Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Objective

The following discussion and analysis are intended to help you understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion in conjunction with our consolidated financial statements and related notes included elsewhere in this Annual Report. 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 Annual Report.

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”, and “our”, are intended to mean the business and operations of SeaStar Medical Holding Corporation and its consolidated subsidiaries (the “Company”, “We”, “SeaStar Medical” or “Us”) following the October 28, 2022, merger between LMF Acquisition Opportunities Inc. (“LMF”), and SeaStar Medical, Inc, (the “Predecessor”) (the transaction herein defined as the “Business Combination” or “Merger”). In connection with the Business Combination, the Predecessor was determined to be the accounting acquirer.

Overview

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

We are a commercial stage medical technology company developing a proprietary platform therapy, our SCD to reduce the consequences of hyperinflammation on vital organs. We received FDA approval for our pediatric SCD (“QUELIMMUNE”) on February 21, 2024, under a HDE, and shipped our first commercial pediatric SCD in July 2024. A pivotal clinical trial for the SCD in adult patients with AKI is underway with 94 patients enrolled as of March 25, 2025.

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

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 of 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.

Currently, few therapeutics are available to clinicians to address hyperinflammation and for those options that do exist, such options are either immunosuppressive or only target one cytokine. We believe our technology has the potential to overcome limitations in existing anti-inflammatory treatments and address the challenge of selectively targeting activated neutrophils and monocytes.

We are leveraging our patent protected and scalable SCD technology platform to develop proprietary therapies that are organ agnostic and target both acute and chronic indications. Preclinically, our SCD was tested in various

animal models, which include acute myocardial infarction, intracranial hemorrhage, chronic heart failure, sepsis, and acute respiratory distress syndrome. The animal models demonstrated the inflammatory response and how it was modified by our SCD. We will continue to explore the application of our SCD technology across a broad range of markets and indications whereproinflammatory activated neutrophils and monocytes may contribute to disease progression or severity in both acute and chronic indications.

We are using our SCD initially to clinically validate several acute organ injury indications, including kidneys and lungs. Our investigational SCD for adults is an extracorporeal synthetic membrane device that is currently being evaluated in a pivotal clinical trial in the U.S. for premarket clearance by the FDA. The SCD for adults is designed to be easily integrated into existing CRRT systems that are commonly installed in hospitals, including in ICUs throughout the United States. Similar to our pediatric SCD (QUELIMMUNE), once approved and commercialized, our adult SCD is expected to initially target acute kidney injury in adults on CRRT. In addition, we are developing our SCD to address inflammation associated with liver disease, acute respiratory distress syndrome, chronic dialysis and chronic heart failure in adult populations. See Part I, Item 1A “Risk Factors” for additional information.

We have incurred net losses in each year since our inception in 2007. As of December 31, 2024 and 2023, we had an accumulated deficit of approximately $139.6 million and $114.7 million, respectively. Our net losses were $24.8 million and $26.2 million for the years ended December 31, 2024 and 2023, respectively. Approximately 72% and 54% of our net losses for the years-ended December 31, 2024 and 2023, respectively, resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. The remaining net losses primarily resulted from non-cash, non-operating changes in fair value of our financial instruments recognized in our statement of operations for the same two fiscal years. For the year ended December 31, 2024, these non-cash, non-operating losses related to change in fair value of convertible notes, change in fair value of liability classified warrants, and interest expense, which were partially offset by interest income.

As of December 31, 2024 and 2023, we had cash and cash equivalents of approximately $1.8 million and $0.2 million, respectively.

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

The recurring losses, working capital deficiency, the need for capital to fund our operations, including clinical trial costs 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 following the issuance date for the consolidated financial statements for the year ended December 31, 2024. See Note 1 to our audited consolidated financial statements for the year ended December 31, 2024, included elsewhere in this Annual Report for additional information on our assessment.

Our need for additional capital will depend in part on the scope and costs of our development activities. To date, we have not generated significant revenue from the sale of commercialized products. Our ability to generate product revenue will depend on the successful development of our adult SCD and eventual ongoing commercialization of QUELIMMUNE. 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

Our pediatric SCD received HDE approval from the FDA in February 2024. Since that time, we have begun to build out our commercial operations, develop our customer base and initiate commercial sales of QUELIMMUNE. We shipped our first commercial QUELIMMUNE units in July 2024. Through December 31, 2024, we have recognized approximately $0.1 million of revenue from the sale of QUELIMMUNE. Historically, prior period revenue has been primarily derived from government and other grants. We will continue to focus our efforts on generating revenue in the future based on product sales of QUELIMMUNE, as well as potential future payments from license or collaboration agreements and government and other grants.

We expect that any revenue we generate will fluctuate from quarter to quarter as we introduce QUELIMMUNE to pediatric hospital customers. We also continue to develop our adult SCD for which we are enrolling patients in a pivotal study to support FDA approval. If we fail to complete the development of, or fail to obtain regulatory approval to commercialize our adult SCD in a timely manner, our ability to generate future revenue, and our results of operations and financial position, could be materially adversely affected.

Research and Development Expenses

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

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, sales and marketing expenses, and expenses associated with obtaining and maintaining patents and obtaining financing, and expenses related to SEC reporting and compliance. As we continue to expand and grow our operations, we expect that our general and administrative expenses will increase, including additional expenses relating to new hires, travel, an enterprise resource planning platform, and branding.

Loss from Operations and Operating Margin

Loss from operations consists of our gross profit less our operating expenses. Operating margin is loss from the operations as a percentage of our net sales.

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, termination of forward purchase agreement, gains from early extinguishments of convertible notes, changes in fair value of the derivative liability related to the conversion option of convertible notes, and interest income derived from cash balances maintained at a commercial financial institution.

Net Loss

Net loss consists of our loss from operations, less other expenses, net.

Factors Affecting Our Operating Results

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

Results of Operations

Comparison of Year Ended December 31, 2024 to Year Ended December 31, 2023

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

Year Ended

December 31, Change

Net Revenue $ 135 $ — $ 135 (*)

Operating expenses

Income tax provision (benefit) 3 — 3 (*)

(*) - revenue or expenses which were new to the year ended December 31, 2024 compared to the year ended December 31, 2023.

Revenue

Net revenue increased $0.1 million to $0.1 million for the year-ended December 31, 2024, compared to no net revenue for the year-ended December 31, 2023. The increase is attributable to the commencement of sales after receiving approval from the FDA to commercially sell our pediatric selective cytopheretic device, QUELIMMUNE, on February 21, 2024. Sales did not occur until after July 1, 2024.

Research and Development Expenses

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

Year Ended

December 31, Change

Research and development expenses for the years ended December 31, 2024 and 2023 were approximately $9.1 million and $6.0 million, respectively. The increase in research and development expenses of $3.1 million, or 52.4%, was primarily driven by increases in clinical trial expenses of $1.8 million and external services of $0.1 million due

to the Neutralize-AKI Adult SCD study, in which we ended the year 2024 with 14 clinical trial sites enrolled, an increase in payroll and personnel expenses of $1.0 million due to increased head count and equity grants, and an increase in other costs of approximately $0.1 million, due to increased travel and other costs relating to increasing clinical trial site enrollees.

General and Administrative Expenses

General and administrative expenses for the years ended December 31, 2024 and 2023 were $8.9 million and $8.2 million, respectively. The increase in general and administrative expenses 7.7% is due primarily to (i) an increase in payroll and related expenses of $0.6 million, due to increased head count as we invested in our finance and commercial functions, (ii) a $0.6 million increase in accounting related costs due to the restatement of certain financial statements for the 2023 and 2022 Forms 10-K and for interim period financial statements on Forms 10-Q, (iii) a $0.1 million increase in legal expense, and (iv) a $0.2 million increase in consulting expenses for various strategic and commercial endeavors, offset by (i) a $0.6 million reduction in SEC related expenses as we transitioned from outside parties to internal resources for SEC related filings and compliance activities, and (ii) a $0.3 million decline in other activities such as public relations, investor relations and certain marketing activities.

Other Income (Expense)

Other income (expense) for the years ended December 31, 2024 and 2023 was expense of $7.0 million and $12.0 million, respectively. The decrease of approximately $5.0 million primarily resulted from (i) $4.2 million decline in the loss from the change in fair value on extinguishments of convertible notes, (ii) a decrease in interest expense of $0.8 million due to the reduction in our outstanding notes and convertible notes, (iii) interest income of $0.1 million during 2024 compared to $0.0 million for 2023, and (iv) we did not recognize a loss from the change in the fair value of forward purchase agreement derivative liabilities for 2024 as the instrument did not exist during 2024, while incurring a loss on the change in fair value of forward purchase agreement derivative liabilities of $1.3 million in 2023.

This was primarily offset by an approximately $1.2 million unfavorable impact due to the change in the fair value of liability classified warrants in 2024 compared to 2023.

Income Tax Provision (Benefit)

We recorded a provision for income taxes of $3 thousand for the year ended December 31, 2024, and did not record a provision for income taxes for the year ended December 31, 2023.

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. We consider 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 2024 and 2023, we 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. A valuation allowance of $28.5 million and $25.6 million was recorded as of and for the years ended December 31, 2024 and 2023, respectively.

Net Loss

During the year ended December 31, 2024, we had a net loss of $24.8 million compared to a net loss of $26.2 million for the year ended December 31, 2023. The decline in net loss of $1.4 million primarily resulted from a decline in other expense of $5.0 million (as discussed above in “Other Income (Expense)” offsetby increases in general and administrative expenses of $0.6 million, and increases in research and development expenses of $3.1 million.

Liquidity and Capital Resources

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 December 31, 2024 and December 31, 2023, we had an accumulated deficit of $139.6 million and $114.7 million, respectively.

As of December 31, 2024 and December 31, 2023, we had cash of $1.8 million and $0.2 million, respectively. We expect that our existing cash will be insufficient to fund our operations for the twelve months from filing date of our Form 10-K for the year ended December 31, 2024, 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 Annual Report. See Note 1 to our audited consolidated financial statements for the year ended December 31, 2024.

Cash Flows

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

Year Ended

December 31,

Statement of cash flow data:

Total cash (used in)/provided by:

Investing activities — —

Cash Flow from Operating Activities

Net cash used in operating activities for the fiscal year ended December 31, 2024 was $16.0 million compared to $10.3 million for the fiscal year ended December 31, 2023. The increase in cash used for operating activities of $5.7 million is primarily due to the increased activity related to clinical trial activities for the Neutralize-AKI clinical trial, and certain general and administrative costs.

Cash Flow from Financing Activities

Net cash provided by financing activities for the fiscal year ended December 31, 2024, was $17.7 million, primarily related to the issuance of new shares of common stock from the combination of certain registered direct offerings and at-the-market issuances, proceeds from convertible notes, and proceeds from the issuance of pre-funded warrants.

Cash provided by financing activity for the fiscal year ended December 31, 2023, was $10.4 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, and payment of convertible notes

Capital Resources

Sources of Liquidity

Shelf Registrations

Shelf Registration 333-275968 - On December 8, 2023, we filed a shelf registration on Form S-3. which was declared effective by the SEC on December 22, 2023. This shelf registration statement covered the offering, issuance and sale by us of up to an aggregate of $100.0 million of its common stock, preferred stock, debt securities, warrants,

rights and units (the “2023 Shelf”). Since the date of effectiveness, we have raised approximately $23.5 million as of December 31, 2024, through the combination of registered direct offerings and “At-the-Market” offerings. As of December 31, 2024, we have approximately $76.5 million remaining to for future offerings, of which, $20.5 million is currently restricted to capital raised from the “At-the-Market” offering.

We have raised $0.9 million from our “At-the-Market” program since January 1, 2025. On February 3, 2025, we raised approximately $6.0 million through an offering of our common stock.

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 FDA, and (ii) if regulatory approval is obtained, to launch and commercialize our products in the U.S. 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:

•

conditions in the capital markets;

•

our ability to receive cash proceeds from our existing funding instruments, including a potential 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 commercialize our products, we expect to continue financing our operations through the sale of equity, issuance of 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 when needed or on acceptable terms.

Based on our results of operations and liquidity as of December 31, 2024, we believe our cash and cash equivalents are not sufficient to meet our operations, working capital and capital expenditure requirements for a period of at least twelve months from the date of our audited consolidated financial statements for the fiscal year ended December 31, 2024. In addition, we do not expect to receive significant 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 the majority of the 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.

Critical Accounting Policies and Estimates

The preparation of the 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 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 (i) incurred-but-not-billed clinical trial costs, (ii) prepaid forward purchase agreement derivative liability, (iii) convertible notes (iv) liability classified warrants, (v) share-based compensation expense.

While our significant accounting policies are described in Note 2 - Summary of Significant Accounting Policies to the notes to our audited consolidated financial statements included elsewhere in the Annual Report on Form 10-K, we believe the following accounting policies to be critical to the judgments and estimates used in the preparation of our annual consolidated financial statements.

Incurred-But-Not-Billed Clinical Trial Site Costs. Our Neutralize-AKI clinical trial study is conducted at 14 qualified healthcare facilities as of December 31, 2024. We are responsible to cover the costs of these clinical trial efforts, including the cost of patient care relating to the adult SCD, It is common practice that the costs incurred by the clinical trial sites are incurred, but not billed until months after the event giving rise to the unbilled activity. Accordingly, we estimate the value of these “incurred-but-not-billed ” activities at the end of each reporting period. Any impact to the Statement of Operations is recognized as a component of research and development expense and included as a component of accrued expenses on the Balance Sheet.

Prepaid Forward Purchase Agreement Derivative Liability. The prepaid forward purchase agreement derivative liability (the “FPA Derivative Liability”) is required to be recognized as a liability as the financial instrument fails the “Indexation Guidance” of ASC 815-10 in addition having certain settlement features that could or will require settlement in cash or shares, depending on the feature. The FPA Derivative Liability was initially recorded at $5.2 million on October 28, 2022 (see Note 5). The FPA Derivative Liability was remeasured each reporting period using a Monte-Carlo Simulation in a risk-neutral framework (a special case of the Income Approach). Specifically, the future stock price is simulated assuming a Geometric Brownian Motion. For each simulated path, the forward purchase value was calculated based on the contractual terms and then discounted at the term-matched risk-free rate. Finally, the value of the forward was calculated as the average present value over all simulated paths. Changes in the fair value of the FPA Derivative Liability are recorded each reporting period to the change in the fair value of the forward purchase agreement derivative liability in the consolidated statement of operations. This instrument no longer existed as of December 31, 2024.

Investor D Convertible Notes. 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 we believe is appropriate for those probability-adjusted cash flows. The change in fair value of the Investor D Convertible Notes each reporting period is recorded to the Change in fair value of convertible notes in the consolidated statement of operations. These notes no longer existed at December 31, 2024.

Liability Classified Warrants. We have entered into or assumed various financial instruments in the form of warrant agreements that require classification as liabilities. This classification requires us to measure the warrants at

fair value at inception, and the remeasure the warrants. The liability classified warrants consist of the following: (see Note 10 for more information):

•

Private Placement Warrants. We assumed 229,520 Private Placement warrants as part of the Business Combination.

•

PIPE Warrants. The PIPE Warrants were entered into in congruence with the Business Combination, and include features similar to the Private Placement Warrants which require liability classification.

•

Investor D Warrants. During the years ended December 31, 2024 and 2023, we entered into various convertible credit agreements with an institutional investor (“Investor D”) which included detachable and separately exercisable warrants to purchase shares of our common stock (the “Investor D Convertible Note Warrants”). These warrants no longer exist as of December 31, 2024.

We use a Black-Scholes option pricing model to fair value liability classified warrants, using standard option pricing inputs such as the strike price of each warrant tranche, estimated volatility, time to maturity, and the risk-free interest rate. The risk-free interest rate is the U.S. Treasury rate at the date of issuance, and the time to maturity is based on the contractual life at the date of issuance. The change in fair value of liability classified warrants each reporting period is recorded to the change in fair value of warrants liability in the consolidated statement of operations.

Share Based Compensation Expense. We estimate the grant date fair value of all grants of equity-based awards (which has historically consisted of either stock options or restricted stock units).

Emerging Growth Company Status

We are an emerging growth company (“EGC”), as defined in the 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 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 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 the Business Combination, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 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 December 31, 2024:

($ in thousands) Total Less than1 year 1-3 years 3-5 years More than5 years

Contractual Obligations:

Note Payable (Insurance Financing) $ 574 $ 574 $ — $ — $ —

Total contractual obligations $ 574 $ 574 $ — $ — $ —

Insurance Financing

In October 2024, we entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $0.7 million. It is to be paid down in 10 monthly installments through August 2025.

Item 7A. 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 8. Financial Statements and Supplementary Data

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

Report of Independent Registered Public Accounting Firm (PCAOB ID: 100) 82

Consolidated Balance Sheets as of December 31, 2024 and 2023 76

Notes to Consolidated Financial Statements 81

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders of

SeaStar Medical Holding Corporation

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheets of SeaStar Medical Holding Corporation (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations, changes in stockholders’ deficit, and cash flows for each of the two years in the period ended December 31, 2024, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America.

Substantial Doubt About the Company’s Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has suffered recurring operating losses and negative cash flows from operating activities since inception and expects to continue incurring operating losses and negative cash flows in the future. These matters raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as

well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.

/s/ WithumSmith+Brown, PC

We have served as the Company’s auditor since 2023.

East Brunswick, New Jersey

March 27, 2025

PCAOB ID No. 100

SeaStar Medical Holding Corporation

Consolidated Balance Sheets

As of December 31, 2024 and 2023

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

ASSETS

Current assets

Accounts receivable 112 —

LIABILITIES AND STOCKHOLDERS̕ DEFICIT

Current liabilities

Contract liabilities — 100

Notes payable, net of deferred financing costs 574 565

Convertible notes, current portion — 4,179

Liability classified warrants 33 2,307

Notes payable, net of deferred financing costs — 4,143

Convertible notes, net of current portion — 194

Commitments and contingencies (Note 13)

Stockholders̕ deficit

Total liabilities and stockholders̕ deficit $ 4,658 $ 3,513

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

SeaStar Medical Holding Corporation

Consolidated Statements of Operations

For the Years Ended December 31, 2024 and 2023

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

Net Revenue $ 135 $ —

Cost of goods sold — —

Gross profit 135 —

Operating expenses

Other income (expense)

Interest income 101 —

Change in fair value of convertible notes (6,145) (5,380)

Change in fair value of warrants liability (697) 545

Loss on extinguishment of convertible notes — (4,949)

Other income — 151

Total other income (expense), net (6,985) (12,022)

Loss before provision for income taxes (24,827) (26,232)

Provision for income taxes 3 —

Net loss per share of common stock, basic and diluted $ (6.63) $ (30.26)

Weighted-average shares outstanding, basic and diluted 3,743,554 866,813

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

SeaStar Medical Holding Corporation

Consolidated Statements of Changes in Stockholders’ Deficit

For the Years Ended December 31, 2024 and 2023

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

Stockholders̕ Deficit

Total

Common Shares Additional Accumulated Stockholders'

Shares Amount Paid-In Capital Deficit Deficit

Issuance of shares - vesting of RSUs 8,238 — — — —

Issuance of shares - prepaid forward contracts 43,879 — 1,870 — 1,870

Forward purchase agreement derivative liability — — 11,521 — 11,521

Issuance of shares - vesting of RSUs 13,136 — — — —

Issuance of shares - stock issued for employee bonuses 10,323 — 73 — 73

Stock-based compensation — — 814 — 814

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

SeaStar Medical Holding Corporation

Consolidated Statements of Cash Flows

For the Years Ended December 31, 2024 and 2023

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

Cash flows from operating activities

Adjustments to reconcile net loss to net cash used in operating activities

Amortization of deferred financing costs 102 48

Change in fair value of convertible notes 6,145 5,380

Change in fair value of forward purchase agreement derivative liability — 1,308

Loss on extinguishment of convertible notes — 4,949

Change in operating assets and liabilities

Account receivable (112) —

Other receivables — 12

Other assets 313 —

Other liabilities (100) —

Net cash used in operating activities (16,007) (10,285)

Cash flows from financing activities

Proceeds from issuance of convertible notes 979 8,000

Payment of convertible notes (700) (400)

Proceeds from issuance of notes payable 713 800

Proceeds from issuance of shares, net of offering costs 17,441 4,742

Proceeds from exercise of convertible note warrants 853 592

Proceeds from issuance of pre-funded warrants 3,766 —

Proceeds from exercise of additional warrants — 180

Payment of commitment fee - equity line of credit — (500)

Proceeds from sale of recycled shares — 1,870

Net cash provided by financing activities 17,650 10,414

Cash, beginning of period 176 47

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

SeaStar Medical Holding Corporation

Consolidated Statements of Cash Flows, cont’d

For the Years Ended December 31, 2024 and 2023

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

Supplemental disclosure of cash flow information 2024 2023

Cash paid for income taxes $ 3 $ —

Cash paid for interest $ 553 $ 1,126

Supplemental disclosure of noncash financing activities

Exercise of liability classified warrants $ 3,106 $ —

Shares issued as payment of convertible notes $ 10,210 $ 10,411

Shares issued to settle forward option-prepaid forward contracts $ — $ 1,870

Board compensation settled in shares of common stock in-lieu-of-cash a 210 $ —

Offering costs incurred but not paid $ 45 $ —

Issuance of convertible note warrants $ 586 $ 2,705

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

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

Note 1. Description of Business

Organization and description of business

SeaStar Medical Holding Corporation, a Delaware corporation, and its wholly owned subsidiary, SeaStar Medical, Inc. (the “Predecessor”), are collectively referred to as the “Company”. The Predecessor was incorporated as a Delaware corporation in June 2007, and it is headquartered in Denver, Colorado. The Company is a commercial stage business and also focused on product development. The Company is principally engaged in the research, development, and commercialization of a platform medical device technology designed to modulate inflammation in various patient populations. The initial target of this technology is for the treatment of acute kidney injuries in pediatric patients.

On October 28, 2022, LMF Merger Sub, Inc., a wholly owned subsidiary of LMF Acquisition Opportunities, Inc., (“LMF”), merged with and into the Predecessor (the “Business Combination”), with the Predecessor surviving the Business Combination as a wholly owned subsidiary of LMF. Following the consummation of the Business Combination, LMF was renamed to “SeaStar Medical Holding Corporation”.

Basis of Presentation

The Company’s consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America (“U.S. GAAP”) and the rules and regulations of the Securities and Exchange Commission (“SEC”).

On June 7, 2024, the Company effected a 1-for-25 reverse-stock split (the “Reverse Stock-Split”) of its issued and outstanding shares of common stock, par value $0.0001 (the “common stock”). Following the effect of the Reverse Stock Split, each 25 shares of the Company’s common stock that were issued and outstanding automatically converted into one outstanding share of common stock. All stock options and warrants of the Company outstanding immediately prior to the Reverse Stock-Split were proportionally adjusted except for the Listed Warrants and the private placement warrants that were issued as part of the SPAC transaction that closed on October 28, 2022, which total 16,788,000 outstanding warrants in the aggregate (the “Unadjusted Warrants”). The Unadjusted Warrants each retained an $11.50 exercise price and require the exercise of 25 warrants to purchase one share of common stock. Unless otherwise indicated, all other share and per share amounts in this annual report reflect the effect of the Reverse-Stock Split. The par value of the Company’s common stock remained unchanged at $0.0001 per share and the number of authorized shares of common stock remained the same after the Reverse-Stock Split.

Liquidity and going concern

As of December 31, 2024, the Company has an accumulated deficit of approximately $139.6 million and cash of approximately $1.8 million. The Company does not believe that its cash on hand will be sufficient to enable it to fund its operations, including clinical trial expenses and capital expenditure requirements for at least 12 months from the issuance of these consolidated financial statements. The Company believes that these conditions raise substantial doubt about its ability to continue as a going concern.

The Company’s need for additional capital will depend in part on the scope and costs of its development activities. To date, the Company has generated very little revenue from the sales of it's commercialized product, QUELIMMUNE. Its ability to generate meaningful product revenue will depend on the successful launch of QUELIMMUNE and development and eventual commercialization of the adult SCD. Until such time, if ever, it expects to finance its operations through the sale of equity or debt, borrowing under credit facilities, or through potential collaborations, other strategic transactions or government and other grants. Adequate capital may not be available to the Company when needed or on acceptable terms.

If the Company is unable to raise capital, it could be forced to delay, reduce, suspend, or cease its research and development programs or any future commercialization efforts, which would have a negative impact on its business, prospects, operating results and financial condition. The accompanying consolidated financial statements have been

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

prepared assuming that the Company will continue as a going concern and do not include adjustments that might result from the outcome of this uncertainty. This basis of accounting contemplates the recovery of the Company’s assets and the satisfaction of liabilities in the normal course of business.

Risks and uncertainties

The Company is subject to risks common to early-stage companies in the medical technology industry including, but not limited to, new medical and technological innovations, dependence on key personnel, protection of proprietary technology, and product liability. There can be no assurance that the Company’s products or services will be accepted in the marketplace, nor can there be any assurance that any future products or services can be developed or deployed at an acceptable cost and with appropriate performance characteristics, or that such products or services will be successfully marketed, if at all. These factors could have a materially adverse effect on the Company’s future financial results, financial position and cash flows.

Note 2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, assumptions and judgments that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and reported amounts of revenues and expenses during the period. Significant estimates include the (i) valuation of the liability classified warrants, (ii) prepaid forward purchase agreement derivative liability, (iii) provision for income taxes, (iv) convertible debt measured at fair value, (v) unbilled clinical trial costs, (vi) and stock-based compensation expense. Although actual results could differ from those estimates, such estimates are developed based on the best information available to management and management’s best judgments at the time.

Cash and cash equivalents

The Company considers all highly liquid investments with an original maturity of three months or less to be cash equivalents. The company did not have any cash equivalents as of December 31, 2024 and 2023.

Concentrations of credit risk

Financial instruments that potentially subject the Company to a significant concentration of credit risk consist primarily of cash. Periodically, the Company may maintain deposits in financial institutions in excess of government insured limits. Any loss incurred or a lack of access to such funds could have a significant adverse impact on the Company’s financial condition, results of operations, and cash flows.

Accounts Receivable

The need for a credit loss allowance is evaluated each reporting period based on the Company’s assessment of the credit worthiness of its customers or any other potential circumstances that could result in a credit loss. The Company initially estimates credit losses based on a portfolio-wide method using an aging schedule at the end of each reporting period. Any customer specific collections subsequent to the reporting period are then adjusted accordingly.

All outstanding accounts receivable customer balances at December 31, 2024 were fully paid subsequent to December 31, 2024. Accordingly, there is no reserve for a credit loss allowance provided as of December 31, 2024.

Income taxes

The Company recognizes deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the consolidated financial statements or tax returns. Deferred tax assets and liabilities are determined based on the difference between the consolidated financial statement carrying amounts and the tax bases

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

of assets and liabilities using enacted tax rates expected to apply to taxable income in the periods in which such differences are expected to reverse. A valuation allowance is provided when the realization of net deferred tax assets is not deemed more likely than not.

The Company complies with the provisions of Accounting Standards Codification (“ASC”) 740, Income Taxes, which provides a comprehensive model for the recognition, measurement, and disclosure in consolidated financial statements of uncertain income tax positions that a company has taken or expects to take on a tax return. Under this guidance, a company can recognize the benefit of an income tax position only if it is more likely than not (greater than 50%) that the tax position will be sustained upon tax examination, based solely on the technical merits of the tax position; otherwise, no benefit can be recognized. The tax benefits recognized are measured based on the largest benefit that has a greater than 50% likelihood of being realized upon ultimate settlement. Additionally, the Company accrues interest and related penalties, if applicable, on all tax exposures for which reserves have been established consistent with jurisdictional tax laws. Interest and penalties are classified as income tax expense in the consolidated financial statements.

Use of Derivative Instruments

The Company’s derivative instruments historically have consisted of financial instruments that arose as part of the Company’s ongoing efforts to raise capital to fund the Company’s operations. It is likely that ongoing efforts to raise capital in the future will result in additional derivative instruments to be issued as part of those efforts. The Company has not nor does it intend to utilize derivative instruments for risk management (i.e. hedging) or investing activities.

These derivative instruments have taken the form of warrants, convertible debt, and other financing arrangements such as a prepaid forward purchase option. The classification of these financial instruments as either a component of liabilities or equity is specific to the terms within each financial instrument agreement. and the application of U.S. GAAP. For those that are liability classified, the Company recognized changes in the fair value of each financial instruments as a “non-operating income / (expense)” component of the Statement of Operations and an adjustment to operating cash flows within the Statement of Cash Flows each reporting period.

The issuance of each derivative instrument is reported as a proceed in the financing section to the Statement of Cash Flows, while the ultimate settlement of each derivative instrument could be reported either as an adjustment to operating cash flows, paydown within financing cash flows, or a non-cash transaction depending on the settlement.

Fair value option of accounting

Generally, when financial instruments are first acquired that are not required to be recorded at fair value per U.S. GAAP, ASC 825, Financial Instruments 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 for the entire financial instrument at fair value with subsequent changes in fair value recognized in earnings through the 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 concluded that its convertible notes (see Note 8) were eligible for the FVO and accordingly elected the FVO for those debt instruments. This election was made because of operational efficiencies in valuing and reporting for these debt instruments at fair value in their entirety at each reporting date. The convertible notes contained certain embedded derivatives that otherwise would require bifurcation and separate accounting at fair value.

The convertible notes, inclusive of their respective accrued interest at the stated interest rates (collectively referred to as the “FVO debt instruments”) were initially recorded at fair value as liabilities on the consolidated balance sheets and subsequently re-measured at fair value at the end of each reporting period presented within the consolidated financial statements until they were settled in 2024. The changes in fair value of the FVO debt instruments are recorded

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

in changes in fair value of convertible notes, included as a component of other income (expense), net, in the consolidated statements of operations.

Fair value of financial instruments

The following provides a summary of those assets or liabilities for which the Company is required to measure at fair value either on a recurring basis, the valuation techniques and summary of inputs used to arrive at the measure of fair value. Changes in fair value of these assets or liabilities are recognized as a component of net income in the consolidated statements of operations. Changes in fair value of these assets or liabilities are considered unrealized gains or losses and therefore are classified as non-cash adjustments to reconcile net income to operating cash flows. Significant increases (decreases) in unobservable inputs used in fair value measurements could, in isolation, potentially result in a significantly lower or higher valuation for those assets or liabilities requiring recurring fair value measurements at each reporting date.

For each simulated path, the forward purchase value was calculated based on the contractual terms and then discounted at the term-matched risk-free rate. Finally, the value of the forward was calculated as the average present value over all simulated paths.

Investor D Convertible Notes. The convertible notes were recorded as liabilities and were recorded at fair value based on Level 3 measurements until they were fully settled in 2024. The estimated fair values of the convertible notes were 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 was then discounted back to each reporting period in which the convertible notes were 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 was appropriate for those probability-adjusted cash flows. The change in fair value of the Investor D Convertible Notes each reporting period was recorded to the change in fair value of convertible notes in the consolidated statement of operations.

Liability Classified Warrants. The Company has entered into or assumed various financial instruments, in the form of warrant agreements, that require classification as liabilities. This classification requires that the Company measure the warrants at each fair value reporting period.

The Company uses a Black-Scholes option pricing model to fair value the warrants, using standard option pricing inputs such as the strike price of each warrant tranche, estimated volatility, time to maturity, and the risk-free interest rate. The risk-free interest rate is the U.S. Treasury rate at the date of issuance, and the time to maturity is based on the contractual life at the date of issuance, which is five years. The change in fair value of the liability classified warrants each reporting period is recorded to the change in fair value of warrants liability in the consolidated statements of operations.

Operating Current Assets and Current Liabilities. The estimated fair value of cash, accounts receivables, prepaid expenses, accounts payable and accrued expenses approximate their fair value because of the short-term nature of these instruments.

Classification of Derivative Gains and Losses on the Statement of Cash Flows. Changes in fair value related to the Company’s derivative financial instruments consisting of (i) liability classified warrants, (ii) convertible notes, and (iii) forward purchase agreements are classified in operating cash flows as adjustments to net income.

Revenue Recognition

Overall

Under ASC Topic 606, the Company recognizes revenue when a customer obtains control of promised goods or services, in an amount that reflects the consideration that the Company expects to receive in exchange for those goods or services. To determine revenue recognition for arrangements that the Company determines are within the scope of Topic 606, the Company evaluates the following criteria: (i) identify the contract with a customer; (ii) identify

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

the performance obligations in the contract; (iii) determine the transaction price, including variable consideration, if any; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) performance obligations are satisfied.

At contract inception, once the contract is determined to be within the scope of ASC 606, the Company assesses whether the goods or services promised within each contract are distinct and, therefore, represent a separate performance obligation. Goods and services that are determined not to be distinct are combined with other promised goods and services until a distinct combined performance obligation is identified. The Company then allocates the transaction price to each performance obligation and recognizes the associated revenue when (or as) each performance obligation is satisfied. The estimate of the transaction price for each contract includes all variable consideration to which the Company expects to be entitled, subject to the constraint on variable consideration. The Company constrains revenue by giving consideration to factors that could otherwise lead to a probable reversal of revenue. Variable consideration is not constrained if the potential reversal of cumulative revenue recognized at the contract level is not significant.

The Company records any payments received from customers prior to the Company fulfilling its performance obligation(s) as contract obligations. Amounts expected to be recognized as revenue within the one year following the balance sheet date are classified as current contract obligations. Amounts not expected to be recognized as revenue within the one year following the balance sheet date are classified as contract obligations, net of current portion. See Note 3 – Revenues and Contract Obligations for further details.

Product Sales Revenue

The Company has sold and intends to continue to sell its products either through a combination of distributor(s) and/or directly to end-user qualified customers through the Company’s own internal commercial/sales resources. The acting distributor during the year ended December 31, 2024 subsequently resold and was to continue to resell the products to present and future customers, until such time the Company terminated its agreement with the distributor (see Notes 3 and 13).

•

Timing of Revenue Recognition – During the brief history (commenced July 2024) of selling pediatric SCDs, revenue has been recognized based on a freight-on-board destination (“FOB Destination”) requirement.

•

Chargebacks, Government Rebates and Discounts – During the brief history of selling pediatric SCDs commercially, the Company has not agreed to chargebacks, government rebates or discounts.

•

Returns – Returns are specific to each order, but generally the Company allows for returns of any damaged or non-conforming product within 30 days of receipt of product. Given the (i) overall rate of product shipped that is defective/damaged, (ii) overall volume of sales to individual end-user customers, (iii) expected supply in the customer channel, and (iv) expected usage by customers, the Company does not anticipate that there will be significant risk of product returns overall.

•

Variable Consideration – based on the above and given the materiality of current sales (less than $0.1 million sold through the year ended December 31, 2024), the Company does not currently estimate a constraint on revenue recognized on product sales.

•

Transaction Price – based on the above, as currently constructed, the Company’s transaction price is fixed, based on the agreed-upon price per each purchase order submitted by each customer. Milestone or up-front payments unique to the distributor were disclosed in Note 3 (also see Note 13), and are not expected to be recognized as revenue, but were returned as a result of a settlement to cease the relationship with the distributor.

•

Allocation of Consideration – each sale of a pediatric SCD is independent of any and all other sales. The entire transaction price for each pediatric SCD is allocated to the sale of that pediatric SCD.

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

The Company will continue to monitor all of the above as the Company continues to commercialize and increase its customer base, which could result with each distributor or end-user customer agreement resulting in its own unique terms and conditions, that will potentially impact the timing and amount of revenue recognition pursuant to U.S. GAAP.

Cost of Goods Sold

Prior to July 2024, the Company only manufactured/assembled pediatric or adult SCDs for research oriented and/or clinical trial related activities. Accordingly, as of and during the year ended December 31, 2024, all inventory on-hand or utilized had $0 carrying value, as it was expensed to research and development expense at the time of purchase. Accordingly, for pediatric SCDs sold during the year ended December 31, 2024, the Company recognized no cost of goods sold, as there was no carrying value attributed to those units sold. As the Company procures inventory in the future, the Company will place value on raw materials and component parts, as there is the potential that the raw materials could be used either for (i) commercial purposes (QUELIMMUNE sales) or (ii) research and development purposes (adult SCDs used in ongoing clinical trials).

Stock-based compensation

In accordance with ASC Topic 718, Compensation – Stock Compensation, the Company recognizes compensation expense for all stock-based awards issued to employees based on the estimated grant-date fair value, which is recognized as expense on a graded vesting approach over the requisite service period. The Company has elected to recognize forfeitures as they occur. The fair value of stock options is determined using the Black-Scholes option-pricing model. The determination of fair value for stock options on the date of grant using an option-pricing model requires management to make certain assumptions including implied volatility, expected term, risk-free interest rate and expected dividends ($nil) in addition to the Company’s common stock valuation. The determination of fair value of restricted stock units is valued based on the value of the Company’s common stock on the grant date.

Research and development expenses

Expenditures made for research and development are charged to expense as incurred. External costs consist primarily of payments for laboratory supplies purchased in connection with the Company’s discovery and preclinical activities, and process development and clinical development activities. Internal costs consist primarily of employee-related costs, consultants fees and costs related to compliance with regulatory requirements.

The Company records expenses related to external research and development services based on services received and efforts expended pursuant to invoices and contracts with consultants that supply, conduct, and manage preclinical studies and clinical trials on its behalf.

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 revised accounting standards, delaying the adoption of these accounting standards until they would apply to private companies. The Company has elected to use this extended transition period for complying with certain new or 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 the JOBS Act.

Net loss per share attributable to common stockholders

The Company’s basic net loss per share attributable to common stockholders is calculated by dividing the net loss attributable to common stockholders by the weighted-average number of shares of common stock outstanding for the period. The diluted net loss per share attributable to common stockholders is computed by giving effect to all potential dilutive common stock equivalents outstanding for the period. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method. See Note 16 for disclosures

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

on exclusion of certain instruments which would be anti-dilutive in circumstances where the Company is reporting a net loss for that earnings period. Basic and diluted net loss per share attributable to common stockholders is presented in conformity with the two-class method required for participating securities as certain outstanding warrants are considered participating securities. The Company’s participating securities do not have a contractual obligation to share in the Company’s losses. As such, the net loss was attributed entirely to common stockholders. As the Company has reported a net loss for the period presented, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders for this period.

Recently adopted accounting standards

Accounting Standards Update 2023-07 - In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07 – Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures, which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. See Note 17 - Segment Reporting. The Company adopted this as of December 31, 2024, resulting in a dedicated segment reporting footnote with the requisite disclosures (see Note 17 - Segment Reporting).

Recently issued accounting standards not yet adopted

Accounting Standards Update 2024-03 — In November 2024, the FASB issued ASU 2024-03 - Income Statement - Reporting Comprehensive Income – Expense Disaggregation (Subtopic 220-40): Disaggregation of Income Statement Expenses. ASU 2024-03 requires the disclosure of additional information related to certain costs and expenses, including amounts of inventory purchases, employee compensation, and depreciation and amortization included in each income statement line item. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods beginning after December 15, 2027, with early adoption permitted. The Company is currently evaluating the impact of adopting this guidance on its consolidated financial statements and disclosures.

Accounting Standards Update 2023-09 — In December 2023, the FASB issued ASU 2023-09 Income Taxes (Topic 740) Improvements to Income Tax Disclosures. ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures. The amendments in this update are effective for public business entities for annual periods beginning after December 15, 2024. Early adoption is permitted. The Company is currently assessing the impact of this guidance on its consolidated financial statements and disclosures.

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

Note 3. Revenues and Contract Obligations

In December 2022, the Company entered into a License and Distribution Agreement (the “Distribution Agreement”) with Nuwellis, Inc. (“Nuwellis”) granting exclusive distribution rights of the Company’s pediatric SCD within the United States of America. Under the terms of the Distribution Agreement, Nuwellis would pay the Company consideration comprising both (i) a per unit sales price for each unit shipped and (ii) a royalty for all units sold to customers.

In addition, Nuwellis also agreed to pay (i) a $100 thousand upfront payment at contract inception (the “Up-front Payment”), and (ii) two contingent milestones payments consisting of (a) $450 thousand payment upon meeting the regulatory milestone of receiving HDE approval from the FDA (the “Regulatory Milestone Payment”), and (b) $300 thousand payment upon meeting a sales-based milestone (the “Sales Based Milestone Payment”).

The Company had the following performance obligations within the Distribution Agreement: (i) a material right to Nuwellis consisting of an exclusive option for Nuwellis to purchase additional pediatric SCDs during the term of the Distribution Agreement for a discounted price, (ii) to provide training to Nuwellis personnel and medical professionals at end-user customers of Nuwellis and (iii) upon each receipt of a valid Nuwellis purchase order, delivery of pediatric SCDs. The transaction price for the Nuwellis material right and training is comprised of the Upfront Payment, the Regulatory Milestone Payment and the Sales Based Milestone Payment. The transaction price for each pediatric SCD device sold was the actual price for each device and the estimated royalties to be received.

Prior to the Company’s termination of the Distribution Agreement discussed below, the Company received full consideration for the Up-front Payment and the Regulatory Milestone Payment for a total of $550 thousand, which had been recorded as contract liabilities and was to be recognized over the remaining term of the Distribution Agreement. However, the Company and Nuwellis entered into a confidential settlement agreement on October 20, 2024 (the “Settlement Agreement”), in connection with the Company’s termination of the Distribution Agreement on August 18, 2024. Under the Settlement Agreement the Company agreed to refund Nuwellis the entire $550 thousand comprising of the Upfront Payment and Regulatory Milestone plus an additional $350 thousand for a total of $900 thousand, of which the $350 thousand was charged to general and administrative expense. The amounts were paid to Nuwellis in three installments during the quarter ended December 31, 2024.

As a result, the Company (i) was precluded from recognizing revenue of approximately $0.1 million for product shipments to Nuwellis during the year ended December 31, 2024, (ii) was precluded from recognizing any revenues related to contract liabilities arising the Upfront Payment and Regulatory Milestone through December 31, 2024, (see below), and (iii) does not anticipate there will be any future shipments of pediatric SCDs to Nuwellis going forward. Due to the termination of the Distribution Agreement and related Settlement Agreement, the Company did not recognize any revenue from the Up-Front Payment or the Regulatory Milestone Payment as it refunded the payments to Nuwellis as part of the Settlement Agreement.

Since the termination of the Distribution Agreement, the Company developed its own commercial operations and sold approximately $0.1 million of pediatric SCDs to an end-user customer during the year ended December 31, 2024.

The following table summarizes the changes in the Company’s contract liability balance for the years ended December 31, 2024 and 2023:

Year Ended

Contract liabilities, beginning of period $ 100 $ —

Consideration refunded (550) —

Revenue — —

Contract liabilities, end of period $ — $ 100

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

The Company had no contract assets at the beginning or end of the fiscal years ended December 31, 2024 and 2023. The accounting policies used to measure the profit and loss of the segment are the same as those described in the summary of significant accounting policies.

Note 4. Trade Accounts Receivable

The table below presents the opening and closing balances of accounts receivable, on a gross and net basis, with the total change in expected credit losses.

Increase in trade account receivable, gross 112 — —

Note 5. Accrued Expenses

Accrued expenses consisted of the following amounts as of December 31, 2024 and 2023:

Accrued director compensation 391 427

Accrued research and development 1,023 507

Note 6. Forward Purchase Agreements

In October 2022, LMF, entered into Forward Purchase Agreements (“FPAs”) with (i) Vellar Opportunity Fund SPV LLC – Series 4 and (ii) HB Strategies LLC (collectively the “FPA Sellers”), whereby, prior to the Business Combination, the FPA Sellers purchased 1,151,400 LMF Class A Shares from redeeming holders (the “Recycled Shares”), and an additional 200,000 LMF Class A Shares constituting share consideration, each at an average price per share of $10.37. Pursuant to the FPAs, the FPA Sellers waived their redemption rights under the governing documents of LMF Merger Sub, Inc. in connection with the Business Combination.

At the Closing, LMF paid to Vellar, out of funds held in the LMF trust account, aggregate amounts of approximately $14.4 million, an amount equal to 1,173,400 LMF Class A Shares (“Recycled Shares”), multiplied by $10.37, the redemption price, approximately $2.1 million for the purpose of repayment of the FPA Sellers having purchased 200,000 shares from third parties in the open market, and reimbursement of legal expenses and a commission fee in the amount of approximately $0.2 million.

The FPA Sellers could, at their discretion, sell Recycled Shares (“Terminated Shares”). The Company was entitled to proceeds from such sales of Terminated Shares equal to the number of Terminated Shares multiplied by the reset price (the “Reset Price”). The Reset Price was initially the per-share redemption price, but was adjusted on a monthly basis to the lower of (a) the then-current Reset Price, (b) $10.00 and (c) the volume weighted-average price (“VWAP”) of the last ten trading days of the prior calendar month, but not lower than $5.00; provided, however, that if the Company offered and sold Class A common stock, or then outstanding or future issued securities were exercised or converted, at a price lower than then then-current Reset Price, then the Reset Price would be modified to equal such reduced price.

In the event that the VWAP Price was less than $3.00 per share for 20 trading days during any 30 trading-day-period, then the FPA Sellers could accelerate the maturity date (“Maturity Date”), which otherwise would have been the third anniversary of the Closing. Upon the occurrence of the Maturity Date, the Company was obligated to pay to the FPA Sellers an amount equal to the number of unsold Recycled Shares, multiplied by $2.50 (the “Maturity Consideration”).

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

The Maturity Consideration was payable by the Company in cash, or at the Company’s option, as equity, issued in Class A common stock, with a per share issue price based on the average daily VWAP Price over 30 scheduled trading days. FPA Sellers would then deliver to the Company the number of unsold Recycled Shares.

During the year ended December 31, 2022, 3,995 Recycled Shares were sold by FPA Sellers. There were 1,147,405 Recycled Shares remaining at December 31, 2022.

During the year ended December 31, 2023, an additional 374,005 Recycled Shares were sold by FPA Sellers. The Company received approximately $1.9 million for the shares sold and recognized a gain of approximately $1.3 million on the sale. Losses on remeasurement of approximately $1.7 million were recorded in change in fair value of forward option-prepaid forward contracts on the consolidated statements of operations for the year ended December 31, 2023.

In accordance with ASC 815, Derivatives and Hedging, the Company had determined that the forward option within the Forward Purchase Agreement, coupled with certain settlement features were embedded features that required bifurcation and recognition as a liability. The liability was remeasured at each reporting date until the liability was extinguished in 2023. The Company recognized a loss of $2.3 million during the year ended December 31, 2023, from the remeasurement of the liability.

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 FPAs. During the year ended December 31, 2023, the FPA Sellers specified the maturity dates and the FPAs matured and were settled by transferring (i) 1,096,972 shares and (ii) all remaining 773,400 unsold Recycled Shares to the FPA Sellers. Upon the final settlement of the FPA, the Company recognized a gain of approximately $1.0 million as the ultimate amount to settle the repurchase of the Company’s shares of common stock underlying the FPAs was reduced by the counterparties to the agreements. Approximately $11.5 million was reclassed to equity as a result of the settlement of the forward purchase agreements during the year ended December 31, 2023.

Note 7. Notes Payable

Notes payable consisted of the following:

LMFA notes payable $ — $ 296

LMFAO note payable — 1,128

Maxim note payable — 2,771

Unamortized deferred financing costs — (52)

Less current portion (574) (565)

On March 15, 2023, the Company amended its LMFA notes payable, LMFAO note payable, and Maxim note payable, extending their maturity dates to June 15, 2024. Additionally, the noteholders agreed to waive their right to receive mandatory prepayments for proceeds received from the first closing of the convertible note financings discussed in Note 8, but designated a mandatory prepayment amount to be paid upon the second closing of the convertible note financings. On May 12, 2023, another amendment was executed whereby the mandatory prepayment amount related to the second closing of the convertible note financings was waived. In consideration for such extensions, the Company agreed to pay the noteholders an aggregate amount of $0.1 million in cash upon receipt of proceeds from the issuance of the note at the second closing under the Securities Purchase Agreement (“SPA”) (see Note 10). The $0.1 million consideration for the modification was capitalized as a deferred financing cost. The Company amortized $52 thousand and $48 thousand of the deferred financing cost during the years ended December 31, 2024 and 2023, respectively.

On August 7 and December 11, 2023, the Company entered into certain amendments and waivers for the LMFA notes payable, LMFAO note payable, and Maxim note payable. 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

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

dates to 91 days after the last maturity date applicable to any of the notes issued pursuant to the amended SPA. In relation to the amendment to the Maxim note payable on December 11, 2023, the Company agreed to make a loan payment of $0.1 million and $0.1 million for placement and other past due fees. As of December 31, 2024, the Company had fully extinguished all notes payable to LMFA, LMFAO and Maxim for $5.4 million of cash.

Senior Secured LMFA Notes Payable

On September 9, 2022, the Predecessor entered into a Credit Agreement (“LMFA Note”) with LM Funding America, Inc. (“LMFA”) whereby LMFA agreed to make advances to the Predecessor of up to $0.7 million for general corporate purposes at an interest rate of 15% per annum. All advances made to the Predecessor under the LMFA Note and accrued interest were due and payable to LMFA on the maturity date. The maturity date of the loan was originally the earlier of (a) October 25, 2022, (b) the consummation of the Business Combination, and (c) the termination of the Merger agreement.

On October 28, 2022, SeaStar Medical Holding Corporation and LMFA entered into the First Amendment to Credit Agreement, dated September 9, 2022, between LMFA and the Predecessor whereby (i) the maturity date of the loan under the LMFA Note was extended to October 30, 2023; (ii) the Company was required to use 5.0% of the gross cash proceeds received from any future debt and equity financing to pay outstanding balance of LMFA Note, provided that such repayment is not required for the first $0.5 million of cash proceeds; (iii) the interest rate of the LMFA Note is reduced from 15% to 7% per annum; and (iv) the default interest rate is reduced from 18% to 15%. The LMFA Note contained customary representations and warranties, affirmative and negative covenants, and events of default.

In addition, on October 28, 2022, the parties entered into a security agreement, pursuant to which SeaStar Medical Holding Corporation granted LMFA a security interest in substantially all of the assets and property of the Company, subject to certain exceptions, as collateral under the amended LMFA Note. In addition, the Company entered into a guaranty, dated October 28, 2022, whereby SeaStar Medical Holding Corporation unconditionally guarantees and promises to pay to LMFA the outstanding principal amount under the LMFA Note.

On November 2, 2022, the Company entered into an additional promissory note in the amount of approximately $0.3 million with LMFA. The promissory note was noninterest bearing and was originally due on demand at any time on or after March 31, 2023.

The Company paid the LMFA notes in full during the year ended December 31, 2024.

Senior Secured LMFAO Note Payable

On October 28, 2022, the Company entered into a consolidated amended and restated promissory note with LMFAO Sponsor, LLC, LMAO’s sponsor and the sole holder of founding shares (the “Sponsor”) as the lender, for an aggregate principal amount of $2.8 million (the “LMFAO Note”) to amend and restate in its entirety (i) the promissory note, dated July 29, 2022, for $1.0 million in aggregate principal amount issued by LMAO to the Sponsor and (ii) the Amended and Restated Promissory Note, dated July 28, 2022, for $1.8 million in aggregate principal amount, issued by LMAO to the Sponsor (collectively, the “Original Notes”). The LMFAO Note amended the Original Notes to (i) extend maturity dates of the Original Notes to October 30, 2023; (ii) permit outstanding amount due under the LMFAO Note to be prepaid without premium or penalty; and (iii) require the Company to use 20.0% of the gross cash proceeds received from any future debt and equity financing to pay outstanding balance of LMFAO Note, provided that such repayment is not required for the first $500 of cash proceeds. The LMFAO Note carried an interest rate of 7% per annum and contained customary representations and warranties and affirmative and negative covenants.

The LMFAO Note was subject to events of default, which could have resulted in the LMFAO Note becoming immediately due and payable, with interest of 15.0% per annum. In addition, on October 28, 2022, the parties entered into a security agreement whereby the Company granted the Sponsor a security interest in substantially all of the assets and property of the Company, subject to certain exceptions, as collateral to secure the Company’s obligations under the LMFAO Note.

The Company paid this note in full during the year ended December 31, 2024.

Unsecured Maxim Note Payable

Pursuant to an engagement letter between the Company and Maxim dated October 28, 2022, the Company was required to pay Maxim, as its financial advisor, an amount equal to $4.2 million in cash as professional fees ($2.0 million assumed from LMAO and $2.2 million related to professional fees of the Company). Upon the Closing, the parties agreed that such amount would be paid in the form of a promissory note. Accordingly, on October 28, 2022, the Company entered into a promissory note with Maxim as the lender, for an aggregate principal amount of $4.2 million (the “Maxim Note”). The

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

Maxim Note had a maturity date of October 30, 2023 and outstanding amounts may be prepaid without premium or penalty. If the Company received any cash proceeds from a debt or equity financing transaction prior to the maturity date, then the Company was required to prepay the indebtedness equal to 25.0% of the gross amount of the cash proceeds, provided that such repayment obligation shall not apply to the first $0.5 million of the cash proceeds received by the Company. Interest on the Maxim Note was due at 7.0% per annum.

The Maxim Note contained customary representations and warranties, and affirmative and negative covenants. The Maxim Note was subject to events of default, which could have resulted in the Maxim Note becoming immediately due and payable, with interest of 15.0% per annum.

As a result of the Reverse Stock-Split, the Maxim Note balance became due within 90 days of the June 2024 Reverse Stock-Split event. The Maxim Note was paid in full during the year ended December 31, 2024.

Insurance Financing

In October 2024, the Company entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $0.7 million. Interest on the financing agreement was 8.440% per annum. The October 2024 financing agreement is to be paid in 10 monthly installments, with an outstanding balance of approximately $0.6 million at December 31, 2024.

In October 2023, the Company entered into a financing arrangement with a lender to finance a portion of the annual premium of an insurance policy in the amount of $0.7 million. Interest on the financing agreement was 9.55% per annum. The October 2023 financing agreement had an outstanding balance of approximately $0.6 million as of December 31, 2023, and was paid in full during the year ended December 31, 2024.

Related Party Notes

The Company from time to time has entered into short-term financings with LMFA to provide short-term liquidity needs. A total of three notes were entered into during the year ended December 31, 2023, ranging from $25 thousand to $0.1 million, with a total borrowing of $225 thousand during the fiscal year. All notes had annualized interest of 7.00% and were paid off within 30 days of each borrowing. There were no related party notes outstanding at December 31, 2024 and 2023.

Investor D Note

On June 28, 2024, the Company and Investor D agreed to exchange all of the remaining outstanding warrants held by Investor D, which were issued in connection with Investor D's convertible debt issued between March 2023 and January 2024, into a short-term note of approximately $0.5 million. The interest rate on the loan was 7.0% per annum and the note was paid in full during the year ending December 31, 2024.

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

Note 8. Convertible Notes

Convertible notes payable activity for the year ended December 31, 2024, consisted of the following:

Fair value of detachable warrants at issuance — — — — — (147) (439) (586)

(Gain)/loss on reporting period remeasurement — — — — 748 — — 748

Redemption — — — — (700) — — (700)

Balance as of December 31, 2024 $ — $ — $ — $ — $ — $ — $ — $ —

Investor D Unsecured Convertible Notes

On March 15, 2023, the Company entered into a Securities Purchase Agreement (the “Investor D SPA”) with an institutional investor (“Investor D”), whereby the Company agreed to issue a series of four senior unsecured convertible notes (collectively, the “Investor D Convertible Notes”) during the year ended December 31, 2023 with principal proceeds 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 (the “First Investor D Note”) in the amount of approximately $3.3 million, convertible into 48,309 shares of common stock at an initial conversion price of $67.50. The First Investor D Note was issued at an 8.0% discount, bore interest at 7.0% per annum, matured on June 15, 2024, and required monthly installments of principal and interest. In addition, the Company issued warrants to purchase 13,134 shares of common stock (the “First Investor D Warrants”). The First Investor D Warrants have an initial exercise price of $74.25 per share of common stock, expire in five years from their issuance date, and contain a cashless exercise provision.

On May 12, 2023, the Company issued a second senior unsecured convertible note (the “Second Investor D Note”) in the amount of approximately $2.2 million, convertible into 32,206 shares of common stock at an initial conversion price of $67.50. The Second Investor D Note was issued at an 8.0% discount, bore interest at 7.0% per annum, matured on August 12, 2024, and required monthly installments of principal and interest. In addition, the Company issued warrants to purchase 8,756 shares of common stock (the “Second Investor D Warrants”). The Second Investor D Warrants have an initial exercise price of $74.25 per share of common stock, expire five years from their issuance date, and contain a cashless exercise provision.

First Amendment to the Investor D SPA

On August 7, 2023, the Company entered into an amendment to the Investor D SPA, whereby the provisions of the third closing are amended (the “First Amended Investor D SPA”). Investor D shall have the discretion to purchase additional shares of the Company’s stock in an aggregate principal amount of $2.0 million (the “Third Investor D Note”). The Third Investor D Note consisted of four tranches which closed on August 7, 2023, August 30, 2023, September 26, 2023, and November 27, 2023. Each tranche of the Third Investor D Note was issued at an 8.0% discount, bore interest at 7.0% per annum and required monthly installments of principal and interest. Each tranche of the Third Investor D Note was convertible into 108,686 shares of common stock at an initial conversion price of $5.00, in a principal amount of $0.5 million, and includes a warrant to purchase up to 29,552 shares of common stock with an exercise price of $5.00 per share. The Third Investor D Notes had maturity dates of November 6, 2024, November 29, 2024, December 25, 2024, and February 26, 2025.

Also on August 7, 2023, the Company entered into a side letter with Investor D (the “Letter Agreement”), pursuant to which the Company agreed to adjust the conversion price of the First and Second Investor D Notes to the lowest of (i) $5.00,

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

(ii) the closing sale price of common stock on the trading day immediately preceding the date of the conversion, and (iii) the average closing sale price of common stock for the five consecutive trading days immediately preceding the date of the conversion (the “Amended First Investor D Note” and the “Amended Second Investor D Note”). The Company also agreed to issue a convertible note warrant to purchase up to 190,625 shares of common stock with an exercise price of $5.00 per share of common stock.

The Company concluded that the August 7, 2023, amendment should be accounted for as an extinguishment of the First and Second Investor D Notes. The Company derecognized the First and Second Investor D Notes with principal amounts of approximately $1.9 million and $0.6 million, respectively, and recorded fair value amounts of approximately $1.6 million and $1.3 million, respectively. The Company then recognized the Amended First and Second Investor D Notes at fair value based on the amended terms at approximately $3.5 million and $2.7 million, respectively, and recorded a loss on extinguishment for the difference between the fair value with the amended terms and the fair value of the original terms on August 7, 2023, of approximately $3.3 million. The Company recorded the convertible note warrants issued with the Letter Agreement as a liability measured at fair value at inception with subsequent changes in fair value recorded in earnings. The initial fair value of the convertible note warrants issued with the Letter Agreement of approximately $1.6 million was also recorded as loss on extinguishment.

The Second Amendment to the Investor D SPA

On December 11, 2023, the Company entered into the Second Amendment to the Investor D SPA which increased the maximum amount of additional funding from approximately $2.0 million to approximately $4.0 million. In addition, the Company closed on a fourth convertible note (the “Fourth Investor D Note”) in a principal amount of approximately $1.1 million, which is convertible into shares of common stock at a conversion price of $14.00 per share, beginning on the earlier of June 11, 2024 (or earlier upon mutual written agreement of the Company and the purchaser), or the date of an event of default, as defined in the Fourth Investor D Note, with a maturity date of March 11, 2025. The Company also issued two warrants each to purchase up to 21,108 shares of common stock with an exercise price of $14.00 per share.

Payments for Principal and Interest and Conversions of Investor D Notes During FY 2023

During the year ended December 31, 2023, the Company made cash payments of principal and interest of approximately $0.2 million and $21 thousand, respectively, on the combination of the First Investor D and Amended First Investor D Notes. The Company also made additional principal and interest payments, which included accelerated payments through equity conversions. Investor D elected to convert the conversion amount (as defined in the Amended First Investor D Note) into shares of common stock of the Company. The Company converted principal and interest into 496,831 shares of common stock with a fair value of approximately $7.0 million. The Amended First Investor D Note was fully satisfied as of December 31, 2023.

During the year ended December 31, 2023, the Company made cash payments of principal and interest of $21 thousand and $3 thousand, respectively, on the Second Investor D Note. The Company also made additional principal and interest payments, which included accelerated payments through equity conversions. Investor D elected to convert the conversion amount as defined in the Amended Second Investor D Note into shares of common stock of the Company. The Company converted principal and interest into 417,078 shares of common stock with a fair value of approximately $3.4 million. The note was fully satisfied as of December 31, 2023.

The Company did not make any payments on the first, second, third, or fourth tranches of the Third Investor D Note or Fourth Investor D Note during the year ended December 31, 2023.

For the purposes of defining the collection of the various agreements and instruments by and between Investor D and the Company:

•

The Investor D SPA, First Amended Investor D SPA, and Second Amended Investor D SPA are referred to as the “Original and Amended Investor D SPA”.

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

•

All Investor D Notes issued and/or amended under the Original and Amended Investor D SPA are collectively referred to as the “Investor D Convertible Notes”.

All warrants issued under the Original and Amended SPA or Letter Agreement are collectively referred to as the “Investor D Convertible Note Warrants”.

Investor D Unsecured Convertible Notes Issued in 2024

The Company completed additional closings related to the Second Amendment to the Investor D Securities Purchase Agreement on January 12, 2024, and January 24, 2024, issuing notes in principal amounts of $0.3 million and $0.8 million, respectively, each at 7.00% per annum (collectively the “2024 Investor D Notes”). The 2024 Investor D Notes were to mature on April 12, 2025 and April 24, 2025, respectively. The 2024 Investor D Notes had an initial conversion price of $350.00 per share and were convertible into shares of the Company’s common stock, beginning on the earlier of June 11, 2024 (or earlier upon mutual written agreement of the Company and the purchaser), or the date of an event of default. The Company also issued warrants to purchase up to 5,278 and 15,382 shares of common stock, respectively, with an exercise price of $14.00 per share, and additional warrants to purchase up to 5,278 and 15,382 shares of common stock, respectively, with an exercise price of $350.00 per share.

On January 30, 2024, the institutional investor agreed to waive its Optional Redemption Rights and any event of default that may arise thereunder with respect to this offering and suspend the Optional Redemption Rights for a period of sixty (60) days following the closing of this offering (the “Suspension Period”), and the Company granted the institutional investor a right to redeem all or a portion of the then outstanding Conversion Amount within three (3) trading days after the Suspension Period at an amount equal to 200% of the Conversion Amount.

During the quarter-ended March 31, 2024, the institutional investor converted approximately $3.3 million (face value) of the outstanding convertible notes into approximately $9.5 million of the Company’s common stock. As of March 31, 2024, the Company still owed the institutional investor approximately $1.0 million (face value) in convertible notes, with a fair value of approximately $1.1 million, which as disclosed below, was ultimately either converted or redeemed by June 30, 2024.

The Company incurred a loss of approximately $5.8 million as a result of the following: (i) $4.7 million loss on conversion into equity as a result of the difference between the fair value of the convertible notes being converted and the equity being delivered, (ii) $0.7 million loss on issuance of the Investor D convertible notes issued during the quarter ended March 31, 2024, as a result of the combination of the fair value of detachable warrants issued in conjunction to the Investor D Notes issues during the quarter ended March 31, 2024, and the excess fair value over the proceeds received for the Investor D convertible notes issues during the quarter ended March 31, 2024, and (iii) $0.4 million loss on the change in fair value of those Investor D convertible notes that were still outstanding as of March 31, 2024.

Investor D April 2024 Side Letter

On April 1, 2024, the Company and Investor D entered into a side letter agreement (the “April 2024 Side Letter”) whereby each party agreed to suspend certain rights of Investor D for a 60-day period, extending those rights from March 30, 2024, to May 30, 2024. Those rights included a 10-day notice period for any subsequent financing and rights to review terms of such financing arrangements. Finally, Investor D waived its rights and notice of default in the event of such financings. In addition, if at the end of the suspension period of May 30, 2024 the convertible notes were still outstanding, Investor D had the right to require the Company to redeem all or a portion of any outstanding Investor D convertible notes at 200% of the conversion amount (the “Make-Whole Amount”).

On June 5, 2024, Investor D and the Company completed the following two transactions, eliminating the remaining outstanding convertible debt:

•

Investor D converted approximately $0.6 million of outstanding principal and $0.7 million of accrued interest and Make-Whole Amount, into 92,858 shares of the Company’s common stock, resulting in a loss of approximately $0.4 million, and

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

•

The Company paid the remaining $0.7 million of outstanding convertible debt and Make-Whole Amount.

Accounting for the Investor D Convertible Notes and Investor D Convertible Note Warrants

The Company concluded that for each Investor D Convertible Note issuance, which included two legally detachable and separately exercisable freestanding financial instruments, (i) the Investor D Convertible Notes and (ii) the Investor D Convertible Note Warrants. The Company concluded that the Investor D Convertible Note Warrants should be recorded as a liability (see Note 10). The Company determined the Investor D Convertible Notes are liability instruments under ASC 480, Distinguishing Liabilities from Equity. The Investor D Convertible Notes were then evaluated in accordance with the requirements of ASC 825, and it was concluded that the Company was not precluded from electing the FVO for the Investor D Convertible Notes. As such, the Investor D Convertible Notes are carried at fair value in the consolidated balance sheets. The Investor D Convertible Notes were measured at fair value each reporting date until they were satisfied with changes in fair value recognized in the consolidated statements of operations, unless the change was concluded to be related to the changes in the Company’s credit rating, in which case the change would have been recognized as a component of accumulated other comprehensive income in the consolidated balance sheets. As the fair value option under ASC 825 was elected, the Company does not recognize interest expense, but instead the change in fair value at each reporting period is impacted by either the accrual or payment of interest.

Note 9. Equity Transactions

January 2024 Offering

On January 26, 2024, the Company entered into a Securities Purchase Agreement with a single institutional investor, pursuant to which the Company issued to the investor (the “Q1 2024 SPA”), (i) in a registered direct offering, 252,182 shares of the Company’s common stock, par value $0.0001 per share, and pre-funded warrants to purchase 181,449 shares of Common Stock (the “Pre-Funded Warrants”) with an exercise price of $0.0001 per share, and (ii) in a concurrent private placement, series A warrants to purchase 433,631 shares of common stock (the “Series A Common Warrants”) and series B warrants to purchase 216,816 shares of common stock each with an exercise price of $20.76 (the "Series B Common Warrants" and together with the Series A Common Warrants, the “Investor E Warrants”). Such registered direct offering and concurrent private placement are referred to herein as the “January 2024 Offering". The January 2024 Offering was priced at-the-market consistent with the rules of the Nasdaq Stock Market.

The Company received aggregate gross proceeds from the January 2024 Offering of approximately $9.0 million, before deducting fees to the Maxim Group LLC and other offering expenses payable by the Company. The Investor E Warrants became exercisable on June 4, 2024, the effective date of stockholder approval for the issuance of the shares of common stock issuable upon exercise of the Investor E Warrants (the “Stockholder Approval Date”). The Series A Common Warrants will expire on the fifth anniversary of the Stockholder Approval Date and the Series B Common Warrants will expire on the twelve-month anniversary of the Stockholder Approval Date. The Pre-Funded Warrants will not expire and were exercisable commencing on January 26, 2024. All Pre-Funded Warrants were exercised during the quarter ended March 31, 2024.

The Company paid approximately $0.7 million in fees to Maxim Group LLC and issued 21,682 warrants (the “PA Warrants”) to purchase shares of the Company’s common stock, with a fair value of approximately $0.3 million at issuance. The exercise price of these warrants is $22.83 per share and the warrants become exercisable on July 30, 2024, expiring five years after the closing date.

July 2024 Offering

On July 10, 2024, the Company entered into a securities purchase agreement (the “Q3 2024 SPA”) with certain institutional investors, pursuant to which the Company agreed to issue and sell, in a registered direct offering priced at-the-market consistent with the rules of the Nasdaq Stock Market: (i) 947,868 shares of the Company’s common stock, $0.0001 par value per share and (ii) Common Stock purchase warrants to purchase up to 947,868 shares of Common Stock (the “July 2024 Investor Warrants”) in a concurrent private placement (together the “July 2024 Offering”). The July 2024 Investor Warrants were immediately exercisable, expire five years following the issuance date and have an exercise price of $10.55 per share. The Company agreed to register the shares of Common Stock underlying the Common Warrants within 30 days of

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

the date of the Purchase Agreement. The combined purchase price of each share of Common Stock and July 2024 Investor Warrant is $10.55. The gross proceeds to the Company from the Offering were approximately $10.0 million, before deducting placement agent fees and other offering expenses payable by the Company.

On May 17, 2024, the Company entered into an engagement letter with H.C. Wainwright & Co., LLC (“Wainwright”), pursuant to which Wainwright agreed to serve as the exclusive placement agent for the Company, on a reasonable best-efforts basis, in connection with the offering. The Company paid Wainwright an aggregate cash fee equal to (i) 6.4% and 1% management fee of the gross proceeds of the July 2024 Offering and (ii) for certain expenses incurred by Wainwright totaling approximately $0.8 million. Additionally, the Company has agreed to issue to Wainwright or its designees as compensation, warrants to purchase up to 66,351 shares of Common Stock, equal to 7.0% of the aggregate number of Shares placed in the Offering (the “July 2024 PA Warrants”, which combined with the July 2024 Investor Warrants are herein referred to as the “July 2024 Warrants”). The Placement Agent Warrants have a term of five years from the commencement of sales under the Offering and an exercise price of $13.1875 per share of Common Stock (equal to 125% of the offering price).

August 2024 At-The-Market Offering

On August 20, 2024, the Company entered into an At-The-Market Offering Agreement (the “ATM Agreement”) with Wainwright as sales agent, to sell shares of its common stock, from time to time, through an “at the market offering” program under which Wainwright acts as sales agent. The sales of the Company’s Common Stock made under the ATM Agreement to be made by any method permitted by law deemed to be an “at the market offering” as defined in Rule 415 promulgated under the Securities Act of 1933, as amended (the “Securities Act”), including sales made directly on or through the Nasdaq Capital Market or on any other existing trading market for the Company’s common stock (the “ATM”).

Through December 31, 2024, the Company raised approximately $0.1 million utilizing the ATM, issuing 12,218 shares of the Company’s Common Stock.

Tumim Equity Line of Credit

In August 2022, the Predecessor, LMAO, and Tumim Stone Capital LLC (“Tumim”) entered into an equity line financing arrangement through a Common Stock Purchase Agreement (“Purchase Agreement”) providing the right to sell Tumim up to $100 million worth of shares of common stock. The Purchase Agreement is subject to certain limitations and conditions and provided for a $2.5 million commitment fee payable to Tumim, of which $1.5 million was paid in cash in 2022 and 2023 and $1.0 million was paid by issuing 8,730 shares of common stock to Tumim in 2023.

During the year ended December 31, 2023, the Company sold 260,000 shares of common stock to Tumim for proceeds of approximately $4.7 million as part of the Purchase Agreement. As of December 31, 2023, approximately $95.3 million was available to be drawn. In February 2024, the Company and Tumim agreed to terminate the Purchase Agreement.

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

Note 10. Warrants

The Company has the following warrants outstanding at December 31, 2024 and 2023:

Liability Classified Warrants

Equity Classified Warrants

Placement Agent Warrants 21,682 —

The following tables provides the weighted-average strike price and time to maturity for each warrant tranche as of December 31, 2024 and 2023:

Liability Classified Warrants

Equity Classified Warrants

Liability Classified Warrants

Equity Classified Warrants

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

July 2024 Warrants

As discussed in Note 8, as part of the Q3 2024 SPA, the Company issued the following warrants to purchase the Company’s common stock to certain institutional investors and the placement agent in July 2024:

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July 2024 Investor Warrants - warrants to purchase 947,868 shares of the Company’s common stock with an exercise price of $10.55, expiring July 10, 2029.

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July 2024 PA Warrants - warrants to purchase 66,351 shares of the Company’s common stock, with an exercise price of $13.1875, expiring July 10, 2029.

Investor E Warrants

As discussed in Note 8 as part of the Q1 2024 SPA, the Company issued the following warrants to purchase the Company’s common stock to Investor E in January 2024:

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Pre-Funded Warrants - warrants to purchase 181,449 shares of common stock with an exercise price of $0.0001. The Pre-Funded Warrants had no expiration date and were exercisable commencing on the date of issuance and at any time until all of the Pre-Funded Warrants are exercised in full. The Pre-Funded Warrants were exercised in full during the quarter ended March 31, 2024.

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Series A and Series B Common Warrants - in a concurrent private placement, Series A Common Warrants to purchase 433,631 shares of Common Stock and Series B Common Warrants to purchase 216,816 shares of common stock each with an exercise price of $20.76.

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PA Warrants – in a concurrent private placement, PA Warrants to purchase 21,682 shares of common stock with an exercise price of $22.83 per share.

Investor E Warrants became exercisable on June 4, 2024, the effective date of stockholder approval for the issuance of the shares of common stock issuable upon exercise of the Investor E Warrants. The Series A Common Warrants will expire on June 4, 2029, and the Series B Common Warrants will expire on June 4, 2025.

Maxim Group LLC (“Maxim”) acted as the placement agent in connection with the transactions pursuant to the Placement Agency Agreement, dated January 26, 2024, by and between the Company and Maxim. On January 30, 2024, Maxim received warrants to purchase 21,682 shares of common stock covering a number of shares equal to 5% of the total number of shares of common stock sold in the Transactions. The PA Warrants became exercisable six months after the closing and will expire on January 30, 2029. The PA Warrants are exercisable at $22.83 per share.

In accordance with ASC 815-40, Derivatives and Hedging-Contracts in Entity’s own Equity, the Company determined the Investor E and July 2024 Warrants meet the conditions for equity classification and are included on the consolidated balance sheets as a component of stockholders’ equity (deficit).

Investor D Warrants

As disclosed in Note 8, the following summarizes warrants issued in connection with the Original and Amended Investor D SPA during the year ended December 31, 2023:

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On March 15, 2023, as part of the issuance of the First Investor D Note, 13,134 warrants were issued with an exercise price of $74.25 per share.

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On May 12, 2023, as part of the issuance of the Second Investor D Note, 8,756 warrants were issued with an exercise price of $74.25 per share.

SeaStar Medical Holding Corporation

Notes to the Consolidated Financial Statements

December 31, 2024 and 2023

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On August 7, 2023, as part of the Letter Agreement, 19,061 warrants were issued with an exercise price of $5.00 per share. Also on August 7, 2023, as part of the issuance of the first tranche of the Third Investor D Note, 29,552 Convertible Note Warrants were issued with an exercise price of $5.00 per share.

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On August 30, 2023, as part of the issuance of the second tranche of the Third Investor D Note, 29,552 warrants were issued with an exercise price of $5.00 per share.

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On September 26, 2023, as part of the issuance of the third tranche of the Third Investor D Note, 29,552 warrants were issued with an exercise price of $5.00 per share.

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On November 27, 2023, as part of the issuance of the fourth tranche of the Third Investor D Note, 29,552 warrants were issued with an exercise price of $5.00 per share.

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On December 11, 2023, in connection with the Second Amended Investor D SPA, and as a result the Fourth Investor D Note, the Company issued two warrants, each to purchase up to 21,108 shares of common stock with an exercise price of $350.00 per share.

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The Company, in conjunction with additional borrowing of convertible debt related to the Second Amendment to the Investor D SPA on January 12, 2024 and January 24, 2024, issued warrants to purchase up to 5,277 and 15,831 shares of common stock, respectively, with an exercise price of $350.00 per share, and additional warrants to purchase up to 5,277 and 15,831 shares of common stock, respectively, with an exercise price of $350.00 per share.

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The Investor D Warrants expired five years from their issuance date and contained cashless exercise provisions. The Company did not have the ability to redeem the warrants.

In 2024, 17,025 of the Investor D Warrants were converted into shares at an exercise price of $5.00. All remaining Investor D Warrants issued in connection with the Investor D SPA were exchanged for a short-term note payable of approximately $0.5 million on June 28, 2024, eliminating all Investor D Warrants, and recognizing a gain of approximately $1.3 million.

The Investor D Warrants were determined to be liability classified. The initial 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 maturity, and the risk-free interest rate. The risk-free interest rate is the U.S. Treasury rate at the date of issuance, and the time to maturity is based on the contractual life at the date of issuance, which was five years. Subsequent changes in fair value were recognized through earnings at each reporting period end-date or settlement date.

Legacy SeaStar Inc. Warrants

ICU US Equity

ICU · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data

ICU US Equity☆

ICU · 10-K · period ended 2024-12-31

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Item 8. Financial Statements and Supplementary Data

ICU US Equity