Delaware |
6770 |
85-3681132 | ||
(State or other jurisdiction of incorporation or organization) |
(Primary Standard Industrial Classification Code Number) |
(I.R.S. Employer Identification Number) |
Copies to: | ||
Curt P. Creely, Esq. Kevin M. Shuler, Esq. Garrett F. Bishop, Esq. Foley & Lardner LLP 100 North Tampa Street, Suite 2700 Tampa, Florida 33602 (813) 229-2300 |
Albert Lung, Esq. Morgan, Lewis & Bockius LLP 1400 Page Mill Road Palo Alto, California 94304 (650) 843-4000 |
Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
Non-accelerated filer |
☒ | Smaller reporting company | ☒ | |||
Emerging growth company | ☒ |
/s/ Bruce M. Rodgers |
Bruce M. Rodgers Chief Executive Officer and Chairman of the Board LMAO Acquisition Opportunities, Inc. [●], 2022 |
1. |
To consider and vote upon a Proposal to approve the transactions contemplated under the Merger Agreement, dated as of April 21, 2022 (the “Merger Agreement”), by and among LMAO, LMF Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LMAO (“Merger Sub”) and SeaStar Medical, Inc., a Delaware corporation (“SeaStar Medical”), (the “Business Combination”), a copy of which is attached to the proxy statement/prospectus as Annex A . This Proposal is referred to as the “Business Combination Proposal” or “Proposal 1.” |
2. |
To consider and vote upon a Proposal to approve the Second Amended and Restated Certificate of Incorporation of LMAO, a copy of which is attached to the proxy statement/prospectus as Annex B (the “Proposed Charter”) to, among other things, change LMAO’s name to “SeaStar Medical Holding Corporation,” and amend certain provisions related to authorized capital stock, reclassification of Class A Common Stock and Class B Common Stock, the classification of the Board, and director removal, to be effective upon the consummation of the Business Combination. This Proposal is referred to as the “Charter Approval Proposal” or “Proposal 2.” |
3. |
To consider and vote upon, on a non-binding advisory basis, four separate governance proposals relating to the following material differences between the Existing Charter and the Proposed Charter: |
(a) |
(i) reclassify LMAO’s existing 100,000,000 authorized shares of Class A Common Stock into 100,000,000 authorized shares of common stock (after giving effect to the conversion of each outstanding share of Class B Common Stock to Class A Common Stock under the terms of LMAO’s current certificate of incorporation) and (ii) increase the number of shares of preferred stock LMAO is authorized to issue from 1,000,000 shares to 10,000,000 shares (Proposal 3A); |
(b) |
change the classification of the Board from two classes of directors with staggered two-year terms to three classes of directors with staggered three-year terms (Proposal 3B); |
(c) |
require the vote of at least two-thirds (66 and 2/3%) of the outstanding shares of capital stock, voting together as a single class, rather than a simple majority, to remove a director from office (Proposal 3C); and |
(d) |
remove certain provisions related to LMAO’s status as a special purpose acquisition company that will no longer be relevant following the Business Combination (Proposal 3D). |
4. |
To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Omnibus Incentive Plan (the “Incentive Plan”, a copy of which is to be attached to the proxy statement/prospectus as Annex D ), to be effective on the later of the date on which it is approved by our stockholders and the closing of the Business Combination. This Proposal is referred to as the “Stock Plan Proposal” or “Proposal 4.” |
5. |
To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Employee Stock Purchase Plan (the “ESPP”, a copy of which is to be attached to the proxy statement/prospectus as Annex E ), to be effective on the later of the date on which it is approved by our stockholders and the closing of the Business Combination. This Proposal is referred to as the “ESPP Proposal” or “Proposal 5.” |
6. |
To consider and vote upon a Proposal to approve for purposes of complying with Nasdaq Listing Rule 5635 (a) and (b), the issuance of more than 20% of the issued and outstanding shares of LMAO Common Stock and the resulting change in control in connection with the Business Combination. This Proposal is referred to as the “Nasdaq Proposal” or “Proposal 6.” |
7. |
To consider and vote upon a Proposal to elect seven (7) directors to serve staggered terms on the Board until the 2023, 2024 and 2025 annual meetings of our stockholders, as applicable, or until their respective successors are duly elected and qualified, or until their earlier death, resignation, retirement or removal. This Proposal is referred to as the “Director Election Proposal” or “Proposal 7.” |
8. |
To consider and vote upon a Proposal to approve the adjournment of the Meeting by the chairman thereof to a later date, if necessary, under certain circumstances, including for the purpose of soliciting additional proxies in favor of the foregoing Proposals, in the event LMAO does not receive the requisite stockholder vote to approve the Proposals. This Proposal is called the “Adjournment Proposal” or “Proposal 8.” |
/s/ Bruce M. Rodgers |
Bruce M. Rodgers Chief Executive Officer and Chairman of the Board LMF Acquisition Opportunities, Inc. [●], 2022 |
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F-1 |
• | “Board” means the board of directors of LMAO. |
• | “Business Combination” means the merger contemplated by the Merger Agreement. |
• | “Certificate of Incorporation” or the “Proposed Charter” means LMAO’s Second Amended and Restated Certificate of Incorporation, a copy of which is attached to this proxy statement/prospectus as Annex B . |
• | “Class A Common Stock” means Class A common stock, par value $0.0001 per share, of LMAO. |
• | “Class B Common Stock” means Class B common stock, par value $0.0001 per share, of LMAO. |
• | “Closing Date” means the date of the consummation of the Business Combination. |
• | “Code” means the Internal Revenue Code of 1986, as amended. |
• | “Combined Company” means LMAO after the consummation of the Business Combination, renamed SeaStar Medical Holding Corporation. |
• | “Combined Company Bylaws” means LMAO’s Amended and Restated Bylaws, a copy of which is attached to this proxy statement/prospectus as Annex C . |
• | “Common Stock” means (i) prior to the filing of the Proposed Charter, collectively, Class A Common Stock and Class B Common Stock, and (ii) at and after the filing of the Proposed Charter, LMAO’s common stock, par value $0.0001 per share. For the avoidance of doubt, each share of Class A Common Stock (including each share issued or issuable upon conversion of Class B Common Stock) and each share of Class B Common Stock shall be reclassified into such single class of common stock of LMAO in connection with the filing of the Proposed Charter with the Secretary of State of the State of Delaware. |
• | “Continental” means Continental Stock Transfer & Trust Company, LMAO’s transfer agent. |
• | “Dow Commitment Letter” means that certain commitment letter dated April 21, 2022 by and among LMAO, Dow Employee’s Pension Plan Trust, Union Carbide Employee Pension Plan and SeaStar Medical. |
• | “Dow Pension Funds” means collectively, the Dow Employees’ Pension Plan Trust and Union Carbide Employees’ Pension Plan. |
• | “Effective Time” means the time at which the Business Combination becomes effective. |
• | “Exchange Act” means the Securities Exchange Act of 1934, as amended. |
• | “Existing Bylaws” means LMAO’s Bylaws. |
• | “Existing Charter” means LMAO’s Amended and Restated Certificate of Incorporation. |
• | “founder shares” means the outstanding shares of Class B Common Stock issued to the Sponsor. |
• | “GAAP” means accounting principles generally accepted in the United States of America. |
• | “Initial Stockholders” means the Sponsor and other initial holders of Class B Common Stock. |
• | “IPO” refers to the initial public offering of 10,350,000 units consummated on January 28, 2021. |
• | “IRS” means the United States Internal Revenue Service. |
• | “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of April 21, 2022, by and among LMAO, Merger Sub and SeaStar Medical. |
• | “Merger Sub” means LMF Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LMAO. |
• | “Private Placement Warrants” mean the warrants issued to our Sponsor in a private placement simultaneously with the closing of our IPO. |
• | “public shares” means shares of Class A Common Stock sold in the IPO, whether they were purchased in the IPO or thereafter in the open market. |
• | “public stockholders” means holders of public shares of Class A Common Stock. |
• | “SEC” means the U.S. Securities and Exchange Commission. |
• | “Securities Act” means the Securities Act of 1933, as amended. |
• | “SeaStar Medical” means SeaStar Medical, Inc., a Delaware corporation, prior to the consummation of the Business Combination. |
• | “Sponsor” means LMFAO Sponsor, LLC, a Florida limited liability company. |
• | expectations regarding SeaStar Medical’s strategies and commercialization plans, including its future business plans or objectives, regulatory approval of product candidates, prospective performance and opportunities and competitors, revenues, backlog conversion, products and services, pricing, operating expenses, market trends, liquidity, cash flows and uses of cash, capital expenditures, and ability to invest in growth initiatives and pursue acquisition opportunities; |
• | risks related to SeaStar Medical’s technology, intellectual property and regulatory approval and process; |
• | risks related to SeaStar Medical’s ability to secure additional financing to execute its growth strategies; |
• | risks related to SeaStar Medical’s reliance on suppliers, vendors, partners and third parties; |
• | risks related to the general economic and financial market conditions; political, legal and regulatory environment; and the industries in which SeaStar Medical operates; |
• | the occurrence of any event, change or other circumstances that could give rise to the termination of the Merger Agreement; |
• | the outcome of any legal proceedings that may be instituted against LMAO or SeaStar Medical following announcement of the Merger Agreement and the transactions contemplated therein; |
• | the inability to complete the Business Combination due to, among other things, the failure to obtain LMAO or SeaStar Medical stockholder approval; |
• | the risk that the announcement and consummation of the proposed Business Combination disrupts SeaStar Medical’s current plans; |
• | the ability to recognize the anticipated benefits of the Business Combination; |
• | unexpected costs related to the proposed Business Combination; |
• | the amount of any redemptions by existing holders of Common Stock being greater than expected; |
• | limited liquidity and trading of LMAO’s securities; |
• | geopolitical risk and changes in applicable laws or regulations; |
• | the possibility that LMAO and/or SeaStar Medical may be adversely affected by other economic, business, and/or competitive factors; |
• | operational risks; |
• | the risks that the COVID-19 pandemic, and local, state, and federal responses to addressing the pandemic, may have an adverse effect on SeaStar Medical’s business operations, as well as SeaStar Medical’s financial condition and results of operations; |
• | litigation and regulatory enforcement risks, including the diversion of management time and attention and the additional costs and demands on SeaStar Medical’s resources; and |
• | the risks that the consummation of the Business Combination is substantially delayed or does not occur. |
• | Proposal 1 |
• | Proposal 2 Annex B . |
• | Proposals 3A-3D non-binding advisory basis, separate governance proposals relating to certain material differences between the Existing Charter and the Proposed Charter attached to this proxy statement/prospectus as Annex B . |
• | Proposal 4 |
• | Proposal 5 |
• | Proposal 6 |
• | Proposal 7 |
• | Proposal 8 |
• | by written consent of SeaStar Medical and LMAO; |
• | by SeaStar Medical or LMAO if the Closing has not occurred on or before July 29, 2022, as such date will be extended to October 29, 2022 in the event that the Sponsor elects, in its sole discretion, to extend the time period by which LMAO must consummate a business combination by depositing additional funds into the Trust Account on or prior to July 29, 2022 pursuant to LMAO’s Letter Agreement, dated January 25, 2021; |
• | by SeaStar Medical or LMAO if the Closing is permanently enjoined or prevented by the terms of a final, non-appealable order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, or a statute, rule, or regulation; |
• | by SeaStar Medical or LMAO if the approval of the stockholders of LMAO is not obtained at the Special Meeting (as defined in the Merger Agreement) and vote of LMAO stockholders, subject to any adjournment, postponement, or recess of the meeting; |
• | by SeaStar Medical or LMAO if the other party has breached any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to the Closing would not to be satisfied at the Closing (a “Terminating Breach”), except that, if such Terminating Breach is curable through the exercise of the other party’s commercially reasonable efforts, then, for a period of 30 days after the other party receives written notice from such party of such breach (the “Cure Period”), such termination will not be effective, and such termination will only become effective if the Terminating Breach is not cured within the Cure Period, provided that this termination right will not be available if such party’s failure to fulfill any obligations under the Merger Agreement has been the proximate cause of the failure of the Closing to occur; |
• | by LMAO if SeaStar Medical and each of the Company Requisite Stockholders have not executed and delivered to LMAO the SeaStar Medical stockholder approval and the Support Agreements within three (3) business days after the execution and delivery of the Merger Agreement; |
• | by SeaStar Medical in the event that the LMAO Board changes its recommendation that LMAO stockholders vote in favor of the Business Combination; or |
• | by SeaStar Medical, prior to LMAO obtaining the approval of the stockholders of LMAO, if the LMAO Board fails to include its recommendation that LMAO stockholders vote in favor of the Business |
Combination in the proxy statement contained in the registration statement distributed to LMAO stockholders. |
(i) | hold public shares; and |
(ii) | prior to 5:00 p.m., Eastern Time, on [●], 2022, (a) submit a written request to Continental that LMAO redeem your public shares for cash and (b) deliver your public shares to Continental, physically or electronically through DTC. |
• | all SeaStar Medical equity is computed on a fully-diluted basis including all outstanding options, warrants and restricted stock units, and assumes the Convertible Note Conversion and the Preferred Stock Conversion have occurred; |
• | the shares to be issued to SeaStar Medical stockholders (A) does not account for (i) the issuance of any additional shares upon the closing of the Business Combination under the Incentive Plan and ESPP and (ii) the withholding of shares of Common Stock to pay future exercises under the SeaStar Medical warrants and options assumed by LMAO or the settlement of SeaStar Medical restricted stock units assumed by LMAO, and (B) assumes (i) that the Dow Pension Funds only purchase the minimum amount under the Dow Commitment Letter and (ii) that SeaStar Medical neither has any indebtedness to be repaid at Closing nor incurs transaction expenses in excess of the transaction expenses cap; |
• | no exercise of LMAO warrants; and |
• | no issuance of additional securities by LMAO prior to the Closing of the Business Combination. |
No Redemption (1)(2) |
50% Redemption (1)(2) |
Maximum Redemption (1)(2) |
||||||||||
Shares: |
||||||||||||
LMAO Public Stockholders |
10,453,500 | 5,278,500 | 1,033,500 | |||||||||
Sponsor |
2,587,500 | 2,587,500 | 2,587,500 | |||||||||
SeaStar Stockholders (3) |
8,407,774 | 8,407,774 | 8,407,774 | |||||||||
|
|
|
|
|
|
|||||||
21,448,774 |
16,273,774 |
12,028,774 |
||||||||||
Ownership Percentage |
||||||||||||
LMAO Public Stockholders |
48.7 |
% |
32.4 |
% |
8.6 |
% | ||||||
Sponsor |
12.1 |
% |
15.9 |
% |
21.5 |
% | ||||||
SeaStar Stockholders (3) |
39.2 |
% |
51.7 |
% |
69.9 |
% |
(1) | LMAO will pay Maxim an aggregate amount of $3,622,500 as deferred underwriting fees upon the completion of the Business Combination. The following table presents the underwriting fees, which includes an underwriting discount of $2,070,000, as a percentage of the aggregate proceeds from the IPO across various redemption scenarios: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption | ||||||||
Number of Shares Remaining |
Fee as a% of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a% of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a% of IPO Proceeds (net of Redemptions) | |||||
10,453,500 |
5.5% | 5,278,500 | 11.2% | 1,033,500 | 76.8% |
(2) | Stockholders will experience additional dilution to the extent the Combined Company issues additional shares of Common Stock after the Closing. The table above excludes (a) [16,088,000] shares of Common Stock that will be issuable upon the exercise of the [5,738,000] Private Placement Warrants and [10,350,000] public warrants; (b) [710,295] shares of Common Stock that will be issuable upon the exercise of [57,942] SeaStar Medical warrants and [271,280] SeaStar Medical options, and settlement of [255,000] SeaStar Medical restricted stock units assumed by LMAO; (c) 1,270,000 shares of Common Stock that will initially be available for issuance under the Incentive Plan; and (d) 380,000 shares of Common Stock that will be available for issuance under the ESPP. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption |
||||||||||||||||||||||
Shares |
Percentage |
Shares |
Percentage |
Shares |
Percentage |
|||||||||||||||||||
Total shares of Common Stock outstanding at Closing |
21,448,774 | 53.68 | % | 16,273,774 | 46.80 | % | 12,028,774 | 39.39 | % | |||||||||||||||
Shares underlying public warrants |
[10,350,000 | ] | 25.90 | % | [10,350,000 | ] | 29.76 | % | [10,350,000 | ] | 33.90 | % | ||||||||||||
Shares underlying Private Placement Warrants |
[5,738,000 | ] | 14.36 | % | [5,738,000 | ] | 16.50 | % | [5,738,000 | ] | 18.79 | % | ||||||||||||
Shares underlying SeaStar assumed equity awards |
[710,295 | ] | 1.78 | % | [710,295 | ] | 2.04 | % | [710,295 | ] | 2.33 | % | ||||||||||||
Shares initially reserved for issuance under the Incentive Plan (a) |
1,270,000 | 3.18 | % | 1,270,000 | 3.65 | % | 1,270,000 | 4.16 | % | |||||||||||||||
Shares initially reserved for issuance under the ESPP |
380,000 | 0.95 | % | 380,000 | 0.09 | % | 380,000 | 1.24 | % | |||||||||||||||
Shares initially reserved for Seastar warrants |
57,942 | 0.15 | % | 57,942 | 0.17 | % | 57,942 | 0.19 | % | |||||||||||||||
Total Shares |
[39,955,011 | ] | 100 | % | [34,780,011 | ] | 100 | % | [30,535,011 | ] | 100 | % |
(a) | On the first trading day in January each calendar year, beginning with 2023, the number of shares of Common Stock available for issuance under the Incentive Plan will automatically increase by three percent (3%) of the total number of shares of Common Stock outstanding on the last trading day of December of the immediately preceding calendar year. |
(3) | Includes 500,000 shares issued to the Dow Pension Funds pursuant to the Dow Commitment Letter (assuming a purchase price of $10 per share). |
• | If an initial business combination is not completed within 18 months from the closing of the IPO (or 21 months from the closing of the IPO, if we extend the period of time to consummate a business combination, as described in more detail in this proxy statement/prospectus), LMAO will be required to liquidate. In such event, [2,587,500] shares of Class B Common Stock held by the Sponsor, which were acquired prior to the IPO for an aggregate purchase price of $25,000, will be worthless. If such founder shares were unrestricted and freely tradeable, they would be valued at approximately $26.3 million, based on the closing price of Class A Common Stock on June 30, 2022. |
• | If an initial business combination is not completed within 18 months from the closing of the IPO (or 21 months from the closing of the IPO, if we extend the period of time to consummate a business combination, as described in more detail in this proxy statement/prospectus), the private placement warrants held by the Sponsor will expire worthless. |
• | That the Sponsor and its affiliates can earn a positive rate of return on their investment even if LMAO’s public stockholders experience a negative return following the consummation of the Business Combination. |
• | The exercise of LMAO’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our stockholders’ best interests. |
• | If the Business Combination with SeaStar Medical is completed, pursuant to the Director Nomination Agreement, the Sponsor will have a right to designate two (2) directors of the Combined Company board of directors. |
• | In connection with the determination of the valuation of SeaStar Medical, LMAO engaged Skyway Capital Markets, LLC (“Skyway”) to act as financial advisor to LMAO. One of LMAO’s board members, Marty Traber, is the Chairman of Skyway. The Board was made aware of Mr. Traber’s connection to Skyway, discussed that Mr. Traber could derive directly or indirectly a pecuniary benefit given the fee paid by LMAO to Skyway in connection with their services and ultimately the remainder of the Board (other than Mr. Traber) unanimously approved the engagement of Skyway to act as financial advisor to LMAO. |
• | The Sponsor and its affiliates are active investors across a number of different investment platforms and companies, which we and our Sponsor believe improved the volume and quality of opportunities that were available to LMAO. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple entities. In order to provide our Sponsor with the flexibility to evaluate opportunities across these platforms, our Existing Charter provides that LMAO renounces its interest in any business combination opportunity offered to any of our directors or officers unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of LMAO, is an opportunity that we are legally permitted to undertake, would be reasonable for LMAO to pursue, and the |
director or officer is permitted to refer the opportunity to us without violating any legal obligation. This waiver allows our Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the entity. We do not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on our search for an acquisition target. |
• | In connection with our IPO, Maxim was engaged to act as sole manager to LMAO and is entitled to a deferred underwriting fee of $3,622,500 upon the completion of the Business Combination. In connection with the IPO, Maxim received an underwriting discount of $2,070,000. In the event that the Business Combination is not consummated and LMAO is unable to consummate another business combination within the timeline required by LMAO’s organizational documents, Maxim would not be entitled to receive the deferred portion of the IPO underwriter fees. Pursuant to the terms of the underwriting agreement dated as of January 25, 2021, Maxim agreed to waive its right to redeem 103,500 shares of Class A Common Stock in connection with the Business Combination. |
• | Maxim and LMAO entered into an engagement letter on March 4, 2021 (the “Maxim-LMAO Engagement Letter”), pursuant to which Maxim provided LMAO with due diligence and financial advisory services until such engagement was terminated pursuant to a termination letter (the “Termination Letter”) entered into on April 21, 2022 (the “Advisory Termination Date”). Prior to the Advisory Termination Date, representatives of Maxim assisted LMAO in efforts to identify and evaluate potential candidates for business combination targets in consideration for advisory fees that Maxim, pursuant to the Termination Letter, agreed to forgo in connection with the Business Combination (provided that if LMAO consummates an initial business combination with a target other than SeaStar Medical that is identified by Maxim during the twelve month period following the Advisory Termination Date, Maxim will be entitled to a portion of the fees otherwise payable to Maxim under the Maxim-LMAO Engagement Letter). Prior to the Advisory Termination Date, a portion of the fees payable under the Maxim-LMAO Engagement Letter would have been due only upon consummation of the Business Combination or another business combination by LMAO within the timeline required by LMAO’s organizational documents. |
• | LMAO also engaged Maxim to act as sole placement agent in connection with a potential private investment in public equity in connection with the Business Combination. Maxim will receive a fee equal to 7.0% of the gross proceeds received by LMAO in the private investment in public equity (not including proceeds from certain investors, including the Dow Pension Funds) and expense reimbursements in connection therewith. The fees owed to Maxim by LMAO (including Maxim’s deferred underwriting fee) are contingent upon the closing of the Business Combination or the completion of a private investment in public equity. |
• | Maxim and SeaStar Medical entered into an engagement letter dated August 14, 2021 (the “Maxim-SeaStar Engagement Letter”), pursuant to which SeaStar Medical retained Maxim as its exclusive financial advisor and investment banker to provide certain financial advisory and investment banking services, including advisory services in connection with the Business Combination. As consideration for Maxim’s services under the Maxim-SeaStar Engagement Letter, Maxim is entitled to receive, and SeaStar Medical agreed to pay Maxim, (i) a monthly retainer fee of $15,000 per month for the term of the Maxim-SeaStar Engagement Letter (for a minimum of six (6) months) and (ii) a cash fee of 2.0% of the enterprise value of the combined entity following consummation of the Business Combination (to be no less than $500,000), to be paid on the Closing Date (the “Transaction Fee”). As of June 30, 2022, SeaStar Medical has paid a total of $150,000 in monthly retainer fees to Maxim, which will offset the Transaction Fee upon the consummation of the Business Combination. In addition, SeaStar Medical agreed to reimburse Maxim for reasonable expenses incurred in connection with the engagement. The Maxim-SeaStar Engagement Letter contains customary indemnification provisions. Either party may terminate the Maxim-SeaStar Engagement Letter (i) for cause or (ii) at any time after six (6) months with written notice to the other party. |
• | The Board was fully informed that representatives of Maxim, in Maxim’s capacity as SeaStar Medical’s advisor pursuant to the Maxim-SeaStar Engagement Letter, communicated with LMAO and with other potential merger candidates, on behalf of SeaStar Medical, in relation to a potential transaction involving SeaStar Medical and that the services Maxim provided to SeaStar Medical included assisting with evaluating the commercial terms of the letter of intent submitted by LMAO. SeaStar Medical, in turn, was fully informed that, while representatives of Maxim were providing advisory services to SeaStar Medical, other representatives of Maxim were, prior to termination of the Maxim-LMAO Engagement Letter, providing services to LMAO as their advisor, including the evaluation of potential acquisition opportunities, until the Termination Letter was executed. Maxim did not, in its capacity as advisor to LMAO prior to the Termination Letter, or in its capacity as placement agent for the potential private investment in public equity, provide to the Board any appraisal, valuation report, fairness opinion or other report related to the potential valuation of SeaStar Medical. Prior to determining to proceed with the Business Combination, the Board engaged Skyway for the purpose of reviewing SeaStar Medical’s financial models and projections and to provide valuation and financial advice to the Board. After careful consideration, the Board made its determination that the Business Combination and the transactions contemplated thereby are fair to, and in the best interests of, LMAO and its stockholders. |
• | FOR the Business Combination Proposal; |
• | FOR the Charter Approval Proposal; |
• | FOR the Governance Proposals; |
• | FOR the Stock Plan Proposal; |
• | FOR the ESPP Proposal; |
• | FOR the Nasdaq Proposal; |
• | FOR the Director Nomination Proposal; and |
• | FOR the Adjournment Proposal. |
• | SeaStar Medical has incurred significant losses since its inception and anticipates that it will continue to incur significant losses for the foreseeable future. |
• | SeaStar Medical has not generated any significant revenue and may never be profitable and SeaStar Medical has a limited operating history, which makes it difficult to forecast its future results of operations. |
• | If SeaStar Medical fails to obtain additional financing, it would be forced to delay, reduce or eliminate its product development program, which may result in the cessation of its operations. |
• | SeaStar Medical’s ability to use its net operating losses to offset future taxable income may be subject to certain limitations. |
• | SeaStar Medical has not received, and may never receive, approval from the FDA to market its product in the United States or abroad and SeaStar Medical is subject to certain risks relating to pursuing an FDA approval via the HDE pathway, including limitations on the ability to profit from sales of the product. |
• | SeaStar Medical will initially depend on revenue generated from a single product and in the foreseeable future will be significantly dependent on a limited number of products. |
• | If SeaStar Medical fails to comply with extensive regulations of United States and foreign regulatory agencies, the commercialization of its products could be delayed or prevented entirely. |
• | Delays in successfully completing SeaStar Medical’s planned clinical trials could jeopardize its ability to obtain regulatory approval and delays, interruptions or the cessation of production by its third-party suppliers of important materials or delays in qualifying new materials, may prevent or delay SeaStar Medical’s ability to manufacture or process its SCD device. |
• | Difficulties in manufacturing SeaStar Medical’s SCD could have an adverse effect upon its revenue and expenses. |
• | SeaStar Medical faces intense competition in the medical device industry and its SCD technology may become obsolete. |
• | If SeaStar Medical or its contractors or service providers fail to comply with laws and regulations, it or they could be subject to regulatory actions, which could affect its ability to develop, market and sell its product candidates and any other future product candidates and may harm its reputation. |
• | SeaStar Medical intends to outsource and rely on third parties for the clinical development and manufacturing, sales and marketing of its SCD or any future product candidates that it may develop, and its future success will be dependent on the timeliness and effectiveness of the efforts of these third parties. |
• | SeaStar Medical is and will be exposed to product liability risks, and clinical and preclinical liability risks, which could place a substantial financial burden upon it should it be sued. |
• | Should SeaStar Medical’s products be approved for commercialization, a lack of third-party coverage and reimbursement for SeaStar Medical’s devices could delay or limit their adoption or adverse changes in reimbursement policies and procedures by payors may impact SeaStar Medical’s ability to market and sell its products. |
• | A small number of SeaStar Medical’s shareholders, including its major stockholder, the Dow Pension Funds, could significantly influence its business. |
• | SeaStar Medical relies upon exclusively licensed patent rights from third parties which are subject to termination or expiration. If licensors terminate the licenses or fail to maintain or enforce the underlying patents, SeaStar Medical’s competitive position could be materially harmed. |
• | If SeaStar Medical is unable to obtain and maintain sufficient patent protection for its products, if the scope of the patent protection is not sufficiently broad, or if the combination of patents, trade secrets and contractual provisions upon which it relies to protect its intellectual property are inadequate, its competitors could develop and commercialize similar or identical products, and SeaStar Medical’s ability to commercialize such products successfully may be adversely affected. |
• | The United States government may exercise certain rights with regard to SeaStar Medical’s inventions, or licensors’ inventions, developed using federal government funding. |
• | Intellectual property rights do not necessarily address all potential threats to SeaStar Medical’s competitive advantage. |
• | SeaStar Medical may obtain only limited geographical protection with respect to certain patent rights, which may diminish the value of its intellectual property rights in those jurisdictions and prevent it from enforcing its intellectual property rights throughout the world. |
• | The Combined Company does not have experience operating as a United States public company and may not be able to adequately develop and implement the governance, compliance, risk management and control infrastructure and culture required for a public company, including compliance with the Sarbanes Oxley Act. |
• | The Combined Company may not be able to consistently comply with all of Nasdaq’s Listing Rules. |
• | SeaStar Medical identified a material weakness in its internal control over financial reporting. If the Combined Company is unable to develop and maintain an effective system of internal controls over financial reporting, the Combined Company may not be able to accurately report its financial results in a timely manner, which may materially and adversely affect the Combined Company’s business, results of operations and financial condition. |
• | The Combined Company may redeem your unexpired warrants prior to their exercise at a time that is disadvantageous to you, thereby making your warrants worthless. |
• | LMAO will be forced to liquidate the Trust Account if it cannot consummate a business combination by July 25, 2022 or, if the Sponsor deposits into the Trust Account $1,035,000 on or prior to July 25, 2022, October 25, 2022. |
• | If the conditions to the Merger Agreement are not met, the Business Combination may not occur. |
• | If third parties bring claims against LMAO, the proceeds held in the trust could be reduced and the per-share redemption amount received by LMAO’s stockholders may be less than [$10.20] per share and LMAO’s stockholders may be held liable for claims by third parties against LMAO to the extent of distributions received by them upon redemption of their shares. |
• | LMAO is requiring stockholders who wish to redeem their public shares in connection with a proposed business combination to comply with specific requirements for redemption that may make it more difficult for them to exercise their redemption rights prior to the deadline for exercising their rights. |
• | LMAO’s Sponsor, directors, and officers may have certain conflicts in determining to recommend the acquisition of SeaStar Medical, since certain of their interests, and certain interests of their affiliates and associates, are different from, or in addition to, your interests as a stockholder. |
• | LMAO’s stockholders will experience immediate dilution as a consequence of, among other transactions, the issuance of Common Stock as consideration in the Business Combination and the shares to Dow pursuant to the Dow Commitment Letter. Having a minority share position may reduce the influence that LMAO’s current stockholders have on the management of LMAO. |
• | There are risks to LMAO stockholders who are not affiliates of the Sponsor of becoming stockholders of the Combined Company through the Business Combination rather than acquiring securities of SeaStar Medical directly in an underwritten public offering, including no independent due diligence review by an underwriter and conflicts of interest of the Sponsor. |
Statement of Operations Data: |
For the Period from October 28, 2020 (inception) through December 31, 2020 |
Year Ended December 31, 2021 |
Three Months Ended March 31, 2021 |
Three Months Ended March 31, 2022 |
||||||||||||
Revenues |
$ | — | $ | — | $ | — | $ | — | ||||||||
Loss from operations |
(5,236 | ) | (1,122,443 | ) | (125,957 | ) | (218,656 | ) | ||||||||
Gain on warrant liability revaluation |
1,185,940 | 1,830,660 | 3,602,133 | |||||||||||||
Interest earned on investments held in Trust Account . . . . . . . . |
— | 11,820 | 1,754 | 2,604 | ||||||||||||
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|
|
|
|
|
|
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Net income (loss) . . . . . . . . . . . |
(5,236 | ) | 75,317 | 1,706,457 | 3,386,081 | |||||||||||
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|
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|
|
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Weighted average shares outstanding – basic and diluted |
||||||||||||||||
Class A Common Stock |
— | 9,651,587 | 7,201,300 | 10,453,500 | ||||||||||||
Class B Common Stock . . . |
2,156,250 | 2,554,418 | 2,453,333 | 2,587,500 | ||||||||||||
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|
|
|
|
|
|
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Basic and diluted net income (loss) per share |
||||||||||||||||
Class A Common Stock |
— | 0.02 | 0.18 | 0.26 | ||||||||||||
Class B Common Stock . . . |
— | 0.02 | 0.18 | 0.26 | ||||||||||||
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Balance Sheet Data: |
As of December 31, 2020 |
As of December 31, 2021 |
As of March 31, 2022 |
|||||||||
Cash |
$ | 38,388 | $ | 51,567 | $ | 88,064 | ||||||
Trust Account |
— | 105,581,820 | 105,584,424 | |||||||||
Total assets |
269,208 | 105,934,441 | 105,961,152 | |||||||||
Total liabilities |
249,444 | 10,929,942 | 7,570,572 | |||||||||
Value of Class A Common Stock subject to redemption |
— | 105,570,000 | 105,570,000 | |||||||||
Stockholders’ equity/(deficit) |
19,764 | (10,565,501 | ) | (7,179,420 | ) |
Year Ended December 31, |
Three Months Ended March 31, |
|||||||||||||||
Statement of Operations Data: |
2020 |
2021 |
2021 |
2022 |
||||||||||||
Operating expenses: |
||||||||||||||||
Research and development |
4,025,172 | 2,766,394 | 746,254 | 355,198 | ||||||||||||
General and administrative |
2,427,725 | 1,682,279 | 315,571 | 457,220 | ||||||||||||
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|
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|
|
|
|||||||||
Total operating expenses |
6,452,897 | 4,448,673 | 1,061,825 | 812,418 | ||||||||||||
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|
|
|
|
|
|
|||||||||
Loss from operations |
(6,452,897 | ) | (4,448,673 | ) | (1,061,825 | ) | (812,418 | ) | ||||||||
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|
|
|
|
|
|
|||||||||
Other income (expense), net: |
||||||||||||||||
Other income |
84,450 | 91,402 | — | — | ||||||||||||
Interest expense |
(3,308,635 | ) | (212,436 | ) | (1,921 | ) | (168,704 | ) | ||||||||
Change in fair value of derivative liability |
— | (26,961 | ) | — | (22,970 | ) | ||||||||||
Gain on sale of assets and liabilities held for sale |
71,114 | — | — | — | ||||||||||||
Loss on disposal of other assets |
(5,658 | ) | — | — | — | |||||||||||
Gain on early extinguishment of convertible notes |
6,344,993 | — | — | — | ||||||||||||
Total other income (expense), net |
3,186,263 | (147,995 | ) | (1,921 | ) | (191,674 | ) | |||||||||
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|
|
|
|
|
|
|
|||||||||
Loss before income tax provision |
(3,266,634 | ) | (4,596,668 | ) | (1,063,746 | ) | (1,004,092 | ) | ||||||||
Income tax provision (benefit) |
9,000 | (787 | ) | 800 | — | |||||||||||
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|
|
|
|
|
|
|
|||||||||
Net loss |
(3,275,634 | ) | (4,595,882 | ) | (1,064,546 | ) | (1,004,092 | ) | ||||||||
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|
|
|
|
|
|
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Net loss per share of common stock, basic and diluted |
$ | — | $ | — | $ | — | $ | — | ||||||||
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|
|
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Weighted-average shares outstanding, basic and diluted |
— | — | — | — | ||||||||||||
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|
|
|
|
|
|
|
As of December 31, 2020 |
As of December 31, 2021 |
As of March 31, 2022 |
||||||||||
Balance Sheet Data |
||||||||||||
Cash |
$ | 2,806,585 | $ | 509,874 | $ | 207,294 | ||||||
Total assets |
2,909,196 | 603,384 | 427,465 | |||||||||
Accumulated deficit |
(71,716,455 | ) | (76,311,857 | ) | (77,315,949 | ) | ||||||
Total stockholders’ deficit |
(71,583,884 | ) | (76,164,540 | ) | (77,164,775 | ) |
• | completing the clinical development of its SCD, initially for the treatment of adult AKI in the hospital setting; |
• | obtaining regulatory approval for its SCD for the designated indication, including the HDE in pediatrics and PMA for adults; |
• | launching and commercializing its SCD, including building a hospital-directed sales force and collaborating with third parties; |
• | obtaining third party reimbursement status from government agencies and insurance carriers; and |
• | entering into collaboration agreement and partnerships to commercialize its products. |
• | significantly delay, scale back or discontinue the development or commercialization of its product candidates; |
• | seek corporate partners on terms that are less favorable than might otherwise be available; |
• | relinquish or license on unfavorable terms, its rights to technologies or product candidates that it otherwise would seek to develop or commercialize itself. |
• | an inability to secure and obtain support and references from collaborators and suppliers required by the FDA; |
• | a disagreement with the FDA regarding the design of the trial, including the number of clinical study subjects and other data, which may require SeaStar Medical to conduct additional testing or increase the size and complexity of its pivotal study; |
• | a failure to obtain a sufficient supply of filters to conduct its trial; |
• | an inability to enroll a sufficient number of subjects; |
• | a shortage of necessary raw materials, such as calcium; and |
• | delays and failures to train qualified personnel to operate the SCD therapy. |
• | SeaStar Medical’s inability to demonstrate the safety or effectiveness of the SCD or any other product it develops to the FDA’s satisfaction; |
• | insufficient data from its preclinical studies and clinical trials, including for its SCD, to support approval; |
• | failure of the facilities of its third-party manufacturers or suppliers to meet applicable requirements; |
• | inadequate compliance with preclinical, clinical or other regulations; |
• | its failure to meet the FDA’s statistical requirements for approval; and |
• | changes in the FDA’s approval policies, or the adoption of new regulations that require additional data or additional clinical studies. |
• | the FDA may refuse to approve an application if it believes that applicable regulatory criteria are not satisfied; |
• | the FDA may require additional testing for safety and effectiveness; |
• | the FDA may interpret data from pre-clinical testing and clinical trials in different ways than SeaStar Medical interprets them; |
• | if regulatory approval of a product is granted, the approval may be limited to specific indications or limited with respect to its distribution; and |
• | the FDA may change its approval policies and/or adopt new regulations. |
• | warning letters, untitled letters or other written notice of violations; |
• | civil penalties; |
• | criminal penalties; |
• | injunctions; |
• | product seizure or detention; |
• | product recalls; and |
• | total or partial suspension of productions. |
• | slow patient enrollment; |
• | serious adverse events related to its medical device candidates; |
• | unsatisfactory results of any clinical trial; |
• | the failure of principal third-party investigators to perform clinical trials on SeaStar Medical’s anticipated schedules; |
• | different interpretations of SeaStar Medical’s pre-clinical and clinical data, which could initially lead to inconclusive results; and |
• | delays resulting from the COVID-19 pandemic. |
• | the availability or contamination of raw materials and components used in the manufacturing process, particularly those for which it has no other supplier; |
• | its ability to comply with new regulatory requirements and cGMP; |
• | potential facility contamination by microorganisms or viruses; |
• | updating of its manufacturing specifications; |
• | product quality success rates and yields; and |
• | global viruses and pandemics, including the current COVID-19 pandemic. |
• | are more effective; |
• | have fewer or less severe adverse side effects; |
• | are better tolerated; |
• | are easier to administer; or |
• | are less expensive than SeaStar Medical’s products or its product candidates. |
• | increase its compliance and operational costs; |
• | expose it to regulatory scrutiny, actions, fines and penalties; |
• | result in reputational harm; interrupt or stop its clinical trials; |
• | result in litigation and liability; result in an inability to process personal data or to operate in certain jurisdictions; or |
• | harm its business operations or financial results or otherwise result in a material harm to its business. |
• | further delays or difficulties in enrolling patients in its clinical trials; |
• | delays or difficulties in clinical site initiation, including difficulties in recruiting clinical site investigators and clinical site staff; |
• | the diversion of healthcare resources away from the conduct of clinical trials, including the diversion of hospital staff supporting the conduct of its clinical trials; |
• | the interruption of key clinical trial activities, such as clinical trial site monitoring, due to limitations on travel imposed or recommended by federal or state governments, employers and others or interruption of clinical trial subject visits and study procedures, which may impact the integrity of subject data and clinical study endpoints; |
• | the interruption of, or delays in receiving, supplies of its product candidates from its contract manufacturing organizations due to staffing shortages, production slowdowns or stoppages and disruptions in delivery systems; |
• | delays in clinical sites receiving the supplies and materials needed to conduct its clinical trials and interruptions in global shipping may affect the transport of clinical trial materials; |
• | limitations on employee resources that would otherwise be focused on the conduct of its clinical trials, including because of sickness of employees or their families or the desire of employees to avoid contact with large groups of people; |
• | delays in receiving feedback or approvals from the FDA or other regulatory authorities with respect to future clinical trials or regulatory submissions; |
• | changes in local regulations as part of a response to the COVID-19 pandemic, which may require it to change the ways in which its clinical trials are conducted, resulting in unexpected costs, or discontinuing the clinical trials altogether; |
• | delays in necessary interactions with local regulators, ethics committees and other important agencies and contractors due to limitations on employee resources or the forced furlough of government employees; |
• | the refusal of the FDA to accept data from clinical trials in affected geographies; and |
• | difficulties launching or commercializing products, including due to reduced access to doctors as a result of social distancing protocols. |
• | whether SeaStar Medical can obtain sufficient capital to develop and commercialize its SCD product candidate and grow its business; |
• | whether SeaStar Medical can manage relationships with key suppliers; |
• | the ability to obtain necessary regulatory approvals; |
• | demand for SeaStar Medical’s products; |
• | the timing and costs of new and existing marketing and promotional efforts; |
• | competition, including from established and future competitors; |
• | SeaStar Medical’s ability to retain existing key management, to integrate recent hires and to attract, retain and motivate qualified personnel; |
• | the overall strength and stability of the economies in the markets in which it operates or intends to operate in the future; and |
• | regulatory, legislative and political changes. |
• | the scope of rights granted under the license agreement and other interpretation related issues; |
• | the extent to which SeaStar Medical’s technology and processes infringe on intellectual property of the licensor that is not subject to the licensing agreement; |
• | the sublicensing of patent and other rights under any collaboration relationships SeaStar Medical might enter into in the future; |
• | SeaStar Medical’s diligence obligations under the license agreement and what activities satisfy those diligence obligations; |
• | the ownership of inventions and know how resulting from the joint creation or use of intellectual property by SeaStar Medical and its licensors; and |
• | the priority of invention of patented technology. |
• | others may be able to make products that are the same as or similar to SeaStar Medical’s products but that are not covered by the claims of patents that it owns or has rights to; |
• | SeaStar Medical or its licensors or any current or future strategic partners might not have been the first to conceive or reduce to practice the inventions covered by its patents or pending patent applications; |
• | SeaStar Medical or its licensors or any future strategic partners might not have been the first to file patent applications covering the inventions in SeaStar Medical’s patents or applications; |
• | others may independently develop similar or alternative technologies or duplicate any of SeaStar Medical’s technologies without infringing SeaStar Medical’s intellectual property rights; |
• | SeaStar Medical’s pending patent rights may not lead to issued patents, or the patents, if granted, may not provide it with any competitive advantage, or may be held invalid or unenforceable, as a result of legal challenges by its competitors; |
• | SeaStar Medical’s competitors might conduct research and development activities in countries where it does not have patent rights and then use the information learned from such activities to develop competitive products for sale in SeaStar Medical’s major commercial markets; |
• | third parties manufacturing or testing SeaStar Medical’s products or technologies could use the intellectual property of others without obtaining a proper license; |
• | SeaStar Medical may not develop additional technologies that are patentable; and |
• | third parties may allege that SeaStar Medical’s development and commercialization of its products infringe their intellectual property rights, the outcome of any related litigation may have an adverse effect on SeaStar Medical’s business, result of operations and financial condition. |
• | its employees may experience uncertainty about their future roles, which might adversely affect the Combined Company’s ability to retain and hire key personnel and other employees; |
• | customers, business partners and other parties with which the Combined Company maintains business relationships may experience uncertainty about its future and seek alternative relationships with third parties, seek to alter their business relationships with the Combined Company or fail to extend an existing relationship or subscription with the Combined Company; and |
• | the Combined Company has expended and will continue to expend significant costs, fees and expenses for professional services and transaction costs in connection with the Business Combination. |
• | a limited availability of market quotations for its securities; |
• | reduced liquidity for its securities; |
• | a limited amount of news and analyst coverage for the company; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | You can vote your shares by signing, dating and returning the enclosed proxy card in the pre-paid postage envelope provided. If you submit your proxy card, your “proxy,” whose name is listed on the proxy card, will vote your shares as you instruct on the proxy card. If you sign and return the proxy card but do not give instructions on how to vote your shares, your shares will be voted, as recommended by our Board. Our Board recommends voting “FOR” each of the Proposals. If you hold your shares of Common Stock in “street name,” which means your shares are held of record by a broker, bank or other nominee, you should follow the instructions provided to you by your broker, bank or nominee to ensure that the votes related to the shares you beneficially own are properly represented and voted at the Meeting. |
• | You can participate in the Meeting and vote during the Meeting even if you have previously voted by submitting a proxy as described above. However, if your shares are held in the name of your broker, bank or another nominee, you must get a proxy from the broker, bank or other nominee. That is the only way LMAO can be sure that the broker, bank or nominee has not already voted your shares. |
• | you may send another proxy card with a later date; |
• | if you are a record holder, you may notify our proxy solicitor, Alliance Advisors, in writing before the Meeting that you have revoked your proxy; or |
• | you may participate in the Meeting, revoke your proxy, and vote during the Meeting, as indicated above. |
• | Delivering certificates representing shares of Common Stock to Continental, or |
• | Delivering the shares of Common Stock electronically through the DWAC system. |
• | the due organization, qualification and good standing of SeaStar Medical; |
• | SeaStar Medical having no subsidiaries; |
• | the due authorization of SeaStar Medical to execute the Merger Agreement and other transaction documents, to perform its obligations thereunder, and to consummate the Business Combination; |
• | the absence of conflicts by the execution, delivery and performance of the Merger Agreement and other transaction documents with (a) laws applicable to, (b) organizational documents, material contracts, or licenses of, SeaStar Medical; |
• | the absence of any filings, permits, approvals, or consents from governmental authorities required in connection with SeaStar Medical’s execution, delivery and performance of the Merger Agreement, the other transaction documents, and the consummation of the Business Combination, except for the filing of the certificate of merger; |
• | the capitalization of SeaStar Medical, including its common stock, preferred stock, options, warrants, restricted stock units, and convertible notes; |
• | the audited balance sheet of SeaStar Medical as of, and the related audited statements of income and comprehensive income, stockholders’ equity, and cash flows, for the years ended December 31, 2021, and December 31, 2020 present fairly the financial position of SeaStar Medical and are in conformity with GAAP; |
• | SeaStar Medical having no liabilities, debts, or obligations in accordance with GAAP other than those shown on its audited balance sheets, except for those that have arisen in the ordinary course of business since December 31, 2021 or under the Merger Agreement and other transaction documents; |
• | litigation and proceedings pending or threatened against, or government orders imposed upon, SeaStar Medical or any settlements related thereto; |
• | SeaStar Medical’s compliance with applicable laws (including, without limitation, anticorruption laws, labor and employment laws, other laws relating to SeaStar Medical’s benefit plans, environmental laws, healthcare laws, FDA rules and regulations, and insurance laws); |
• | the material contracts of SeaStar Medical and that such contracts are in full force and effect; |
• | material tax returns required to be filed by SeaStar Medical, and audits, examinations or other proceedings with respect to SeaStar Medical’s taxes; |
• | SeaStar Medical’s insurance policies; |
• | the material permits necessary for SeaStar Medical to conduct its business; |
• | the tangible property of SeaStar Medical, and that such property is free of liens and is in reasonably good condition; |
• | the real property leased by SeaStar Medical, and that such lease is in full force and effect; |
• | SeaStar Medical’s owned and licensed intellectual property, and the violation, infringement or misappropriation of intellectual property against or by SeaStar Medical; |
• | SeaStar Medical’s compliance with its data privacy and data security policies and applicable laws relating to the use, collection, retention, or other processing of any personal data; |
• | the maintenance and implementation of reasonable and appropriate disaster recovery and security plans and other steps to safeguard SeaStar Medical’s trade secrets, confidential information, and IT systems from unauthorized or illegal access and use; |
• | the absence of a Material Adverse Effect (as defined below) since December 31, 2020; |
• | brokerage, finder’s or other fee or commission based upon arrangements made by SeaStar Medical in connection with the transactions contemplated by the Merger Agreement; |
• | related party transactions between SeaStar Medical and its affiliates or directors and officers; |
• | the information supplied by SeaStar Medical in writing specifically for inclusion in the proxy statement/prospectus; and |
• | SeaStar Medical having no government contracts. |
• | the due organization, qualification and good standing of LMAO and Merger Sub; |
• | the due authorization of LMAO and Merger Sub to execute the Merger Agreement and other transaction documents, to perform their obligations thereunder, and to consummate the Business Combination (once approval of LMAO’s stockholders is obtained); |
• | the absence of conflicts by the execution, delivery and performance of the Merger Agreement and other transaction documents with (a) laws applicable to, (b) organizational documents or contracts of, LMAO or Merger Sub (once approval of LMAO’s stockholders is obtained); |
• | litigation, proceedings, and investigations pending or threatened against LMAO or Merger Sub; |
• | the absence of any filings, approvals, or consents from governmental authorities required in connection with LMAO or Merger Sub’s execution or delivery of the Merger Agreement, the other transaction documents, and the consummation of the Business Combination, except for the applicable requirements of securities laws and Nasdaq; |
• | the Trust Account, including there being at least $105,000,000 in such account; |
• | brokerage, finder’s or other fee or commission based upon arrangements made by LMAO or any of its affiliates in connection with the transactions contemplated by the Merger Agreement; |
• | LMAO’s compliance with its SEC filing requirements since the IPO, its financial statements contained therein, and maintenance of disclosure controls and procedures required under the Exchange Act; |
• | the absence of any business activities of LMAO other than activities directed toward the accomplishment of a business combination; |
• | material tax returns required to be filed by LMAO, and audits, examinations or other proceedings with respect to LMAO’s taxes; |
• | the capitalization of LMAO, including its Class A Common Stock, Class B Common Stock, preferred stock, and warrants; |
• | the Nasdaq listing status of LMAO’s units, its Class A Common Stock, and its public warrants; |
• | the Sponsor Support Agreement is in full force and effect; |
• | related party transactions between LMAO and Merger Sub and their affiliates or directors and officers; |
• | Neither LMAO nor Merger Sub being an “investment company” within the meaning of the Investment Company Act; |
• | the absence of any substantial governmental interest in the Combined Company, requiring declaration to the Committee on Foreign Investment in the United States, as a result of the Business Combination; |
• | the absence of any contracts of LMAO or the Merger Sub that would be required to be filed as an exhibit to LMAO’s Annual Report on Form 10-K, but have not yet been filed; and |
• | the absence of any current negotiations or discussion regarding an alternative business combination. |
(i) | any change in applicable laws or GAAP or any interpretation thereof, |
(ii) | any change in interest rates or economic, political, business, financial, commodity, currency or market conditions generally, |
(iii) | the announcement or the execution of the Merger Agreement, the pendency or consummation of the merger or the performance of the Merger Agreement, including the impact thereof on relationships, contractual or otherwise, with customers, suppliers, licensors, distributors, partners, providers and employees, |
(iv) | any change generally affecting any of the industries or markets in which SeaStar Medical operates or the economy as a whole, |
(v) | the taking of any action expressly required by the Merger Agreement or with the prior written consent of LMAO, |
(vi) | any earthquake, hurricane, tsunami, tornado, flood, mudslide, wild fire or other natural disaster, act of God or other force majeure event, |
(vii) | any national or international political or social conditions in countries in which, or in the proximate geographic region of which, SeaStar Medical operates, including the engagement by the United States or such other countries in hostilities or the escalation thereof, whether or not pursuant to the declaration of a |
national emergency or war, or the occurrence or the escalation of any military or terrorist attack upon the United States or such other country, or any territories, possessions, or diplomatic or consular offices of the United States or such other countries or upon any United States or such other country military installation, equipment or personnel, |
(viii) | any failure of SeaStar Medical to meet any projections, forecasts or budgets, and |
(ix) | COVID-19 or any law, directive, pronouncement or guideline issued by a governmental authority, the Centers for Disease Control and Prevention, the World Health Organization or industry group providing for business closures, changes to business operations, “sheltering-in-place” or other restrictions that relate to, or arise out of, an epidemic, pandemic or disease outbreak (including the COVID-19 pandemic) or any change in such law, directive, pronouncement or guideline or interpretation thereof following the date of the Merger Agreement or SeaStar Medical’s compliance therewith, provided |
• | change or amend the Company Certificate of Incorporation (as defined in the Merger Agreement), bylaws or other organizational documents of SeaStar Medical, except as otherwise required by law, except for any amendment to the Company Certificate of Incorporation in order to facilitate the closing of the Merger; |
• | make, declare, set aside, establish a record date for or pay any dividend or distribution, other than any dividends or distributions from any wholly owned subsidiary of SeaStar Medical to SeaStar Medical or any other wholly owned subsidiary of SeaStar Medical; |
• | enter into, assume, assign, partially or completely amend any material term of, modify any material term of or terminate (excluding any expiration in accordance with its terms or any modification or amendment that is not adverse to SeaStar Medical) any material contract or any lease, sublease, or license related to the leased real property, other than entry into such agreements in the ordinary course of business; |
• | issue, deliver, sell, transfer, pledge, dispose of or place any lien (other than a permitted lien) on any shares of capital stock or any other equity or voting securities of SeaStar Medical; |
• | sell, assign, transfer, convey, lease, license, abandon, allow to lapse of expire, subject to or grant any lien (other than permitted liens) on or otherwise dispose of any material assets, rights or properties of SeaStar Medical (other than owned intellectual property), other than the sale or other disposition of assets or equipment deemed by SeaStar Medical in its reasonable business judgment to be obsolete or no longer material to the business of SeaStar Medical, in each such case, in the ordinary course of business; |
• | (i) cancel or compromise any claims or indebtedness owed to SeaStar Medical, (ii) settle any pending or threatened action (A) if such settlement would require payment by SeaStar Medical in an amount greater than $200,000 or (B) to the extent such settlement includes an agreement to accept or concede injunctive relief, or (C) to the extend such settlements involve a governmental authority or alleged criminal wrongdoing, or (iii) agree to modify in any respect materially adverse to SeaStar Medical any confidentiality or similar contract to which SeaStar Medical is a party; |
• | transfer, sell, assign, license, sublicense, encumber, impair, abandon, permit to lapse or expire, dedicate to the public, cancel, subject to any lien, fail to diligently maintain, or otherwise dispose of any right, title or interest in any Owned Intellectual Property, other than non-exclusive licenses granted to customers in the ordinary course of business; |
• | disclose any confidential information or trade secrets (other than in the ordinary course of business subject to appropriate written obligations with respect to confidentiality, non-use and non-disclosure) or source code to any person; |
• | except as otherwise required by law or the terms of any existing SeaStar Medical benefit plans set forth in SeaStar Medical’s disclosure schedule as in effect on the date of the Merger Agreement, (i) increase the compensation or benefits of any employee of SeaStar Medical except for increases made in the ordinary course of business consistent with past practice, (ii) make any grant of any severance, retention, or termination payment to any person with a base salary of more than $100,000, (iii) hire additional officers or terminate existing officers, (iv) hire any employee of SeaStar Medical or any other individual who is providing or will provide services to SeaStar Medical other than any employee or individual with an annual base salary or annual compensation of less than $100,000, (v) accelerate or commit to accelerate the funding, payment or vesting of any benefit or compensation to any current or former employee, director, officer or other service provider, or (vi), establish, adopt, enter into, amend, or terminate any SeaStar Medical benefit plan or any plan, agreement, program, policy, trust, fund or other arrangement that would be a SeaStar Medical benefit plan if it were in existence as of the date of the Merger Agreement; |
• | directly or indirectly acquire by merging or consolidating with, or by purchasing a substantial portion of the assets of, or by purchasing all of or any substantial equity interest in, or by any other manner, any business or any corporation, partnership, limited liability company, joint venture, association or other entity or person or division thereof; |
• | make any loans or advance any money or other property to any person, except for (i) advances in the ordinary course of business, consistent with past practice, to employees or officers of SeaStar Medical for expenses not to exceed $10,000 individually or $50,000 in the aggregate, (ii) prepayments and deposits paid to suppliers of SeaStar Medical in the ordinary course of business and (iii) trade credit extended to customers of SeaStar Medical in the ordinary course of business; |
• | redeem, purchase or otherwise acquire any shares of capital stock (or other equity interests) of SeaStar Medical or any securities or obligations convertible (whether currently convertible or convertible only after the passage of time or the occurrence of certain events) into or exchangeable for any shares of capital stock (or other equity interests) of SeaStar Medical; |
• | adjust, split, combine, subdivide, recapitalize, reclassify or otherwise effect any change in respect of any shares of capital stock or other equity interests or securities of SeaStar Medical; |
• | make any change in its customary accounting principles or methods of accounting materially affecting the reported assets, liabilities or results of operations of SeaStar Medical, other than as may be required by applicable law, GAAP, or regulatory guidelines; |
• | shorten or lengthen the customary payment cycles for any of its payables or receivables or otherwise engage in unusual efforts to accelerate the collection of accounts receivable or unusually delay the payment of accounts payable or participate in activity of the type sometimes referred to as “trade loading” or “channel stuffing” or any other activity that reasonably could be expected to result in an increase, temporary or otherwise, in the demand for the products offered by SeaStar Medical before the Closing; |
• | adopt or enter into a plan of complete or partial liquidation, dissolution, merger, consolidation, restructuring, recapitalization or other reorganization of SeaStar Medical (other than the Business Combination); |
• | make, change or revoke any material tax election, adopt or change any material accounting method with respect to taxes, file any material amended tax return, file any material tax return prepared in a manner that is inconsistent with the past practices of SeaStar Medical with respect to the treatment of items on such tax return, settle or compromise any material tax liability, enter into any material closing agreement with respect to any tax, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitations period applicable to any material tax, claim, or assessment, enter into any tax sharing, tax allocation, tax assumption, or tax indemnification agreement, fail to pay any material taxes when due (including estimated taxes), or take any actions with respect to taxes (including deductions or credits) pursuant to the CARES Act; |
• | directly or indirectly, incur, or modify in any material respect the terms of any indebtedness, or issue any debt securities or assume, guarantee or endorse, or otherwise become responsible for, the obligations of any person for indebtedness; |
• | make any loans, advances or capital contributions to, or guarantees for the benefit of, or any investments in, any person, other than the reimbursement of expenses of employees in the ordinary course of business; |
• | fail to maintain in full force and effect material insurance policies covering SeaStar Medical and its properties, assets and businesses in a form and amount consistent with past practices; |
• | enter into any contract with any broker, finder, investment banker or other person under which such person is or will be entitled to any brokerage fee, finders’ fee or other commission in connection with the Business Combination; |
• | enter into any transaction or amend in any material respect any existing agreement with any person that, to the knowledge of SeaStar Medical, is an affiliate of SeaStar Medical (excluding ordinary course payments of annual compensation, provision of benefits or reimbursement of expenses in respect of members or stockholders who are officers or directors of SeaStar Medical); |
• | enter into any agreement that restricts the ability of SeaStar Medical to (i) engage or compete in any line of business, or (ii) enter into any new line of business; |
• | terminate, amend, fail to review or preserve or otherwise fail to maintain in full force and effect any material permit, except for amendments contemplated in the ordinary course of business; |
• | make individual commitments for capital expenditures or construction of fixed assets in excess of $200,000; or |
• | enter into any agreement, or otherwise become obligated, to do or take any action prohibited by any of the foregoing. |
• | change, modify, or amend the trust agreement, LMAO’s organizational documents or the organizational documents of Merger Sub, other than as strictly necessary to facilitate the closing of the Merger in accordance with the terms and conditions of the Merger Agreement; |
• | declare, set aside or pay any dividends on, or make any other distribution in respect of any outstanding capital stock of, or other equity interests in, LMAO; |
• | split, combine or reclassify any capital stock of, or other equity interests in, LMAO; |
• | other than in connection with redemptions of LMAO’s Class A Common Stock or as otherwise required by LMAO’s organizational documents in order to consummate the Transactions, repurchase, redeem or otherwise acquire, or offer to repurchase, redeem or otherwise acquire, any capital stock of, or other equity interests in, LMAO; |
• | make, change or revoke any material tax election, adopt or change any material accounting method with respect to taxes, file any material amended tax return, file any material tax return prepared in a manner that is inconsistent with the past practices of SeaStar Medical with respect to the treatment of item son such tax returns, settle or compromise any material tax liability, enter into any material closing agreement with respect to any tax, surrender any right to claim a material refund of taxes or consent to any extension or waiver of the limitations period applicable to any material tax, claim, or assessment, enter into any tax sharing, tax allocation, tax assumption, or tax indemnification agreement, fail to pay any material taxes when due (including estimated taxes), or take any actions with respect to taxes (including deductions or credits) pursuant to the CARES Act; |
• | enter into, renew, or amend in any material respect, any transaction or contract with an affiliate of LMAO (including, for the avoidance of doubt, (i) the Sponsor or anyone related by blood, marriage or adoption to any Sponsor and (ii) any person in which any Sponsor has a direct or indirect legal, contractual or beneficial ownership interest of 5% or greater); |
• | voluntarily sell, lease, license, sublicense, abandon, divest, transfer, cancel, abandon or permit to lapse or expire, dedicate to the public, or otherwise dispose of, or agree to do any of the foregoing, or otherwise dispose of material assets or properties of LMAO or Merger Sub; |
• | waive, release, compromise, settle or satisfy any pending or threatened material claim (which shall include, but not be limited to, any pending or threatened action) or compromise or settle any liability in excess of $250,000 individually or $1,500,000 in the aggregate; |
• | incur, guarantee or otherwise become liable for (whether directly, contingently or otherwise) any indebtedness, provided, however, and notwithstanding the foregoing, LMAO shall be permitted to incur indebtedness of $1,035,000 (without seeking or obtaining prior consent of SeaStar Medical) if Sponsor elects to loan such amount to LMAO in connection with an extension to the deadline for LMAO to, pursuant to LMAO’s certificate of incorporation, consummate an initial business combination; provided further, that any such loan, if made, (i) shall be evidenced by a non-interest bearing promissory note repayable at Closing and (ii) shall be made in accordance with, and pursuant to, the terms and conditions of LMAO’s Letter Agreement, dated January 25, 2021, LMAO’s certificate of incorporation and the trust agreement; |
• | offer, issue, deliver, grant or sell, or authorize or propose to offer, issue, deliver, grant or sell, any capital stock of, other equity interests, equity equivalents, stock appreciation rights, phantom stock ownership interests or similar rights in, LMAO or any of its subsidiaries or any securities convertible into, or any rights, warrants or options to acquire, any such capital stock or equity interests; |
• | amend, modify or waive any of the terms or rights set forth in any LMAO warrant or LMAO’s warrant agreement, including any amendment, modification or reduction of the warrant price set forth therein; or |
• | agree in writing or otherwise agree, commit or resolve to take any of the actions described in the foregoing. |
• | during the Interim Period, subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to LMAO or its subsidiaries by third parties that may be in LMAO’s or its subsidiaries’ possession from time to time, and except for any information which in the opinion of LMAO’s legal counsel would result in the loss of attorney-client privilege or other privilege from disclosure, (i) afford SeaStar Medical and its representatives reasonable access to its and its subsidiaries’ properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and (ii) furnish such representatives with all financial and operating data and other information concerning its affairs that are in its possession, in each case as SeaStar Medical and its representatives may reasonably request solely for purposes of consummating the Business Combination; |
• | after the Effective Time, indemnify and hold harmless each present and former director, manager and officer of SeaStar Medical and LMAO and each of their respective subsidiaries against any costs, expenses, judgments, fines, losses, damages or liabilities incurred in connection with any action, to the fullest extent that it, SeaStar Medical or its subsidiaries would have been permitted under applicable law and their respective certificate of incorporation, bylaws, or other organization documents in effect on the date of the Merger Agreement to indemnify such person; |
• | cause LMAO and its subsidiaries to maintain, for a period of six years from the Effective Time, provisions in its certificate of incorporation, bylaws and other organizational documents concerning the indemnification and exoneration of officers and directors/managers that are no less favorable to those persons than the provisions of such certificate of incorporation, bylaws and other organizational documents as of the date of the Merger Agreement; |
• | maintain, and cause one or more of its subsidiaries to maintain, for a period of six years from the Effective Time, a directors’ and officers’ liability insurance policy covering those persons who are currently covered by SeaStar Medical’s directors’ and officers’ liability insurance policies on terms not less favorable than the terms of such current insurance coverage, except that in no event will it be required to pay an annual premium for such insurance in excess of 400% of the aggregate annual premium payable by SeaStar Medical for such insurance policy for the year ended December 31, 2021; provided that LMAO may cause coverage to be extended under the current directors’ and officers’ liability insurance by obtaining a six-year “tail” policy containing terms not materially less favorable than the terms of such current insurance coverage with respect to claims existing or occurring at or prior to the Effective Time; |
• | Unless otherwise approved in writing by SeaStar Medical, neither LMAO or Merger Sub shall permit any amendment or modification to be made to, any waiver (in whole or in part) or provide consent to (including consent to termination), of any provision or remedy under, or any replacement of, the Sponsor Support Agreement. LMAO shall take, or cause to be taken, all reasonable actions and use all reasonable efforts to do, or cause to be done, all things necessary, proper or advisable to satisfy in all material respects on a timely basis all conditions and covenants applicable to LMAO in the Sponsor Support Agreement and otherwise comply with its obligations thereunder and to enforce its rights under each such agreement. LMAO will give SeaStar Medical prompt written notice: (i) of any breach or default (or any event or circumstance that, with or without notice, lapse of time or both, could give rise to any breach or default) by any party to the Sponsor Support Agreement; and (ii) of the receipt of any written notice or other written communication from any other party to the Sponsor Support Agreement with respect to any actual, potential, threatened or claimed expiration, lapse, withdrawal, breach, default, termination or repudiation by any party under any such agreement or any provisions thereof; |
• | during the Interim Period, use commercially reasonable efforts to ensure it remains listed as a public company on, and for shares of Class A Common Stock and LMAO warrants (but, in the case of its warrants, only to the extent issued as of the date of the Merger Agreement) to be listed on, Nasdaq; |
• | during the Interim Period, use commercially reasonable efforts to keep current and timely file all reports required to be filed or furnished with the SEC and to otherwise comply in all material respects with its reporting obligations under applicable securities laws; |
• | prior to the Effective Time, take all reasonable steps as may be required or permitted to cause any acquisition or disposition of Common Stock that occurs or is deemed to occur by reason of or pursuant to the Business Combination by each individual who is or will be subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to LMAO to be exempt under Rule 16b-3 promulgated under the Exchange Act; |
• | use commercially reasonable efforts to prepare (i) a long-term incentive plan which shall initially reserve shares of Common Stock equal to ten percent (10%) of the Post-Closing Fully-Diluted Share Amount (as defined in the Merger Agreement) (the “LMAO LTIP”) and (ii) an employee stock purchase program which shall initially reserve shares of Common Stock equal to three percent (3%) of the Post-Closing Fully Diluted Share Amount (the “LMAO Employee Stock Purchase Program”) and LMAO shall prior to the Closing, obtain the approval of the LMAO LTIP and LMAO Employee Stock Purchase Program from LMAO stockholders; |
• | during the Interim Period, use commercially reasonable efforts to (i) take all actions necessary to continue to qualify as an “emerging growth company” within the meaning of the JOBS Act and (ii) not take any action that would cause it to not qualify as an “emerging growth company” within the meaning of the JOBS Act; and |
• | during the Interim Period, not take, and not permit any of its affiliates or representatives to take, whether directly or indirectly, written or oral, any action to (i) solicit, initiate, continue or engage in any discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than SeaStar Medical and/or any of its affiliates or representatives) concerning, relating to or which is intended or is reasonably likely to give rise to or result in, any offer, inquiry, proposal or indication of interest, written or oral relating to any business combination involving LMAO (a “business combination proposal”) other than with SeaStar Medical and its affiliates and representatives and (iii) immediately cease and cause to be terminated, and cause its affiliates and representatives to do the same, any and all existing discussions, conversations, negotiations, or other communications with any person conducted prior to the date of the Merger Agreement with respect to, or which is reasonably likely to give rise to or result in, a business combination proposal. |
• | during the Interim Period, subject to confidentiality obligations and similar restrictions that may be applicable to information furnished to SeaStar Medical by third parties that may be in SeaStar Medical’s possession from time to time, and except for any information which (i) relates to the negotiation of the Merger Agreement or the Business Combination, (ii) is prohibited from being disclosed by applicable law or (iii) in the opinion of SeaStar Medical’s legal counsel would result in the loss of attorney-client privilege or other privilege from disclosure, SeaStar Medical will (A) afford LMAO and its representatives reasonable access during normal business hours with reasonable advance notice to its properties, books, contracts, commitments, tax returns, records and appropriate officers and employees and (B) use its commercially reasonable efforts to furnish LMAO and such representatives with all financial and operating data and other information concerning the affairs of SeaStar Medical that are in its possession, in each case as LMAO or its representatives may reasonably request solely for the purposes of consummating the Business Combination; |
• | on behalf of itself and its affiliates, waive any past, present or future claim of any kind against, and any right to access, the trust account, trustee, and LMAO or to collect from the trust account any monies that may be owed to them by LMAO or any of its affiliates for any reason whatsoever, and will not seek recourse against the trust account at any time for any reason whatsoever; |
• | at the Closing, deliver to LMAO a FIRPTA certification and notice as well as an IRS Form W-9 executed by SeaStar Medical; |
• | deliver to LMAO evidence of the SeaStar Medical stockholder approval and Support Agreements executed by the Company Requisite Stockholders (as defined in the Merger Agreement) within three (3) business days of the execution of the Merger Agreement, which will acknowledge that the adoption and approvals are irrevocable and result in the waiver of any rights of the Company Requisite Stockholders to demand appraisal in connection with the Merger pursuant to the DGCL; |
• | to the extent required by the DGCL, SeaStar Medical will promptly (and, in any event, within 15 Business Days of the date of SeaStar Medical stockholder approval) deliver to any SeaStar Medical stockholder who has not executed the SeaStar Medical stockholder approval (i) a notice of the taking of the actions described in the SeaStar Medical stockholder approval in accordance with Section 228 of the DGCL, and (ii) the notice in accordance with Section 262 of the DGCL; |
• | promptly after the delivery of the SeaStar Medical stockholder approval to LMAO, SeaStar Medical will prepare and mail to each SeaStar Medical stockholder an information statement regarding the transactions contemplated by the Merger Agreement, which shall solicit the consent of SeaStar Medical stockholders (other than the Company Requisite Stockholders) with respect to the adoption and approval of the Merger Agreement and shall include (i) a statement to the effect that the SeaStar Medical’s board of directors had unanimously recommended that SeaStar Medical’s stockholders vote in favor of the adoption and approval of the Merger Agreement; and (ii) such other information as LMAO and SeaStar Medical reasonably agree is required or advisable under applicable Law to be included therein; |
• | prior to the Closing Date, if required to avoid the imposition of taxes under Section 4999 of the Code or the loss of deduction under Section 280G with respect to any payment or benefit in connection with any of the transactions contemplated by the Merger Agreement, SeaStar Medical will (i) solicit and use reasonable best efforts to obtain from each person who SeaStar Medical reasonably believes is a SeaStar Medical “disqualified individual” who would otherwise receive or retain any payment or benefits that could constitute a “parachute payment” as a result of or in connection with the consummation of the Business Combination, a waiver of such disqualified individual’s rights to some or all of such payments or benefits (the “Waived 280G Benefits”) so that no payments and/or benefits shall be deemed to be “excess parachute payments”; (ii) submit to a SeaStar Medical stockholder vote the right of any such “disqualified individual” to receive the Waived 280G Benefits and (iii) deliver to LMAO evidence that a vote of SeaStar Medical’s stockholders was soliciting regarding the right of a “disqualified individual” to receive the Waived 280G Benefits and that either (a) the requisite number of votes of SeaStar Medical stockholders was obtained with respect to the Waived 280G Benefits (the “280G Approval”) or (b) the 280G Approval was not obtained, and, as a consequence, the Waived 280G Benefits shall not be retained or provided; |
• | use commercially reasonable efforts to provide LMAO, as promptly as reasonably practicable but no later than May 15, 2022, reviewed financial statements, including condensed balance sheets and condensed statements of income and comprehensive income, stockholder’s equity and cash flows, of SeaStar Medical as at and for the three (3) months ended March 31, 2022, prepared in accordance with GAAP and Regulation S-X (the “Reviewed Financials”), and any other audited or unaudited balance sheets and the related audited or unaudited statements of comprehensive (loss) income, stockholder’s equity and cash flows of the Company as of and for a year-to-date |
• | be available and will use reasonable best efforts to make SeaStar Medical’s officers, managers, representatives and employees available to, in each case, during normal business hours and upon reasonable |
advance notice, to LMAO and its counsel in connection with (i) the drafting of the registration statement and (ii) responding in a timely manner to comments on the registration statement from the SEC; |
• | will reasonably cooperate with LMAO in connection with the preparation for inclusion in the registration statement of pro forma financial statements that comply with the requirements of Regulation S-X under the rules and regulations of the SEC; |
• | after the date on which the proxy statement contained in the registration statement is mailed to LMAO’s stockholders, SeaStar Medical will give LMAO prompt written notice of any action taken or not taken by SeaStar Medical, or of any development regarding SeaStar Medical, which is or becomes known by SeaStar Medical, that would cause the registration statement to contain an untrue statement of a material fact or omit to state a material fact necessary in order to make the statements not misleading; provided, that if any such action shall be taken or fail to be taken or such development shall otherwise occur, LMAO and SeaStar Medical will cooperate fully to cause an amendment or supplement to be made promptly to the registration statement, such that the registration statement no longer contains an untrue statement of a material fact or omits to state a material fact necessary in order to make the statements, not misleading; and |
• | (i) during the Interim Period, not, and not permit any of its affiliates and representatives to take, whether directly or indirectly, written or oral, any action to (A) solicit, initiate, continue or engage in discussions or negotiations with, or enter into any agreement with, or encourage, respond, provide information to or commence due diligence with respect to, any person (other than LMAO and/or any of its affiliates or representatives) concerning any purchase of any of SeaStar Medical’s equity securities or the issuance and sale of any securities of, or membership interests in, SeaStar Medical or its subsidiaries (other than any purchases of equity securities by SeaStar Medical from employees of SeaStar Medical or its subsidiaries) or any merger, recapitalization or similar business combination transaction, or sale of substantial assets involving SeaStar Medical of its subsidiaries, other than immaterial assets or assets sold in the ordinary course of business (each such acquisition transaction, but excluding the Business Combination, an “Acquisition Transaction”), or (B) commence, continue or renew any due diligence investigation regarding, or that is reasonably likely to give rise to or result in, any offer, inquiry, proposal, indication of interest, written or oral, with respect to, or which is reasonably likely to give rise to or result in, an Acquisition Transaction, and (ii) immediately cease and cause to be terminated, and direct its affiliates and representatives to do the same, any and all discussions, conversations, negotiations, or other communications with any person conducted prior to the date of the Merger Agreement with respect to, or which is reasonably likely to give rise to or result in, an Acquisition Transaction. |
• | use, and will cause its respective subsidiaries to use (i) commercially reasonable efforts to assemble, prepare and file any information as may be reasonably necessary to obtain as promptly as practicable all governmental and regulatory consents required to be obtained in connection with the Business Combination, (ii) commercially reasonable efforts to obtain all material consents and approvals of third parties that any of LMAO, SeaStar Medical, or their respective affiliates are required to obtain in order to consummate the Business Combination, provided that SeaStar Medical shall not be required to seek any such required consents or approvals of third party counterparties to material contracts to the extent such material contract is terminable at will, for convenience or upon or after the giving of notice of termination by a party thereto unless otherwise agreed in writhing by SeaStar Medical and LMAO and (iii) take such other action as may be necessary or reasonably requested by the other party to satisfy the closing conditions and consummate the Business Combination; |
• | jointly prepare, and LMAO will file with the SEC, a preliminary registration statement containing a prospectus/proxy statement on Form S-4 concerning the Business Combination to be sent to LMAO |
stockholders in advance of the Special Meeting (as defined in the Merger Agreement) for the purposes of the matters specified herein; |
• | use their reasonable efforts to (i) cause the registration statement when filed with the SEC to comply in all material respects with all legal requirements applicable thereto, (ii) respond as promptly as reasonably practicable to and resolve all comments received from the SEC, (iii) to be declared effective under the Securities Act as promptly as practicable, (iv) to keep the registration statement effective as long as is necessary to consummate the Business Combination, and (v) otherwise ensure that the information contained therein contains no untrue statement of material fact or material omission; |
• | in regards to LMAO, as promptly as practicable following the Proxy Clearance Date (as defined in the Merger Agreement), cause the proxy statement contained in the registration statement to be mailed to its stockholders of record; |
• | in regards to LMAO, prior to or as promptly as practicable after Proxy Clearance Date, establish a record date (which date will mutually be agreed with SeaStar Medical) for, duly call and give notice of the Special Meeting in accordance with the DGCL for the purposes of obtaining approval for the matters specified herein, which will be held not more than 25 days after the date on which LMAO commences mailing of the proxy statement to its stockholders proxy statement/prospectus to the LMAO stockholders; |
• | in regards to LMAO, use its commercially reasonable efforts to obtain the approval of the matters specified herein at the Special Meeting, including by soliciting proxies as promptly as practicable in accordance with applicable law; |
• | not make any public announcement or issue any public communication regarding the Merger Agreement or the Business Combination without first obtaining the prior consent of SeaStar Medical or LMAO, as applicable, except if such announcement or other communication is required by applicable law or legal process; and |
• | use its commercially reasonable efforts to take, or cause to be take, all actions, and to do, or cause to be done, and to assist and cooperate with the other parties in doing, all things necessary, proper or advisable to consummate and make effective, in the most expeditious manner practicable, the Business Combination. |
• | the parties shall have received the clearances, authorizations and other approvals from governmental authorities; |
• | no governmental authority will have issued any order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority enjoining or otherwise prohibiting the consummation of the Business Combination and no law or regulation has been adopted that makes consummation of the Business Combination illegal or otherwise prohibited; |
• | The completion of LMAO offering its stockholders with the opportunity to redeem shares of LMAO Class A Common Stock in accordance with LMAO’s organizational documents, which such stockholders may elect by delivering such shares for redemption no later than two (2) business days prior to the date of the Special Meeting (the “LMAO Stockholder Redemption”); |
• | the Available Closing Acquiror Cash (as defined in the Merger Agreement) will not be less than $15,000,000; |
• | LMAO will have at least $5,000,001 of net tangible assets (as determined in accordance with Rule 3a51-1(g)(1) of the Exchange Act) remaining upon the consummation of the Closing (after giving |
effect to the LMAO Stockholder Redemption, and the other transactions contemplated to occur on the Closing Date, including the payment of LMAO’s and SeaStar Medical’s expenses); |
• | the registration statement will have been declared effective under the Securities Act, no stop order suspending the effectiveness of the registration statement will be in effect and no proceedings for purposes of suspending the effectiveness of the registration statement shall have been initiated or be threatened by the SEC; |
• | approval of the stockholders of LMAO will have been obtained; |
• | approval by the Company Requisite Stockholders will have been obtained; |
• | The LMAO Common Stock to be issued in connection with the Business Combination will have been approved for listing on Nasdaq, subject only to official notice of issuance thereof, and no revocation or suspension thereof shall have occurred; and |
• | SeaStar Medical will have amended its Company Options, Company Warrants and Company Restricted Stock Unit Awards (each as defined in the Merger Agreement) in a manner reasonably acceptable to LMAO in order to, to the extent necessary, permit their assignment to, and assumption by, LMAO. |
• | The Specified Representations will be true and correct in all respects as the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date); |
• | certain of the representations and warranties of SeaStar Medical pertaining to its current capitalization will be true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in each case other than de minimis |
• | each of the remaining representations and warranties of SeaStar Medical will be true and correct (without giving any effect to any limitation as to “materiality” or “Material Adverse Effect” or any similar limitation set forth therein) as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in all respects, except where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a Material Adverse Effect (as defined in the Merger Agreement); |
• | each of the covenants, agreements, and obligations of SeaStar Medical to be performed or complied with as of or prior to the Closing will have been performed in all material respects; |
• | Since the date of the Merger Agreement, no Material Adverse Effect and be continuing as of immediately prior to the Closing; |
• | SeaStar Medical will have delivered the Reviewed Financials no later than May 15, 2022; |
• | SeaStar Medical will have delivered to LMAO a certificate signed by an officer of SeaStar Medical, dated the Closing Date, certifying that, to the knowledge and belief of such officer, the foregoing conditions have been fulfilled; |
• | SeaStar Medical will have delivered to LMAO executed counterparts of each transaction agreement to which SeaStar Medical is a party; |
• | SeaStar Medical will have delivered to LMAO evidence as to (i) the payment of certain indebtedness set forth on SeaStar Medical’s disclosure schedule, (ii) the termination of any liens related thereto, and (iii) the termination of each agreement set forth on SeaStar Medical’s disclosure schedule; and |
• | SeaStar Medical will have delivered evidence of consents from certain counterparties set forth on SeaStar Medical’s disclosure schedules. |
• | The Acquiror Specified Representations will be true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date); |
• | certain of the representations and warranties of LMAO and Merger Sub regarding capitalization will be true and correct in all respects as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in each case other than de minimis |
• | each of the remaining representations and warranties of LMAO and Merger Sub will be true and correct (without giving any effect to any limitation as to “materiality” or “material adverse effect” or any similar limitation set forth therein) as of the date of the Merger Agreement and as of the Closing Date (except that such representations and warranties that by their terms speak specifically as of the date of the Merger Agreement or another date will be true and correct in all respects as of such date), in all respects, except, where the failure of such representations and warranties to be so true and correct, individually or in the aggregate, has not had, and would not reasonably be expected to result in, a material adverse effect; |
• | each of the covenants, agreements, and obligations of LMAO and Merger Sub to be performed or complied with as of or prior to the Closing will have been performed in all material respects; |
• | the Available Closing Acquiror Cash will not be less than $15,000,000; |
• | LMAO will have delivered to SeaStar Medical a certificate signed by an officer of LMAO, dated as of the Closing Date, certifying that, to the knowledge and belief of such officer, the foregoing conditions have been fulfilled; and |
• | LMAO will have delivered to SeaStar Medical executed counterparts of each transaction agreement to which LMAO or Merger Sub is a party. |
• | by written consent of SeaStar Medical and LMAO; |
• | by SeaStar Medical or LMAO if the Closing has not occurred on or before July 29, 2022, as such date will be extended to October 29, 2022 in the event that the Sponsor elects, in its sole discretion, to extend the time period by which LMAO must consummate a business combination by depositing additional funds into the Trust Account on or prior to July 29, 2022 pursuant to LMAO’s Letter Agreement, dated January 25, 2021; |
• | by SeaStar Medical or LMAO if the Closing is permanently enjoined or prevented by the terms of a final, non-appealable order, judgment, injunction, decree, writ, stipulation, determination or award, in each case, entered by or with any governmental authority, or a statute, rule, or regulation; |
• | By SeaStar Medical or LMAO if the approval of the stockholders of LMAO is not obtained at the Special Meeting and vote of LMAO stockholders, subject to any adjournment, postponement, or recess of the meeting; |
• | by SeaStar Medical or LMAO if the other party has breached any of its representations, warranties, covenants or agreements set forth in the Merger Agreement such that the conditions to the Closing would not to be satisfied at the Closing (a “Terminating Breach”), except that, if such Terminating Breach is curable through the exercise of the other party’s commercially reasonable efforts, then, for a period of 30 days after the other party receives written notice from such party of such breach (the “Cure Period”), such termination will not be effective, and such termination will only become effective if the Terminating Breach is not cured within the Cure Period, provided that this termination right will not be available if such party’s failure to fulfill any obligations under the Merger Agreement has been the proximate cause of the failure of the Closing to occur; |
• | by LMAO if SeaStar Medical and each of the Company Requisite Stockholders have not executed and delivered to LMAO the SeaStar Medical stockholder approval and the Support Agreements within three (3) business days after the execution and delivery of the Merger Agreement; |
• | by SeaStar Medical in the event that the LMAO Board changes its recommendation that LMAO stockholders vote in favor of the Business Combination; or |
• | by SeaStar Medical, prior to LMAO obtaining the approval of the stockholders of LMAO, if the LMAO Board fails to include its recommendation that LMAO stockholders vote in favor of the Business Combination in the proxy statement contained in the registration statement distributed to LMAO stockholders. |
• | Met weekly to review referrals of potential acquisition targets and eliminated targets with obvious obstacles precluding a business combination resulting in a list of more than 150 potential acquisition targets in a variety of industries, including financial services, financial technology, electric vehicles, health care, medical device, bio-technology, asset management, real estate services, insurance, aviation, cybersecurity, space technology, electronic gaming, energy, shipping, banking, and manufacturing; |
• | Communicated an interest to discuss a business acquisition with all 150 potential acquisition targets, approximately 117 of whom were willing to enter into preliminary discussions in the period from January 28, 2021 through April 22, 2022; |
• | Entered into non-disclosure agreements with approximately 31 target companies after preliminary discussions and review of publicly available information from the period February 1, 2021 to March 2, 2022; |
• | Had in person, telephonic or email discussions with all of those target companies under NDA, each of which were actively pursued (including SeaStar Medical) by engaging in significant due diligence and detailed discussions directly with senior executives and/or stockholders; |
• | Submitted indications of interest or intent to ten acquisition candidates, nine of which (other than SeaStar Medical) were not introduced by Maxim and were not clients of Maxim; and |
• | Discussed various targets at LMAO’s regularly scheduled board meetings. |
• | Public research on the medical device industry and its prospects in review of SeaStar Medical’s historical financial performance and forecast; |
• | Conference call meetings with SeaStar Medical’s management and representatives regarding operations, company services, technology, intellectual property, major suppliers, partners and customers, and growth prospects, both organic and through possible acquisitions, among other customary due diligence matters; |
• | Review of SeaStar Medical’s potential customer base and sales pipeline, including existing material contracts, near-term prospects and potential for further expansion; |
• | Review of competitive landscape and SeaStar Medical’s potential for achieving further market penetration; and |
• | Review of certain other legal, regulatory, intellectual property and financial due diligence. |
• | Unique and Highly Disruptive Business Model |
• | Attractive Opportunity for Growth out-licensing activities and scaling production with manufacturing partners. |
• | Strong Institutional Backing |
• | Experienced Management Team |
• | Benefits Not Achieved |
• | Liquidation of LMAO |
• | Stockholder Vote |
• | Lack of Third Party Fairness Opinion |
• | Closing Conditions |
• | Litigation |
• | Fees and Expenses |
• | Not in Initial Target Industry |
• | Other Risks Risk Factors |
(US$ in millions) | ||||||||||||||||||||||||||||
Revenue (1) |
EBITDA (1) |
|||||||||||||||||||||||||||
Company |
Last Twelve Months |
2024E |
2025E |
Last Twelve Months |
2024E |
2025E |
Enterprise Value (2) |
|||||||||||||||||||||
Small Cap |
||||||||||||||||||||||||||||
CorMedix Inc. |
$ | 0 | $ | 47 | $ | 110 | $ | (29 | ) | $ | (6 | ) | $ | 49 | $ | 127 | ||||||||||||
Cytosorbents Corporation |
43 | 89 | 108 | (22 | ) | 17 | 31 | 125 | ||||||||||||||||||||
Spectral Medical Inc. |
2 | 73 | 198 | (7 | ) | 15 | 67 | 73 | ||||||||||||||||||||
Median |
$ |
2 |
$ |
73 |
$ |
110 |
$ |
(22 |
) |
$ |
15 |
$ |
49 |
$ |
125 |
|||||||||||||
Mean |
22 |
81 |
153 |
(14 |
) |
16 |
49 |
99 |
||||||||||||||||||||
Large Cap |
||||||||||||||||||||||||||||
Johnson & Johnson |
$ | 94,880 | $ | 104,047 | $ | 108,347 | $ | 32,371 | $ | 38,190 | $ | 41,725 | $ | 473,068 | ||||||||||||||
Medtronic plc |
31,785 | 35,122 | 37,373 | 9,609 | 11,047 | 11,427 | 160,296 | |||||||||||||||||||||
Stryker Corporation |
17,108 | 20,971 | 22,467 | 4,645 | 6,110 | 6,745 | 108,726 | |||||||||||||||||||||
Boston Scientific Corporation |
11,888 | 14,819 | 15,788 | 3,102 | 4,535 | 3,649 | 70,853 | |||||||||||||||||||||
Baxter International Inc. |
12,784 | 17,415 | 18,319 | 2,981 | 4,343 | 4,680 | 53,867 | |||||||||||||||||||||
Fresenius Medical Care AG & Co. |
19,018 | 23,150 | 24,484 | 2,885 | 4,964 | 5,373 | 33,816 | |||||||||||||||||||||
DaVita Inc. |
11,619 | 13,111 | 13,847 | 2,451 | 2,972 | 2,972 | 24,802 | |||||||||||||||||||||
Smith & Nephew plc |
5,212 | 5,939 | 6,257 | 1,178 | 1,651 | 1,743 | 15,566 | |||||||||||||||||||||
Median |
$ |
14,946 |
$ |
19,193 |
$ |
20,393 |
$ |
3,042 |
$ |
4,750 |
$ |
5,026 |
$ |
62,360 |
||||||||||||||
Mean |
25,537 |
29,322 |
30,860 |
7,403 |
9,196 |
9,789 |
117,624 |
(1) | Capital IQ consensus estimates for 2024E and 2025E |
(2) | Enterprise value equals all fully diluted shares at the stock price less any option proceeds plus straight debt, minority interest, straight preferred stock, all out-of-the-money convertibles, less investments in unconsolidated affiliates and cash. |
Last Twelve Months |
EV / 2024E |
EV / 2025E |
||||||||||||||||||||||
Company |
Revenue |
EBITDA |
Revenue |
EBITDA |
Revenue |
EBITDA |
||||||||||||||||||
Small Cap |
||||||||||||||||||||||||
CorMedix Inc. |
NM | NM | 2.7 | NM | 1.2 | 2.6 | ||||||||||||||||||
Cytosorbents Corporation |
2.9 | NM | 1.4 | 7.4 | 1.2 | 4.0 | ||||||||||||||||||
Spectral Medical Inc. |
NM | NM | 1.0 | 4.8 | 0.4 | 1.1 | ||||||||||||||||||
Median |
2.9x |
NM |
1.4x |
6.1x |
1.2x |
2.6x |
||||||||||||||||||
Mean |
2.9x |
NM |
1.7x |
6.1x |
0.9x |
2.6x |
||||||||||||||||||
Large Cap |
||||||||||||||||||||||||
Johnson & Johnson |
5.0 | 14.6 | 4.5 | 12.4 | 4.4 | 11.3 | ||||||||||||||||||
Medtronic plc |
5.0 | 16.7 | 4.6 | 14.5 | 4.3 | 14.0 | ||||||||||||||||||
Stryker Corporation |
6.4 | 23.4 | 5.2 | 17.8 | 4.8 | 16.1 | ||||||||||||||||||
Boston Scientific Corporation |
6.0 | 22.8 | 4.8 | 15.6 | 4.5 | 19.4 | ||||||||||||||||||
Baxter International Inc. |
4.2 | 18.1 | 3.1 | 12.4 | 2.9 | 11.5 | ||||||||||||||||||
Fresenius Medical Care AG & Co. |
1.8 | 11.7 | 1.5 | 6.8 | 1.4 | 6.3 | ||||||||||||||||||
DaVita Inc. |
2.1 | 10.1 | 1.9 | 9.1 | 1.8 | 8.3 | ||||||||||||||||||
Smith & Nephew plc |
3.0 | 13.2 | 2.6 | 9.4 | 2.5 | 8.9 | ||||||||||||||||||
Median |
4.6x |
15.6x |
3.8x |
12.4x |
3.6x |
11.4x |
||||||||||||||||||
Mean |
4.2x |
16.3x |
3.5x |
12.3x |
3.3x |
12.0x |
($ in thousands) |
Historical |
Projected |
||||||||||||||||||||||
2020 |
2021 |
2022 |
2023 |
2024 |
2025 |
|||||||||||||||||||
Revenues |
$ | — | $ | — | $ | — | $ | 1,715.0 | $ | 6,247.5 | $ | 47,223.8 | ||||||||||||
Cost of goods sold |
$ | — | $ | — | $ | 164.2 | $ | 598.0 | $ | 5,031.9 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Gross profit |
$ | — | $ | — | $ | — | $ | 1,550.8 | $ | 5,649.5 | $ | 42,191.9 | ||||||||||||
Operating expenses |
6,453.0 | 4,449.0 | 6,601.1 | 15,259.3 | 19,888.0 | 22,214.6 | ||||||||||||||||||
Depreciation and amortization |
1.80 | 1.80 | 1.80 | — | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating expenses |
6,453.00 | 4,449.00 | 6,602.90 | 15,261.10 | 19,889.80 | 22,214.60 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Operating loss (income) |
(6,453.00 | ) | (4,449.00 | ) | (6,602.90 | ) | (13,710.30 | ) | (14,240.30 | ) | 19,977.30 | |||||||||||||
Other income (loss) |
6,494.00 | 64.00 | ||||||||||||||||||||||
Interest expense |
(3,308.00 | ) | (212.00 | ) | — | — | — | — | ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net income (loss) before income taxes |
(3,267.00 | ) | (4,597.00 | ) | (6,602.90 | ) | (13,710.30 | ) | (14,240.30 | ) | 19,977.30 | |||||||||||||
Discontinued operations |
||||||||||||||||||||||||
Income taxes (benefit) |
9.0 | (1.0 | ) | — | — | — | — | |||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Net operating profit after tax |
(3,276.0 | ) | (4,596.0 | ) | (6,602.9 | ) | (13,710.3 | ) | (14,240.3 | ) | 19,977.3 | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Interest expense |
3,308.00 | 212.00 | ||||||||||||||||||||||
Income taxes (benefit) |
9.0 | (1.0 | ) | — | ||||||||||||||||||||
Depreciation and amortization |
— | — | 1.8 | 1.8 | 1.8 | — | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBITDA (1) |
41.0 | (4,385.0 | ) | (6,601.1 | ) | (13,708.5 | ) | (14,238.5 | ) | 19,977.3 | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
EBIT |
(6,453.0 | ) | (4,449.0 | ) | (6,602.9 | ) | (13,710.3 | ) | (14,240.3 | ) | 19,977.3 |
(1) | EBITDA represents net income (loss) before interest expense, provision for income taxes, depreciation and amortization. EBITDA does not represent net income, as that term is defined under GAAP, and should not be considered as an alternative to net income (loss) as an indicator of operating performance. |
• | New SCD product candidate sales to pediatric hospitals based on a HDE approval for pediatric acute kidney injury patients on continuous renal replacement therapy; and |
• | New SCD product candidate sales to adult hospitals based on a PMA approval for adult acute kidney injury patients on continuous renal replacement therapy. |
• | United States Government Agency for Healthcare Research data to estimate the annual number of pediatric acute kidney injury patients on continuous renal replacement therapy; |
• | The number of SCD treatments per patient based on pediatric clinical study length of treatment; and |
• | The price per SCD based on current pricing of extracorporeal therapies used today. |
• | United States Government Agency for Healthcare Research data to estimate the annual number of adult acute kidney injury patients on continuous renal replacement therapy; |
• | The number of SCD treatments per patient based on adult clinical study length of treatment; and |
• | The price per SCD based on current pricing of extracorporeal therapies used today. |
• | Obtaining FDA HDE regulatory approval in the first quarter of 2023; |
• | Enrolling patients for SCD 006 (Adult AKI Pivotal Study) beginning in the first quarter of 2023; and |
• | Obtaining FDA PMA regulatory approval in the first half of 2025. |
• | Market growth assumptions for 2022 through 2025 |
• | Growth in headcount. |
• | Large available market |
• | Expansion into new markets |
• | If an initial business combination is not completed within 18 months from the closing of the IPO (or 21 months from the closing of the IPO, if we extend the period of time to consummate a business |
combination, as described in more detail in this proxy statement/prospectus), LMAO will be required to liquidate. In such event, [2,587,500] shares of Class B Common Stock held by the Sponsor, which were acquired prior to the IPO for an aggregate purchase price of $25,000, will be worthless. If such founder shares were unrestricted and freely tradeable, they would be valued at approximately $26.3 million, based on the closing price of Class A Common Stock on June 30, 2022. |
• | If an initial business combination is not completed within 18 months from the closing of the IPO (or 21 months from the closing of the IPO, if we extend the period of time to consummate a business combination, as described in more detail in this proxy statement/prospectus), the private placement warrants held by the Sponsor will expire worthless. |
• | That the Sponsor and its affiliates can earn a positive rate of return on their investment even if LMAO’s public stockholders experience a negative return following the consummation of the Business Combination. |
• | The exercise of LMAO’s directors’ and officers’ discretion in agreeing to changes or waivers in the terms of the transaction may result in a conflict of interest when determining whether such changes or waivers are appropriate and in our stockholders’ best interests. |
• | If the Business Combination with SeaStar Medical is completed, pursuant to the Director Nomination Agreement, the Sponsor will have a right to designate two (2) directors of the Combined Company board of directors. |
• | In connection with the determination of the valuation of SeaStar Medical, LMAO engaged Skyway to act as financial advisor to LMAO. One of LMAO’s board members, Marty Traber, is the Chairman of Skyway. The Board was made aware of Mr. Traber’s connection to Skyway, discussed that Mr. Traber could derive directly or indirectly a pecuniary benefit given the fee paid by LMAO to Skyway in connection with their services and ultimately the remainder of the Board (other than Mr. Traber) unanimously approved the engagement of Skyway to act as financial advisor to LMAO. |
• | The Sponsor and its affiliates are active investors across a number of different investment platforms and companies, which we and our Sponsor believe improved the volume and quality of opportunities that were available to LMAO. However, it also creates potential conflicts and the need to allocate investment opportunities across multiple entities. In order to provide our Sponsor with the flexibility to evaluate opportunities across these platforms, our Existing Charter provides that LMAO renounce its interest in any business combination opportunity offered to any of our directors or officers unless such opportunity is expressly offered to such person solely in his or her capacity as a director or officer of LMAO, is an opportunity that we are legally permitted to undertake, would be reasonable for LMAO to pursue, and the director or officer is permitted to refer the opportunity to us without violating any legal obligation. This waiver allows our Sponsor and its affiliates to allocate opportunities based on a combination of the objectives and fundraising needs of the target, as well as the investment objectives of the entity. We do not believe that the waiver of the corporate opportunities doctrine otherwise had a material impact on our search for an acquisition target. |
• | In connection with our IPO, Maxim was engaged to act as sole manager to LMAO and is entitled to a deferred underwriting fee of $3,622,500 upon the completion of the Business Combination. In connection with the IPO, Maxim received an underwriting discount of $2,070,000. In the event that the Business Combination is not consummated and LMAO is unable to consummate another business combination within the timeline required by LMAO’s organizational documents, Maxim would not be entitled to receive the deferred portion of the IPO underwriter fees. Pursuant to the terms of the underwriting agreement dated as of January 25, 2021, Maxim agreed to waive its right to redeem 103,500 shares of Class A Common Stock in connection with the Business Combination. |
• | Maxim and LMAO entered into the Maxim-LMAO Engagement Letter on March 4, 2021, pursuant to which Maxim provided LMAO with due diligence and financial advisory services until such engagement was terminated pursuant to a termination letter (the “Termination Letter”) entered into on April 21, 2022 |
(the “Advisory Termination Date”). Prior to the Advisory Termination Date, representatives of Maxim assisted LMAO in efforts to identify and evaluate potential candidates for business combination targets in consideration for advisory fees that Maxim, pursuant to the Termination Letter, agreed to forgo in connection with the Business Combination (provided that if LMAO consummates an initial business combination with a target other than SeaStar Medical that is identified by Maxim during the twelve month period following the Advisory Termination Date, Maxim will be entitled to a portion of the fees otherwise payable to Maxim under the Maxim-LMAO Engagement Letter). Prior to the Advisory Termination Date, a portion of the fees payable under the Maxim-LMAO Engagement Letter would have been due only upon consummation of the Business Combination or another business combination by LMAO within the timeline required by LMAO’s organizational documents. |
• | Maxim and SeaStar Medical entered into an engagement letter dated August 14, 2021 (the “Maxim-SeaStar Engagement Letter”), pursuant to which SeaStar Medical retained Maxim as its exclusive financial advisor and investment banker to provide certain financial advisory and investment banking services, including advisory services in connection with the Business Combination. As consideration for Maxim’s services under the Maxim-SeaStar Engagement Letter, Maxim is entitled to receive, and SeaStar Medical agreed to pay Maxim, (i) a monthly retainer fee of $15,000 per month for the term of the Maxim-SeaStar Engagement Letter (for a minimum of six (6) months) and (ii) a cash fee of 2.0% of the enterprise value of the combined entity following consummation of the Business Combination (to be no less than $500,000), to be paid at the Closing Date (the “Transaction Fee”). As of June 30, 2022, SeaStar Medical has paid a total of $150,000 in monthly retainer fees to Maxim, which will offset the Transaction Fee upon the consummation of the Business Combination. In addition, SeaStar Medical agreed to reimburse Maxim for reasonable expenses incurred in connection with the engagement. The Maxim-SeaStar Engagement Letter contains customary indemnification provisions. Either party may terminate the Maxim-SeaStar Engagement Letter (i) for cause or (ii) at any time after six (6) months with written notice to the other party. |
• | LMAO also engaged Maxim to act as sole placement agent in connection with a potential private investment in public equity in connection with the Business Combination. In consideration for Maxim’s placement agent services, Maxim will receive a fee equal to 7.0% of the gross proceeds received by LMAO in the private investment in public equity (not including proceeds from certain investors, including the Dow Pension Funds) and expense reimbursements in connection therewith. The fees owed to Maxim by LMAO (including Maxim’s deferred underwriting fee) are contingent upon the closing of the Business Combination or the completion of a private investment in public equity. |
• | The Board was fully informed that representatives of Maxim, in Maxim’s capacity as SeaStar Medical’s advisor pursuant to the Maxim-SeaStar Engagement Letter, communicated with LMAO and with other potential merger candidates, on behalf of SeaStar Medical, in relation to a potential transaction involving SeaStar Medical and that the services Maxim provided to SeaStar Medical included assisting with evaluating the commercial terms of the letter of intent submitted by LMAO. SeaStar Medical, in turn, was fully informed that, while representatives of Maxim were providing advisory services to SeaStar Medical, other representatives of Maxim were, prior to termination of the Maxim-LMAO Engagement Letter, providing services to LMAO as their advisor, including the evaluation of potential acquisition opportunities, until the Termination Letter was executed. Maxim did not, in its capacity as advisor to LMAO prior to the Termination Letter, or in its capacity as placement agent for the potential private investment in public equity, provide to the Board any appraisal, valuation report, fairness opinion or other report related to the potential valuation of SeaStar Medical. Prior to determining to proceed with the Business Combination, the Board engaged Skyway for the purpose of reviewing SeaStar Medical’s financial models and projections and to provide valuation and financial advice to the Board. After careful consideration, the Board made its determination that the Business Combination and the transactions contemplated thereby are fair to, and in the best interests of, LMAO and its stockholders. |
• | all SeaStar Medical equity is computed on a fully-diluted basis including all outstanding options, warrants and restricted stock units, and assumes the Convertible Note Conversion and the Preferred Stock Conversion have occurred; |
• | the shares to be issued to SeaStar Medical stockholders (A) does not account for (i) the issuance of any additional shares upon the Closing under the Incentive Plan or ESPP and (ii) the withholding of shares of Common Stock to pay future exercises under the SeaStar Medical warrants and options assumed by LMAO or the settlement of SeaStar Medical restricted stock units assumed by LMAO, and (B) assumes (i) that the Dow Pension Funds only purchase the minimum amount under the Dow Commitment Letter and (ii) that SeaStar Medical neither has any indebtedness to be repaid at Closing nor incurs transaction expenses in excess of the transaction expenses cap; |
• | no exercise of LMAO warrants; and |
• | no issuance of additional securities by LMAO prior to the Closing of the Business Combination. |
No Redemption (1)(2) |
50% Redemption (1)(2) |
Maximum Redemption (1)(2) |
||||||||||
Shares: |
||||||||||||
LMAO Public Stockholders |
10,453,500 | 5,278,500 | 1,033,500 | |||||||||
Sponsor |
2,587,500 | 2,587,500 | 2,587,500 | |||||||||
SeaStar Stockholders (3) |
8,407,774 | 8,407,774 | 8,407,774 | |||||||||
|
|
|
|
|
|
|||||||
21,448,774 |
16,273,774 |
12,028,774 |
||||||||||
Ownership Percentage |
||||||||||||
LMAO Public Stockholders |
48.7 |
% |
32.4 |
% |
8.6 |
% | ||||||
Sponsor |
12.1 |
% |
15.9 |
% |
21.5 |
% | ||||||
SeaStar Stockholders (3) |
39.2 |
% |
51.7 |
% |
69.9 |
% |
(1) | LMAO will pay Maxim an aggregate amount of $3,622,500 as deferred underwriting fees upon the completion of the Business Combination. The following table presents the underwriting fees, which includes an underwriting discount of $2,070,000, as a percentage of the aggregate proceeds from the IPO across various redemption scenarios: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption | ||||||||
Number of Shares Remaining |
Fee as a % of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a % of IPO Proceeds (net of Redemptions) |
Number of Shares Remaining |
Fee as a % of IPO Proceeds (net of Redemptions) | |||||
10,453,500 |
5.5% | 5,278,500 | 11.2% | 1,033,500 | 76.8% |
(2) | Stockholders will experience additional dilution to the extent the Combined Company issues additional shares of Common Stock after the Closing. The table above excludes (a) [16,088,000] shares of Common Stock that will be issuable upon the exercise of the [5,738,000] Private Placement Warrants and [10,350,000] public warrants; (b) [710,295] shares of Common Stock that will be issuable upon the exercise of the [57,942] SeaStar Medical warrants and [271,280] SeaStar Medical options, and settlement of [255,000] SeaStar Medical restricted stock units assumed by LMAO; (c) 1,270,000 shares of Common |
Stock that will initially be available for issuance under the Incentive Plan; and (d) 380,000 shares of Common Stock that will be available for issuance under the ESPP. The following table illustrates the impact on relative ownership levels assuming the issuance of all such shares: |
Assuming No Redemption |
Assuming 50% Redemption |
Assuming Maximum Redemption |
||||||||||||||||||||||
Shares |
Percentage |
Shares |
Percentage |
Shares |
Percentage |
|||||||||||||||||||
Total shares of Common Stock outstanding at Closing |
21,448,774 | 53.76 | % | 16,273,774 | 46.87 | % | 12,028,774 | 39.39 | % | |||||||||||||||
Shares underlying public warrants |
[10,350,000 | ] | 25.94 | % | [10,350,000 | ] | 29.81 | % | [10,350,000 | ] | 33.90 | % | ||||||||||||
Shares underlying Private Placement Warrants |
[5,738,000 | ] | 14.38 | % | [5,738,000 | ] | 16.53 | % | [5,738,000 | ] | 18.79 | % | ||||||||||||
Shares underlying SeaStar Assumed equity awards |
[710,295 | ] | 1.78 | % | [710,295 | ] | 2.05 | % | [710,295 | ] | 2.33 | % | ||||||||||||
Shares initially reserved for issuance under the Incentive Plan (a) |
1,270,000 | 3.18 | % | 1,270,000 | 3.66 | % | 1,270,000 | 4.16 | % | |||||||||||||||
Shares initially reserved for issuance under the ESPP |
380,000 | 0.96 | % | 380,000 | 1.08 | % | 380,000 | 1.24 | % | |||||||||||||||
Shares initially reserved for SeaStar warrants |
57,942 | 0.15 | % | 57,942 | 0.20 | % | 57,942 | 0.19 | % | |||||||||||||||
Total Shares |
[39,955,011 | ] | 100 | % | [34,780,011 | ] | 100 | % | [30,535,011 | ] | 100 | % |
(a) | On the first trading day in January each calendar year, beginning with 2023, the number of shares of Common Stock available for issuance under the Incentive Plan will automatically increase by three percent (3%) of the total number of shares of Common Stock outstanding on the last trading day of December of the immediately preceding calendar year. |
(3) | Includes 500,000 shares issued to the Dow Pension Funds pursuant to the Dow Commitment Letter (assuming a purchase price of $10 per share). |
(i) | hold public shares and |
(ii) | prior to 5.00 p.m., Eastern Time, on [•], 2022, (a) submit a written request to Continental that LMAO redeem your public shares for cash and (b) deliver your public shares to Continental, physically or electronically through DTC. |
• | Changes to Authorized Capital Stock - |
• | Classified Board - two-year terms. The Proposed Charter divides the Board into three classes with staggered three-year terms; |
• | Director Removal - two-thirds (66 and 2/3%) of the outstanding shares of capital stock of the Combined Company, voting together as a single class, entitled to vote at an election of directors; and |
• | Removal of Blank Check Company Provisions - |
• | If shares of Common Stock otherwise issuable under the Incentive Plan are surrendered in payment of the exercise price of an option, then the number of shares of Common Stock available for issuance under the Incentive Plan shall be reduced only by the net number of shares issued by us upon such exercise and not by the gross number of shares as to which such option is exercised. |
• | Upon the exercise of any stock appreciation right under the Incentive Plan, the number of shares of Common Stock available for issuance under the Incentive Plan shall be reduced by the net number of shares as to which such right is exercised, and not by the gross number of shares issued by us upon such exercise. |
• | If shares of Common Stock otherwise issuable under the Incentive Plan are withheld by us in satisfaction of the withholding taxes incurred in connection with the issuance, vesting or exercise of any award or the issuance of Common Stock thereunder, then the number of shares of Common Stock available for issuance under the Incentive Plan shall be reduced by the net number of shares issued, vested or exercised under such award, calculated in each instance after payment of such share withholding. |
• | Upon the exercise of an option through the net exercise procedure under the Incentive Plan or upon the exercise of a stock appreciation right, then for purposes of calculating the number of shares of Common Stock remaining available for exercise under such option or stock appreciation right, the number of such shares shall be reduced by the net number of shares for which the option or stock appreciation right is exercised, and without regard to any cash settlement of a stock appreciation right. |
• | Unvested shares issued under the Incentive Plan and subsequently forfeited or repurchased by us, at a price per share not greater than the original issue price paid per share, pursuant to our repurchase rights under the Incentive Plan shall be available for subsequent issuance under the Incentive Plan. |
• | Shares of Common Stock that have been repurchased by us on the open market using stock option exercise proceeds shall not be available for subsequent issuance under the Incentive Plan. |
• | Tandem stock appreciation rights granted in conjunction with options, which provide the holders with the right to surrender the related option grant for an appreciation distribution from us in an amount |
equal to the excess of (i) the fair market value of the vested shares of Common Stock subject to the surrendered option over (ii) the aggregate exercise price payable for those shares. |
• | Stand-alone stock appreciation rights, which allow the holders to exercise those rights as to a specific number of shares of our Common Stock and receive in exchange an appreciation distribution from us in an amount equal to the excess of (i) the fair market value of the shares of Common Stock as to which those rights are exercised over (ii) the aggregate exercise price in effect for those shares. The exercise price per share may not be less than the fair market value per underlying share of Common Stock on the date the stand-alone stock appreciation right is granted, and the right may not have a term in excess of ten years. |
• | Each outstanding award may be assumed, substituted, replaced with a cash retention program that preserves the intrinsic value of the award and provides for subsequent payout in accordance with the same vesting schedule applicable to the award or otherwise continued in effect by the successor corporation. |
• | To the extent an award is not so assumed, substituted, replaced, or continued, the award will automatically accelerate in full (with vesting of performance-based awards to be determined with reference to actual performance attained as of the change in control or based on target level), unless the acceleration of such award is precluded by other limitations imposed in the applicable award agreement. |
• | The plan administrator has complete discretion to grant one or more awards which will vest in the event the individual’s service with us or the successor entity is terminated within a designated period following a change in control transaction in which those awards are assumed or otherwise continued in effect. |
• | Unless the plan administrator establishes a different definition for one or more awards, a change in control will be deemed to occur for purposes of the Incentive Plan in the event (a) a merger or asset sale or (b) there occurs any transaction pursuant to which any person or group of related persons becomes directly or indirectly the beneficial owner of securities possessing 50% or more of the total combined voting power of our outstanding securities or (c) there is a change in the majority of the Board effected through one or more contested elections for board membership. |
• | Purchase rights may not be granted to any individual who owns stock (including stock purchasable under any outstanding purchase rights) possessing 5% or more of the total combined voting power or value of all classes of stock of the Company or any of its affiliates. |
• | A participant may not be granted rights to purchase more than $25,000 worth of Common Stock (valued at the time each purchase right is granted) for each calendar year in which such purchase rights are outstanding. |
• | The plan administrator will establish the maximum number of shares purchasable by a participant on each purchase date during an offering period. |
• | a limited availability of market quotations for our securities; |
• | reduced liquidity with respect to our securities; |
• | a determination that our shares are a “penny stock,” which will require brokers trading in our securities to adhere to more stringent rules, possibly resulting in a reduced level of trading activity in the secondary trading market for our securities; |
• | a limited amount of news and analyst coverage for the post-transaction company; and |
• | a decreased ability to issue additional securities or obtain additional financing in the future. |
• | banks or other financial institutions, underwriters, or insurance companies; |
• | traders in securities who elect to apply a mark-to-market |
• | real estate investment trusts and regulated investment companies; |
• | tax-exempt organizations, qualified retirement plans, individual retirement accounts, or other tax-deferred accounts; |
• | expatriates or former long-term residents of the United States; |
• | subchapter S corporations, partnerships or other pass-through entities or investors in such entities; |
• | dealers or traders in securities, commodities or currencies; |
• | grantor trusts; |
• | persons subject to the alternative minimum tax; |
• | U.S. persons whose “functional currency” is not the U.S. dollar; |
• | persons who received shares of Common Stock through the issuance of restricted stock under an equity incentive plan or through a tax-qualified retirement plan or otherwise as compensation; |
• | persons who own (directly or through attribution) 5% or more (by vote or value) of the outstanding shares of Common Stock (excluding treasury shares); |
• | holders holding Common Stock as a position in a “straddle,” as part of a “synthetic security” or “hedge,” as part of a “conversion transaction,” or other integrated investment or risk reduction transaction; |
• | controlled foreign corporations, passive foreign investment companies, or foreign corporations with respect to which there are one or more United States shareholders within the meaning of Treasury Regulation Section 1.367(b)-3(b)(1)(ii); or |
• | the Sponsor or its affiliates. |
• | an individual who is a citizen or resident of the United States; |
• | a corporation (or other entity that is classified as a corporation for U.S. federal income tax purposes) that is created or organized in or under the laws of the United States or any State thereof or the District of Columbia; |
• | an estate the income of which is subject to U.S. federal income tax regardless of its source; or |
• | a trust (i) if a court within the United States is able to exercise primary supervision over the administration of the trust and one or more U.S. persons have the authority to control all substantial decisions of the trust, or (ii) that has a valid election in effect under applicable Treasury Regulations to be treated as a U.S. person for U.S. federal income tax purposes. |
• | the gain is effectively connected with a trade or business of the Non-U.S. Holder in the United States (and, if required by an applicable income tax treaty, is attributable to a United States permanent establishment or fixed base of the Non-U.S. Holder); |
• | the Non-U.S. Holder is an individual who is present in the United States for a period or periods aggregating 183 days or more in the taxable year of the disposition, and certain other conditions are met; or |
• | LMAO is or has been a “United States real property holding corporation” for U.S. federal income tax purposes at any time during the shorter of the five-year period ending on the date of disposition or the Non-U.S. Holder’s holding period for such Common Stock redeemed, and either (A) shares of Common Stock are not considered to be regularly traded on an established securities market or (B) such Non-U.S. Holder has owned or is deemed to have owned, at any time during the shorter of the five-year period preceding such disposition and such Non-U.S. Holder’s holding period more than 5% of the outstanding shares of Common Stock. There can be no assurance that shares of Common Stock will be treated as regularly traded on an established securities market for this purpose. |
• | Execute on the clinical plan through key relationships: |
• | Differentiation through medical education: |
• | Business development and out-licensing activities: |
standard of care and treatment infrastructure, and highlight the differentiating factors of our SCD product candidates that can provide a cost effective solution. |
• | Scaling production with manufacturing partners: |
Clinical Stage Product Candidates | ||
Indication |
Current Status and Timeline | |
Pediatric Acute Kidney Injury on CRRT | • Submitted a HDE application with the FDA in June 2022 • Expected completion of substantive review by the FDA of HDE application by the first quarter of 2023 | |
Adult Acute Kidney Injury on CRRT | • Breakthrough Device Designation granted by the FDA in April 2022 • Finalization of design and preparatory work of a pivotal trial and expect to submit IDE protocol to the FDA in the third quarter of 2022 • Expected enrollment in the first quarter of 2023 • Expected to receive interim results in late 2023 and final results in 2024 • Expected submission of a PMA to the FDA in the second half of 2024 | |
Additional Clinical Studies under IDEs | ||
Indication |
Current Status | |
Cardiorental Syndrome in Congested Heart Failure | • Exploratory clinical research at UOM to define patient population for potential treatment of SCD product candidates • Any future studies will be based upon initial clinical data collected in these studies | |
Myocardial Stunning in End Stage Renal Disease | ||
Hepatorenal Syndrome |
Granted Patents |
Pending Applications |
|||||||||||||||
US |
Foreign |
US |
Foreign |
|||||||||||||
SCD Technology (Patent Families 1-5) |
12 | 14 | 3 | 14 | ||||||||||||
Other Technology (Patent Families 6-10) |
5 | 6 | 2 | 1 | (PCT) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
17 | 20 | 5 | 15 | ||||||||||||
|
|
|
|
|
|
|
|
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2031 | Methods for processing leukocytes and methods for treating subjects having inflammatory conditions using such methods | |||
United States | Granted | 2029 | Methods for treating subjects undergoing a cardiopulmonary bypass | |||
United States | Granted | 2029 | Methods for treating subjects with end-stage renal disease | |||
United States | Granted | 2029 | Methods for treating subjects with acute renal failure | |||
United States | Granted | 2029 | Methods for treating subject with sepsis | |||
United States | Granted | 2031 | A device that processes activated leukocytes and platelets | |||
United States | Granted | 2029 | Methods for treating acute lung injury and acute respiratory distress syndrome | |||
United States | Granted | 2029 | Systems for treating activated platelets | |||
United States | Granted | 2028 | Systems for treating activated leukocytes | |||
United States | Pending | 2028* | Systems for treating leukocytes and platelets and methods for treating subject having inflammatory conditions by processing leukocytes or platelets | |||
Canada | Granted | 2028 | Systems and methods for processing leukocytes and platelets and systems for treating inflammatory conditions | |||
Canada | Granted | 2028 | A device for processing activated leukocytes and platelets |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
Japan | Granted | 2028 | A device and methods for treating leukocytes | |||
Japan | Granted | 2028 | A device for processing activated leukocytes | |||
New Zealand | Granted | 2028 | Systems and methods for processing leukocytes and platelets and for treating inflammatory conditions | |||
Europe | Pending | 2028* | A device for use in treating an inflammatory condition | |||
Europe | Pending | 2028* | A device that processes platelets or leukocytes | |||
Hong Kong | Pending | 2028* | A device for treating an inflammatory condition | |||
Hong Kong | Pending | 2028* | A device that processes platelets or leukocytes |
* | Expiration date if application is granted. |
† |
This patent family was developed with U.S. federal government funding and is subject to obligations under the Bayh-Dole Act. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2031 | Cartridge for treating leukocytes or platelets | |||
United States | Pending | 2031* | Methods for processing leukocytes or platelets and for treating a subject with an inflammatory condition | |||
Australia | Granted | 2031 | Cartridge for treating leukocytes or platelets and methods for treating a subject with an inflammatory condition |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
France, Germany, Italy, Spain, & UK |
Granted | 2031 | Cartridge for sequestering leukocytes or platelets | |||
Canada | Pending | 2031* | Cartridge for processing leukocytes or platelets | |||
Japan | Pending | 2031* | Cartridge for treating leukocytes or platelets | |||
Japan | Pending | 2031* | Cartridge for treating leukocytes or platelets |
* | Expiration date if application is granted. |
† |
This patent family was developed with U.S. federal government funding and is subject to obligations under the Bayh-Dole Act. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2032 | Methods for treating chronic heart failure | |||
Japan | Granted | 2032 | Device for use in treating chronic heart failure | |||
Canada | Pending | 2032* | Device for use in treating chronic heart failure | |||
Europe | Pending | 2032* | Device for use in treating chronic heart failure | |||
Japan | Pending | 2032* | Device for use in treating chronic heart failure |
* | Expiration date if application is granted. |
† |
This patent family was developed with |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2032 | Methods for increasing myocardial function in subject with acute decompensated heart failure | |||
United States | Pending | 2032* | Methods for increasing myocardial function in subject with chronic heart failure | |||
Australia | Granted | 2032 | Methods for increasing myocardial function in a subject with acute chronic heart failure or chronic heart failure | |||
Australia | Granted | 2032 | Methods, cartridges, and systems for improving myocardial function and treating inflammation associated with acute decompensated heart failure and chronic heart failure |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
Canada | Pending | 2032* | Devices for use in treating subjects with chronic heart failure and acute decompensated heart failure | |||
Europe | Pending | 2032* | Devices for use in treating subjects with chronic heart failure or acute decompensated heart failure | |||
Japan | Pending | 2032* | Devices for use increasing myocardial function in subjects with chronic heart failure or acute decompensated heart failure | |||
Japan | Pending | 2032* | Devices for use in increasing myocardial function in subjects with chronic heart failure or acute decompensated heart failure |
* | Expiration date if application is granted. |
† |
This patent family was developed with |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2025 | Design patent directed to a medical device connector | |||
United States | Granted | 2024 | Design patent directed to a medical device connector | |||
United States | Granted | 2025 | Design patent directed to a medical device connector | |||
United Kingdom | Granted | 2034 | Design patent directed to a medical device connector | |||
United Kingdom | Granted | 2034 | Design patent directed to a medical device connector | |||
United Kingdom | Granted | 2034 | Design patent directed to a medical device connector | |||
European Community | Granted | 2034 | Design patent directed to a medical device connector | |||
European Community | Granted | 2034 | Design patent directed to a medical device connector | |||
European Community | Granted | 2034 | Design patent directed to a medical device connector |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Pending | 2040* | Devices and methods for preparing a donor organ for transplantation |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
US | Pending | 2040* | Device and methods for reducing rejection of a transplanted organ in a recipient |
* | Expiration date if application is granted. |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
PCT | Pending | 2041* | Devices and methods for treating cytokine release syndrome and tumor lysis syndrome |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2027 | Extracorporeal cell-based therapeutic device and delivery system for renal cells |
Jurisdiction |
Status |
Expiration Date |
Subject Matter | |||
United States | Granted | 2031 | Methods for enhanced propagation of renal cells |
• | occurs in pediatric patients or in a pediatric subpopulation, and such device is labeled for use in pediatric patients or in a pediatric subpopulation in which the disease or condition occurs, or |
• | occurs in adult patients and does not occur in pediatric patients or occurs in pediatric patients in such numbers that the development of the device for such patients is impossible, highly impracticable, or unsafe. |
• | establishment registration and device listing; |
• | the QSR, which requires manufacturers, including third-party manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process; |
• | labeling regulations and the FDA prohibitions against the promotion of products for uncleared, unapproved or “off-label” uses and other requirements related to promotional activities; |
• | medical device reporting regulations, which require that manufactures report to the FDA if their device may have caused or contributed to a death or serious injury, or if their device malfunctioned and the device or a similar device marketed by the manufacturer would be likely to cause or contribute to a death or serious injury if the malfunction were to recur; and |
• | corrections and removal reporting regulations, which require that manufactures report to the FDA field corrections or removals if undertaken to reduce a risk to health posed by a device or to remedy a violation of the FDCA that may present a risk to health. |
• | warning or untitled letters, fines, injunctions, consent decrees and civil penalties; |
• | customer notifications, voluntary or mandatory recall or seizure of our products; |
• | operating restrictions, partial suspension or total shutdown of production; |
• | delay in processing submissions or applications for new products or modifications to existing products; |
• | withdrawing approvals that have already been granted; and |
• | criminal prosecution. |
Three Months Ended March 31, |
Change |
|||||||||||||||
($ in thousands) |
2022 |
2021 |
$ |
% |
||||||||||||
Revenue |
$ | — | $ | — | $ | — | — | |||||||||
Operating expenses: |
||||||||||||||||
Research and development |
355 | 746 | (391 | ) | (52 | )% | ||||||||||
General and administrative |
457 | 316 | 141 | 45 | % | |||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses |
812 | 1,062 | (250 | ) | (24 | )% | ||||||||||
|
|
|
|
|
|
|||||||||||
Loss from operations |
(812 |
) |
(1,062 |
) |
(250 |
) |
(24 | )% | ||||||||
|
|
|
|
|
|
|||||||||||
Total other income (expense) |
(192 | ) | (2 | ) | (190 | ) | 95 | % | ||||||||
|
|
|
|
|
|
|||||||||||
Loss before income tax expense |
(1,004 |
) |
(1,064 |
) |
60 |
(6 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Income tax expense (benefit) |
— | 1 | 1 | (100 | )% | |||||||||||
|
|
|
|
|
|
|||||||||||
Net loss |
$ |
(1,004 |
) |
$ |
(1,065 |
) |
$ |
61 |
(6 | )% | ||||||
|
|
|
|
|
|
Three Months Ended March 31, |
Change |
|||||||||||||||
($ in thousands) |
2022 |
2021 |
$ |
% |
||||||||||||
Clinical trials |
$ | 4 | $ | 340 | $ | (336 | ) | (99 | )% | |||||||
External services |
270 | 298 | (28 | ) | (9 | )% | ||||||||||
Payroll and personnel expenses |
43 | 81 | (38 | ) | (47 | )% | ||||||||||
Other research and development expenses |
38 | 27 | 11 | 41 | % | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 355 | $ | 746 | $ | (391 | ) | (52 | )% | ||||||||
|
|
|
|
|
|
|
|
Year Ended December 31, |
Change |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
$ |
% |
||||||||||||
Revenue |
$ | — | $ | — | $ | — | — | |||||||||
Operating expenses: |
||||||||||||||||
Research and development |
2,766 | 4,025 | (1,259 | ) | (31 | )% | ||||||||||
General and administrative |
1,683 | 2,428 | (745 | ) | (31 | )% | ||||||||||
|
|
|
|
|
|
|||||||||||
Total operating expenses |
4,449 | 6,453 | (2,004 | ) | (31 | )% | ||||||||||
|
|
|
|
|
|
|||||||||||
Loss from operations |
(4,449 |
) |
(6,453 |
) |
(2,004 |
) |
(31 | )% | ||||||||
|
|
|
|
|
|
|||||||||||
Total other income (expense) |
(148 | ) | 3,186 | (3,334 | ) | (105 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Loss before income tax expense |
(4,597 |
) |
(3,267 |
) |
(1,330 |
) |
41 | % | ||||||||
|
|
|
|
|
|
|||||||||||
Income tax expense (benefit) |
(1 | ) | 9 | (10 | ) | (111 | )% | |||||||||
|
|
|
|
|
|
|||||||||||
Net loss |
$ |
(4,596 |
) |
$ |
(3,276 |
) |
$ |
(1,320 |
) |
40 | % | |||||
|
|
|
|
|
|
|
Change |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
$ |
% |
||||||||||||
Clinical trials |
$ | 989 | $ | 1,703 | $ | (714 | ) | (42 | )% | |||||||
External services |
1,278 | 1,384 | (106 | ) | (8 | )% | ||||||||||
Payroll and personnel expenses |
353 | 291 | 62 | 21 | % | |||||||||||
Other research and development expenses |
146 | 647 | (501 | ) | (77 | )% | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | 2,766 | $ | 4,025 | $ | (1,259 | ) | (31 | )% | ||||||||
|
|
|
|
|
|
|
|
• | our ability to successfully complete the Business Combination; |
• | 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 Exchange Act and rules implemented by the SEC and Nasdaq. |
Year Ended December 31, |
Three Months Ended March 31, |
|||||||||||||||
($ in thousands) |
2021 |
2020 |
2022 |
2021 |
||||||||||||
Statement of cash flows data: |
||||||||||||||||
Total cash (used in)/provided by: |
||||||||||||||||
Operating activities |
$ | (5,114 | ) | $ | (5,572 | ) | $ | (587 | ) | $ | (1,700 | ) | ||||
Investing activities |
— | — | — | — | ||||||||||||
Financing activities |
2,817 | 4,892 | 284 | (1 | ) | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
$ | (2,297 | ) | $ | (680 | ) | $ | (303 | ) | $ | (1,701 | ) | |||||
|
|
|
|
|
|
|
|
($ in thousands) |
Total |
Less than 1 year |
1 – 3 years |
3 – 5 years |
More than 5 years |
|||||||||||||||
Contractual obligations: |
||||||||||||||||||||
Convertible notes |
$ | 3,214 | $ | 2,700 | $ | 514 | $ | — | $ | — | ||||||||||
SBA loan payable |
63 | 1 | 2 | 2 | 59 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Total contractual obligations |
$ |
3,277 |
$ |
2,701 |
$ |
516 |
$ |
2 |
$ |
59 |
||||||||||
|
|
|
|
|
|
|
|
|
|
• | the accompanying notes to the unaudited pro forma condensed combined financial information; |
• | the historical financial statements of LMAO as of and for the three months ended March 31, 2022 and for the year ended December 31, 2021, and the related notes, included elsewhere in this proxy statement/prospectus; |
• | the historical financial statements of SeaStar Medical as of and for the three months ended March 31, 2022 and for the year ended December 31, 2021, and the related notes, included elsewhere in this proxy statement/prospectus; |
• | other information relating to LMAO and SeaStar Medical included in this proxy statement/prospectus, including the Merger Agreement and the description of certain terms thereof set forth under “ Proposal No. 1 — The Business Combination Proposal — The Merger Agreement Management’s Discussion and Analysis of Financial Condition and Results of Operations of LMAO Management’s Discussion and Analysis of Financial Condition and Results of Operations of SeaStar Medical |
• | Scenario 1 — No redemption |
• | Scenario 2 — Maximum redemptions of Class A Common Stock |
exercise their redemption rights upon consummation of the Business Combination at a redemption price of approximately $10.20 per share, which is the maximum amount of redemptions that could occur and still ensure that LMAO meets its requirement to maintain net tangible assets of at least $5,000,001. The maximum redemption scenario assumes that both SeaStar Medical and LMAO have waived their rights to terminate the Business Combination Agreement, including that LMAO have at least $15 million in available cash after the closing of the Business Combination. Pursuant to the terms of the underwriting agreement dated as of January 25, 2021, Maxim agreed to waive its right to redeem 103,500 shares of Class A Common Stock in connection with the Business Combination. |
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Assets |
||||||||||||||||||||||||||||||||
Current Assets |
||||||||||||||||||||||||||||||||
Cash |
$ | 88 | $ | 207 | 105,584 | A | $ | 100,173 | (96,084 | ) | $ | 4,089 | ||||||||||||||||||||
(10,706 | ) | C | ||||||||||||||||||||||||||||||
5,000 | J | |||||||||||||||||||||||||||||||
Other receivables |
— | — | — | |||||||||||||||||||||||||||||
Inventory |
— | — | — | |||||||||||||||||||||||||||||
Prepaid expenses |
289 | 38 | 2,303 | C | 2,630 | 2,630 | ||||||||||||||||||||||||||
Cash and marketable securities held in trust |
105,584 | — | (105,584 | ) | A | — | — | |||||||||||||||||||||||||
Other assets |
180 | 350 | C | 530 | 530 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total current assets |
105,961 | 425 | 103,333 | 7,249 | ||||||||||||||||||||||||||||
Other long-term assets |
— | 2 | 2 | 2 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Long Term Assets |
— | 2 | 2 | 2 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Assets |
$ | 105,961 | $ | 427 | $ | 103,335 | $ | 7,251 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Liabilities |
||||||||||||||||||||||||||||||||
Short Term Liabilities |
||||||||||||||||||||||||||||||||
Accounts payable and accrued expenses |
309 | 641 | 950 | 950 | ||||||||||||||||||||||||||||
Current portion of notes payable - government loans |
— | 26 | 26 | 26 | ||||||||||||||||||||||||||||
Convertible notes, less discount, related party |
— | 2,459 | (2,459 | ) | G | — | — | |||||||||||||||||||||||||
Notes and advances payable - related parties |
310 | — | (310 | ) | C | |||||||||||||||||||||||||||
Deferred underwriting Commissions in connection with the initial public offering |
3,623 | — | (3,623 | ) | B | — | — | |||||||||||||||||||||||||
Warrant liability |
3,329 | — | (2,141 | ) | H | 1,188 | 1,188 | |||||||||||||||||||||||||
Derivative liability |
— | 543 | (543 | ) | G | — | — | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Short Term Liabilities |
7,571 | 3,669 | 2,164 | 2,164 | ||||||||||||||||||||||||||||
Long Term Liabilities |
||||||||||||||||||||||||||||||||
Notes payable - government loans, net of current portion |
63 | 63 | 63 |
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Convertible notes, less discount, related party, net of current portion |
453 | (453 | ) | G | — | — | ||||||||||||||||||||||||||
Derivative liability |
58 | (58 | ) | G | — | — | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Long Term Liabilities |
— | 574 | 63 | 63 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Liabilities |
7,571 | 4,243 | 2,227 | 2,227 | ||||||||||||||||||||||||||||
Class A Common Stock subject to possible redemption 10,350,000 shares at redemption value of $10.20 per share |
105,570 | (105,570 | ) | E | — | — | ||||||||||||||||||||||||||
Convertible Preferred Stock |
— | 73,349 | (73,349 | ) | F | — | — | — | ||||||||||||||||||||||||
Stockholders’ Equity (Deficit) |
||||||||||||||||||||||||||||||||
Common Stock |
— | — | — | D | 2 | (1 | ) | I | 1 | |||||||||||||||||||||||
1 | E | |||||||||||||||||||||||||||||||
1 | F | |||||||||||||||||||||||||||||||
Additional Paid in Capital |
— | 151 | 178,422 | (96,083 | ) | I | 82,339 | |||||||||||||||||||||||||
(7,743 | ) | C | ||||||||||||||||||||||||||||||
105,569 | E | |||||||||||||||||||||||||||||||
(7,180 | ) | F | ||||||||||||||||||||||||||||||
73,348 | F | |||||||||||||||||||||||||||||||
3,513 | G | |||||||||||||||||||||||||||||||
2,141 | H | |||||||||||||||||||||||||||||||
5,000 | J | |||||||||||||||||||||||||||||||
3,623 | B | |||||||||||||||||||||||||||||||
Accumulated Deficit |
(7,180 | ) | (77,316 | ) | 7,180 | F | (77,316 | ) | (77,316 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Stockholder’s Equity (Deficit) |
(7,180 | ) | (77,165 | ) | 101,108 | 5,024 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Liabilities and Stockholders’ Equity (Deficit) |
105,961 | $ | 427 | $ | 103,335 | $ | 7,251 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
($ in thousands) |
||||||||||||||||||||||||||||||||
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Operating Expenses |
||||||||||||||||||||||||||||||||
Research and Development |
$ | — | $ | 355 | $ | 355 | $ | 355 | ||||||||||||||||||||||||
General and Administrative |
219 | 457 | 676 | 676 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Operating Expenses |
219 | 812 | 1,031 | 1,031 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loss from Operations |
(219 | ) | (812 | ) | (1,031 | ) | (1,031 | ) | ||||||||||||||||||||||||
Change in fair value of derivative liability |
(23 | ) | (23 | ) | (23 | ) | ||||||||||||||||||||||||||
Interest Expense |
(169 | ) | (169 | ) | (169 | ) | ||||||||||||||||||||||||||
Gain on warrant liability revaluation |
3,602 | — | 3,602 | 3,602 | ||||||||||||||||||||||||||||
Investment Income Earned on Marketable Securities Held in Trust Account |
3 | — | (3 | ) | aa | — | — | |||||||||||||||||||||||||
Other income |
— | — | ||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Other Income (Loss) |
3,605 | (192 | ) | (3 | ) | 3,410 | 3,410 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before taxes |
3,386 | (1,004 | ) | (3 | ) | 2,379 | 2,379 | |||||||||||||||||||||||||
Taxes |
||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net Income (loss) |
$ | 3,386 | $ | (1,004 | ) | $ | (3 | ) | $ | 2,379 | $ | 2,379 | ||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income per share: |
||||||||||||||||||||||||||||||||
Basic weighted average shares outstanding of redeemable Class A Common Stock |
10,453,500 | — | 21,448,774 | bb | 12,028,774 | |||||||||||||||||||||||||||
Diluted weighted average shares outstanding of redeemable Class A Common Stock |
10,453,500 | — | 21,448,774 | bb | 12,028,774 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basis net income per share, redeemable Class A Common Stock |
$ | 0.26 | $ | — | $ | 0.11 | $ | 0.20 | ||||||||||||||||||||||||
Diluted net income per share, redeemable Class A Common Stock |
$ | 0.26 | $ | — | $ | 0.11 | $ | 0.20 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding of non-redeemable Class B Common Stock |
2,587,500 | — | ||||||||||||||||||||||||||||||
Basic and diluted net income per share, non-redeemable Class B Common Stock |
$ | 0.26 | $ | — | ||||||||||||||||||||||||||||
|
|
|
|
|||||||||||||||||||||||||||||
Weighted-average number of common shares used in computing net loss per share attributable to common stockholders - basic and diluted |
— | — | ||||||||||||||||||||||||||||||
Net loss per share attributable to common stockholders - basic and diluted |
— | — | ||||||||||||||||||||||||||||||
|
|
|
|
($ in thousands) |
||||||||||||||||||||||||||||||||
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Operating Expenses |
||||||||||||||||||||||||||||||||
Research and Development |
$ | — | $ | 2,766 | $ | 2,766 | $ | 2,766 | ||||||||||||||||||||||||
General and Administrative |
1,122 | 1,683 | 2,805 | 2,805 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Total Operating Expenses |
1,122 | 4,449 | $ | 5,571 | $ | 5,571 | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Loss from Operations |
(1,122 | ) | (4,449 | ) | (5,571 | ) | (5,571 | ) | ||||||||||||||||||||||||
Change in fair value of derivative liability |
(27 | ) | (27 | ) | (27 | ) | ||||||||||||||||||||||||||
Interest Expense |
(212 | ) | (212 | ) | (212 | ) | ||||||||||||||||||||||||||
Gain on warrant liability revaluation |
1,186 | 1,186 | 1,186 | |||||||||||||||||||||||||||||
Investment Income Earned on Marketable Securities Held in Trust Account |
12 | $ | (12 | ) | aa | — | — | |||||||||||||||||||||||||
Other income |
— | 91 | 91 | 91 | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Total Other Income (Loss) |
1,198 | (148 | ) | (12 | ) | 1,038 | 1,038 | |||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income (loss) before taxes |
76 | (4,597 | ) | (12 | ) | (4,533 | ) | (4,533 | ) | |||||||||||||||||||||||
Taxes |
(1 | ) | (1 | ) | (1 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Net Income (loss) |
$ | 76 | $ | (4,596 | ) | $ | (12 | ) | $ | (4,532 | ) | $ | (4,532 | ) | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||
Income per share: |
||||||||||||||||||||||||||||||||
Basic weighted average share outstanding of redeemable Class A Common Stock |
9,651,587 | — | 21,448,774 | bb | 12,178,774 | |||||||||||||||||||||||||||
Diluted weighted average share outstanding of redeemable Class A Common Stock |
9,651,587 | — | 21,448,774 | bb | 12,178,774 | |||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basic net income per share, redeemable Class A Common Stock |
$ | 0.02 | $ | — | $ | (0.21 | ) | $ | (0.37 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Diluted net income per share, redeemable Class A Common Stock |
$ | 0.02 | $ | — | $ | (0.21 | ) | $ | (0.37 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
No Redemption |
Assuming Maximum Redemption |
|||||||||||||||||||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
Pro Forma Adjustments |
Notes to Pro Forma Adjustments |
Pro Forma Combined |
|||||||||||||||||||||||||
Basic and diluted weighted average shares outstanding of non-redeemable Class B Common Stock |
2,554,418 | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Basic and diluted net income per share, non-redeemable Class B Common Stock |
$ | 0.02 | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Weighted-average number of common shares used in computing net loss per share attributable to common stockholders - basic and diluted |
— | — | — | — | ||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Net loss per share attributable to common stockholders - basic and diluted |
$ | — | $ | — | $ | — | $ | — | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
1. |
Description of the Business Combination |
2. |
Basis of Presentation |
• | The pre-Business Combination stockholders of SeaStar Medical are generally expected to hold majority of voting rights in the Combined Company; |
• | The pre-Business Combination stockholders of SeaStar Medical have the right to appoint the majority of directors to the Combined Company’s Board of Directors; |
• | Senior management of SeaStar Medical comprise the senior management of the Combined Company; and |
• | The operations of SeaStar Medical comprise the only ongoing operations of the Combined Company. |
3. |
Transaction Accounting Adjustments |
A | Cash released from Trust Account |
B | Deferred underwriter fee |
C | Transaction costs |
D | Automatic conversion of Class B Common Stock into Class A Common Stock |
E | Reclassification of Class A Common Stock subject to possible redemption — assuming no redemptions |
F | Conversion of SeaStar Medical’s convertible preferred stock (Series A and Series B) and common stock into Common Stock |
Number of shares to be issued in connection with the Business Combination after giving effect to the Preferred Stock Conversion and Convertible Note Conversion: |
Number of shares of SeaStar Medical Common Stock on a fully-diluted basis | 7,088,417 | |
Total SeaStar Medical Common Stock before exchange | 7,088,417 | |
x: Exchange Ratio | 1.216 | |
Total number of shares of Common Stock held by SeaStar Medical stockholders (1) |
7,907,774 |
(1) | The issuance of 7,907,744 shares of Common Stock does not take into account that a portion of such number of shares of Common Stock will be withheld at closing of the Business Combination for future issuance in connection with the exercise of the SeaStar Medical warrants and the SeaStar Medical options assumed by LMAO and the settlement of the SeaStar Medical restricted stock units assumed by LMAO. |
G | Conversion of related party note payable |
H | Reclassification of LMAO Public Warrants from liability to equity |
I | Reclassification of Class A Common Stock subject to possible redemption — assuming a maximum number of redemptions |
J | Commitment from DOW Pension Funds - $5.0 million |
aa | Represents elimination of interest earned on cash and marketable securities held in the trust account |
bb | Represents net loss attributable to Class A common stockholders |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||
$ | 2,379 | $ | 2,379 | |||||
Weighted average Class A Common Stock outstanding, basic |
21,448,774 | 12,028,774 | ||||||
Weighted average Class A Common Stock outstanding, diluted |
21,448,774 | 12,028,774 | ||||||
Net loss per share of Class A Common Stock, basic |
$ | 0.11 | $ | 0.20 | ||||
Net loss per share of Class A Common Stock, diluted |
$ | 0.11 | $ | 0.20 |
aa | Represents elimination of interest earned on cash and marketable securities held in the trust account |
bb | Represents net loss attributable to Class A common stockholders |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||
$ | (4,532 | ) | $ | (4,532 | ) | |||
Weighted average Class A Common Stock outstanding, basic |
21,448,774 | 12,178,774 | ||||||
Weighted average Class A Common Stock outstanding, diluted |
21,448,774 | 12,178,774 | ||||||
Net loss per share of Class A Common Stock, basic |
$ | (0.21 | ) | $ | (0.37 | ) | ||
Net loss per share of Class A Common Stock, diluted |
$ | (0.21 | ) | $ | (0.37 | ) |
• | historical per share information of LMAO for the three months ended March 31, 2022 and year ended December 31, 2021; |
• | historical per share information of SeaStar Medical for the three months ended March 31, 2022 and the year ended December 31, 2021; and |
• | unaudited pro forma per share information of the Combined Company for three months ended March 31, 2022 and the year ended December 31, 2021 after giving effect to the Business Combination, assuming two redemption scenarios as follows: |
• | Scenario 1 No redemption |
• | Scenario 2 Maximum redemptions of Class A Common Stock |
• | The following tables should be read in conjunction with the selected historical financial information included elsewhere in this proxy statement/prospectus, and the historical financial statements of LMAO and SeaStar Medical and the related notes thereto that are included elsewhere in this proxy statement/prospectus. The unaudited LMAO and SeaStar Medical pro forma combined per share information is derived from, and should be read in conjunction with, the unaudited pro forma condensed combined financial statements and the related notes thereto included elsewhere in this proxy statement/prospectus. |
• | The unaudited pro forma combined net income (loss) per share information below does not purport to represent the actual results of operations that would have occurred had the companies been combined during the period presented, nor does it purport to represent the actual results of operations for any future date or period. The unaudited pro forma combined book value per share information below does not purport to represent what the value of LMAO and SeaStar Medical would have been had the companies been combined during the period presented. |
Historical |
Pro Forma |
|||||||||||||||
LMF Acquisition Opportunities, Inc. |
SeaStar Medical, Inc. |
Assuming No Redemption |
Assuming Maximum Redemption |
|||||||||||||
As of and for the Three Months Ended March 31, 2022 |
||||||||||||||||
Book value per share (1) |
$ | (0.55 | ) | $ | (11.76 | ) | $ | 4.71 | $ | 0.42 | ||||||
Book value per share of redeemable Class A Common Stock (2) |
$ | (0.44 | ) | — | ||||||||||||
Book value per share of non-redeemable Class B Common Stock(3) |
(0.11 | ) | — | |||||||||||||
Book value per share of common stock equivalents (3) |
— | — | ||||||||||||||
Net loss per share, basic (4) |
$ | 0.26 | $ | 0.11 | $ | 0.20 | ||||||||||
Net loss per share, diluted (5) |
$ | 0.26 | $ | 0.11 | $ | 0.20 | ||||||||||
Net income per share of redeemable Class A Common Stock, basic and diluted (6) |
$ | 0.21 | — | |||||||||||||
Net income per share of non-redeemable Class B Common Stock, basic and diluted(7) |
$ | 0.05 | — | |||||||||||||
Net loss per share attributable to common stockholders, basic and diluted (8) |
$ | 0.26 | — | |||||||||||||
Weighted average shares outstanding - basic |
10,453,500 | — | 21,448,774 | 12,028,774 | ||||||||||||
Weighted average shares outstanding - diluted |
10,453,500 | — | 21,448,774 | 12,028,774 | ||||||||||||
As of and for the Year Ended December 31, 2021 |
— | — | ||||||||||||||
Book value per share (1) |
$ | (0.81 | ) | — | $ | 4.41 | $ | 0.40 | ||||||||
Book value per share of redeemable Class A Common Stock (2) |
$ | (0.65 | ) | — | ||||||||||||
Book value per share of non-redeemable Class B Common Stock(3) |
(0.16 | ) | — | |||||||||||||
Book value per share of common stock equivalents (3) |
— | — | ||||||||||||||
Net loss per share, basic (4) |
$ | 0.01 | $ | (0.21 | ) | $ | (0.37 | ) | ||||||||
Net loss per share, diluted (5) |
$ | 0.01 | $ | (0.21 | ) | $ | (0.37 | ) | ||||||||
Net income per share of redeemable Class A Common Stock, basic and diluted (6) |
$ | 0.00 | — | |||||||||||||
Net income per share of non-redeemable Class B Common Stock, basic and diluted(7) |
$ | 0.00 | — | |||||||||||||
Net loss per share attributable to common stockholders, basic and diluted (8) |
$ | (0.65 | ) | — | ||||||||||||
Weighted average shares outstanding - basic |
9,651,587 | — | 21,448,774 | 12,178,774 | ||||||||||||
Weighted average shares outstanding - diluted |
9,651,587 | — | 21,448,774 | 12,178,774 |
(1) | Book value per share is calculated as total equity divided by pro forma information outstanding basic share. |
(2) | Book value per share is calculated as total equity divided by redeemable Class A Common Stock outstanding at March 31, 2022 and December 31, 2021, respectively. |
(3) | Book value per share is calculated as total equity divided by common stock equivalents (i.e. preferred shares and convertible debt) at March 31, 2022 and December 31, 2021, respectively. |
(4) | Book value per share is calculated as total equity divided by SeaStar Medical Common Stock outstanding at March 31, 2022 and December 31, 2021, respectively. |
(5) | Net loss per share is based on the pro forma information. |
(6) | Net income per share is based on weighted average number of shares of redeemable Class A Common Stock outstanding for the three months ended March 31, 2022 and year ended December 31, 2021, respectively. |
(7) | Net income per share is based on weighted average number of shares of non-redeemable Class B Common Stock outstanding for the three months ended March 31, 2022 and year ended December 31, 2021, respectively. |
(8) | Net loss per share is based on weighted average number of LMAO common stock outstanding for the three months ended March 31, 2022 and year ended December 31, 2021, respectively. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption (the “30-day redemption period”) to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A Common Stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending 3 business days before we send the notice of redemption to the warrant holders. |
• | If we are unable to complete our initial business combination within 18 months from the closing of our IPO (or 21 months from the closing, if we extend the period of time to consummate a business combination), we will: (i) cease all operations, except for the purpose of winding up; (ii) as promptly as reasonably possible, but not more than 10 business days thereafter subject to lawfully available funds therefor, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then outstanding public shares, which redemption will completely extinguish public stockholders’ rights as stockholders (including the right to receive further liquidating distributions, if any), subject to applicable law; and (iii) as promptly as reasonably possible following such redemption, subject to the approval of our remaining stockholders and our Board, dissolve and liquidate, subject in each case to our obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law; |
• | Prior to our initial business combination, we may not issue additional shares of capital stock that would entitle the holders thereof to: (i) receive funds from the trust account; or (ii) vote on any initial business combination; |
• | Although we do not intend to enter into an initial business combination with a target business that is affiliated with our Sponsor, our directors or our officers, we are not prohibited from doing so. In the event we enter into such a transaction, we, or a committee of independent directors, will obtain an opinion from an independent investment banking firm that is a member of FINRA or an independent accounting firm that such an initial business combination is fair to LMAO from a financial point of view; |
• | If a stockholder vote on our initial business combination is not required by law and we do not decide to hold a stockholder vote for business or other legal reasons, we will offer to redeem our public shares pursuant to Rule 13e-4 and Regulation 14E of the Exchange Act, and will file tender offer documents with the SEC prior to completing our initial business combination which contain substantially the same financial and other information about our initial business combination and the redemption rights as is required under Regulation 14A of the Exchange Act; whether or not we maintain our registration under the our Exchange Act or our listing on Nasdaq, we will provide our public stockholders with the opportunity to redeem their public shares by one of the two methods listed above; |
• | So long as we obtain and maintain a listing for our securities on Nasdaq, Nasdaq rules require that we must complete one or more business combinations having an aggregate fair market value of at least 80% of the value of the assets held in the Trust Account (excluding the deferred underwriting commissions and taxes payable on the interest earned on the Trust Account) at the time of our signing a definitive agreement in connection with our initial business combination; |
• | If our stockholders approve an amendment to our Existing Charter: (i) to modify the substance or timing of our obligation to redeem 100% of our public shares if we do not complete our initial business combination within 18 months from the closing of our IPO (or 21 months from the closing, if we extend the period of time to consummate a business combination); or (ii) with respect to any other provision relating to stockholders’ rights or pre-business combination activity, we will provide our public stockholders with the opportunity to redeem all or a portion of their shares of Class A Common Stock upon such approval at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned on the funds held in the Trust Account and not previously released to us to pay our franchise and income taxes, divided by the number of then outstanding public shares; and |
• | We will not effectuate our initial business combination with another blank check company or a similar company with nominal operations. |
• | a stockholder who owns 15% or more of our outstanding voting stock (otherwise known as an “interested stockholder”); |
• | an affiliate of an interested stockholder; or |
• | an associate of an interested stockholder, for three years following the date that the stockholder became an interested stockholder. |
• | our Board approves the transaction that made the stockholder an “interested stockholder,” prior to the date of the transaction; after the completion of the transaction that resulted in the stockholder becoming an interested stockholder, that stockholder owned at least 85% of our voting stock outstanding at the time the transaction commenced, other than statutorily excluded shares of Common Stock; or |
• | on or subsequent to the date of the transaction, the initial business combination is approved by our Board and authorized at a meeting of our stockholders, and not by written consent, by an affirmative vote of at least two-thirds of the outstanding voting stock not owned by the interested stockholder. |
Name |
Age |
Position | ||
Bruce Rodgers | 58 | Chief Executive Officer, President, and Chairman of the Board of Directors | ||
Richard Russell | 61 | Chief Financial Officer, Treasurer, Secretary, and Director | ||
Bruce Bennett | 61 | Director | ||
Craig Burson | 60 | Director | ||
Martin Traber | 76 | Director |
• | the appointment, compensation, retention, replacement, and oversight of the work of the independent registered public accounting firm engaged by us; |
• | pre-approving all audit and permitted non-audit services to be provided by the independent registered public accounting firm engaged by us, and establishing pre-approval policies and procedures; |
• | setting clear hiring policies for employees or former employees of the independent registered public accounting firm, including but not limited to, as required by applicable laws and regulations; |
• | setting clear policies for audit partner rotation in compliance with applicable laws and regulations; |
• | obtaining and reviewing a report, at least annually, from the independent registered public accounting firm describing: (i) the independent registered public accounting firm’s internal quality-control procedures; (ii) any material issues raised by the most recent internal quality-control review, or peer review, of the audit firm, or by any inquiry or investigation by governmental or professional authorities within the preceding five years respecting one or more independent audits carried out by the firm and any steps taken to deal with such issues; and (iii) all relationships between the independent registered public accounting firm and us to assess the independent registered public accounting firm’s independence; |
• | reviewing and approving any related party transaction required to be disclosed pursuant to Item 404 of Regulation S-K promulgated by the SEC prior to us entering into such transaction; and |
• | reviewing with management, the independent registered public accounting firm, and our legal advisors, as appropriate, any legal, regulatory or compliance matters, including any correspondence with regulators or government agencies and any employee complaints or published reports that raise material issues regarding our financial statements or accounting policies and any significant changes in accounting standards or rules promulgated by the Financial Accounting Standards Board, the SEC or other regulatory authorities. |
• | reviewing and approving on an annual basis the corporate goals and objectives relevant to our Chief Executive Officer’s compensation, if any is paid by us, evaluating our Chief Executive Officer’s performance in light of such goals and objectives and determining and approving the remuneration (if any) of our Chief Executive Officer based on such evaluation; |
• | reviewing and approving on an annual basis the compensation, if any is paid by us, of all of our other officers; |
• | reviewing on an annual basis our executive compensation policies and plans; |
• | implementing and administering our incentive compensation equity-based remuneration plans; |
• | assisting management in complying with our proxy statement and annual report disclosure requirements; |
• | approving all special perquisites, special cash payments and other special compensation and benefit arrangements for our officers and employees; |
• | if required, producing a report on executive compensation to be included in our annual proxy statement; and |
• | reviewing, evaluating and recommending changes, if appropriate, to the remuneration for directors. |
Name |
Age |
Position | ||
Eric Schlorff | 49 | Chief Executive Officer and Class III Director | ||
Caryl Baron | 55 | Finance Controller | ||
Kevin Chung | 49 | Chief Medical Officer | ||
Kenneth Van Heel | 58 | Class III Director | ||
Rick Barnett | 62 | Class I Director | ||
Andres Lobo | 56 | Class I Director | ||
Allan Collins, MD | 74 | Class II Director | ||
Bruce Rodgers | 59 | Class II Director | ||
Richard Russell | 61 | Class II Director |
• | retaining, overseeing and evaluating the independence and performance of our independent auditor; |
• | reviewing and discussing with our independent auditor their annual audit, including the timing and scope of audit activities; |
• | pre-approving audit services; |
• | overseeing the financial reporting process and discussing with management and our independent registered public accounting firm the quarterly and annual financial statements that we file with the SEC; |
• | reviewing the adequacy and effectiveness of our accounting and internal controls over financial reporting, disclosure controls and policies and procedures; |
• | reviewing and discussing guidelines and policies governing the process by which our senior management assesses and manages our exposure to risk; |
• | reviewing, and if appropriate, approving or ratifying any related party transactions and other significant conflicts of interest; |
• | establishing procedures for the receipt, retention and treatment of complaints received by us and the confidential, anonymous submission by our employees of concerns regarding questionable accounting or auditing matters; |
• | reviewing our program to monitor compliance with our code of ethics; and |
• | overseeing significant deficiencies and material weaknesses in the design or operation of our internal controls over financial reporting. |
• | evaluating, determining, and recommending to our Board, the compensation of our executive officers; |
• | administering and recommending to our Board the compensation of our directors; |
• | reviewing and approving our executive compensation plan and recommending that our Board amend these plans if deemed appropriate; |
• | administering our general compensation plan and other employee benefit plans, including incentive compensation and equity-based plans and recommending that our Board amend these plans if deemed appropriate; |
• | reviewing and approving any severance or termination arrangements to be made with any of our executive officers; and |
• | reviewing and approving at least annually the corporate goals and objectives relevant to the compensation of our Chief Executive Officer and other executive officers. |
• | identifying, screening and recommending to our Board director candidates for election (or re-election); |
• | overseeing the policies and procedures with respect to the consideration of director candidates recommended by stockholders; |
• | reviewing and recommending to our Board for approval, as appropriate, disclosures concerning our policies and procedures for identifying and screening Board nominee candidates, the criteria used to evaluate Board membership and director independence as well as any policies regarding Board diversity; |
• | reviewing independence qualifications of directors under the applicable Nasdaq rules; |
• | developing and coordinating with management on appropriate director orientation programs; and |
• | reviewing our stockholder engagement plan, if any, and overseeing relations with stockholders. |
• | for any transaction from which the director derives an improper personal benefit; |
• | for any act or omission not in good faith or that involves intentional misconduct or a knowing violation of law; |
• | for any unlawful payment of dividends or redemption of shares; or |
• | for any breach of a director’s duty of loyalty to the corporation or its stockholders. |
• | Eric Schlorff, Chief Executive Officer |
• | Caryl Baron, Finance Controller |
Name and Principal Position |
Year |
Salary ($) |
Bonus (1) ($) |
Option Awards (2) ($) |
Total ($) |
|||||||||||||||
Eric Schlorff |
2021 | $ | 300,000 | $ | 22,500 | $ | — | $ | 322,500 | |||||||||||
Chief Executive Officer |
||||||||||||||||||||
Caryl Baron |
2021 | $ | 150,000 | $ | 56,000 | $ | 6,594 | $ | 212,594 | |||||||||||
Finance Controller |
(1) | Amounts reflect annual bonuses for 2021, which were paid in September 2021, as well as a one-time $50,000 cash retention bonus to Ms. Baron. |
(2) | Amounts reflect the grant date fair value of options granted to SeaStar Medical’s named executive officers calculated in accordance with FASB ASC Topic 718. SeaStar Medical’s named executive officers will only have a benefit to the extent the fair market value of its common stock is greater than the exercise price of such stock options. For information regarding assumptions underlying the valuation of equity awards, see Note 2 to SeaStar Medical’s audited financial statements appearing in this proxy statement /prospectus. Ms. Baron received a stock option to purchase 16,361 shares of common stock under the 2019 Stock Incentive Plan during fiscal year 2021. The option is exercisable immediately subject to a repurchase right in favor of the Company which lapses as the option vests. The option vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from January 1, 2021, and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from January 1, 2022, and expires January 1, 2031, subject to the terms of the award agreement. |
OPTION AWARDS |
||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options (#) Exercisable (1) |
Number of Securities Underlying Unexercised Options (#) Unexercisable |
Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#) |
Option Exercise Price ($) |
Option Expiration |
|||||||||||||||
Eric Schlorff |
10,277 (2) |
4,672 | $10.00 | 3/1/2029 | ||||||||||||||||
Chief Executive Officer |
31,922 | (3) |
37,809 | $ | 0.53 | 2/20/2030 | ||||||||||||||
Caryl Baron |
1,743 | (4) |
2,243 | $ | 10.00 | 3/20/2030 | ||||||||||||||
Finance Controller |
— | (5) |
16,361 | $ | 0.55 | 1/1/2031 |
(1) | This table provides information pertaining to all outstanding equity awards held by our named executive officers as of December 31, 2021. Stock options granted prior to 2021 are exercisable upon completion of six(6) months of service following the date of grant, subject to a repurchase right in favor of the Company which lapses as the option vests. Stock options granted in 2021 are exercisable immediately, subject to a repurchase right in favor of the Company which lapses as the option vests. Accordingly, the columns and footnotes below reflect the extent to which stock options held by our named executive officers were vested (as opposed to exercisable) as of December 31, 2021. |
(2) | The option was granted on February 8, 2019 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from March 1, 2019 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from March 1, 2019. |
(3) | The option was granted on August 13, 2020 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from February 20, 2020 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from February 20, 2020. |
(4) | The option was granted on March 30, 2020 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from March 30, 2020 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from March 30, 2020. |
(5) | The option was granted on January 1, 2021 and vests with respect to (i) twenty-five percent (25%) of the shares upon completion of one (1) year of service measured from January 1, 2021 and (ii) the balance of the shares subject to the option in a series of thirty-six (36) successive equal monthly installments upon completion of each additional month of service over the thirty-six (36)-month period measured from January 1, 2021. |
Name |
Option Awards (1) ($) |
All Other Compensation ($) |
Total ($) |
|||||||||
Richard Barnett |
$ | 8,221 | $ | 112,500 | (2) | $ | 120,721 | |||||
Ray Chow |
$ | 19,213 | $ | 300,000 | (2) | $ | 319,213 | |||||
Allan Collins |
$ | 8,221 | $ | 112,500 | (2) | $ | 120,721 | |||||
David Humes |
$ | 6,229 | $ | 277,401 | $ | 283,630 | ||||||
Andres Lobo |
— | — | — | |||||||||
Ken Van Heel |
$ | 8,286 | — | $ | 8,286 |
(1) | Amounts reflect the grant date fair value of options granted to our non-employee directors calculated in accordance with FASB ASC Topic 718. For information regarding assumptions underlying the valuation of equity awards, see note 7 to our financial statements appearing at the end of this proxy statement /prospectus. |
(2) | Represents cash compensation paid to certain of our non-employee directors during fiscal 2021 for consulting services. See “ SeaStar Medical Related Party Transactions |
(3) | Represent payments to Mr. Humes and Innovative BioTherapies, Inc., an entity controlled and wholly-owned by Dr. Humes, pursuant to a consulting agreement and research service agreement, respectively, during fiscal year 2021. See “ SeaStar Medical Related Party Transactions |
• | each person or “group” (as such term is used in Section 13(d)(3) of the Exchange Act) known by LMAO to be the beneficial owner of more than 5% of shares of our Common Stock as of [●], 2022 (pre-Business Combination) or of shares of our Common Stock upon the closing of the Business Combination; |
• | each of LMAO’s executive officers and directors; |
• | each person who will become an executive officer or director of the Combined Company upon the closing of the Business Combination; |
• | all of our current executive officers and directors as a group; and |
• | all executive officers and directors of the Combined Company as a group upon the closing of the Business Combination. |
• | all SeaStar Medical equity is computed on a fully-diluted basis including all outstanding options, warrants and restricted stock units; |
• | the shares to be issued to SeaStar Medical stockholders (A) does not account for (i) the issuance of any additional shares upon the Closing under the Incentive Plan or ESPP and (ii) the withholding of shares of Common Stock to pay future exercises under the SeaStar Medical warrants and options assumed by LMAO or the settlement of SeaStar Medical restricted stock units assumed by LMAO, and (B) assumes (i) that Dow Pension Funds only purchase the minimum amount under the Dow Commitment Letter and (ii) that SeaStar Medical neither has any indebtedness to be repaid at Closing nor incurs transaction expenses in excess of the transaction expenses cap; |
• | no redemptions of our Class A Common Stock by public stockholders; |
• | no exercise of LMAO warrants; and |
• | no issuance of additional securities by LMAO prior to the Closing of the Business Combination. |
Pre-Business Combination |
Post-Business Combination |
|||||||||||||||||||||||
Number of Shares |
Assuming No Redemption |
Assuming Maximum Redemptions |
||||||||||||||||||||||
Name and Address of Beneficial Owner |
Number of Shares Beneficially Owned |
% of Class |
Number of Shares |
% of Class |
Number of Shares |
% of Class |
||||||||||||||||||
Pre-Business Combination directors and officers(1) |
||||||||||||||||||||||||
LMFAO Sponsor, LLC (our sponsor) (2)(3) |
2,587,500 | 100 | % | 2,587,500 | 12.1 | % | 2,587,500 | 21.5 | % | |||||||||||||||
Bruce Rodgers (3) |
— | * | — | |||||||||||||||||||||
Richard Russell (3) |
— | * | — | |||||||||||||||||||||
Bruce Bennett (4) |
— | * | ||||||||||||||||||||||
Craig Burson (4) |
— | * | ||||||||||||||||||||||
Martin Traber (4) |
— | * | ||||||||||||||||||||||
All pre-Business Combination officers and directors as a group (5 individuals) |
2,587,500 | 100 | % | 2,587,500 | 12.1 | % | 2,587,500 | 21.5 | % | |||||||||||||||
Five Percent Holders (5) |
||||||||||||||||||||||||
Karpus Investment Management (6) |
1,529,348 | 14.6 | % | 1,529,348 | 7.1 | % | 1,529,348 | 12.7 | % | |||||||||||||||
Saba Capital Management, L.P. (7) |
972,567 | 9.3 | % | 972,567 | 4.5 | % | 972,567 | 8.1 | % | |||||||||||||||
Hudson Bay Capital Management LP (8) |
750,000 | 7.2 | % | 750,000 | 3.5 | % | 750,000 | 6.2 | % | |||||||||||||||
Dow Employees’ Pension Plan Trust (9) |
3,445,841 | 16.1 | % | 3,445,841 | 28.6 | % | ||||||||||||||||||
Union Carbide Employees’ Pension Plan (10) |
2,297,223 | 10.7 | % | 2,297,223 | 19.1 | % | ||||||||||||||||||
Post-Business Combination directors and officers (11) |
||||||||||||||||||||||||
Eric Schlorff (12) |
— | * | 52,863 | * | 52,863 | * | ||||||||||||||||||
Rick Barnett (13) |
— | * | 7,206 | * | 7,206 | * | ||||||||||||||||||
Allan Collins, MD (13) |
— | * | 7,206 | * | 7,206 | * | ||||||||||||||||||
Kenneth Van Heel |
— | * | — | * | — | * | ||||||||||||||||||
Andres Lobo |
— | * | — | * | — | * | ||||||||||||||||||
Bruce Rodgers (3) |
— | * | — | * | — | * | ||||||||||||||||||
Richard Russell (3) |
— | * | — | * | — | * | ||||||||||||||||||
Caryl Baron (14) |
— | * | 8,036 | * | 8,036 | * | ||||||||||||||||||
Kevin Chung, MD |
— | * | — | * | — | * |
* | Represents less than 1% of beneficial ownership |
(1) | Unless otherwise noted, the business address of each of the following entities or individuals is c/o LMF Acquisition Opportunities, Inc., 1200 W. Platt St., Suite 100, Tampa, Florida 33606 |
(2) | Interests shown consist solely of founder shares, which are shares of Class B Common Stock. Such shares will automatically convert into shares of Class A Common Stock on a one-for-one |
(3) | LMFAO Sponsor, LLC, our Sponsor, is the record holder of the shares reported herein. The sole manager of the Sponsor is LM Funding America, Inc., a Delaware corporation, of which Bruce Rodgers is the Chief Executive Officer, President, and Chairman of the Board of Directors and Richard Russell is the Chief Financial Officer, Treasurer, and Secretary. Although Mr. Rodgers and Mr. Russell have membership interests in the Sponsor, the board of directors of LM Funding America, Inc. has sole voting and investment discretion with respect to the shares held of record by the Sponsor, and as such, neither Mr. Rodgers nor Mr. Russell is deemed to have beneficial ownership of the Class B Common Stock held directly by the Sponsor. |
(4) | Does not include any shares held by the Sponsor. This individual is a member of the Sponsor but does not have voting or dispositive control over the shares held by the Sponsor. |
(5) | Interests shown consist solely of public shares, which are shares of Class A Common Stock. Shares of Class A Common Stock and Class B Common Stock will be reclassified as Common Stock in connection with the Business Combination. |
(6) | According to Schedule 13G filed on February 14, 2022. Karpus Investment Management (“Karpus”) is controlled by City of London Investment Group plc (“CLIG”), which is listed on the London Stock Exchange. However, in accordance with SEC Release No. 34-39538 (January 12, 1998), effective informational barriers have been established between Karpus and CLIG such that voting and investment power over the subject securities is exercised by Karpus independent of CLIG, and, accordingly, attribution of beneficial ownership is not required between Karpus and CLIG. The business address of Karpus is 183 Sully’s Trail, Pittsford, New York 14534. |
(7) | According to Schedule 13G filed on February 2, 2022. The business address of Saba Capital Management, L.P. is 28 Havemeyer Place, 2nd Floor, Greenwich, Connecticut 06830. |
(8) | According to Schedule 13G filed on February 14, 2022. Hudson Bay Capital Management LP (“Hudson”) serves as the investment manager of HB Strategies LLC, in whose name the securities reported herein are held. As such, Hudson may be deemed to be the beneficial owner of all shares of Class A Common Stock held by HB Strategies LLC. Mr. Sander Gerber serves as the managing member of Hudson Bay Capital GP LLC, which is the general partner of Hudson. Mr. Gerber disclaims beneficial ownership of these securities. The business address of Hudson is 405 Lexington Avenue, 58th Floor, New York, New York 10174. |
(9) | Includes (i) 945,693 shares of SeaStar Medical Series A-1 preferred stock, (ii) 359,797 shares of SeaStar Medical Series B preferred stock, (iii) 1,435 warrants exercisable into SeaStar Medical Series A-2 preferred stock, and (iv) convertible notes with an aggregate outstanding principal amount of $2,475,307, which will automatically convert into 247,530 shares of SeaStar Medical Common Stock immediately prior to the Business Combination. The business address of the Dow Employees’ Pension Plan Trust is Sylvia Stoesser Center, 2211 H.H. Dow Way, Midland, MI 48674. |
(10) | Includes (i) 945,693 shares of SeaStar Medical Series A-1 preferred stock, (ii) 359,797 shares of SeaStar Medical Series B preferred stock, (iii) 1,435 warrants exercisable into SeaStar Medical Series A-2 preferred stock, and (iv) convertible notes with an aggregate outstanding principal amount of $2,475,307, which will automatically convert into 247,530 shares of SeaStar Medical Common Stock immediately prior to the Business Combination. The business address of the Dow Employees’ Pension Plan Trust is Sylvia Stoesser Center, 2211 H.H. Dow Way, Midland, MI 48674. |
(11) | Unless otherwise noted, the business address of each of the following entities or individuals is SeaStar Medical, Inc., 3513 Brighton Blvd Ste 410, Denver, CO 80216. |
(12) | Includes 3,531 shares of common stock issuable upon exercise of stock options within 60 days of June 30, 2022 and excludes 165,000 RSUs granted on April 4, 2022 that will not start to vest until the first anniversary of the grant date. |
(13) | Includes 847 shares of common stock issuable upon exercise of stock options within 60 days of June 30, 2022 and excludes 7,000 RSUs granted on April 4, 2022, that will not start to vest until the first anniversary of the grant date. |
(14) | Includes 847 shares of common stock issuable upon exercise of stock options within 60 days of June 30, 2022 and excludes 35,000 RSUs granted on April 4, 2022 that will not start to vest until the first anniversary of the grant date. |
Date of Issuance |
Principal Amount | Maturity Date | Interest Rate Per Annum |
|||||||
June 10, 2021 |
$ | 500,000 | December 10, 2022 | 8 | % | |||||
September 10, 2021 (in five tranches) |
||||||||||
Tranche 1 – September 10, 2021 |
$ | 1,400,000 | September 10, 2022 | 8 | % | |||||
Tranche 2 – October 15, 2021 |
$ | 400,000 | October 15, 2022 | 8 | % | |||||
Tranche 3 – November 15, 2021 |
$ | 400,000 | November 15, 2022 | 8 | % | |||||
Tranche 4 – March 16, 2022 |
$ | 200,000 | March 16, 2024 | 8 | % | |||||
Tranche 5 – April 18, 2022 |
$ | 200,000 | April 18, 2025 | 8 | % | |||||
April 12, 2022 |
$ | 800,000 | April 12, 2025 | 8 | % |
Date of Issuance |
Principal Amount | Maturity Date | Interest Rate Per Annum |
|||||||
December 31, 2021 |
$ | 44,713 | December 31, 2024 | 8 | % | |||||
January 1, 2022 |
$ | 10,063 | January 1, 2025 | 8 | % | |||||
February 28, 2022 |
$ | 2,100 | February 28, 2025 | 8 | % | |||||
March 31, 2022 |
$ | 8,488 | March 31, 2025 | 8 | % |
Date of Issuance |
Principal Amount | Maturity Date | Interest Rate Per Annum |
|||||||
December 31, 2021 |
$ | 69,148.62 | December 31, 2024 | 8 | % | |||||
January 31, 2022 |
$ | 14,635.96 | January 31, 2025 | 8 | % | |||||
March 31, 2022 |
$ | 61,176.44 | March 31, 2025 | 8 | % |
• | the risks, costs and benefits to the Combined Company; |
• | the impact on a director’s independence in the event that the related person is a director, immediate family member of a director or an entity with which a director is affiliated; |
• | the availability of other sources for comparable services or products; and |
• | the terms available to or from, as the case may be, unrelated third parties or to or from employees generally. |
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UNAUDITED CONDENSED FINANCIAL STATEMENTS: |
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AUDITED FINANCIAL STATEMENTS: |
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UNAUDITED FINANCIAL STATEMENTS: |
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AUDITED FINANCIAL STATEMENTS: |
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March 31, 2022 |
December 31, 2021 |
|||||||
(Unaudited) |
||||||||
ASSETS |
||||||||
Cash |
$ | 88,064 | $ | 51,567 | ||||
Prepaid insurance and other fees |
160,572 | 286,237 | ||||||
Prepaid expenses |
128,092 | 14,817 | ||||||
Cash and marketable securities held in trust |
105,584,424 | 105,581,820 | ||||||
Current Assets |
105,961,152 | 105,934,441 | ||||||
Total assets |
$ | 105,961,152 | $ | 105,934,441 | ||||
LIABILITIES AND STOCKHOLDERS’ DEFICIT |
||||||||
Accrued expenses |
309,465 | 376,702 | ||||||
Notes and advances payable - related parties |
310,000 | — | ||||||
Deferred underwriting commissions in connection with the initial public offering |
3,622,500 | 3,622,500 | ||||||
Warrant liability (Note 9) |
3,328,607 | 6,930,740 | ||||||
Total current liabilities |
7,570,572 | 10,929,942 | ||||||
Total liabilities |
7,570,572 | 10,929,942 | ||||||
Commitments |
||||||||
Class A common stock subject to possible redemption 10,350,000 shares at redemption value of $10.20 per share |
105,570,000 | 105,570,000 | ||||||
Stockholders’ deficit: |
||||||||
Preferred stock, $0.0001 par value; 1,000,000 shares authorized; none issued and outstanding |
— | — | ||||||
Class A common stock, $0.0001 par value; 100,000,000 shares authorized; 103,500 issued and outstanding at March 31, 2022 and December 31, 2021 excluding 10,350,000 shares subject to possible redemption |
10 | 10 | ||||||
Class B common stock, $0.0001 par value; 20,000,000 shares authorized; 2,587,500 shares issued and outstanding at March 31, 2022 and December 31, 2021 (See Note 6) |
259 | 259 | ||||||
Additional paid-in capital |
— | — | ||||||
Accumulated deficit |
(7,179,689 | ) | (10,565,770 | ) | ||||
Total stockholders’ deficit |
(7,179,420 | ) | (10,565,501 | ) | ||||
Total liabilities and stockholders’ deficit |
$ | 105,961,152 | $ | 105,934,441 | ||||
For the Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Expenses: |
||||||||
Formation and Administrative costs |
$ | 218,656 | $ | 125,957 | ||||
Loss from operations |
(218,656 | ) | (125,957 | ) | ||||
Gain on warrant liability revaluation |
3,602,133 | 1,830,660 | ||||||
Other income |
||||||||
Investment income earned on marketable securities held in Trust Account |
2,604 | 1,754 | ||||||
Net income |
$ | 3,386,081 | $ | 1,706,457 | ||||
Net income per share: |
||||||||
Weighted average shares outstanding, basic and dilutive |
||||||||
Class A - Common stock |
10,453,500 | 7,201,300 | ||||||
Class B - Common stock |
2,587,500 | 2,453,333 | ||||||
Basic and diluted net income per share |
||||||||
Class A - Common stock |
$ | 0.26 | $ | 0.18 | ||||
Class B - Common stock |
$ | 0.26 | $ | 0.18 |
Class A Common Stock |
Class B Common Stock |
Additional paid in capital |
Accumulated Deficit |
Total Deficit |
||||||||||||||||||||||||
Shares (1) |
Amount |
Shares (1) |
Amount |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
— | $ | — | 2,156,250 | $ | 215 | $ | 24,785 | $ | (5,236 | ) | $ | 19,764 | |||||||||||||||
Class A Units issued for cash |
10,350,000 | 1,035 | — | — | 103,498,965 | — | 103,500,000 | |||||||||||||||||||||
Representative shares issued for no cash |
103,500 | 10 | — | — | (10 | ) | — | — | ||||||||||||||||||||
Class A Units reclassified to Commitments subject to possible redemption |
(10,350,000 | ) | (1,035 | ) | — | — | (105,568,965 | ) | (105,570,000 | ) | ||||||||||||||||||
Underwriter fee & offering costs |
— | — | — | — | (6,211,902 | ) | — | (6,211,902 | ) | |||||||||||||||||||
Private placement warrants issued for cash |
— | — | — | — | 5,738,000 | — | 5,738,000 | |||||||||||||||||||||
Class B shares issued to Sponsor |
— | — | 431,250 | 44 | (44 | ) | — | — | ||||||||||||||||||||
Warrants classified as liabilities |
— | — | — | — | (8,116,680 | ) | — | (8,116,680 | ) | |||||||||||||||||||
Reclass APIC to retained earnings |
— | — | — | — | 10,635,851 | (10,635,851 | ) | — | ||||||||||||||||||||
Net income |
— | — | — | — | — | 1,706,457 | 1,706,457 | |||||||||||||||||||||
Balance - March 31, 2021 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (8,934,630 | ) | $ | (8,934,361 | ) | ||||||||||||||
Balance as of December 31, 2021 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (10,565,770 | ) | $ | (10,565,501 | ) | ||||||||||||||
Net income |
— | — | — | — | — | 3,386,081 | 3,386,081 | |||||||||||||||||||||
Balance - March 31, 2022 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (7,179,689 | ) | $ | (7,179,420 | ) | ||||||||||||||
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company send the notice of redemption to the warrant holders. |
As of March 31, 2022 |
As of December 31, 2021 |
|||||||
Public Warrants |
$ | 2,141,400 | $ | 4,450,500 | ||||
Private Placement Warrants |
1,187,200 | 2,480,240 | ||||||
$ | 3,328,600 | $ | 6,930,740 | |||||
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Level |
March 31, 2022 |
December 31, 2021 |
||||||||||
Assets: |
||||||||||||
Government securities held in Trust Account |
1 | $ | 105,584,424 | $ | 105,581,820 | |||||||
Liabilities: |
||||||||||||
Private Placement Warrants |
3 | 1,187,200 | 2,480,240 | |||||||||
Public Warrants |
3 | 2,141,400 | 4,450,500 |
For the Twelve Months Ended December 31, 2021 |
From October 28, 2020 (inception) to December 31, 2020 |
|||||||
Expenses: |
||||||||
Formation and Administrative costs |
$ | 1,122,443 | $ | 5,236 | ||||
Loss from operations |
(1,122,443 | ) | (5,236 | ) | ||||
Gain on warrant liability revaluation |
1,185,940 | — | ||||||
Other income |
||||||||
Investment income earned on marketable securities held in Trust Account |
11,820 | — | ||||||
Net income (loss) |
$ | 75,317 | $ | (5,236 | ) | |||
Net income (loss) per share: |
||||||||
Weighted average shares outstanding, basic and dilutive |
||||||||
Class A — Common stock |
9,651,587 | — | ||||||
Class B — Common stock |
2,554,418 | 2,156,250 | ||||||
Basic and diluted net income (loss) per share |
||||||||
Class A — Common stock |
$ | 0.02 | $ | — | ||||
Class B — Common stock |
$ | 0.02 | $ | — |
Class A Common Stock |
Class B Common Stock |
Additional paid in capital |
Accumulated Deficit |
Total Equity (Deficit) |
||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||
Balance as of December 31, 2020 |
— | $ | — | 2,156,250 | $ | 215 | $ | 24,785 | $ | (5,236 | ) | $ | 19,764 | |||||||||||||||
Class A Units issued for cash |
10,350,000 | 1,035 | — | — | 103,498,965 | — | 103,500,000 | |||||||||||||||||||||
Representative shares issued |
103,500 | 10 | — | — | (10 | ) | — | — | ||||||||||||||||||||
Class A Units subject to possible redemption |
(10,350,000 | ) | (1,035 | ) | (105,568,965 | ) | — | (105,570,000 | ) | |||||||||||||||||||
Private placement warrants issued for cash |
5,738,000 | — | 5,738,000 | |||||||||||||||||||||||||
Class B shares dividend issued to Sponsor |
431,250 | 44 | (44 | ) | — | — | ||||||||||||||||||||||
Warrants classified as liabilities |
(8,116,680 | ) | — | (8,116,680 | ) | |||||||||||||||||||||||
Underwriting fee & offering costs |
(6,211,902 | ) | — | (6,211,902 | ) | |||||||||||||||||||||||
Reclass APIC to retained earnings |
10,635,851 | (10,635,851 | ) | — | ||||||||||||||||||||||||
Net income |
— | — | — | — | — | 75,317 | 75,317 | |||||||||||||||||||||
Balance — December 31, 2021 |
103,500 | $ | 10 | 2,587,500 | $ | 259 | $ | — | $ | (10,565,770 | ) | $ | (10,565,501 | ) | ||||||||||||||
• | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
• | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
• | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
• | in whole and not in part; |
• | at a price of $0.01 per warrant; |
• | upon not less than 30 days’ prior written notice of redemption to each warrant holder; and |
• | if, and only if, the reported last sale price of the Class A common stock equals or exceeds $18.00 per share (as adjusted for stock splits, stock dividends, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period ending three business days before the Company send the notice of redemption to the warrant holders. |
As of December 31, 2021 |
As of January 28, 2021 |
|||||||
Class A Common stock price |
$ | 10.04 | $ | 9.90 | ||||
Term in years |
5.07 | 6.00 | ||||||
Risk free rate |
1.27 | % | 0.58 | % | ||||
Implied Volatility |
11.6 | % | 12.1 | % |
As of December 31, 2021 |
As of January 28, 2021 |
|||||||
Public Warrants |
$ | 4,450,500 | $ | 5,175,000 | ||||
Private Placement Warrants |
2,480,240 | 2,941,680 | ||||||
$ | 6,930,740 | $ | 8,116,680 | |||||
Level 1: | Quoted prices in active markets for identical assets or liabilities. An active market for an asset or liability is a market in which transactions for the asset or liability occur with sufficient frequency and volume to provide pricing information on an ongoing basis. | |
Level 2: | Observable inputs other than Level 1 inputs. Examples of Level 2 inputs include quoted prices in active markets for similar assets or liabilities and quoted prices for identical assets or liabilities in markets that are not active. | |
Level 3: | Unobservable inputs based on the Company’s assessment of the assumptions that market participants would use in pricing the asset or liability. |
Level |
December 31, 2021 |
January 28, 2021 |
||||||||||
Assets: |
||||||||||||
Government securities held in Trust Account |
1 | $ | 105,581,820 | $ | 105,570,833 | |||||||
Liabilities: |
||||||||||||
Private Placement Warrants |
3 | 2,480,240 | 2,941,680 | |||||||||
Public Warrants |
3 | 4,450,500 | 5,175,000 |
March 31, 2022 |
December 31, 2021 |
|||||||
ASSETS |
| |||||||
Current assets |
||||||||
Cash |
$ | 207 | $ | 510 | ||||
Other receivables |
— | 58 | ||||||
Prepaid expenses |
38 | 33 | ||||||
Other current assets |
180 | — | ||||||
|
|
|
|
|||||
Total current assets |
425 | 601 | ||||||
|
|
|
|
|||||
Other assets |
2 | 2 | ||||||
|
|
|
|
|||||
Total assets |
$ | 427 | $ | 603 | ||||
|
|
|
|
|||||
LIABILITIES, CONVERTIBLE PREFERRED STOCK, AND STOCKHOLDERS’ DEFICIT |
| |||||||
Current liabilities |
||||||||
Accounts payable |
$ | 199 | $ | 85 | ||||
Accrued expenses |
442 | 186 | ||||||
Investor deposits in advance of note execution |
26 | — | ||||||
Convertible notes, less discount, related party |
2,459 | 2,378 | ||||||
Derivative liability |
543 | 471 | ||||||
|
|
|
|
|||||
Total current liabilities |
3,669 | 3,120 | ||||||
|
|
|
|
|||||
Long-term liabilities |
||||||||
Notes payable—Government loans |
63 | 63 | ||||||
Convertible notes, less discount, related party, net of current portion |
453 | 181 | ||||||
Derivative liability |
58 | 55 | ||||||
|
|
|
|
|||||
Total long-term liabilities |
574 | 299 | ||||||
|
|
|
|
|||||
Total liabilities |
4,243 | 3,419 | ||||||
|
|
|
|
|||||
Commitments and contingencies (see note 7) |
||||||||
Preferred stock: $0.001 par value, 3,211,555 and 2,965,505 shares authorized at |
||||||||
March 31, 2022 and December 31, 2021, respectively |
||||||||
Series B preferred stock; 700,000 and 453,950 shares designated; 633,697 and 439,203 shares issued and outstanding with an aggregate liquidation preference of $7,281 and 5,421 as of March 31, 2022 and December 31, 2021, respectively |
7,821 | 5,421 | ||||||
Series A-1 preferred stock; 1,601,060 shares designated; 1,576,154 shares issued and outstanding with an aggregate liquidation preference of $77,799 as of March 31, 2022 and December 31, 2021 |
19,450 | 19,451 | ||||||
Series A-2 preferred stock; 900,495 shares designated; 577,791 and 772,285 shares issued and outstanding with an aggregate liquidation preference of $7,130 and 9,530 as of March 31, 2022 and December 31, 2021, respectively |
46,078 | 48,477 | ||||||
|
|
|
|
|||||
Total convertible preferred stock |
73,349 | 73,349 | ||||||
|
|
|
|
|||||
Stockholders’ deficit |
||||||||
Common stock—$0.001 par value per share; 4,431,999 and 3,531,504 shares authorized at March 31, 2022 and December 31, 2021, respectively, and no shares issued or outstanding at March 31, 2022 and December 31, 2021 |
— | — | ||||||
Additional paid-in capital |
151 | 147 | ||||||
Accumulated deficit |
(77,316 | ) | (76,312 | ) | ||||
|
|
|
|
|||||
Total stockholders’ deficit |
(77,165 | ) | (76,165 | ) | ||||
|
|
|
|
|||||
Total liabilities, convertible preferred stock and stockholders’ deficit |
$ | 427 | $ | 603 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Operating expenses |
||||||||
Research and development |
$ | 355 | $ | 746 | ||||
General and administrative |
457 | 316 | ||||||
|
|
|
|
|||||
Total operating expenses |
812 | 1,062 | ||||||
|
|
|
|
|||||
Loss from operations |
(812 | ) | (1,062 | ) | ||||
Other expense |
||||||||
Interest expense |
(169 | ) | (2 | ) | ||||
Change in fair value of derivative liability |
(23 | ) | — | |||||
|
|
|
|
|||||
Total other expense |
(192 | ) | (2 | ) | ||||
|
|
|
|
|||||
Loss before income tax provision |
(1,004 | ) | (1,064 | ) | ||||
Income tax provision |
— | 1 | ||||||
|
|
|
|
|||||
Net loss |
$ | (1,004) | $ | (1,065) | ||||
|
|
|
|
|||||
Net loss per share of common stock, basic and diluted |
$ | — | $ | — | ||||
|
|
|
|
|||||
Weighted-average shares outstanding, basic and diluted |
— | — | ||||||
|
|
|
|
Convertible Preferred Stock | Stockholders’ Deficit | |||||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock |
Series A-1 Preferred Stock |
Series A-2 Preferred Stock |
Common Shares | Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2020 |
426,977 | $ | 5,270 | 1,576,154 | $ | 19,451 | 784,511 | $ | 48,628 | $ | 73,349 | — | $ | — | $ | 133 | $ | (71,716 | ) | $ | (71,583 | ) | ||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 3 | — | 3 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (1,065 | ) | (1,065 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, March 31, 2021 |
426,977 |
$ |
5,270 |
1,576,154 |
$ |
19,451 |
784,511 |
$ |
48,628 |
$ |
73,349 |
— |
$ |
— |
$ |
136 |
$ |
(72,781 |
) |
$ |
(72,645 |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Convertible Preferred Stock | ||||||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock |
Series A-1 Preferred Stock |
Series A-2 Preferred Stock |
Common Shares | Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance, December 31, 2021 |
439,203 | $ | 5,421 | 1,576,154 | $ | 19,451 | 772,285 | $ | 48,477 | $ | 73,349 | — | $ | — | $ | 147 | $ | (76,312 | ) | $ | (76,165 | ) | ||||||||||||||||||||||||||
Conversion of Series A-2 Preferred stock to Series B Preferred stock |
194,494 | 2,400 | — | — | (194,494 | ) | (2,400 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 4 | — | 4 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (1,004 | ) | (1,004 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, March 31, 2022 |
633,697 |
$ |
7,821 |
1,576,154 |
$ |
19,451 |
577,791 |
$ |
46,077 |
$ |
73,349 |
— |
$ |
— |
$ |
151 |
$ |
(77,316 |
) |
$ |
(77,165 |
) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (1,004 | ) | $ | (1,065) | |||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||
Amortization of discount on secured convertible notes |
109 | — | ||||||
Non-cash accrued interest related to convertible notes |
61 | — | ||||||
Non-cash conversion of accrued expenses into convertible notes |
96 | — | ||||||
Non-cash fair value of discount on issuance of convertible notes |
(52 | ) | — | |||||
Non-cash fair value of derivative liability on issuance of convertible notes |
52 | — | ||||||
Change in fair value of derivative liability |
23 | — | ||||||
Stock-based compensation |
4 | 3 | ||||||
Changes in operating assets and liabilities |
||||||||
Inventory |
— | 55 | ||||||
Prepaid expenses |
(5 | ) | 4 | |||||
Other current assets |
(180 | ) | — | |||||
Accounts payable |
114 | (272 | ) | |||||
Accrued expenses and other current liabilities |
195 | (425 | ) | |||||
|
|
|
|
|||||
Net cash used in operating activities |
(587 | ) | (1,700 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Proceeds from issuance of convertible notes |
284 | — | ||||||
Repayment of PPP loan |
— | (1 | ) | |||||
|
|
|
|
|||||
Net cash provided by (used in) financing activities |
284 | (1 | ) | |||||
|
|
|
|
|||||
Net decrease in cash |
(303 | ) | (1,701 | ) | ||||
Cash, beginning of period |
510 | 2,807 | ||||||
|
|
|
|
|||||
Cash, end of period |
$ | 207 | $ | 1,106 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information |
| |||||||
Cash paid for income taxes |
$ | — | $ | 1 | ||||
Cash paid for interest |
$ | — | $ | 1 | ||||
Supplemental disclosure of noncash flow information |
| |||||||
Conversion of Series A-2 Preferred stock into Series B Preferred stock |
$ | 2,400 | $ | — |
1. | DESCRIPTION OF BUSINESS |
1. | DESCRIPTION OF BUSINESS (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Level 3 Rollforward |
Derivative Liability |
|||
Balance December 31, 2021 |
$ | 526 | ||
Additions |
52 | |||
Changes in fair value |
23 | |||
|
|
|||
Balance March 31, 2022 |
$ | 601 | ||
|
|
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
3. | ACCRUED EXPENSES |
March 31, 2022 |
December 31, 2021 |
|||||||
Accrued legal |
$ | 139 | $ | 27 | ||||
Accrued interest |
134 | 72 | ||||||
Accrued research and development |
69 | 58 | ||||||
Accrued director renumeration |
62 | — | ||||||
Accrued bonus |
30 | — | ||||||
Accrued other |
8 | 29 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ | 442 | $ | 186 | ||||
|
|
|
|
4. | CONVERTIBLE NOTES |
4. | CONVERTIBLE NOTES (continued) |
March 31, 2022 |
December 31, 2021 |
|||||||
Dow Notes |
$ | 1,740 | $ | 1,620 | ||||
Union Carbide Notes |
1,160 | 1,080 | ||||||
IBT & David Humes Notes |
210 | 114 | ||||||
Investor Notes |
104 | 104 | ||||||
Unamortized Debt Discount |
(302 | ) | (359 | ) | ||||
|
|
|
|
|||||
2,912 | 2,559 | |||||||
Less current portion |
(2,459 | ) | (2,378 | ) | ||||
|
|
|
|
|||||
$ | 453 | $ | 181 | |||||
|
|
|
|
2022 (remaining) |
$ | 2,700 | ||
2023 |
— | |||
2024 |
418 | |||
2025 |
96 | |||
|
|
|||
$ | 3,214 | |||
|
|
5. | NOTES PAYABLE – GOVERNMENT LOANS |
5. | NOTES PAYABLE – GOVERNMENT LOANS (continued) |
As of March 31, |
||||
2022 (remaining) |
$ | — | ||
2023 |
— | |||
2024 |
1 | |||
2025 |
1 | |||
2026 |
1 | |||
2027 |
1 | |||
Thereafter |
59 | |||
|
|
|||
$ | 63 | |||
|
|
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK |
7. | COMMITMENTS AND CONTINGENCIES |
8. | LETTER OF INTENT |
9. | INCOME TAXES |
10. | NET LOSS PER SHARE |
Three Months Ended March 31, |
||||||||
2022 |
2021 |
|||||||
Options to purchase common stock |
276,387 | 275,007 | ||||||
Convertible preferred stock |
2,787,642 | 2,787,642 | ||||||
|
|
|
|
|||||
Total |
3,064,029 | 3,062,649 | ||||||
|
|
|
|
11. | SUBSEQUENT EVENTS |
11. | SUBSEQUENT EVENTS (continued) |
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Operating expenses |
||||||||
Research and development |
$ | 2,766 | $ | 4,025 | ||||
General and administrative |
1,683 | 2,428 | ||||||
|
|
|
|
|||||
Total operating expenses |
4,449 | 6,453 | ||||||
|
|
|
|
|||||
Loss from operations |
(4,449 | ) | (6,453 | ) | ||||
Other income (expense), net |
||||||||
Interest expense |
(212 | ) | (3,308 | ) | ||||
Other income |
91 | 84 | ||||||
Gain on sale of assets and liabilities held for sale |
— | 71 | ||||||
Change in fair value of derivative liability |
(27 | ) | — | |||||
Loss on disposal of other assets |
— | (6 | ) | |||||
Gain on early extinguishment of convertible notes |
— | 6,345 | ||||||
|
|
|
|
|||||
Total other income (expense), net |
(148 | ) | 3,186 | |||||
|
|
|
|
|||||
Loss before income tax provision |
(4,597 | ) | (3,267 | ) | ||||
Income tax provision (benefit) |
(1 | ) | 9 | |||||
|
|
|
|
|||||
Net loss |
$ | (4,596 | ) | $ | (3,276 | ) | ||
|
|
|
|
|||||
Net loss per share of common stock, basic and diluted |
$ | — | $ | — | ||||
|
|
|
|
|||||
Weighted-average shares outstanding, basic and diluted |
— | — | ||||||
|
|
|
|
Convertible Preferred Stock | Additional Paid-In Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
|||||||||||||||||||||||||||||||||||||||||||||
Series B Preferred Stock |
Series A-1 Preferred Stock |
Series A-2 Preferred Stock |
Common Shares | |||||||||||||||||||||||||||||||||||||||||||||
Shares | Amount | Shares | Amount | Shares | Amount | Total | Shares | Amount | ||||||||||||||||||||||||||||||||||||||||
Balance, January 1, 2020 |
— | $ | — | — | $ | — | — | $ | — | $ | — | 784,551 | $ | 78 | $ | 48,683 | $ | (68,440 | ) | $ | (19,679 | ) | ||||||||||||||||||||||||||
Conversion of common stock into preferred stock |
— | — | — | — | 784,511 | 48,628 | 48,628 | (784,551 | ) | (78 | ) | (48,550 | ) | — | (48,628 | ) | ||||||||||||||||||||||||||||||||
Conversion of convertible notes into preferred stock |
19,785 | 245 | 1,576,154 | 19,451 | — | — | 19,696 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Issuance of stock |
407,192 | 5,025 | — | — | — | — | 5,025 | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (3,276 | ) | (3,276 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, December 31, 2020 |
426,977 | 5,270 | 1,576,154 | 19,451 | 784,511 | 48,628 | 73,349 | — | — | 133 | (71,716 | ) | (71,583 | ) | ||||||||||||||||||||||||||||||||||
Conversion of Series A-2 Preferred stock to Series B Preferred stock |
12,226 | 151 | — | — | (12,226 | ) | (151 | ) | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||
Stock-based compensation |
— | — | — | — | — | — | — | — | — | 14 | — | 14 | ||||||||||||||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | — | — | — | — | (4,596 | ) | (4,596 | ) | ||||||||||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||
Balance, December 31, 2021 |
439,203 | $ | 5,421 | 1,576,154 | $ | 19,451 | 772,285 | $ | 48,477 | $ | 73,349 | — | $ | — | $ | 147 | $ | (76,312 | ) | $ | (76,165 | ) | ||||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
||||||||
2021 |
2020 |
|||||||
Cash flows from operating activities |
||||||||
Net loss |
$ | (4,596 | ) | $ | (3,276 | ) | ||
Adjustments to reconcile net loss to net cash used in operating activities |
||||||||
Amortization of discount on secured convertible notes |
140 | 1,454 | ||||||
Amortization of deferred financing costs |
— | 239 | ||||||
Accrued interest added to principal of convertible notes |
— | 1,615 | ||||||
Non-cash accrued interest related to convertible notes |
72 | — | ||||||
Change in fair value of derivative liability |
27 | — | ||||||
Gain on convertible note extinguishment |
— | (6,345 | ) | |||||
PPP loan forgiveness |
(91 | ) | (84 | ) | ||||
Gain on sale of assets and liabilities held for sale |
— | (71 | ) | |||||
Loss on disposal of other assets |
— | 6 | ||||||
Stock-based compensation |
14 | — | ||||||
Changes in operating assets and liabilities |
||||||||
Inventory |
55 | 137 | ||||||
Prepaid expenses |
12 | 129 | ||||||
Accounts payable |
(297 | ) | 225 | |||||
Accrued expenses and other current liabilities |
(450 | ) | 395 | |||||
Other assets |
— | 4 | ||||||
|
|
|
|
|||||
Net cash used in operating activities |
(5,114 | ) | (5,572 | ) | ||||
|
|
|
|
|||||
Cash flows from financing activities |
||||||||
Proceeds from issuance of convertible notes |
2,746 | — | ||||||
Proceeds from issuance of Series B Preferred stock |
— | 5,025 | ||||||
Repayment to settle convertible notes |
— | (300 | ) | |||||
Proceeds from PPP loan |
91 | 104 | ||||||
Repayment of PPP loan |
(20 | ) | — | |||||
Proceeds from SBA loan |
— | 63 | ||||||
|
|
|
|
|||||
Net cash provided by financing activities |
2,817 | 4,892 | ||||||
|
|
|
|
|||||
Net decrease in cash |
(2,297 | ) | (680 | ) | ||||
Cash, beginning of year |
2,807 | 3,487 | ||||||
|
|
|
|
|||||
Cash, end of year |
$ | 510 | $ | 2,807 | ||||
|
|
|
|
|||||
Supplemental disclosure of cash flow information |
||||||||
Cash paid for income taxes |
$ | — | $ | 1 | ||||
Cash paid for interest |
$ | — | $ | 1 | ||||
Supplemental disclosure of noncash flow information |
||||||||
Fair value of derivative liability and discount on issuance of convertible notes |
$ | 499 | $ | — | ||||
Conversion of Series A-2 Preferred stock into Series B Preferred stock |
$ | 151 | $ | — | ||||
Conversion of accrued expenses into convertible notes |
$ | 114 | $ | — | ||||
Other receivables of cash in transit for convertible notes |
$ | 58 | $ | — | ||||
Assets and liabilities held for sale exchanged for prepaid research and development |
$ | — | $ | 110 | ||||
Conversion of common stock into Series A-2 Preferred stock |
$ | — | $ | 48,628 | ||||
Conversion of convertible notes into Series A-1 Preferred stock |
$ | — | $ | 19,696 |
1. | DESCRIPTION OF BUSINESS |
1. | DESCRIPTION OF BUSINESS (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
Level 3 Rollforward |
Derivative Liability |
|||
Balance December 31, 2019 |
$ | 9,010 | ||
Recognized as part of the net gain on early extinguishment of convertible notes |
(9,010 | ) | ||
|
|
|||
Balance December 31, 2020 |
— | |||
Additions |
499 | |||
Changes in fair value |
27 | |||
|
|
|||
Balance December 31, 2021 |
$ | 526 | ||
|
|
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
2. | SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued) |
3. | ACCRUED EXPENSES |
2021 |
2020 |
|||||||
Accrued research and development |
$ | 58 | $ | 485 | ||||
Accrued bonus |
— | 47 | ||||||
Accrued legal |
27 | 40 | ||||||
Accrued interest |
72 | — | ||||||
Accrued other |
29 | 106 | ||||||
|
|
|
|
|||||
Total accrued expenses |
$ | 186 | $ | 678 | ||||
|
|
|
|
4. | CONVERTIBLE NOTES |
4. | CONVERTIBLE NOTES (continued) |
2021 | 2020 | |||||||
Dow Notes |
$ | 1,620 | $ | — | ||||
Union Carbide Notes |
1,080 | — | ||||||
IBT & David Humes Notes |
114 | — | ||||||
Investor Notes |
104 | |||||||
Unamortized Debt Discount |
(359 | ) | — | |||||
|
|
|
|
|||||
2,559 | — | |||||||
Less current portion |
(2,378 | ) | — | |||||
|
|
|
|
|||||
$ | 181 | $ | — | |||||
|
|
|
|
4. | CONVERTIBLE NOTES (continued) |
Years ending December 31, |
||||
2022 |
$ | 2,700 | ||
2023 |
— | |||
2024 |
218 | |||
|
|
|||
$ | 2,918 | |||
|
|
5. | NOTES PAYABLE — GOVERNMENT LOANS |
5. | NOTES PAYABLE — GOVERNMENT LOANS (continued) |
Years ending December 31, |
||||
2022 |
$ | — | ||
2023 |
1 | |||
2024 |
1 | |||
2025 |
1 | |||
2026 |
1 | |||
Thereafter |
59 | |||
|
|
|||
$ | 63 | |||
|
|
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK |
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK (continued) |
6. | CONVERTIBLE PREFERRED STOCK AND COMMON STOCK (continued) |
7. | STOCK-BASED COMPENSATION AWARDS |
Options | Weighted Average Exercise Price |
Total Intrinsic Value |
Weighted Average Remaining Contractual Life (Years) |
|||||||||||||
Outstanding as of December 31, 2019 |
73,974 | $ | 10.00 | |||||||||||||
Granted |
106,970 | $ | 3.82 | |||||||||||||
Forfeited |
(39,093 | ) | $ | 10.00 | ||||||||||||
|
|
|||||||||||||||
Outstanding as of December 31, 2020 |
141,851 | $ | 5.34 | $ | — | 8.84 | ||||||||||
|
|
|
|
|||||||||||||
Granted |
153,504 | $ | 0.55 | |||||||||||||
Forfeited |
(7,973 | ) | $ | 10.00 | ||||||||||||
|
|
|||||||||||||||
Outstanding as of December 31, 2021 |
287,382 | $ | 2.65 | $ | — | 8.61 | ||||||||||
|
|
|
|
|||||||||||||
Options exercisable as of December 31, 2021 |
67,840 | $ | 5.53 | $ | — | 7.94 | ||||||||||
|
|
|
|
7. | STOCK-BASED COMPENSATION AWARDS (continued) |
2021 |
2020 |
|||||||
Research and development |
$ | 12 | $ | — | ||||
General and administrative |
2 | — | ||||||
|
|
|
|
|||||
Total |
$ | 14 | $ | — | ||||
|
|
|
|
2021 |
2020 |
|||||||
Expected term (years) |
6.3 | 5.9 | ||||||
Expected volatility |
74.8 | % | 77.1 | % | ||||
Risk-free interest rate |
0.78 | % | 0.1 | % | ||||
Expected dividend rate |
0 | % | 0 | % |
8. | COMMITMENTS AND CONTINGENCIES |
8. | COMMITMENTS AND CONTINGENCIES (continued) |
9. | INCOME TAXES |
2021 |
2020 |
|||||||
Statutory income tax rate |
21.0 | % | 21.0 | % | ||||
State income tax |
3.6 | % | 3.3 | % | ||||
PPP Loan forgiveness |
0.5 | % | 0.5 | % | ||||
Other |
(1.3 | )% | (0.1 | )% | ||||
Valuation allowance |
(23.8 | )% | (25.0 | )% | ||||
|
|
|
|
|||||
Total effective income tax rate |
(0.0 | )% | (0.3 | )% | ||||
|
|
|
|
9. | INCOME TAXES (continued) |
2021 |
2020 |
|||||||
Deferred tax assets: |
||||||||
Net operating losses |
$ | 17,538 | $ | 16,637 | ||||
Accrued compensation |
— | 4 | ||||||
Reserves |
— | 31 | ||||||
Stock-based compensation |
3 | — | ||||||
Tax credits |
648 | 648 | ||||||
|
|
|
|
|||||
Total deferred tax assets |
18,189 | 17,320 | ||||||
|
|
|
|
|||||
Valuation allowance |
(18,189 | ) | (17,320 | ) | ||||
|
|
|
|
|||||
Net deferred tax assets |
$ | — | $ | — | ||||
|
|
|
|
10. | NET LOSS PER SHARE |
10. | NET LOSS PER SHARE (continued) |
2021 |
2020 |
|||||||
Options to purchase common stock |
287,382 | 141,851 | ||||||
Convertible preferred stock |
2,787,642 | 2,787,642 | ||||||
|
|
|
|
|||||
Total |
3,075,024 | 2,929,493 | ||||||
|
|
|
|
11. | SUBSEQUENT EVENTS |
11. | SUBSEQUENT EVENTS (continued) |
Page |
||||||
ARTICLE I CERTAIN DEFINITIONS |
A-2 |
|||||
Section 1.01 |
Definitions |
A-2 | ||||
Section 1.02 |
Construction |
A-16 | ||||
Section 1.03 |
Knowledge |
A-17 | ||||
Section 1.04 |
Equitable Adjustments |
A-17 | ||||
ARTICLE II THE MERGER |
A-17 |
|||||
Section 2.01 |
The Merger |
A-17 | ||||
Section 2.02 |
Effective Time |
A-17 | ||||
Section 2.03 |
Effect of the Merger |
A-17 | ||||
Section 2.04 |
Governing Documents |
A-17 | ||||
Section 2.05 |
Directors and Officers |
A-17 | ||||
Section 2.06 |
Further Assurances |
A-18 | ||||
Section 2.07 |
Intended Tax Treatment |
A-18 | ||||
ARTICLE III MERGER CONSIDERATION; CONVERSION OF SECURITIES |
A-18 |
|||||
Section 3.01 |
Merger Consideration |
A-18 | ||||
Section 3.02 |
Effect on Convertible Notes and Capital Stock |
A-19 | ||||
Section 3.03 |
Exchange Procedures; Stockholder Deliverables |
A-20 | ||||
Section 3.04 |
Lost Certificate |
A-21 | ||||
Section 3.05 |
Company Dissenting Shares |
A-21 | ||||
Section 3.06 |
Treatment of Company Warrants |
A-21 | ||||
Section 3.07 |
Treatment of Company Equity Awards and Company Restricted Share Units. |
A-22 | ||||
Section 3.08 |
Withholding Rights |
A-23 | ||||
ARTICLE IV CLOSING TRANSACTIONS; ADJUSTMENT TO MERGER CONSIDERATION |
A-23 |
|||||
Section 4.01 |
Closing |
A-23 | ||||
Section 4.02 |
Closing Statement |
A-23 | ||||
ARTICLE V REPRESENTATIONS AND WARRANTIES OF THE COMPANY |
A-24 |
|||||
Section 5.01 |
Corporate Organization of the Company |
A-24 | ||||
Section 5.02 |
Subsidiaries |
A-24 | ||||
Section 5.03 |
Due Authorization |
A-24 | ||||
Section 5.04 |
No Conflict |
A-25 | ||||
Section 5.05 |
Governmental Authorities; Consents |
A-25 | ||||
Section 5.06 |
Current Capitalization |
A-25 | ||||
Section 5.07 |
Financial Statements |
A-26 | ||||
Section 5.08 |
Undisclosed Liabilities |
A-27 | ||||
Section 5.09 |
Litigation and Proceedings |
A-27 | ||||
Section 5.10 |
Compliance with Laws |
A-27 | ||||
Section 5.11 |
Contracts; No Defaults |
A-28 | ||||
Section 5.12 |
Company Benefit Plans |
A-30 | ||||
Section 5.13 |
Labor Matters |
A-31 | ||||
Section 5.14 |
Taxes |
A-33 | ||||
Section 5.15 |
Insurance |
A-35 | ||||
Section 5.16 |
Permits |
A-35 | ||||
Section 5.17 |
Machinery, Equipment and Other Tangible Property |
A-35 | ||||
Section 5.18 |
Real Property |
A-35 |
Section 5.19 |
Intellectual Property, Information Technology and Data Matters |
A-36 | ||||
Section 5.20 |
Environmental Matters |
A-38 | ||||
Section 5.21 |
Absence of Changes |
A-39 | ||||
Section 5.22 |
Brokers’ Fees |
A-39 | ||||
Section 5.23 |
Healthcare Matters |
A-39 | ||||
Section 5.24 |
Insurance Regulatory Matters |
A-40 | ||||
Section 5.25 |
Related Party Transactions |
A-40 | ||||
Section 5.26 |
Registration Statement |
A-40 | ||||
Section 5.27 |
Government Contracts |
A-40 | ||||
Section 5.28 |
FDA Matters |
A-41 | ||||
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF ACQUIROR PARTIES |
A-42 |
|||||
Section 6.01 |
Corporate Organization |
A-42 | ||||
Section 6.02 |
Due Authorization |
A-43 | ||||
Section 6.03 |
No Conflict |
A-43 | ||||
Section 6.04 |
Litigation and Proceedings |
A-44 | ||||
Section 6.05 |
Governmental Authorities; Consents |
A-44 | ||||
Section 6.06 |
Financial Ability; Trust Account |
A-44 | ||||
Section 6.07 |
Brokers’ Fees |
A-45 | ||||
Section 6.08 |
SEC Reports; Financial Statements; Sarbanes-Oxley Act; Undisclosed Liabilities |
A-45 | ||||
Section 6.09 |
Business Activities |
A-46 | ||||
Section 6.10 |
Tax Matters |
A-46 | ||||
Section 6.11 |
Capitalization |
A-48 | ||||
Section 6.12 |
Nasdaq Stock Market Listing |
A-48 | ||||
Section 6.13 |
PIPE Investment |
A-49 | ||||
Section 6.14 |
Sponsor Support Agreement |
A-49 | ||||
Section 6.15 |
Related Party Transactions |
A-49 | ||||
Section 6.16 |
Investment Company Act |
A-50 | ||||
Section 6.17 |
Acquiror Stockholders |
A-50 | ||||
Section 6.18 |
Contracts |
A-50 | ||||
Section 6.19 |
No Alternative Transactions |
A-50 | ||||
ARTICLE VII COVENANTS OF THE COMPANY |
A-50 |
|||||
Section 7.01 |
Conduct of Business |
A-50 | ||||
Section 7.02 |
Inspection |
A-53 | ||||
Section 7.03 |
No Claim Against the Trust Account |
A-53 | ||||
Section 7.04 |
Proxy Solicitation; Other Actions |
A-53 | ||||
Section 7.05 |
Code Section 280G |
A-54 | ||||
Section 7.06 |
FIRPTA Certificates |
A-55 | ||||
Section 7.07 |
Company Stockholder Approval; Support Agreements |
A-55 | ||||
ARTICLE VIII COVENANTS OF ACQUIROR |
A-55 |
|||||
Section 8.01 |
Indemnification and Insurance |
A-55 | ||||
Section 8.02 |
Conduct of Acquiror During the Interim Period |
A-57 | ||||
Section 8.03 |
PIPE Investment |
A-58 | ||||
Section 8.04 |
Certain Transaction Agreements |
A-58 | ||||
Section 8.05 |
Inspection |
A-59 | ||||
Section 8.06 |
Section 16 Matters |
A-59 | ||||
Section 8.07 |
Acquiror NASDAQ Listing |
A-59 | ||||
Section 8.08 |
Acquiror Public Filings |
A-59 | ||||
Section 8.09 |
Intentionally Omitted |
A-59 |
Section 8.10 |
LTIP; Employee Stock Purchase Program |
A-59 | ||||
Section 8.11 |
Qualification as an Emerging Growth Company |
A-60 | ||||
ARTICLE IX JOINT COVENANTS |
A-60 |
|||||
Section 9.01 |
Support of Transaction |
A-60 | ||||
Section 9.02 |
Registration Statement |
A-60 | ||||
Section 9.03 |
Acquiror Special Meeting |
A-62 | ||||
Section 9.04 |
Exclusivity |
A-63 | ||||
Section 9.05 |
Tax Matters |
A-64 | ||||
Section 9.06 |
Confidentiality; Publicity |
A-64 | ||||
Section 9.07 |
Cooperation; Further Assurances |
A-65 | ||||
ARTICLE X CONDITIONS TO OBLIGATIONS |
A-65 |
|||||
Section 10.01 |
Conditions to Obligations of All Parties |
A-65 | ||||
Section 10.02 |
Additional Conditions to Obligations of Acquiror Parties |
A-66 | ||||
Section 10.03 |
Additional Conditions to the Obligations of the Company |
A-67 | ||||
Section 10.04 |
Frustration of Conditions |
A-68 | ||||
Section 10.05 |
Sponsor Agreement |
A-68 | ||||
ARTICLE XI TERMINATION/EFFECTIVENESS |
A-68 |
|||||
Section 11.01 |
Termination |
A-68 | ||||
Section 11.02 |
Effect of Termination |
A-70 | ||||
ARTICLE XII MISCELLANEOUS |
A-70 |
|||||
Section 12.01 |
Waiver |
A-70 | ||||
Section 12.02 |
Notices |
A-70 | ||||
Section 12.03 |
Assignment |
A-71 | ||||
Section 12.04 |
Rights of Third Parties |
A-71 | ||||
Section 12.05 |
Expenses |
A-71 | ||||
Section 12.06 |
Governing Law |
A-71 | ||||
Section 12.07 |
Captions; Counterparts |
A-72 | ||||
Section 12.08 |
Schedules and Exhibits |
A-72 | ||||
Section 12.09 |
Entire Agreement |
A-72 | ||||
Section 12.10 |
Amendments |
A-72 | ||||
Section 12.11 |
Severability |
A-72 | ||||
Section 12.12 |
Jurisdiction; WAIVER OF TRIAL BY JURY |
A-72 | ||||
Section 12.13 |
Enforcement |
A-73 | ||||
Section 12.14 |
Non-Recourse |
A-73 | ||||
Section 12.15 |
Nonsurvival of Representations, Warranties and Covenants |
A-73 | ||||
Section 12.16 |
Acknowledgements |
A-74 | ||||
Section 12.17 |
Legal Representation |
A-75 |
Exhibit A – | Form of Sponsor Support Agreement | |
Exhibit B – | Form of Support Agreement | |
Exhibit C – | Form of Acquiror Charter | |
Exhibit D – | Form of Acquiror Bylaws | |
Exhibit E – | Form of Amended and Restated Registration Rights Agreement | |
Exhibit F – | Form of Director Nomination Agreement | |
Exhibit G – | Form of Certificate of Merger |
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: | /s/ Bruce M. Rodgers | |
Name: | Bruce M. Rodgers | |
Title: | Chief Executive Officer and Chairman of the Board of Directors | |
LMF MERGER SUB, INC. | ||
By: | /s/ Bruce M. Rodgers | |
Name: | Bruce M. Rodgers | |
Title: | President |
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Name: | Eric Schlorff | |
Title: | Chief Executive Officer |
LMF Acquisition Opportunities, Inc. | ||
By: |
| |
Name: Bruce M. Rodgers | ||
Title: Chief Executive Officer |
SeaStar Medical, Inc. | ||
By: |
| |
Name: | ||
Title: |
LMFAO Sponsor, LLC | ||
By: |
| |
Name: Bruce M. Rodgers Title: President and Chief Executive Officer |
Address: |
c/o LMF Acquisition Opportunities, Inc. 1200 W. Platt St., Suite 100 Tampa, Florida 33606 |
By: |
| |
Name: | ||
Title: | ||
Address for Notices: | ||
With copies to: |
LMF Acquisition Opportunities, Inc. | ||
By: | ||
Name: | ||
Title: |
SeaStar Medical, Inc. | ||
By: | ||
Name: | ||
Title: |
STOCKHOLDER | ||||
Signature of Stockholder |
Name of Person Signing for the Stockholder (If signing in a representative capacity for a corporation, trust, partnership or other entity) | |||
Printed Name of Stockholder |
Title of Person Signing for the Stockholder (If signing in a representative capacity for a corporation, trust, partnership or other entity) | |||
[Signature of Stockholder’s Spouse] |
[Printed Name of Stockholder’s Spouse] |
Shares Owned Beneficially |
Shares Held of Record |
Shares Over Which the Stockholder has Full Voting Power |
||||||||||
Company Common Stock: |
[ | ●] | [ | ●] | [ | ●] | ||||||
Company Preferred Stock: |
[ | ●] | [ | ●] | [ | ●] |
By: | ||
Name: | ||
Title: | ||
Address for Notices: | ||
With copies to: |
COMPANY : | ||
LMF ACQUISITION OPPORTUNITIES, INC. | ||
By: | ||
Name: Bruce M. Rodgers | ||
Title: Chief Executive Officer |
INVESTORS: | ||
LMFAO SPONSOR, LLC | ||
By: | ||
Name: Bruce M. Rodgers | ||
Title: President and Chief Executive Officer |
INVESTORS: | ||
DOW EMPLOYEES’ PENSION PLAN TRUST | ||
By: | ||
Name: | ||
Title: |
UNION CARBIDE EMPLOYEE PENSION PLAN TRUST | ||
By: | ||
Name: | ||
Title: |
RICK BARNETT | ||
By: |
RAY CHOW | ||
By: |
ALLAN COLLINS | ||
By: |
DAVID HUMES | ||
By: |
ANDRES LOBO | ||
By: |
ERIC SCHLORFF | ||
By: |
KENNETH VAN HEEL | ||
By: |
CARYL BARON | ||
By: |
Name |
State of Incorporation | |
SeaStar Medical, Inc. | Delaware | |
LMF Merger Sub, Inc. | Delaware |
S EA STAR MEDICAL , INC . | ||
By: | ||
Name: | ||
Title: |
LMF Acquisition Opportunities, Inc. | ||
By: | ||
Name: Bruce M. Rodgers | ||
Title: Chief Executive Officer |
I |
PURPOSE OF THE PLAN |
II |
TYPES OF AWARDS |
III |
ADMINISTRATION OF THE PLAN |
IV |
ELIGIBILITY |
V |
SHARES SUBJECT TO THE PLAN |
VI |
OPTIONS |
VII |
STOCK APPRECIATION RIGHTS |
VIII |
STOCK AWARDS |
IX |
RESTRICTED STOCK UNITS |
X |
DIVIDEND EQUIVALENT RIGHTS |
XI |
OTHER AWARDS |
XII |
EFFECT OF CHANGE IN CONTROL |
XIII |
REPRICING PROGRAMS |
XIV |
MISCELLANEOUS |
I. | PURPOSE OF THE PLAN |
II. | ADMINISTRATION OF THE PLAN |
III. | STOCK SUBJECT TO PLAN |
IV. | PURCHASE/HOLDING PERIODS |
V. | ELIGIBILITY |
VI. | PAYROLL DEDUCTIONS |
VII. | PURCHASE RIGHTS |
VIII. | ACCRUAL LIMITATIONS |
IX. | EFFECTIVE DATE AND TERM OF THE PLAN |
X. | AMENDMENT OF THE PLAN |
XI. | GENERAL PROVISIONS |
XII. | DEFINITIONS |
SEASTAR MEDICAL HOLDING CORPORATION | ||
By: | ||
Name: |
||
Title: |
||
LMFAO SPONSOR, LLC | ||
By: | ||
Name: |
||
Title: |
Sincerely, |
|
[Applicable Nominee] |
Exhibit |
Description |
Incorporated by Reference | ||||||||
Schedule/ Form |
File Number |
Exhibits |
Filing Date | |||||||
99.3 | Consent of Eric Schlorff to be named as a director. | Form S-4 | 333-264993 | 99.3 | May 16, 2022 | |||||
99.4 | Consent of Andres Lobo to be named as a director. | Form S-4 | 333-264993 | 99.4 | May 16, 2022 | |||||
99.5 | Consent of Rick Barnett to be named as a director. | Form S-4 | 333-264993 | 99.5 | May 16, 2022 | |||||
99.6 | Consent of Allan Collins to be named as a director. | Form S-4 | 333-264993 | 99.6 | May 16, 2022 | |||||
99.7 | Consent of Kenneth Van Heel to be named as a director. | Form S-4 | 333-264993 | 99.7 | May 16, 2022 | |||||
99.8 | Preliminary Proxy Card. | |
|
|
| |||||
101.INS | Inline XBRL Instance Document. | |||||||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||||
101.SCH | Inline XBRL Taxonomy Extension Schema Document. | |||||||||
101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase Document. | |||||||||
101.LAB | Inline XBRL Taxonomy Extension Labels Linkbase Document. | |||||||||
101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||||
104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | |||||||||
107 | Filing Fee Table. | Form S-4 | 333-264993 | 107 | May 16, 2022 |
* | Indicates management contract or compensatory plan or arrangement. |
† | To be filed by amendment. |
# | Certain of the exhibits and schedules to this Exhibit have been omitted in accordance with Regulation S-K Item 601(a)(5). The Registrant agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request; provided, however, that LMAO may request confidential treatment pursuant to Rule 24b-2 of the Exchange Act, as amended, for any schedule or exhibit so furnished. |
a. | The undersigned registrant hereby undertakes: |
i. | To file, during any period in which offers or sales are being made, a post-effective amendment to this registration statement: |
(1) | To include any prospectus required by Section 10(a)(3) of the Securities Act of 1933; |
(2) | To reflect in the prospectus any facts or events arising after the effective date of the registration statement (or the most recent post-effective amendment thereof) which, individually or in the aggregate, represent a fundamental change in the information set forth in the registration statement. Notwithstanding the foregoing, any increase or decrease in volume of securities offered (if the total dollar value of securities offered would not exceed |
that which was registered) and any deviation from the low or high end of the estimated maximum offering range may be reflected in the form of prospectus filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the changes in volume and price represent no more than a 20% change in the maximum aggregate offering price set forth in the “Calculation of Registration Fee” table in the effective registration statement; and |
(3) | To include any material information with respect to the plan of distribution not previously disclosed in the registration statement or any material change to such information in the registration statement; |
ii. | That, for the purpose of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
iii. | To remove from registration by means of a post-effective amendment any of the securities being registered which remain unsold at the termination of the offering. |
iv. | That, for the purpose of determining liability under the Securities Act to any purchaser, each prospectus filed pursuant to Rule 424(b) as part of a registration statement relating to an offering other than registration statements relying on Rule 430B or other than prospectuses filed in reliance on Rule 430A, shall be deemed to be part of and included in the registration statement as of the date it is first used after effectiveness; provided, however, that no statement made in a registration statement or prospectus that is part of the registration statement or made in a document incorporated or deemed incorporated by reference into the registration statement or prospectus that is part of the registration statement will, as to a purchaser with a time of contract of sale prior to such first use, supersede or modify any statement that was made in the registration statement or prospectus that was part of the registration statement or made in any such document immediately prior to such date of first use. |
v. | That, for the purpose of determining any liability under the Securities Act to any purchaser in the initial distribution of the securities, the undersigned registrant undertakes that in a primary offering of securities of the undersigned registrant pursuant to this registration statement, regardless of the underwriting method used to sell the securities to the purchaser, if the securities are offered or sold to such purchaser by means of any of the following communications, the undersigned registrant will be a seller to the purchaser and will be considered to offer or sell such securities to such purchaser: |
(1) | Any preliminary prospectus or prospectus of the undersigned registrant relating to the offering required to be filed pursuant to Rule 424; |
(2) | Any free writing prospectus relating to the offering prepared by or on behalf of the undersigned registrant or used or referred to by the undersigned registrant; |
(3) | The portion of any other free writing prospectus relating to the offering containing material information about the undersigned registrant or its securities provided by or on behalf of the undersigned registrant; and |
(4) | Any other communication that is an offer in the offering made by the undersigned registrant to the purchaser. |
vi. | The undersigned registrant hereby undertakes as follows: that prior to any public reoffering of the securities registered hereunder through use of a prospectus which is a part of this registration statement, by any person or party who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer undertakes that such reoffering prospectus will contain the information called for by the applicable registration form with respect to re-offerings by persons who may be deemed underwriters, in addition to the information called for by the other Items of the applicable Form. |
vii. | The undersigned registrant hereby undertakes as follows: that every prospectus (i) that is filed pursuant to the paragraph immediately preceding, or (ii) that purports to meet the requirements of section 10(a)(3) of the Securities Act and is used in connection with an offering of securities subject to Rule 415, will be filed as a part of an amendment to the registration statement and will not be used until such amendment is effective, and that, for purposes of determining any liability under the Securities Act, each such post-effective amendment shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof. |
viii. | Insofar as indemnification for liabilities arising under the Securities Act may be permitted to directors, officers and controlling persons of the registrant pursuant to the foregoing provisions, or otherwise, the registrant has been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable. In the event that a claim for indemnification against such liabilities (other than the payment by the registrant of expenses incurred or paid by a director, officer or controlling person of the registrant in the successful defense of any action, suit or proceeding) is asserted by such director, officer or controlling person in connection with the securities being registered, the registrant will, unless in the opinion of its counsel the matter has been settled by controlling precedent, submit to a court of appropriate jurisdiction the question whether such indemnification by it is against public policy as expressed in the Securities Act and will be governed by the final adjudication of such issue. |
b. | The undersigned registrant hereby undertakes to respond to requests for information that is incorporated by reference into the prospectus pursuant to Items 4, 10(b), 11, or 13 of this Form, within one business day of receipt of such request, and to send the incorporated documents by first class mail or other equally prompt means. This includes information contained in documents filed subsequent to the effective date of the registration statement through the date of responding to the request. |
c. | The undersigned registrant hereby undertakes to supply by means of a post-effective amendment all information concerning a transaction, and the company being acquired involved therein, that was not the subject of and included in the registration statement when it became effective. |
LMF Acquisition Opportunities, Inc. | ||||
By: | /s/ Bruce M. Rodgers | |||
Name: | Bruce M. Rodgers | |||
Title: | Chief Executive Officer and Chairman of the Board |
Signature |
Title |
Date | ||
/s/ Bruce M. Rodgers |
Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer) | July 11, 2022 | ||
Bruce M. Rodgers | ||||
/s/ Richard Russell |
Chief Financial Officer, Member of the Board of Directors (Principal Financial Officer and Principal Accounting Officer) | July 11, 2022 | ||
Richard Russell | ||||
/s/ * |
Member of the Board of Directors |
July 11, 2022 | ||
Martin Traber | ||||
/s/ * |
Member of the Board of Directors |
July 11, 2022 | ||
Craig Burson | ||||
/s/ * |
Member of the Board of Directors |
July 11, 2022 | ||
Bruce Bennet |
*By: |
/s/ Bruce M. Rodgers | |
Bruce M. Rodgers | ||
Attorney-in-fact |
Exhibit 10.11
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the Agreement) is made as of August 13, 2020 (the Effective Date) by and between SeaStar Medical, Inc., (the Company), and Eric Schlorff (Executive).
WHEREAS, the Company and Executive previously entered into an Employment Agreement dated March 1, 2019 (Prior Employment Agreement);
WHEREAS, the Executive was promoted and appointed by the Board of Directors of the Company (the Board) to serve as the Companys Chief Executive Officer (CEO) and the parties desire to amend and restate the Prior Employment Agreement in connection with this promotion;
NOW, THEREFORE, in consideration of the promises and mutual covenants contained herein, the parties agree as follows:
1. Employment Period. Executives employment with the Company pursuant to this Agreement shall be at will, and either the Company or Executive may terminate the employment relationship at any time in accordance with the provisions of Paragraph 7. The period during which Executive is in fact employed by the Company pursuant to this Agreement shall constitute the Employment Period hereunder. Executives commencement of employment hereunder as the CEO shall be February 20, 2020 (the CEO Employment Commencement Date). All number of shares of common stock set forth herein reflects the reverse stock split effectuated by the Company on or about July 30, 2020.
2. Duties and Responsibilities.
A. Executive shall serve as the Companys Chief Executive Officer (CEO), with a principal office in the Companys Denver, Colorado location, and shall report to the Companys Board. Executive agrees to perform in good faith and to the best of his ability all services that may be required of Executive hereunder and to be available to render such services at all reasonable times and places in accordance with such directions and requests as may be made from time to time by the Board.
B. Executive is expected and agrees to devote his full working time and attention to the business of the Company, and will not render services to any other business without the prior approval of the Board or, directly or indirectly, engage or participate in any business that is competitive in any manner with the business of the Company.
C. Executive also understands and agrees that he must fully comply with the Companys standard operating policies, procedures, and practices that are from time to time in effect during the term of his employment.
3. Compensation.
A. During the Employment Period, Executive shall receive an annual gross base salary, to be paid monthly in accordance with the Companys normal payroll procedures (Base Salary), less all applicable withholdings and deductions. Executives starting annual gross Base Salary shall be $300,000, less applicable deductions and withholding.
1
B. Executive shall also be eligible to participate in the Companys bonus plan to be established by the Board or its compensation committee from time-to-time based on specified financial, business and operational targets and milestones.
C. The Company shall deduct and withhold from any compensation payable to Executive any and all applicable federal, state, and local income and employment withholding taxes and any other amounts required to be deducted or withheld by the Company under applicable statutes, regulations, ordinances, or orders governing or requiring the withholding or deduction of amounts otherwise payable as compensation or wages.
4. Equity.
A. Prior to the date hereof, the Executive has received a grant of stock option to purchase an aggregate of 14,950 shares of common stock (the Option). The Option shall be subject to the terms and conditions of the applicable Stock Option Agreement and Stock Option Plan. Twenty-five percent (25%) of the shares subject to the Option shall vest twelve (12) months after March 1, 2019 (the Employment Commencement Date in the Prior Employment Agreement). No shares shall vest before such date, and no rights to any vesting shall be earned or accrued prior to such date. The remaining shares shall thereafter vest monthly over the subsequent thirty-six (36) months in equal monthly amounts, subject to Executives continuing eligibility.
B. Subject to approval of the Board, the Company shall grant Executive an additional option under the Plan to purchase up to 69,801 shares of the Companys Common Stock (the Additional Option), representing approximately 2.5% of issued and outstanding shares of the Company as of the date hereof. The Additional Option shall be subject to the terms and conditions of the applicable Stock Option Agreement and Stock Option Plan. Twenty-five percent (25%) of the shares subject to the Option shall vest twelve (12) months after the CEO Employment Commencement Date, and thereafter the remaining shares subject to the Option shall vest monthly over the subsequent thirty-six (36) months in equal monthly amounts, subject to Executives continuing eligibility.
C. Subject to approval of the Board, the Company will grant Executive certain performance-based options (Performance Options) to purchase such number of shares of the Companys Common Stock upon the achievement of certain performance-based milestones with such vesting schedules as set forth in Schedule I hereto, and the Performance Options shall be granted pursuant to the Plan and shall have an exercise price equal to the fair market value of shares of Common Stock on the date of grant. In addition, Executive shall be eligible to receive certain special cash bonus as set forth in Schedule II hereto.
5. Benefits; Reimbursement.
A. Health Insurance. During the Employment Period, Executive shall be eligible to participate in all employee benefits and benefit plans generally made available to the Companys employees from time-to-time, including, but not limited to, medical, dental, vision and long-term disability insurance benefits and arrangements, subject to the terms, conditions and relevant qualification criteria for such benefits and benefit plans. The Company, in its discretion, may change from time-to-time the employee benefits and benefit plans it generally makes available to its employees.
2
B. Expense Reimbursement. Executive shall be entitled to reimbursement for all reasonable and necessary expenses incurred by Executive associated with the conduct of the Companys business in accordance with the Companys policies. Such reimbursements shall be subject to the Companys then-existing policies and procedures for reimbursement of business expenses, but in any event shall include submission of written requests for reimbursement within thirty (30) days of incurring the expense, accompanied by vouchers, receipts or other details of such expenses in the form required by the Company, sufficient to substantiate a deduction for such business expenses under all applicable rules and regulations of federal and state taxing authorities. If such expense qualifies for reimbursement, then the Company will reimburse Executive for that expense in accordance with existing expense reimbursement policies and practices.
C. Vacation, Sick, and Holiday Pay. Executive shall be entitled to vacation, sick, and holiday pay pursuant to the terms of the Companys generally applicable employee policies, as may exist from time to time.
6. Proprietary Information and Inventions Agreement. As a condition of employment and the benefits provided by the Prior Employment Agreement, Executive executed and delivered to the Company the Companys form of Proprietary Information and Inventions Agreement. Executive shall at all times remain subject to the terms and conditions of such PIIA, and nothing in this Agreement shall supersede, modify or affect Executives obligations, duties and responsibilities thereunder.
7. Termination of Employment. Executives employment pursuant to this Agreement is at will and may be terminated by either party, with or without cause, in accordance with the following provisions:
A. Upon cessation of Executives employment for any reason, Executive, or his estate if applicable, shall be paid any unpaid Base Salary earned under Paragraph 3 for services rendered through the date of such termination.
B. Executive may voluntarily separate from his employment under this Agreement at any time, but is requested to give the Company at least thirty (30) days prior written notice of such resignation.
C. The Company may terminate Executives employment with or without Cause under this Agreement at any time by providing notice of such termination to Executive. Such termination shall be effective immediately upon Executives receipt of such notice, unless otherwise indicated by the notice.
8. Severance Benefits
A. Resignation or Termination for Cause. If Executive resigns or is terminated for Cause (as defined below), then he shall only be entitled to payment of his final wages earned through the separation date (including payout of any accrued but unused vacation), but shall not otherwise be entitled to any severance or separation pay from the Company.
3
B. Termination Without Cause. If the Company terminates Executives employment without Cause (as defined below) then, subject to Executive timely executing, returning, and not revoking a separation agreement and general release of claims acceptable to the Company in its discretion (Separation Agreement), the Company will pay Executive an amount equal to Executives salaries for six (6) months.
(1) For purposes of this Agreement, Cause means, in the Companys reasonable good faith belief that one of the following have occurred:
(i) Executives conviction of, or a plea of guilty or no contest to, any felony under the laws of the United States or any state thereof or misconduct of any kind involving moral turpitude, fraud, embezzlement, theft, dishonesty, or sexual harassment;
(ii) Executives commission of an act of fraud, material misconduct, or misappropriation of property or information belonging to the Company;
(iii) Executive has engaged in an act of gross negligence or willful misconduct in the performance of his employment or Board obligations and duties;
(iv) Executive has engaged in any other misconduct that has had or is likely to have a material adverse effect on the Companys reputation or business; or
(2) Executives breach of the PIIA or other unauthorized misuse of the Companys trade secrets or proprietary information.
9. Change in Control
A. In the event of a Change of Control (as defined below), then 100% of any remaining balance of any unvested Shares shall immediately vest.
(1) For purposes of this Agreement, Change of Control means
(i) Any consolidation or merger of the Company with or into any other corporation or other entity or person, or any other corporate reorganization, in which the capital stock of the Companys immediately prior to such consolidation, merger or reorganization, represents less than fifty percent (50%) of the voting power of the surviving entity (or, if the surviving entity is a wholly owned subsidiary, its parent) immediately after such consolidation, merger or reorganization;
(ii) Any transaction or series of related transactions to which the Company is a party in which in excess of fifty percent (50%) of the Companys voting power is transferred; provided that a Corporate Transaction shall not include (x) any consolidation or merger effected exclusively to change the domicile of the Company, or (y) any transaction or series of transactions principally for bona fide equity financing purposes in which cash is received by the Company or any successor or indebtedness of the Company is cancelled or converted or a combination thereof; and
4
(iii) A sale, lease, exclusive license or other disposition of all or substantially all of the assets of the Company.
10. Benefit Limit. The benefit limitations of this Paragraph shall be applicable in the event Executive receives any benefits under this Agreement which are deemed to constitute parachute payments under Code Section 280G. In the event that any payments to which Executive becomes entitled in accordance with the provisions of this Agreement would otherwise constitute a parachute payment under Code Section 280G, then such payments will be subject to reduction to the extent necessary to assure that Executive receives only the greater of (i) the amount of those payments which would not constitute such a parachute payment or (ii) the amount which yields Executive the greatest after-tax amount of benefits after taking into account any excise tax imposed on the payments provided to Executive under this Agreement (or on any other benefits to which Executive may become entitled in connection with any change in control or ownership of the Company or the subsequent termination of his/her employment with the Company under Code Section 4999.
11. Delayed Commencement of Benefits. Notwithstanding any provision to the contrary in this Agreement, no payments or benefits that are subject to the restrictions of Code Section 409A to which Executive becomes entitled under this Agreement shall be made or paid to Executive prior to the earlier of (i) the expiration of the six (6)-month period measured from the date of his/her separation from service with the Company or (ii) the date of his/her death, if Executive is deemed at the time of such separation from service a key employee within the meaning of that term under Code Section 416(i) and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2). Upon the expiration of the applicable Code Section 409A(a)(2) deferral period, all payments deferred pursuant to this Paragraph shall be paid in a lump sum to Executive, and any remaining payments due under this Agreement shall be paid in accordance with the normal payment dates specified for them herein.
12. Compliance with Section 409A. It is the intent of the Company and Executive that the provisions of this Agreement comply with all applicable requirements of Code Section 409A. Accordingly, to the extent any provisions of this Agreement would otherwise contravene one or more requirements or limitations of Code Section 409A, then the Company and Executive shall, within the remedial amendment period provided under the Treasury Regulations issued under Code Section 409A, effect through mutual agreement the appropriate amendments to those provisions which are necessary in order to bring the provisions of this Agreement into compliance with Section 409A.
13. Cessation of Benefits. In the event of a breach by Executive of any of his/her obligations of this Agreement or under the PIIA, he/she shall cease to be entitled to any further benefits under this Agreement. In no event shall Executive be entitled to any benefits under this Agreement if (i) his/her employment ceases by reason of a termination for Cause, or (ii) he/she voluntarily resigns from employment with the Company.
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14. Successors and Assigns. This Agreement and all rights hereunder are personal to Executive and may not be transferred or assigned by Executive at any time. The Company may assign its rights, together with its obligations hereunder, to any parent, subsidiary, affiliate or successor, or in connection with any sale, transfer or other disposition of all or substantially all of its business and assets, provided, however, that any such assignee assumes the Companys obligations hereunder.
15. Notices.
A. Any and all notices, demands or other communications required or desired to be given hereunder by any party shall be in writing and shall be validly given or made to another party if delivered either personally or if deposited in the United States mail, certified or registered, postage prepaid, return receipt requested. If such notice, demand or other communication shall be delivered personally, then such notice shall be conclusively deemed given at the time of such personal delivery.
B. If such notice, demand or other communication is given by mail, such notice shall be conclusively deemed given forty-eight (48) hours after deposit in the United States mail addressed to the party to whom such notice, demand or other communication is to be given as hereinafter set forth:
To the Company:
SeaStar Medical, Inc.
3513 Brighton Blvd, Ste. 410
Denver, CO 80216
Attn: Ray Chow, Chairman of the Board
With a copy (via email is sufficient) to current directors on the Board
To Executive:
Eric Schlorff
11978 Ridge Parkway
Apt 12101
Broomfield, CO 80021
(or such personal address as the Company may have on file for Executive
at the time of notice.)
C. Any party hereto may change its address for the purpose of receiving notices, demands and other communications as herein provided by a written notice given in the manner aforesaid to the other party hereto.
6
16. General Creditor Status. The benefits to which Executive may become entitled under this Agreement shall be paid, when due, from the Companys general assets, and no trust fund, escrow arrangement or other segregated account shall be established as a funding vehicle for such payments. Accordingly, Executives right (or the right of the executors or administrators of Executives estate) to receive such benefits shall at all times be that of a general creditor of the Company and shall have no priority over the claims of other general creditors.
17. Governing Documents. This Agreement, together with (i) Schedules attached hereto, (ii) any equity agreements, and (iii) the PIIA, shall constitute the entire agreement and understanding of the Company and Executive with respect to the terms and conditions of Executives employment with the Company and the eligibility for any potential severance payments and consulting payments following separation from employment with the Company, and this Agreement shall supersede all prior and contemporaneous written or verbal agreements and understandings between Executive and the Company relating to such subject matter. This Agreement, including but not limited to the at-will nature of the employment relationship as reflected herein, may only be amended by written instrument signed by Executive and the Chief Executive Officer.
18. Governing Law. The provisions of Agreement shall be construed and interpreted under the laws of the State of Colorado applicable to agreements executed and wholly performed within the State of Colorado. If any provision of this Agreement as applied to any party or to any circumstance should be adjudged by a court of competent jurisdiction to be void or unenforceable for any reason, the invalidity of that provision shall in no way affect (to the maximum extent permissible by law) the application of such provision under circumstances different from those adjudicated by the court, the application of any other provision of this Agreement, or the enforceability or invalidity of this Agreement as a whole. Should any provision of this Agreement become or be deemed invalid, illegal or unenforceable in any jurisdiction by reason of the scope, extent or duration of its coverage, then such provision shall be deemed amended to the extent necessary to conform to applicable law so as to be valid and enforceable or, if such provision cannot be so amended without materially altering the intention of the parties, then such provision will be stricken, and the remainder of this Agreement shall continue in full force and effect.
19. Arbitration.
A. Except as provided herein, each party hereto agrees that any and all disputes which arise out of or relate to Executives employment, the termination of Executives employment, or the terms of this Agreement shall be resolved through final and binding arbitration. Such arbitration shall be in lieu of any trial before a judge and/or jury, and Executive and the Company expressly waive all rights to have such disputes resolved via trial before a judge and/or jury. Such disputes shall include, without limitation, claims for breach of contract or of the covenant of good faith and fair dealing, claims of discrimination, claims under any federal, state or local law or regulation now in existence or hereinafter enacted and as amended from time to time concerning in any way Executives employment with the Company or its termination. The only claims not covered by this Employment Agreement to arbitrate disputes, which shall instead be resolved pursuant to applicable law, are: (i) claims for benefits under the unemployment insurance benefits; (ii) claims for workers compensation benefits under any of the Companys workers compensation insurance policy or fund; (iii) claims under the National Labor Relations Act; and (iv) claims that may not be arbitrated as a matter of law.
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B. Arbitration will be conducted in CITY, Colorado. Arbitration shall be conducted in accordance with the Federal Arbitration Act (FAA) and the National Rules for the Resolution of Employment Disputes of the American Arbitration Association (AAA Rules available at www.adr.org), provided, however, that the arbitrator shall allow the discovery authorized by the Colorado Revised Uniform Arbitration Act, Colorado Revised Statutes section 13-22-217, et seq., or any other discovery required by applicable law in arbitration proceedings, including, but not limited to, discovery available under the applicable state and/or federal arbitration statutes. Also, to the extent that any of the AAA Rules or anything in this arbitration section conflicts with any arbitration procedures required by applicable law, the arbitration procedures required by applicable law shall govern.
C. During the course of arbitration, the Company will bear the cost of (i) the arbitrators fee, and (ii) any other expense or cost Executive would not be required to bear if Executive were free to bring the dispute or claim in court. Each party shall bear their own attorneys fees incurred in connection with the arbitration. The arbitrator will not have authority to award attorneys fees unless a statute or contract at issue in the dispute authorizes the award of attorneys fees to the prevailing party. In such case, the arbitrator shall have the authority to make an award of attorneys fees as required or permitted by the applicable statute or contract.
D. The arbitrator shall issue a written award that sets forth the essential findings of fact and conclusions of law on which the award is based. The arbitrator shall have the authority to award any relief authorized by law in connection with the asserted claims or disputes. The arbitrators award shall be subject to correction, confirmation, or vacation, as provided by applicable law setting forth the standard of judicial review of arbitration awards. Judgment upon the arbitrators award may be entered in any court having jurisdiction thereof.
E. This arbitration provision does not prohibit Executive from pursuing an administrative claim with a local, state or federal administrative agency such as the Colorado Division of Civil Rights, the Equal Employment Opportunity Commission, or the Colorado Department of Labor and Employment Division of Workers Compensation, but this provision does prohibit Executive from seeking or pursuing court action regarding any such claim.
20. Counterparts. This Agreement may be executed in more than one counterpart, each of which shall be deemed an original, but all of which together shall constitute but one and the same instrument.
21. Construction. The language of this Agreement shall be construed as to its fair meaning, and not strictly for or against either party. Any rule of construction that any ambiguities in a contract shall be construed against the drafter of a contract shall not apply.
22. Indemnification. Executive will be provided indemnification to the maximum extent permitted by the Companys and its subsidiaries and affiliates Articles of Incorporation or Bylaws, but on terms no less favorable than provided to any other Company executive officer or director and subject to the terms of any separate written indemnification agreement.
[Signature Page to Follow]
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement as of the day and year written above.
SEASTAR MEDICAL, INC. | ||
By: | /s/ Ray Chow | |
Title: | Chairman of the Board | |
Name: | Ray Chow |
EMPLOYEE | ||
/s/ Eric Schlorff | ||
Eric Schlorff |
Exhibit 10.12
SEASTAR MEDICAL, INC.
2019 STOCK INCENTIVE PLAN
I. | PURPOSE OF THE PLAN |
This 2019 Stock Incentive Plan is intended to promote the interests of SeaStar Medical, Inc., a Delaware corporation, by providing eligible persons in the Corporations employ or service with the opportunity to acquire a proprietary interest, or otherwise increase their proprietary interest, in the Corporation as an incentive for them to continue in such employ or service.
II. | AWARDS |
Awards under the Plan may consist of (i) options, (ii) stock awards and (iii) restricted stock units.
III. | ADMINISTRATION OF THE PLAN |
A. The Plan shall be administered by the Board. However, any or all administrative functions otherwise exercisable by the Board may be delegated to the Committee. Members of the Committee shall serve for such period of time as the Board may determine and shall be subject to removal by the Board at any time. The Board may also at any time terminate the functions of the Committee and reassume all powers and authority previously delegated to the Committee.
B. The Plan Administrator shall have the authority to determine which eligible persons are to receive Awards, the time or times when those Awards are to be made, the number of shares of Common Stock to be covered by each such Award, the applicable exercise and/or vesting schedule, the exercise price or purchase price (if any) to be paid by the Participant, the status of a granted option as either an Incentive Option or a Non-Statutory Option, and the maximum term for which the option is to remain outstanding.
C. The Plan Administrator shall have the authority (subject to the provisions of the Plan) to establish such rules and regulations as it may deem appropriate for proper administration of the Plan and to make such determinations under, and issue such interpretations of, the Plan and any outstanding Awards thereunder as it may deem necessary or advisable. Decisions of the Plan Administrator shall be final and binding on all parties who have an interest in the Plan or any Award thereunder.
IV. | ELIGIBILITY |
A. The persons eligible to participate in the Plan are as follows:
(i) Employees;
(ii) non-employee members of the Board and the non-employee members of the board of directors of any Parent or Subsidiary; and
(iii) consultants and other independent advisors who provide services to the Corporation (or any Parent or Subsidiary).
V. | STOCK SUBJECT TO THE PLAN |
A. The stock issuable under the Plan shall be shares of authorized but unissued or reacquired Common Stock. Subject to adjustment as provided in Section V.D, the maximum number of shares of Common Stock which may be issued over the term of the Plan shall not exceed 166,939,180 shares.
B. Shares of Common Stock subject to outstanding Awards shall be available for subsequent issuance under the Plan to the extent those Awards expire, terminate or are cancelled for any reason prior to the issuance of the underlying shares of Common Stock. Unvested shares issued under the Plan and subsequently forfeited to or repurchased by the Corporation, at a price per share not greater than the exercise or purchase price paid per share, pursuant to the Corporations repurchase rights under the Plan, shall be added back to the number of shares of Common Stock reserved for issuance under the Plan and shall accordingly be available for reissuance through one or more subsequent Awards under the Plan.
C. Subject to adjustment as provided in Section V.D, the maximum number of shares of Common Stock which may be issued under the Plan pursuant to Incentive Options shall not exceed 166,939,180 shares.
D. Should any change be made to the Common Stock by reason of any stock split, stock dividend, spin-off transaction, extraordinary distribution (whether in cash, securities or other property), recapitalization, combination of shares, exchange of shares or other similar transaction affecting the outstanding Common Stock without the Corporations receipt of consideration or in the event of a substantial reduction to the value of the outstanding shares of Common Stock by reason of a spin-off transaction or extraordinary distribution or in the event of any merger, consolidation, reincorporation, or other reorganization, then equitable adjustments shall be made to (i) the maximum number and/or class of securities issuable under the Plan, (ii) the number and/or class of securities and the exercise or purchase price per share in effect under each outstanding Award, (iii) the number and/or class of securities subject to forfeiture or the Corporations outstanding repurchase rights under the Plan and the repurchase price payable per share and (iv) the maximum number and/or class of securities that may be issued under the Plan pursuant to Incentive Options. In the event of a Change in Control, the provisions of Section XI shall apply. The adjustments shall be made by the Plan Administrator in such manner as the Plan Administrator deems appropriate, and those adjustments shall be final, binding and conclusive. In no event shall any such adjustments be made in connection with the conversion of one or more outstanding shares of the Corporations preferred stock into shares of Common Stock.
VI. | TERMS OF OPTIONS |
The Plan Administrator may grant options to eligible persons upon such terms as it deems appropriate. Each option shall be evidenced by an Award Agreement in the form approved by the Plan Administrator; provided, however, that each such agreement shall comply with the terms and conditions of the Plan.
A. Type of Options. Each option shall be designated in the Award Agreement as either an Incentive Option or a Non-Statutory Option. Incentive Options may only be granted to Employees.
B. Exercise Price.
1. The exercise price per share shall be fixed by the Plan Administrator but shall not be less than one hundred percent (100%) of the Fair Market Value per share of Common Stock on the option grant date; provided, however, if any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the exercise price per share shall not be less than one hundred ten percent (110%) of the Fair Market Value per share of Common Stock on the option grant date.
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2. The exercise price shall be payable in one or more of the following forms as determined by the Plan Administrator and specified in the Award Agreement:
(i) cash or check made payable to the Corporation;
(ii) a promissory note payable to the Corporation having such recourse, interest, security and repayment terms as the Plan Administrator deems appropriate after taking into account the tax and accounting consequences of permitting the use of a promissory note and subject to the applicable requirements of Delaware General Corporation Law;
(iii) by having the Corporation withhold a number of shares of Common Stock otherwise deliverable pursuant to the exercise of the option with such withheld shares valued at Fair Market Value on the Exercise Date;
(iv) should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised, in shares of Common Stock valued at Fair Market Value on the Exercise Date and held for the period (if any) necessary to avoid a charge to the Corporations earnings for financial reporting purposes; or
(v) should the Common Stock be registered under Section 12 of the 1934 Act at the time the option is exercised and only to the extent the option is exercised for vested shares, through a special sale and remittance procedure pursuant to which the Participant shall concurrently provide irrevocable instructions (A) to a brokerage firm (with such brokerage firm reasonably satisfactory to the Corporation for purposes of administering such procedure in compliance with any applicable pre-clearance or pre-notification requirements) to effect the immediate sale of the purchased shares and remit to the Corporation, out of the sale proceeds available on the settlement date, sufficient funds to cover the aggregate exercise price payable for the purchased shares plus all applicable taxes required to be withheld by the Corporation by reason of such exercise and (B) to the Corporation to deliver the certificates for the purchased shares directly to such brokerage firm on the settlement date in order to complete the sale.
Except to the extent a sale and remittance procedure is utilized, payment of the exercise price for the purchased shares must be made on the Exercise Date.
3. The Plan Administrator shall have the discretion (exercisable at any time) to permit the exercise price of an outstanding option to be paid in one or more of the forms specified in Section VI.B.2.
C. Exercise and Term of Options. Each option shall be exercisable at such time or times, during such period and for such number of shares as shall be determined by the Plan Administrator. No option shall have a term in excess of ten (10) years measured from the option grant date. If any Employee to whom an Incentive Option is granted is a 10% Stockholder, then the option term shall not exceed five (5) years measured from the option grant date.
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D. Effect | of Termination of Service. |
1. The following provisions shall govern the exercise of any options held by the Participant at the time of cessation of Service or death:
(i) Should the Participant cease to remain in Service for any reason other than death, Disability or Misconduct, then the Participant shall have a period of three (3) months from the date of such cessation of Service during which to exercise each outstanding option held by such Participant.
(ii) Should the Participants Service terminate by reason of Disability, then the Participant shall have a period of twelve (12) months from the date of such cessation of Service during which to exercise each outstanding option held by such Participant.
(iii) If the Participant dies while holding an outstanding option, then the personal representative of his or her estate or the person or persons to whom the option is transferred pursuant to the Participants will or the laws of inheritance or, if beneficiary designations are permitted and have been validly made, the Participants designated beneficiary or beneficiaries of that option shall have a twelve (12)-month period from the date of the Participants death to exercise such option.
(iv) Under no circumstances, however, shall any such option be exercisable after the specified expiration of the option term.
(v) During the applicable post-Service exercise period, the option may not be exercised in the aggregate for more than the number of vested shares for which the option is exercisable at the time of cessation of the Participants Service or death. No additional shares shall vest under the option following the Participants cessation of Service, except to the extent (if any) specifically authorized by the Plan Administrator in its sole discretion pursuant to an express written agreement with the Participant. Upon the expiration of the applicable exercise period or (if earlier) upon the expiration of the option term, the option shall terminate and cease to be outstanding.
(vi) Should the Participants Service be terminated for Misconduct or should the Participant otherwise engage in Misconduct while holding one or more outstanding options under the Plan, then all those options shall terminate immediately and cease to remain outstanding.
2. The Plan Administrator shall have the discretion, exercisable either at the time an option is granted or at any time while the option remains outstanding, to:
(i) extend the period of time for which the option is to remain exercisable following the Participants cessation of Service or death from the limited period otherwise in effect for that option to such greater period of time as the Plan Administrator shall deem appropriate, but in no event beyond the expiration of the option term, and/or
(ii) permit the option to be exercised, during the applicable post-Service exercise period, not only with respect to the number of vested shares of Common Stock for which such option is exercisable at the time of the Participants cessation of Service or death but also with respect to one or more additional installments in which the Participant would have vested under the option had the Participant continued in Service.
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E. Unvested Shares. The Plan Administrator shall have the discretion to grant options which are exercisable for unvested shares of Common Stock. Should the Participant cease Service while holding such unvested shares, the Corporation shall have the right to repurchase any or all of those unvested shares at a price per share equal to the lower of (i) the exercise price paid per share or (ii) the Fair Market Value per share of Common Stock at the time of the Participants cessation of Service. The terms upon which such repurchase right shall be exercisable (including the period and procedure for exercise and the appropriate vesting schedule for the purchased shares) shall be established by the Plan Administrator and set forth in the document evidencing such repurchase right.
F. Stockholder Rights. The holder of an option shall have no stockholder rights with respect to the shares subject to the option until such person shall have exercised the option, paid the exercise price and become the recordholder of the purchased shares.
G. Limits on Incentive Options. The aggregate Fair Market Value of the shares of Common Stock (determined as of the respective date or dates of grant) for which one or more options granted to any Employee under the Plan (or any other option plan of the Corporation or any Parent or Subsidiary) may for the first time become exercisable as Incentive Options during any one (1) calendar year shall not exceed the sum of One Hundred Thousand Dollars ($100,000). To the extent the Employee holds two (2) or more such options which become exercisable for the first time in the same calendar year, the foregoing limitation on the exercisability of such options as Incentive Options shall be applied on the basis of the order in which such options are granted, except to the extent otherwise provided under applicable law or regulation.
H. Repricing Program. The Plan Administrator shall have the authority to effect, at any time and from time to time, with the consent of the affected option holders, the cancellation of any or all outstanding options under the Plan and to grant in substitution therefor new options covering the same or different number of shares of Common Stock but with an exercise price per share based on the Fair Market Value per share of Common Stock on the new option grant date.
VII. | TERMS OF STOCK AWARDS |
The Plan Administrator may issue shares of Common Stock to eligible persons upon such terms as it deems appropriate. Each such stock issuance shall be evidenced by an Award Agreement in the form approved by the Plan Administrator; provided, however, that each such agreement shall comply with the terms and conditions of the Plan.
A. Consideration. Shares of Common Stock may be issued under the Plan for any of the following items of consideration which the Plan Administrator may deem appropriate in each individual instance:
1. cash or check made payable to the Corporation;
2. past services rendered to the Corporation (or any Parent or Subsidiary);
3. a promissory note payable to the Corporation having such recourse, interest, security and repayment terms as the Plan Administrator deems appropriate after taking account the tax and accounting consequences of permitting the use of a promissory note and subject to the applicable requirements of Delaware General Corporation Law; or
4. any other valid consideration under the Delaware General Corporation Law.
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B. Vesting Provisions.
1. Shares of Common Stock issued under the Plan may, in the discretion of the Plan Administrator, be fully and immediately vested upon issuance or may vest in one or more installments over the Participants period of Service or upon attainment of specified performance objectives.
2. Any new, substituted or additional securities or other property (including money paid other than as a regular cash dividend) which the Participant may have the right to receive with respect to the Participants unvested shares of Common Stock by reason of any stock dividend, stock split, spin-off transaction, extraordinary distribution (whether in cash, securities or other property), recapitalization, reincorporation, combination of shares, exchange of shares or other similar change affecting the outstanding Common Stock as a class without the Corporations receipt of consideration shall be issued subject to (i) the same vesting requirements applicable to the Participants unvested shares of Common Stock and (ii) such escrow arrangements as the Plan Administrator shall deem appropriate.
3. Should the Participant cease to remain in Service while holding one or more unvested shares of Common Stock issued under the Plan or should the performance objectives not be attained with respect to one or more such unvested shares of Common Stock, then those shares shall be immediately surrendered to the Corporation for cancellation, and the Participant shall have no further stockholder rights with respect to those shares. To the extent the surrendered shares were previously issued to the Participant for consideration paid in cash or cash equivalent (including the Participants purchase-money indebtedness), the Corporation shall repay to the Participant the lower of (i) the cash consideration paid for the surrendered shares or (ii) the Fair Market Value of those shares at the time of the Participants cessation of Service and shall cancel the unpaid principal balance of any outstanding purchase-money note of the Participant attributable to such surrendered shares by the applicable clause (i) or (ii) amount.
4. The Plan Administrator may in its discretion waive the surrender and cancellation of one or more unvested shares of Common Stock (or other assets attributable thereto) which would otherwise occur upon the non-completion of the vesting schedule applicable to those shares. Such waiver shall result in the immediate vesting of the Participants interest in the shares of Common Stock as to which the waiver applies. Such waiver may be effected at any time, whether before or after the Participants cessation of Service or the attainment or non-attainment of the applicable performance objectives.
C. Stockholder Rights. The Participant shall have full stockholder rights with respect to any shares of Common Stock issued to the Participant under a stock award, whether or not the Participants interest in those shares is vested. Accordingly, the Participant shall have the right to vote such shares and to receive any regular cash dividends paid on such shares.
VIII. | TERMS OF RESTRICTED STOCK UNITS |
The Plan Administrator may grant restricted stock units to eligible persons which entitle the Participants to receive the shares underlying those awards upon vesting or upon the expiration of a designated time period following the vesting of those awards. Each award of restricted stock units shall be evidenced by one or more Award Agreements in the form approved by the Plan Administrator; provided, however, that each such agreement shall comply with the terms and conditions of the Plan.
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A. Vesting Provisions.
1. Restricted stock units may, in the discretion of the Plan Administrator, vest in one or more installments over the Participants period of Service or upon the attainment of specified performance objectives.
2. Outstanding restricted stock units shall automatically terminate, and no shares of Common Stock shall actually be issued in satisfaction of those Awards, if the performance goals or Service requirements established for those awards are not attained or satisfied. The Plan Administrator, however, shall have the discretionary authority to issue vested shares of Common Stock under one or more outstanding awards of restricted stock units as to which the designated performance goals or Service requirements have not been attained or satisfied.
B. Stockholder Rights. The Participant shall not have any stockholder rights with respect to the shares of Common Stock subject to a restricted stock units award until that award vests and the shares of Common Stock are actually issued thereunder.
IX. | TRANSFERABILITY OF AWARDS |
A. Except as provided below, Awards, together with the shares of Common Stock subject to the Awards, shall not be assignable or transferable other than by will or by the laws of inheritance following the Participants death.
B. However, a Non-Statutory Option, together with the underlying unexercised shares of Common Stock, may to the extent permitted by the Plan Administrator be assigned in whole or in part during the Participants lifetime by gift or pursuant to a domestic relations order to one or more of the Participants Family Members or to a trust established exclusively for the Participant and/or one or more such Family Members. The assigned portion may only be exercised by the person or persons who acquire a proprietary interest in the Non-Statutory Option pursuant to the assignment. The terms applicable to the assigned portion shall be the same as those in effect for the option immediately prior to such assignment and shall be set forth in such documents issued to the assignee as the Plan Administrator may deem appropriate.
C. Notwithstanding the foregoing, the Participant may also, to the extent permitted by the Plan Administrator and subject to applicable law, designate one or more Family Members as the beneficiary or beneficiaries of his or her outstanding Awards under the Plan, and those Awards shall, in accordance with such designation, automatically be transferred to such beneficiary or beneficiaries upon the Participants death while holding those Awards. Such beneficiary or beneficiaries shall take the transferred Awards subject to all the terms and conditions of the applicable agreement evidencing each such transferred Award.
D. Prior to the date the Corporation first becomes subject to the reporting requirements of Section 13 or 15(d) of the 1934 Act, outstanding options under the Plan, together with the shares of Common Stock subject to those options during the period prior to exercise, shall not be the subject of any short position, put equivalent position (as such term is defined in Rule 16a-1(h) under the 1934 Act) or call equivalent position (as such term is defined Rule 16a-1(b) of the 1934 Act).
E. Except as otherwise provided above, until the date the Corporation first becomes subject to the reporting requirements of Section 13 or 15(d) of the 1934 Act, outstanding options under the Plan, together with the shares of Common Stock subject to those options during the period prior to exercise, shall not be the subject of any pledges, gifts, hypothecations or other transfers, other than pursuant to the Corporations repurchase rights or in connection with a Change in Control in which such options shall terminate and cease to be outstanding.
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X. | RESTRICTIONS ON SHARES |
A. Until such time as the Common Stock is first registered under Section 12 of the 1934 Act, the Corporation shall have the right of first refusal with respect to any proposed disposition by the Participant (or any successor in interest) of any shares of Common Stock issued under the Plan. Such right of first refusal shall be exercisable in accordance with the terms established by the Plan Administrator and set forth in the document evidencing such right.
B. In connection with any underwritten public offering by the Corporation of its equity securities, the Participant (or any successor in interest) shall be subject to transferability and market stand-off restrictions with respect to any shares of Common Stock issued under the Plan in accordance with the terms established by the Plan Administrator and set forth in the document evidencing the issuance of such shares.
C. The Plan Administrator may require that a Participant (or any successor in interest) execute a stockholders agreement, with such terms as the Plan Administrator deems appropriate, with respect to any shares of Common Stock issued to the Participant pursuant to the Plan.
D. Unvested shares may, in the Plan Administrators discretion, be held in escrow by the Corporation until the Participants interest in such shares vests or may be issued directly to the Participant with restrictive legends on the certificates evidencing those unvested shares.
XI. | CHANGE IN CONTROL |
A. In the event of a Change in Control, each outstanding Award, as determined by the Plan Administrator in its sole discretion, may be (i) assumed by the successor corporation (or parent thereof), (ii) canceled and substituted with an Award granted by the successor corporation (or parent thereof), (iii) otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction, or (iv) replaced with a cash retention program of the Corporation or any successor corporation which preserves the spread existing on the unvested shares subject to the Award at the time of the Change in Control (the excess of the Fair Market Value of those shares over the aggregate purchase price payable for such shares) and, subject to Section XI.C, provides for subsequent payout of that spread in accordance with the same exercise/vesting schedule applicable to those unvested Award shares, but only if such replacement cash program would not result in the treatment of the Award as an item of deferred compensation subject to Code Section 409A.
B. To the extent an outstanding Award is not assumed, substituted, continued or replaced in accordance with Section XI.A, such Award shall automatically vest in full immediately prior to the effective date of the Change in Control, unless the acceleration of such Award is subject to other limitations imposed by the Plan Administrator at the time of the grant of the Award. The Plan Administrator in its sole discretion shall have the authority to provide that to the extent any such Award, as so accelerated, remains unexercised and outstanding on the effective date of the Change in Control, such Award shall be cancelled and terminated and the holder of such Award shall become entitled to receive, upon consummation of the Change in Control and subject to Section XI.C, a lump sum cash payment in an amount equal to the product of (i) the number of shares of Common Stock subject to such Award and (ii) the excess of (a) the Fair Market Value per share of Common Stock on the date of the Change in Control over (b) the per share exercise price or purchase price in effect for such Award. However, any such Award shall be subject to cancellation and termination, without cash payment or other consideration due the Award holder, if the Fair Market Value per share of Common Stock on the date of such Change in Control is less than the per share exercise price or purchase price in effect for such Award.
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C. The Plan Administrator shall have the authority to provide that any escrow, holdback, earn-out or similar provisions in the definitive agreement effecting the Change in Control shall apply to any cash payment made pursuant to Section XI.A(iv) or Section XI.B to the same extent and in the same manner as such provisions apply to a holder of a share of Common Stock.
D. Immediately following the consummation of the Change in Control, all outstanding Awards shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction.
E. In the event of any Change in Control, the Plan Administrator in its sole discretion may determine that all outstanding repurchase rights (i) are to be assigned to the successor corporation (or parent thereof) or otherwise continued in full force and effect pursuant to the terms of the Change in Control transaction or (ii) are to be terminated and the shares of Common Stock subject to those terminated rights are to immediately vest in full, unless such accelerated vesting is precluded by limitations imposed by the Plan Administrator at the time the repurchase right is issued.
F. Each Award which is assumed in connection with a Change in Control or otherwise continued in effect shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities into which the shares of Common Stock subject to that Award would have been converted in consummation of such Change in Control had those shares actually been outstanding at that time. Appropriate adjustments shall also be made to (i) the number and class of securities available for issuance under the Plan following the consummation of such Change in Control and (ii) the exercise price or purchase price payable per share under each outstanding Award, provided the aggregate exercise price or purchase price payable for such securities shall remain the same. To the extent the actual holders of the Corporations outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation (or parent thereof) may, in connection with the assumption or continuation of the outstanding Awards and subject to the Plan Administrators approval, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control.
G. The Plan Administrator shall have the discretion, exercisable either at the time an Award is granted or at any time while an Award remains outstanding, to structure such Award so that (i) all or a portion of the Award shall automatically accelerate and vest (and any repurchase rights of the Corporation with respect to the unvested shares subject to that Award that become vested on such accelerated basis shall immediately terminate) upon the occurrence of a Change in Control, whether or not such Award is to be assumed in the Change in Control or otherwise continued in effect or (ii) all or a portion of the shares subject to such Award will automatically vest on an accelerated basis should the Participants Service terminate by reason of an Involuntary Termination within a designated period following the effective date of any Change in Control in which the Award is assumed or otherwise continued in effect and the repurchase rights applicable to those shares do not otherwise terminate.
H. The portion of any Incentive Option accelerated in connection with a Change in Control shall remain exercisable as an Incentive Option only to the extent the applicable One Hundred Thousand Dollar ($100,000) limitation is not exceeded. To the extent such dollar limitation is exceeded, the accelerated portion of such option shall be exercisable as a Non-Statutory Option under the Federal tax laws.
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I. The grant of Awards under the Plan shall in no way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
XII. | EFFECTIVE DATE, AMENDMENT AND TERMINATION OF PLAN |
A. The Plan shall become effective when adopted by the Board, but no option granted under the Plan may be exercised, and no shares shall be issued under the Plan, until the Plan is approved by the Corporations stockholders. If such stockholder approval is not obtained within twelve (12) months after the date of the Boards adoption of the Plan, then all Awards previously granted under the Plan shall terminate and cease to be outstanding, and no further Awards shall be granted and no shares shall be issued under the Plan. Subject to such limitation, the Plan Administrator may grant Awards and issue shares under the Plan at any time after the effective date of the Plan and before the date fixed herein for termination of the Plan.
B. The Board shall have complete and exclusive power and authority to amend or modify the Plan in any or all respects. However, no such amendment or modification shall adversely affect the rights and obligations with respect to Awards at the time outstanding under the Plan unless the Participant consents to such amendment or modification. In addition, certain amendments may require stockholder approval pursuant to applicable laws and regulations.
C. Awards may be granted under the Plan which are in excess of the number of shares of Common Stock then available for issuance under the Plan, provided any excess shares actually issued shall be held in escrow until there is obtained stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock available for issuance under the Plan. If such stockholder approval is not obtained within twelve (12) months after the date the first such excess Awards are made, then (i) any unexercised options and unvested restricted stock units granted on the basis of such excess shares shall terminate and cease to be outstanding and (ii) the Corporation shall promptly refund to the Participants the exercise price or purchase price paid for any excess shares issued under the Plan and held in escrow, together with interest (at the applicable Short Term Federal Rate) for the period the shares were held in escrow, and such shares shall thereupon be automatically cancelled and cease to be outstanding.
D. The Plan shall terminate upon the earliest of (i) the expiration of the ten (10)-year period measured from the date the Plan is adopted by the Board, (ii) the date on which all shares available for issuance under the Plan shall have been issued as vested shares or (iii) the termination of all outstanding Awards under the Plan in connection with a Change in Control. All Awards outstanding at the time of a clause (i) termination event shall continue to have full force and effect in accordance with the provisions of the documents evidencing those Awards.
XIII. | GENERAL |
A. Any cash proceeds received by the Corporation from the sale of shares of Common Stock under the Plan shall be used for general corporate purposes.
B. The Corporations obligation to deliver shares of Common Stock upon the exercise of any options granted under the Plan or upon the issuance or vesting of any shares issued under the Plan shall be subject to the satisfaction of all applicable tax withholding requirements.
C. The implementation of the Plan, the granting of any Awards under the Plan and the issuance of any shares of Common Stock under an Award shall be subject to the Corporations procurement of all approvals and permits required by regulatory authorities having jurisdiction over the Plan, the Awards granted under it and the shares of Common Stock issued pursuant to it.
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D. Nothing in the Plan shall confer upon the Participant any right to continue in Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Parent or Subsidiary employing or retaining such person) or of the Participant, which rights are hereby expressly reserved by each, to terminate such persons Service at any time for any reason, with or without cause.
E. In the event there are at any time two thousand (2,000) or more holders of outstanding options under the Plan or five hundred (500) or more holders of outstanding options under the Plan who are not accredited investors, the Corporation shall provide to each such option holder, at the time the outstanding options first become held by five hundred (500) or two thousand (2,000) holders, as applicable, and at successive six (6)-month intervals thereafter, financial statements that meet the requirements of Rule 701(e)(4) under the 1933 Act and that are at the time of distribution not more than one hundred and eighty (180) days old. Such obligation shall continue until such time as the Corporation becomes subject to the reporting requirements of Section 13 or 15(d) of the 1934 Act or (if earlier) no longer relies on the exemption from such reporting requirements provided by Rule 12h-1(f) under the 1934 Act. The Corporation may require that option holders agree to keep any financial information so provided confidential.
XIV. | DEFINITIONS |
The following definitions shall be in effect under the Plan:
A. Award shall mean an option, a stock award or a restricted stock unit.
B. Award Agreement shall mean the agreement entered into by the Corporation and the Participant evidencing the Award.
C. Board shall mean the Corporations Board of Directors.
D. Change in Control shall have the meaning assigned to such term in the Award Agreement for the particular Award or in any other agreement incorporated by reference into the Award Agreement for purposes of defining such term, and in the absence of such a Change in Control definition shall mean a change in ownership or control of the Corporation effected through any of the following transactions:
(i) a merger, consolidation or other reorganization approved by the Corporations stockholders, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporations outstanding voting securities immediately prior to such transaction; or
(ii) a stockholder-approved sale, transfer or other disposition of all or substantially all of the Corporations assets in liquidation or dissolution of the Corporation; or
(iii) the acquisition, directly or indirectly by any person or related group of persons (other than the Corporation or a person that directly or indirectly controls, is controlled by, or is under common control with, the Corporation), of beneficial ownership (within the meaning of Rule 13d-3
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of the 1934 Act) of securities possessing more than fifty percent (50%) of the total combined voting power of the Corporations outstanding securities pursuant to a tender or exchange offer made directly to the Corporations stockholders.
In no event shall any public offering of the Corporations securities be deemed to constitute a Change in Control.
E. Code shall mean the Internal Revenue Code of 1986, as amended.
F. Committee shall mean a committee of one (1) or more Board members appointed by the Board to exercise one or more administrative functions under the Plan.
G. Common Stock shall mean the Corporations common stock.
H. Corporation shall mean SeaStar Medical, Inc., a Delaware corporation, and any successor corporation to all or substantially all of the assets or voting stock of SeaStar Medical, Inc.
I. Disability shall have the meaning assigned to such term in the Award Agreement for the particular Award or in any other agreement incorporated by reference into the Award Agreement for purposes of defining such term, and in the absence of such a definition shall mean the inability of the Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that is expected to result in death or has lasted or can be expected to last for a continuous period of twelve (12) months or more.
J. Employee shall mean an individual who is in the employ of the Corporation (or any Parent or Subsidiary), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.
K. Exercise Date shall mean the date on which the Corporation shall have received written notice of the option exercise.
L. Fair Market Value per share of Common Stock on any relevant date shall be determined in accordance with the following provisions:
(i) If the Common Stock is at the time traded on the Nasdaq Capital, Global or Global Select Market, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question, as such price is reported by the National Association of Securities Dealers for that particular Stock Exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(ii) If the Common Stock is at the time listed on any other Stock Exchange, then the Fair Market Value shall be the closing selling price per share of Common Stock on the date in question on the Stock Exchange determined by the Plan Administrator to be the primary market for the Common Stock, as such price is officially quoted in the composite tape of transactions on such exchange and published in The Wall Street Journal. If there is no closing selling price for the Common Stock on the date in question, then the Fair Market Value shall be the closing selling price on the last preceding date for which such quotation exists.
(iii) If the Common Stock is not at the time listed on any Stock Exchange, then the Fair Market Value shall be determined by the Plan Administrator through the reasonable application of a reasonable valuation method that takes into account the applicable valuation factors set forth in the
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Treasury Regulations issued under Section 409A of the Code; provided, however, that with respect to an Incentive Option, such Fair Market Value shall be determined in accordance with the standards of Section 422 of the Code and the applicable Treasury Regulations thereunder.
M. Family Member means, with respect to a particular Participant, any child, stepchild, grandchild, parent, stepparent, grandparent, spouse, former spouse, sibling, niece, nephew, mother-in-law, father-in-law, son-in-law, daughter-in-law, brother-in-law or sister-in-law.
N. Incentive Option shall mean an option which satisfies the requirements of Code Section 422.
O. Involuntary Termination shall have the meaning assigned to such term in the Award Agreement for the particular Award or in any other agreement incorporated by reference into the Award Agreement for purposes of defining such term, and in the absence of such an Involuntary Termination definition shall mean the termination of the Service of any individual which occurs by reason of:
(i) such individuals involuntary dismissal or discharge by the Corporation for reasons other than Misconduct, or
(ii) such individuals voluntary resignation following (A) a change in his or her position with the Corporation which materially reduces his or her duties and responsibilities or the level of management to which he or she reports, (B) a reduction in his or her level of compensation (including base salary, fringe benefits and target bonus under any corporate-performance based bonus or incentive programs) by more than fifteen percent (15%) or (C) a relocation of such individuals place of employment by more than fifty (50) miles, provided and only if such change, reduction or relocation is effected without the individuals consent.
P. Misconduct shall have the meaning assigned to such term in the Award Agreement for the particular Award or in any other agreement incorporated by reference into the Award Agreement for purposes of defining such term, and in the absence of such a Misconduct definition shall mean the commission of any act of fraud, embezzlement or dishonesty by the Participant, any unauthorized use or disclosure by such person of confidential information or trade secrets of the Corporation (or any Parent or Subsidiary), or any other intentional misconduct by such person adversely affecting the business or affairs of the Corporation (or any Parent or Subsidiary) in a material manner. The foregoing definition shall not in any way preclude or restrict the right of the Corporation (or any Parent or Subsidiary) to discharge or dismiss any Participant or other person in the Service of the Corporation (or any Parent or Subsidiary) for any other acts or omissions, but such other acts or omissions shall not be deemed, for purposes of the Plan, to constitute grounds for termination for Misconduct.
Q. 1933 Act shall mean the Securities Act of 1933, as amended.
R. 1934 Act shall mean the Securities Exchange Act of 1934, as amended.
S. Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code Section 422.
T. Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
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U. Participant shall mean any person to whom an Award is granted under the Plan.
V. Plan shall mean the Corporations 2019 Stock Incentive Plan, as set forth in this document.
W. Plan Administrator shall mean either the Board or the Committee acting in its capacity as administrator of the Plan.
X. Service shall mean the performance of services for the Corporation (or any Parent or Subsidiary, whether now existing or subsequently established) by a person in the capacity of an Employee, a non-employee member of the board of directors or a consultant or independent advisor, except to the extent otherwise specifically provided in the documents evidencing the Award. For purposes of the Plan, a Participant shall be deemed to cease Service immediately upon the occurrence of either of the following events: (i) the Participant no longer performs services in any of the foregoing capacities for the Corporation or any Parent or Subsidiary or (ii) the entity for which the Participant is performing such services ceases to remain a Parent or Subsidiary of the Corporation, even though the Participant may subsequently continue to perform services for that entity. Service shall not be deemed to cease during a period of military leave, sick leave or other personal leave approved by the Corporation; provided, however, that for a leave which exceeds three (3) months, Service shall be deemed, for purposes of determining the period within which any outstanding option held by a Participant may be exercised as an Incentive Option, to cease on the first day immediately following the expiration of such three (3)-month period, unless such Participant is provided with the right to return to Service following such leave either by statute or by written contract. Except to the extent otherwise required by law or expressly authorized by the Plan Administrator or by the Corporations written policy on leaves of absence, no Service credit shall be given for vesting purposes for any period the Participant is on a leave of absence.
Y. Stock Exchange shall mean the American Stock Exchange, the Nasdaq Capital, Global or Global Select Market or the New York Stock Exchange.
Z. Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
AA. 10% Stockholder shall mean the owner of stock (as determined under Code Section 424(d)) possessing more than ten percent (10%) of the total combined voting power of all classes of stock of the Corporation (or any Parent or Subsidiary).
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Exhibit 10.22
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
SEASTAR MEDICAL, INC.
TRANSACTION BONUS AGREEMENT
This Transaction Bonus Agreement (this Agreement) is made as of December 23, 2021 by and between SeaStar Medical, Inc., a Delaware corporation (the Company), and Eric Schlorff (Employee).
WHEREAS, Employee is a valued employee and the Company has determined that it is appropriate to award certain Business Development Bonuses and Exit Event Bonuses under the terms and conditions of this Agreement to Employee as an incentive for Employee to complete such business development and Exit Event opportunities for the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, capitalized terms used herein that are not otherwise defined shall have the meanings set forth below:
Affiliate means (i) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company (or its successors), or (ii) any other entity (including its successors) which is designated as an Affiliate by the Board.
Board means the Board of Directors of the Company.
Business Development Objective means the execution and closing of a definitive BD Agreement.
BD Agreement means a definitive business development between the Company and one or more third parties, including but are not limited to, any licensing, collaboration, partnership, product development or strategic agreement or arrangement, in which the Company receives or is eligible to receive cash payment from such third parties, which may include but are not limited to, any upfront and milestone, licensing or service fees, royalty payments and other similar cash fees; provided that, (i) any such definitive business development agreement executed on or after the initial closing of an Exit Event will not be deemed a BD Agreement for the purposes of calculating the BD Cash Payment and therefore does not affect the Earned Cash Bonus that Employee is eligible for.
BD Cash Payment means the gross proceeds in cash received by the Company prior to the Expiration Date pursuant to the terms of a BD Agreement.
Cause means any of the following: (i) any material breach by the Employee of any material written agreement between the Employee and the Company (or its Affiliates, as applicable) (including without limitation an employment agreement or this Agreement) and the Employees failure to cure such breach within thirty (30) days after receiving written notice thereof; (ii) any failure by the Employee to comply with the Companys (or its Affiliates, as applicable) material written policies or rules as they may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance of the Employees duties and the Employees failure to cure such condition within thirty (30) days after receiving written notice thereof; (iv) the Employees repeated failure to follow reasonable and lawful instructions from the Board or Chief Executive Officer (or the Board of Directors or Chief Executive Officer of the Companys Affiliate, as applicable) and the Employees failure to cure such condition within thirty (30) days after receiving written notice thereof; (v) the Employees conviction of, or plea of guilty or nolo contendere to, any felony or other crime that results in, or is reasonably expected to result in, material harm to the business or reputation of the Company (or its Affiliate, as applicable), or any felony or misdemeanor involving moral turpitude; (vi) the Employees commission of or participation in an act of fraud; (vii) the Employees intentional material damage to the Companys (or its Affiliates, as applicable) business, property or reputation; (viii) the Employees unauthorized use or disclosure of any proprietary information or trade secrets of the Company or its Affiliates, as applicable, or any other party to whom the Employee owes an obligation of nondisclosure as a result of his or her relationship with the Company or its Affiliates; or (ix) the Employees intoxication or abuse of a controlled substance that adversely impairs the Employees performance of his duties for the Company or its Affiliates, as applicable. For purposes of clarity, a termination without Cause does not include any termination that occurs as a result of the Employees death or disability. The determination as to whether the Employees Continuous Service Status has been terminated for Cause shall be made in good faith by the Company (or its Affiliate, as applicable) and shall be final and binding on the Employee. The foregoing definition does not in any way limit the Companys (or any of its Affiliates, as applicable) ability to terminate the Employees employment relationship at any time.
Code means the Internal Revenue Code of 1986, as amended, and the Treasury regulations and other official guidance promulgated thereunder.
Expiration Date means earlier of (i) the date on which the Board approves a resolution to dissolve, wind down or proceed with a bankruptcy proceeding; (ii) December 31, 2022, as may be extended by the Companys Compensation Committee in writing from time to time.
Exit Event means (i) an acquisition of the Company by way of a merger, consolidation, reorganization or other transaction or series of transactions pursuant to which stockholders of the Company prior to such acquisition own less than fifty percent (50%) of the voting interests in the surviving or resulting entity; (ii) a sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company in a transaction or series of transactions; (iii) any person or group (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Board of Directors; (iv) a firmly underwritten public offering of the Companys common stock pursuant to a registration statement filed with the Securities and Exchange Commission, and
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
declared effective under the U.S. Securities Act of 1933 (and not subsequently withdrawn) covering the offer and sale of common stock for the Company; or (v) a merger of the Company with a special purpose acquisition company or any reverse merger or reverse acquisition transaction in which (x) the post-merger securities of the surviving or parent entity are publicly traded on the Nasdaq Stock Markets National Market, the New York Stock Exchange or another exchange or marketplace and (y) the stockholders of the Company receive upon conversion or exchange of their outstanding shares of capital stock of the Company securities constituting, or upon conversion would constitute (assuming conversion on such date), more than 50% of the outstanding share capital of such special purpose acquisition company.
Section 409A means Section 409A of the Code and the Treasury Regulations and other applicable guidance thereunder.
ARTICLE II
BUSINESS DEVELOPMENT BONUS
2.1 Business Development Bonus.
(a) Subject to the terms and conditions herein and provided that the Employee remains in a continued employment relationship with the Company or its Affiliates, if the Company receives BD Cash Payments in a range set forth in the table below, Employee will become eligible for the corresponding Total Amount of Earned Cash Bonus and the Company will pay Employee the difference between any previously paid Earned Cash Bonus and newly eligible Earned Cash Bonus in the next regular payroll after the date Employee becomes eligible for such Earned Cash Bonus and such eligibility is confirmed by the Compensation Committee. Notwithstanding anything contrary contained herein, including the foregoing sentence, if the Total BD Cash Payments is below [*], the corresponding Total Amount of Earned Cash Bonus set forth in the table above will vest and become payable by Company at the next regular payroll upon vesting as follows: 25% of such portion of the Total Amount of Earned Cash Bonus shall vest each six (6) months from the Vesting Commencement Date, so that such Total Amount of Earned Cash Bonus will be fully vested on the second anniversary of the Vesting Commencement Date and fully paid to Employee at the next regular payroll; provided that, upon the earlier of (a) an Exit Event or (b) the Total Amount of BD Cash Payment reaches [*], the vesting and payment of such Total Amount of Earned Cash Bonus shall accelerate such that the full amount vests and becomes immediate payable prior to the consummation of the Exit Event or at the next regular payroll if there is no Exit Event. For the purposes of this paragraph, Vesting Commencement Date means, as applicable, the date on which the Company receives [*] in Total Amount of BD Cash Payments.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Table for Business Development Bonus:
Total Amount of BD Cash Payments (1) |
Cumulative Amount of Earned Cash Bonus | |
[*] |
$112,500 | |
[*] |
$202,500 | |
[*] |
$315,000 | |
[*] |
$450,000 | |
[*] |
2.7 % of the cash payment multiple (2) |
(1) | Represents aggregate BD Cash Payments received by the Company under all BD Agreements prior to the Expiration Date. |
(2) | If the Total Amount of BD Cash Payments reaches [*] or more, then the Total Amount of Earned Cash Bonus shall be $450,000 plus an amount equal to 2.7% of the Cash Payment Multiple. The amount of Cash Payment Multiple shall be an amount equal to (i) Total Amount of BD Cash Payments minus (ii) [*]. As examples, if the Total Amount of BD Cash Payments is [*] then the difference between [*] and each such amount is [*]. Therefore, the Cash Payment Multiple for each such amount, and the Total Amount of Earned Cash Bonus will be [*], or $450,000 plus [*] (2.7% x [*]). |
(b) For the avoidance of doubt, payments of Total Amount of Earned Cash Bonus are intended to be cumulative, i.e, any prior payment of Earned Cash Bonus, if any, shall be deducted from any subsequent payment of Total Amount of Earned Cash Bonus.
2.2 Conditions and Timing of Payment. The Compensation Committee of the Company is responsible for reviewing and approving the achievement of Business Development Objectives and the amount of Earned Cash Bonus that should be paid to Employee. If the Compensation Committee determines that such Earned Cash Bonus shall be paid to Employee, the Company shall make such payment, subject to any tax withholding obligations, promptly after such determination but no later than the immediate next regularly scheduled payroll date for such Employee.
2.3 Termination of Employment. If the employment of the Employee with the Company or its Affiliates is terminated prior to the execution of the BD Agreement, then this Agreement will immediately terminate. Employee shall be eligible to receive any unpaid or unvested Earned Cash Bonus under this Agreement after the termination of his employment if the BD Agreement was executed prior to such termination, except that if the Employee is terminated for Cause, the Board of Directors, upon recommendation from the Compensation Committee, shall have the right and discretion to suspend or terminate any unpaid or unvested Earned Cash Bonus upon written notice to the Employee setting forth an explanation of such determination, including the facts forming the basis of the termination for Cause.
ARTICLE III
EXIT EVENT BONUS
3.1 Acquisition. Upon the initial closing of an Exit Event as described in clauses (i), (ii) and (iii) of the definition of Exit Event prior to the Expiration Date (an Acquisition), and the total cash consideration received by the stockholders of the Company (or in the case of clause (ii) of such definition, the total gross cash proceeds received by the Company) equals to or exceeds [*], then the Company shall pay Employee a one-time cash bonus (Acquisition Cash Bonus) in an amount equal to 2.7% of such total cash consideration or total gross cash proceeds promptly following the initial closing of the Acquisition.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
3.2 IPO. Upon the initial closing of an Exit Event as described in clause (iv) of the definition of Exit Event (an IPO), if the amount of cash gross proceeds received by the Company is [*] or more, then the Company shall pay Employee a one-time cash bonus of $270,000, payable promptly following the initial closing of the IPO.
3.3 Business Combination. Upon the initial closing of an Exit Event as described in clause (v) of the definition of Exit Event (a Business Combination), if the total amount of gross cash proceeds received or obtained by the Company, either pursuant to a PIPE, public offering or an acquisition of cash reserve in the trust fund, or a combination thereof, is [*] or more, then the Company shall pay Employee a one-time cash bonus of $270,000, payable promptly following the closing of the Business Combination.
3.4 Termination of Employment. If the employment of the Employee with the Company or its Affiliates is terminated prior to the closing of an Exit Event, then this Agreement will immediately terminate. Employee shall be eligible to receive any unpaid or unvested Earned Cash Bonus under this Agreement after the termination of his employment as long as the termination occurs on or following the closing of the Exit Event.
ARTICLE IV
MISCELLANEOUS
4.1 Non-transferability. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company.
4.2 Withholding Taxes. The Company or any applicable Affiliate shall be entitled, if necessary or desirable, to withhold from any amount due and payable hereunder to the Employee (or secure payment from Employee in lieu of withholding) the amount of any withholding or other tax due with respect to the Bonus payable to the Employee under this Agreement. If desirable, the Company or Affiliate may satisfy any such tax obligation by withholding from any payment of any kind otherwise due to the Employee. The Company shall have no liability for any tax imposed on the Employee as a result of amounts paid or payable to the Employee pursuant to this Agreement.
4.3 Amendment of the Agreement. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
4.5 Titles and Headings. The headings and titles used in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
4.6 Governing Law. The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the state of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the state of Delaware and agree that any such litigation shall be conducted only in the courts of Delaware or the federal courts of the United States located in Delaware and no other courts.
4.7 No Obligation; Company Discretion. No provision of this Agreement or the bonus granted hereunder shall be interpreted to impose an obligation on the Company to accept, agree to or otherwise enter into or complete any proposed or potential Exit Event or BD Agreement. The decision to enter into (or to reject) a proposed transaction to consummate an Exit Event or enter into an BD Agreement, and all terms and conditions of such transaction, including the amount, timing and form of consideration to be provided in connection therewith, shall be within the sole and absolute discretion of the Company. In addition, this Agreement shall not be interpreted or construed so as to limit or prevent the Company or any Affiliate from taking any actions with respect to the operation or conduct of their business or entering into any transaction that they deem appropriate or in their best interest.
4.8 No Right to Continued Service. Nothing in this Agreement shall interfere with or limit in any way any right of the Company or any of its Affiliates to terminate the Employees employment at any time and for any reason (or no reason), nor confer upon the Employee any right to continued service with the Company or any of its Affiliates for any period of time or to continue such Employees present (or any other) rate of compensation. By accepting any payment under this Agreement, the Employee and each Person claiming under or through the Employee shall be conclusively deemed to have indicated such Persons acceptance and ratification of, and consent to, any action taken by the Company or Board pursuant to this Agreement.
4.9 Other Benefits. The bonuses set forth in this Agreement are a special incentive and shall not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.10 No Equity Interest. The Employee shall not have any rights as a stockholder of the Company as a result of this Agreement or the bonuses granted pursuant hereto.
4.11 Unfunded Plan. To the extent that any person acquires a right to receive payments under this Agreement, such right shall be no greater than the right of an unsecured general creditor. All payments to be made hereunder shall be paid from general assets. This Agreement and the payment of any bonus hereunder are not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
4.12 Section 280G. Notwithstanding anything in this Agreement to the contrary, in the event that any portion of any payments to which the Employee becomes entitled in accordance with the provisions of this Agreement may become subject to the excise tax under Section 4999 of the Code or may be nondeductible to the Company or any Affiliate or any successor under Section 280G of the Code, payment of those amounts shall be contingent upon obtaining the approval of stockholders as provided in Section 280G(b)(5)(A)(ii) of the Code and the Treasury regulations thereunder or any successor provision. In the absence of such stockholder approval in accordance with Section 280G(b)(5)(A)(ii) of the Code or any successor provision, the portion of such payments that would otherwise cause any amount to be nondeductible under Section 280G of the Code shall be forfeited and the Employee shall have no further claim of right to such amount, except as otherwise determined by the Board.
4.13 Section 409A. This Agreement and the bonus set forth hereunder are intended to be exempt from the requirements of Section 409A of the Code pursuant to the short-term deferral rule.
4.14 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating to the subject matter hereof.
4.15 Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such partys address as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Companys books and records.
4.16 Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.
4.17 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution of a facsimile copy will have the same force and effect as execution of an original, and a facsimile signature will be deemed an original and valid signature.
7
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.18 Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to this Agreement or any notices required by applicable law by email or any other electronic means. The Employee hereby consents to (i) conduct business electronically (ii) receive such documents and notices by such electronic delivery and (iii) sign documents electronically and agrees to participate through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
4.19 Imposition of Other Requirements. The Company reserves the right to impose other requirements on payment of the bonuses set forth hereunder, to the extent the Company determines it is necessary or advisable in order to comply with applicable law. The Employee agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
[Signature Page Follows]
8
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
The parties have executed this Transaction Bonus Agreement as of the date first set forth above.
SEASTAR MEDICAL, INC. | ||
By: | /s/ Richard Barnett | |
Name: | Richard Barnett | |
Title: | Chairman of Compensation Committee of | |
Board of Directors of the Company | ||
ERIC SCHLORFF | ||
/s/ Eric Schlorff | ||
ADDRESS: |
| |
|
9
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Exhibit 10.23
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
SEASTAR MEDICAL, INC.
TRANSACTION BONUS AGREEMENT
This Transaction Bonus Agreement (this Agreement) is made as of December 23, 2021 by and between SeaStar Medical, Inc., a Delaware corporation (the Company), and Ray Chow (Participant).
WHEREAS, Participant previously executed a certain Amended and Restated Consulting Agreement dated May 20, 2020 with the Company (the Consulting Agreement).
WHEREAS, Participant is a valued advisor of the Company and the Company has determined that it is appropriate to award certain Business Development Bonuses and Exit Event Bonuses under the terms and conditions of this Agreement to Participant as an incentive for Participant to materialize such business development opportunities and/or consummate an Exit Event for the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, capitalized terms used herein that are not otherwise defined shall have the meanings set forth below:
Affiliate means (i) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company (or its successors), or (ii) any other entity (including its successors) which is designated as an Affiliate by the Board.
Board means the Board of Directors of the Company.
Business Development Objective means the execution and closing of a definitive BD Agreement.
BD Agreement means a definitive business development between the Company and one or more third parties, including but are not limited to, any licensing, collaboration, partnership, product development or strategic agreement or arrangement, in which the Company receives or is eligible to receive cash payment from such third parties, which may include but are not limited to, any upfront and milestone, licensing or service fees, royalty payments and other similar cash fees; provided that, (i) any such definitive business development agreement executed on or after the initial closing of an Exit Event will not be deemed a BD Agreement for the purposes of calculating the BD Cash Payment and therefore does not affect the Earned Cash Bonus that Participant is eligible for.
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
BD Cash Payment means the gross proceeds in cash received by the Company prior to the Expiration Date pursuant to the terms of a BD Agreement.
Code means the Internal Revenue Code of 1986, as amended, and the Treasury regulations and other official guidance promulgated thereunder.
Expiration Date means earlier of (i) the date on which the Board approves a resolution to dissolve, wind down or proceed with a bankruptcy proceeding; (ii) December 31, 2022, as may be extended by the Companys Compensation Committee in writing from time to time; or (iii) expiration or termination of the Consulting Agreement.
Exit Event means (i) an acquisition of the Company by way of a merger, consolidation, reorganization or other transaction or series of transactions pursuant to which stockholders of the Company prior to such acquisition own less than fifty percent (50%) of the voting interests in the surviving or resulting entity; (ii) a sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company in a transaction or series of transactions; (iii) any person or group (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Board of Directors; (iv) a firmly underwritten public offering of the Companys common stock pursuant to a registration statement filed with the Securities and Exchange Commission, and declared effective under the U.S. Securities Act of 1933 (and not subsequently withdrawn) covering the offer and sale of common stock for the Company; or (v) a merger of the Company with a special purpose acquisition company or any reverse merger or reverse acquisition transaction in which (x) the post-merger securities of the surviving or parent entity are publicly traded on the Nasdaq Stock Markets National Market, the New York Stock Exchange or another exchange or marketplace and (y) the stockholders of the Company receive upon conversion or exchange of their outstanding shares of capital stock of the Company securities constituting, or upon conversion would constitute (assuming conversion on such date), more than 50% of the outstanding share capital of such special purpose acquisition company.
Section 409A means Section 409A of the Code and the Treasury Regulations and other applicable guidance thereunder.
ARTICLE II
BUSINESS DEVELOPMENT BONUS
2.1 Business Development Bonus.
(a) Subject to the terms and conditions herein and provided that the Participant remains in a continued consulting relationship with the Company or its Affiliates, if the Company receives BD Cash Payments in a range set forth in the table below, Participant will become eligible for the corresponding Total Amount of Earned Cash Bonus and the Company will pay Participant the difference between any previously paid Earned Cash Bonus and newly eligible Earned Cash Bonus in the next month after the date Participant becomes eligible for such Earned Cash Bonus
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
and such eligibility is confirmed by the Compensation Committee. Notwithstanding anything contrary contained herein, including the foregoing sentence, if the Total BD Cash Payments is below [*], the corresponding Total Amount of Earned Cash Bonus set forth in the table above will vest and become payable by Company at the next month upon vesting as follows: 25% of such portion of the Total Amount of Earned Cash Bonus shall vest each six (6) months from the Vesting Commencement Date, so that such Total Amount of Earned Cash Bonus will be fully vested on the second anniversary of the Vesting Commencement Date and fully paid to Participant at the next month upon achievement; provided that, upon the earlier of (a) an Exit Event or (b) the Total Amount of BD Cash Payment reaches [*], the vesting and payment of such Total Amount of Earned Cash Bonus shall accelerate such that the full amount vests and becomes immediate payable prior to the consummation of the Exit Event or at the next month following achievement if there is no Exit Event. For the purposes of this paragraph, Vesting Commencement Date means, as applicable, the date on which the Company receives [*] in Total Amount of BD Cash Payments.
Table for Business Development Bonus:
Total Amount of BD Cash Payments (1) |
Cumulative Amount of Earned Cash Bonus | |
[*] |
$125,000 | |
[*] |
$225,000 | |
[*] |
$350,000 | |
[*] |
$500,000 | |
[*] |
3.0 % of the cash payment multiple (2) |
(1) Represents aggregate BD Cash Payments received by the Company under all BD Agreements prior to the Expiration Date.
(2) If the Total Amount of BD Cash Payments reaches [*] or more, then the Total Amount of Earned Cash Bonus shall be $500,000 plus an amount equal to 3.0% of the Cash Payment Multiple. The amount of Cash Payment Multiple shall be an amount equal to (i) Total Amount of BD Cash Payments minus (ii) [*]. As examples, if the Total Amount of BD Cash Payments is [*] then the difference between [*] and each such amount is [*]. Therefore, the Cash Payment Multiple for each such amount, and the Total Amount of Earned Cash Bonus will be [*], or $500,000 plus [*] (3.0% x [*]).
(b) For the avoidance of doubt, payments of Total Amount of Earned Cash Bonus are intended to be cumulative, i.e, any prior payment of Earned Cash Bonus, if any, shall be deducted from any subsequent payment of Total Amount of Earned Cash Bonus.
2.2 Conditions and Timing of Payment. The Compensation Committee of the Company is responsible for reviewing and approving the achievement of Business Development Objectives and the amount of Earned Cash Bonus that should be paid to Participant. If the Compensation Committee determines that such Earned Cash Bonus shall be paid to Participant, the Company shall make such payment promptly after such determination but no later than the immediate next monthly payment for such Participant under the Consulting Agreement.
2.3 Termination of Consulting Agreement. If the Consulting Agreement is terminated prior to the execution of the BD Agreement, then this Agreement will immediately terminate. Participant shall be eligible to receive any unpaid or unvested Earned Cash Bonus under this Agreement after the termination of the Consulting Agreement if the BD Agreement was executed prior to such termination.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
ARTICLE III
EXIT EVENT BONUS
3.1 Acquisition. Upon the initial closing of an Exit Event as described in clauses (i), (ii) and (iii) of the definition of Exit Event prior to the Expiration Date (an Acquisition), and the total cash consideration received by the stockholders of the Company (or in the case of clause (ii) of such definition, the total gross cash proceeds received by the Company) equals to or exceeds [*], then the Company shall pay Participant a one-time cash bonus (Acquisition Cash Bonus) in an amount equal to 3.0% of such total cash consideration or total gross cash proceeds promptly following the initial closing of the Acquisition.
3.2 IPO. Upon the initial closing of an Exit Event as described in clause (iv) of the definition of Exit Event (an IPO), if the amount of cash gross proceeds received by the Company is [*] or more, then the Company shall pay Participant a one-time cash bonus of $150,000, payable promptly following the initial closing of the IPO.
3.3 Business Combination. Upon the initial closing of an Exit Event as described in clause (v) of the definition of Exit Event (a Business Combination), if the total amount of gross cash proceeds received or obtained by the Company, either pursuant to a PIPE, public offering or an acquisition of cash reserve in the trust fund, or a combination thereof, is [*] or more, then the Company shall pay Participant a one-time cash bonus of $150,000, payable promptly following the closing of the Business Combination.
3.4 Consulting Agreement. Notwithstanding anything to the contrary, the parties agree that (a) in connection with an Exit Event, the Company shall pay Participant the higher of (i) the applicable bonus amount set forth in this Article 3 and (ii) the outstanding fees pursuant to the Consulting Agreement and that (b) in no event will Participant be paid under both this Agreement and the Consulting Agreement for the same Exit Event.
3.5 Termination of Consulting Agreement. If the Consulting Agreement is terminated prior to the closing of an Exit Event, then this Agreement will immediately terminate. Participant shall be eligible to receive any bonus under this Article III in connection with an Acquisition, IPO or Business Combination after the termination of Consulting Agreement so long as the termination occurs on or following the closing of an Exit Event.
ARTICLE IV
MISCELLANEOUS
4.1 Nontransferability. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.2 Withholding Taxes. Participant is responsible for all taxes, including withholding taxes with respect the any amount due and paid hereunder. The Company shall have no liability for any tax imposed on the Participant as a result of amounts paid or payable to the Participant pursuant to this Agreement.
4.3 Amendment of the Agreement. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance.
4.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
4.5 Titles and Headings. The headings and titles used in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
4.6 Governing Law. The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the state of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the state of Delaware and agree that any such litigation shall be conducted only in the courts of Delaware or the federal courts of the United States located in Delaware and no other courts.
4.7 No Obligation; Company Discretion. No provision of this Agreement or the bonus granted hereunder shall be interpreted to impose an obligation on the Company to accept, agree to or otherwise enter into or complete any proposed or potential Exit Event or BD Agreement. The decision to enter into (or to reject) a proposed transaction to consummate an Exit Event or enter into an BD Agreement, and all terms and conditions of such transaction, including the amount, timing and form of consideration to be provided in connection therewith, shall be within the sole and absolute discretion of the Company. In addition, this Agreement shall not be interpreted or construed so as to limit or prevent the Company or any Affiliate from taking any actions with respect to the operation or conduct of their business or entering into any transaction that they deem appropriate or in their best interest.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.8 No Right to Continued Service. Nothing in this Agreement shall interfere with or limit in any way any right of the Company or any of its Affiliates to terminate the Participants consulting relationship at any time and for any reason (or no reason), nor confer upon the Participant any right to continued service with the Company or any of its Affiliates for any period of time. By accepting any payment under this Agreement, the Participant and each person claiming under or through the Participant shall be conclusively deemed to have indicated such persons acceptance and ratification of, and consent to, any action taken by the Company or Board pursuant to this Agreement.
4.9 Other Benefits. The bonuses set forth in this Agreement are a special incentive and shall not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.
4.10 No Equity Interest. The Participant shall not have any rights as a stockholder of the Company as a result of this Agreement or the bonuses granted pursuant hereto.
4.11 General Assets. To the extent that any person acquires a right to receive payments under this Agreement, such right shall be no greater than the right of an unsecured general creditor. All payments to be made hereunder shall be paid from general assets.
4.12 Section 280G. Notwithstanding anything in this Agreement to the contrary, in the event that any portion of any payments to which the Participant becomes entitled in accordance with the provisions of this Agreement may become subject to the excise tax under Section 4999 of the Code or may be nondeductible to the Company or any Affiliate or any successor under Section 280G of the Code, payment of those amounts shall be contingent upon obtaining the approval of stockholders as provided in Section 280G(b)(5)(A)(ii) of the Code and the Treasury regulations thereunder or any successor provision. In the absence of such stockholder approval in accordance with Section 280G(b)(5)(A)(ii) of the Code or any successor provision, the portion of such payments that would otherwise cause any amount to be nondeductible under Section 280G of the Code shall be forfeited and the Participant shall have no further claim of right to such amount, except as otherwise determined by the Board.
4.13 Section 409A. This Agreement and the bonus set forth hereunder are intended to be exempt from the requirements of Section 409A of the Code pursuant to the short-term deferral rule.
4.14 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating to the subject matter hereof.
4.15 Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such partys address as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Companys books and records.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.16 Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.
4.17 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution of a facsimile copy will have the same force and effect as execution of an original, and a facsimile signature will be deemed an original and valid signature.
4.18 Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to this Agreement or any notices required by applicable law by email or any other electronic means. The Participant hereby consents to (i) conduct business electronically (ii) receive such documents and notices by such electronic delivery and (iii) sign documents electronically and agrees to participate through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
4.19 Imposition of Other Requirements. The Company reserves the right to impose other requirements on payment of the bonuses set forth hereunder, to the extent the Company determines it is necessary or advisable in order to comply with applicable law. The Participant agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
[Signature Page Follows]
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
The parties have executed this Transaction Bonus Agreement as of the date first set forth above.
SEASTAR MEDICAL, INC. | ||
By: | /s/ Richard Barnett | |
Name: | Richard Barnett | |
Title: Chairman of Compensation Committee of Board of Directors of the Company |
RAY CHOW | ||
/s/ Ray Chow | ||
ADDRESS: | ||
| ||
|
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Exhibit 10.24
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
SEASTAR MEDICAL, INC.
TRANSACTION BONUS AGREEMENT
This Transaction Bonus Agreement (this Agreement) is made as of December 23, 2021 by and between SeaStar Medical, Inc., a Delaware corporation (the Company), and Caryl Baron (Employee).
WHEREAS, Employee is a valued employee and the Company has determined that it is appropriate to award certain Business Development Bonuses and Exit Event Bonuses under the terms and conditions of this Agreement to Employee as an incentive for Employee to complete such business development and Exit Event opportunities for the Company.
NOW, THEREFORE, the parties hereto, intending to be legally bound, hereby agree as follows:
ARTICLE I
DEFINITIONS
For purposes of this Agreement, capitalized terms used herein that are not otherwise defined shall have the meanings set forth below:
Affiliate means (i) any corporation, trade or business (including, without limitation, a partnership or limited liability company) which is directly or indirectly controlled 50% or more (whether by ownership of stock, assets or an equivalent ownership interest or voting interest) by the Company (or its successors), or (ii) any other entity (including its successors) which is designated as an Affiliate by the Board.
BD Agreement means a definitive business development between the Company and one or more third parties, including but are not limited to, any licensing, collaboration, partnership, product development or strategic agreement or arrangement, in which the Company receives or is eligible to receive cash payment from such third parties, which may include but are not limited to, any upfront and milestone, licensing or service fees, royalty payments and other similar cash fees; provided that, (i) any such definitive business development agreement executed on or after the initial closing of an Exit Event will not be deemed a BD Agreement for the purposes of calculating the BD Cash Payment and therefore does not affect the Earned Cash Bonus that Employee is eligible for.
BD Cash Payment means the gross proceeds in cash received by the Company prior to the Expiration Date pursuant to the terms of a BD Agreement.
Board means the Board of Directors of the Company.
Business Development Objective means the execution and closing of a definitive BD Agreement.
Cause means any of the following: (i) any material breach by the Employee of any material written agreement between the Employee and the Company (or its Affiliates, as applicable) (including without limitation an employment agreement or this Agreement) and the Employees failure to cure such breach within thirty (30) days after receiving written notice thereof; (ii) any failure by the Employee to comply with the Companys (or its Affiliates, as applicable) material written policies or rules as they may be in effect from time to time; (iii) neglect or persistent unsatisfactory performance of the Employees duties and the Employees failure to cure such condition within thirty (30) days after receiving written notice thereof; (iv) the Employees repeated failure to follow reasonable and lawful instructions from the Board or Chief Executive Officer (or the Board of Directors or Chief Executive Officer of the Companys Affiliate, as applicable) and the Employees failure to cure such condition within thirty (30) days after receiving written notice thereof; (v) the Employees conviction of, or plea of guilty or nolo contendere to, any felony or other crime that results in, or is reasonably expected to result in, material harm to the business or reputation of the Company (or its Affiliate, as applicable), or any felony or misdemeanor involving moral turpitude; (vi) the Employees commission of or participation in an act of fraud; (vii) the Employees intentional material damage to the Companys (or its Affiliates, as applicable) business, property or reputation; (viii) the Employees unauthorized use or disclosure of any proprietary information or trade secrets of the Company or its Affiliates, as applicable, or any other party to whom the Employee owes an obligation of nondisclosure as a result of his or her relationship with the Company or its Affiliates; or (ix) the Employees intoxication or abuse of a controlled substance that adversely impairs the Employees performance of his duties for the Company or its Affiliates, as applicable. For purposes of clarity, a termination without Cause does not include any termination that occurs as a result of the Employees death or disability. The determination as to whether the Employees Continuous Service Status has been terminated for Cause shall be made in good faith by the Company (or its Affiliate, as applicable) and shall be final and binding on the Employee. The foregoing definition does not in any way limit the Companys (or any of its Affiliates, as applicable) ability to terminate the Employees employment relationship at any time.
Code means the Internal Revenue Code of 1986, as amended, and the Treasury regulations and other official guidance promulgated thereunder.
Exit Event means (i) an acquisition of the Company by way of a merger, consolidation, reorganization or other transaction or series of transactions pursuant to which stockholders of the Company prior to such acquisition own less than fifty percent (50%) of the voting interests in the surviving or resulting entity; (ii) a sale, lease, exclusive license, or other disposition of all or substantially all of the assets of the Company in a transaction or series of transactions; (iii) any person or group (within the meaning of Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended), becomes the beneficial owner (as defined in Rule 13d-3 under the Securities Exchange Act of 1934, as amended), directly or indirectly, of more than 50% of the outstanding voting securities of the Company having the right to vote for the election of members of the Board of Directors; (iv) a firmly underwritten public offering of the Companys common stock pursuant to a registration statement filed with the Securities and Exchange Commission, and declared effective under the U.S. Securities Act of 1933 (and not subsequently withdrawn) covering the offer and sale of common stock for the Company; or (v) a merger of the Company with a special purpose acquisition company or any reverse merger or reverse acquisition transaction in which (x) the post-merger securities of the surviving or parent entity are publicly
2
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
traded on the Nasdaq Stock Markets National Market, the New York Stock Exchange or another exchange or marketplace and (y) the stockholders of the Company receive upon conversion or exchange of their outstanding shares of capital stock of the Company securities constituting, or upon conversion would constitute (assuming conversion on such date), more than 50% of the outstanding share capital of such special purpose acquisition company.
Expiration Date means earlier of (i) the date on which the Board approves a resolution to dissolve, wind down or proceed with a bankruptcy proceeding; (ii) December 31, 2022, as may be extended by the Companys Compensation Committee in writing from time to time.
Section 409A means Section 409A of the Code and the Treasury Regulations and other applicable guidance thereunder.
ARTICLE II
BUSINESS DEVELOPMENT BONUS
2.1 Business Development Bonus.
(a) Subject to the terms and conditions herein and provided that the Employee remains in a continued employment relationship with the Company or its Affiliates, if the Company receives BD Cash Payments in a range set forth in the table below, Employee will become eligible for the corresponding Total Amount of Earned Cash Bonus and the Company will pay Employee the difference between any previously paid Earned Cash Bonus and newly eligible Earned Cash Bonus in the next regular payroll after the date Employee becomes eligible for such Earned Cash Bonus and such eligibility is confirmed by the Compensation Committee. Notwithstanding anything contrary contained herein, including the foregoing sentence, if the Total BD Cash Payments is below [*], the corresponding Total Amount of Earned Cash Bonus set forth in the table above will vest and become payable by Company at the next regular payroll upon vesting as follows: 25% of such portion of the Total Amount of Earned Cash Bonus shall vest each six (6) months from the Vesting Commencement Date subject to continuing service by Employee through such date, so that such Total Amount of Earned Cash Bonus will be fully vested on the second anniversary of the Vesting Commencement Date and fully paid to Employee at the next regular payroll; provided that, upon the earlier of (a) an Exit Event or (b) the Total Amount of BD Cash Payment reaches [*], the vesting and payment of such Total Amount of Earned Cash Bonus shall accelerate such that the full amount vests and becomes immediate payable prior to the consummation of the Exit Event or at the next regular payroll if there is no Exit Event. For the purposes of this paragraph, Vesting Commencement Date means, as applicable, the date on which the Company receives [*] in Total Amount of BD Cash Payments.
Table for Busines Development Bonus:
Total Amount of BD Cash Payments (1) |
Cumulative Amount of Earned Cash Bonus | |
[*] |
$62,500 | |
[*] |
$11,250 | |
[*] |
$17,500 | |
[*] |
$25,000 | |
[*] |
0.15 % of the cash payment multiple (2) |
(1) Represents aggregate BD Cash Payments received by the Company under all BD Agreements prior to the Expiration Date.
(2) If the Total Amount of BD Cash Payments reaches [*] or more, then the Total Amount of Earned Cash Bonus shall be $25,000 plus an amount equal to 0.15% of the Cash Payment Multiple. The amount of Cash Payment Multiple shall be an amount equal to (i) Total Amount of BD Cash Payments minus (ii) [*]. As examples, if the Total Amount of BD Cash Payments is [*] then the difference between [*] and each such amount is [*]. Therefore, the Cash Payment Multiple for each such amount, and the Total Amount of Earned Cash Bonus will be [*], or $25,000 plus [*] (0.15% x [*]).
3
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
(b) For the avoidance of doubt, payments of Total Amount of Earned Cash Bonus are intended to be cumulative, i.e, any prior payment of Earned Cash Bonus, if any, shall be deducted from any subsequent payment of Total Amount of Earned Cash Bonus.
2.2 Conditions and Timing of Payment. The Compensation Committee of the Company is responsible for reviewing and approving the achievement of Business Development Objectives and the amount of Earned Cash Bonus that should be paid to Employee. If the Compensation Committee determines that such Earned Cash Bonus shall be paid to Employee, the Company shall make such payment, subject to any tax withholding obligations, promptly after such determination but no later than the immediate next regularly scheduled payroll date for such Employee.
2.3 Termination of Employment. If the employment of the Employee with the Company or its Affiliates is terminated prior to the execution of the BD Agreement, then this Agreement will immediately terminate. Employee shall be eligible to receive any unpaid and vested Earned Cash Bonus under this Agreement after the termination of his employment if the BD Agreement was executed prior to such termination and the Employee is otherwise eligible to receive Earned Cash Bonus pursuant to the terms herein, except that if the Employee is terminated for Cause, the Board of Directors or the Compensation Committee shall have the right and discretion to suspend or terminate any payment of any remaining unpaid or vested Earned Cash Bonus under this Agreement.
ARTICLE III
EXIT EVENT BONUS
3.1 Acquisition. Upon the initial closing of an Exit Event as described in clauses (i), (ii) and (iii) of the definition of Exit Event prior to the Expiration Date (an Acquisition), and the total cash consideration received by the stockholders of the Company (or in the case of clause (ii) of such definition, the total gross cash proceeds received by the Company) equals to or exceeds [*], then the Company shall pay Employee a one-time cash bonus (Acquisition Cash Bonus) in an amount equal to 0.15% of such total cash consideration or total gross cash proceeds promptly following the initial closing of the Acquisition.
3.2 IPO. Upon the initial closing of an Exit Event as described in clause (iv) of the definition of Exit Event (an IPO), if the amount of cash gross proceeds received by the Company is [*] or more, then the Company shall pay Employee a one-time cash bonus of $15,000, payable promptly following the initial closing of the IPO.
4
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
3.3 Business Combination. Upon the initial closing of an Exit Event as described in clause (v) of the definition of Exit Event (a Business Combination), if the total amount of gross cash proceeds received or obtained by the Company, either pursuant to a PIPE, public offering or an acquisition of cash reserve in the trust fund, or a combination thereof, is [*] or more, then the Company shall pay Employee a one-time cash bonus of $15,000, payable promptly following the closing of the Business Combination.
3.4 Termination of Employment. If the employment of the Employee with the Company or its Affiliates is terminated prior to the closing of an Exit Event, then this Agreement will immediately terminate. Employee shall be eligible to receive any bonus in connection with an Acquisition, IPO or Business Combination after the termination of his employment as long as the termination occurs on or following the closing of the Exit Event.
ARTICLE IV
MISCELLANEOUS
4.1 Non-transferability. Except as otherwise provided in this Agreement, this Agreement, and the rights and obligations of the parties hereunder, will be binding upon and inure to the benefit of their respective successors, assigns, heirs, executors, administrators and legal representatives. The Company may assign any of its rights and obligations under this Agreement. No other party to this Agreement may assign, whether voluntarily or by operation of law, any of its rights and obligations under this Agreement, except with the prior written consent of the Company.
4.2 Withholding Taxes. The Company or any applicable Affiliate shall be entitled, if necessary or desirable, to withhold from any amount due and payable hereunder to the Employee (or secure payment from Employee in lieu of withholding) the amount of any withholding or other tax due with respect to the Bonus payable to the Employee under this Agreement. If desirable, the Company or Affiliate may satisfy any such tax obligation by withholding from any payment of any kind otherwise due to the Employee. The Company shall have no liability for any tax imposed on the Employee as a result of amounts paid or payable to the Employee pursuant to this Agreement.
4.3 Amendment of the Agreement. No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, shall be effective unless in writing signed by the parties to this Agreement. No delay or failure to require performance of any provision of this Agreement shall constitute a waiver of that provision as to that or any other instance.
4.4 Severability. If one or more provisions of this Agreement are held to be unenforceable under applicable law, the parties agree to renegotiate such provision in good faith. In the event that the parties cannot reach a mutually agreeable and enforceable replacement for such provision, then (i) such provision shall be excluded from this Agreement, (ii) the balance of the Agreement shall be interpreted as if such provision were so excluded and (iii) the balance of the Agreement shall be enforceable in accordance with its terms.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.5 Titles and Headings. The headings and titles used in this Agreement are for reference purposes only and shall not affect in any way the meaning or interpretation of this Agreement.
4.6 Governing Law. The validity, interpretation, construction and performance of this Agreement, and all acts and transactions pursuant hereto and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the state of Delaware, without giving effect to principles of conflicts of law. For purposes of litigating any dispute that may arise directly or indirectly from this Agreement, the parties hereby submit and consent to the exclusive jurisdiction of the state of Delaware and agree that any such litigation shall be conducted only in the courts of Delaware or the federal courts of the United States located in Delaware and no other courts.
4.7 No Obligation; Company Discretion. No provision of this Agreement or the bonus granted hereunder shall be interpreted to impose an obligation on the Company to accept, agree to or otherwise enter into or complete any proposed or potential Exit Event or BD Agreement. The decision to enter into (or to reject) a proposed transaction to consummate an Exit Event or enter into an BD Agreement, and all terms and conditions of such transaction, including the amount, timing and form of consideration to be provided in connection therewith, shall be within the sole and absolute discretion of the Company. In addition, this Agreement shall not be interpreted or construed so as to limit or prevent the Company or any Affiliate from taking any actions with respect to the operation or conduct of their business or entering into any transaction that they deem appropriate or in their best interest.
4.8 No Right to Continued Service. Nothing in this Agreement shall interfere with or limit in any way any right of the Company or any of its Affiliates to terminate the Employees employment at any time and for any reason (or no reason), nor confer upon the Employee any right to continued service with the Company or any of its Affiliates for any period of time or to continue such Employees present (or any other) rate of compensation. By accepting any payment under this Agreement, the Employee and each Person claiming under or through the Employee shall be conclusively deemed to have indicated such Persons acceptance and ratification of, and consent to, any action taken by the Company or Board pursuant to this Agreement.
4.9 Other Benefits. The bonuses set forth in this Agreement are a special incentive and shall not be taken into account in computing the amount of salary or compensation for purposes of determining any bonus, incentive, pension, retirement, death or other benefit under any employee benefit plan of the Company, unless such plan or agreement expressly provides otherwise.
4.10 No Equity Interest. The Employee shall not have any rights as a stockholder of the Company as a result of this Agreement or the bonuses granted pursuant hereto.
4.11 Unfunded Plan. To the extent that any person acquires a right to receive payments under this Agreement, such right shall be no greater than the right of an unsecured general creditor. All payments to be made hereunder shall be paid from general assets. This Agreement and the payment of any bonus hereunder are not intended to be subject to the Employee Retirement Income Security Act of 1974, as amended.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.12 Section 280G. Notwithstanding anything in this Agreement to the contrary, in the event that any portion of any payments to which the Employee becomes entitled in accordance with the provisions of this Agreement may become subject to the excise tax under Section 4999 of the Code or may be nondeductible to the Company or any Affiliate or any successor under Section 280G of the Code, payment of those amounts shall be contingent upon obtaining the approval of stockholders as provided in Section 280G(b)(5)(A)(ii) of the Code and the Treasury regulations thereunder or any successor provision. In the absence of such stockholder approval in accordance with Section 280G(b)(5)(A)(ii) of the Code or any successor provision, the portion of such payments that would otherwise cause any amount to be nondeductible under Section 280G of the Code shall be forfeited and the Employee shall have no further claim of right to such amount, except as otherwise determined by the Board.
4.13 Section 409A. This Agreement and the bonus set forth hereunder are intended to be exempt from the requirements of Section 409A of the Code pursuant to the short-term deferral rule.
4.14 Entire Agreement. This Agreement sets forth the entire agreement and understanding of the parties relating to the subject matter herein and supersedes all prior or contemporaneous discussions, understandings and agreements, whether oral or written, between them relating to the subject matter hereof.
4.15 Notices. Any notice, demand or request required or permitted to be given under this Agreement shall be in writing and shall be deemed sufficient when delivered personally or by overnight courier or sent by email, or 48 hours after being deposited in the U.S. mail as certified or registered mail with postage prepaid, addressed to the party to be notified at such partys address as set forth on the signature page, as subsequently modified by written notice, or if no address is specified on the signature page, at the most recent address set forth in the Companys books and records.
4.16 Construction. This Agreement is the result of negotiations between and has been reviewed by each of the parties hereto and their respective counsel, if any; accordingly, this Agreement shall be deemed to be the product of all of the parties hereto, and no ambiguity shall be construed in favor of or against any one of the parties hereto.
4.17 Counterparts. This Agreement may be executed in any number of counterparts, each of which when so executed and delivered shall be deemed an original, and all of which together shall constitute one and the same agreement. Execution of a facsimile copy will have the same force and effect as execution of an original, and a facsimile signature will be deemed an original and valid signature.
4.18 Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to this Agreement or any notices required by applicable law by email or any other electronic means. The Employee hereby consents to (i) conduct business electronically (ii) receive such documents and notices by such electronic delivery and (iii) sign documents electronically and agrees to participate through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
4.19 Imposition of Other Requirements. The Company reserves the right to impose other requirements on payment of the bonuses set forth hereunder, to the extent the Company determines it is necessary or advisable in order to comply with applicable law. The Employee agrees to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
[Signature Page Follows]
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[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
The parties have executed this Transaction Bonus Agreement as of the date first set forth above.
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Name: Eric Schlorff Title: Chief Executive Officer |
CARYL BARON | ||
/s/ Caryl Baron | ||
ADDRESS: |
| |
|
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Exhibit 10.25
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
SUPPLY AGREEMENT
BETWEEN FRESENIUS USA MARKETING, INC.
&
SEASTAR MEDICAL, INC.
This Agreement, dated March 31, 2022, is made by and between Fresenius USA Marketing, Inc. (FUSA), a Delaware corporation with its principal office located at 920 Winter Street, Waltham, Massachusetts 02451-1457, and an indirect subsidiary of Fresenius Medical Care Holdings, Inc. d/b/a Fresenius Medical Care North America (FMCNA), and SeaStar Medical, Inc. (SeaStar), a Delaware corporation with its principal office located at 3513 Brighton Boulevard, Suite 410, Denver, Colorado 80216
Definitions: EFFECTIVE DATE shall mean the date the Agreement is countersigned and deemed accepted by FUSA. CONTRACT YEAR shall mean the period of time from the EFFECTIVE DATE to the last day of the month in which the first anniversary of the EFFECTIVE DATE occurs (the ANNIVERSARY DATE) and thereafter each successive twelve month period following the ANNIVERSARY DATE.
Section 1.0 Pricing; Payment Terms
1.1 Subject to the terms and conditions set forth in this Agreement, FUSA agrees to sell to SeaStar, and SeaStar agrees to purchase from FUSA, [*] and [*] at $[*] per case. Additional product information is located at [*]. The price is exclusive of any applicable state and local sales tax, which if applicable, shall be paid by the SeaStar. The dialyzers are not sold through authorized distributors and are available for direct purchase only.
1.2 At any time after the first ANNIVERSARY DATE of the EFFECTIVE DATE of this Agreement, FUSA may increase the prices listed on the attached EXHIBITS at a percentage equal to the Consumer Price Index Medical Series ID: CUUR0000SAM, provided that such price increases shall not exceed, in the aggregate, [*] percent ([*]%) during any CONTRACT YEAR.
1.3 Subject to FUSA credit review, payment terms shall be Net 30 Days from the date of FUSAs invoice. Invoices that are not paid pursuant to the terms of this Agreement may be subject to a late payment charge of one and one-half percent (1.5%) per month. Additionally, FUSA, in addition to all other rights available to it, reserves the right to stop shipment and require payment in advance of shipment in the event that SeaStar is delinquent in its payment for past purchases. All orders shall be subject to the terms and conditions of this Agreement and shall not be subject to the terms, conditions, or provisions of any order confirmation, except to the extent that such confirmation specifies quantities.
1.4 SeaStar Medical is permitted to resell the [*] as part of the Selective Cytopheretic Device (SCD) system under a Humanitarian Device Exemption in pediatric patients as well as for Emergency Use Authorization related to the COVID-19 Pandemic in the United States. SeaStar may continue to use the [*] as part of the SCD system in additional clinical studies, pending the mid- to long-term supply availability of the [*] for the SeaStar Medical. SeaStar Medical will use the [*] as part of the SCD system in the upcoming clinical trial, SCD 006, and will resell the [*] as part of the SCD system, in both an Emergency Use Authorization application as well as a future PMA-approved product from data generated from SCD 006 in the United States
Section 2.0 Term and Termination
2.1 Unless earlier terminated pursuant to any Section(s) below, this Agreement shall be for a term of three (3) years, commencing on the EFFECTIVE DATE (the Term).
2.2 If either party fails to meet any of its material obligations or otherwise materially breaches this Agreement, the other party may, at its option, terminate this Agreement and any other Agreement between FUSA and SeaStar with sixty (60) days written notice, if the failure to meet the obligation or cure the breach of either party is unable to be remedied in that timeframe.
2.3 Either party may terminate this Agreement, effective immediately with written notice if the other shall file for bankruptcy, or shall be adjudicated bankrupt, or shall take advantage of any applicable insolvency law, or shall make an assignment for the benefit of creditors, or shall be dissolved, or shall have a receiver appointed for its property.
2.4 In the event that any future changes in federal or state law or regulations applicable to the performance of the Agreement shall, in the reasonable opinion of legal counsel for either party, make any portion of this Agreement invalid or illegal, either party may terminate this Agreement upon thirty (30) days written notice to the other, if within said thirty (30)-day period the parties are not able to agree on a mutually acceptable addendum to the Agreement.
Section 3.0 Discounts; Disclosure
3.1 Prices invoiced for the PRODUCT(S) purchased reflect any negotiated discounts, and rebates may apply to purchases. Any discounts, rebates or deductions from FUSAs list price or other concessions received by SeaStar from FUSA are Discounts or Other Reductions in Price under 42 U.S.C. § 1320a-7b(b)(3)(A). The parties shall comply with all laws and regulations (including 42 C.F.R. 1001.952(h)) regarding reporting of any discount, rebate, or other concession in the fiscal year of the SeaStar in which it was earned or the year after, and report any discount, rebate, or other concession, consistent with applicable rules. FUSA shall provide additional information requested by the applicable Medicare or state health care program to assist SeaStar in meeting its reporting requirement.
Section 4.0 FUSA Performance
4.1 FUSA shall use commercially reasonable efforts to fill orders, but FUSA shall not be liable for non-performance or delays caused by a supply shortage of raw materials, manufacturing problems, delivery or labor problems, acts of regulatory agencies, discontinuation of a product line, Acts of God, pandemics, epidemics, or causes beyond its control.
Section 5.0 Product Ordering and Management
5.1 SeaStar shall abide by the Terms and Conditions of General Information on Product Ordering and Management, which is located at https://fmcna.com/fresenius-renal-therapies-group-product-catalogs/.
Section 6.0 Confidentiality
6.1 All information in this Agreement relating to pricing, discounts, rebates, purchase commitment, and payment terms is confidential and, except as provided in Section 3.0, SeaStar shall not disclose any such information to any third party without FUSAs prior written consent. FUSA hereby consents to SeaStar disclosing such information to SeaStars third-party consultants and financial and legal advisors, provided they are bound by Non-Disclosure and Confidentiality Agreements with SeaStar from disclosing such information.
Section 7.0 Indemnification; Compatibility; Rights of First Refusal and First Offer for New Fiber; Right of First Refusal for Distribution;
7.1 SeaStar agrees to indemnify, defend, and hold FUSA and its officers, directors, agents and employees harmless from and against any and all loss, damage and/or expense (including reasonable attorneys fees) that they may suffer as a result of third party claims, demands, actions, proceedings, liabilities, costs or judgments, or threats thereof arising out of (i) any of SeaStars handling, storage, use, or sale of the dialyzers purchased under this Agreement; or (ii) the breach by SeaStar of any of its representations and warranties contained in this Agreement; or (iii) SeaStars negligence or willful misconduct.
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
7.2 SeaStar shall use best efforts to ensure that the SCD is compatible with, and never incompatible with, devices manufactured or sold by FMCNA or its affiliates.
7.3 If SeaStar elects to switch to another fiber for the SCD during the Term, SeaStar shall provide FUSA with a right of first refusal to provide such alternative fiber to SeaStar. For a period of two (2) years after the Term, if SeaStar elects to switch to another fiber for the SCD, SeaStar shall provide FUSA with a right of first offer to provide such alternative fiber to SeaStar.
7.4 If, during the period from three (3) years from regulatory approval of the SCD, SeaStar elects to promote and sell the SCD through distributors, SeaStar shall provide FUSA with a right of first refusal to be SeaStars exclusive distributor of the SCD in the United States and its territories, provided that the SCD is not promoted or sold in a manner that is incompatible with any devices manufactured and/or sold by FMCNA or its affiliates.
7.5 SeaStar will fund FMCNAs development of the technical files for the [*] and [*] through (a) an upfront payment of $[*], payable within 15 business days of the Effective Date, and (b) ongoing payments for FMCNA personnels time at a rate of $[*] per hour, payable on a monthly basis within 15 days of the date of FMCNAs invoice to SeaStar. The ongoing payments will be capped at $[*]. FMCNA will submit the completed technical files to the FDA and grant SeaStar a right of reference.
Section 8.0 General Provisions
8.1 This Agreement contains the entire Agreement between FUSA and SeaStar and supersedes all prior understandings or Agreements of the parties, whether written or oral. No modification of, nor amendment to, this Agreement shall be effective unless in writing and signed by FUSA and SeaStar.
8.2 Each party warrants that it is not, nor will it hire, retain or use any individual or entity that is excluded, debarred, suspended or otherwise ineligible to participate in (collectively, debarred) federal or state health care programs, or federal or state procurement or non-procurement programs in connection with the obligations set forth in this Agreement, including without limitation persons or entities listed on the HHS/OIG List of Excluded Individuals/Entities (http://exclusions.oig.hhs.gov/search.aspx) or the SAM exclusion database:(https://www.sam.gov/portal/public/SAM), or persons or entities debarred by the FDA. Each party further represents that, to the best of its knowledge, it is not aware of any investigation or circumstances which might result in it or any of its employees, agents, or subcontractors being debarred or proposed to be debarred. Either party shall have the right to terminate this Agreement immediately without further obligation in the event that the other party becomes debarred or hires, retains, or uses an individual or entity that is debarred.
8.3 As stated in the Fresenius Medical Care Code of Ethics and Business Conduct, FUSA upholds the values of integrity and lawful conduct, especially with regard to anti-bribery and anti-corruption. FUSA upholds these values in its own operations, as well as in its relationships with business partners. FUSAs continued success and reputation depends on a common commitment to act accordingly. Together with FUSA, SeaStar is committed to uphold these fundamental values by adherence to applicable laws and regulations.
8.4 The rights and obligations of the parties shall inure to the benefit of and shall be binding upon the parties hereto and their respective successors and assigns, provided that neither party shall assign its rights and obligations hereunder without the prior written consent of the other. The sale or transfer of substantially all of the assets of SeaStar, the sale or transfer of more than fifty percent (50%) of the outstanding stock of SeaStar, and the merger of SeaStar into another entity constitute an assignment for which this section applies. SeaStar expressly acknowledges that any assignment to entities controlled by, controlling, or under common ownership with FUSA or originating out of any merger or consolidation of FUSA shall not require the consent of SeaStar.
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
8.5 This Agreement is deemed to be executed in, shall be governed by and construed according to the laws of the Commonwealth of Massachusetts without reference to conflict of law principles. Each party agrees to submit to the jurisdiction of the courts of Massachusetts for the purpose of resolving any dispute hereunder. If particular portions of this Agreement are ruled unenforceable, such portions shall be deemed modified to the extent necessary to render such portions enforceable and to preserve to the fullest extent permissible the intent and agreement of the parties herein set forth.
8.6 FUSAs failure to insist on performance of any of the terms or conditions herein, or to exercise any right, or privilege, or FUSAs waiver of any breach hereunder shall not thereafter waive any other term, condition, right, or privilege.
8.7 Upon request, SeaStar shall supply the following financial information certified by an independent certified public accountant: complete fiscal financial statements (within ninety (90) days of the close of SeaStars fiscal year) and quarterly unaudited balance sheet and income statement (within forty-five (45) days of SeaStars quarterly close).
8.8 The Parties agree that this Agreement may be executed by exchanging signed copies via facsimile or PDF (such facsimile or PDF which may also be forwarded by email). Any notice required to be given under this Agreement shall be given by certified mail, return receipt requested, postage prepaid, or by nationally recognized overnight courier service which provides confirmation of delivery, to the applicable Party at the following addresses:
If to SeaStar: | If to FUSA: | |
SeaStar Medical, Inc | Fresenius USA Marketing, Inc. | |
Attn: Eric Schlorff | Attn: RTG Contracts Department | |
3513 Brighton Blvd Ste 410 | 920 Winter Street | |
Denver, CO 80215 | Waltham, MA 02451-1457 | |
With a copy to: | ||
Fresenius Medical Care North America | ||
Attn: Law Department/RTG | ||
920 Winter Street | ||
Waltham, MA 02451-1457 |
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
IN WITNESS WHEREOF, the parties hereto have caused their duly authorized representative to execute this Agreement.
Fresenius USA Marketing, Inc. Waltham, Massachusetts | SeaStar Medical, Inc. Denver, Colorado | |
By: /s/ Joseph E. Turk, Jr. | By: /s/ Eric Schlorff | |
Print Name: Joseph E. Turk, Jr. | Print Name: Eric Schlorff | |
Title: President | Title: Chief Executive Officer | |
Date: April 5, 2022 | Date: 03/31/2022 |
[*] = Certain confidential information contained in this document, marked by brackets, has been omitted because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.
Exhibit 10.27
AMENDMENT TO SUPPLY AGREEMENT
This Amendment to the Supply Agreement (this Amendment) is made as of May 5, 2022, and hereby amends the Supply Agreement dated as of March 31, 2022 (the Agreement), by and between Fresenius USA Marketing, Inc. (FUSA), an indirect subsidiary of Fresenius Medical Care Holdings, Inc. d/b/a Fresenius Medical Care North America, and SeaStar Medical, Inc. (SeaStar).
RECITALS
WHEREAS, FUSA and SeaStar desire to amend the Agreement in connection with a contemplated transaction by SeaStar and public disclosure requirements;
NOW, THEREFORE, in consideration of the foregoing and for other good and valid consideration, the receipt and sufficiency of which are hereby acknowledged, and intending to be legally bound hereby, the parties hereby agree as follows:
1. | Confidentiality. Section 6.1 of the Agreement is hereby deleted in its entirety and replaced with the following: |
All information in this Agreement relating to pricing, discounts, rebates, purchase commitment, and payment terms is confidential and, except as provided in Section 3.0, SeaStar shall not disclose any such information to any third party without FUSAs prior written consent. FUSA hereby consents to SeaStar disclosing such information to SeaStars third-party consultants and financial and legal advisors, provided they are bound by Non-Disclosure and Confidentiality Agreements with SeaStar from disclosing such information. Notwithstanding the foregoing, SeaStar may disclose information in this Agreement to the extent required by applicable law, regulation or order of a governmental agency or a court of competent jurisdiction, or in prosecuting or defending litigation; provided, that SeaStar shall provide advance notice thereof (to the extent practicable) to FUSA, consult with FUSA with respect to such disclosure, use reasonable efforts to minimize the amount of information necessary to be disclosed and provide FUSA sufficient opportunity to object to any such disclosure or to request confidential treatment thereof.
2. | Assignment. Section 8.4 of the Agreement is hereby deleted in its entirety and replaced with the following: |
The rights and obligations of the parties shall inure the benefit of and shall be binding upon the parties hereto and their respective successors and assigns, provided that neither party shall assign its rights and obligations hereunder without the prior written consent of the other; and further provided that each party expressly acknowledges that any assignment to entities controlled by, controlling, or under common ownership with a party or originating out of any merger or consolidation of a party shall not require the consent of the other party.
3. | Entire Agreement. This Amendment, together with the Agreement, constitutes the full and entire understanding and agreement between the parties with regard to the subject matter hereof and thereof and no party shall be liable or bound to any other in any manner by any representations, warranties, covenants and agreements except as specifically set forth herein and therein. As amended hereby, the Agreement shall remain in full force and effect. |
4. | Titles and Subtitles. The titles and subtitles used in this Amendment are used for convenience only and are not to be considered in construing or interpreting this Amendment. |
5. | Counterparts. This Amendment may be executed in two or more counterparts and by facsimile or electronic signature, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. |
6. | Governing Law. The terms of this Amendment shall be construed in accordance with the laws of the Commonwealth of Massachusetts, without reference to conflict of law principals. |
[Remainder of page intentionally left blank; signature page follows]
SEASTAR MEDICAL, INC. | ||
By: | /s/ Eric Schlorff | |
Name: | Eric Schlorff | |
Title: | Chief Executive Officer | |
FRESENIUS USA MARKETING, INC. | ||
By: | /s/ Joseph E. Turk, Jr. | |
Name: | Joseph E. Turk, Jr. | |
Title: | President | |
Dated: | May 13, 2022 |
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the inclusion in this Registration Statement on Form S-4 (Amendment No. 1) of our report dated April 6, 2022 with respect to the audited financial statements of LMF Acquisition Opportunities, Inc. (the Company) for the year ended December 31, 2021 and the period from October 28, 2020 (inception) to December 31, 2020.
We also consent to the references to us under the heading Experts in such Registration Statement.
/s/ MaloneBailey, LLP
www.malonebailey.com
Houston, Texas
July 11, 2022
Exhibit 23.2
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We consent to the use of our report dated April 14, 2022 relating to the financial statements of SeaStar Medical, Inc. included in the Proxy Statement/Prospectus of LMF Acquisition Opportunities, Inc., which is part of this Registration Statement on Form S-4. We also consent to the reference to our firm under the heading Experts in such Registration Statement.
ArmaninoLLP
Bellevue, Washington
July 11, 2022
Exhibit 99.8
Signature [PLEASE SIGN WITHIN BOX] Date Signature (Joint Owners) Date TO VOTE, MARK BLOCKS BELOW IN BLUE OR BLACK INK AS FOLLOWS: KEEP THIS PORTION FOR YOUR RECORDS THIS PROXY CARD IS VALID ONLY WHEN SIGNED AND DATED. DETACH AND RETURN THIS PORTION ONLY D88112-[TBD] LMF ACQUISITION OPPORTUNITIES, INC. 1200 W PLATT, SUITE 100 TAMPA, FL 33606 ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! ! Yes No The Board of Directors recommends you vote FOR Proposals 1 through 8. 2. Charter Approval Proposal To consider and vote upon a Proposal to approve the Second Amended and Restated Certificate of Incorporation of LMAO, a copy of which is attached to the proxy statement/prospectus as Annex B. 7. Director Election Proposal To consider and vote upon a Proposal to elect seven (7) directors as set forth below to serve staggered terms on the Board until the 2023, 2024 and 2025 annual meetings of our stockholders, as applicable, or until their respective successors are duly elected and qualified, or until their earlier death, resignation, retirement or removal. The proposed directors under the Director Election Proposal are: 1. Business Combination Proposal To consider and vote upon a Proposal to approve the transactions contemplated under the Merger Agreement, dated as of April 21, 2022, by and among LMAO, LMF Merger Sub, Inc., a Delaware corporation and wholly-owned subsidiary of LMAO and SeaStar Medical, Inc., a Delaware corporation, a copy of which is attached to the proxy statement/ prospectus as Annex A. LMF ACQUISITION OPPORTUNITIES, INC. 3. The Governance Proposals To consider and vote upon, on a non-binding advisory basis, four separate governance proposals relating to the following material differences between the Existing Charter and the Proposed Charter. 3a. Governance Proposal 3A ! ! ! For All Withhold All For All Except 3b. Governance Proposal 3B To change the classification of the Board from two classes of directors with staggered two-year terms to three classes of directors with staggered three-year terms. 3c. Governance Proposal 3C To require the vote of at least two-thirds (66 and 2/3%) of the outstanding shares of capital stock, voting together as a single class, rather than a simple majority, to remove a director from office. 5. ESPP Proposal To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Employee Stock Purchase Plan, a copy of which is to be attached to the proxy statement/prospectus as Annex E. 6. Nasdaq Proposal To consider and vote upon a Proposal to approve for purposes of complying with Nasdaq Listing Rule 5635 (a) and (b), the issuance of more than 20% of the issued and outstanding shares of LMAO Common Stock and the resulting change in control in connection with the Business Combination. 8. Adjournment Proposal To consider and vote upon a Proposal to approve the adjournment of the meeting by the chairman thereof to a later date, if necessary. NOTE: Such other business as may properly come before the meeting or any adjournment thereof. Please indicate if you plan to attend this meeting. 4. Stock Plan Proposal To consider and vote upon a Proposal to approve the LMF Acquisition Opportunities, Inc. 2022 Omnibus Incentive Plan, a copy of which is to be attached to the proxy statement/prospectus as Annex D. 3d. Governance Proposal 3D To remove certain provisions related to LMAOs status as a special purpose acquisition company that will no longer be relevant following the Business Combination. Please sign exactly as your name(s) appear(s) hereon. When signing as attorney, executor, administrator, or other fiduciary, please give full title as such. Joint owners should each sign personally. All holders must sign. If a corporation or partnership, please sign in full corporate or partnership name by authorized officer. For Against Abstain For Against Abstain To withhold authority to vote for any individual nominee(s), mark For All Except and write the number(s) of the nominee(s) on the line below. ! ! ! Class I Nominees: 01) Andres Lobo 02) Rick Barnett Class II Nominees: 03) Bruce Rodgers 04) Richard Russell 05) Allan Collins Class III Nominees: 06) Eric Schlorff 07) Kenneth Van Heel ! ! VOTE BY INTERNETwww.proxyvote.com or scan the QR Barcode above Use the Internet to transmit your voting instructions and for electronic delivery of information up until 11:59 p.m. Eastern Time the day before the meeting. Have your proxy card in hand when you access the web site and follow the instructions to obtain your records and to create an electronic voting instruction form. ELECTRONIC DELIVERY OF FUTURE PROXY MATERIALS If you would like to reduce the costs incurred by our company in mailing proxy materials, you can consent to receiving all future proxy statements, proxy cards and annual reports electronically via e-mail or the Internet. To sign up for electronic delivery, please follow the instructions above to vote using the Internet and, when prompted, indicate that you agree to receive or access proxy materials electronically in future years. VOTE BY PHONE1-800-690-6903 Use any touch-tone telephone to transmit your voting instructions up until 11:59 p.m. Eastern Time the day before the meeting. Have your proxy card in hand when you call and then follow the instructions. VOTE BY MAIL Mark, sign and date your proxy card and return it in the postage-paid envelope we have provided or return it to Vote Processing, c/o Broadridge, 51 Mercedes Way, Edgewood, NY 11717. PRELIMINARY PROXY CARDSUBJECT TO COMPLETION, DATED [____], 2022 VIEW MA SCAN TO TERIALS & VOTE wï€ To (i) reclassify LMAOs existing 100,000,000 authorized shares of Class A Common Stock into 100,000,000 authorized shares of Common Stock (after giving effect to the conversion of each outstanding share of Class B Common Stock to Class A Common Stock under the terms of LMAOs current certificate of incorporation) and (ii) increase the number of shares of preferred stock LMAO is authorized to issue from 1,000,000 shares to 10,000,000 shares.
Important Notice Regarding the Availability of Proxy Materials for the Special Meeting:The Notice and Proxy Statement is available at www.proxyvote.com D88113-[TBD] LMF ACQUISITION OPPORTUNITIES, INC. Special Meeting of Stockholders [TBD] PM This proxy is solicited by the Board of Directors The undersigned hereby appoints Bruce M. Rodgers and Richard Russell, or either of them, as proxies, each with the power to appoint his substitute, and hereby authorizes them to represent and to vote, as designated on the reverse side of this ballot, all of the shares of Common Stock of LMF ACQUISITION OPPORTUNITIES, INC. that the undersigned is entitled to vote at the Special Meeting of Stockholders to be held at [TBD] p.m., Eastern Time on [TBD] at [TBD], and any adjournment or postponement thereof. This proxy, when properly executed, will be voted in the manner directed herein. If no such direction is made, this proxy will be voted in accordance with the Board of Directors recommendations. Continued and to be signed on reverse side