LMF Acquisition Opportunities, Inc. (LMAO) Adds $100M Purchase Agreement & $7M PIPE

LMF (NASDAQ:LMAO) announced this afternoon that it has entered into a common stock purchase agreement, a registration rights agreement, and has secured a PIPE in connection to its combination with clinical biotech firm SeaStar Medical.

The parties entered into a $100 million purchase agreement and registration rights agreement with Tumim Stone Capital LLC, but their respective obligations under the purchase agreement will not become effective until the business combination closes. Additionally, LMF and SeaStar must meet certain deliverables and amendments under the agreement.

LMF will have the right, but not the obligation, to sell to Tumim, and Tumim is obligated to purchase, up to $100 million of the company’s common stock. The sale, however, will be subject to certain limitations, and may occur from time to time at the LMF’s sole discretion, over the period starting after the date of the consummation of the business combination and ending on the first day of the month next following the 24-month anniversary of the closing date.

Furthermore, there will be no upper limits on the price per share that Tumim must pay for shares of common stock. Actual sales of shares of common stock to Tumim will depend on a variety of factors to be determined by LMF from time to time, including, among others, market conditions, the trading price of the common stock and determinations by the company as to the appropriate sources of funding and its operations.

And as consideration for Tumim’s irreversible commitment to purchase shares of LMF’s common stock, LMF will pay Tumim a commitment fee of $2.5 million which will be done through an issuance of shares. The number of commitment shares issued will be based on the weighted average trading price of the LMF’s common stock prior to the Initial Registration Statement. If the company terminates the purchase agreement prior to issuance of the shares, then LMF will be required to pay Tumim the fee in cash.

In regards to the PIPE, LMF has entered into subscription agreements with “certain third-party investors” for 700,000 shares of Class A common stock at $10.00 per share, and warrants to purchase up to 700,000 shares of the Class A Common Stock for $7 million. The PIPE Warrants will be exercisable starting on the closing date at $11.50 per share. Pursuant to the PIPE, LMF has agreed to provide registration rights to the third-party investors relating to the sale and issuance of the Class A Common Stock and PIPE Warrants.

The parties originally announced the $85 million deal in April 2022, but did not supplement it with a PIPE at the time. LMAO and SeaStar Medical later entered into a commitment letter with Dow Employees’ Pension Plan Trust and Union Carbide Employees’ Pension Plan pursuant to which Dow agreed to a PIPE equal to or greater than $5 million which would close immediately prior to the closing of the deal. Denver-based SeaStar is developing a therapeutic method to address hyper-inflammation with particular applications in treating COVID-19 patients.