk)[42](index=42&type=chunk) [Note 5. Convertible Notes](index=10&type=section&id=Note%205.%20Convertible%20Notes) This note describes the Company's convertible debt instruments, including issuances, conversions, and related financial impacts - During Q1 2024, the Company issued two additional **Investor D notes totaling $1.1 million** in principal, with an initial conversion price of **$0.56 per share**[44](index=44&type=chunk) - The institutional investor converted approximately **$3.3 million** (face value) of outstanding debt into approximately **$9.5 million** of the Company's **common stock** during Q1 2024[47](index=47&type=chunk) - The Company incurred a **total loss** of approximately **$5.8 million** related to **convertible notes** in Q1 2024, including **losses on conversion into equity**, **issuance of new notes**, and **changes in fair value of outstanding notes**[48](index=48&type=chunk) [Note 6. Equity Transactions](index=11&type=section&id=Note%206.%20Equity%20Transactions) This note details significant equity-related activities, such as offerings, warrant exercises, and credit line changes - On **January 26, 2024**, the Company completed a registered direct offering and concurrent private placement, receiving **aggregate gross proceeds** of approximately **$9.0 million**[49](index=49&type=chunk) - The Q1 2024 SPA included the **issuance of 6.3 million shares of common stock**, **pre-funded warrants** to purchase **4.5 million shares**, and **Series A and B warrants** to purchase **16.3 million shares**[49](index=49&type=chunk)[56](index=56&type=chunk) - All **Pre-Funded Warrants were exercised in full** during the first quarter ended **March 31, 2024**[51](index=51&type=chunk) - The **Tumin Equity Line of Credit**, with approximately **$95.3 million** available to draw as of December 31, 2023, was **terminated** in February 2024[53](index=53&type=chunk) [Note 7. Warrants](index=12&type=section&id=Note%207.%20Warrants) This note provides information on the Company's outstanding warrants, their classification, and fair value adjustments Warrants Outstanding Summary | Warrants Outstanding | March 31, 2024 | December 31, 2023 | | :------------------- | :------------- | :---------------- | | Liability Classified Warrants | | Investor D Warrants | 3,158,086 | 6,368,289 | | Private Placement Warrants | 5,738,000 | 5,738,000 | | PIPE Investor Warrants | 500,000 | 500,000 | | Subtotal | 9,396,086 | 12,606,289 | | Equity Classified Warrants | | Investor E Warrants | 16,261,142 | — | | Placement agent Warrants | 542,038 | — | | Public Stockholders' Warrants | 10,550,000 | 10,550,000 | | Legacy Warrants | 48,914 | 48,914 | | Subtotal | 27,402,094 | 10,598,914 | | Grand Total | 36,798,180 | 23,205,203 | - The Company incurred **$1.6 million** in **losses** from the exercise of certain **Investor D Warrants** and a **$1.2 million loss** from the mark-to-market adjustment for remaining **liability classified warrants** during Q1 2024[60](index=60&type=chunk) - **Investor E** and **Placement Agent Warrants**, issued in Q1 2024, are **classified as equity**, while **Investor D**, **Private Placement**, and **PIPE Investor Warrants remain liability classified**[55](index=55&type=chunk)[58](index=58&type=chunk) [Note 8. Stock-Based Compensation Awards](index=14&type=section&id=Note%208.%20Stock-Based%20Compensation%20Awards) This note outlines the Company's stock-based compensation plans and related expenses Stock-Based Compensation Expenses (in thousands) | Stock-Based Compensation (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :-------------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $119 | $39 | | General and administrative | $315 | $466 | | Total stock-based compensation | $434 | $505 | - **Total stock-based compensation decreased** to **$0.4 million** in Q1 2024 from **$0.5 million** in Q1 2023[61](index=61&type=chunk) - The 2022 Omnibus Incentive Plan provides long-term incentives, with options generally vesting over one or four years and expiring 10 years after grant[62](index=62&type=chunk) [Note 9. Commitments and Contingencies](index=16&type=section&id=Note%209.%20Commitments%20and%20Contingencies) This note discloses the Company's contractual obligations, license agreements, and potential legal liabilities - The Company has an exclusive license and distribution agreement for its Selective Cytopheretic Device (SCD) in the United States, with milestone payments tied to regulatory approvals and sales[71](index=71&type=chunk) - A legal settlement of approximately **$0.2 million** was paid during the year ended December 31, 2023, related to a stockholder litigation demand concerning authorized common stock shares[75](index=75&type=chunk) [Note 10. Fair Value Measurements](index=17&type=section&id=Note%2010.%20Fair%20Value%20Measurements) This note explains the methodologies and inputs used to determine the fair value of financial instruments Fair Value of Liabilities (in thousands) | Liabilities (in thousands) | March 31, 2024 (Level 3) | December 31, 2023 (Level 3) | | :------------------------- | :----------------------- | :-------------------------- | | Convertible notes | $1,135 | $4,179 | | Liability classified warrants | $2,633 | $2,307 | | Total | $3,768 | $6,486 | - The **fair value of convertible notes decreased significantly** from **$4.2 million** to **$1.1 million**, while **liability classified warrants increased** from **$2.3 million** to **$2.6 million**[80](index=80&type=chunk) - All **fair value measurements** for **convertible notes** and **liability classified warrants** are classified as **Level 3**, indicating **significant unobservable inputs** are used[78](index=78&type=chunk)[80](index=80&type=chunk) [Note 11. Income Taxes](index=19&type=section&id=Note%2011.%20Income%20Taxes) This note details the Company's income tax position, including deferred tax assets and valuation allowances - SeaStar Medical recorded **no provision for income taxes** for the three months ended March 31, 2024, or 2023[115](index=115&type=chunk) - A **full valuation allowance** has been recorded against the Company's **net deferred tax assets** due to the uncertainty of future profitable operations and taxable income[86](index=86&type=chunk)[116](index=116&type=chunk) [Note 12. Net Loss Per Share](index=19&type=section&id=Note%2012.%20Net%20Loss%20Per%20Share) This note presents the calculation of basic and diluted net loss per share and the impact of potentially dilutive securities Net Loss Per Share Calculation | Net Loss Per Share | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :----------------- | :-------------------------------- | :-------------------------------- | | Net loss | $(12,697) | $(7,096) | | Weighted-average shares outstanding | 67,106,081 | 13,025,852 | | Basic and diluted net loss per share | $(0.19) | $(0.54) | - **Basic and diluted net loss per share improved** to **($0.19)** in Q1 2024 from **($0.54)** in Q1 2023, despite a higher **net loss**, **due to a significant increase in weighted-average shares outstanding**[87](index=87&type=chunk) - Approximately **37.3 million potentially dilutive securities were excluded** from diluted **net loss per share computation** in Q1 2024 because their inclusion would have been **anti-dilutive**[89](index=89&type=chunk) [Note 13. Subsequent Events](index=21&type=section&id=Note%2013.%20Subsequent%20Events) This note discloses significant events that occurred after the balance sheet date but before the financial statements were issued - On **April 1, 2024**, the Company and **Investor D** entered into a side letter agreement **suspending certain Investor D rights** for 60 days, after which **Investor D** has the right to **redeem outstanding convertible notes** at **200%** of the conversion amount[90](index=90&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the Company's financial condition, results of operations, liquidity, and capital resources for the three months ended March 31, 2024. It highlights the Company's pre-revenue stage, ongoing net losses, and significant doubt about its ability to continue as a going concern, while also detailing operational expenses, other income/expense, and recent developments [Overview](index=22&type=section&id=Overview) This section provides an overview of the Company's business, financial performance, and going concern status - SeaStar Medical is a medical technology company developing a platform therapy, the Selective Cytopheretic Device (SCD), to reduce hyperinflammation, initially targeting acute kidney injury in pediatric and adult CRRT populations[95](index=95&type=chunk)[96](index=96&type=chunk) - The Company is in the **pre-revenue stage** and has incurred **significant net losses** since its inception, with an **accumulated deficit** of **$127.4 million** as of **March 31, 2024**[97](index=97&type=chunk)[101](index=101&type=chunk) - The Company's recurring losses and **insufficient cash** (**$5.0 million** as of **March 31, 2024**) raise **substantial doubt** about its ability to continue as a **going concern** for the next twelve months[98](index=98&type=chunk)[100](index=100&type=chunk) [Key Components of Results of Operations](index=24&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section outlines the primary drivers of the Company's financial performance, including revenue and expense trends - The Company has **not generated revenue** from commercialized products to date, but expects to commercialize its pediatric SCD following HDE approval in February 2024[103](index=103&type=chunk) - **Research and development expenses are expected to increase** as the Company continues product development and clinical trials[104](index=104&type=chunk) - **General and administrative expenses are anticipated to rise** with operational expansion, including new hires, travel, and a new enterprise resource planning platform[106](index=106&type=chunk) [Results of Operations](index=24&type=section&id=Results%20of%20Operations) This section analyzes the Company's financial results for the reporting period, detailing changes in revenue, expenses, and net loss Consolidated Results of Operations (in thousands) | Financial Metric (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | Change ($) | Change (%) | | :------------------------------ | :-------------------------------- | :-------------------------------- | :--------- | :--------- | | Revenue | $0 | $0 | $0 | — | | Research and development | $1,697 | $1,730 | $(33) | (2)% | | General and administrative | $2,253 | $2,851 | $(598) | (21)% | | Total operating expenses | $3,950 | $4,581 | $(631) | (14)% | | Loss from operations | $(3,950) | $(4,581) | $631 | (14)% | | Total other income (expense) | $(8,747) | $(2,515) | $(6,232) | 248% | | Net loss | $(12,697) | $(7,096) | $(5,601) | 79% | - **Net loss increased** by **$5.6 million**, or **79%**, to **$12.7 million** in Q1 2024 compared to **$7.1 million** in Q1 2023, **primarily driven by a significant increase in other expenses**[111](index=111&type=chunk)[117](index=117&type=chunk) - **Other expenses increased** by **$6.2 million**, or **248%**, **mainly due to losses on extinguishment of convertible notes** (**$4.6 million**), **change in fair value of liability classified warrants** (**$2.8 million**), and **loss on issuance of convertible notes** (**$0.7 million**)[114](index=114&type=chunk) [Liquidity and Capital Resources](index=27&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's ability to meet its financial obligations and its sources of funding - As of **March 31, 2024**, the Company had **$5.0 million** in **cash**, which is **deemed insufficient** to fund operations for at least the next twelve months, reinforcing the **going concern doubt**[119](index=119&type=chunk) - The Company does not expect to rely on the cash exercise of warrants to fund operations, as the current common stock trading price is below the exercise price, making such exercises **unlikely**[121](index=121&type=chunk) - Future funding requirements are **significant, dependent on** clinical trial progress, regulatory approvals, intellectual property costs, and public company operating expenses, **necessitating additional equity or debt financing**[123](index=123&type=chunk)[124](index=124&type=chunk) [Cash Flows](index=29&type=section&id=Cash%20Flows) This section analyzes the Company's cash inflows and outflows from operating, investing, and financing activities Consolidated Cash Flow Data (in thousands) | Cash Flow Data (in thousands) | Three Months Ended March 31, 2024 | Three Months Ended March 31, 2023 | | :---------------------------- | :-------------------------------- | :-------------------------------- | | Operating activities | $(3,488) | $(2,294) | | Investing activities | $0 | $0 | | Financing activities | $8,331 | $2,972 | | Net increase in cash | $4,843 | $678 | - **Net cash used in operating activities increased** to **$3.5 million** in Q1 2024 from **$2.3 million** in Q1 2023, **primarily due to the timing of vendor payments**[129](index=129&type=chunk) - **Net cash provided by financing activities rose** to **$8.3 million** in Q1 2024 from **$3.0 million** in Q1 2023, **driven by new share issuances**, **warrant exercise proceeds**, and **convertible note conversions**[130](index=130&type=chunk) [Critical Accounting Policies and Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section discusses the accounting policies and estimates that require significant judgment and are crucial to the Company's financial reporting - There have been **no material changes** to the Company's **critical accounting policies** or methods from those disclosed in its Annual Report on Form 10-K for the year ended December 31, 2023[132](index=132&type=chunk) [Emerging Growth Company Status](index=31&type=section&id=Emerging%20Growth%20Company%20Status) This section explains the Company's status as an emerging growth company and the implications for its financial reporting - The Company **maintains its status** as an '**emerging growth company**' (EGC) and **continues to utilize the extended transition period** for new accounting standards and other exemptions provided by the JOBS Act[133](index=133&type=chunk)[134](index=134&type=chunk) [Contractual Obligations and Commitments](index=31&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details the Company's future payment obligations under various contracts and agreements Contractual Obligations Summary (in thousands) | Contractual Obligations (in thousands) | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :----------------------------------- | :---- | :--------------- | :-------- | :-------- | :---------------- | | LMFA note payable | $0 | $0 | $0 | $0 | $0 | | LMFAO note payable | $0 | $0 | $0 | $0 | $0 | | Maxim note payable | $2,565| $0 | $2,565 | $0 | $0 | | Convertible Notes | $918 | $918 | $0 | $0 | $0 | | Insurance Financing | $357 | $357 | $0 | $0 | $0 | | Total contractual obligations | $3,840| $1,275 | $2,565 | $0 | $0 | - **Total contractual obligations** as of **March 31, 2024**, amount to **$3.8 million**, with **$1.3 million** due within one year and **$2.6 million** due in 1-3 years[136](index=136&type=chunk) [Recent Developments](index=33&type=section&id=Recent%20Developments) This section provides updates on significant events and milestones that occurred recently - In **April 2024**, SeaStar Medical was included in a consortium **awarded a $3.6 million NIH grant** to evaluate its SCD-Adult device for cardiorenal syndrome in chronic heart failure patients[138](index=138&type=chunk) - The SCD-Adult device **previously received a Breakthrough Device Designation** from the FDA's CBER in September 2023 for cardiorenal syndrome[138](index=138&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=33&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, SeaStar Medical is not required to provide quantitative and qualitative disclosures about market risk - The Company is a **smaller reporting company** and is not required to provide quantitative and qualitative disclosures about market risk[139](index=139&type=chunk) [Item 4. Controls and Procedures](index=33&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the Company's disclosure controls and procedures were not effective as of March 31, 2024, due to identified material weaknesses in internal control over financial reporting. Remediation efforts are underway, including strengthening the accounting team - The Company's **disclosure controls and procedures were not effective** as of **March 31, 2024**, **due to material weaknesses in internal control over financial reporting**[141](index=141&type=chunk) - A **material weakness was identified** in the design and operation of financial accounting and reporting controls[144](index=144&type=chunk) - **Remediation efforts** include **strengthening the accounting team** with an experienced Controller and **Chief Financial Officer**, and identifying additional accounting resources[145](index=145&type=chunk) PART II. OTHER INFORMATION This section covers legal proceedings, risk factors, equity sales, defaults, mine safety, other information, and exhibits [Item 1. Legal Proceedings](index=36&type=section&id=Item%201.%20Legal%20Proceedings) The Company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations - The Company is **not currently involved** in any legal proceedings **deemed likely to have a material adverse effect** on its business, financial condition, or results of operations[148](index=148&type=chunk) [Item 1A. Risk Factors](index=36&type=section&id=Item%201A.%20Risk%20Factors) No new risk factors have emerged that were not already disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023 - **No additional risk factors have arisen** beyond those disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2023[149](index=149&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=36&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company did not engage in any unregistered sales of equity securities during the three months ended March 31, 2024 - The Company did not have any sales of unregistered securities during the three months ended March 31, 2024[150](index=150&type=chunk) [Item 3. Defaults Upon Senior Securities](index=36&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the Company for the reporting period - This item is marked as 'N/A' (Not Applicable)[150](index=150&type=chunk) [Item 4. Mine Safety Disclosures](index=36&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the Company for the reporting period - This item is marked as 'N/A' (Not Applicable)[150](index=150&type=chunk) [Item 5. Other Information](index=36&type=section&id=Item%205.%20Other%20Information) No director or officer of the Company adopted or terminated a Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement during the three months ended March 31, 2024 - **No director or officer adopted or terminated** a '**Rule 10b5-1 trading arrangement**' or '**non-Rule 10b5-1 trading arrangement**' during the three months ended March 31, 2024[150](index=150&type=chunk) [Item 6. Exhibits](index=37&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including organizational documents, warrant forms, employment agreements, and certifications - The exhibit index includes the Second Amended and Restated Bylaws, various forms of warrants, an employment agreement, and certifications from the Principal Executive Officer and Principal Financial Officer[153](index=153&type=chunk) [Signatures](index=38&type=section&id=Signatures) This section provides the official signatures for the quarterly report filing - The report is signed by **Eric Schlorff**, **Chief Executive Officer**, and **David Green**, **Chief Financial Officer**, on **May 14, 2024**[156](index=156&type=chunk)

DENVER, April 30, 2024 (GLOBE NEWSWIRE) -- SeaStar Medical Holding Corporation (NASDAQ:ICU), a medical device company developing proprietary solutions to reduce the consequences of hyperinflammation on vital organs, announces that the National Institutes of Health's (NIH) National Heart, Lung, and Blood Institute has awarded a $3.6 million grant for a clinical trial to evaluate the Selective Cytopheretic Device Adult (SCD-ADULT, a member of the Company's Quelimmune™ product family) as a bridging strategy to ...

Exhibit 99.1 SeaStar Medical Reports 2023 Financial Results and Provides a Business Update DENVER (April 17, 2024) – SeaStar Medical Holding Corporation (Nasdaq: ICU) ("SeaStar Medical" or the "Company"), a commercial-stage medical device company developing proprietary solutions to reduce the consequences of hyperinflammation on vital organs, reports financial results for the 12 months ended December 31, 2023 and provides a business update. "It was exceptionally exciting to receive our first FDA approval fo ...

DENVER, April 17, 2024 (GLOBE NEWSWIRE) -- SeaStar Medical Holding Corporation (NASDAQ:ICU) ("SeaStar Medical" or the "Company"), a commercial-stage medical device company developing proprietary solutions to reduce the consequences of hyperinflammation on vital organs, reports financial results for the 12 months ended December 31, 2023 and provides a business update. "It was exceptionally exciting to receive our first FDA approval for Quelimmune™, which is now available for treating critically ill pediatric ...

• fluctuations in the valuation of companies perceived by investors to be comparable to us; Furthermore, the stock markets have experienced extreme price and volume fluctuations that have affected and continue to affect the market prices of equity securities of many companies. These fluctuations often have been unrelated or disproportionate to the operating performance of those companies. These broad market and industry fluctuations, as well as general economic, political, and market conditions such as rece ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39927 SEASTAR MEDICAL HOLDING CORPORATION (Exact name of Registrant as specified in its Charter) (State or other jurisdictio ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 001-39927 SEASTAR MEDICAL HOLDING CORPORATION (Exact name of Registrant as specified in its Charter) (State or other jurisdiction of ...

[PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This section presents the unaudited consolidated financial statements and management's discussion and analysis for SeaStar Medical Holding Corporation [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited consolidated financial statements for SeaStar Medical Holding Corporation, including the Balance Sheets, Statements of Operations, Statements of Changes in Stockholders' Deficit, and Statements of Cash Flows, along with their accompanying notes, for the periods ended March 31, 2023, and December 31, 2022 (or March 31, 2022 for operations and cash flows) These statements are prepared in conformity with U.S. GAAP and SEC interim reporting rules [Consolidated Balance Sheets (Unaudited)](index=3&type=section&id=Consolidated%20Balance%20Sheets%20(Unaudited)) This section presents the unaudited consolidated balance sheets, detailing assets, liabilities, and stockholders' deficit as of March 31, 2023, and December 31, 2022 Consolidated Balance Sheet Highlights (March 31, 2023 vs. December 31, 2022) | Metric (in thousands) | March 31, 2023 | December 31, 2022 | Change | | :-------------------- | :------------- | :---------------- | :----- | | Cash | $725 | $47 | +$678 | | Total current assets | $3,384 | $3,036 | +$348 | | Total assets | $3,386 | $4,767 | -$1,381 | | Total current liabilities | $8,036 | $5,350 | +$2,686 | | Total liabilities | $14,270 | $13,002 | +$1,268 | | Total stockholders' deficit | $(10,884) | $(8,235) | -$(2,649) | [Consolidated Statements of Operations (Unaudited)](index=4&type=section&id=Consolidated%20Statements%20of%20Operations%20(Unaudited)) This section presents the unaudited consolidated statements of operations, detailing revenues and expenses for the three months ended March 31, 2023 and 2022 Consolidated Statements of Operations Highlights (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change ($) | Change (%) | | :-------------------- | :-------------------------- | :-------------------------- | :--------- | :--------- | | Research and development | $1,784 | $355 | +$1,429 | +403% | | General and administrative | $2,797 | $457 | +$2,340 | +512% | | Total operating expenses | $4,581 | $812 | +$3,769 | +464% | | Loss from operations | $(4,581) | $(812) | -$(3,769) | +464% | | Total other expense, net | $(681) | $(192) | -$(489) | +255% | | Net loss | $(5,262) | $(1,004) | -$(4,258) | +424% | | Net loss per share (basic & diluted) | $(0.40) | $(0.14) | -$(0.26) | +186% | [Consolidated Statements of Changes in Stockholders' Deficit (Unaudited)](index=5&type=section&id=Consolidated%20Statements%20of%20Changes%20in%20Stockholders'%20Deficit%20(Unaudited)) This section presents the unaudited consolidated statements of changes in stockholders' deficit for the three months ended March 31, 2023 and 2022 Changes in Stockholders' Deficit Highlights (Three Months Ended March 31, 2023 vs. 2022) | Metric (in thousands) | March 31, 2023 | December 31, 2022 | March 31, 2022 | | :-------------------- | :------------- | :---------------- | :------------- | | Additional Paid-In Capital | $93,702 | $91,089 | $73,499 | | Accumulated Deficit | $(104,587) | $(99,325) | $(77,316) | | Total Stockholders' Deficit | $(10,884) | $(8,235) | $(3,816) | - The accumulated deficit increased from **$99.3 million** at December 31, 2022, to **$104.6 million** at March 31, 2023, primarily due to the net loss incurred during the period[15](index=15&type=chunk)[88](index=88&type=chunk) [Consolidated Statements of Cash Flows (Unaudited)](index=6&type=section&id=Consolidated%20Statements%20of%20Cash%20Flows%20(Unaudited)) This section presents the unaudited consolidated statements of cash flows, detailing operating, investing, and financing activities for the three months ended March 31, 2023 and 2022 Consolidated Statements of Cash Flows Highlights (Three Months Ended March 31, 2023 vs. 2022) | Cash Flow Activity (in thousands) | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change ($) | | :-------------------------------- | :-------------------------- | :-------------------------- | :--------- | | Net cash used in operating activities | $(2,294) | $(587) | -$(1,707) |\n| Net cash provided by financing activities | $2,972 | $284 | +$2,688 |\n| Net increase (decrease) in cash | $678 | $(303) | +$981 |\n| Cash, end of period | $725 | $207 | +$518 | - The increase in cash used for operating activities by **$1.7 million** was primarily due to increased resources allocated to launching clinical trials[122](index=122&type=chunk) - Net cash provided by financing activities increased significantly due to proceeds from the issuance of convertible notes, new shares of common stock, and the sale of recycled shares, partially offset by payments of notes payable[123](index=123&type=chunk) [Notes to Unaudited Consolidated Financial Statements](index=7&type=section&id=Notes%20to%20Unaudited%20Consolidated%20Financial%20Statements) This section provides detailed explanatory notes accompanying the unaudited consolidated financial statements, offering context and additional information on accounting policies and transactions [Note 1. Description of Business](index=7&type=section&id=Note%201.%20Description%20of%20Business) This note describes SeaStar Medical's business, its medical device technology, and the going concern considerations due to accumulated losses - SeaStar Medical Holding Corporation is a pre-revenue medical technology company focused on research, development, and commercialization of a platform medical device technology (SCD) designed to modulate inflammation, primarily targeting acute kidney injuries[20](index=20&type=chunk)[21](index=21&type=chunk)[86](index=86&type=chunk)[87](index=87&type=chunk) - The company's accumulated deficit of **$104.6 million** and cash of **$725 thousand** as of March 31, 2023, raise substantial doubt about its ability to continue as a going concern for at least 12 months[27](index=27&type=chunk)[88](index=88&type=chunk)[110](index=110&type=chunk) - Future operations are expected to be financed through equity or debt sales, credit facilities, or strategic transactions, as adequate capital may not be available on acceptable terms[28](index=28&type=chunk)[92](index=92&type=chunk) [Note 2. Summary of Significant Accounting Policies](index=8&type=section&id=Note%202.%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the significant accounting policies and critical estimates used in preparing the financial statements, including fair value measurements - Significant estimates in financial statements include the valuation of forward option on prepaid forward contracts, derivative liability, warrants, convertible debt at fair value, and stock-based compensation expense[32](index=32&type=chunk)[125](index=125&type=chunk) - The company elected the fair value option (FVO) for its convertible notes due to operational efficiencies, with changes in fair value recognized in the consolidated statements of operations[35](index=35&type=chunk)[36](index=36&type=chunk) - The fair value of forward option on prepaid forward contracts, convertible notes, and warrants liability are classified as **Level 3** in the fair value hierarchy, indicating significant unobservable inputs[39](index=39&type=chunk) [Note 3. Forward Purchase Agreements](index=10&type=section&id=Note%203.%20Forward%20Purchase%20Agreements) This note details transactions related to forward purchase agreements, including recycled share sales and fair value remeasurements - During Q1 2023, **374,005 recycled shares** were sold by FPA Sellers for **$1.87 million**, resulting in a gain of **$1.31 million** on the sale[46](index=46&type=chunk) - A loss on remeasurement of **$1.65 million** was recorded for the change in fair value of forward option on prepaid forward contracts[46](index=46&type=chunk) - A Volume Weighted Average Price (VWAP) trigger event occurred in March 2023, allowing FPA Sellers to mature the agreements, though no maturity date has been specified as of the report issuance[47](index=47&type=chunk)[133](index=133&type=chunk) [Note 4. Accrued Expenses](index=10&type=section&id=Note%204.%20Accrued%20Expenses) This note provides a breakdown of accrued expenses, including commitment fees, bonuses, and research and development costs Accrued Expenses (in thousands) | Accrued Expense Category | March 31, 2023 | December 31, 2022 | | :----------------------- | :------------- | :---------------- | | Accrued commitment fee, equity line of credit | $0 | $1,500 | | Accrued bonus | $621 | $450 | | Accrued research and development | $212 | $18 | | Accrued settlement | $200 | $0 | | Accrued director remuneration | $157 | $61 | | Accrued legal | $137 | $80 | | Accrued extension consideration to notes payable holders | $100 | $0 | | Accrued interest | $33 | $112 | | Accrued other | $71 | $24 | | Total accrued expenses | $1,531 | $2,245 | [Note 5. Equity Line of Credit](index=10&type=section&id=Note%205.%20Equity%20Line%20of%20Credit) This note details transactions under the equity line of credit, including commitment fee payments and share sales - The company paid **$1.5 million** in previously accrued commitment fees during Q1 2023, with **$1.0 million** paid in common stock (**218,842 shares**) and **$0.5 million** in cash[49](index=49&type=chunk)[134](index=134&type=chunk) - **378,006 shares** of common stock were sold to Tumim Stone Capital LLC for **$1.11 million** as part of the equity line financing arrangement during Q1 2023[49](index=49&type=chunk)[134](index=134&type=chunk) - As of March 31, 2023, **$98.89 million** was available to draw under the equity line[49](index=49&type=chunk) [Note 6. Notes Payable](index=11&type=section&id=Note%206.%20Notes%20Payable) This note details the company's notes payable, including maturity extensions and new promissory notes Notes Payable Balances (in thousands) | Note Type | March 31, 2023 | December 31, 2022 | | :-------------------- | :------------- | :---------------- | | LMFA notes payable | $443 | $968 | | LMFAO note payable | $1,758 | $2,785 | | Maxim note payable | $3,640 | $4,167 | | Insurance financing | $493 | $910 | | Total notes payable (net of deferred financing costs) | $5,745 | $7,652 | - LMFA, LMFAO, and Maxim notes' maturity dates were extended to **June 15, 2024**, in March 2023, in exchange for a **$0.1 million** cash payment to noteholders upon receipt of proceeds from the second closing of the securities purchase agreement[51](index=51&type=chunk)[116](index=116&type=chunk) - A **$0.1 million** promissory note with LMFA, bearing **7.0% interest**, was entered into on March 13, 2023, and repaid on March 24, 2023[53](index=53&type=chunk)[117](index=117&type=chunk) [Note 7. Convertible Notes](index=12&type=section&id=Note%207.%20Convertible%20Notes) This note describes the issuance and fair value accounting of the First Convertible Note, including its terms and warrants - On March 15, 2023, the company issued the First Convertible Note to 3i LP with a principal amount of **$3.26 million**, convertible into **1,207,729 shares** at **$2.70/share**, and warrants for **328,352 shares**[60](index=60&type=chunk)[135](index=135&type=chunk) - The First Convertible Note was issued at an **8.0% discount**, bears **7.0% interest**, matures on **June 15, 2024**, and is carried at fair value on the balance sheet[60](index=60&type=chunk)[61](index=61&type=chunk)[135](index=135&type=chunk) - The fair value of the First Convertible Note was **$2.39 million** at March 31, 2023, resulting in a difference of **$0.86 million** from the unpaid principal balance[62](index=62&type=chunk) [Note 8. Warrants](index=13&type=section&id=Note%208.%20Warrants) This note details the issuance and fair value classification of Convertible Note Warrants and other outstanding warrants - **328,352 Convertible Note Warrants** were issued on March 15, 2023, with an exercise price of **$2.97 per share**, expiring in **five years**, and valued at **$0.5 million** at issuance[65](index=65&type=chunk)[136](index=136&type=chunk) - These warrants are classified as a liability and measured at fair value due to potential cash settlement under the exchange cap provision[66](index=66&type=chunk) Outstanding Warrants | Warrant Type | March 31, 2023 | December 31, 2022 | | :------------------------ | :------------- | :---------------- | | Public Stockholders' Warrants | 10,350,000 | 10,350,000 | | Private Placement Warrants | 5,738,000 | 5,738,000 | | PIPE Investor Warrants | 700,000 | 700,000 | | Convertible Note Warrants | 328,352 | — | | SeaStar Warrants | 69,714 | 69,714 | | Total | 17,186,066 | 16,857,714 | [Note 9. Common Stock](index=13&type=section&id=Note%209.%20Common%20Stock) This note details stock-based compensation expenses and changes in common stock Stock-Based Compensation Expense (in thousands) | Expense Category | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | | :------------------------ | :-------------------------- | :-------------------------- | | Research and development | $39 | $0 | | General and administrative | $466 | $4 | | Total | $505 | $4 | - Total stock-based compensation expense significantly increased from **$4 thousand** in Q1 2022 to **$505 thousand** in Q1 2023[68](index=68&type=chunk) [Note 10. Commitments and Contingencies](index=13&type=section&id=Note%2010.%20Commitments%20and%20Contingencies) This note outlines the company's contractual commitments, including licensing agreements and legal settlements - The company entered into an exclusive license and distribution agreement for its SCD in the U.S., receiving a **$0.1 million** upfront payment recorded as a liability, with potential milestone payments of **$0.45 million** for FDA approval and **$0.35 million** for initial sales[69](index=69&type=chunk) - A legal settlement of **$0.2 million** was accrued as of March 31, 2023, to be paid in **four $50 thousand installments**[72](index=72&type=chunk) [Note 11. Income Taxes](index=14&type=section&id=Note%2011.%20Income%20Taxes) This note discusses the company's income tax position, including the valuation allowance against deferred tax assets - The company has recorded a full valuation allowance against its net deferred tax assets due to uncertainty of future profitable operations and taxable income[73](index=73&type=chunk)[107](index=107&type=chunk) - No income tax provision or benefit was recorded for the three months ended March 31, 2023, or 2022[12](index=12&type=chunk)[102](index=102&type=chunk) [Note 12. Net Loss Per Share](index=14&type=section&id=Note%2012.%20Net%20Loss%20Per%20Share) This note details the calculation of basic and diluted net loss per share, including the impact of anti-dilutive securities Net Loss Per Share (Basic and Diluted) | Metric | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | | :------------------------ | :-------------------------- | :-------------------------- | | Net loss (in thousands) | $(5,262) | $(1,004) | | Weighted average shares outstanding | 13,025,852 | 7,238,767 | | Basic and diluted net loss per share | $(0.40) | $(0.14) | - Diluted net loss per share is the same as basic net loss per share for all periods presented due to the company reporting a net loss, making potentially dilutive securities anti-dilutive[74](index=74&type=chunk) - The calculation of weighted average shares outstanding for Q1 2022 has been retroactively restated to reflect the Business Combination as if it occurred at the beginning of the period[77](index=77&type=chunk) [Note 13. Subsequent Events](index=15&type=section&id=Note%2013.%20Subsequent%20Events) This note discloses significant events occurring after the balance sheet date, including convertible note payments and new issuances - On April 3, 2023, the company made the first principal payment of **$217 thousand** and interest payment of **$19 thousand** on the First Convertible Note[79](index=79&type=chunk) - In May 2023, 3i LP converted **$140 thousand** of principal and **$10 thousand** of interest from the First Convertible Note into **123,104 shares** of common stock[80](index=80&type=chunk) - On May 12, 2023, the company issued the Second Convertible Note with a principal amount of **$2.17 million** and warrants for **218,901 shares**, bearing **7.0% interest** and maturing **August 12, 2024**[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's perspective on the company's financial condition, results of operations, liquidity, and capital resources, highlighting the pre-revenue stage, significant net losses, and the ongoing need for additional capital to fund its medical device development and commercialization efforts It also discusses the impact of the Business Combination and the company's going concern status [Overview](index=16&type=section&id=Overview) This overview introduces SeaStar Medical's business, its accumulated losses, and the going concern uncertainty - The company is a medical technology company developing the Selective Cytopheretic Device (SCD) to modulate hyperinflammation in acute organ injury indications, including kidneys and lungs, and aims to integrate it into existing CRRT systems[86](index=86&type=chunk)[87](index=87&type=chunk) - SeaStar Medical has incurred significant net losses since inception, with an accumulated deficit of **$104.6 million** as of March 31, 2023, and reported a net loss of **$5.3 million** for Q1 2023[88](index=88&type=chunk) - The company's recurring losses, working capital deficiency, and need for capital raise substantial doubt about its ability to continue as a going concern[91](index=91&type=chunk) [Key Components of Results of Operations](index=17&type=section&id=Key%20Components%20of%20Results%20of%20Operations) This section outlines the key drivers of the company's operating results, including revenue expectations and expense trends - The company is pre-revenue from commercialized products, with past revenue primarily from grants, and future revenue dependent on successful product development, regulatory approval, and potential licensing/collaboration agreements[94](index=94&type=chunk) - Research and development expenses are expected to increase significantly as the company advances its product development and clinical trials[95](index=95&type=chunk) - General and administrative expenses are expected to increase due to new hires, travel, a new ERP platform, branding, and professional fees for accounting and legal services[97](index=97&type=chunk) [Results of Operations](index=17&type=section&id=Results%20of%20Operations) This section analyzes the company's operating performance, focusing on changes in expenses and net loss for the period Operating Expenses Comparison (Three Months Ended March 31, 2023 vs. 2022) | Expense Category (in thousands) | 3 Months Ended Mar 31, 2023 | 3 Months Ended Mar 31, 2022 | Change ($) | Change (%) | | :------------------------------ | :-------------------------- | :-------------------------- | :--------- | :--------- | | Research and development | $1,784 | $355 | +$1,429 | +403% | | General and administrative | $2,797 | $457 | +$2,340 | +512% | | Total operating expenses | $4,581 | $812 | +$3,769 | +464% | - The **403% increase** in R&D expenses was driven by increases in clinical trial expenses (**$0.6 million**), external services (**$0.3 million**), and payroll/personnel expenses (**$0.5 million**)[103](index=103&type=chunk) - The **512% increase** in G&A expenses was primarily due to higher professional fees for SEC reporting (**$0.6 million**), payroll-related expenses (**$0.7 million**), insurance (**$0.4 million**), financial instrument expenses (**$0.1 million**), SEC reporting costs (**$0.2 million**), a legal settlement (**$0.2 million**), and marketing (**$0.1 million**)[104](index=104&type=chunk) - Net loss increased by **$4.3 million** to **$5.3 million** in Q1 2023, primarily due to increased operating expenses and a **$1.7 million** change in fair value of forward option-prepaid forward contracts, partially offset by a **$0.1 million** change in fair value of convertible notes and a **$1.3 million** gain on recycled share sales[108](index=108&type=chunk) [Liquidity and Capital Resources](index=19&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's financial liquidity, capital funding sources, and future funding requirements - The company's operations have been financed primarily through equity securities sales and convertible debt, with significant operating losses and negative cash flows since inception[109](index=109&type=chunk) - Existing cash of **$0.7 million** as of March 31, 2023, is insufficient to fund operations for at least 12 months, raising substantial doubt about the company's ability to continue as a going concern[110](index=110&type=chunk) - The company does not expect to rely on the cash exercise of warrants to fund operations in the near term, as the common stock trading price (**$1.86**) is significantly below the warrant exercise price (**$11.50**)[112](index=112&type=chunk) - Future funding requirements are substantial and depend on clinical trial progress, regulatory approvals, intellectual property costs, and public company operating expenses[118](index=118&type=chunk)[120](index=120&type=chunk) [Critical Accounting Policies and Estimates](index=22&type=section&id=Critical%20Accounting%20Policies%20and%20Estimates) This section highlights the critical accounting policies and significant estimates that impact the company's financial statements - Management's preparation of financial statements involves significant estimates, assumptions, and judgments, including the valuation of forward option on forward purchase agreements, derivative liability, warrants, convertible notes at fair value, and share-based compensation expense[124](index=124&type=chunk)[125](index=125&type=chunk) [Emerging Growth Company Status](index=22&type=section&id=Emerging%20Growth%20Company%20Status) This section explains the company's status as an Emerging Growth Company and its election to utilize certain JOBS Act exemptions - As an Emerging Growth Company (EGC), SeaStar Medical has elected to use the extended transition period for complying with new or revised accounting standards, delaying adoption until they apply to private companies[126](index=126&type=chunk) - The company intends to rely on other JOBS Act exemptions, including not providing an auditor's attestation report on internal controls, reduced compensation disclosure, and exemptions from mandatory audit firm rotation[127](index=127&type=chunk) [Contractual Obligations and Commitments](index=23&type=section&id=Contractual%20Obligations%20and%20Commitments) This section details the company's contractual obligations and commitments, including notes payable and convertible notes Contractual Obligations as of March 31, 2023 (in thousands) | Contractual Obligation | Total | Less than 1 year | 1-3 years | 3-5 years | More than 5 years | | :--------------------- | :------- | :--------------- | :-------- | :-------- | :---------------- | | LMFA note payable | $443 | $0 | $443 | $0 | $0 | | LMFAO note payable | $1,758 | $0 | $1,758 | $0 | $0 | | Maxim note payable | $3,640 | $0 | $3,640 | $0 | $0 | | First Convertible Note | $3,251 | $2,599 | $652 | $0 | $0 | | Insurance Financing | $493 | $493 | $0 | $0 | $0 | | Total | $9,585 | $3,092 | $6,493 | $0 | $0 | [Recent Developments](index=23&type=section&id=Recent%20Developments) This section summarizes recent significant events, including forward purchase agreement triggers and new convertible note issuances - A VWAP trigger event occurred in March 2023 for the Forward Purchase Agreements, allowing FPA Sellers to mature the agreements, but no maturity date has been specified[133](index=133&type=chunk) - The company paid **$1.5 million** in accrued commitment fees for its equity line of credit, with **$1.0 million** in stock and **$0.5 million** in cash, and sold **378,006 shares** for **$1.11 million** to Tumim[134](index=134&type=chunk) - On March 15, 2023, the company issued the first of four senior unsecured convertible notes to 3i LP, with a principal amount of **$3.26 million** and warrants, issued at an **8% discount** and bearing **7% interest**[135](index=135&type=chunk)[136](index=136&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=23&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, SeaStar Medical is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[137](index=137&type=chunk) [Item 4. Controls and Procedures](index=24&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were not effective as of March 31, 2023, due to identified material weaknesses in financial accounting and reporting controls, stemming partly from the recent Business Combination and the preliminary stage of developing an internal control framework - Disclosure controls and procedures were not effective as of March 31, 2023, due to material weaknesses in financial accounting and reporting controls[139](index=139&type=chunk)[143](index=143&type=chunk) - Material weaknesses identified relate to deficiencies in the design and operation of financial accounting and reporting controls, with plans to address additional headcount for complex accounting transactions[143](index=143&type=chunk) - No changes in internal control over financial reporting occurred during the three months ended March 31, 2023, that materially affected or are reasonably likely to materially affect internal control over financial reporting[144](index=144&type=chunk) [PART II. OTHER INFORMATION](index=25&type=section&id=PART%20II.%20OTHER%20INFORMATION) This section provides additional information, including legal proceedings, risk factors, equity sales, and exhibits [Item 1. Legal Proceedings](index=25&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings that are expected to have a material adverse effect on its business, financial condition, or results of operations, though litigation can still have an adverse impact - No current legal proceedings are expected to have a material adverse effect on the company's business, financial condition, or results of operations[146](index=146&type=chunk) [Item 1A. Risk Factors](index=25&type=section&id=Item%201A.%20Risk%20Factors) This section updates previously disclosed risk factors, emphasizing the critical need for additional financing to fund product development and regulatory approval processes, the potential adverse effects of Forward Purchase Agreements, and the significant risks associated with obtaining FDA approval for its SCD product candidates - Failure to obtain additional financing could force delays, reductions, or elimination of product development programs, potentially leading to cessation of operations[148](index=148&type=chunk)[150](index=150&type=chunk)[151](index=151&type=chunk) - The company faces risks related to Forward Purchase Agreements, including potential adverse effects on common stock price and the obligation to pay Maturity Consideration if a VWAP Trigger Event occurs and no agreement is reached with FPA Sellers[152](index=152&type=chunk)[153](index=153&type=chunk)[154](index=154&type=chunk)[155](index=155&type=chunk) - There is no guarantee of FDA approval for the SCD product candidates, with current HDE application for pediatric AKI not approvable in its current form and risks associated with completing the adult AKI pivotal trial[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk)[159](index=159&type=chunk)[160](index=160&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=27&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company entered into a Securities Purchase Agreement on March 15, 2023, to issue up to $9.8 million in senior unsecured convertible notes and warrants to an institutional investor (3i LP) in a series of closings, with the first tranche already issued Future closings are subject to conditions including SEC registration and stockholder approval - On March 15, 2023, the company issued the first tranche of senior unsecured convertible notes (principal amount **$3.26 million**) and warrants (**328,352 shares**) to 3i LP, with an **8% original issue discount** and **7% interest**, maturing **June 15, 2024**[161](index=161&type=chunk)[165](index=165&type=chunk) - Future tranches of convertible notes and warrants (up to **$9.8 million** total principal) are subject to conditions, including SEC registration statement effectiveness and stockholder approval for issuances exceeding **19.99%** of outstanding shares[162](index=162&type=chunk)[164](index=164&type=chunk) - The notes and warrants were issued to an accredited investor in reliance on Regulation D exemption and have not been registered under the Securities Act[168](index=168&type=chunk) [Item 3. Defaults Upon Senior Securities](index=28&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) This item is not applicable to the company for the reporting period - Not Applicable[169](index=169&type=chunk) [Item 4. Mine Safety Disclosures](index=28&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company for the reporting period - Not Applicable[169](index=169&type=chunk) [Item 5. Other Information](index=28&type=section&id=Item%205.%20Other%20Information) This item is not applicable to the company for the reporting period - Not Applicable[169](index=169&type=chunk) [Item 6. Exhibits](index=29&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed as part of the Form 10-Q, including forms of warrants, securities purchase agreements, registration rights agreements, convertible notes, and certifications from executive officers - Key exhibits include forms of Common Stock Purchase Warrant, Securities Purchase Agreement, Registration Rights Agreement, Senior Unsecured Convertible Note, and certifications from the Principal Executive Officer and Principal Financial Officer[171](index=171&type=chunk) [Signatures](index=30&type=section&id=Signatures) This section contains the required signatures of the company's authorized officers and directors, affirming the filing of the Form 10-Q [Signatures](index=30&type=section&id=Signatures) This section contains the required signatures of the company's authorized officers and directors, affirming the filing of the Form 10-Q - The report is signed by **Eric Schlorff (CEO)** and **Caryl Baron (Interim CFO)** on **May 15, 2023**, along with other directors[175](index=175&type=chunk)[179](index=179&type=chunk)