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SeaStar Medical Announces $10 Million Registered Direct Offering Priced At-the-Market Under Nasdaq Rules

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SeaStar Medical has announced a $10 million registered direct offering priced at-the-market under Nasdaq rules. The offering involves the sale of 947,868 shares of common stock at $10.55 each, along with unregistered warrants for the same number of shares, which are exercisable immediately and expire in five years.

H.C. Wainwright & Co. is acting as the exclusive placement agent. The offering is expected to close on July 11, 2024, subject to customary conditions. The net proceeds will be used for general corporate purposes, including working capital and capital expenditures.

The shares are offered under a previously effective shelf registration statement, while the warrants are issued in a private placement and are not registered under the Securities Act.

Positive
  • Expected gross proceeds of $10 million from the offering.
  • Funds to be used for general corporate purposes, potentially strengthening the company's financial position.
Negative
  • Potential dilution for existing shareholders with the issuance of 947,868 new shares.
  • Unregistered warrants add to potential future dilution if exercised.

SeaStar Medical's announcement of a $10 million registered direct offering is significant for several reasons. Firstly, the issuance of 947,868 shares at $10.55 per share represents a strategic move to raise capital. This type of offering is often pursued to quickly secure funds without the traditional underwriting process, indicating an urgent need for capital or to capitalize on favorable market conditions.

From a financial perspective, the fact that the offering is priced at-the-market under Nasdaq rules suggests confidence in the current market valuation of their stock. The accompanying private placement of unregistered warrants also adds a potential future source of equity financing, with a five-year exercise window providing a long runway for the company.

SeaStar Medical intends to use the proceeds for general corporate purposes, which could encompass working capital and capital expenditures. However, retail investors should be cautious about the dilution of their existing shares. The new issuance will increase the total number of outstanding shares, potentially diluting the value of existing shares if the funds are not used efficiently to generate proportional growth.

On the positive side, the involvement of H.C. Wainwright & Co., a known placement agent, could bring some level of validation to the offering. Yet, it's important to monitor how SeaStar Medical deploys these new funds, as ineffective use could negatively impact shareholder value.

The structuring of this direct offering and concurrent private placement of warrants sheds light on SeaStar Medical's broader market strategy. Direct offerings are typically faster and less expensive than public offerings, highlighting the company's need for rapid capital access. This move might signal upcoming business activities or investments that necessitate immediate funding.

The decision to issue unregistered warrants in a private placement indicates a targeted approach to attract institutional investors who are generally more risk-tolerant and can provide strategic support beyond mere capital. These warrants, having an exercise price matching the direct offering price, can also act as an incentive for these investors to support the company's stock price in the long term.

For retail investors, understanding the nature of shelf registration statements is essential. This means the company had pre-filed with the SEC to sell securities over time, providing flexibility to access the market when favorable. However, the key concern remains the deployment of these funds. Investors should look for transparent communication from SeaStar Medical regarding specific projects or milestones funded by this capital to gauge potential returns.

DENVER, July 10, 2024 (GLOBE NEWSWIRE) -- SeaStar Medical Holding Corporation (Nasdaq: ICU) (SeaStar Medical), today announced it has entered into a definitive agreement for the issuance and sale of an aggregate of 947,868 shares of its common stock (or common stock equivalents in lieu thereof) at a purchase price of $10.55 per share of common stock (or per common stock equivalent in lieu thereof), in a registered direct offering priced at-the-market under Nasdaq rules. In addition, in a concurrent private placement, SeaStar Medical will issue and sell unregistered warrants to purchase up to 947,868 shares of common stock. The warrants will have an exercise price of $10.55 per share, will be exercisable immediately upon issuance and will expire five years following the issuance date.

H.C. Wainwright & Co. is acting as the exclusive placement agent for the offering.

The closing of the offering is expected to occur on or about July 11, 2024, subject to the satisfaction of customary closing conditions. The gross proceeds from the offering are expected to be approximately $10 million. SeaStar Medical intends to use the net proceeds of this offering for general corporate purposes, which may include additions to working capital and capital expenditures.

The shares of common stock (or common stock equivalents) described above (but not the unregistered warrants issued in the concurrent private placement or the shares of common stock underlying such unregistered warrants) are being offered by SeaStar Medical pursuant to a shelf registration statement on Form S-3 (File No. 333-275968) that was previously filed with the Securities and Exchange Commission (“SEC”) on December 8, 2023, and subsequently declared effective on December 22, 2023. The shares of common stock (or common stock equivalents) offered in the registered direct offering are being offered only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and accompanying base prospectus relating to, and describing the terms of, the registered direct offering will be filed with the SEC and will be available on the SEC's website at www.sec.gov. Electronic copies of the final prospectus supplement and the accompanying base prospectus relating to the offering, when available, may also be obtained by contacting H.C. Wainwright & Co., LLC, at 430 Park Ave., New York, New York 10022, by telephone at (212) 856-5711, or by email at placements@hcwco.com.

The unregistered warrants described above are being made in a transaction not involving a public offering and have not been registered under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) and/or Rule 506(b) of Regulation D promulgated thereunder and, along with the shares of common stock underlying such unregistered warrants, have not been registered under the Securities Act or applicable state securities laws. Accordingly, the unregistered warrants and underlying shares of common stock may not be offered or sold in the United States except pursuant to an effective registration statement with the SEC or an applicable exemption from the registration requirements of the Securities Act and such applicable state securities laws.

This press release does not constitute an offer to sell or a solicitation of an offer to buy the securities in this offering, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.

About SeaStar Medical

SeaStar Medical is a commercial-stage medical technology company that is redefining how extracorporeal therapies may reduce the consequences of excessive inflammation on vital organs. SeaStar Medical’s novel technologies rely on science and innovation to provide life-saving solutions to critically ill patients. The Company is developing and commercializing cell-directed extracorporeal therapies that target the effector cells that drive systemic inflammation, causing direct tissue damage and secreting a range of pro-inflammatory cytokines that initiate and propagate imbalanced immune responses.

For more information visit www.seastarmedical.com or visit us on LinkedIn or X.

Forward-Looking Statements

This press release contains certain forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1955. These forward-looking statements include, without limitation, statements related to the timing and completion of the registered direct offering and concurrent private placement, the satisfaction of customary closing conditions related to the registered direct offering and concurrent private placement and the intended use of proceeds therefrom. Words such as “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions are intended to identify such forward-looking statements. Forward-looking statements are predictions, projections and other statements about future events that are based on current expectations and assumptions and, as a result, are subject to significant risks and uncertainties that could cause the actual results to differ materially from the expected results. Most of these factors are outside SeaStar Medical’s control and are difficult to predict. Factors that may cause actual future events to differ materially from the expected results include, but are not limited to: (i) the risk that SeaStar Medical may not be able to obtain regulatory approval of its SCD product candidates; (ii) the risk that SeaStar Medical may not be able to raise sufficient capital to fund its operations, including current or future clinical trials; (iii) the risk that SeaStar Medical and its current and future collaborators are unable to successfully develop and commercialize its products or services, or experience significant delays in doing so, including failure to achieve approval of its products by applicable federal and state regulators, (iv) the risk that SeaStar Medical may never achieve or sustain profitability; (v) the risk that SeaStar Medical may not be able to access funding under existing agreements; (vi) the risk that third-parties suppliers and manufacturers are not able to fully and timely meet their obligations, (vii) the risk of product liability or regulatory lawsuits or proceedings relating to SeaStar Medical’s products and services, (viii) the risk that SeaStar Medical is unable to secure or protect its intellectual property, (ix) market and other conditions; and (x) other risks and uncertainties indicated from time to time in SeaStar Medical’s Annual Report on Form 10-K, including those under the “Risk Factors” section therein and in SeaStar Medical’s other filings with the SEC. The foregoing list of factors is not exhaustive. Forward-looking statements speak only as of the date they are made. Readers are cautioned not to put undue reliance on forward-looking statements, and SeaStar Medical assumes no obligation and do not intend to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise.

SeaStar Medical Contact:
LHA Investor Relations
Jody Cain
(310) 691-7100
Jcain@lhai.com

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FAQ

What is the size of SeaStar Medical's recent registered direct offering?

SeaStar Medical announced a $10 million registered direct offering, issuing 947,868 shares at $10.55 per share.

When is SeaStar Medical's $10 million offering expected to close?

The offering is expected to close on or about July 11, 2024, subject to customary closing conditions.

What will SeaStar Medical use the proceeds from the offering for?

SeaStar Medical intends to use the net proceeds for general corporate purposes, including additions to working capital and capital expenditures.

What is the exercise price and expiration of the warrants issued in SeaStar Medical's offering?

The warrants have an exercise price of $10.55 per share, are exercisable immediately, and will expire five years from issuance.

Are the warrants issued in SeaStar Medical's offering registered?

No, the warrants are issued in a private placement and are not registered under the Securities Act.

SeaStar Medical Holding Corporation

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