Faruqi & Faruqi, LLP, a leading national securities law firm, is investigating potential claims against SeaStar Medical Holding Corporation (“SeaStar” or the “Company”) and reminding investors of the September 6, 2024 deadline to seek the role of lead plaintiff in a federal securities class action filed against the company. The firm alleges that SeaStar and its executives violated federal securities laws by making false and/or misleading statements and/or failing to disclose certain critical information.
Specifically, the complaint alleges that SeaStar and/or Legacy SeaStar had deficient compliance controls and procedures related to the HDE Application, leading to deficiencies in the application itself. The FDA’s approval of the HDE Application was deemed unlikely in its current form, and the SCD’s regulatory prospects were overstated. The complaint further alleges that SeaStar downplayed the true scope and severity of deficiencies in its financial controls and procedures, while simultaneously overstating the efforts to remedy these deficiencies. This led to SeaStar failing to properly account for the classification of certain outstanding warrants and the Prepaid Forward Agreement, increasing the likelihood of a restatement of previously issued financial statements. These actions, the complaint alleges, ultimately led to an overstatement of SeaStar’s post-merger business and financial prospects, rendering the company’s public statements materially false and misleading.
On March 27, 2024, SeaStar announced its intention to restate its financial statements for the fiscal year ended December 31, 2022, and for the interim periods ended March 31, 2023, June 30, 2023, and September 30, 2023. The restatement impacts the accounting treatment and classification of certain outstanding warrants and the prepaid forward purchase arrangement terminated in June 2023. SeaStar’s CEO stated that the restatement is not expected to have a material impact on the company’s business operations or cash position, but rather is related to the reporting of non-cash accounting items. The CEO further explained that the company’s decision to pursue a SPAC in late 2022 was due to challenging market conditions at the time, and many SPACs, including SeaStar, relied on complex financial instruments. Unfortunately, certain of these instruments required accounting treatment differing from SeaStar’s previous judgment, ultimately leading to the need for a restatement.
Following this announcement, SeaStar’s stock price fell $0.04 per share, or 5.41%, to close at $0.70 per share on March 27, 2024.
Investors who suffered losses exceeding $50,000 investing in SeaStar stock or options between October 31, 2022 and March 26, 2024 are encouraged to contact Faruqi & Faruqi partner Josh Wilson directly at 877-247-4292 or 212-983-9330 (Ext. 1310). The firm is also encouraging anyone with information regarding SeaStar’s conduct, including whistleblowers, former employees, shareholders, and others, to contact them. For more information about the SeaStar class action, visit www.faruqilaw.com/ICU.
