S-1/A: SeaStar Medical Seeks Up to $5.0 Million in Public Offering Amidst Going Concern Doubts and Nasdaq Delisting Threat

SeaStar Medical Holding Corporation is offering up to 5.15 million shares of common stock and accompanying warrants to raise approximately $4.3 million in net proceeds, as the company faces substantial doubt about its ability to continue as a going concern and a Nasdaq delisting threat.

Summary

• SeaStar Medical is conducting a public offering of up to 5,149,860 shares of common stock, along with Series A and Series B warrants to purchase an equal number of shares, or pre-funded warrants with accompanying warrants.
• The assumed combined public offering price is $0.9709 per share and accompanying warrants, based on the Nasdaq closing price on June 17, 2025.
• The company expects to receive approximately $4.3 million in net proceeds from this offering, assuming all securities are sold and no exercise of warrants, which will be used for working capital, product candidate development, and general corporate purposes.
• SeaStar Medical has incurred significant net losses since its inception, with an accumulated deficit of $143.3 million as of March 31, 2025, and $139.6 million as of December 31, 2024.
• The company reported a net loss of $3.8 million for the three months ended March 31, 2025, and $24.8 million for the year ended December 31, 2024.
• As of March 31, 2025, the company had cash of $5.3 million and negative working capital of $0.2 million.
• The company's independent auditors have expressed substantial doubt about its ability to continue as a going concern.
• SeaStar Medical received FDA approval for its pediatric Selective Cytopheretic Device (SCD), QUELIMMUNE, on February 21, 2024, and shipped its first commercial units in July 2024.
• The company is currently conducting a pivotal clinical trial (NEUTRALIZE-AKI) for its adult SCD therapy, with 108 patients enrolled as of June 12, 2025, and anticipates topline results and PMA submission in mid-2026.
• The SCD therapy has received six Breakthrough Device Designations (BDD) from the FDA for various indications, including adult AKI, cardiorenal syndrome, hepatorenal syndrome, and end-stage renal disease (ESRD).
• The company is facing Nasdaq non-compliance issues, including a minimum market value of listed securities requirement ($35 million) and a stockholders' equity requirement ($2.5 million), with a deadline of June 22, 2025, to demonstrate compliance for the latter.
• Management has implemented cost-reduction measures, including waiving executive bonuses for 2023 and 2024 and implementing a 20% decrease in annual base salaries for executive officers and board members, expecting to reduce monthly operating expenses by approximately $50,000.

Sentiment

Score: 2

Explanation: The company is in a precarious financial position, marked by substantial doubt about its ability to continue as a going concern, recurring significant losses, negative working capital, and a Nasdaq delisting threat. While the product technology shows promise and has received FDA approvals/designations, the severe financial distress and reliance on future capital raises for survival overshadow these positives, indicating a very high-risk investment.

Positives

• Received FDA approval on February 21, 2024, under a Humanitarian Device Exemption (HDE) for its pediatric SCD therapy (QUELIMMUNE), making it the only FDA-approved product for pediatric AKI due to sepsis requiring kidney replacement therapy.
• Shipped its first commercial pediatric SCD (QUELIMMUNE) in July 2024 and has 5 active commercial sites as of March 31, 2025.
• SCD therapy has been awarded Breakthrough Device Designation (BDD) for six therapeutic indications by the FDA, which enables a speedier pathway to approval and more frequent/flexible meetings with the FDA.
• Clinical studies with over 150 pediatric and adult AKI patients on CRRT showed a 50% reduction in mortality rates, and 100% of survivors at 60 days did not require dialysis.
• Health economic outcomes research (HEOR) suggests QUELIMMUNE therapy could be cost-beneficial, potentially saving ~$70,000 per pediatric AKI hospitalization by reducing length of stay by 3 days.
• The company has a patent portfolio of 34 patents and 7 pending applications, with 20 patents and 4 applications exclusively owned, and 14 patents and 3 applications co-owned with the University of Michigan under an exclusive license.

Negatives

• The company has incurred significant net losses since its inception, with an accumulated deficit of $143.3 million as of March 31, 2025.
• There is substantial doubt about the company's ability to continue as a going concern, as stated by independent auditors and acknowledged by management, due to recurring operating losses and negative cash flows.
• The company does not have sufficient cash on hand to fund operations for at least 12 months from the March 31, 2025 financial statement issuance date.
• The company is not in compliance with Nasdaq's minimum market value of listed securities ($35 million) and minimum stockholders' equity ($2.5 million) requirements, facing potential delisting.
• The current offering is on a 'reasonable best efforts' basis with no minimum amount of securities required to be sold, meaning the company may not raise the capital it needs.
• The company will initially depend on revenue generated from a single product (pediatric SCD), making it vulnerable to market acceptance and competition.
• The exercise of existing warrants is highly dependent on the common stock price, which is currently below the exercise price for most warrants, making significant cash proceeds from exercises unlikely in the near term.
• The company is involved in ongoing legal proceedings, including a putative class action and a stockholder derivative action, alleging material misstatements and deficiencies in internal controls, which could incur significant costs and divert management attention.
• The company terminated its exclusive distribution agreement with Nuwellis in December 2024 due to breach, resulting in a $900,000 settlement payment to Nuwellis.

Risks

• Immediate and future dilution for investors due to the current offering and potential future equity issuances.
• Sales of a substantial number of common stock shares in the market following the offering may depress the market price.
• Management has broad discretion over the use of offering proceeds, which may not enhance operating results or stock price.
• Warrants and pre-funded warrants are speculative in nature and may not be profitable to exercise.
• Inability to obtain additional financing could force delays, reductions, or elimination of product development programs.
• Challenges in obtaining additional FDA approvals for products, including the adult AKI SCD, which could delay or prevent commercialization.
• Changes in U.S. tariff, trade, or tax provisions could adversely impact manufacturing and sales.
• Inability to manage growth effectively could strain resources and delay business objectives.
• Loss of government grant funding due to changing U.S. government priorities could impact future growth plans.
• Failure to comply with extensive U.S. and foreign regulatory agency regulations could delay or prevent commercialization.
• Delays in successfully completing clinical trials could jeopardize regulatory approval.
• Limited experience with large-scale contracts with medical device manufacturers and potential difficulties in manufacturing SCD devices.
• Lack of third-party coverage and reimbursement for devices could delay or limit adoption.
• Adverse changes in reimbursement policies and procedures by payors may impact the ability to market and sell products.
• Exposure to product liability and clinical/preclinical liability risks, which could result in substantial financial burden.
• United States legislative or FDA regulatory reforms may make it more difficult and costly to obtain regulatory approval and commercialize products.
• Subject to stringent and changing privacy laws, regulations, and standards, with potential for increased compliance costs and legal actions.
• Business operations could be adversely affected if security measures are compromised or fail.
• Dependence on key personnel and inability to attract and retain qualified personnel could impede business objectives.
• Estimates of market opportunity, industry projections, and financial forecasts may prove inaccurate.
• Reliance on exclusively licensed patent rights from third parties, which are subject to termination or expiration.
• Inability to obtain and maintain sufficient patent protection or protect trade secrets could adversely affect competitive advantage.
• U.S. government may exercise certain rights (e.g., march-in rights) regarding inventions developed with federal funding.
• New technology may lead to competitors developing superior products, rendering SCD technology obsolete.
• Intense competition in the medical device industry from companies with greater resources.
• Outsourcing of operational and development activities means dependence on third parties, whose failures could have a material adverse effect.
• Product recalls could divert resources, harm reputation, and negatively affect sales.
• Risks arising from future pandemics could impact clinical trials, manufacturing, and supply chains.
• Lack of long-term experience operating as a U.S. public company and potential failure to implement adequate governance, compliance, risk management, and control infrastructure.
• Volatility in the common stock trading price and potential for future sales to depress the price.
• No history of cash dividends and no expectation to pay dividends in the future, limiting return on investment to stock price appreciation.

Future Outlook

SeaStar Medical anticipates reporting topline clinical trial results and submitting a Pre-market Approval (PMA) application for its adult AKI SCD therapy in mid-2026. The company plans to continue exploring and expanding the application of its SCD technology to additional indications with large patient populations, including acute respiratory distress syndrome, chronic dialysis, cardiorenal syndrome, and hepatorenal syndrome. Future growth strategies include innovating and expanding applications through clinical trials, differentiation through medical education, business development and out-licensing activities, and scaling production with manufacturing partners. The company expects to continue incurring significant losses and will need additional funding to support its operations and complete planned regulatory approval processes.

Management Comments

• Our Chief Executive Officer, Mr. Eric Schlorff, and our Chief Medical Officer, Dr. Kevin Chung, each agreed to waive receipt of their earned bonuses for our 2023 and 2024 fiscal years to support efforts to reduce liabilities.
• The Board of Directors approved a 20% decrease in the annual base salary of Eric Schlorff (CEO), David Green (CFO), and Kevin Chung (CMO), as well as certain other members of management and directors' cash retainer fees, expecting to reduce monthly operating expenses by approximately $50,000.
• 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.
• We believe that our SCD therapy is readily applicable for use in other indications, which will increase the addressable market for our SCD therapy, but will also require additional clinical studies and FDA approval.
• We believe that our first-in-class SCD therapy can address the large potential market of over one million patients each year that face life-threatening hyperinflammatory conditions, including organ failure and potential loss of life.

Industry Context

SeaStar Medical operates in the highly competitive medical device industry, specifically targeting hyperinflammation and cytokine storm, with an initial focus on Acute Kidney Injury (AKI). The AKI market is growing, with an estimated 6 million patients annually in the U.S., and hospital costs associated with AKI are between $5.4 billion and $20 billion per year. The company's SCD technology aims to address the lack of therapeutic options that specifically neutralize over-active white blood cells responsible for destructive hyperinflammation. Current treatments are often immunosuppressive or target single cytokines, which are generally suboptimal. The company leverages existing Continuous Renal Replacement Therapy (CRRT) systems in ICUs, a global market estimated at $986 million ($354 million in U.S. as of 2019), dominated by large players like Fresenius Medical Care Holdings, Inc. and Baxter International. The company's strategy emphasizes demonstrating clear clinical benefit and positive financial incentives for hospitals to gain market acceptance.

Comparison to Industry Standards

• In clinical studies with more than 150 pediatric and adult AKI patients on CRRT, SeaStar Medical's SCD reduced mortality rates by 50%, compared to historical mortality rates of approximately 50% for AKI patients on CRRT.
• Of the patients who survived 60 days in SeaStar Medical's SCD clinical studies, none required dialysis, compared to a historical control where nearly one in four (25%) of AKI patients on CRRT who survive hospitalization usually require long-term dialysis.
• Health economic outcomes research (HEOR) for pediatric AKI hospitalizations involving CKRT estimated costs over $450,000 per event, with SeaStar Medical's QUELIMMUNE therapy projected to be cost-beneficial by lowering mortality and reducing hospital length of stay by 3 days, leading to estimated savings of ~$70,000 per hospitalization.

Management Changes

Corporate Governance

Legal Proceedings

• **Stockholder Derivative Action (Lazo v. Schlorff et. al., C.A. No. 1:24-cv-3444, D. Colorado):** Filed on December 13, 2024, by a purported stockholder, alleging that the CEO, former CFO, and certain current/former directors violated Section 14(a) and 10(b) of the Exchange Act, breached fiduciary duties, and were unjustly enriched due to purportedly false/misleading statements regarding FDA approval prospects and deficiencies in internal financial controls leading to financial restatements. The action seeks damages, restitution, and injunctive relief concerning corporate governance and internal controls. The court stayed the action on January 30, 2025, pending resolution of a motion to dismiss in the Class Action.
• **Putative Class Action (Wells v. SeaStar Medical Holding Corporation et al, Case No. 1:24-cv-0187, D. Colorado):** Filed on July 5, 2024, by a purported stockholder, alleging that the company, CEO, and former CFO made material misstatements or omissions regarding business and operations, culminating in the restatement of consolidated financial statements. Asserts claims under Section 10(b) and 20(a) of the Exchange Act, seeking compensatory and other damages. An amended complaint was filed on March 4, 2025. The company intends to vigorously defend the action. The company has not recognized a contingent liability for this Class Action event as it does not qualify for recognition criteria under ASC 450 Contingencies.

Related Party Transactions

• **Amended and Restated Registration Rights Agreement:** On April 21, 2022, certain stockholders and LMAO entered into this agreement, requiring the company to file a registration statement for shares issued or issuable to them. Lock-up restrictions were waived for Mr. David Humes and Mr. Michael Humes on October 25, 2022, and other stockholders agreed to waive their right to release lock-up restrictions as a result.
• **Amendment to Credit Agreement with LM Funding America, Inc. (LMFA) and Amended Promissory Note:** On October 28, 2022, the company and LMFA amended the Credit Agreement to extend the loan maturity, permit prepayment, require 5.0% of future gross cash proceeds from debt/equity financing (after the first $500,000) to repay the note, and reduce interest rates. A security interest was granted in company assets. The LMFA notes were paid in full during 2024.
• **Sponsor Promissory Note:** On October 28, 2022, the company entered into a $2.785 million promissory note with LMFAO Sponsor, LLC (the Sponsor), amending and restating previous notes. Terms included extended maturity, prepayment allowance, and a 5.0% repayment requirement from future gross cash proceeds (after the first $500,000). A security interest was granted in company assets. This note was paid in full during 2024.
• **Investor D Convertible Notes:** From March 2023 to January 2024, the company issued a series of senior unsecured convertible notes and warrants to an institutional investor (Investor D) totaling up to $9.8 million. These notes were subject to various amendments, conversion price adjustments, and warrant issuances. All Investor D Convertible Notes were fully satisfied by June 30, 2024, through conversions to common stock and cash payments. All Investor D Warrants were exchanged for a short-term note payable of approximately $0.5 million on June 28, 2024, and subsequently eliminated.
• **Lincoln Park Capital Fund, LLC Purchase Agreement:** On April 25, 2025, the company entered into an equity line of credit with Lincoln Park Capital Fund, LLC, allowing the company to sell up to $15.0 million in common stock over 36 months. The company issued 236,406 shares to Lincoln Park as consideration for this commitment.

Stakeholder Impact

• **Shareholders:** Existing shareholders will experience immediate and future dilution from the current offering and potential future equity raises. The ongoing Nasdaq non-compliance and going concern issues pose a significant risk of delisting and potential loss of investment. Litigation could also negatively impact share price and value.
• **Employees:** Executive officers and board members have taken 20% pay cuts and waived bonuses, indicating financial strain. The company's going concern status creates uncertainty regarding job security and future compensation.
• **Customers (Hospitals/Clinicians):** Continued commercialization of QUELIMMUNE and development of adult SCD could provide new therapeutic options for critically ill patients. However, the company's financial instability could impact product availability and long-term support.
• **Suppliers:** The company's reliance on single suppliers for critical components and potential supply chain disruptions could affect its ability to manufacture and deliver products, impacting supplier relationships.
• **Creditors:** The company's substantial doubt about its ability to continue as a going concern and recurring losses indicate a high risk for creditors, although recent debt obligations have been paid off or converted.

Next Steps

• Complete the NEUTRALIZE-AKI pivotal clinical trial for adult AKI SCD therapy.
• Report topline clinical trial results for NEUTRALIZE-AKI in mid-2026.
• Submit a Pre-market Approval (PMA) application for adult AKI SCD therapy in mid-2026.
• Continue to activate additional commercial sites for QUELIMMUNE in 2025.
• Provide Nasdaq with an update on fundraising plans and updated income projections for the next 12 months by June 22, 2025, to address listing compliance.
• Explore and pursue business development opportunities with major medical and pharmaceutical companies for partnerships and out-licensing arrangements.
• Identify and secure various suppliers and manufacturing partners to scale production for commercial launch of adult SCD, if approved.
• Continue to develop a comprehensive reimbursement strategy with CMS, private payors, and other stakeholders.

Key Dates

Recommendation

Keywords

Medical Device, Acute Kidney Injury, Sepsis, Hyperinflammation, Cytokine Storm, FDA Approval, Breakthrough Device Designation, Clinical Trials, CRRT, Pediatric AKI, Adult AKI, Cardiorenal Syndrome, Hepatorenal Syndrome, ESRD, Public Offering, Warrants, Pre-Funded Warrants, Nasdaq Listing, Going Concern, Biotechnology, Healthcare, QUELIMMUNE, Selective Cytopheretic Device