Registrant’s telephone number, including area code: ~~813-222-8996~~(844) 427-8100

Indicate by check mark whether the ~~registrant~~Registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the ~~registrant~~Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes☑ ☒ No ☐

Indicate by check mark whether the ~~registrant~~Registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the ~~registrant~~Registrant was required to submit such files). Yes☑ ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and ~~"emerging~~“emerging growth ~~company"~~company” in Rule 12b-2 of the Exchange Act.:

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the ~~registrant~~Registrant is a shell company (as defined in Rule 12b-2 of the Exchange ~~Act).~~Act ). Yes ☑☐ No ☒

As of ~~May 7, 2021, there were 10,453,500~~August 4, 2023, the registrant had 18,570,971 shares of ~~the Registrant’s Class A Common Stock,~~common stock, $0.0001 par value ~~and 2,587,500 shares~~per share, outstanding.

Table of ~~the Registrant’s Class B Common Stock, $0.0001 par value, issued and outstanding.~~Contents

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

The accompanying notes are an integral part of these condensed consolidated financial statements.

The accompanying notes are an integral part of these unaudited condensed consolidated financial ~~statements.~~statements

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

Note 2. Summary of ~~Section 404~~Significant Accounting Policies

Use of Estimates

The preparation of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in its periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approval of any golden parachute payments not previously approved.

Further, Section 102(b)(1) of the JOBS Act exempts emerging growth companies from being required to comply with new or revised financial accounting standards until private companies (that is, those that have not had a Securities Act registration statement declared effective or do not have a class of securities registered under the Exchange Act) are required to comply with the new or revised financial accounting standards. The JOBS Act provides that a company can elect to opt out of the extended transition period and comply with the requirements that apply to non-emerging growth companies but any such election to opt out is irrevocable. The Company has elected not to opt out of such extended transition period which means that when a standard is issued or revised and it has different application dates for public or private companies, the Company, as an emerging growth company, can adopt the new or revised standard at the time private companies adopt the new or revised standard. This may make comparison of the Company’s financial statements with another public company which is neither an emerging growth company nor an emerging growth company which has opted out of using the extended transition period difficult or impossible because of the potential differences in accounting standards used.

~~Use of Estimates~~

~~The preparation of~~unaudited condensed consolidated financial statements in conformity with USU.S. GAAP requires management to make estimates, assumptions and ~~assumptions~~judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and ~~the~~ reported amounts of revenues and expenses during the ~~reporting~~ period. ~~Actual~~Significant estimates include the valuation of the forward option on prepaid forward contracts, derivative liability, warrants, provision for income taxes, convertible debt measured at fair value, and the amount of stock-based compensation expense. Although actual results could differ from those ~~estimates.~~estimates, such estimates are developed based on the best information available to management and management's best judgments at the time.

Concentrations of credit risk

~~Cash and Cash Equivalents~~

The Company considers all short-term investments with an original maturity of three months or less when purchased to be cash equivalents. The Company did not have any cash equivalents as of March 31, 2021.

~~Cash and Marketable Securities Held in Trust Account~~

~~At March 31, 2021, substantially all of the assets held in the Trust Account were held in U.S. Treasury Securities Money Market Funds.~~

~~Concentration of Credit Risk~~

Financial instruments that potentially subject the Company to ~~concentrations~~a significant concentration of credit risk consist primarily of ~~a cash account~~cash. Periodically, the Company may maintain deposits in a financial ~~institution, which, at times, may exceed the Federal Depository Insurance Coverage~~institutions in excess of ~~$250,000. As of March 31, 2021, the~~government insured limits. The Company has not experienced any losses on ~~this~~deposits since inception.

Fair value option of accounting

Generally, when financial instruments are first acquired and are not required to be recorded at fair value, ASC 825, Financial Instruments (“ASC 825”), allows an entity to elect the fair value option (“FVO”). The FVO may be elected on an instrument-by-instrument basis only at the time of acquisition and once elected is irrevocable. The FVO allows an entity to account ~~and management believes~~for the entire financial instrument at fair value with subsequent changes in fair value recognized in earnings through the condensed consolidated statements of operations at each reporting date. A financial instrument is generally eligible for the FVO if, amongst other factors, no part of the financial instrument is classified in stockholders’ equity.

Based on the eligibility assessment discussed above, the Company ~~is not exposed to significant risks on such account.~~

~~Common Stock Subject to Possible Redemption~~

T~~he Company accounts~~concluded that its convertible notes (see Note 7) were eligible for ~~its Class A common stock subject to possible redemption~~the FVO and accordingly elected the FVO for those debt instruments. This election was made because of operational efficiencies in ~~accordance with the guidance~~valuing and reporting for these debt instruments at fair value in ~~Accounting Standards Codification ("ASC") Topic 480 "Distinguishing Liabilities from Equity." Class A common stock subject to mandatory redemption (if any) are classified as a liability instrument~~their entirety at each reporting date. The convertible notes contain certain embedded derivatives that otherwise would require bifurcation and ~~are measured~~separate accounting at fair value. ~~Conditionally redeemable common stock (including common stock that feature redemption rights that are either within~~

The convertible notes, inclusive of their respective accrued interest at the ~~control of~~stated interest rates (collectively referred to as the holder or subject to redemption upon the occurrence of uncertain events not solely within the Company's control) are classified as temporary equity. At all other times, common stock are classified as stockholders' equity. The Company's common stock feature certain redemption rights that are considered to be outside of the Company's control and subject to the occurrence of uncertain future events. Accordingly, 8,871,863 Class A common stock subject to possible redemption are presented“FVO debt instruments”) were initially recorded at ~~redemption~~fair value as ~~temporary equity, outside of~~liabilities on the ~~stockholders' equity section of the Company's~~condensed consolidated balance ~~sheet.~~

~~Derivative Warrant Liabilities~~

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including issued stock purchase warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives, pursuant to ASC 480sheets and ~~ASC 815-15. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is re-assessed~~subsequently re-measured at fair value at the end of each reporting ~~period. In accordance with ASC 825-10 “Financial Instruments”, offering costs attributable to~~period presented within the ~~issuance of the derivative warrant liabilities have been allocated based on their relative fair value of total proceeds and are recognized~~condensed consolidated financial statements. The changes in ~~the statement of operations as incurred.~~

The 10,350,000 warrants issued in connection with the IPO (the “Public Warrants”) and the 5,768,000 Private Placement Warrants are recognized as derivative liabilities in accordance with ASC 815-40. Accordingly, the Company recognizes the warrant instruments as liabilities at fair value and adjust the instruments to fair value at each reporting period. The liabilities are subject to re-measurement at each balance sheet date until exercised. The fair value of the ~~Public Warrants issued and Private Placement Warrants have been estimated using a Monte Carlo simulation model each measurement date. Derivative warrant liabilities~~FVO debt instruments are ~~classified as non-current liabilities as their liquidation is not reasonably expected to require the use of current assets or require the creation of current liabilities.~~

~~Offering Costs~~

The Company complies with the requirements of the ASC 340-10-S99-1 and SEC Staff Accounting Bulletin ("SAB") Topic 5A - "Expenses of Offering". Offering costs consist principally of professional and registration fees incurred through the balance sheet date that are related to the IPO and that were charged to stockholders' equity upon the completion of the IPO. Accordingly, on March 31, 2021, offering costs totaling $6,233,747 have been charged to stockholders' equity (consisting of $2,070,000recorded in ~~underwriters' discount, $3,622,500~~changes in ~~deferred underwriters' fee, the~~ fair value of convertible notes, included as a component of other income (expense), net, in the ~~shares issued~~condensed consolidated statements of operations.

Notes to the ~~underwriters of $1,000 deemed as underwriters’ compensation,~~Condensed Consolidated Financial Statements

(in thousands, except for shares and ~~approximately $540,247 of other cash expenses).~~per-share amounts)

Fair ~~Value of Financial Instruments~~value measurements

Fair value is defined as the price that would be received ~~for sale of~~to sell an asset or paid ~~for~~to transfer of a liability in an orderly transaction between market participants at the measurement ~~date. GAAP establishes a three-tier~~date (exit price). Inputs used to measure fair value ~~hierarchy, which prioritizes~~are classified into the ~~inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted~~following hierarchy:

Level 1 – quoted prices in active markets for identical assets ~~or liabilities (Level 1 measurements)~~ and ~~the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:~~liabilities.

•

~~Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets;~~

Level 2 ~~defined as~~– other significant observable inputs ~~other than quoted prices in active markets that are either directly or indirectly observable such as~~(including quoted prices for similar ~~instruments~~assets and liabilities, interest rate, credit risk, etc.).

Level 3 – significant unobservable inputs (including the Company’s own assumptions in ~~active markets~~determining the fair value of assets and liabilities).

The fair value of the forward option on prepaid forward contracts, convertible notes, and the warrants liability, are classified as Level 3 in the fair value hierarchy.

The followingtable presents the changes in the forward option-prepaid forward contracts, convertible notes measured at fair value, warrants liability, and the notes derivative liability for the six months ended June 30, 2023 and 2022 (in thousands):


	Forward Option-
	Prepaid									Notes Payable
Level 3 Rollforward	Forward Contracts			Convertible Notes			Warrants Liability			Derivative Liability
Balance January 1, 2022	$	—		$	—		$	—		$	(526	)
Additions		—			—			—			(52	)
Changes in fair value		—			—			—			578
Balance June 30, 2022	$	—		$	—		$	—		$	—

Balance January 1, 2023	$	1,729		$	—		$	—		$	—
Additions		—			4,425			575			—
Sale of recycled shares		(564	)		—			—			—
Payments		—			(258	)		—			—
Shares issued as payments		—			(1,937	)		—			—
Changes in fair value		(1,723	)		—			(480	)		—
Shares issued as maturity consideration		558			—			—			—
Balance June 30, 2023	$	—		$	2,230		$	95		$	—

The convertible notes are recorded as liabilities and are recorded at fair value based on Level 3 measurements. The estimated fair values of the convertible notes are each determined based on the aggregated, probability-weighted average of the outcomes of certain possible scenarios. The combined value of the probability-weighted average of those outcomes is then discounted back to each reporting period in which the convertible notes are outstanding, in each case, based on a risk-adjusted discount rate estimated based on the implied interest rate using the changes in observed interest rates of corporate rate debt that the Company believes is appropriate for those probability-adjusted cash flows.

The estimated fair value of prepaid expenses, accounts payable and accrued expenses approximate their fair value because of the short-term nature of these instruments.

Emerging growth company status

The Company is an “emerging growth company”, as defined in the Jumpstart Our Business Startups Act of 2012 ("JOBS Act"). Under the JOBS Act, emerging growth companies can take advantage of an extended transition period for complying with new or ~~quoted prices~~revised accounting standards, delaying the adoption of these accounting standards until

Notes to the Condensed Consolidated Financial Statements

(in thousands, except for ~~identical~~shares and per-share amounts)

they would apply to private companies. The Company has elected to use this extended transition period for complying with certain new or ~~similar instruments~~revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it is (1) no longer an emerging growth company or (2) affirmatively and irrevocably opt out of the extended transition period provided in ~~markets that are not active; and~~the JOBS Act.

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

~~Income Taxes~~Note 3. Forward Purchase Agreements

During the six months ended June 30, 2023, 374,005 recycled shares were sold by Forward Purchase Agreement Sellers ("FPA Sellers"). The Company ~~complies~~received $1,870 for the shares sold and recognized a gain of $1,306 on the sale. Losses on remeasurement of $69 and $1,723 were recorded in Change in fair value of forward option-prepaid forward contracts on the unaudited condensed consolidated statements of operations for the three and six months ended June 30, 2023, respectively.

In March 2023, the price of the Company stock was below $3.00 for more than 20 trading days and the FPA Sellers at their discretion had the ability to specify the maturity dates for the FPA. During the three months ended June 30, 2023, the FPA Sellers specified the maturity dates and the FPAs matured and were settled by transferring 1,096,972 shares to the FPA Sellers, with a fair value of $558. As the ~~accounting~~FPAs were classified as a liability at fair value, upon settlement, the FPAs were marked to their fair value at the settlement dates and ~~reporting~~the liability was settled.

Note 4. Accrued Expenses

Accrued expenses consisted of the following:


($ in thousands)	June 30, 2023		December 31, 2022
Accrued commitment fee, equity line of credit	$	—	$	1,500
Accrued bonus		502		450
Accrued director remuneration		244		61
Accrued settlement		150		—
Accrued interest		72		112
Accrued legal		51		80
Accrued research and development		19		18
Other		57		24
Total accrued expenses	$	1,095	$	2,245

Note 5. Equity Line of Credit

The Company paid previously accrued commitment fees of $1,500 during the six months ended June 30, 2023, of which $1,000 was paid in 218,842 shares of common stock and $500 was paid in cash.

During the three and six months ended June 30, 2023, the Company sold 26,993 and 404,999 shares of common stock to Tumim Stone Capital LLC for proceeds of $55 and $1,162, respectively, as part of the equity line financing arrangement. As of June 30, 2023, $98,837 was available to draw.

Notes to the Condensed Consolidated Financial Statements

(in thousands, except for shares and per-share amounts)

Note 6. Notes Payable

Notes payable consisted of the following:


($ in thousands)	June 30, 2023			December 31, 2022
LMFA notes payable	$	438		$	968
LMFAO note payable		1,757			2,785
Maxim note payable		3,590			4,167
Insurance financing		199			910
Unamortized deferred financing costs		(77	)		—
		5,907			8,830
Less current portion		(5,907	)		(1,178	)
	$	—		$	7,652

Future maturities of principal repayment of the notes payable as of June 30, 2023 are as follows:


($ in thousands)
Years ended December 31:
2023 (remaining)	$	—
2024		5,907
	$	5,907

On March 15, 2023, the Company amended its LMFA notes, LMFAO note, and Maxim note, extending their maturity dates to June 15, 2024. Inconsideration for such extension, the Company agreed to pay the noteholders an aggregate amount of $100 in cash upon receipt of proceeds from the issuance of the note at the second closing under the securities purchase agreement (see Note 7). The $100 consideration for the modification was capitalized as a deferred financing cost. The Company amortized $20 and $23 of the deferred financing cost during the three and six months ended June 30, 2023, respectively.

LMFA Notes Payable

During the six months ended June 30, 2023, the maturity date was extended to June 15, 2024. The balance due was $438 and $968 as of June 30, 2023 and December 31, 2022, respectively. The balance at December 31, 2022 consisted of a $700 interest bearing note and a $268 noninterest bearing note. The Company recorded interest expense of $7 and $19 for the three and six months ended June 30, 2023, respectively, on the interest-bearing note. The noninterest bearing note was paid in full in January 2023.

The mandatory repayment provisions of the LMFA note were waived for the second senior unsecured convertible note drawn on May 12, 2023 (see Note 7).

LMFAO Note Payable

During the six months ended June 30, 2023, the maturity date was extended to June 15, 2024. The mandatory repayment provisions of the LMFA note were waived for the second senior unsecured convertible note drawn on May 12, 2023 (see Note 7).

The balance due was $1,757 and $2,785 on June 30, 2023 and December 31, 2022, respectively. The Company recorded interest expense of $31 and $74 for the three and six months ended June 30, 2023, respectively.

Maxim Note Payable

During the six months ended June 30, 2023, the maturity date was extended to June 15, 2024. The mandatory repayment provisions of the Maxim note were waived for the first senior unsecured convertible note drawn on March 15, 2023 (see Note 7).

Notes to the Condensed Consolidated Financial Statements

(in thousands, except for shares and per-share amounts)

The balance of the Maxim note was $3,590 and $4,167 as of June 30, 2023 and December 31, 2022, respectively. The Company recorded interest expense of $63 and $130 for the six months ended June 30, 2023.

Insurance Financing

The balance due was $199 and $910 on June 30, 2023 and December 31, 2022, respectively. As of June 30, 2023, two monthly installments of $101, consisting of principal and interest remain. The Company recorded interest expense of $6 and $17 for the three and six months ended June 30, 2023.

Notes Payable

Amortization of the debt discounts related to the Dow, Union Carbide, IBT and investor notes for the three and six months ended June 30, 2022 was $99 and $208, respectively.

Note 7. Convertible Notes

3i Notes

On March 15, 2023, the Company entered into a securities purchase agreement with 3i LP ("3i") an institutional investor, whereby the Company has the ability to issue a series of four senior unsecured convertible notes (collectively the "Convertible Notes"), with principal amounts totaling up to $9,000, and warrants to purchase shares of the Company’s common stock. On March 15, 2023, the Company issued a note (the "First Convertible Note"), convertible into 1,207,729 shares of common stock at an initial conversion price of $2.70, in a principal amount of $3,261, and a warrant to purchase up to 328,352 shares of common stock. The First Convertible Note was issued at an 8.0% discount, bears interest at 7.0% per annum, matures on June 15, 2024, and requires monthly installments of principal and interest.

On May 12, 2023, the Company issued a note (the "Second Convertible Note"), convertible into 805,153 shares of common stock at an initial conversion price of $2.70, in a principal amount of $2,174, and a warrant to purchase up to 218,901 shares of common stock. The Second Convertible Note was issued at an 8.0% discount, bears interest at 7.0% per annum, matures on August 12, 2024, and requires monthly installments of principal and interest.

The Company concluded that the transactions include two legally detachable and separately exercisable freestanding financial instruments: the Convertible Notes and the warrants. The Company concluded that the warrants should be recorded as a liability (see Note 8). The Company determined the Convertible Notes are liability instruments under ASC 480, Distinguishing Liabilities from Equity. The Convertible Notes were then evaluated in accordance with the requirements of ASC ~~Topic 740 “Income Taxes,”~~825, and it was concluded that the Company was not precluded from electing the FVO for the Convertible Notes. As such, the Convertible Notes are carried at fair value in the condensed consolidated balance sheets. The Convertible Notes are measured at fair value each reporting date with changes in fair value recognized in the condensed consolidated statements of operations, unless the change is concluded to be related to the changes in the Company’s credit rating, in which ~~requires~~case the change will be recognized as a component of accumulated other comprehensive income in the condensed consolidated balance sheets.

During the six months ended June 30, 2023, the Company made cash payments of principal and interest of $238 and $20, respectively, on the First Convertible Note. The Company also made additional principal and interest payments, which included accelerated payments through equity conversions. In accordance and pursuant to the First Convertible Note, 3i elected to convert the conversion amount (as defined in the First Convertible Note) into shares of common stock of the Company. The Company converted principal and interest into1,879,688 shares of common stock with a fair value of $1,291.

During the six months ended June 30, 2023, the Company made principal and interest payments on the Second Convertible Note, which included accelerated payments, though equity conversions. In accordance and pursuant to the Second Convertible Note, 3i elected to convert the conversion amount (as defined in the Second Convertible Note) of principal and interest into shares of common stock of the Company. The Company converted principal and interest into 1,208,479 shares of common stock with a fair value of $646.

Future maturities of principal repayment of the Convertible Notes as of June 30, 2023 are as follows:

Notes to the Condensed Consolidated Financial Statements

(in thousands, except for shares and per-share amounts)


($ in thousands)
Years ended December 31:
2023 (remaining)	$	2,609
2024		1,009
	$	3,618

Note 8. Warrants

On March 15, 2023, as part of the issuance of the First Convertible Note (see Note 7) 328,352 warrants (“Convertible Note Warrants”) were issued with an ~~asset~~exercise price of $2.97 per share. On May 12, 2023, as part of the issuance of the Second Convertible Note (see Note 7) 218,901 Convertible Note Warrants were issued with an exercise price of $2.97 per share. The Convertible Note Warrants expire five years from their issuance date and contain cashless exercise provisions. The Company does not have the ability to redeem the Convertible Note Warrants. The Convertible Note Warrants for the First Convertible Note were valued at $500 at issuance. The Convertible Note Warrants for the Second Convertible Note were valued at $75 at issuance.

In accordance with ASC 815-40, Derivatives and Hedging-Contracts in and Entity’s own Equity, the Company has determined that the Convertible Note Warrants do not meet the conditions for equity classification, due to potential cash settlement under the exchange cap provision of the securities purchase agreement, and should be carried on the condensed consolidated balance sheets as a liability ~~approach~~measured at fair value, with subsequent changes in fair value recorded in the condensed consolidated statements of operations as change in fair value of warrants liability. The fair value of the Convertible Note Warrants was determined using a Black-Scholes option pricing model, which considers variables such as estimated volatility, time to ~~financial accounting~~maturity, and ~~reporting for income taxes. Deferred income tax assets~~the risk-free interest rate. The risk-free interest rate is the U.S. Treasury rate at the date of issuance, and ~~liabilities are computed for differences between~~ the ~~financial statement and tax bases of assets and liabilities that will result in future taxable or deductible amounts,~~time to maturity is based on ~~enacted tax laws~~the contractual life at the date of issuance, which is five years.

The Company has the following warrants outstanding:


	June 30,		December 31,
	2023		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		547,253		—
SeaStar Warrants		69,714		69,714
		17,404,967		16,857,714

Note 9. Common Stock and ~~rates applicable~~Stock-Based Compensation

During the six months ended June 30, 2023, the Company issued 459,185 shares of common stock for management bonuses and 153,405 shares of common stock for vested restricted stock units. The Company also granted 351,029 options and 234,019 restricted stock units during the six months ended June 30, 2023. For options granted during the six months ended June 30, 2023, the weighted-average grant date fair value was $1.20 per share and the options vest one year from the grant date. For RSUs granted during the six months ended June 30, 2023, the weighted-average grant date fair value was $1.47 per share and the RSUs vest one year from the grant date.

The following represents stock-based compensation expense in the company’s unaudited condensed consolidated statements of operations:

Notes to the ~~periods~~ Condensed Consolidated Financial Statements

(in ~~which~~thousands, except for shares and per-share amounts)


($ in thousands)	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		2022
Research and development	$	96	$	90	$	135	$	90
General and administrative		459		255		925		259
Total	$	555	$	345	$	1,060	$	349

Note 10. Commitments and Contingencies

License and distribution agreement

On December 27, 2022, the ~~differences are expected~~Company entered into a license and distribution agreement with a distributor, appointing the distributor as the exclusive distributor to ~~affect taxable income. Valuation allowances are established, when necessary,~~promote, advertise, market, distribute and sell the Selective Cytopheretic Device (“SCD”) in the United States. The Company received an upfront payment of $100 on January 3, 2023. If the Company does not receive written authorization to ~~reduce deferred tax assets~~market the SCD, prior to the ~~amount expected~~first anniversary of the effective date, the Company will repay the $100. The Company has recorded the $100 upfront payment as a liability in the unaudited condensed consolidated balance sheets as of June 30, 2023. The Company shall also receive milestone payments in the amounts of $450 and $350 for obtaining approval from the Food and Drug Administration and for selling the first sixty units to ~~be realized.~~any third parties. The term of the agreement is three years.

ASC 740 also clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold and measurement process for financial statement recognition and measurementLease agreements

The Company is part of a ~~tax position taken or expected~~membership agreement for shared office space and can cancel at any time. Rent expense was $8 and $16 for the three and six months ended June 30, 2023 and 2022, respectively.

Litigation

Liabilities for loss contingencies arising from claims, assessments, litigation, fines, penalties, and other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. From time to ~~be taken~~time, the Company may become involved in legal proceedings arising in the ordinary course of business.

In connection with the Business Combination, LMAO proposed, for stockholder approval, various amendments to its Amended and Restated Certificate of Incorporation, which included among other things a ~~tax return. For those benefits~~proposal to ~~be recognized,~~increase the authorized shares of common stock. A purported stockholder sent a ~~tax position must be more-likely-than-not~~Stockholder Litigation Demand letter (the “Demand”) to ~~be sustained~~the Board of Directors of LMAO alleging that the Delaware General Corporation Law required a separate class vote of the Class A common stockholders to increase the authorized shares of common stock. Following receipt of the Demand, the Company canceled and withdrew the proposal to increase the authorized shares of common stock.

The stockholder’s counsel thereafter demanded that the Company pay counsel fees for the purported benefit conferred upon ~~examination~~the Company’s shareholders by ~~taxing authorities. ASC 740 also provides guidance on derecognition, classification, interest and penalties, accounting~~causing the Company to withdraw the allegedly invalid proposal to increase the authorized shares of common stock. The Company recorded $150 for a legal settlement in ~~interim period, disclosure and transition.~~

~~In assessing realizable deferred tax assets, management assesses the likelihood that deferred tax assets~~accrued expenses as of June 30, 2023. The settlement will be ~~recovered from future taxable income,~~paid in three installments of $50 in August 2023, September 2023, and ~~to the extent that recovery is not likely or there is insufficient operating history, a valuation allowance is established.~~November 2023. The Company ~~adjusts~~was not subject to any other material legal proceedings during the ~~valuation allowance in the period management determines it is more likely than not that net deferred tax assets will~~three and six months ended June 30, 2023, and no material legal proceedings are currently pending or ~~will not be realized. As of March 31, 2021, the Company determined that~~threatened.

Note 11. Income Taxes

In accordance with U.S. GAAP, a valuation allowance should be ~~established.~~

As of March 31, 2021 and December 31, 2020, the Company did not recognize any assets or liabilities relative to uncertain tax positions. Interest or penalties, if any, will be recognized in income tax expense. Since there are no significant unrecognized tax benefits as a result of tax positions taken, there are no accrued penalties or interest. Tax positions are positions taken in a previously filed tax return or positions expected to be taken in a future tax return that are reflected in measuring current or deferred income tax assets and liabilities reported in the financial statements.

~~The Company reflects tax benefits, only~~provided if it is more likely than not that the Company will be able to sustain the tax return position, based on its technical merits. If a tax benefit meets this criterion, it is measured and recognized based on the largest amount of benefit that is cumulatively greater than 50% likely to be realized. Management does not believe that there are any uncertain tax positions at March 31, 2021 and December 31, 2020.

The Company may be subject to potential examination by federal, state and city taxing authorities in the areas of income taxes. These potential examinations may include questioning the timing and amount of deductions, the nexus of income among various tax jurisdictions and compliance with federal, state and city tax laws. The Company’s management does not expect that the total amount of unrecognized tax benefits will materially change over the next twelve months.

~~Recent Accounting Pronouncements~~

~~Management does not believe that any recently issued, but not effective, accounting standards, if currently adopted, would have a material effect on the Company’s financial statements.~~

~~NOTE 4. GOVERNMENT SECURITIES HELD IN TRUST ACCOUNT~~

~~As of March 31, 2021, substantially~~some or all of the assets totaling $105,571,754 were held in U.S. Treasury Bills with a maturity due as of May 13, 2021. Management elects to measure the government securities at fair value in accordance with the guidance in ASC Topic 825 “Financial Instruments”. Any changes in fair value of the government securities are recognized in net income. Impairment of government securities is recognized in earnings when a decline in value has occurred that is deemed to be other than temporary, and the current fair value becomes the new cost basis for the securities.

~~NOTE 5. PREPAID EXPENSES~~

~~As of March 31, 2021, the Company had prepaid expenses of approximately $663,000 in connection with the prepayment for D&O insurance.~~

~~Note 6. Initial Public Offering~~

Pursuant to the IPO on January 28, 2021, the Company sold 10,350,000 Units, at a purchase price of $10.00 per Unit. Each unit consists of one share of Class A common stock, and one warrant to purchase one share of Class A common stock. Each warrant will entitle the holder to purchase one share of Class A common stock at a price of $11.50 per share, subject to adjustment. Each warrant will become exercisable on the later of 30 days after the completion of the initial Business Combination or 12 months from the closing of the IPO and will expire five years after the completion of the initial Business Combination, or earlier upon redemption or liquidation. (see Note 7).

Aggregate of $10.20 per Unit sold in the IPO is being held in the Trust Account and invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its franchise and incomeCompany’s deferred tax ~~obligations (less up to $50,000 of interest to pay dissolution expenses), the proceeds from the IPO and the sale of the Private Placement Warrants~~assets will not be ~~released~~realized. The Company’s ability to realize the benefit of its deferred tax assets will depend on the generation of future taxable income. Due to the uncertainty of future profitable operations and taxable income, the Company has recorded a full valuation allowance against its net deferred tax assets. The

Notes to the Condensed Consolidated Financial Statements

(in thousands, except for shares and per-share amounts)

Company believes its tax filing position and deductions related to tax periods subject to examination will be sustained under audit and, therefore, has no reserve for uncertain tax positions.

Note 12. Net Loss Per Share

Basic net loss per common share is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, including vested restricted stock units for which common shares have not yet been issued, without consideration of potentially dilutive securities. Diluted net loss per share is computed by dividing the net loss by the weighted-average number of common shares and potentially dilutive securities outstanding for the period. For purposes of the diluted net loss per share calculation, the warrants, common stock options, and unvested restricted stock units are considered to be potentially dilutive securities. As the Company has reported a net loss for all periods presented, diluted net loss per common share is the same as basic net loss per common share for all periods.

The following weighted-average outstanding shares of potentially dilutive securities were excluded from the ~~Trust Account until the earliest~~computation of ~~(a) the completion of the Company’s initial Business Combination, (b) the redemption of any Public Shares properly submitted in connection with a stockholder vote~~diluted net loss per share attributable to amend the Company’s amended and restated certificate of incorporation, and (c) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination within 15 months from the closing of the IPO (or up to 21 months from the closing of the IPO if the Company extends the period of time to consummate a business combination, as described in more detail the prospectuscommon stockholders for the ~~IPO), subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could~~periods presented because including them would have ~~priority over the claims of the Company’s public stockholders.~~been anti-dilutive:

~~Note 7. Private Placement~~


	Three Months Ended June 30,				Six Months Ended June 30,
	2023		2022		2023		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		448,627		—		256,393		—
SeaStar warrants		69,714		69,714		69,714		69,714
Options to purchase common stock		576,534		332,544		411,579		335,102
Unvested restricted stock units		129,640		296,696		213,548		149,168
Total		18,012,515		698,954		17,739,234		553,984

Simultaneously with the closing of the IPO, the Company consummated a private placement with the Company’s Sponsor purchasing an aggregate of 5,738,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price of $5,738,000. A portion of the proceeds from the sale of the Private Placement Warrants were added to the proceeds from the IPO held in the Trust Account. The Private Placement Warrants are identical to the warrants sold in the IPO except that the Private Placement Warrants, so long as they are held by the Sponsor or their permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the Company’s initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights.

The Private Placement Warrants will be non-redeemable and exercisable on a cashless basis so long as they are held by the Sponsor, the underwriters or their permitted transferees. If the Private Placement Warrants are held by holders other than the Sponsor, the underwriters or their permitted transferees, the Private Placement Warrants will be redeemable by the Company and exercisable by the holders on the same basis as the warrants included in the units being sold in the IPO. In addition, for as long as the Private Placement Warrants are held by the underwriters or their designees or affiliates, they may not be exercised after five years from the Effective Date.

The Company’s Sponsor has agreed to (i) waive its redemption rights with respect to its founder shares and Public Shares in connection with the completion of the Company’s initial Business Combination, (ii) waive its redemption rights with respect to its founder shares and Public Shares in connection with a stockholder vote to approve an amendment to the Company’s amended and restated certificate of incorporation (A) to modify the substance or timing of the Company’s obligation to redeem 100% of its Public Shares if the Company does not complete its initial Business Combination within 18 months from the closing of the IPO (or up to 21 months from the closing of the IPO if the Company extends the period of time to consummate a business combination, as described in more detail in the prospectus for the IPO) or (B) with respect to any other provision relating to stockholders’ rights or pre-initial Business Combination activity and (iii) waive its rights to liquidating distributions from the Trust Account with respect to its founder shares if the Company fails to complete its initial Business Combination within 18 months from the closing of the IPO (or up to 21 months from the closing of the IPO if the Company extends the period of time to consummate a business combination. In addition, the Company’s Sponsor has agreed to vote any founder shares held by them and any Public Shares purchased during or after the IPO (including in open market and privately negotiated transactions) in favor of the Company’s initial Business Combination.

~~Note 8. Related Party Transactions~~

~~Related Party Loans~~

On November 6, 2020, the Company issued an unsecured promissory note to the Sponsor, pursuant to which the Company may borrow up to an aggregate principal amount of $300,000 to be used for a portion of the expenses of the IPO. This loan was non-interest bearing, unsecured and due at the earlier of June 30, 2021 or the closing of the IPO. The loan was to be repaid upon the closing of the IPO out of the offering proceeds not held in the Trust Account. On January 27, 2020, the Company had drawn down

~~$151,000 under the promissory note with the Sponsor to pay for offering expenses. On January 28, 2021, the Company repaid $151,000 to the Sponsor.~~

~~Related Party Loans~~

In order to finance transaction costs in connection with a Business Combination, the Sponsor or an affiliate of the Sponsor, or certain of the Company’s officers and directors may, but are not obligated to, loan the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be convertible into private placement-equivalent warrants at a price of $1.00 per warrant (which, for example, would result in the holders being issued 1,500,000 warrants if $1,500,000 of notes were so converted), at the option of the lender. Such warrants would be identical to the Private Placement Warrants, including as to exercise price, exercisability and exercise period. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans.

~~Related Party Extension Loans~~

The Company will have until 18 months from the closing of the IPO to consummate a Business Combination. However, if the Company anticipates that it may not be able to consummate a Business Combination within 18 months, the Company will, by resolution of the Company’s board of directors, extend the period of time to consummate a Business Combination by an additional three months (for a total of 21 months to complete a Business Combination) if such extension is requested by the Sponsor. Pursuant to the terms of the Company’s certificate of incorporation and the trust agreement entered into between the Company and Continental Stock Transfer & Trust Company on January 25, 2021, in order to extend the time available for the Company to consummate a Business Combination, the Sponsor or its affiliates or designees must deposit into the Trust Account $1,035,000 ($0.10Net loss per share ~~in either case) on or prior to~~is calculated using the date of the deadline. Such payment would be made in the form of a loan. Such loan will be non-interest bearing and payable upon the consummation of the Company’s Business Combination. If the Company completes a Business Combination, the Company would repay such loaned amount out of the proceeds of the Trust Account released to the Company. If the Company does not complete a Business Combination, the Company will not repay such loan. Furthermore, the letter agreement with the Sponsor contains a provision pursuant to which the Sponsor has agreed to waive its right to be repaid for such loan out of the funds held in the Trust Account in the event that the Company does not complete a Business Combination. The Sponsor and its affiliates or designees are obligated to fund the Trust Account in order to extend the time for the Company to complete a Business Combination, but the Sponsor is not obligated to extend such time.

~~Founder Shares~~

~~On November 6, 2020, the Company issued 2,156,250 shares of Class B common stock to the Sponsor for $25,000 in cash, or approximately $0.012 per share, in connection with formation.~~ ~~In January 2021, the Company effected a stock dividend of 431,250 shares of Class B common stock, resulting in the Sponsor holding an aggregate of 2,587,500 founder shares~~.

The Sponsor has agreed not to transfer, assign or sell its founder shares until the earlier of: (i) one year after the date of the consummation of the Business Combination; or (ii) the date on which the Company consummates a liquidation, merger, stock exchange, or other similar transaction that results in all of its stockholders having the right to exchange their shares of Class A common stock for cash, securities, or other property. Notwithstanding the foregoing, if the closing price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any 30-trading day period commencing 150 days after the Business Combination, the founder shares will no longer be subject to such transfer restrictions.

~~Note 9. Commitments Registration Rights~~

The holders of the founder shares, Private Placement Warrants, shares of Class A common stock underlying the Private Placement Warrants, and warrants (including underlying securities) that may be issued upon conversion of working capital loans will have registration rights to require the Company to register a sale of any of its securities held by them pursuant to a registration rights agreement signed on January 19, 2021. These holders will be entitled to make up to three demands, excluding short form registration demands, that the Company registers such securities for sale under the Securities Act. In addition, these holders will have “piggy-back” registration rights to include their securities in other registration statements filed by the Company.

Notwithstanding the foregoing, the underwriters may not exercise their demand and “piggyback” registration rights after five and seven years, respectively, after the effective date of the registration statement for the IPO and may not exercise their demand rights on more than one occasion.

~~Right of First Refusal~~

Subject to certain conditions, the Company granted Maxim Group LLC (“Maxim”), for a period beginning on the closing of the IPo and ending 18 months after the date of the consummation of the Business Combination, a right of first refusal to act as lead left book-

running managing underwriter with at least 75% of the economics; or, in the case of a three-handed deal 50% of the economics, for any and all future public and private equity, convertible and debt offerings for the Company or any of its successors or subsidiaries. In accordance with FINRA Rule 5110(g)(6), such right of first refusal shall not have a duration of more than three years from the effective date of the registration statement for the IPO.

~~Representative’s Common Stock~~

~~On January 25, 2021, the Company issued to Maxim and/or its designees, 103,500 shares of Class A common stock.~~ The Company estimated the fair value of the stock to be $1,000 based upon the price of the Founder Shares issued to the Sponsor. The stock were treated as underwriters’ compensation and charged directly to stockholders’ equity.

Maxim has agreed not to transfer, assign, or sell any such shares until the completion of the Business Combination. In addition, Maxim has agreed: (i) to waive its redemption rights with respect to such shares in connection with the ~~completion of the Business Combination; and (ii) to waive its rights to liquidating distributions from the Trust Account with respect to such shares if the Company fails to complete its~~ Business Combination ~~within 18 months from the closing of the IPO (or 21 months from the closing, if the Company extends the period of time to consummate a Business Combination.~~

The shares have been deemed compensation by FINRA and are therefore subject to a lock-up for a period of 180 days immediately following the date of the effectiveness of the registration statement for the IPO pursuant to Rule 5110(e)(1) of FINRA’s NASD Conduct Rules. Pursuant to FINRA Rule 5110(e)(1), these securities will not be the subject of any hedging, short sale, derivative, put, or call transaction that would result in the economic disposition of the securities by any person for a period of 180 days immediately following the effective date of the registration statement for the IPO, nor may they be sold, transferred, assigned, pledged, or hypothecated for a period of 180 days immediately following the effective date of the registration statement for the IPO, except to any underwriter and selected dealer participating in the offering and their bona fide officers or partners.

~~Risks and Uncertainties~~

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus (the “COVID-19 outbreak”). In March 2020, the WHO classified the COVID-19 outbreak as a pandemic, based on the rapid increase in exposure globally. The full impact of the COVID-19 outbreak continues to evolve. The impact of the COVID-19 outbreak on the Company’s financial position will depend on future developments, including the duration and spread of the outbreak and related ~~advisories and restrictions. These developments and~~transactions, assuming the impact of the COVID-19 outbreak on the financial markets and the overall economy are highly uncertain and cannot be predicted. If the financial markets and/or the overall economy are impacted for an extended period, the Company’s financial position may be materially adversely affected. Additionally, the Company’s ability to complete an initial business combination may be materially adversely affected due to significant governmental measures being implemented to contain the COVID-19 outbreak or treat its impact, including travel restrictions, the shutdown of businesses and quarantines, among others, which may limit the Company’s ability to have meetings with potential investors or affect the ability of a potential target company’s personnel, vendors and service providers to negotiate and consummate an initial business combination in a timely manner. The Company’s ability to consummate an initial business combination may also be dependent on the ability to raise additional equity and debt financing, which may be impacted by the COVID-19 outbreak and the resulting market downturn.

~~Note 10. Derivative Liability~~

~~Warrants~~

At March 31, 2021, there are 16,188,000 warrants outstanding. Each warrant entitles the holder thereof to purchase one share of the Company’s Class A common stock at a price of $11.50 per share, subject to adjustment as discussed herein. In addition, if: (x) the Company issues additional shares of Class A common stock or equity-linked securities for capital raising purposes in connection with the closing of its Business Combination at an issue price or effective issue price of less than $9.20 per share of Class A common stock (with such issue price or effective issue price to be determined in good faith by the Company’s board of directors and, in the case of any such issuance to the Company’s Sponsor or its affiliates, without taking into account any founder shares held by the Company’s Sponsor or its affiliates, prior to such issuance) (the “Newly Issued Price”); (y) the aggregate gross proceeds from such issuances represent more than 60% of the total equity proceeds, and interest thereon, available for the funding ofwere outstanding since January 1, 2022. As the Business Combination onand related transactions are being reflected as if they had occurred at the ~~date~~beginning of the ~~consummation~~period presented, the calculation of ~~the Business Combination (net of redemptions); and (z) the volume~~ weighted average trading price of the Company’s common stock during the 20 trading day period starting on the trading day prior to the day on which the Company consummates the Business Combination (such price, the “Market ~~Value”)~~ ~~is below $9.20~~shares outstanding for basic and diluted net loss per share ~~the exercise price of the warrants will be adjusted (to the nearest cent) to be equal to 115% of the higher of the Market~~ ~~Value~~ and the Newly Issued Price, and the $18.00 per share redemption trigger price described below under “Redemption of warrants” will be adjusted (to the nearest cent) to be equal to 180% of the higher of the Market ~~Value~~ ~~and the Newly Issued Price.~~

The warrants will become exercisable on the later of 12 months from March 31, 2021, or 30 days after the completion of its Business Combination, and will expire five years after the completion of the Business Combination, at 5:00 p.m., New York City time, or earlier upon redemption or liquidation.

The Company will not be obligated to deliver any shares of Class A common stock pursuant to the exercise of a warrant and will have no obligation to settle such warrant exercise unless a registration statement under the Securities Act with respect toassumes that the shares of Class A common stock underlying the warrants is then effective and a prospectus is current. No warrant will be exercisable and the Company will not be obligated to issue shares of Class A common stock upon exercise of a warrant unless Class A common stock issuable upon such warrant exercise has been registered, qualified, or deemed to be exempt under the securities laws of the state of residence of the registered holder of the warrants. In no event will the Company be required to net cash settle any warrant. In the event that a registration statement is not effective for the exercised warrants, the purchaser of a unit containing such warrant will have paid the full purchase price for the unit solely for the share of Class A common stock underlying such unit.

~~Once the warrants become exercisable, the Company may call the warrants for redemption (excluding the Private Placement Warrants):~~

~~in whole and not inpart;~~

~~at a price of $0.01 perwarrant;~~

~~upon not less than 30 days’ prior written notice of redemption to each warrant holder;and~~

~~if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for~~stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company send the notice of redemption to the warrant~~holders.~~

If the Company calls the warrants for redemption as described above, the management will have the option to require any holder that wishes to exercise its warrant to do so on a “cashless basis.” If the management takes advantage of this option, all holders of warrants would pay the exercise price by surrendering their warrants for that number of shares of Class A common stock equal to the quotient obtained by dividing: (x) the product of the number of shares of Class A common stock underlying the warrants, multiplied by the difference between the exercise price of the warrants and the “fair market value” (defined below); by (y) the fair market value. The “fair market value” shall mean the average reported last sale price of the Class A common stock for the 10 trading days ending on the third trading day prior to the date on which the notice of redemption is sent to the holders of warrants.

The exercise price and number of shares of common stock issuable on exercise of the warrants may be adjusted in certain circumstances, including in the event of a stock dividend, extraordinary dividend, or the Company’s recapitalization, reorganization, merger, or consolidation. However, the warrants will not be adjusted for issuances of shares of common stock at a price below their respective exercise prices.

~~Warrants Classified as Derivative Liabilities~~

The Company previously accounted for its outstanding Public Warrants (as defined in Note 3) and Private Placement Warrants issued in connection with its IPO as components of equity instead of as derivative liabilities. The warrant agreement governing the warrants includes a provision that provides for potential changes to the settlement amounts dependent upon the characteristics of the holder of the warrant. In addition, the warrant agreement includes a provision that in the event of a tender or exchange offer made to and accepted by holders of more than 50% of the outstanding shares of a single class of common shares, all holders of the warrants would be entitled to receive cash for their warrants (the “tender offer provision”).

The Company’s management has evaluated both the Public Warrants and the Private Placement Warrants using ASC Subtopic 815-40, Contracts in Entity’s Own Equity. ASC Section 815-40-15 addresses equity versus liability treatment and classification of equity-linked financial instruments, including warrants, and states that a warrant may be classified as a component of equity only if, among other things, the warrant is indexed to the issuer’s common stock. Under ASC Section 815-40-15, a warrant is not indexed to the issuer’s common stock if the terms of the warrant require an adjustment to the exercise price upon a specified event and that event is not an input to the fair value of the warrant. The Company concluded that the Company’s Private Placement Warrants are not indexed to the Company’s common shares in the manner contemplated by ASC Section 815-40-15 because the holder of the instrument is not an input into the pricing of a fixed-for-fixed option on equity shares. In addition, based on management’s evaluation, the Company also concluded the tender offer provision included in the warrant agreement fails the “classified in stockholders’ equity” criteria as contemplated by ASC Section 815-40-25.

~~As a result of the above, the Company has classified the warrants as derivative liabilities.~~

The following table presents fair value information as of March 31, 2021 and January 28, 2021 of the Company’s warrants. The Company used a Monte Carlo simulation model to value the Public Warrants and a modified Black-Scholes model to value the Private Placement Warrants. The Company’s warrant liability is based on a valuation model utilizing management judgment and pricing inputs from observable and unobservable markets with less volume and transaction frequency than active markets. Significant deviations from these estimates and inputs could result in a material change in fair value. The fair value of the warrant liability is classified within Level 3 of the fair value hierarchy.

As of March 31, 2021
As of January 28, 2021
Public Warrants
$   4,036,500
$   5,175,000
Private Placement Warrants
2,249,520
2,941,680

$  6,286,020
$  8,116,680

The Company recognized a $1,830,660 gain upon the revaluation of the warrants as of March 31, 2021. The Company will remeasure these warrants at the end of each reporting period and recognize changes in the fair value from the prior period in the Company’s operating results for the current period.

~~NOTE 11. FAIR VALUE MEASUREMENTS~~

The Company follows the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually.

The fair value of the Company’s financial assets and liabilities reflects management’s estimate of amounts that the Company would have received in connection with the sale of the assets or paid in connection with the transfer of the liabilities in an orderly transaction between market participants at the measurement date. In connection with measuring the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs used in order to value the assets and liabilities:

~~Level 1:~~

Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis.

~~Level 2:~~

Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active.

~~Level 3:~~

~~Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability.~~

The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at March 31, 2021, and indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:

"

Level

March 31,
2021

January 28, 2021

Assets:

Government securities held in Trust Account

1

$
105,570,833

$
105,570,833

Liabilities:

Private Placement Warrants

3

2,249,520

2,941,680

Public Warrants

3

4,036,500

5,175,000

~~Note 12. Stockholder’s Equity~~

~~Preferred Stock~~ ~~— The Company is authorized to issue a total of 1,000,000 shares of preferred stock at par value of $0.0001 each. On March 31, 2021, there were no shares of preferred stock issued or outstanding.~~

~~Class A Common Stock~~ — The Company is authorized to issue a total of 100,000,000 shares of Class A common stock at par value of $0.0001 each. On March 31, 2021, there were 10,453,000 shares of Class A common stock issued and outstanding~~, excluding 8,871,863 shares of Class A common shares subject to possible redemption.~~

~~Class B Common Stock~~ — The Company is authorized to issue a total of 20,000,000 shares of Class B common stock at par value of $0.0001 each. On November 6, 2020, the Company issued 2,156,250 shares of Class B common stock to its initial stockholder, the Sponsor, for $25,000, or approximately $0.012 per share. In January 2021, the Company effected a stock dividend, resulting in the initial stockholder holding an aggregate of 2,587,500 founder shares of Class B common stock. At March 31, 2021, there were 2,587,500 shares of Class B common stock issued and outstanding.

The Sponsor has agreed not to transfer, assign, or sell any of its founder shares until the earlier of: (i) one year after the date of the consummation of the Business Combination; or (ii) the date on which the Company consummates a liquidation, merger, stock exchange, or other similar transaction that results in all of its stockholders having the right to exchange their shares of Class A

common stock for cash, securities, or other property. Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor with respect to any founder shares. Notwithstanding the foregoing, if the closing price of the Company’s Class A common stock equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations, and the like) for any 20 trading days within any 30-trading day period commencing 150 days after the Business Combination, the founder shares will no longer be subject to such transfer restrictions. Any permitted transferees will be subject to the same restrictions and other agreements of the Sponsor with respect to any founder shares.

The shares of Class B common stock will automatically convert into shares of the Company’s Class A common stock at the time of its Business Combination on a one-for-one basis, subject to adjustment for stock splits, stock dividends, reorganizations, recapitalizations, and the like, and subject to further adjustment as provided herein. In the case that additional shares of Class A common stock, or equity-linked securities, are issued or deemed issued in excess of the amounts offered in the IPO and related to the closing of the Business Combination, the ratio at which shares of Class B common stock shall convert into shares of Class A common stock will be adjusted (unless the holders of a majority of the outstanding shares of Class B common stock agree to waive such adjustment with respect to any such issuance or deemed issuance) so that the number of shares of Class A common stock issuable upon conversion of all shares of Class B common stock will equal, in the aggregate, on an as-converted basis, 20% of the sum of the total number of all shares of common stock outstanding upon the completion of this offering (not including the shares of Class A common stock issuable to Maxim) plus all shares of Class A common stock and equity-linked securities issued or deemed issued in connection with the Business Combination ~~(excluding any~~have been outstanding for the entire period presented. The calculation of weighted average shares ~~or equity-linked~~outstanding for basic and diluted net loss per share for the three and six months ended June 30, 2022 has been retroactively restated to give effect to the Business Combination.


	Three Months Ended June 30,						Six Months Ended June 30,
	2023			2022			2023			2022
Net loss	$	(3,669	)	$	(902	)	$	(8,931	)	$	(1,906	)
Weighted average shares outstanding - basic
and diluted		14,932,866			7,238,767			13,984,625			7,238,767
Basic and diluted net loss per share	$	(0.25	)	$	(0.12	)	$	(0.64	)	$	(0.26	)

Note 13. Subsequent Events

In July 2023, the Company sold 234,579 shares of common stock to Tumim Stone Capital LLC for proceeds of $120, as part of the equity line financing arrangement (see Note 5).

In July and August 2023, the Company made principal and interest payments on the Second Convertible Note, which included accelerated payments, through equity conversions. In accordance and pursuant to the Second Convertible

Notes to the Condensed Consolidated Financial Statements

(in thousands, except for shares and per-share amounts)

Note, 3i elected to convert the conversion amount (as defined in the Second Convertible Note) into shares of common stock of the Company. The Company converted principal and interest into 590,154 shares of common stock with a fair value of $283.

On August 7, 2023, the Company entered into an amendment to the securities purchase agreement with 3i, whereby the VWAP price will be $0.20 for all future conversions and the provisions of the third closing have been amended. 3i will have the discretion to purchase additional shares of the Company common stock in an aggregate principal amount of $2,000, provided that 3i will purchase additional shares of the Company common stock in an aggregate principal amount of $1,000 in two tranches no later than September 5, 2023. On August 7, 2023, the Company issued a note (the "Third Convertible Note") in a principal amount of $543, convertible into shares of common stock at an initial conversion price of $0.20, and a warrant to purchase up to 738,791 shares of common stock. The Third Convertible Note was issued at an 8.0% discount, bears interest at 7.0% per annum, matures on November 6, 2024, and requires monthly installments of principal and interest.

In connection with the amendment to the securities purchase agreement with 3i, the Company entered into a letter agreement with 3i, providing for (i) certain adjustment mechanisms for the conversion price of the First and Second Convertible Notes and additional notes issued or to be issued under the securities purchase agreement, as amended, (ii) a six month waiver period of any cash payment obligations of the Company under each existing note, and (iii) the issuance of an additional warrant to purchase an aggregate of 4,765,620 shares of common stock.

Also on August 7, 2023, the Company entered into certain amendments and waivers for the Maxim Note, LMFA Note, and LMFAO Note. The lenders waved their rights to receive any mandatory prepayments for proceeds received by the Company from the convertible note financings and agreed to extend the maturity dates to 91 days after the last maturity date applicable to any ~~seller in~~of the ~~Business Combination or any private placement-equivalent units~~notes issued pursuant to the ~~Sponsor, its affiliates, or certain~~amended securities purchase agreement with 3i.

Item 2. Management’s Discussion and Analysis of ~~officers~~Financial Condition and ~~directors upon conversion~~Results of ~~working capital loans made~~Operations.

The following discussion and analysis are intended to ~~the Company).~~

Holders of the Class A common stock and holders of the Class B common stock will vote together as a single class on all matters submitted to a vote of the Company's stockholders, with each share of common stock entitling the holder to one vote.

~~Item 2.~~

~~Management’s Discussion and Analysis of Financial Condition and Results of Operations~~

~~Forward-Looking Statements~~

This Quarterly Report on Form 10-Q contains certain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included in this Quarterly Report on Form 10-Q, including, without limitation, statements regarding our or our management team’s expectations, hopes, beliefs, intentions or strategies regarding the future, are forward-looking statements. Forward-looking statements generally can be identified by the use of forward-looking terminology such as “anticipate,” “believe,” “continue,” “could,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “should,” “would” or the negative thereof or any variation thereon or similar terminology or expressions.

We have based these forward-looking statements on our current expectations and beliefs concerning future developments and their potential effects on us. These forward-looking statements are not guarantees and are subject to known and unknown risks, uncertainties, and assumptions about us that may cause our actual results, levels of activity, performance, or achievements to be materially different from any future results, levels of activity, performance, or achievements expressed or implied by such forward-looking statements. Important factors which could materially affect our results and our future performance include, without limitation:

~~our ability to complete our initial business combination;~~

~~our expectations around the performance of the prospective target business or businesses;~~

~~our success in retaining or recruiting, or changes required in, our officers, key employees or directors following our initial business combination;~~

~~our officers and directors allocating their time to other businesses and potentially having conflicts of interest with~~help you understand our business, ~~or in approving our initial business combination, as a result~~financial condensed condition, results of ~~which they would then receive expense reimbursements;~~

~~our potential ability to obtain additional financing to complete our initial business combination;~~

~~our pool of prospective target businesses;~~

~~the ability of our officers and directors to generate a number of potential acquisition opportunities;~~

~~our public securities’ potential~~operations, liquidity, and ~~trading;~~

~~the lack of a market for our securities;~~

~~the use of proceeds not held~~capital resources. You should read this discussion in ~~the trust account or available to us from interest income on the trust account balance;~~

~~the trust account not being subject to claims of third parties; or~~

~~our financial performance, and~~

~~other factors set forth under “Item 1A. Risk Factors” in our Annual Report on Form 10-K for the fiscal year ended December 31, 2020~~.

~~Except as required by law, we assume no duty to update or revise any forward-looking statements.~~

~~Overview~~

LMF Acquisition Opportunities, Inc. (the “Company”) was incorporated in Delaware for the purpose of effecting a merger, capital stock exchange, asset acquisition, stock purchase, reorganization, or similar business combinationconjunction with ~~one or more businesses (the “Business Combination”). The Company has not selected any specific business-combination target and it has not, nor has anyone on~~ the Company’s ~~behalf, initiated any substantive discussions, directly or indirectly, with any business-combination target.~~

~~The Company has selected December 31 as its fiscal year end.~~

As of March 31, 2021, the Company had not yet commenced any operations. All activity for the period from October 27, 2020 (inception) through March 31, 2021 relates to the Company's formation and the initial public offering ("IPO") described below. The Company will not generate any operating revenues until after the completion of its initial Business Combination, at the earliest. The Company will generate non-operating income in the form of interest income on cash and cash equivalents from the proceeds derived from the IPO.

The registration statement for the Company’s IPO was declared effective on January 25, 2021 (the “Effective Date”). On January 28, 2021, the Company consummated the IPO of 10,350,000 units (the “Units” and, with respect to the shares of Class A common stock

~~included in the Units sold, the “Public Shares”), at $10.00 per Unit, generating gross proceeds of $103,500,000, which offering is further described in Note 6.~~

Simultaneously with the closing of the IPO, the Company consummated the sale of 5,738,000 warrants (the “Private Placement Warrants”) at a price of $1.00 per Private Placement Warrant in a private placement to LMFAO Sponsor LLC, a Florida limited liability company (the “Sponsor”), generating gross proceeds of $5,738,000.

Transaction costs for the IPO amounted to $6,233,747 consisting of $2,070,000 of underwriting discount, $3,622,500 of deferred underwriting fee, the fair value of the shares issued to the underwriters of $1,000 deemed as underwriters’ compensation, and $540,247 of other offering costs. In addition, $974,009 of cash was held outside of the Trust Account (as defined below) as of the date of the IPO and became available for working capital purposes at such time.

Following the closing of the IPO on January 28, 2021, an amount of $105,570,000 ($10.20 per Unit) from the net proceeds of the sale of the Units in the IPO and the sale of the Private Placement Warrants was placed in a trust account (“Trust Account”) which will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company. Except with respect to interest earned on the funds held in the Trust Account that may be released to the Company to pay its franchise and income tax obligations (less up to $100,000 of interest to pay dissolution expenses), the proceeds from the IPO and the sale of the Private Placement Warrants will not be released from the Trust Account until the earliest of (a) the completion of the Company’s initial Business Combination, (b) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation, and (c) the redemption of the Company’s Public Shares if the Company is unable to complete the initial Business Combination within 18 months from the closing of the IPO (or up to 21 months from the closing of the IPO if the Company extends the period of time to consummate a business combination, as described in more detail in the prospectus for the IPO), subject to applicable law. The proceeds deposited in the Trust Account could become subject to the claims of the Company’s creditors, if any, which could have priority over the claims of the Company’s public stockholders.

~~COVID-19 Update~~

A The significant outbreak of COVID-19 has resulted in a widespread health crisis that could adversely affect the economies and financial markets worldwide, and the business of any potential target business with which we consummate a business combination could be materially and adversely affected. We may be unable to complete a business combination if continued concerns relating to COVID-19 restrict travel, limit the ability to have meetings with potential investors, or the target company’s personnel, vendors, and services providers are unavailable to negotiate and consummate a transaction in a timely manner. The extent to which COVID-19 impacts our search for a business combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of COVID-19 and the actions to contain COVID-19 or treat its impact, among others. If the disruptions posed by COVID-19 or other matters of global concern continue for an extensive period of time, our ability to consummate a business combination, or the operations of a target business with which we ultimately consummate a business combination, may be materially adversely affected.

~~Results of Operations for the Three Months Ended March 31, 2021~~

The Company’s only activities since inception in October 28, 2020 through March 31, 2021 were organizational activities and those necessary to consummate the IPO. The Company does not expect to generate any operating revenues until after the completion of the initial Business Combination.

~~Revenues~~

~~The Company had no revenues during the three months ended March 31, 2021~~

~~Expenses~~

~~During the three months ended March 31, 2021, expenses were approximately $126 thousand, and are associated with formation and administrative expenses.~~

~~Gain on Revaluation of Warrants~~

~~The Company recognized a $1,830,660 gain upon the revaluation of the warrants as of March 31, 2021.~~

~~Other Income~~

~~The Company’s investment in U.S. government securities generated an unrealized gain of $1.7 thousand for the three months ended March 31, 2021.~~

~~Income Tax Expense~~

During the three months ended March 31, 2021, the Company did not incur any income tax expense due to the Company being in a loss situation since inception. As such, any benefits from the Company’s operating loss is deferred as it recognizes a taxation valuation allowance for the full amount. The Company did not recognize any income tax expense for the three months ended March 31, 2020.

~~Net Income~~

~~During the three months ended March 31, 2021, net income was $1.7 million. Such net income resulted from a revaluation of the Company’s warrants.~~

~~Liquidity and Capital Resources~~

~~General~~

~~As of March 31, 2021, we had cash and cash equivalents of $503 thousand.~~

~~Cash from Operations~~

~~Net cash used in operations was $280 thousand during the three months ended March 31, 2021 due to cash used for operating and formation costs.~~

~~Cash from Investing Activities~~

~~For the three months ended March 31, 2021 net cash used in investing activities was $105.6 million as the Company invested $105.6 million into its Trust account.~~

~~Cash from Financing Activities~~

Net cash provided by financing activities was $106.3 million for the three months ended March 31, 2021 due to the $106.8 million generated by the Company’s IPO. The Company also paid $468 thousand during the period for director and officer insurance premiums.

~~Shareholders’ Equity~~

~~During the three months ended March 31, 2021, the Company issued 10.3 million units, 0.4 million in Class B shares and 5.7 million Private Placement Warrants.~~

~~As of March 31, 2021, the Company owed $286 thousand for financed insurance premiums.~~

~~Off-Balance Sheet Arrangements~~

~~We do not have any off-balance sheet arrangements.~~

~~Item 3.~~

~~Quantitative and Qualitative Disclosures About Market Risk~~

~~As a smaller reporting company, we are not required to make disclosures under this item.~~

~~Item 4.~~

~~Controls and Procedures~~

~~(a) Evaluation of disclosure controls and procedures.~~

Disclosure controls are procedures that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act, such as this Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure. Our management evaluated, with the participation of our chief executive officer and chief financial officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of March 31, 2021, pursuant to Rule 13a-15(b) under the Exchange Act. Based upon that evaluation, our Certifying Officers concluded that, as of March 31, 2021, our disclosure controls and procedures were not effective.

Specifically, management’s determination was based on the following material weaknesses which existed as of March 31, 2021: Since inception in 2020 to the present, the Company did not effectively segregate certain accounting duties due to the small size of its accounting staff. In addition, our internal control over financial reporting did not result in effective controls to properly evaluate complex equity transactions. This lack of control led to improper accounting classification of warrants we issued in January 2021 which, due to its impact on our financial statements which we determined to be a material weakness. This mistake in classification was brought to our attention only when the SEC issued a Staff Statement on Accounting and Reporting Considerations for Warrants Issued by Special Purpose Acquisition Companies (“SPACs”) dated April 12, 2021 (the “SEC Statement”). The SEC Statement addresses certain accounting and reporting considerations related to warrants of a kind similar to those we issued at the time of our initial public offering in January 2021.

A material weakness is a deficiency, or a combination of control deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interimcondensed consolidated financial statements ~~will not be prevented or detected on a timely basis. Notwithstanding the determination that our internal control over financial reporting was not effective, as of March 31, 2021,~~ and ~~that there was a material weakness as identified~~related notes included elsewhere in this ~~Quarterly Report, we believe that our financial statements contained in this Quarterly Report fairly present our financial position, results of operations~~Form 10-Q and ~~cash flows for the periods covered hereby in all material respects.~~

We do not expect that our disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints, and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures, no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions.

~~(b) Changes in internal control over financial reporting.~~

There were no changes in our internal control over financial reporting that occurred during the quarter ended March 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

~~PART~~ ~~II. OTHER~~ ~~INFORMATION~~

~~Item 1.~~

~~Legal Proceedings~~

~~We are not currently a party to material litigation proceedings, nor, to our knowledge, is any material legal proceeding threatened against us or any of our officers or directors in their corporate capacity.~~

~~Item 1A.~~

~~Risk Factors~~

~~Except as set forth below, there have been no material changes from the risk factors previously disclosed in the section entitled “Risk Factors”~~ in our Annual Report on Form 10-K for the year ended December 31, ~~2020:~~2022.

In addition to historical financial analysis, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions, as described under the heading “Cautionary Note Regarding Forward Looking Statements.” Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, risks and uncertainties, including those set forth under “Risk Factors” included elsewhere (or incorporated by reference) in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2022. Unless the context otherwise requires, references in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” to “SeaStar Medical,“ “we,“ “us,” “our,” and “the Company” are intended to mean the business and operations of SeaStar Medical Holding Corporation and its consolidated subsidiaries following the Business Combination.

Overview

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").

The Company is a medical technology company developing a platform therapy to reduce the consequences of hyperinflammation on vital organs. 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. If the inflammatory response becomes excessive and dysregulated, normal neutrophil die off may be delayed, 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.

We are initially using our proprietary Selective Cytopheretic Device (“SCD”) technology platform to clinically validate several acute organ injury indications, including kidneys and lungs. Our investigational SCD is an extracorporeal synthetic membrane device designed to be easily integrated into existing Continuous Renal Replacement Therapy ("CRRT") systems that are commonly installed in hospitals, including in Intensive Care Units throughout the United States. Once approved and commercialized, the SCD would initially target acute kidney injury in both the pediatric CRRT population as well as adults on CRRT. In addition, we are developing our SCD to address inflammation associated with chronic dialysis and chronic heart failure. The regulatory approval process for our SCD product candidates is costly and involves significant risks and uncertainties. For a detailed description of these and other risks, please see “Risk Factors” under Part II, Item I of this Form 10-Q.

We have ~~identified material weaknesses~~incurred net losses in each year since our ~~internal control over~~inception in 2007. As of June 30, 2023 and December 31, 2022, we had an accumulated deficit of $108.3 million and $99.3 million, respectively. Our net losses were $3.7 million and $0.9 million for the three months ended June 30, 2023 and 2022, respectively. Our net losses were $8.9 million and $1.9 million for the six months ended June 30, 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. For the three and six months ended June 30, 2022, additional losses were related to the change in fair value of the forward option derivatives and the change in fair value of convertible notes.

As of June 30, 2023 and December 31, 2022, we had cash of $0.0 million.

Our accompanying unaudited condensed consolidated financial ~~reporting.~~statements have been prepared on a going concern basis, which contemplates the realization of assets and liabilities in the normal course of business. Our 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 the Company be unable to continue as a going concern.

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.

Our need for additional capital will depend in part on the scope and costs of our development activities. To date, we have not generated any significant revenue from the sale of commercialized products. Our ability to generate product revenue will depend on the successful development and eventual commercialization of our products. Until such time, if ever, 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 or 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.

Key Components of Results of Operations

Revenue

To date, we have not generated any revenue from the sale of commercialized products. Revenue has been primarily derived from government and other grants. We may generate revenue in the future based on payments from future license or collaboration agreements and government and other grants, and, if our products receive regulatory approval for commercialization, from product sales. We expect that any revenue we generate will fluctuate from quarter to quarter. If we fail to complete the development of or obtain regulatory approval for commercialization of our products in a timely manner, our ability to generate future revenue and our results of operations and financial position, would be materially adversely affected.

Research and Development Expenses

Since our inception, we have focused our resources on our 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 products.

General and Administrative Expenses

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.

Other significant general and administrative expenses include facilities costs, professional fees for accounting and legal services, expenses associated with obtaining and maintaining patents and obtaining financing, and expenses related to SEC reporting. 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, a new enterprise resource planning platform, and branding.

Other Income (Expense), Net

Total other income (expense), net primarily consists of interest expense relating to interest incurred on our notes, financing fees related to our convertible notes, gain on issuance of convertible notes, change in fair value of convertible notes, change in fair value of warrants liability, change in fair value of forward-option forward contracts, and gain on sale of recycled shares.

Net Loss

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

Factors Affecting the Company’s Operating Results

We believe that our performance and future success depend on a number of factors that present significant opportunities for us but also pose risks and challenges. Please see the factors discussed elsewhere in this Form 10-Q, including those discussed in Part I, Item 1A, “Risk Factors,” for additional information.

Results of Operations

Comparison of the Three Months Ended June 30, 2023 to the Three Months Ended June 30, 2022

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.


	Three Months Ended
	June 30,						Change
($ in thousands)	2023			2022			$			%
Revenue	$	—		$	—		$	—			—
Operating expenses
Research and development		2,007			596			1,411			237	%
General and administrative		1,743			716			1,027			143	%
Total operating expenses		3,750			1,312			2,438			186	%
Loss from operations		(3,750	)		(1,312	)		(2,438	)		186	%
Total other income (expense)		86			410			(324	)		(79	)%
Loss before income tax provision		(3,664	)		(902	)		(2,762	)		306	%
Income tax provision (benefit)		5			—			5
Net loss	$	(3,669	)	$	(902	)	$	(2,767	)		307	%

Research and Development Expenses

The following table discloses the breakdown of research and development expenses:


	Three Months Ended
	June 30,				Change
($ in thousands)	2023		2022		$		%
Clinical trials	$	803	$	—	$	803		100	%
External services		486		419		67		16	%
Payroll and personnel expenses		656		115		541		470	%
Other research and development expenses		62		62		-		0	%
	$	2,007	$	596	$	1,411		237	%

Research and development expenses for the three months ended June 30, 2023 and 2022 were $2.0 million and $0.6 million, respectively. The increase in research and development expenses of $1.4 million, or 237%, was primarily driven by increases in clinical trial expenses of $0.8 million, an increase in the use of external services of $0.1 million, and an increase in payroll and personnel expenses of $0.5 million.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2023 and 2022 were $1.7 million and $0.7 million, respectively. The increase in general and administrative expenses of $1.0 million, or 143%, is due primarily to an increase in insurance expense of $0.4 million, increase in professional fees related to SEC reporting of $0.2 million, cost of SEC reporting of $0.2 million, an increase in payroll related expenses of $0.1 million, and an increase in marketing and travel expenses of $0.1 million.

Other Income (Expense)

Other income (expense) for the three months ended June 30, 2023 and 2022 was income of $0.1 million and income of $0.4 million, respectively. The decrease of $0.3 million primarily resulted from increases in interest, the change in fair value of forward option-prepaid forward contracts, and change in fair value of convertible notes, partially offset by the gain on issuance of convertible notes, and the change in fair value of warrants liability.

Income Tax Provision (Benefit)

SeaStar Medical recorded a provision for income taxes of $0.0 million for the three months ended June 30, 2023, and an income tax benefit of $0.0 million for the three months ended June 30, 2022.

Under Accounting Standards Codification (“ASC”) 740-10-30-5, Income Taxes, deferred tax assets should be reduced by a valuation allowance if, based on the weight of available evidence, it is more-likely-than-not (i.e., a likelihood of more than 50%) that some portion or all of the deferred tax assets will not be realized. SeaStar Medical considers all positive and negative evidence available in determining the potential realization of deferred tax assets including, primarily, the recent history of taxable earnings or losses. Based on operating losses reported during 2022 and 2021, the Company concluded there was not sufficient positive evidence to overcome this recent operating history. As a result, we believe that a valuation allowance continues to be necessary based on the more-likely-than-not threshold noted above.

Net Loss

During the three months ended June 30, 2023, SeaStar Medical had a net loss of $3.7 million compared to a net loss of $0.9 million for the three months ended June 30, 2022. The increased net loss of $2.8 million primarily resulted from increases in general and administrative expenses of $1.0 million, increases in research and development expenses of $1.4 million, change in fair value of forward option-prepaid forward contracts of $0.1 million, and the change in fair value of convertible notes of $0.8 million, partially offset by the change in fair value of notes payable of $0.6 million during the three months ended June 30, 2022, and the gain on issuance of convertible notes of $0.7 million, and the change in fair value of warrants liability of $0.5 million during the three months ended June 30, 2023.

Comparison of the Six Months Ended June 30, 2023 to the Six Months Ended June 30, 2022


	Six Months Ended
	June 30,						Change
($ in thousands)	2023			2022			$			%
Revenue	$	—		$	—		$	—			—
Operating expenses
Research and development		3,791			951			2,840			299	%
General and administrative		4,540			1,173			3,367			287	%
Total operating expenses		8,331			2,124			6,207			292	%
Loss from operations		(8,331	)		(2,124	)		(6,207	)		292	%
Total other income (expense)		(595	)		218			(813	)		(373	)%
Loss before income tax provision		(8,926	)		(1,906	)		(7,020	)		368	%
Income tax provision (benefit)		5			—			5
Net loss	$	(8,931	)	$	(1,906	)	$	(7,025	)		369	%

Research and Development Expenses

The following table discloses the breakdown of research and development expenses:


	Six Months Ended
	June 30,				Change
($ in thousands)	2023		2022		$			%
Clinical trials	$	1,314	$	—	$	1,314			100	%
External services		1,167		689		478			69	%
Payroll and personnel expenses		1,224		158		1,066			675	%
Other research and development expenses		86		104		(18	)		(17	)%
	$	3,791	$	951	$	2,840			299	%

Research and development expenses for the six months ended June 30, 2023 and 2022 were $3.8 million and $1.0 million, respectively. The increase in research and development expenses of $2.8 million, or 299%, was primarily driven by increases in clinical trial expenses of $1.3 million, an increase in the use of external services of $0.5 million, and an increase in payroll and personnel expenses of $1.0 million.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2023 and 2022 were $4.5 million and $1.2 million, respectively. The increase in general and administrative expenses of $3.4 million, or 287%, was driven by an increase in payroll related expenses of $0.8 million, an increase in insurance expense of $0.8 million, an increase in professional fees related to SEC reporting of $0.8 million, cost of SEC reporting of $0.4 million, an increase in marketing and travel expenses of $0.3 million, a legal settlement of $0.2 million, and an increase in director's compensation of $0.1 million.

Other Income (Expense)

Other income (expense) for the six months ended June 30, 2023 and 2022 was expense of $0.6 million and income of $0.2 million, respectively. The decrease of $0.8 million primarily resulted from increases in interest expense, the change in fair value of convertible notes, the change in fair value of forward option-prepaid forward contracts, partially offset by the gain on issuance of convertible notes, the change in fair value of warrants liability, and a gain on sales of recycled shares.

Income Tax Provision (Benefit)

SeaStar Medical recorded a provision for income taxes of $0.0 million for the six months ended June 30, 2023, and an income tax benefit of $0.0 million for the six months ended June 30, 2022.

Net Loss

During the six months ended June 30, 2023, SeaStar Medical had a net loss of $8.9 million compared to a net loss of $1.9 million for the six months ended June 30, 2022. The increased net loss of $7.0 million primarily resulted from increases in general and administrative expenses of $3.4 million, increases in research and development expenses of $2.8 million, increases in interest expense of $0.3 million, change in fair value of convertible notes of $0.7 million, and a change in fair value of forward option-prepaid forward contracts of $1.7 million, partially offset by the change in fair value of notes payable of $0.6 million during the six months ended June 30, 2022, and the gain on issuance of convertible notes of $0.7 million, change in fair value of warrants liability of $0.5 million, and a gain on sale of recycled shares of $1.3 million during the six months ended June 30, 2023.

Liquidity and Capital Resources

Sources of Liquidity

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 June 30, 2023 and December 31, 2022, we had an accumulated deficit of $108.3 million and $99.3 million, respectively.

As of June 30, 2023 and December 31, 2022, we had cash of $0.0 million. We expect that our existing cash will be insufficient to fund our operations, including clinical trial expenses and capital expenditure requirements. We believe that this raises doubt about our ability to continue as a going concern. To finance our operations beyond that point, we would need to raise additional capital, and there is no guarantee that we will be able to secure additional funding on favorable terms, or at all. We have concluded that these circumstances raise doubt about our ability to continue as a going concern within one year after the issuance date of this Form 10-Q.

On March 15, 2023, the Company entered into a securities purchase agreement with an institutional investor, whereby the Company agreed to issue a series of four senior unsecured convertible notes, with principal amounts totaling up to $9.8 million, and warrants to purchase shares of the Company’s common stock. On March 15, 2023, the Company issued the first senior unsecured convertible note in the amount of $3.3 million and warrants to purchase 328,352 shares of common stock. On May 12, 2023, the Company issued the second senior unsecured convertible note in the amount of $2.2 million and warrants to purchase 218,901 shares of common stock. The senior unsecured convertible notes were issued at an 8.0% discount and bear interest at 7.0% per annum and mature on June 15, 2024, and August 12, 2024. The senior unsecured convertible notes are redeemable, in whole or in part, at any time at the discretion of the Company. The warrants have an initial exercise price of $2.97 per share of common stock, expire 5 years from their issuance date, and contain cashless exercise provisions.

At each of the third and fourth closings, the Company may, at its option, issue and sell to the Purchaser (i) additional Notes, each in a principal amount of $2.2 million and (ii) additional Warrants to purchase shares of common stock equal to 25% of the shares issuable upon conversion of the Notes on the applicable closing date. Pursuant to the Securities Purchase Agreement, the Company must satisfy certain additional conditions in order to sell and issue the additional Notes and additional Warrants at the second, third and fourth closings. Such additional conditions include, but are not limited to, the effectiveness of a registration statement to be filed by the Company with the SEC to register shares of common stock issuable upon conversion of the Notes and exercise of the Warrants, and for the third and fourth closings, the approval by stockholders of the Company to issue more than 19.99% of issued and outstanding shares pursuant to applicable Nasdaq Rules.

On August 7, 2023, the Company entered into an amendment to the securities purchase agreement, whereby the provisions of the third closing are amended. The institutional investor shall have the discretion to purchase additional shares of the Company common stock in an aggregate principal amount of $2.0 million, provided that institutional investor will purchase additional shares of the Company common stock in an aggregate principal amount of $1.0 million in two tranches no later than September 5, 2023. On August 7, 2023,

the Company issued a note, convertible into shares of common stock at an initial conversion price of $0.20, in a principal amount of $0.5 million, and a warrant to purchase up to 738,791 shares of common stock.

In connection with the amendment to the securities purchase agreement, the Company entered into a letter agreement with the institutional investor, providing for (i) certain adjustment mechanisms for the conversion price of the First and Second Convertible Notes and additional notes issued or to be issued under the securities purchase agreement, as amended, (ii) a six month waiver period of any cash payment obligations of the Company under each existing note, and (iii) the issuance of an additional warrant to purchase an aggregate of 4,765,620 shares of common stock.

On March 15, 2023, the Company amended its LMFA notes, LMFAO note and Maxim note, extending their maturity dates to June 15, 2024. Inconsideration for such extension, the Company agreed to pay the note holders an aggregate amount of $0.1 million in cash upon receipt of proceeds from the issuance of the notes at the second closing under the securities purchase agreement. The mandatory repayment provisions of the notes were waived for the first senior unsecured convertible note drawn on March 15, 2023.

On May 12, 2023, the Company amended its LMFA notes, LMFAO note and Maxim note. The mandatory repayment provisions of the notes were waived for the LMFA notes, and LMFAO note for the second senior unsecured convertible note drawn on May 12, 2023. The mandatory repayment for the Maxim note was reduced to $0.1 in full satisfaction of the obligation under the promissory note with respect to the second closing.

On August 7, 2023, the Company entered into certain amendments and waivers for the Maxim Note, LMFA Note, and LMFAO Note. The lenders waved their rights to receive any mandatory prepayments for proceeds received by the Company from the convertible note financings and agreed to extend the maturity dates to 91 days after the last maturity date applicable to any of the notes issued pursuant to the amended securities purchase agreement with 3i.

Future Funding Requirements

We expect to incur significant expenses in connection with our ongoing activities as we seek to (i) continue clinical development of our SCD product for approval by the Food and Drug Administration ("FDA"), and (ii) if regulatory approval is obtained, to launch and commercialize our product in the U.S. market, including subsequent launches in key international markets. We will need additional funding in connection with these activities. Our future funding requirements, both short-term and long-term, will depend on many factors, including:

•

our ability to receive cash proceeds from our existing funding sources, including equity line of credit;

•

the progress and results of our clinical trials and interpretation of those results by the FDA and other regulatory authorities;

•

the costs and timing of preparing, filing and prosecuting patent applications, maintaining and enforcing our intellectual property rights and defending any intellectual property-related claims; and

•

the costs of operating as a public company, including hiring additional personnel as well as increased director and officer insurance premiums, audit and legal fees, investor relations fees and expenses related to compliance with public company reporting requirements under the Securities Exchange Act of 1934, as amended, and rules implemented by the SEC and Nasdaq.

Until such time, if ever, as we are able to successfully develop and ~~maintain~~commercialize our products, we expect to continue financing our operations through the sale of equity, debt, borrowings under credit facilities or through potential collaborations with other companies, other strategic transactions or government or other grants. Adequate capital may not be available to us when needed or on acceptable terms.

Based on our results of operations and liquidity as of June 30, 2023, we believe our cash and cash equivalents, including the cash we obtained from the Business Combination and the PIPE Investment, as well as potential proceeds available under the Purchase Agreement with Tumim Stone Capital ("Tumim") and from the Forward Purchase Agreements ("FPA"), 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 as of June 30, 2023, are made available. In addition, we do not expect to receive any cash proceeds from the exercise of warrants in the near term, because the trading price of our common stock is currently below the exercise price of such warrants. We are seeking additional cash to fund our growth through future debt or equity financing transactions; however, there can be no assurance that we will be able to obtain additional capital on terms acceptable to us, if at all, or that we will generate sufficient future revenues and cash flows to fund our operations. Our estimates of our results of operations, working capital and capital expenditure requirements may be different than our actual needs, and those estimates may need to be revised if, for example, our actual revenue is lower, and our net operating losses are higher, than we project, and our cash and cash equivalents position is reduced faster than anticipated. We do not currently have any committed external source of funds. To the extent that we raise additional capital through the sale of equity or convertible debt securities, the ownership interest of our stockholders will be diluted, and the terms of these securities may include

liquidation or other preferences that adversely affect the rights of stockholders. Debt financing and preferred equity financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making acquisitions or capital expenditures. Debt financing would also result in fixed payment obligations. If we are unable to raise additional funds through equity or debt financings or other arrangements when needed, we may be required to delay, reduce, suspend or cease our research and development programs or any future commercialization efforts, which would have a negative impact on our business, prospects, operating results, and financial condition. See the section titled “Risk Factors” for additional risks associated with our substantial capital requirements.

Cash Flows

The following table shows a summary of our cash flows for each of the periods shown below:


	Six Months Ending
	June 30,
($ in thousands)	2023			2022
Statement of cash flow data:
Total cash (used in)/provided by:
Operating activities	$	(4,463	)	$	(1,578	)
Investing activities		—			—
Financing activities		4,429			1,681
	$	(34	)	$	103

Cash Flow from Operating Activities

Net cash used in operating activities for the six months ended June 30, 2023 was $4.5 million compared to $1.6 million for the six months ended June 30, 2022. The increase in cash used for operating activities of $2.9 million is primarily due to the increase of resources to launch the clinical trial.

Cash Flow from Financing Activities

Net cash provided by financing activities for the six months ended June 30, 2023 was $4.4 million, primarily related to the issuance of new shares of common stock, proceeds from convertible notes, and the sale of recycled shares, partially offset by payments of notes payable, payment of convertible notes, and payment of commitment fees for the equity line of credit. Cash provided by financing activities for the six months ended June 30, 2022 was $1.7 million, primarily from the issuance of notes payable.

Critical Accounting Policies and Estimates

The preparation of the unaudited condensed consolidated financial statements and related disclosures in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements, and income and expenses during the periods reported. Although actual results could materially differ from those estimates, such estimates are developed based on the best information available to management and management's best judgments at the time.

Significant estimates include the valuation of the forward option on forward purchase agreement, derivative liability, warrants, convertible notes at fair value, and the amount of share-based compensation expense.

Emerging Growth Company Status

We are an emerging growth company (“EGC”), as defined in the Jumpstart Our Business Startups (“JOBS”) Act. The JOBS Act permits companies with EGC status to take advantage of an extended transition period to comply with new or revised accounting standards, delaying the adoption of these accounting standards until they apply to private companies. We have elected to use this extended transition period to enable us to comply with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date we (i) are no longer an emerging growth company or (ii) affirmatively and irrevocably opt out of the extended transition period provided in the JOBS Act. As a result, our condensed consolidated financial statements may not be comparable to companies that comply with the new or revised accounting standards as of public company effective dates.

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Since we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor’s attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation

disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor’s report providing additional information about the audit and the condensed consolidated financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer’s compensation to median employee compensation.

We will remain an EGC under the JOBS Act until the earliest of (i) the last day of our first fiscal year following the fifth anniversary of the closing of this offering, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.07 billion, (iii) the date on which we are deemed to be a “large-accelerated filer” under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three-years.

Contractual Obligations and Commitments

The following table summarizes our contractual obligations as of June 30, 2023:


($ in thousands)	Total		Less than 1 year		1-3 years		3-5 years		More than 5 years
Contractual Obligations:
LMFA note payable		438		438		—		—		—
LMFAO note payable		1,757		1,757		—		—		—
Maxim note payable		3,590		3,590		—		—		—
First Convertible Note		2,107		2,107		—
Second Convertible Note		1,719		1,719		—		—		—
Insurance Financing		199		199		—		—		—
Total contractual obligations	$	9,810	$	9,810	$	—	$	—	$	—

Financing Transactions

Forward Purchase Agreements

In March 2023, a Volume Weighted Average Price (“VWAP”) trigger event occurred, and the FPAs could mature on the date specified by the FPA Sellers’ discretion. During the three months ended June 30, 2023, the FPAs matured and were settled by transferring 1,096,972 shares to the FPA Sellers, with a fair value of $0.6 million.

Equity Line of Credit

The Company paid previously accrued commitment fees of $1.5 million during the six months ended June 30, 2023, of which $1.0 million was paid in 218,842 shares of common stock and $0.5 million was paid in cash.

During the six months ended June 30, 2023, the Company sold 404,999 shares of common stock to Tumim for $1.2 million as part of the equity line financing arrangement.

Convertible Notes

On March 15, 2023, the Company entered into a securities purchase agreement with a related party institutional investor, whereby the Company will issue a series of four senior unsecured convertible notes, with principal amounts totaling up to $9.0 million, and warrants to purchase shares of the Company’s common stock. On March 15, 2023, the Company issued a note, convertible into 1,207,729 shares of common stock at an initial conversion price of $2.70, in a principal amount of $3.0 million, and a warrant to purchase up to 328,352 shares of common stock. The senior unsecured convertible note was issued at an 8.0% discount, bears interest at 7.0% per annum, and matures on June 15, 2024. The senior unsecured convertible notes are redeemable, in whole or in part, at any time at the discretion of the Company. The warrants have an initial exercise price of $2.97 per share of common stock, expire five years from their issuance date, and contain cashless exercise provisions. The convertible note contains an original issue discount of $0.3 million and was measured at fair value.

On May 12, 2023, the Company issued the second convertible note, convertible into 805,153 shares of common stock at an initial conversion price of $2.70, in a principal amount of $2.2 million, and a warrant to purchase up to 218,901 shares of common stock. The senior unsecured convertible note was issued at an 8.0% discount, bears interest at 7.0% per annum, and matures on August 12, 2024.

The senior unsecured convertible note is redeemable, in whole or in part, at any time at the discretion of the Company. The warrants have an initial exercise price of $2.97 per share of common stock, expire five years from their issuance date, and contain cashless exercise provisions. The convertible note contains an original issue discount of $0.2 million and was measured at fair value.

On May 12, 2023, the second convertible note and the warrants attached to the second convertible note were recorded at their fair values of $1.2 million and $0.1 million, respectively, which was less than the proceeds received from the second convertible note of $2.0 million and the Company recorded a gain on the issuance of the Second Convertible Note of $0.7 million in the unaudited condensed consolidated statements of operations for the three months ended June 30, 2023.

The warrants attached to the notes at the time of issuance are classified as a liability.

Item 3. Quantitative and Qualitative Disclosures About Market Risk.

We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.

Item 4. Controls and Procedures.

This Item 4 includes information concerning the controls and controls evaluation referred to in the certifications of our Chief Executive Officer and Interim Chief Financial Officer required by Rule 13a-14 of the Exchange Act included in this Form 10-Q as Exhibits 31.1 and 31.2.

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and Interim Chief Financial Officer, have conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) as of June 30, 2023 and based on this evaluation, have concluded that, as a result of the material weaknesses in internal control over financial reporting as described below, our disclosure controls and procedures were not effective as of June 30, 2023.

Pursuant to Rule 13a-15(e), the term “disclosure controls and procedures” means controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by an issuer in the reports that it files or submits under the Exchange Act is accumulated and communicated to the issuer’s management, including its Chief Executive Officer and Chief Financial Officer, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Management's Report on Internal Control Over Financial Reporting

Management is responsible for designing, implementing, and maintaining adequate internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The management of the Company has designed such internal control over financial reporting or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. Internal control over financial reporting, no matter how well designed, has inherent limitations. Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation. Further, because of changes in conditions, the effectiveness of internal control over financial reporting we may ~~not be able to accurately report our financial results in a timely manner.~~vary over time.

As ~~described~~discussed elsewhere in this report, we ~~identified material weaknesses~~completed the Business Combination on October 28, 2022. Prior to the Business Combination, SeaStar Medical, Inc. was a private company and therefore its controls were not required to be designed or maintained in accordance with Rules 13a-15 and 15d-15 under the Exchange Act. The design and implementation of internal control over financial reporting for the Company post-Business Combination has required and will continue to require significant time and resources from management and other personnel. Because of this, the design and ongoing development of our framework for implementation and evaluation of internal control over financial reporting is in its preliminary stages. As a result, management was unable, without incurring unreasonable effort or expense, to conduct an assessment of our internal control over financial reporting ~~related to the accounting for the warrants~~as of December 31, 2022. Accordingly, we issued in connection with our initial public offering in January 2021 and in connection with the small size of our accounting staff and segregation of accounting duties. As a result of these material weaknesses, our management concluded that ourare excluding management’s report on internal control over financial reporting ~~was not effective~~pursuant to Section 215.02 of the SEC Division of Corporation Finance’s Regulation S-K Compliance & Disclosure Interpretations.

Identification of Material Weaknesses

In the course of preparing the unaudited condensed consolidated financial statements that are included in this Form 10-Q, the Company has identified material weaknesses in its internal controls over financial reporting as of ~~March 31, 2021. These material weaknesses led~~June 30, 2023, which relates to a ~~material misstatement of our warrant liabilities, Class A common stock subject to possible redemption, change~~deficiency in the ~~fair value~~design and operation of ~~warrant liabilities, additional paid-in capital, accumulated deficit~~its financial accounting and ~~related financial disclosures for the three months ended March 31, 2021.~~

reporting controls. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. ~~Any failure~~The Company has identified that additional headcount will be addressed in the near term to ~~maintain such~~allow for further research and internal dialogue on complex accounting transactions prior to conclusion. The Company will also continue to review the overall internal control ~~could adversely impact~~environment as we develop the requisite internal control framework.

Changes in Internal Control over Financial Reporting

There were no changes in our ~~ability~~internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) during the period ended June 30, 2023 that materially affected, or are reasonably likely to ~~report~~materially affect, our internal control over financial ~~position~~reporting.

PART II—OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various claims and ~~results from operations on a timely and accurate basis. If our financial statements~~legal proceedings. We are not ~~accurate, investors may not have~~currently a ~~complete understanding~~party to any legal proceedings that, in the opinion of our ~~operations. Likewise, if our financial statements~~management, are ~~not filed on a timely basis, we could be subject~~likely to ~~sanctions or investigations by the stock exchange on which our common stock is listed, the SEC or other regulatory authorities. In either case, there could result~~have a material adverse effect on our ~~business. Ineffective internal controls could also cause investors~~business, financial condition or results of operations. Regardless of the outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors.

Item 1A. Risk Factors.

In addition to ~~lose confidence~~the other information set forth in this report, you should carefully consider the factors discussed in the “Risk Factors” in our ~~reported~~Annual Report on Form 10-K for the year ended December 31, 2022 and our other public filings, which could materially affect our business, financial ~~information,~~condition or future results. Except as set forth below, there has been no material changes from risk factors previously disclosed in “Risk Factors” in our Form 10-K for the year ended December 31, 2022:

If the Company fails to obtain additional financing, it would be forced to delay, reduce or eliminate its product development program, which may result in the cessation of its operations.

Developing medical device products, including conducting preclinical studies and clinical trials, is expensive. The Company expects its research and development expenses to substantially increase in connection with its ongoing activities, particularly as it advances its clinical programs. As of June 30, 2023 and December 31, 2022, the Company had negative working capital of $(11.4) million and $2.3 million, respectively. The Company currently does not have sufficient capital to support its operations and complete its planned regulatory approval process. The Company will need to secure additional capital to continue its operation, and such funding may not be available on acceptable terms, or at all. In addition, the Company incurred a significant amount of debt, including the issuance of unsecured and secured promissory notes to LM Funding America, Inc. (“LMFA”), LMFAO Sponsor (the "Sponsor"), Maxim ("Maxim”), and convertible notes to 3i LP, an affiliate of Tumim Stone Capital ("Tumim"), and the Company may not have sufficient funds to repay these loans. Even if the Company obtains additional funding, the Company will be required to make certain mandatory payments under such promissory notes, which will reduce the amount of proceeds available for the Company to operate its business.

On August 23, 2022, LMAO and SeaStar Medical, Inc. entered into a Common Stock Purchase Agreement (the “Purchase Agreement”) with Tumim for the purchase of up to $100.0 million in shares of the common stock after the consummation of the Business Combination. There are certain conditions and limitations on the Company’s ability to utilize the $100.0 million equity line with Tumim. The Company will be required to satisfy various conditions, which include, among others: (1) delivery of a compliance certificate; (2) filing of an initial registration statement; and (3) customary bring-down opinions and negative assurances, in order to commence the selling of common stock to Tumim under the Purchase Agreement. Once such conditions are satisfied, Tumim’s purchases are subject to various restrictions and other limitations, including a cap on the number of shares of common stock that we can sell based on the trading volume of our common stock, as well as certain beneficial ownership restrictions of Tumim. If any of these conditions are not satisfied or limitations are in effect, the Company may not be able to utilize all or part of the Tumim equity line, which would have an adverse impact on the Company’s ability to satisfy its capital needs and could have a ~~negative effect~~material adverse impact on its business. The Company has received a total of $1.9 million from the Purchase Agreement through June 30, 2023. However, this source of capital may be limited since it depends substantially on the trading volume and price of our common stock.

~~We can give~~In March 2023, the Company completed a convertible note financing in which the Company may issue up to a principal amount of approximately $9.8 million of convertible notes to 3i LP (the “Lender”) in four separate tranches subject to certain conditions (the “Convertible Note Financing”), and on March 15, 2023, the Company closed the first tranche of the financing by issuing a convertible note in a principal amount of $3.3 million, and a warrant to purchase up to 328,352 shares of common stock. However, there is no ~~assurance~~guarantee that the ~~measures we have taken~~Company will be able to satisfy the conditions required to issue additional notes under the remaining three tranches, including the requirement to obtain stockholder approval of such financing at the next annual meeting of stockholders. In addition, because some of the outstanding notes of the Company with Maxim, LMFA, and ~~plan~~Sponsor include mandatory prepayment provisions, the Company may be required to ~~take~~use a portion of the proceeds from the Convertible Note Financing to repay such notes, unless the Company can obtain a waiver from holders of such notes, and there is no guarantee that such waivers will be obtained. Even if the Company receives sufficient capital in the future, the Company will ~~remediate~~be required to raise additional funds to support its own operations and complete its planned regulatory approval process, and such funding may not be available in sufficient amounts or on acceptable terms to the Company, or at all. If it is unable to raise additional capital when required or on acceptable terms, the Company may be required to:

•

significantly delay, scale back or discontinue the development or commercialization of its product candidates;

•

seek corporate partners on terms that are less favorable than might otherwise be available; and/or

•

relinquish or license on unfavorable terms, its rights to technologies or product candidates that it otherwise would seek to develop or commercialize itself.

If it is unable to raise additional capital in sufficient amounts or on acceptable terms, the Company will be prevented from pursuing development and commercialization efforts, including completing the clinical trials and regulatory approval process for its SCD product candidates, which would have a material ~~weakness identified or that any additional material weaknesses or restatements~~adverse impact on its business, results of operations, and financial ~~results will~~condition.

The Company has not ~~arise~~received, and may never receive, approval from the FDA to market its product in the ~~future due~~United States or abroad.

The Company may encounter various challenges and difficulties in its application to seek approval from the FDA to sell and market its SCD product candidates, including the application for HDE for pediatric AKI indication and the pivotal trial for adult AKI indication.

The Company is required to submit a ~~failure~~substantial amount of supporting documentation for its HDE application to ~~implement~~demonstrate the eligibility of the SCD to treat pediatric patients. The Company recently announced that it has received a letter from the Center for Biologics Evaluation and ~~maintain adequate internal control over financial reporting~~Research (“CBER”) of the FDA regarding the Company’s HDE application for its pediatric SCD program. In the letter, the FDA indicated that the application is not approvable in its current form but outlined specific guidance as to how the application may be amended and resubmitted successfully. While the Company believes that each of the current deficiencies cited by CBER in their letter are readily addressable, there is no guarantee that the Company will be able to fully address these deficiencies to obtain approval in a timely or ~~circumvention of these controls.~~at all. In addition, even if wethe Company is able to comply with the guidance provided by the FDA and address the deficiencies, the Company may be required to make significant or material changes to the device structure and process of implement of SCD, and such changes may render the device less effective or require additional testing or trial to confirm effectiveness, which will increase the cost of our operations significantly. Our failure to address the FDA’s concerns will adversely affect the Company’s business operations and financial conditions.

While the Company recently obtained approval from the FDA to conduct the AKI adult pivotal trial for SCE, there is no guarantee that the Company will be able to complete such trial in a timely manner, or at all, nor will there be any assurance that positive data will be generated from such trials. Even if the Company is able to generate positive results from this trial, the FDA and other regulatory agencies may require the Company to conduct additional trials to support the study or disagree with the design of the trial and request changes or improvements to such design. The Company is also subject to numerous other risks relating to the regulatory approval process, which include but are ~~successful~~not limited to:

•

an inability to secure and obtain support and references from collaborators and suppliers required by the FDA;

•

a disagreement with the FDA regarding the design of the trial, including the number of clinical study subjects and other data, which may require SeaStar Medical to conduct additional testing or increase the size and complexity of its pivotal study;

•

a failure to obtain a sufficient supply of filters to conduct its trial;

•

an inability to enroll a sufficient number of subjects;

•

a shortage of necessary raw materials, such as calcium; and

•

delays and failures to train qualified personnel to operate the SCD therapy.

Even if the Company obtains approval, the FDA or other regulatory authorities may require expensive or burdensome post-market testing or controls. Any delay in, ~~strengthening our controls~~or failure to receive or maintain, clearance or approval for its future products could prevent the Company from generating revenue from these products or achieving profitability. Additionally, the FDA and ~~procedures,~~other regulatory authorities have broad enforcement powers. Regulatory enforcement or inquiries, or other increased scrutiny on the Company, could dissuade some physicians from using its products and adversely affect its reputation and the perceived safety and efficacy of its products.

Delays or rejections may occur based on changes in governmental policies for medical devices during the period of product development. The FDA can delay, limit or deny approval of a PMA application for many reasons, including:

•

the Company’s inability to demonstrate the safety or effectiveness of the SCD or any other product it develops to the FDA’s satisfaction;

•

insufficient data from its preclinical studies and clinical trials, including for its SCD, to support approval;

•

failure of the facilities of its third-party manufacturers or suppliers to meet applicable requirements;

•

inadequate compliance with preclinical, clinical or other regulations;

•

its failure to meet the FDA’s statistical requirements for approval; and

•

changes in the ~~future those controls and procedures~~FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical studies.

If the Company is not able to obtain regulatory approval of its SCD in a timely manner or at all, it may not be ~~adequate~~able to ~~prevent or identify irregularities or errors or~~continue to ~~facilitate the fair presentation~~operate its business and may be forced to shut down its operations.

We recently received letters of deficiency from NASDAQ for failure to comply with certain continued listing requirements, and there is no guarantee that we will be able to regain compliance to avoid a delisting of our ~~financial statements.~~common stock.

~~The SEC issued guidance~~On June 14, 2023, the Company received a letter from the NASDAQ Stock Market (“NASDAQ”), indicating that the Company did not comply with the $35 million minimum market value requirement for continued listing on the ~~application~~Nasdaq Capital Market under Nasdaq Listing Rule 5550(b)(2). In accordance with NASDAQ rules, the Company has been provided an initial period of ~~warrant accounting guidance which required~~180 calendar days, or until December 11, 2023, to regain compliance with such market value requirement. In addition, on June 26, 2023, the Company received a letter from NASDAQ indicating that ~~our warrants be accounted~~the Company did not comply with the $1.00 per share minimum bid price requirement for ~~as liabilities rather than as equity and~~continued inclusion on the NASDAQ Capital Market pursuant to Nasdaq Listing Rule 5550(a)(2). In accordance with NASDAQ rules, the Company has been provided an initial period of 180 calendar days, or until December 26, 2023 to regain compliance with such ~~requirement resulted in a restatement~~minimum bid price requirement. If the Company does not regain compliance by each such date, the Company may apply for an extension of grace periods or file an appeal with NASDAQ requesting continued listing of our ~~previously issued financial statements.~~common stock.

~~On April 12, 2021, the staff~~There is no guarantee that we will be able to regain compliance of the ~~SEC issued~~market value or the minimum bid price requirement under NASDAQ rules prior to these deadlines for the grace periods, and while we have the option to extend the grace periods, there is no guarantee that NASDAQ will grant such extension. Our failure to meet NASDAQ’s continued listing requirements may result in the delisting of our common stock, which will make our stock significantly less liquid and negatively affect its value. Delisting may also result in an event of default under our Notes and a public statement entitled “Staff Statement on Accounting and Reporting Considerations for Warrants issued by Special Purpose Acquisition Companies (“SPACs”) (the “Statement”). In the Statement, the SEC staff expressed its view thatbreach of certain terms and conditions common to SPAC warrants may require the warrants to be classified as liabilities on the SPAC’s balance sheet as opposed to equity. Since issuance, our warrants were accounted for as equity within our balance sheet, and after discussion and evaluation, includingcovenants with our ~~independent auditors, we~~warrant holders, which will have ~~concluded that our warrants should be presented as liabilities with subsequent fair value remeasurement. Therefore we conducted~~ a ~~valuation~~material adverse effect on us. Delisting could also impair the liquidity of our ~~warrants~~common stock and ~~restated~~could harm our ~~previously issued financial statements, which resulted in unanticipated costs and diversion of management resources~~ability to raise capital through alternative financing sources on terms acceptable to us, or at all, and may result in potential loss of ~~investor confidence. Although we have now completed~~confidence by investors, employees, and fewer business development opportunities.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

N/A

Item 3. Defaults Upon Senior Securities.

N/A

Item 4. Mine Safety Disclosures.

N/A

Item 5. Other Information.

On August 8, 2023, the ~~restatement, we cannot guarantee that we will have no further inquiries from the SEC or Nasdaq regarding our restated financial statements or matters relating thereto.~~

~~Any future inquiries from the SEC or Nasdaq as a result~~compensation committee of the ~~restatement~~board of ~~our historical financial statements will, regardless~~directors of the ~~outcome, likely consume~~Company approved a ~~significant amount~~modification of ~~our resources~~the terms of the base salary of each of Eric Schlorff, Chief Executive Officer, Kevin Chung, Chief Operating Officer and Caryl Baron, Interim Chief Financial Officer, as follows:

•

50% of cash payment of monthly salaries of each of Mr. Schlorff and Mr. Chung for the months of August and September 2023 will be paid in ~~addition~~shares of common stock of the Company calculated based on the average trading price in ten (10) consecutive trading days immediately prior to ~~those resources already consumed~~each payroll date.

•

10% of cash payment of monthly salary of Ms. Baron for the months of August and September 2023 will be paid in ~~connection~~shares of common stock of the Company calculated based on the average trading price in ten (10) consecutive trading days immediately prior to each payroll date.

Except for the above, no other changes have been made to the compensation arrangements with the ~~restatement itself.~~three executive officers.

The warrants issued in our IPO and in a concurrent private placement are accounted for as a warrant liability and are recorded at fair value upon issuance with changes in fair value each period to be reported in earnings, which may have an adverse effect on the market price of our common stock.

2127

Following the restatement of our historical financial statements, we account for our warrants as a warrant liability and recorded at fair value upon issuance any changes in fair value each period reported in earnings as determined by the Company based upon a valuation report obtained from its independent third party valuation firm. The impact of changes in fair value on earnings may have an adverse effect on the market price of our common stock.

Item 6. Exhibits

Exhibit Index


~~Item 2.~~	~~Unregistered Sales of Equity Securities and Use of Proceeds~~

~~(a)~~ ~~Sales of Unregistered Securities.~~

Simultaneously with the closing of the IPO, the Company consummated the Private Placement with the Company’s Sponsor purchasing an aggregate of 5,738,000 warrants at a price of $1.00 per warrant, for an aggregate purchase price of $5,738,000. The proceeds from the sale of the Private Placement Warrants were added to the proceeds from the IPO held in the Trust Account. The Private Placement Warrants are identical to the warrants sold in the IPO except that the Private Placement Warrants, so long as they are held by the Sponsor or their permitted transferees, (i) will not be redeemable by the Company, (ii) may not (including the Class A common stock issuable upon exercise of these warrants), subject to certain limited exceptions, be transferred, assigned or sold by the holders until 30 days after the completion of the Company’s initial Business Combination, (iii) may be exercised by the holders on a cashless basis and (iv) will be entitled to registration rights. The issuance of the Private Placement Warrants was made pursuant to an exemption from registration contained in Section 4(a)(2) of the Securities Act.

~~(b)~~ ~~Use of Proceeds.~~

On November 6, 2020, we issued 2,156,250 shares of our Class B common stock, to our sponsor for $25,000 in cash, at a purchase price of approximately $0.012 per share, in connection with our formation. Such shares were issued in connection with our organization pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

On January 28, 2021, we consummated our initial public offering of 10,350,000 units. Each unit consists of one share of our Class A common stock and one redeemable warrant, with each warrant entitling the holder thereof to purchase one share of Class A common stock for $11.50 per share. The units were sold at a price of $10.00 per unit, generating gross proceeds of $103,500,000. Maxim Group LLC acted as sole book-running manager. The securities sold in the initial public offering were registered under the Securities Act on a Registration Statement on Form S-1 (No. 333-251962), which was declared effective by the SEC on January 25, 2021.

Simultaneously with the closing of our initial public offering, we consummated a private placement of 5,738,000 private placement warrants, at a price of $1.00 per private placement warrant, to our sponsor, generating gross proceeds of $5,738,000. Such securities were issued pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act.

Following the closing of our initial public offering and the sale of the private placement warrants, an aggregate amount of $105,570,00 (which amount includes the deferred underwriting discount) was placed in a trust account established in connection with the initial public offering.

Transaction costs amounted to $6,233,747, consisting of $2,070,00 in underwriting discount, $3,622,500 in deferred underwriting discount, the fair value of the shares issued to the underwriters of $1,000 deemed as underwriters’ compensation, and $540,247 of other offering costs. In addition, $974,008 of cash is held outside of the trust account and is available for the payment of offering costs and for working capital purposes.

We intend to use substantially all of the funds held in the trust account, including any amounts representing interest earned on the trust account not previously released to us (less taxes payable) to complete our initial business combination. We may withdraw interest to pay our franchise and income taxes. To the extent that our equity or debt is used, in whole or in part, as consideration to complete our initial business combination, we may apply the balance of the cash released to us from the trust account for general corporate purposes, including for maintenance or expansion of operations of the post-transaction company, the payment of principal or interest due on indebtedness incurred in completing our initial business combination, to fund the purchase of other companies or for working capital.

We intend to use the funds held outside the trust account primarily to identify and evaluate target businesses, perform business due diligence on prospective target businesses, travel to and from the offices of prospective target businesses or their representatives or owners, review corporate documents and material agreements of prospective target businesses, and structure, negotiate, complete a business combination, and implement our plan of dissolution.

~~For a description of the use of the proceeds generated in our initial public offering, see Part I, Item 2 of this Quarterly Report.~~

~~(c)~~ ~~Repurchase of Securities~~.

~~None.~~

~~Item 3.~~

~~Defaults Upon Senior Securities~~

~~None.~~

~~Item 4.~~

~~Mine Safety Disclosures~~

~~None.~~

~~Item 5.~~

~~Other~~ ~~Information~~

~~None~~

~~Item 6.~~

~~Exhibits~~ ~~– To Be Updated~~

~~The following documents are filed as a part of this report or are incorporated herein by reference.~~

~~EXHIBIT~~ ~~NUMBER~~			~~DESCRIPTION~~
Exhibit No.		Description
~~3.1~~
10.1**		~~Amended~~Share Issuance and ~~Restated Certificate~~Settlement Agreement, dated as of ~~Incorporation (incorporated~~June 6, 2023, by ~~reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)~~and between SeaStar Medical Holding Corporation and Vellar Opportunity Fund SPV LLC - Series 4.
~~3.2~~31.1**		~~Bylaws (incorporated by reference~~Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the ~~Company’s Registration Statement on Form S-1 filed with~~Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the ~~SEC on January 8, 2021)~~Sarbanes-Oxley Act of 2002.
~~4.1~~31.2**		~~Specimen Unit Certificate (incorporated by reference~~Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the ~~Company’s Registration Statement on Form S-1/A filed with~~Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the ~~SEC on January 19, 2021)~~Sarbanes-Oxley Act of 2002.
~~4.2~~32.1**		~~Specimen Class A common stock Certificate (incorporated by reference~~Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the ~~Company’s Registration Statement on Form S-1/A filed with the SEC on January 19, 2021)~~Sarbanes-Oxley Act of 2002.
~~4.3~~32.2**		~~Specimen Warrant Certificate (included in Exhibit 4.4) (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)~~
~~4.4~~			Warrant Agreement, dated January 25, 2021, between the Company and Continental Stock Transfer & Trust Company (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)
~~10.1~~	Letter Agreement, dated January 25, 2021, among the Company and our officers, directors, and LMFAO Sponsor, LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)
~~10.2~~	~~Promissory Note, dated November 6, 2020, issued to LMFAO Sponsor, LLC (incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on January 8, 2021)~~
~~10.3~~	Investment Management Trust Agreement, dated January 25, 2021, between the Company and Continental Stock Transfer & Trust Company, LLC, as trustee (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)
~~10.4~~	Registration Rights Agreement, dated January 25, 2021, among the Company, LMFAO Sponsor, LLC, and Maxim Partners LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)
~~10.5~~	Securities Subscription Agreement, dated November 6, 2020 between the Registrant and LMFAO Sponsor, LLC (incorporated by reference to the Company’s Registration Statement on Form S-1 filed with the SEC on January 8, 2021)
~~10.6~~	Private Placement Warrants Purchase Agreement between the Company and LMFAO Sponsor, LLC (incorporated by reference to the Company’s Current Report on Form 8-K filed with the SEC on January 28, 2021)
~~10.7~~	~~Form of Indemnity Agreement (Incorporated by reference to the Company’s Registration Statement on Form S-1/A filed with the SEC on January 19, 2021)~~
31.1*			~~Rule 13a – 14(a)~~ Certification of ~~the Principal Executive Officer~~

31.2*			~~Rule 13a – 14(a) Certification of the Principal Financial Officer~~

32.1*			~~Written Statement of the Principal Executive Officer and~~ Principal Financial Officer Pursuant to 18 U.S.C. §Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS		Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
~~101.INS~~101.SCH		Inline XBRL ~~Instance Document.~~Taxonomy Extension Schema Document
101.CAL
~~101.SCH~~			~~XBRL Taxonomy Extension Schema.~~

~~101.CAL~~			Inline XBRL Taxonomy Extension Calculation ~~Linkbase.~~Linkbase Document
101.DEF
~~101.DEF~~			Inline XBRL Taxonomy Extension Definition ~~Linkbase.~~Linkbase Document
101.LAB
~~101.LAB~~			Inline XBRL Taxonomy Extension Label ~~Linkbase.~~Linkbase Document
101.PRE
~~101.PRE~~			Inline XBRL Taxonomy Extension Presentation ~~Linkbase.~~Linkbase Document
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

** Filed herewith

~~SIGNATURES~~

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the ~~registrant~~Registrant has duly caused this ~~report~~Report to be signed on its behalf by the undersigned, thereunto duly ~~authorized:~~authorized.


	~~LMF ACQUISITION OPPORTUNITIES, INC.~~SeaStar Medical Holding Corporation

Date: ~~May 24, 2021~~August 14, 2023	By:	/s/ ~~Bruce M. Rodgers~~Eric Schlorff
		~~Bruce M. Rodgers~~Eric Schlorff
		Chief Executive Officer ~~and Chairman of the Board~~ (Principal Executive Officer)
		~~(Principal Executive Officer)~~
Date: August 14, 2023	By:	/s/ Caryl Baron
~~Date: May 24, 2021~~	~~By:~~	~~/s/ Richard Russell~~Caryl Baron
		~~Richard Russell~~
		Interim Chief Financial Officer
		(Principal Financial and Accounting Officer)


Delaware	85-3681132
(State or other jurisdiction of incorporation or organization)	(I.R.S. ~~employer~~Employer ~~identification no.~~Identification No.)
3513 Brighton Blvd.,Suite 410 Denver, CO	80216
~~1200 West Platt Street~~ ~~Suite 100~~ ~~Tampa, FL~~	~~33606~~
(Address of principal executive offices)	(Zip ~~code)~~Code)


Title of each ~~class:~~class	~~Trading symbol~~	Trading Symbol(s)	Name of each exchange on which registered
~~Units, each consisting of one share of Class A~~ Common Stock, ~~and one Warrant~~$0.0001 par value	~~LMAOU~~	ICU	The Nasdaq Stock Market LLC
~~Class A Common Stock par value $0.0001 per share~~	~~LMAO~~	~~The Nasdaq Stock Market LLC~~
~~Redeemable~~ Warrants, each whole warrant exercisable for one share of ~~Class A~~ Common Stock ~~at an exercise price of~~for $11.50 per share	~~LMAOW~~	ICUCW	The Nasdaq Stock Market LLC


Large accelerated filer	☐	~~Accelerated filer~~	Accelerated filer		☐
Non-accelerated filer	☒		Smaller reporting company		☒
~~Non-accelerated filer~~	☑	~~Smaller reporting company~~		☑

		Emerging growth company		☑☒

	3/31/2021		12/31/2020
	(Unaudited)
ASSETS
Cash	$	503,309	$	38,388
Prepaid insurance and other fees		663,236		—
Prepaid expenses		96,117		230,820
Current Assets		1,262,662		269,208
Cash and marketable securities held in trust		105,571,754		—
Total assets	$	106,834,416	$	269,208

LIABILITIES AND STOCKHOLDERS' EQUITY
Accrued expenses		4,324		123,031
Insurance liability		285,933		—
Due to related parties		—		126,413
Total current liabilities		290,257		249,444
Deferred underwriting commissions in connection with the initial public offering		3,622,500		—
Warrant liability (Note 10)		6,286,020		—
Total liabilities		10,198,777		249,444

Commitments
Class A common stock subject to possible redemption 8,871,863 shares at redemption value		89,605,819		—
Stockholders’ equity:
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding		—		—
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 1,581,637 issued and outstanding at March 31, 2021 excluding 8,871,863 shares subject to possible redemption		158		—
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 2,587,500 shares and 2,156,250 issued and outstanding at March 31, 2021 and December 31, 2020, respectively (See Note 6.)		259		215
Additional paid-in capital		5,328,182		24,785
Accumulated deficit		1,701,221		(5,236	)
Total stockholders’ equity		7,029,820		19,764
Total liabilities and stockholders’ equity	$	106,834,416	$	269,208


	June 30,			December 31,
	2023			2022
ASSETS
Current assets
Cash	$	13		$	47
Other receivables		—			12
Prepaid expenses		2,319			2,977
Total current assets		2,332			3,036
Forward option-prepaid forward contracts, net		-			1,729
Other assets		2			2
Total assets	$	2,334		$	4,767
LIABILITIES AND STOCKHOLDERS' DEFICIT
Current liabilities
Accounts payable	$	4,355		$	1,927
Accrued expenses		1,095			2,245
Contingent upfront payment for license agreement		100			—
Notes payable, net of deferred financing costs		5,907			1,178
Convertible notes		2,230			—
Warrants liability		95			—
Total current liabilities		13,782			5,350
Notes payable, net of deferred financing costs		-			7,652
Total liabilities		13,782			13,002
Commitments and contingencies (see Note 10)
Stockholders' deficit (1)
Common stock - $0.0001 par value per share; 100,000,000 shares authorized; 18,121,238 and 12,699,668 shares issued and outstanding at June 30, 2023 and December 31, 2022, respectively		2			1
Additional paid-in capital		96,806			91,089
Accumulated deficit		(108,256	)		(99,325	)
Total stockholders' deficit		(11,448	)		(8,235	)
Total liabilities and stockholders' deficit	$	2,334		$	4,767


☑☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO


		Page

PART I.	FINANCIAL INFORMATION	31

Item 1.	Financial Statements (Unaudited)	31
	Condensed Consolidated Balance Sheets (Unaudited)	1
	LMF Acquisition Opportunities, Inc. Balance Sheets March 31, 2021 (unaudited) and December 31, 2020Condensed Consolidated Statements of Operations (Unaudited)	32
	Condensed Consolidated Statements of Changes in Stockholders' Deficit (Unaudited)	3
	~~LMF Acquisition Opportunities, Inc. Statement~~Condensed Consolidated Statements of Operations Three Months Ended March 31, 2021 (unaudited)Cash Flows (Unaudited)	4
	Notes to Unaudited Condensed Consolidated Financial Statements	5
Item 2.	LMF Acquisition Opportunities, Inc. Statement of Cash Flows Three Months Ended March 31, 2021 (unaudited)	5

	LMF Acquisition Opportunities, Inc. Statement of Equity for the Three Months Ended March 31, 2021 (unaudited)	6
	~~Notes to Unaudited Financial Statements~~	7

~~Item 2.~~	Management’s Discussion and Analysis of Financial Condition and Results of Operations	1715

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	2023
Item 4.	Controls and Procedures	23
~~Item 4.~~	~~Controls and Procedures~~	20
PART II.	OTHER INFORMATION	25
~~PART II.~~	~~OTHER INFORMATION~~	21
Item 1.	Legal Proceedings	25
Item 1.1A.	~~Legal Proceedings~~Risk Factors	2125

Item ~~1A.~~2.	~~Risk Factors~~	21

~~Item 2.~~	Unregistered Sales of Equity Securities and Use of Proceeds	2227

Item 3.	Defaults Upon Senior Securities	2227
Item 4.	Mine Safety Disclosures	27
Item 4.5.	~~Mine Safety Disclosures~~Other Information	2227

Item 5.6.	~~Other Information~~Exhibits	23

~~Item 6.~~	~~Exhibits~~	24
		28
~~SIGNATURES~~Signatures		2529

	For the Three Months Ended 3/31/2021
Expenses:
Formation and Administrative costs	$	125,957
Loss from operations		(125,957	)
Gain on warrant liability revaluation		1,830,660
Other income
Interest earned on marketable securities held in Trust Account		1,754
Net income	$	1,706,457
Income per share:
Basic weighted average shares outstanding		9,654,633
Diluted weighted average shares outstanding		9,654,633
Basic net income per share	$	0.18
Diluted net income per share	$	0.18


	Stockholders' Deficit
										Total
	Common Shares				Additional		Accumulated			Stockholders'
	Shares (1)		Amount		Paid-In Capital		Deficit			Deficit
Balance, January 1, 2022		7,238,767	$	1	$	73,495	$	(76,312	)	$	(2,816	)
Stock-based compensation		—		—		4		—			4
Net loss		—		—		—		(1,004	)		(1,004	)
Balance, March 31, 2022		7,238,767		1		73,499		(77,316	)		(3,816	)
Stock-based compensation						345					345
Net loss								(902	)		(902	)
Balance, June 30, 2022		7,238,767	$	1	$	73,844	$	(78,218	)	$	(4,373	)


Balance, January 1, 2023	12,699,668	$	1	$	91,089	$	(99,325	)	$	(8,235	)
Issuance of shares - equity line of credit	378,006		—		1,108		—			1,108
Issuance of shares - commitment fee for equity line of credit	218,842		—		1,000		—			1,000
Stock-based compensation	—		—		505		—			505
Net loss	—		—		—		(5,262	)		(5,262	)
Balance, March 31, 2023	13,296,516		1		93,702		(104,587	)		(10,884	)
Issuance of shares - equity line of credit	26,993		—		55		—			55
Issuance of shares - conversion of convertible notes	3,088,167		1		1,936		—			1,937
Issuance of shares - vesting of RSUs	153,405		—		—		—			—
Issuance of shares - prepaid forward contracts	1,096,972		—		558		—			558
Stock-based compensation	459,185		—		555		—			555
Net loss	—		—		—		(3,669	)		(3,669	)
Balance, June 30, 2023	18,121,238	$	2	$	96,806	$	(108,256	)	$	(11,448	)

	For the Three Months Ended 3/31/2021
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	1,706,457
Adjustments to reconcile net income to cash used in operating activities
Formation costs paid by related parties		(126,413	)
Gain on warrant liability revaluation		(1,830,660	)
Interest earned on marketable securities in trust		(1,754	)

Change in assets and liabilities
Prepaid costs		90,758
Accrued expenses		(118,707	)
Net cash used in operating activities		(280,319	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Investment in Trust account		(105,570,000	)

Net cash used in financing activities		(105,570,000	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Insurance financing payments		(468,061	)
Proceeds from issuance of private placement warrants		5,738,000
Proceeds from issuance of units		103,500,000
Issue costs from issuance of units		(2,454,699	)
Net cash provided by financing activities		106,315,240
NET INCREASE IN CASH		464,921
CASH - BEGINNING OF YEAR		38,388
CASH - END OF PERIOD	$	503,309

SUPPLEMENTAL DISCLOSURES OF NON-CASHFLOW INFORMATION
Warrant liability	$	6,286,020
Issuance costs	$	3,757,203

										Additional
	Class A Common Stock					Class B Common Stock				paid			Accumulated			Total			Redeemable
	Shares (1)			Amount		Shares (1)		Amount		in capital			Deficit			Equity			Interest
Balance as of December 31, 2020		—		$	—		2,156,250	$	215	$	24,785		$	(5,236	)	$	19,764		$	-
Class A Units issued for cash, net of offering costs		10,350,000			158		—		—		97,287,940			—			97,288,098			—
Class A Units issued for no cash		103,500					—		—		—			—			-			—
Class A Units reclassified to Commitments subject to possible redemption		(8,871,863	)								(89,605,819	)					(89,605,819	)		89,605,819
Private placement warrants issued for cash											5,738,000						5,738,000			—
Class B shares dividend							431,250		44		(44	)					-			—
Warrants classified as liabilities											(8,116,680	)					(8,116,680	)		—
Net income		—			—		—		—		—			1,706,457			1,706,457			—
Balance - March 31, 2021		1,581,637		$	158		2,587,500	$	259	$	5,328,182		$	1,701,221		$	7,029,820		$	89,605,819



	As of March 31, 2021	As of January 28, 2021
Public Warrants	$ 4,036,500	$ 5,175,000
Private Placement Warrants	2,249,520	2,941,680
	$ 6,286,020	$ 8,116,680

"	Level		March 31, 2021		January 28, 2021
Assets:
Government securities held in Trust Account		1	$	105,570,833	$	105,570,833
Liabilities:
Private Placement Warrants		3		2,249,520		2,941,680
Public Warrants		3		4,036,500		5,175,000