Quarterly Report for Quarter Ending June 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis are intended to help you understand our business, financial condition, results of operations, liquidity, and capital resources. You should read this discussion in conjunction with our condensed consolidated financial statements and related notes included elsewhere in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024 (filed March 27, 2025) and Form 10-K/A for the year ended December 31, 2024 (filed April 23, 2025).

In addition to historical financial analysis, this discussion and analysis contains forward-looking statements based upon current expectations that involve risks, uncertainties, and assumptions, as described under the heading "Cautionary Note Regarding Forward Looking Statements." Actual results and timing of selected events may differ materially from those anticipated in these forward-looking statements as a result of various factors, risks and uncertainties, including those set forth under "Risk Factors" included elsewhere (or incorporated by reference) in this Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2024. Unless the context otherwise requires, references in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" to "SeaStar Medical", "we", "us", "our," and "the Company" are intended to mean the business and operations of SeaStar Medical Holding Corporation and its consolidated subsidiaries following the Business Combination.

Overview

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

We are a commercial-stage healthcare company focused on transforming treatments for critically ill patients facing organ failure and potential loss of life. Our Selective Cytopheretic Device ("SCD") is designed as a disease-modifying device that neutralizes over-active immune cells and stops the cytokine storm that yields destructive hyperinflammation and creates a cascade of events that wreak havoc in the patient's body. It has broad potential applications for patients suffering from both acute and chronic kidney disease as well as cardiovascular and other serious inflammatory diseases.

We received Food and Drug Administration ("FDA") approval on February 21, 2024, under a Humanitarian Device Exemption ("HDE") for our pediatric SCD therapy. It is the only FDA approved product for use in pediatric patients with acute kidney injury ("AKI") due to sepsis or a septic condition requiring kidney replacement therapy. We shipped our first commercial pediatric SCD ("QUELIMMUNE") in July 2024. In addition, we are currently conducting a pivotal clinical trial to assess the safety and efficacy of the SCD therapy in critically ill adult patients with AKI requiring continuous renal replacement therapy ("CRRT").

Our SCD therapy has been awarded Breakthrough Device Designation ("BDD") for six therapeutic indications by the FDA, including the use of the SCD therapy for adult patients with AKI, patients with cardiorenal syndrome awaiting left ventricular assist device ("LVAD") implantation, patients with hepatorenal syndrome, patients with end stage renal disease ("ESRD") and adult and pediatric patients undergoing cardiac surgery. The BDD enables the potential for a speedier pathway to approval and the ability to have more frequent and flexible meetings with the FDA.

The inflammatory response is essential to the healing process of critical organs; however, the overactivation of inflammatory cells, which can be triggered by many different bodily insults such as trauma, surgery or infection, can send the body into shock and cause severe damage to a variety of critical organs such as the heart, lungs and kidney. Central to inflammation are the cells within blood and lymph circulatory systems, called white blood cells (primarily neutrophils and monocytes). In a normal inflammatory response, neutrophils are the first immune cells to arrive at the site and are key to the entire immune response that kills pathogens and promotes tissue repair. These inflammatory cells release chemicals (cytokines) that trigger the immune system to eliminate foreign pathogens or damaged tissue, enhancing the immune response.

If the inflammatory response becomes excessive and dysregulated (referred to as proinflammatory), the inflammatory cells will continue to produce cytokines and other damaging molecules, further enhancing the dysregulated immune response, and altering feedback mechanisms that regulate the immune system. This results in damaging hyperinflammation spreading uncontrollably to other parts of the body, often leading to acute chronic solid organ dysfunction or failure, including the heart, lung, kidney, liver, and even death. This hyperinflammatory response is also known as the "cytokine storm," referring to the body's reaction to the category of small-secreted proteins

released by hyperinflammatory cells that affect communication between cells. Currently, there are no therapeutic options that specifically neutralize the white blood cells that are primarily responsible for the destructive hyperinflammatory response.

Clinicians typically address hyperinflammation with therapies that are either immunosuppressive or that target one cytokine, both of which are generally suboptimal in the treatment of hyperinflammation. We believe our technology has the potential to overcome limitations in existing anti-inflammatory treatments and address the challenge of selectively targeting activated neutrophils and monocytes. Clinical and preclinical studies conducted over the last 15 years have demonstrated that our SCD therapy can modulate the degree of activity of proinflammatory cells to help reduce tissue damage and speed the repair and recovery of organ function. Data from our trials demonstrated that the use of our SCD therapy to reverse the cytokine storm in more than 150 pediatric and adult patients with acute kidney injury on CRRT reduced mortality rates by 50%, and of those patients who survived 60 days, none have required dialysis. We believe our SCD therapy has the potential to transform the treatment of acute organ failure in the intensive care unit ("ICU") and to improve organ function in patients with chronic kidney disease, certain cardiovascular diseases, and other serious inflammatory diseases.

Preclinically, we evaluated our SCD therapy in various animal models representing multiple hyperinflammatory indications, including acute myocardial infarction, intracranial hemorrhage, chronic heart failure, sepsis, and acute respiratory distress syndrome. The animal models demonstrated the inflammatory response and how it was modified by our SCD therapy. We will continue to explore the application of our SCD therapy across a broad range of indications where proinflammatory activated neutrophils and monocytes contribute to disease progression or severity in both acute and chronic indications.

We are leveraging our patent protected and scalable SCD therapy platform to develop proprietary treatments that are organ agnostic and target both acute and chronic indications. The SCD therapy is delivered via an extracorporeal synthetic membrane device that easily integrates into existing CRRT systems that are commonly employed for patients with acute organ injury in hospitals, including in ICUs throughout the United States. It also has the potential to be integrated into kidney dialysis systems for chronic kidney disease patients receiving renal replacement therapy at centers throughout the United States. We believe that the ease of use and broad applicability of the therapy across multiple disease states should enable us to capture a sizable market for our SCD therapy with increasingly favorable economics.

Our senior management team has over a combined 73 years of experience in the healthcare industry, including expertise in regulatory and medical affairs, commercialization and distribution in our initial therapeutic priority areas. We also have assembled a team of well-respected scientific advisors who are experts in the development of our technology and products.

There is a substantial clinical need for safe and effective control of hyperinflammation and we believe that our first-in-class SCD therapy can address the large potential market of over one million patients each year that face life-threatening hyperinflammatory conditions, including organ failure and potential loss of life.

We have incurred net losses in each year since our inception in 2007. As of June 30, 2025 and December 31, 2024, we had an accumulated deficit of $145.3 million and $139.6 million, respectively. Our net losses were $5.8 million and $15.9 million for the six months ended June 30, 2025, and 2024, respectively. For the six months ended June 30, 2025, substantially all our net losses resulted from costs incurred in connection with our research and development programs and from general and administrative costs associated with our operations. For the six months ended June 30, 2024, our net losses resulted from a combination of operating costs which were comprised of (i) research and development, and (ii) general and administrative, coupled with non-operating gains and losses due to changes in the fair value of certain liability classified financial instruments.

As of June 30, 2025, and December 31, 2024, we had cash of $6.3 million and $1.8 million, respectively.

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

The recurring losses, working capital deficiency, the need for capital to fund our operations, including clinical trial and regulatory approval expenses, and the amount of cash reserve are factors that raise substantial doubt about our ability to continue as a going concern for the twelve-month period from the date the unaudited condensed consolidated financial statements are made available. See Note 1 to our unaudited condensed consolidated financial

statements for the six months ended June 30, 2025, included elsewhere in this Form 10-Q for additional information on our assessment.

Our need for additional capital will depend in part on the scope and costs of our development activities. To date, we have generated revenue of approximately $0.8 million from the sale of commercialized pediatric SCD products. Our ability to generate product revenue in the future will depend on the successful roll-out of our QUELIMMUNE pediatric SCD to hospitals and the development and eventual successful commercialization of our adult SCD. Until such time we are able to generate significant revenue from product sales, we expect to finance our operations through the sale of equity or debt, borrowings under credit facilities, potential collaborations, other strategic transactions or government and other grants. Adequate capital may not be available to us when needed or on acceptable terms. If we are unable to raise capital, we could be forced to delay, reduce, suspend or cease our research and development programs and any future commercialization efforts, which would have a negative impact on our business, prospects, operating results and financial condition. See Part I, Item 1A "Risk Factors" for additional information.

Key Components of Results of Operations

Revenue

Our QUELIMMUNE received HDE approval from the FDA in February 2024. Since that time, we have begun to build out our commercial operations, develop our customer base and initiate commercial sales of QUELIMMUNE. We shipped our first commercial QUELIMMUNE units in July 2024. Through June 30, 2025, we have recognized approximately $0.8 million of revenue from the sale of QUELIMMUNE. Historically, prior period revenue has been primarily derived from government and other grants. We will continue to focus our efforts on generating revenue in the future based on product sales of QUELIMMUNE, as well as potential future payments from license or collaboration agreements and government and other grants.

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

Research and Development Expenses

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

The Company is continuously reviewing research and development spend to ensure it is aligned with the Company's objectives.

General and Administrative Expenses

General and administrative expenses consist primarily of salaries and related costs for employees in executive, sales and commercial and finance roles, which also include stock-based compensation expenses and benefits for such employees.

Other significant general and administrative expenses include facilities costs, insurance, professional fees for accounting and legal services and expenses associated with obtaining and maintaining patents obtaining financing. As we continue to expand and grow our operations, we expect that our general and administrative expenses will increase, including additional expenses relating to new hires, travel, an enterprise resource planning platform, and branding. However, the Company is also in the process, as evidenced by the results of the three and six months ended June 30, 2025, of reducing overall general and administrative spend, and identifying efficiencies.

Loss from Operations and Operating Margin

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

Other Income (Expense), Net

Total other income (expense), net primarily consists of interest expense relating to interest incurred on our notes, interest income due to overnight sweep activity with the Company's main commercial financial institution, change in the fair value of warrants liability, and change in fair value of convertible notes (six and three months ended June 30, 2024 only).

Factors Affecting Operating Results

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

Results of Operations

Comparison of the Three Months Ended June 30, 2025 to the Three Months Ended June 30, 2024

The following table sets forth a summary of our results of operations. This information should be read together with our unaudited condensed consolidated financial statements and related Notes included elsewhere in this Form 10-Q.

(*) - there was no activity for the three months ended June 30, 2024.

Revenue, Cost of Goods Sold and Gross Profit

Revenue increased $0.3 million, while gross profit also increased $0.3 million for the three months ended June 30, 2025, compared to the same period ending June 30, 2024. This was made possible because we obtained an HDE for QUELIMMUNE in February 2024, and final regulatory clearance to sell commercially from the FDA under this HDE in July 2024. The Company has six customer sites for QUELIMMUNE as of June 30, 2025.

Research and Development Expenses

The following table discloses the breakdown of research and development expense for the three months ended June 30, 2025 compared to the same period ending June 30, 2024:

Research and development expenses for the three months ended June 30, 2025 and 2024 were $1.0 million and $2.3 million, respectively. The decline in research and development expenses of approximately $1.3 million, or 56%, was primarily driven by (i) $0.7 million decline in clinical trial expenses, due to the (a) $0.3 million expense offset due to the services provided to a third-party for certain clinical research services (see Note 2), and (b) and a $0.3 million reduction in pre-clinical consulting services, (ii) $0.3 million decline in external services as a result of the Company's reducing consulting spend as it brought in-house certain assembly and regulatory services, and (iii) $0.3 million net reduction in personnel costs, primarily driven by a $0.5 million favorable reduction in bonus expense due to the agreement by certain employees involved in research and development to rescind unpaid 2023 and 2024 performance bonuses owed to them, offset by a $0.2 million increase in salaries and wage expense due to increased headcount.

General and Administrative Expenses

General and administrative expenses for the three months ended June 30, 2025 and 2024 were approximately $1.0 million and $2.3 million, respectively. The $1.3 million decrease in general and administrative expenses was the result of (i) $0.3 million decline in audit and accounting related fees, due to the restatement of the 2023 and 2022 financials during the spring of 2024, (ii) $0.5 million decline in Directors' compensation as the active Directors approved the rescission of any earned-but-unpaid director fees as of June 30, 2025, (iii) $0.1 million in certain SEC fees as the Company brought in-house more SEC related filing activities, (iv) $0.2 million decrease in personnel costs primarily driven by the agreement by certain employees involved in general and administrative activities to rescind unpaid bonuses owed to them from 2023 and 2024, and (vi) $0.2 million in a reduction in consultant expenditures.

Other Income (Expense)

Other income (net) reversed from approximately $1.4 million of net other income for the three months ended June 30, 2024, to a $0.3 million loss during the same period ended June 30, 2025. primarily due to (i) the decline in the favorable gain from the decline of the our liability classified warrants from $1.9 million for the three months ended June 30, 2024, compared to the $17 thousand decline in the three months ended June 30, 2025, offset by a (i) $0.4 million loss from the change in liability classified convertible notes during the three months ended June 30, 2024 compared to no such activity during the three months ended June 30, 2025, as no such notes existed during the three months ended June 30, 2025, (iii) $0.1 million decline in interest expense as the Company's overall debt obligations declined for the three months ended June 30, 2025, compared to the same period ended June 30, 2024, and (iv) a $0.3 million fee paid to a third party investor related to the Company's standby equity purchase agreement ("SEPA").

Income Tax Provision (Benefit)

We recorded no provision for income taxes for the three months ended June 30, 2025, and $3 thousand provision for income taxes for the three months ended June 30, 2024.

Net Loss

During the three months ended June 30, 2025, we had a net loss of approximately $2.0 million compared to a net loss of approximately $3.2 million for the three months ended June 30, 2024. The decreased net loss of approximately $1.2 million has been disclosed in the above discussion.

Comparison of the Six Months Ended June 30, 2025 to the Six Months Ended June 30, 2024

(*) - there was no activity for the six months ended June 30, 2024.

Revenue, Cost of Goods Sold and Gross Profit

Revenue increased $0.6 million for the six months ended June 30, 2025 compared to the six months ended June 30, 2024, as we commenced commercial sales in July 2024. This was made possible because we obtained an HDE for QUELIMMUNE in February 2024, and final regulatory clearance to sell commercially from the FDA under this HDE in July 2024. The Company has six customer sites for QUELIMMUNE as of June 30, 2025.

Research and Development Expenses

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

Research and development expenses for the six months ended June 30, 2025 and 2024 were $3.5 million and $4.0 million, respectively. The decline in research and development expenses of approximately $0.5 million, or 13%, was primarily driven by (i) a $0.1 million net reduction in personnel costs, primarily driven by a $0.5 million favorable reduction in bonus expense due to the agreement by certain employees involved in research and development to rescind unpaid 2023 and 2024 performance bonuses owed to them, offset by a $0.4 million increase in salaries and wages due to increased headcount , (ii) $0.3 million decline in consulting services, (iii) $0.4 million decline in pre-clinical related services, and offset by (i) $0.3 million increase in clinical trial site costs as we have continued to increase the number of Neutralize-AKI sites and patients.

General and Administrative Expenses

General and administrative expenses for the six months ended June 30, 2025 and 2024 were approximately $2.7 million and $4.6 million, respectively. The $1.8 million decrease in general and administrative expenses was the result of (i) $0.2 million decline in personnel costs due to the rescission of certain employee bonuses arising from performance in 2023 and 2024, (ii) $0.1 million decline in employee conferences and seminars, (iii) $0.5 million decline in accounting related fees, due to the fact that the Company was dealing with certain restatement activities during the spring of 2024, (iv) $0.3 million decline related to legal fees, (v) $0.1 million in recruiting fees that were avoided for the six months ended June 30, 2025, (vi) $0.1 million decline in conferences and seminars, and (vi) $0.5 million decline in Directors' compensation as the active Directors approved the rescission of any earned-but-unpaid director fees as of June 30, 2025 for active Directors.

Other Expense

Other expenses (net) decreased approximately $7.1 million, a decline of approximately 97% for the six months ended June 30, 2025, compared to the six months ended June 30, 2024. The key drivers for this decrease were as follows: (i) the Company recognized a loss of $6.1 million for changes in the fair value of convertible notes during the six months ended June 30, 2024, however, the Company did not have any convertible notes outstanding during the six months ended June 30, 2025, (ii) the Company recognized a gain of $33 thousand for its liability classified warrants for the six months ended June 30, 2025, while incurring a loss of approximately $1.0 million for the six months ended June 30, 2024, largely driven by the value of the Company's stock and certain features of warrants that were in existence during the six months ended June 30, 2024, that are no longer outstanding in 2025, (iii) the Company recognized interest income, net of expenses of $74 thousand during the six months ended June 30, 2024, compared to net interest expense of $200 thousand during the six months ended June 30, 2025. This was because the Company reduced its outstanding debt obligations from approximately $3.1 million as of June 30, 2024, to no outstanding debt or notes payable obligations as of June 30, 2025. This was offset by a $0.3 million fee paid to a third-party investor related to the Company's standby equity purchase agreement ("SEPA").

Income Tax Provision

We recorded a provision for income taxes of $3 thousand for both the six months ended June 30, 2025, and June 30, 2024.

Net Loss

During the six months ended June 30, 2025, we had a net loss of approximately $5.8 million compared to a net loss of approximately $15.9 million for the six months ended June 30, 2024. The decreased net loss of approximately $10.1 million has been disclosed in the above discussion.

Liquidity and Capital Resources

Sources of Liquidity

To date, we have financed our operations primarily through the sale of equity securities and convertible debt and, to a lesser extent, through grants from governmental and other agencies. Since our inception, we have incurred significant operating losses and negative cash flows. As of June 30, 2025 and December 31, 2024, we had shareholders equity of approximately $3.3 million and we had an accumulated deficit of approximately $145.3 million and $139.6 million, respectively.

As of June 30, 2025, and December 31, 2024, we had cash of $6.3 million and $1.8 million, respectively. Based on our results of our operations and liquidity as of June 30, 2025, and even when taking into account (i) a public offering in the second quarter of 2025, (ii) a registered direct offering in the first quarter of 2025, and (iii) access to raise money on an at-the-market facility ("ATM Facility") and standby equity purchase agreement ("SEPA"), we believe our cash and cash equivalents are insufficient to meet our working capital and capital expenditure requirements for a period of at least twelve months from the date of our unaudited condensed consolidated financial statements for the six months ended June 30, 2025, are made available. We believe that this raises substantial doubt about our ability to continue as a going concern. While the Company raised additional capital in July of 2025, this additional subsequent increase in our available cash would not be sufficient to change this conclusion had that capital raise occurred prior to June 30, 2025.

To finance our operations, we will need to raise additional capital. As described below, we cannot expect to receive any cash proceeds from the exercise of warrants in the near term, because the exercise of warrants is not in our control. We are seeking additional cash to fund our growth through future debt or equity financing transactions; however, there can be no assurance that we will be able to obtain additional capital on terms acceptable to us, if at all, or that we will generate sufficient future revenues and cash flows to fund our operations. We do not currently have any committed external source of funds. We have concluded that these circumstances raise doubt about our ability to continue as a going concern within one year after the issuance date of this Form 10-Q. See Note 1 to our unaudited condensed consolidated financial statements for the period ended June 30, 2025.

In April 2025, the Company entered into a $15 million SEPA and unused available capacity on the ATM Facility that will allow us to potentially raise up to approximately $18.2 million (The ATM is subject baby-shelf limitations as the Company is currently limited by general instruction I.B.6 to Form S-3)

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

If exercised, we could receive the proceeds from any exercise of warrants that are exercised for cash pursuant to their terms. To the extent any warrants are exercised on a "cashless basis," the amount of cash we would receive from the exercise of the warrants will decrease. We would expect to use any such proceeds received from warrants that are exercised for cash in the future for general corporate and working capital purposes, which would increase our liquidity. However, we will only receive such proceeds if and when the warrant holders exercise the warrants. The exercise of the warrants, and any proceeds we may receive from their exercise, are highly dependent on the price of our common stock and the spread between the exercise price of the warrant and the price of our common stock at the time of exercise. There is no assurance that the warrant holders will elect to exercise for cash any or all of such warrants, and we believe that any such exercise currently is unlikely to occur. The likelihood that warrant holders will exercise the warrants, and therefore the amount of cash proceeds that we would receive from such exercise, is dependent upon the trading price of our common stock. If the trading price for our common stock remains less than the respective exercise price of our outstanding warrants, we believe our warrant holders will be unlikely to exercise their warrants. There is no guarantee that the warrants will be in the money following the time they become exercisable and prior to their expiration, and as such, the warrants may expire worthless, and we may not receive any proceeds from the exercise of the warrants. To the extent that any of the warrants are exercised on a "cashless basis," the amount of cash we would receive from the exercise of the warrants will decrease.

As of the date of this Quarterly Report, we have neither included nor intend to include any potential cash proceeds from the exercise of our warrants in our short-term or long-term liquidity projections. We will continue to evaluate the probability of warrant exercise over the life of our warrants and the merit of including potential cash proceeds from the exercise in our liquidity projections.

Future Funding Requirements

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

Our estimates of our results of operations, working capital and capital expenditure requirements may be different than our actual needs, and those estimates may need to be revised if, for example, our actual revenue is lower, and our net operating losses are higher, than we project, and our cash and cash equivalents position is reduced faster than anticipated. Until such time, if ever, as we are able to generate significant revenue from the commercialization of our products, we expect to continue financing our operations through the sale of equity, debt, borrowings under credit facilities or through potential collaborations with other companies, other strategic transactions or government or other grants. Adequate capital may not be available to us when needed or on acceptable terms.

Contractual Obligations and Commitments

As of June 30, 2025, the Company does not have any contractual obligations or commitments outstanding. During June 2025, the Company paid down the remaining $0.2 million of outstanding insurance financing obligation that was originally to be paid down through October 2025.

Cash Flows

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

Net cash used in operating activities for the six months ended June 30, 2025 was $5.7 million compared to $6.3 million for the six months ended June 30, 2024. The decrease in cash used for operating activities of $0.6 million is primarily due to the $0.6 million due to (i) the timing of certain payments from customers or to vendors to reduce our cash outflows for operating activities and (ii) the Company's reduced operating expenditures during the six months ended June 30, 2025 compared to the same period ended June 30, 2024.

Net cash provided by financing activities for the six months ended June 30, 2025 was $10.1 million, was primarily related to (i) $5.2 million received from the issuance of new shares of common stock, and (ii) $5.6 million in proceeds from issuance of pre-funded warrants. This was offset by approximately $0.6 million paid to settle outstanding notes payable.

Critical Accounting Policies and Estimates

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

There has been no material change from the policies or methods disclosed in our Annual Report to Form 10-K filed March 27, 2025, and as amended by Form 10-K/A filed April 23, 2025, for the year-ended December 31, 2025.

Emerging Growth Company Status

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

In addition, we intend to rely on the other exemptions and reduced reporting requirements provided by the JOBS Act. Since we intend to rely on such exemptions, we are not required to, among other things: (i) provide an auditor's attestation report on our system of internal controls over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act; (ii) provide all of the compensation disclosure that may be required of non-emerging growth public companies under the Dodd-Frank Wall Street Reform and Consumer Protection Act; (iii) comply with any requirement that may be adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the consolidated financial statements (auditor discussion and analysis); and (iv) disclose certain executive compensation-related items such as the correlation between executive compensation and performance and comparisons of the Chief Executive Officer's compensation to median employee compensation.

We will remain an EGC under the JOBS Act until the earliest of (i) the last day of our first fiscal year following the fifth anniversary of the closing of the Business Combination, (ii) the last date of our fiscal year in which we have total annual gross revenue of at least $1.235 billion, (iii) the date on which we are deemed to be a "large-accelerated filer" under the rules of the SEC with at least $700.0 million of outstanding securities held by non-affiliates, or (iv) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the previous three years