SeaStar Medical Holding Corp

Previous wording

The following discussion and analysis are intended to help you understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion in conjunction with our consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2023.

Current wording

The following discussion and analysis are intended to help you understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024 (filed March 27, 2025) and Form 10-K/A for the year ended December 31, 2024 (filed April 23, 2025).

Previous wording

On October 28, 2022, LMAO consummated a series of transactions that resulted in the combination of LMF Merger Sub, Inc. and SeaStar Medical, Inc. pursuant to an Agreement and Plan of Merger (the "Business Combination"), resulting in the formation of the Company.

Current wording

On October 28, 2022, LMAO consummated a series of transactions that resulted in the combination of LMF Merger Sub, Inc. and the Predecessor pursuant to an Agreement and Plan of Merger. Immediately upon consummation of the Business Combination, LMAO was renamed SeaStar Medical Holdings Corporation (as defined above).

Previous wording

We are a commercial stage medical technology company developing a proprietary platform therapy, our Selective Cytopheretic Device (“SCD”), to reduce the consequences of hyperinflammation on vital organs. We received Food and Drug Administration ("FDA") approval for our pediatric SCD on February 22, 2024, under a Humanitarian Device Exemption ("HDE"), and shipped our first commercial pediatric SCD in July 2024. A pivotal clinical trial for the SCD in adult patients with Acute Kidney Injury ("AKI") is underway with 59 patients enrolled as of November 12, 2024.

Current wording

We received Food and Drug Administration (“FDA”) approval on February 21, 2024, under a Humanitarian Device Exemption (“HDE”) for our pediatric SCD therapy. It is the only FDA approved product for use in pediatric patients with acute kidney injury (“AKI”) due to sepsis or a septic condition requiring kidney replacement therapy. We shipped our first commercial pediatric SCD (“QUELIMMUNE”) in July 2024. In addition, we are currently conducting a pivotal clinical trial to assess the safety and efficacy of the SCD therapy in critically ill adult patients with AKI requiring continuous renal replacement therapy (“CRRT”).

Previous wording

The inflammatory response is critical to fend off infections and repair damaged tissue in the body. Central to inflammation are the cells within blood and lymph circulatory systems, called white blood cells (primarily neutrophils and monocytes), also referred to commonly as “pus” cells. In a normal inflammatory response, neutrophils are the first immune cells to arrive at the site and are key to the entire immune response that kills pathogens and promotes tissue repair. These inflammatory cells release chemicals (cytokines) that trigger the immune system to eliminate foreign pathogens or damaged tissue, enhancing the immune response.

Current wording

The inflammatory response is essential to the healing process of critical organs; however, the overactivation of inflammatory cells, which can be triggered by many different bodily insults such as trauma, surgery or infection, can send the body into shock and cause severe damage to a variety of critical organs such as the heart, lungs and kidney. Central to inflammation are the cells within blood and lymph circulatory systems, called white blood cells (primarily neutrophils and monocytes). In a normal inflammatory response, neutrophils are the first immune cells to arrive at the site and are key to the entire immune response that kills pathogens and promotes tissue repair. These inflammatory cells release chemicals (cytokines) that trigger the immune system to eliminate foreign pathogens or damaged tissue, enhancing the immune response.

Previous wording

If the inflammatory response becomes excessive and dysregulated (referred as proinflammatory), normal neutrophil cells die off (“apoptosis”), allowing the inflammatory cells to continue to produce cytokines, further enhancing the dysregulated immune response, and altering feedback mechanisms that regulate the immune system. This results in damaging hyperinflammation spreading uncontrollably to other parts of the body, often leading to acute chronic solid organ dysfunction or failure, including heart, lung, kidney and liver diseases. This hyperinflammatory response is also known as the “cytokine storm,” referring to the body’s reaction to the category of small-secreted proteins released by hyperinflammatory cells that affect communication between cells. The cytokine storm, when left uncontrolled, can lead to organ damage and even death.

Current wording

If the inflammatory response becomes excessive and dysregulated (referred to as proinflammatory), the inflammatory cells will continue to produce cytokines and other damaging molecules, further enhancing the dysregulated immune response, and altering feedback mechanisms that regulate the immune system. This results in damaging hyperinflammation spreading uncontrollably to other parts of the body, often leading to acute chronic solid organ dysfunction or failure, including the heart, lung, kidney, liver, and even death. This hyperinflammatory response is also known as the “cytokine storm,” referring to the body’s reaction to the category of small-secreted proteins released by hyperinflammatory cells that affect communication between cells. Currently, there are no therapeutic options that specifically neutralize the white blood cells that are primarily responsible for the destructive hyperinflammatory response.

Previous wording

Based on clinical and preclinical studies conducted over the last 15 years, our technology has shown promise in modulating the degree of activity of proinflammatory cells to help reduce tissue damage and speed the repair and recovery of organ function. We believe this approach, if successful, will transform the ability of clinicians to treat acute organ failure in the intensive care unit (“ICU”) and to improve organ function in hospitalized patients.

Current wording

Clinicians typically address hyperinflammation with therapies that are either immunosuppressive or that target one cytokine, both of which are generally suboptimal in the treatment of hyperinflammation. We believe our technology has the potential to overcome limitations in existing anti-inflammatory treatments and address the challenge of selectively targeting activated neutrophils and monocytes. Clinical and preclinical studies conducted over the last 15 years have demonstrated that our SCD therapy can modulate the degree of activity of proinflammatory cells to help reduce tissue damage and speed the repair and recovery of organ function. Data from our trials demonstrated that the use of our SCD therapy to reverse the cytokine storm in more than 150 pediatric and adult patients with acute kidney injury on CRRT reduced mortality rates by 50%, and of those patients who survived 60 days, none have required dialysis. We believe our SCD therapy has the potential to transform the treatment of acute organ failure in the intensive care unit (“ICU”) and to improve organ function in patients with chronic kidney disease, certain cardiovascular diseases, and other serious inflammatory diseases.

Previous wording

We are leveraging our patent protected and scalable SCD technology platform to develop proprietary therapies that are organ agnostic and target both acute and chronic indications. Preclinically, our SCD was tested in various animal models, which include acute myocardial infarction, intracranial hemorrhage, chronic heart failure, sepsis, and acute respiratory distress syndrome. The animal models demonstrated the inflammatory response and how it was modified by our SCD. We will continue to explore the application of our SCD technology across a broad range of markets and indications where proinflammatory activated neutrophils and monocytes may contribute to disease progression or severity in both acute and chronic indications.

Current wording

Preclinically, we evaluated our SCD therapy in various animal models representing multiple hyperinflammatory indications, including acute myocardial infarction, intracranial hemorrhage, chronic heart failure, sepsis, and acute respiratory distress syndrome. The animal models demonstrated the inflammatory response and how it was modified by our SCD therapy. We will continue to explore the application of our SCD therapy across a broad range of indications where proinflammatory activated neutrophils and monocytes contribute to disease progression or severity in both acute and chronic indications.

Previous wording

We have incurred net losses in each year since our inception in 2007. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $135.2 million and $114.7 million, respectively. Our net losses were $20.4 million and $16.8 million for the nine months ended September 30, 2024, and 2023, respectively. Substantially all our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations.

Current wording

We have incurred net losses in each year since our inception in 2007. As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of $143.3 million and $139.6 million, respectively. Our net losses were $3.8 million and $12.7 million for the three months ended March 31, 2025, and 2024, respectively. For the three months ended March 31, 2025, substantially all our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. For the three months ended March 31, 2024, our net losses results from a combination of operating costs which comprised (i) research and development, and (ii) general and administrative, coupled with non-operating gains and losses due to changes in the fair value of certain liability classified financial instruments.

Previous wording

As of September 30, 2024, and December 31, 2023, we had cash of $2.1 million and $0.2 million, respectively.

Current wording

As of March 31, 2025, and December 31, 2024, we had cash of $5.3 million and $1.8 million, respectively.

Previous wording

Our accompanying unaudited consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities in the normal course of business. Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should we be unable to continue as a going concern.

Current wording

Our accompanying unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities in the normal course of business. Our unaudited condensed consolidated financial statements do not include any adjustments relating to the recoverability and classification of asset amounts or the classification of liabilities that might be necessary should we be unable to continue as a going concern.

Previous wording

The recurring losses, working capital deficiency, the need for capital to fund our operations, including clinical trial and regulatory approval expenses, and the amount of cash reserve are factors that raise substantial doubt about our ability to continue as a going concern for the twelve-month period from the date the unaudited consolidated financial statements are made available. See Note 1 to our unaudited consolidated financial statements for the three- and nine- months ended September 30, 2024, included elsewhere in this Form 10-Q for additional information on our assessment.

Current wording

The recurring losses, working capital deficiency, the need for capital to fund our operations, including clinical trial and regulatory approval expenses, and the amount of cash reserve are factors that raise substantial doubt about our ability to continue as a going concern for the twelve-month period from the date the unaudited condensed consolidated financial statements are made available. See Note 1 to our unaudited condensed consolidated financial statements for the three months ended March 31, 2025, included elsewhere in this Form 10-Q for additional information on our assessment.

Previous wording

Our need for additional capital will depend in part on the scope and costs of our development activities. To date, we have generated revenue of approximately $0.1 million from the sale of commercialized pediatric SCD products. Our ability to generate product revenue in the future will depend on the successful roll-out of our QUELIMMUNE pediatric SCD to hospitals and the development and eventual successful commercialization of our adult SCD. Until such time we are able to generate significant revenue from product sales, we expect to finance our operations through the sale of equity or debt, borrowings under credit facilities, potential collaborations, other strategic transactions or government and other grants. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we could be forced to delay, reduce, suspend or cease our research and development programs and any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See Part I, Item 1A “Risk Factors” for additional information.

Current wording

Our need for additional capital will depend in part on the scope and costs of our development activities. To date, we have generated revenue of approximately $0.5 million from the sale of commercialized pediatric SCD products. Our ability to generate product revenue in the future will depend on the successful roll-out of our QUELIMMUNE pediatric SCD to hospitals and the development and eventual successful commercialization of our adult SCD. Until such time we are able to generate significant revenue from product sales, we expect to finance our operations through the sale of equity or debt, borrowings under credit facilities, potential collaborations, other strategic transactions or government and other grants. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we could be forced to delay, reduce, suspend or cease our research and development programs and any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See Part I, Item 1A“Risk Factors” for additional information.

Previous wording

Our pediatric SCD received HDE approval from the FDA in February 2024. Since that time, we have begun to build out our commercial operations, develop our customer base and initiate commercial sales of QUELIMMUNE. We shipped our first commercial QUELIMMUNE units in July 2024. Through September 30, 2024, we have recognized approximately $0.1 million of revenue from the sale of QUELIMMUNE. Historically, prior period revenue has been primarily derived from government and other grants. We will continue to focus our efforts on generating revenue in the future based on product sales of QUELIMMUNE, as well as potential future payments from license or collaboration agreements and government and other grants. We expect that any revenue we generate will fluctuate from quarter to quarter as we introduce QUELIMMUNE to pediatric hospital customers. We also continue to develop our adult SCD for which we are enrolling patients in a pivotal study to support a FDA approval. If we fail to complete the development of, or fail to obtain regulatory approval for commercialization of our adult SCD in a timely manner, our ability to generate future revenue, and our results of operations and financial position, could be materially adversely affected.

Current wording

Our QUELIMMUNE received HDE approval from the FDA in February 2024. Since that time, we have begun to build out our commercial operations, develop our customer base and initiate commercial sales of QUELIMMUNE. We shipped our first commercial QUELIMMUNE units in July 2024. Through March 31, 2025, we have recognized approximately $0.4 million of revenue from the sale of QUELIMMUNE. Historically, prior period revenue has been primarily derived from government and other grants. We will continue to focus our efforts on generating revenue in the future based on product sales of QUELIMMUNE, as well as potential future payments from license or collaboration agreements and government and other grants.

Previous wording

Since inception, we have focused our resources on research and development activities, including conducting preclinical studies and clinical trials, and developing our process and activities related to regulatory filings for our products. Subject to the availability of additional funding, we plan to further increase our research and development expenses for the foreseeable future as we continue the development of our SCD as well as a next generation SCD.

Current wording

Since inception, we have focused our resources on research and development activities, including conducting preclinical studies and clinical trials, and developing our process and activities related to regulatory filings for our products. Subject to the availability of additional funding, we plan to further increase our research and development expenses for the foreseeable future as we continue the development of our SCD as well as a next generation SCD. Research and Development expenses also include salaries and related costs for employees in clinical and medical affairs roles, which include stock-based compensation expenses and benefits for such employees.

Previous wording

General and administrative expenses consist primarily of salaries and related costs for employees in executive and finance roles, which also include stock-based compensation expenses and benefits for such employees.

Current wording

General and administrative expenses consist primarily of salaries and related costs for employees in executive, sales and commercial and finance roles, which also include stock-based compensation expenses and benefits for such employees.

Previous wording

Other significant general and administrative expenses include facilities costs, insurance, professional fees for accounting and legal services and expenses associated with obtaining and maintaining patents and obtaining financing. As we continue to expand and grow our operations, we expect that our general and administrative expenses will increase, including additional expenses relating to new hires, travel, an enterprise resource planning platform, and branding.

Current wording

Other significant general and administrative expenses include facilities costs, insurance, professional fees for accounting and legal services and expenses associated with obtaining and maintaining patents obtaining financing. As we continue to expand and grow our operations, we expect that our general and administrative expenses will increase, including additional expenses relating to new hires, travel, an enterprise resource planning platform, and branding.

Previous wording

Net loss consists of the loss from operations, less other expense.

Current wording

Net loss consists of the loss from operations, less other expenses.

Previous wording

The following table sets forth a summary of our results of operations. This information should be read together with our unaudited consolidated financial statements and related Notes included elsewhere in this Form 10-Q.

Current wording

The following table sets forth a summary of our results of operations. This information should be read together with our unaudited condensed consolidated financial statements and related Notes included elsewhere in this Form 10-Q.

Previous wording

September 30, 2024, and (ii) $5.3 million loss on the change in fair value or extinguishments of convertible notes that occurred during the three-months ended September 30, 2023, but there was no such activity for the three months ended September 30, 2024, as all convertible notes were fully redeemed or converted by June 30, 2024.

Current wording

(*) - there was no activity for the three months ended March 31, 2024.

Previous wording

Revenue increased $0.1 million for the three-months ended September 30, 2024 compared to the three-months ended September 30, 2023, as the Company commenced commercial sales in July 2024. This was made possible because the Company obtained an HDE for the pediatric SCD in February 2024, and final regulatory clearance to sell commercially from the FDA under this HDE in July 2024.

Current wording

Revenue increased $0.3 million for the three months ended March 31, 2025 compared to the three months ended March 31, 2024, as we commenced commercial sales in July 2024. This was made possible because we obtained an HDE for QUELIMMUNE in February 2024, and final regulatory clearance to sell commercially from the FDA under this HDE in July 2024. The Company has five customer sites for QUELIMMUNE as of March 31, 2025.

Previous wording

Research and development expenses for the three months ended September 30, 2024 and 2023 were $2.3 million and $1.1 million, respectively. The increase in research and development expenses of approximately $1.2 million, or 115%, was primarily driven by (i) a $0.7 million increase in clinical trial costs due to the Company's increased efforts related to patient treatments and obtaining regulatory approval to commercially market and sell its adult SCD devices, (ii) a $0.4 million increase in personnel costs related to increased headcount during the three-months ended September 30, 2024 compared to this same period ended September 30, 2023, and (iii) $0.2 million increase in external costs due to the use of certain 3rd party vendors in conjunction with the Company's regulatory compliance and maintenance efforts.

Current wording

Research and development expenses for the three months ended March 31, 2025 and 2024 were $2.4 million and $1.7 million, respectively. The increase in research and development expenses of approximately $0.7 million, or 43%, was primarily driven by (i) a $0.7 million increase in clinical trial costs due the Company's NEUTRALIZE-AKI pivotal trial, which increased from five (5) clinical trial sites as of March 31, 2024, to sixteen (16) clinical trial sites as of March 31, 2025, (ii) a $0.2 million increase in personnel costs related to increased headcount during the three months ended March 31, 2025 compared to this same period ended March 31, 2024, (iii) $0.1 million increase in other costs, mostly due to an increase in medical affairs activities.

Previous wording

SeaStar Medical recorded a provision for income taxes of $0.0 million for the three months ended September 30, 2024, and a provision for income taxes of $0.0 million for the nine months ended September 30, 2023.

Current wording

We recorded a provision for income taxes of $3 thousand for the three months ended March 31, 2025, and no provision for income taxes for the three months ended March 31, 2024.

Previous wording

During the three months ended September 30, 2024, SeaStar Medical had a net loss of $4.5 million compared to a net loss of $7.2 million for the three months ended September 30, 2023. The decreased net loss of $2.7 million has been disclosed in the above discussion.

Current wording

During the three months ended March 31, 2025, we had a net loss of approximately $3.8 million compared to a net loss of approximately $12.7 million for the three months ended March 31, 2024. The decreased net loss of approximately $8.9 million has been disclosed in the above discussion.

Previous wording

To date, we have financed our operations primarily through the sale of equity securities and convertible debt and, to a lesser extent, through grants from governmental and other agencies. Since our inception, we have incurred significant operating losses and negative cash flows. As of September 30, 2024 and December 31, 2023, we had an accumulated deficit of $135.1 million and $114.7 million, respectively.

Current wording

To date, we have financed our operations primarily through the sale of equity securities and convertible debt and, to a lesser extent, through grants from governmental and other agencies. Since our inception, we have incurred significant operating losses and negative cash flows. As of March 31, 2025 and December 31, 2024, we had an accumulated deficit of approximately $143.3 million and $139.6 million, respectively.

Previous wording

As of September 30, 2024 and December 31, 2023, we had cash of $2.1 million and $0.2 million, respectively. Based on our results of operations and liquidity as of September 30, 2024, we believe our cash and cash equivalents, including the cash we obtained from the registered direct financing in the first quarter of 2024 and the registered direct offering in July 2024, are not sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of our unaudited consolidated financial statements for the nine months ended September 30, 2024, are made available. We believe that this raises substantial doubt about our ability to continue as a going concern.

Current wording

As of March 31, 2025 and December 31, 2024, we had cash of $5.3 million and $1.8 million, respectively. Based on our results of operations and liquidity as of March 31, 2025, we believe our cash and cash equivalents, including the cash we obtained from the registered direct financing in the first quarter of 2025 and the registered direct offering in July 2024, are not sufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of our unaudited condensed consolidated financial statements for the three months ended March 31, 2025, are made available. We believe that this raises substantial doubt about our ability to continue as a going concern.

Previous wording

In October 2023, we entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $0.7 million. We paid down the remaining principal and interest payments during the three months ended September 30, 2024.

Current wording

In October 2024, the Company entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $0.7 million. The Company will pay the remaining five monthly installments of principal and interest totaling approximately $0.4 million with the last payment being made in August 2025.

Previous wording

Net cash used in operating activities for the nine months ended September 30, 2024 was $11.3 million compared to $5.8 million for the nine months ended September 30, 2023. The increase in cash used for operating activities of $5.5 million is primarily due to the (i) increase in operating expenditures of approximately $2.0 million, and (ii) coupled with the timing of certain payments to vendors to reduce our outstanding payables resulted in an increase in cash outflows for operating activities.

Current wording

Net cash used in operating activities for the three months ended March 31, 2025 was $2.7 million compared to $3.5 million for the three months ended March 31, 2024. The decrease in cash used for operating activities of $0.8 million is primarily due to the $0.8 million due to the timing of certain (i) payments from customers or to vendors to reduce our cash outflows for operating activities.

Previous wording

Net cash provided by financing activities for the nine months ended September 30, 2024 was $13.2 million, was primarily related to (i) $13.6 million received from the issuance of new shares of common stock, (ii) $3.8 million in proceeds from issuance of pre-funded warrants, (iii) $0.9 million from proceeds received from the exercise of warrants to purchase shares of the our common stock, and (iv) $1.0 million received from the issuance of convertible notes. This was offset by (i) $5.3 million paid to settle outstanding notes payable and (ii) $0.7 million paid to cover a redemption of certain outstanding convertible notes.

Current wording

Net cash provided by financing activities for the three months ended March 31, 2025 was $6.1 million, was primarily related to (i) $1.6 million received from the issuance of new shares of common stock, and (ii) $4.8 million in proceeds from issuance of pre-funded warrants. This was offset by (i) $0.2 million paid to settle outstanding notes payable.

Previous wording

There has been no material change from the policies or methods disclosed in our Annual Report to Form 10-K filed April 16, 2024, as amended by Form 10-K/A filed April 26, 2024, and Form 10-K/A filed July 3, 2024, for the year-ended December

Current wording

There has been no material change from the policies or methods disclosed in our Annual Report to Form 10-K filed March 27, 2025, and as amended by Form 10-K/A filed April 23, 2025, for the year-ended December 31, 2024.