Quarterly Report for Quarter Ending March 31, 2026 (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, 2025 (filed March 25, 2026).

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, 2025. 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

We are a commercial-stage healthcare company focused on transformational 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, also referred to as "NEUTRALIZE-AKI" to assess the safety and efficacy of the SCD therapy in critically ill adult patients with AKI requiring continuous renal replacement therapy ("CRRT"). We are also conducting a feasibility study of the SCD therapy in adult patients with Cardiorenal Syndrome ("CRS") awaiting left ventricular assist device ("LVAD") implantation.

Our SCD therapy has been awarded six Breakthrough Device Designations ("BDD") by the FDA. These BDDs cover multiple therapeutic indications for the use of our SCD therapy in adult patients with AKI, CRS awaiting LVAD implantation, hepatorenal syndrome, end stage renal disease ("ESRD"), and systemic inflammatory response while 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 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 kidneys. 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 and potentially 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 a specific 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 and Board has extensive 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.

SCD Therapy for Pediatric Patients

We are currently commercializing our first product, QUELIMMUNE, under an HDE that was approved by the FDA on February 21, 2024. QUELIMMUNE is currently the only FDA-approved product for critically ill pediatric patients with life-threatening AKI due to sepsis or a septic condition.

We commenced our first product shipment of QUELIMMUNE in July 2024 and continue to target top-tier pediatric medical facilities for adoption of the QUELIMMUNE therapy. As a condition of the approval, the FDA stipulated that we would need to institute a post approval patient surveillance registry to track certain safety and performance metrics (the "SAVE Surveillance Registry"). This typically requires an Institutional Review Board ("IRB") review and approval to use QUELIMMUNE therapy at the medical facility, which can lengthen the QUELIMMUNE adoption process.

A benefit of the SAVE Surveillance Registry is the opportunity to collect real-world data from the commercial use of QUELIMMUNE therapy. Early results from the first 21 critically ill pediatric patients with life-threatening AKI and sepsis or a septic condition in the commercial setting in the SAVE Surveillance Registry showed no device related safety events with the QUELIMMUNE therapy with 76% of patients surviving through 60 days and 71% surviving through 90 days. We believe these data are on track to validate a 50% reduction in loss of life compared to historical data. Additionally, in December of 2025, based on the safety data from this set of patients, the FDA approved a reduction in the mandatory enrollment size of the SAVE Surveillance Registry from the originally-required 300 patients to only 50 patients. We enrolled the 50^th patient of the SAVE Surveillance Registry on March 4, 2026.

We are also evaluating additional clinical development opportunities in children based on unmet medical needs. One such indication is for the use of our SCD therapy for the treatment of systemic inflammatory response in pediatric patients undergoing cardiac surgery, aimed at preventing post-operative complications and adverse outcomes, for which FDA awarded BDD on March 27, 2025.

SCD Therapy for Adult Patients

We are currently conducting a pivotal trial, NEUTRALIZE-AKI, to evaluate the safety and efficacy of our SCD therapy in adults with AKI in the ICU receiving CRRT. The trial's primary endpoint is a composite of 90-day mortality or dialysis dependency of patients treated with SCD therapy in addition to CRRT as the standard of care, compared with the control group receiving only CRRT standard of care. We anticipate reporting topline clinical trial results and, assuming a successful trial outcome, submission of a Pre-market Approval ("PMA") application in 2027.

We are also evaluating additional clinical development of the SCD therapy in adults based on unmet clinical needs and market opportunity. Our BDD awards by the FDA in multiple therapeutic areas are expected to expedite the clinical development and regulatory review of the SCD therapy for use in the designated patient populations and are the primary focus of our future clinical development decisions. We received our first BDD awards in 2022 with the following additional BDDs in adult patient indications thereafter:

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On April 29, 2022, we received a BDD for the use of our SCD in the treatment of immunomodulatory dysregulation in adult patients (18 and older) with AKI, which is expected to accelerate the regulatory approval process for our ongoing pivotal trial.

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On September 28, 2023, we received BDD for our SCD for use in patients in the hospital ICU with acute or chronic systolic heart failure and worsening renal function due to cardiorenal syndrome or right ventricular dysfunction awaiting implantation of a left ventricular assist device.

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On October 18, 2023, we received BDD designation for our SCD for use with patients in the hospital ICU with AKI and acute on chronic liver failure.

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On November 6, 2024, we received BDD for our SCD to treat chronic systemic inflammation in end-stage renal disease (ESRD) patients who require chronic hemodialysis, also known as chronic dialysis. This is our first BDD in a chronic disease setting.

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On March 27, 2025, the FDA awarded a BDD for our SCD therapy for the treatment of systemic inflammatory response in adult patients undergoing cardiac surgery, aimed at preventing post-operative complications and adverse outcomes.

We believe that our SCD therapy is readily applicable for use in other indications as well, which will increase the addressable market for our SCD therapy, but will also require additional clinical studies and FDA approval.

We have pursued patent protection for our SCD therapy as well as other technologies. Our patent portfolio consists of 46 patents and 1 pending patent application in the U.S. and certain foreign jurisdictions. Of these patents and patent applications, 21 patents and 1 patent applications are owned exclusively by us, and 25 patents are co-owned with the University of Michigan ("UOM"). The UOM has granted us an exclusive worldwide, royalty-bearing license to the UOM's interest in all of the co-owned patents and applications. This license permits us to commercialize our SCD therapy in all human therapeutic indications. For more information, see "Intellectual Property" below.

We have incurred net losses in each year since our inception in 2007. As of March 31, 2026 and December 31, 2025, we had an accumulated deficit of $155.2 million and $151.7 million, respectively. Our net losses were $3.5 million and $3.8 million for the three months ended March 31, 2026, and 2025, respectively. For the three months ended March 31, 2026, 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.

As of March 31, 2026, and December 31, 2025, we had cash of $9.3 million and $12.0 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 three months ended March 31, 2026, 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 $1.9 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 therapy 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. We recognized $0.5 million and $0.3 of revenue million for the three months ended March 31, 2026 and 2025, respectively. Through March 31, 2026, we have recognized approximately $1.9 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.

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 and obtaining financing. To the extent we 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 months ended March 31, 2026, 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, net primarily consists of interest income due to overnight sweep activity with the Company's main commercial financial institution and interest expense relating to interest incurred on our note for the three months ended March 31, 2026.

Net Loss

Net loss consists of our loss from operations, offset by other income, net and taxes.

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 March 31, 2026 to the Three Months Ended March 31, 2025

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

		Three Months
		March 31,								Change
($ in thousands)		2026				2025				$				%
Net revenue		$	495			$	293			$	202				69	%
Cost of goods sold			46				-				46				*
Gross profit			449				293				156				1
Operating expenses
Research and development			2,344				2,431				(87	)			(4	)%
General and administrative			1,708				1,684				24				1	%
Total operating expenses			4,052				4,115				(63	)			-2	%
Loss from operations			(3,603	)			(3,822	)			219				-6	%
Total other income (expense)			85				53				32				60	%
Loss before income tax provision			(3,518	)			(3,769	)			251				-7	%
Income tax provision (benefit)			3				3				-				0	%
Net loss		$	(3,521	)		$	(3,772	)		$	251				-7	%

(*) - there was no activity for the three months ended March 31, 2025.

Revenue, Cost of Goods Sold and Gross Profit

Net revenue increased $0.2 million to $0.5 million for the three months ended March 31, 2026, compared to $0.3 million net revenue for the three months ended March 31, 2025. The increase is primarily attributable to increased customer adoption of QUELIMMUNE during March 31, 2026 compared to March 31, 2025.

Research and Development Expenses

The following table discloses the breakdown of research and development expense for the three months ended March 31, 2026 compared to the same period ending March 31, 2025:

		Three Months Ended
		March 31,								Change
($ in thousands)		2026				2025				$				%
Clinical trials		$	1,031			$	1,268			$	(237	)			(19	)%
External services			157				102				55				54	%
Payroll and personnel expenses			1,011				925				86				9	%
Other research and development expenses			145				136				9				7	%
		$	2,344			$	2,431			$	(87	)			(4	)%

Research and development expenses for the three months ended March 31, 2026 and 2025 were $2.3 million and $2.4 million, respectively. The decrease in research and development expenses of approximately $0.1 million, or 4%, was primarily driven by (i) $0.3 million decline in clinical trial expenses, due to (a) a $0.1 million reduction in preclinical consulting services and (b) by $0.2 million decrease in clinical trial site costs related to the Neutralize-AKI study; offset by (i) $0.1 million increase in compensation costs, and (ii) $0.1 million increase in device development costs.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2026 and 2025 were approximately $1.7 million and $1.7 million, respectively, with a slight increase of $24 thousand. This was the result of (i) a $0.1 million increase in legal related fees due to litigation related expenses, (ii) a $0.1 million increase in accounting related expenses due to timing of activities, and (iii) a $0.1 million in marketing related expenses as the Company continues to commercialize QUELIMMUNE. This was offset by (i) a $0.2 million decline in compensation costs due to reduced headcount, and (ii) a $0.1 million decline in SEC related expenses due to the fact that the Company held a special meeting of the Stockholders during the three months ended March 31, 2025.

Other Income (Expense)

Other income, net increased $32 thousand for the three months March 31, 2026 compared to the same period ending March 31, 2025. The increase is driven primarily by an increase in interest income as a result of our increased cash during the three months ended March 31, 2026 compared to the same period ending March 31, 2025.

Income Tax Provision (Benefit)

We recorded a provision for income taxes of $3 thousand and $3 thousand for the three months ended March 31, 2026 and March 31, 2025. respectively.

Net Loss

During the three months ended March 31, 2026, we had a net loss of approximately $3.5 million compared to a net loss of approximately $3.8 million for the three months ended March 31, 2025. The reason for the decreased net loss of approximately $0.3 million has been disclosed in the above discussion.

Liquidity and Capital Resources

Sources of Liquidity

We finance our operations primarily through sales of equity securities, through registered direct or public offerings, our at-the-market program, and our standby equity purchase agreement. We finance certain insurance needs through a short-term note payable.

Shelf Registration

On December 8, 2023, we filed a shelf registration statement on Form S-3 (File No. 333-275968), which was declared effective by the SEC on December 22, 2023. This shelf registration statement covered the offering, issuance and sale of up to an aggregate of $100.0 million of our common stock, preferred stock, debt securities, warrants, rights and units (the "2023 Shelf").

Since the date of effectiveness and through March 31, 2026, we have raised approximately $44.1 million under the 2023 Shelf and have approximately $55.9 million remaining for future offerings. However, actual availability for primary offerings is limited by the "baby shelf" restrictions applicable to our use of Form S-3.

At-The-Market Offering

On August 20, 2024, we entered into an At-The-Market Offering Agreement (the "ATM Agreement") with Wainwright as sales agent, to sell shares of Common Stock, from time to time, through an "at the market offering" program under which Wainwright will act as sales agent. As of March 31, 2026, we are currently restricted from raising capital on the ATM Agreement due to the baby shelf limitations, which is a component of the 2023 Shelf.

Standby Equity Purchase Agreement

On April 25, 2025, we entered into a standby equity purchase agreement ("SEPA") with Lincoln Park Capital, LLC ("Lincoln Park") pursuant to which we have the right to sell to Lincoln Park shares of Common Stock, subject to certain limitations, from time to time over the 36-month period commencing on the Commencement Date. As of March 31, 2026, approximately $14.7 million in aggregate capacity remained available under the SEPA.

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 March 31, 2026.

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:

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conditions of the capital markets;

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our ability to receive cash proceeds from new and existing funding sources, including our standby equity purchase agreement.

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

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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

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

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

The following table summarizes our contractual obligations as of March 31, 2026:

($ in thousands)		Total				Less than 1 year				1-3 years				3-5 years				More than 5 years
Contractual Obligations:
Insurance Financing		$	331			$	331			$	-			$	-			$	-
Total contractual obligations		$	331			$	331			$	-			$	-			$	-

Cash Flows

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

		Three Months Ended
		March 31,
($ in thousands)		2026				2025
Statement of cash flow data:
Total cash (used in)/provided by:
Operating activities		$	(2,761	)		$	(2,654	)
Investing activities			-				-
Financing activities			129				6,131
Net increase (decrease) in cash		$	(2,632	)		$	3,477

Net cash used in operating activities for the three months ended March 31, 2026 was $2.8 million compared to $2.7 million for the three months ended March 31, 2025This is primarily due to the timing of certain payments to vendors.

Net cash provided by financing activities for the three months ended March 31, 2026 was $0.1 million, was primarily related to (i) $0.3 million received from the issuance of new shares of common stock, which was partially offset by (ii) approximately $0.2 million paid to settle outstanding notes payable. Net cash provided by financing activities for the three months ended March 31, 2025 was $6.1 million, was primarily related to (i) $1.6 million received from the issuance of new shares of common stock, and (ii) $4.8 million in proceeds from issuance of pre-funded warrants. This was partially offset by $0.2 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 25, 2026, 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.