# EDGAR Filing Document

**Accession Number:** 0001855485
**File Stem:** 0001641172-25-022797
**Filing Date:** 2025-8
**Character Count:** 219242
**Document Hash:** f20b69fb807bb5df3b42ab6387962f8a
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001641172-25-022797.hdr.sgml**: 20250808

**ACCESSION NUMBER**: 0001641172-25-022797

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 79

**CONFORMED PERIOD OF REPORT**: 20250630

**FILED AS OF DATE**: 20250808

**DATE AS OF CHANGE**: 20250808

**FILER**: 

**COMPANY DATA:**
- **COMPANY CONFORMED NAME:** Calidi Biotherapeutics, Inc.
- **CENTRAL INDEX KEY:** 0001855485
- **STANDARD INDUSTRIAL CLASSIFICATION:** BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836]
- **ORGANIZATION NAME:** 03 Life Sciences
- **EIN:** 862967193
- **STATE OF INCORPORATION:** DE
- **FISCAL YEAR END:** 1231

**FILING VALUES:**
- **FORM TYPE:** 10-Q
- **SEC ACT:** 1934 Act
- **SEC FILE NUMBER:** 001-40789
- **FILM NUMBER:** 251199138

**BUSINESS ADDRESS:**
- **STREET 1:** 4475 EXECUTIVE DRIVE
- **STREET 2:** SUITE 200
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92121
- **BUSINESS PHONE:** 858-794-9600

**MAIL ADDRESS:**
- **STREET 1:** 4475 EXECUTIVE DRIVE
- **STREET 2:** SUITE 200
- **CITY:** SAN DIEGO
- **STATE:** CA
- **ZIP:** 92121

**FORMER COMPANY:**
- **FORMER CONFORMED NAME:** First Light Acquisition Group, Inc.
- **DATE OF NAME CHANGE:** 20210406

?xml version='1.0' encoding='ASCII'?

**UNITED STATES**

**SECURITIES AND EXCHANGE COMMISSION**

**WASHINGTON, D.C. 20549**

**FORM 10-Q**

**☒** **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934** 

**FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025**

**or**

**☐** **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934**

**Commission File Number 001-40789**

**Calidi Biotherapeutics, Inc.**

**(Exact name of registrant as specified in its charter)**

---

| | |
|:---|:---|
| **Delaware** | **86-2967193** |
| **(State or other jurisdiction of**<br> **incorporation or organization)** | **(IRS Employer**<br> **Identification No.)** |
| **4475 Executive Drive, Suite 200,**<br> **San Diego, California** | **92121** |
| **(Address of principal executive offices)** | **(Zip Code)** |

---

**(858) 794-9600**

**(Registrant's telephone number, including area code)**

Securities registered pursuant to Section 12(b) of the Act:

---

| | |
|:---|:---|
| **Title of each class** | **Name of each exchange on which registered** |
| Common Stock, $0.0001 par value CLDI | NYSE American LLC |

---

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and "emerging growth company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐ Accelerated filer ☐ <br> Non-accelerated filer ☒ Smaller reporting company ☒ <br> Emerging growth company ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of August 4, 2025, the registrant had 3,426,406 shares of common stock, $0.0001 par value, outstanding, excluding 150,000 non-voting shares of common stock held in escrow.

**Calidi Biotherapeutics, Inc.**

**FORM 10-Q**

**TABLE OF CONTENTS**

---

| | | |
|:---|:---|:---|
| [**PART I - FINANCIAL INFORMATION**](#a_001) | [**PART I - FINANCIAL INFORMATION**](#a_001) |  |
| Item 1. | [Condensed Consolidated Financial Statements (unaudited)](#a_002) | 4 |
|  | [Condensed Consolidated Balance Sheets](#a_003) | 4 |
|  | [Condensed Consolidated Statements of Operations](#a_004) | 5 |
|  | [Condensed Consolidated Statements of Changes in Total Equity](#a_006) | 7 |
|  | [Condensed Consolidated Statements of Cash Flows](#a_007) | 8 |
|  | [Notes to Condensed Consolidated Financial Statements](#a_008) | 9 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_009) | 37 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_010) | 50 |
| Item 4. | [Controls and Procedures](#a_011) | 50 |
| [**PART II - OTHER INFORMATION**](#a_012) | [**PART II - OTHER INFORMATION**](#a_012) |  |
| Item 1. | [Legal Proceedings](#a_013) | 51 |
| Item 1A. | [Risk Factors](#a_014) | 51 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_015) | 51 |
| Item 3. | [Defaults Upon Senior Securities](#a_016) | 51 |
| Item 4. | [Mine Safety Disclosures](#a_017) | 51 |
| Item 5. | [Other Information](#a_018) | 51 |
| Item 6. | [Exhibits](#a_019) | 51 |
|  | [Signatures](#a_020) | 53 |

---

**EXPLANATORY NOTE**

On August 4, 2025, the Company effected a reverse stock split (the "2025 Reverse Stock Split") of its shares of Common Stock, par value $0.0001 per share ("Common Stock"). As a result of the 2025 Reverse Stock Split, every twelve (12) shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the 2025 Reverse Stock Split. Any fractional shares that would otherwise have resulted from the 2025 Reverse Stock Split were rounded up to the next whole number. The 2025 Reverse Stock Split reduced the number of shares of Common Stock outstanding from 42,915,580 shares to approximately 3,576,406 shares, inclusive of 150,000 non-voting common stock held in escrow, subject to adjustment for the rounding up of fractional shares. The number of authorized shares of Common Stock under the Company's Second Amended and Restated Certificate of Incorporation, as amended, remained unchanged at 330,000,000 shares. Trading of the Company's shares of Common Stock on the NYSE American, LLC commenced on a split-adjusted basis on August 5, 2025.

All references in this Quarterly Report to the number of shares, and per share amounts, as well as option and warrant amounts and exercise prices, including the condensed consolidated financial statements and accompanying notes, have also been restated to give retroactive effect to the 2025 Reverse Stock Split.

**PART I - FINANCIAL INFORMATION**

**Item 1. Financial Statements**

**CALIDI BIOTHERAPEUTICS, INC.** 

**CONDENSED CONSOLIDATED BALANCE SHEETS** 

(*In thousands except for par value data*)

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | **(Unaudited)** |  |
| **ASSETS** |  |  |
| CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $5279 | $9591 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 770 | 636 |
| Total current assets | 6049 | 10227 |
| NONCURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Machinery and equipment, net | 929 | 869 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets, net | 2333 | 2934 |
| &nbsp;&nbsp;&nbsp;Other noncurrent assets | 40 | 152 |
| TOTAL ASSETS | $9351 | $14182 |
| **LIABILITIES AND TOTAL EQUITY** |  |  |
| CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $1215 | $2072 |
| &nbsp;&nbsp;&nbsp;Related party accounts payable | 12 | 2 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 1493 | 1858 |
| &nbsp;&nbsp;&nbsp;Related party accrued expenses and other current liabilities | 441 | 480 |
| &nbsp;&nbsp;&nbsp;Term notes payable, net of discount, including accrued interest |  | 251 |
| &nbsp;&nbsp;&nbsp;Related party term notes payable, net of discount, including accrued interest | 775 | 2702 |
| &nbsp;&nbsp;&nbsp;Related party bridge loan payable, including accrued interest |  | 223 |
| &nbsp;&nbsp;&nbsp;Related party other current liability |  | 638 |
| &nbsp;&nbsp;&nbsp;Finance lease liability, current | 113 | 66 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use liability, current | 1304 | 1204 |
| Total current liabilities | 5353 | 9496 |
| NONCURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use liability, noncurrent | 993 | 1845 |
| &nbsp;&nbsp;&nbsp;Finance lease liability, noncurrent | 226 | 145 |
| &nbsp;&nbsp;&nbsp;Promissory note | 600 | 600 |
| &nbsp;&nbsp;&nbsp;Warrant liability | 96 | 119 |
| &nbsp;&nbsp;&nbsp;Related party warrant liability | 7 | 9 |
| TOTAL LIABILITIES | 7275 | 12214 |
| Commitments and contingencies (Note 11) |  |  |
| **TOTAL EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 330,000 shares authorized; 2,877 and 1,730 shares issued and outstanding as of June 30, 2025 and December 31, 2024, respectively |  |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 134193 | 123277 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income loss, net of tax | (13) | (28) |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (132416) | (121715) |
| &nbsp;&nbsp;&nbsp;Total stockholders' equity | 1764 | 1534 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest | 312 | 434 |
| &nbsp;&nbsp;&nbsp;Total equity | 2076 | 1968 |
| **TOTAL LIABILITIES AND TOTAL EQUITY** | $9351 | $14182 |

---

 

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.* 

**CALIDI BIOTHERAPEUTICS, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS** 

*(In thousands, except per share data)* 

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| **OPERATING EXPENSES** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $(2593) | $(2167) | $(5018) | $(4910) |
| &nbsp;&nbsp;&nbsp;General and administrative | (3071) | (3605) | (5708) | (7614) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | (5664) | (5772) | (10726) | (12524) |
| Loss from operations | (5664) | (5772) | (10726) | (12524) |
| **OTHER INCOME (EXPENSES), NET** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (29) | (108) | (63) | (206) |
| &nbsp;&nbsp;&nbsp;Interest expense – related party | (23) | (165) | (61) | (320) |
| &nbsp;&nbsp;&nbsp;Change in fair value of other liabilities and derivatives | (18) | 86 | 14 | (112) |
| &nbsp;&nbsp;&nbsp;Change in fair value of other liabilities and derivatives – related party | (1) | 9 | 2 | 8 |
| &nbsp;&nbsp;&nbsp;Grant income |  | 181 | 50 | 181 |
| &nbsp;&nbsp;&nbsp;Other income (expense), net | (22) | 10 | (32) | (7) |
| &nbsp;&nbsp;&nbsp;Total other income (expenses), net | (93) | 13 | (90) | (456) |
| **LOSS BEFORE INCOME TAXES** | (5757) | (5759) | (10816) | (12980) |
| &nbsp;&nbsp;&nbsp;Income tax provision | (4) | (8) | (7) | (12) |
| **NET LOSS** | $(5761) | $(5767) | $(10823) | $(12992) |
| &nbsp;&nbsp;&nbsp;Net loss attributable to noncontrolling interest | (46) |  | (122) |  |
| **NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST** | (5715) | (5767) | (10701) | (12992) |
| &nbsp;&nbsp;&nbsp;Deemed dividend on warrants |  | (1671) |  | (1671) |
| **NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $(5715) | $(7438) | $(10701) | $(14663) |
| **Net loss per share; basic and diluted** | $(1.99) | $(16.75) | $(4.17) | $(39.61) |
| **Weighted average common shares outstanding; basic and diluted** | 2877 | 444 | 2569 | 370 |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.* 

**CALIDI BIOTHERAPEUTICS, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS** 

*(In thousands)*

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| **NET LOSS** | $(5761) | $(5767) | $(10823) | $(12992) |
| Other comprehensive income (expense), net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment | 13 | (38) | 15 | 20 |
| **COMPREHENSIVE LOSS** | $(5748) | $(5805) | $(10808) | $(12972) |
| Comprehensive loss attributable to noncontrolling interest | (46) |  | (122) |  |
| **COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $(5702) | $(5805) | $(10686) | $(12972) |

---

*The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.* 

**CALIDI BIOTHERAPEUTICS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF TOTAL EQUITY**

**(Unaudited)** 

(*In thousands, except share amounts*)

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital** | **Accumulated**<br> **Other**<br> **Comprehensive**<br>**Income (Loss)** | **Accumulated**<br>**Deficit** | **Total Stockholders'**<br>**Equity** | **Non controlling**<br>**Interest** | **Total**<br>**Equity** |
| Balance at December 31, 2024 | 1730051 | $— | $123277 | $(28) | $(121715) | $1534 | $434 | $1968 |
| Issuance of common stock through At the Market Offering | 223583 |  | 2754 |  |  | 2754 |  | 2754 |
| Issuance of common stock and warrants through January Confidentially Marketed Public Offering, net of financing costs | 416667 |  | 3607 |  |  | 3607 |  | 3607 |
| Issuance of common stock and warrants for March Registered Direct Offering and Concurrent Private Placement, net of financing costs | 277084 |  | 3423 |  |  | 3423 |  | 3423 |
| Restricted stock unit shares released | 2038 |  |  |  |  |  |  |  |
| Stock-based compensation |  |  | 607 |  |  | 607 |  | 607 |
| Foreign currency translation adjustments |  |  |  | 2 |  | 2 |  | 2 |
| Net loss |  |  |  |  | (4986) | (4986) | (76) | (5062) |
| Balance at March 31, 2025 | 2649423 | $— | $133668 | $(26) | $(126701) | $6941 | $358 | $7299 |
| Exercise of pre-funded warrants | 227334 |  | 3 |  |  | 3 |  | 3 |
| Stock-based compensation |  |  | 522 |  |  | 522 |  | 522 |
| Foreign currency translation adjustments |  |  |  | 13 |  | 13 |  | 13 |
| Net loss |  |  |  |  | (5715) | (5715) | (46) | (5761) |
| Balance at June 30, 2025 | 2876757 |  | 134193 | (13) | (132416) | 1764 | 312 | 2076 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **Common Stock** | **Common Stock** | | | | | | |
|  | **Shares** | **Amount** | **Additional**<br> **Paid-in**<br>**Capital** | **Accumulated**<br> **Other**<br> **Comprehensive**<br>**Income (Loss)** | **Accumulated**<br>**Deficit** | **Total**<br> **Stockholders'**<br>**Equity** | **Non controlling**<br>**Interest** | **Total**<br>**Equity** |
| Balance at December 31, 2023 | 296019 | $— | $91384 | $(47) | $(99572) | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(8235) | $— | $(8235) |
| Issuance of common stock in lieu of cash for services | 417 |  | 29 |  |  | 29 |  | 29 |
| Issuance of common stock in lieu of cash for SEPA commitment fee | 1157 |  | 81 |  |  | 81 |  | 81 |
| Issuance of common stock to Calidi stockholders as result of Merger | 132 |  |  |  |  |  |  |  |
| Issuance of warrants for legal settlement |  |  | 158 |  |  | 158 |  | 158 |
| Financing fees |  |  | (327) |  |  | (327) |  | (327) |
| Stock-based compensation |  |  | 888 |  |  | 888 |  | 888 |
| Foreign currency translation adjustments |  |  |  | 58 |  | 58 |  | 58 |
| Net loss |  |  |  |  | (7225) | (7225) |  | (7225) |
| Balance at March 31, 2024 | 297725 | $— | $92213 | $11 | $(106797) | $(14573) | $— | $(14573) |
| Issuance of common shares and pre-funded warrants through April Public Offering, net of financing costs | 110271 |  | 4822 |  |  | 4822 |  | 4822 |
| Issuance of common stock per Convertible Note conversion | 21408 |  | 1028 |  |  | 1028 |  | 1028 |
| Issuance of common shares through May Inducement Offer, net of financing costs | 89151 |  | 1818 |  |  | 1818 |  | 1818 |
| Exercise of common stock warrants | 4167 |  | 100 |  |  | 100 |  | 100 |
| Exercise of common pre-funded warrants | 16375 |  | 2 |  |  | 2 |  | 2 |
| Issuance of RSUs for deferred compensation settlement |  |  | 105 |  |  | 105 |  | 105 |
| Stock-based compensation |  |  | 751 |  |  | 751 |  | 751 |
| Foreign currency translation adjustments |  |  |  | (38) |  | (38) |  | (38) |
| Net loss |  |  |  |  | (5767) | (5767) |  | (5767) |
| Balance at June 30, 2024 | 539097 | $— | $100839 | $(27) | $(112564) | $(11752) |  | (11752) |

---

**CALIDI BIOTHERAPEUTICS, INC.** 

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS** 

*(In thousands)* 

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(10823) | $(12992) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 801 | 752 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount and financing costs |  | 32 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 1129 | 1639 |
| &nbsp;&nbsp;&nbsp;Change in fair value of debt, other liabilities and derivatives | (16) | 104 |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (156) | 1582 |
| &nbsp;&nbsp;&nbsp;Accounts payable | (733) | 1142 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | (1449) | (1095) |
| &nbsp;&nbsp;&nbsp;Operating lease right of use liability | (764) | (489) |
| Net cash used in operating activities | (12011) | (9325) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of machinery and equipment | (64) | (5) |
| Net cash used in investing activities | (64) | (5) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from public offerings | 6573 | 5406 |
| &nbsp;&nbsp;&nbsp;Proceeds from Registered Direct Offering | 3503 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of pre-funded warrants | 3 | 2 |
| &nbsp;&nbsp;&nbsp;Repayment of principal on related party term notes payable | (1625) |  |
| &nbsp;&nbsp;&nbsp;Payment of financing costs | (381) | (781) |
| &nbsp;&nbsp;&nbsp;Repayment of principal on term notes payable | (200) | (300) |
| &nbsp;&nbsp;&nbsp;Repayment of principal on related party bridge loan payable | (200) |  |
| &nbsp;&nbsp;&nbsp;Repayment of financing lease obligations | (34) | (45) |
| &nbsp;&nbsp;&nbsp;Proceeds from warrant inducement financing |  | 2140 |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of common stock warrants |  | 100 |
| &nbsp;&nbsp;&nbsp;Related party proceeds from issuance of loan payable |  | 200 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of convertible notes payable |  | 3000 |
| &nbsp;&nbsp;&nbsp;Repayment of convertible note payable |  | (1500) |
| &nbsp;&nbsp;&nbsp;Payment of debt issuance costs |  | (9) |
| Net cash provided by financing activities | 7639 | 8213 |
| &nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash | 6 | 4 |
| **NET DECREASE IN CASH AND RESTRICTED CASH** | (4430) | (1113) |
| **CASH AND RESTRICTED CASH BALANCE:** |  |  |
| &nbsp;&nbsp;&nbsp;At beginning of the period | 9809 | 2167 |
| &nbsp;&nbsp;&nbsp;At end of the period | $5379 | $1054 |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $837 | $116 |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $7 | $6 |
| **SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES** |  |  |
| Machinery and equipment acquired through financing leases | $152 | $— |
| Issuance of common stock in lieu of cash for services | $— | $29 |
| Issuance of common stock in lieu of cash for SEPA commitment fee | $— | $81 |
| Issuance of warrants for legal settlement | $— | $158 |
| Issuance of convertible note for legal settlement | $— | $1500 |
| Financing fees included in accounts payable and accrued liabilities | $— | $560 |
| Discount on convertible note payable | $— | $149 |
| Deemed dividend on warrants | $— | $1671 |
| Issuance of common stock per conversion of convertible note | $— | $1028 |
| Issuance of RSUs for liability settlement | $— | $105 |

---

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

**CALIDI BIOTHERAPEUTICS, INC.** 

**NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS** 

**(Unaudited)** 

**1. Organization and Nature of Operations**

On September 12, 2023, First Light Acquisition Group, Inc., a Delaware corporation ("FLAG") consummated a series of transactions that resulted in the merger of FLAG Merger Sub Inc., a Nevada corporation and a wholly-owned subsidiary of FLAG and Calidi Biotherapeutics. Inc., a Nevada corporation ("Calidi" and the transactions the "Business Combination"). Following the consummation of the Business Combination, FLAG was renamed "Calidi Biotherapeutics, Inc." and Calidi was renamed "Calidi Biotherapeutics (Nevada), Inc. and became a wholly owned subsidiary of the Company. Unless the context otherwise requires, the "Company" refers to Calidi Biotherapeutics, Inc., a Delaware corporation (f/k/a First Light Acquisition Group, Inc., a Delaware corporation) and its consolidated subsidiaries.

The Company is a clinical-stage biotechnology company that is developing genetic medicines and proprietary genetically-engineered oncolytic viruses. The Company is developing a pipeline of product candidates that are designed to: (i) protect oncolytic viruses from complement inactivation and innate immune cell inactivation by the body's immune system, (ii) deliver potent genetic payloads directly into the tumors, and (iii) modify the tumor microenvironment by promoting a strong and durable antitumor immune response to facilitate tumor elimination, potentially leading to an improved cancer therapy.

The Company's operations to date have focused on organization and staffing, business planning, raising capital, licensing, acquiring and developing technology, establishing intellectual property portfolio, identifying potential product candidates and undertaking preclinical studies, process development and manufacturing for preclinical and clinical trials. The Company's product candidates are subject to long development cycles and the Company may be unsuccessful in its efforts to develop, obtain regulatory approval for or market its product candidates.

The Company is subject to risks and uncertainties common to early-stage companies in the biotechnology industry, including, but not limited to, possible failure of preclinical studies or clinical trials, the need to obtain marketing approval for its product candidates, development by competitors of new technological innovations, dependence on key personnel, protection of proprietary technology, compliance with government regulations, the need to successfully commercialize and gain market acceptance of any of the Company's products that are approved and the ability to secure additional capital to fund operations. Product candidates currently under development will require significant additional research and development efforts, including extensive preclinical and clinical testing, and regulatory approval prior to commercialization. These efforts require significant amounts of additional capital, adequate personnel and infrastructure, and extensive compliance-reporting capabilities. Even if the Company's drug development efforts are successful, it is uncertain when, if ever, the Company will realize significant revenue from product sales.

 

*Reverse Stock Split*

On July 10, 2024, the Company filed a First Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation with the Secretary of State of the State of Delaware to effect a 1-for-10 reverse stock split of the shares of the Company's common stock, par value $0.0001 per share ("Common Stock"), effective on July 15, 2024 (the "2024 Reverse Stock Split"). As a result of the 2024 Reverse Stock Split, every ten shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the 2024 Reverse Stock Split, and any fractional shares that would otherwise have resulted from the 2024 Reverse Stock Split were rounded up to the next whole number. The number of authorized shares of Common Stock under the Company's Second Amended and Restated Certificate of Incorporation, as amended, remained unchanged.

On August 1, 2025, the Company filed a Second Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation , as amended, with the Secretary of State of the State of Delaware to effect a 1-for-12 reverse stock split of the shares of the Company's common stock, par value $0.0001 per share ("Common Stock"), effective on August 4, 2025 (the "2025 Reverse Stock Split"). As a result of the 2025 Reverse Stock Split, every twelve shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the 2025 Reverse Stock Split, and any fractional shares that would otherwise have resulted from the 2025 Reverse Stock Split were rounded up to the next whole number. The number of authorized shares of Common Stock under the Company's Second Amended and Restated Certificate of Incorporation, as amended, remained unchanged. Trading of the Company's shares of Common Stock on the NYSE American, LLC commenced on a split-adjusted basis on August 5, 2025.

All references to share and per share amounts for all periods presented in the unaudited condensed consolidated financial statements have been retrospectively restated to reflect the 2024 Reverse Stock Split and 2025 Reverse Stock Split. All rights to receive shares of common stock under outstanding securities, including but not limited to, warrants, options, and restricted stock units ("RSUs") were adjusted to give effect to the reverse stock split. Furthermore, proportionate adjustments were made to the per share exercise price and the number of shares of Common Stock that may be purchased upon exercise of outstanding stock options granted by the Company, and the number of shares of Common Stock reserved for future issuance under the Company's 2023 Equity Incentive Plan.

 

*Liquidity and Going Concern*

The unaudited condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities in the normal course of business, and do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company has experienced recurring losses from operations and negative cash flows from operating activities, has a significant accumulated deficit and expects to continue to incur net losses into the foreseeable future. The Company had an accumulated deficit of $132.4 million at June 30, 2025. During the six months ended June 30, 2025, the Company used $12.0 million of cash for operating activities. As of June 30, 2025, the Company had cash of $5.3 million and restricted cash of $0.1 million. Management expects operating losses and negative cash flows to continue for the foreseeable future.

Management estimates that based on the Company's liquidity resources, there is substantial doubt about the Company's ability to continue as a going concern within 12 months from the date of issuance of the unaudited condensed consolidated financial statements. The accompanying unaudited condensed consolidated financial statements have been prepared on the basis of the Company continuing to operate in the normal course of business and does not reflect any adjustments to the assets and liabilities related to the substantial doubt of its ability to continue as a going concern.

Management's ability to continue as a going concern is dependent upon its ability to raise additional funding. Management's plans to raise additional capital through public or private equity or debt financing to fulfill its operating and capital requirements for at least 12 months from the date of the issuance of the financial statements. However, the Company may not be able to secure such financing in a timely manner or on favorable terms, if at all. Furthermore, if the Company issues equity securities to raise additional funds, its existing stockholders may experience dilution, and the new equity securities may have rights, preferences and privileges senior to those of the Company's existing stockholders.

*Risks and Uncertainties*

Changes in economic conditions, including rising interest rates, public health issues, lower consumer confidence, volatile equity capital markets, ongoing supply chain disruptions and the impacts of geopolitical conflicts, may affect the Company's operations.

**2. Summary of Significant Accounting Policies** 

*Unaudited Interim Financial Information* 

The accompanying unaudited condensed consolidated financial statements as of June 30, 2025, and for the three and six months ended June 30, 2025 and 2024, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission ("SEC") and in conformity with accounting principles generally accepted in the United States of America ("U.S. GAAP") for interim financial reporting. Accordingly, these unaudited condensed consolidated financial statements do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments necessary, all of which are of a normal and recurring nature, to state fairly the Company's financial position, results of operations and cash flows. Interim results are not necessarily indicative of results for a full year or future periods. These unaudited condensed consolidated financial statements should be read in conjunction with Calidi's audited consolidated financial statements for the year ended December 31, 2024 in the Company's Form 10-K, which was filed with the SEC on March 31, 2025.

Any reference in these notes to applicable guidance is meant to refer to the authoritative U.S. GAAP as found in the Accounting Standards Codification ("ASC") and Accounting Standards Update ("ASU") of the FASB.

*Principles of Consolidation* 

The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of its wholly owned subsidiary, Calidi Biotherapeutics (Nevada), Inc., a company incorporated in the state of Nevada and Calidi Biotherapeutics, Inc., StemVac GmbH ("StemVac"), a company organized under the laws of Germany, and Calidi Biotherapeutics Australia Pty Ltd ("Calidi Australia"), a wholly owned Australian subsidiary, Nova Cell, Inc. ("Nova Cell"), a subsidiary incorporated in the state of Nevada, and RedTail Biopharma, Inc. ("RedTail"), a wholly owned subsidiary incorporated in the state of Nevada. StemVac's primary operating activities include process development and other research and development activities for the Company under a cost-plus intercompany development agreement funded by the Company. Calidi Australia's principal purpose was for conducting certain parts of the SNV1 clinical enabling activities in Australia. Nova Cell's primary operating activities will be expanding potential uses of the Company's AAA stem cell programs from oncology to other fields that require regenerative medical applications, such as cosmetics, orthopedics, auto-immune diseases, and various other therapies. Nova Cell will also serve as a technology service provider to develop innovative stem cell-based products, such as anti-aging creams and lotions. RedTail's primary operating activities will be to expand on the Company's systemic antitumor virotherapies. Both Nova Cell and RedTail were incorporated in May 2024. RedTail has had no activity to date.

Variable interest entities ("VIEs") are legal entities that either have an insufficient amount of equity at risk for the entity to finance its activities without additional subordinated financial support or, as a group, the holders of equity investment at risk lack the ability to direct the entity's activities that most significantly impact economic performance through voting or similar rights, or do not have the obligation to absorb the expected losses or the right to receive expected residual returns of the entity.

For all VIEs in which the Company is involved, it assesses whether it is the primary beneficiary on an ongoing basis. In circumstances where the Company has both the power to direct the activities that most significantly impact the VIEs performance and the obligation to absorb losses or the right to receive the benefits of the VIE that could be significant, the Company would conclude that it is the primary beneficiary of the VIE, and the Company consolidates the VIE. In situations where the Company is not deemed to be the primary beneficiary of the VIE, it does not consolidate the VIE and only recognizes the Company's interests in the VIE.

The Company owns 75% of Nova Cell's fully-diluted capitalization, with the remaining 25% owned by a related party investor (see Note 8). Under the rules of determining whether an entity is a VIE, the Company has a controlling financial interest and is deemed to be the primary beneficiary of Nova Cell and therefore consolidates Nova Cell's financial statements. Since the Company owns less than 100% of Nova Cell, the Company records net loss attributable to noncontrolling interest in its consolidated statements of operations equal to the percentage of the economic or ownership interests retained in Nova Cell by the noncontrolling party.

The accompanying unaudited condensed consolidated financial statements include all adjustments, consisting only of normal recurring adjustments, necessary for a fair presentation of the Company's financial condition and results of operations. All material intercompany accounts and transactions have been eliminated in consolidation.

*Use of Estimates* 

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, and contingent assets and liabilities, at the date of the unaudited condensed consolidated financial statements, and the reported amounts during the reporting period. On an ongoing basis, management evaluates estimates which are subject to significant judgment, including, but not limited to, valuation methods used, assumptions requiring the use of judgment to prepare financial projections, timing of potential commercialization of acquired in-process intangible assets, applicable discount rates, comparable companies or transactions, liquidity events, assumptions related to the going concern assessments, allocation of direct and indirect expenses, useful lives associated with long- lived assets, key assumptions in operating and financing leases including incremental borrowing rates, loss contingencies, valuation allowances related to deferred income taxes, assumptions used to value common stock, debt and debt-like instruments, warrants, and stock-based awards and other equity instruments. Actual results may differ materially from those estimates.

*Cash and Restricted Cash*

The Company considers all highly liquid investments purchased with an original maturity date of ninety days or less to be cash equivalents. Cash and cash equivalents include cash in readily available checking, money market accounts and brokerage accounts.

The Company classifies cash that has contractual or legal restrictions imposed by third parties as restricted cash, which is restricted as to withdrawal or use except for the specified purpose under a contract. The Company classifies restricted cash as either part of prepaids and other current assets, or as part of other noncurrent assets, depending on the term and nature of the underlying contract with a financial institution, which requires the Company to hold a fixed amount of funds in a restricted money market account as collateral to the financial institution for the Company's corporate credit card program with that financial institution.

The following table provides a reconciliation of cash and restricted cash reported within the balance sheet dates that comprise the total of the same such amounts shown in the unaudited condensed consolidated statements of cash flows (in thousands):

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **June 30,**<br> **2024** |
| Cash | $5279 | $836 |
| Restricted cash included within prepaid expenses and other current assets | 100 | 100 |
| Restricted cash included within other noncurrent assets |  | 118 |
| Total cash and restricted cash as shown in the unaudited condensed consolidated statements of cash flows | $5379 | $1054 |

---

*Machinery and Equipment*

Machinery and equipment are stated at cost, less accumulated depreciation, and includes assets purchased under financing leases. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, generally over a period of 3 to 5 years. For equipment purchased under financing leases, The Company depreciates the equipment based on the shorter of the useful life of the equipment or the term of the lease, ranging from 3 to 5 years, depending on the nature and classification of the financing lease. Maintenance and repairs are expensed as incurred whereas significant renewals and betterments are capitalized. When assets are retired or otherwise disposed of, the cost and the related accumulated depreciation are removed from the respective accounts and any resulting gain or loss is reflected in the Company's unaudited condensed consolidated statements of operations.

 

*Leases* 

The Company accounts for leases in accordance with ASC 842, *Leases*. The Company determines if an arrangement is a lease at inception. Leases are classified as either finance or operating, with classification affecting the pattern of expense recognition in the unaudited condensed consolidated statements of operations. When determining whether a lease is a finance lease or an operating lease, ASC 842 does not specifically define criteria to determine "major part of remaining economic life of the underlying asset" and "substantially all of the fair value of the underlying asset." For lease classification determination, the Company continues to use: (i) greater than or equal to 75% to determine whether the lease term is a major part of the remaining economic life of the underlying asset; and (ii) greater than or equal to 90% to determine whether the present value of the sum of lease payments is substantially all of the fair value of the underlying asset. The Company accounts for the lease and non-lease components as a single lease component.

For operating leases, the Company recognizes right-of-use ("ROU") assets and lease liabilities for leases with terms greater than 12 months in the unaudited condensed consolidated balance sheet, while leases with terms of 12 months or less are not capitalized. ROU assets represent the right to use an underlying asset during the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. Operating lease ROU assets and liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As most leases do not provide an implicit rate, the Company uses an incremental borrowing rate commensurate with the lease term, based on the information available at commencement date in determining the present value of lease payments. The Company uses the implicit rate when it is readily determinable. The operating lease ROU asset also includes any lease payments made and excludes lease incentives. Lease terms may include options to extend or terminate the lease when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a straight-line basis over the lease term. The Company discloses the amortization of ROU assets and operating lease payments as a net amount, "Amortization of right-of-use assets and liabilities", on the unaudited condensed consolidated statements of cash flows.

Finance leases are included in machinery and equipment, and in finance lease liabilities, current and noncurrent, in the unaudited condensed consolidated balance sheets. The Company discloses the amortization of finance ROU assets in depreciation and amortization expense on the unaudited condensed consolidated statements of cash flows.

See Note 11 for further disclosures in accordance with ASC 842.

*Impairment of Long-lived Assets*

The Company assesses the impairment of long-lived assets, which consist primarily of right-of-use assets for operating leases and machinery and equipment, whenever events or changes in circumstances indicate that such assets might be impaired and the carrying value may not be recoverable. If events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable and the expected undiscounted future cash flows attributable to the asset are less than the carrying amount of the asset, an impairment loss equal to the excess of the assets carrying value over its fair value is recorded in the Company's unaudited condensed consolidated statements of operations.

*Warrants*

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant's specific terms and applicable authoritative guidance in ASC 480, Distinguishing Liabilities from Equity, and ASC 815, *Derivatives and Hedging*. Warrants that meet the definition of a derivative financial instrument and the equity scope exception in ASC 815-10-15-74(a) are classified as equity and are not subject to remeasurement provided that the Company continues to meet the criteria for equity classification. Warrants that are classified as liabilities are accounted for at fair value and remeasured at each reporting date until exercise, expiration, or modification that results in equity classification. Any change in the fair value of the warrants is recognized as change in fair value of warrant liabilities in the unaudited condensed consolidated statements of operations. The classification of warrants, including whether warrants should be recorded as liabilities or as equity, is re-assessed at the end of each reporting period. The fair value of liability-classified warrants is determined using the Black-Scholes options pricing model ("Black-Scholes model") which includes Level 3 inputs.

*Fair Value Measurements* 

The Company follows ASC 820, *Fair Value Measurement*, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Accordingly, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

ASC 820 establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are as follows:

---

| | |
|:---|:---|
| Level 1: | Quoted prices in active markets for identical assets and liabilities; |
| Level 2: | Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
| Level 3: | Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities, which require the reporting entity to develop its own assumptions. |

---

When quoted market prices are available in active markets, the fair value of assets and liabilities is estimated within Level 1 of the valuation hierarchy. If quoted prices are not available, then fair values are estimated by using pricing models, quoted prices of assets and liabilities with similar characteristics, or discounted cash flows, within Level 2 of the valuation hierarchy. In cases where Level 1 or Level 2 inputs are not available, the fair values are estimated by using inputs within Level 3 of the hierarchy. See Note 3 for fair value measurements.

*Derivative Financial Instruments* 

The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815, *Derivatives and Hedging*. The Company values its derivatives using the Black-Scholes option-pricing model or other acceptable valuation models, as applicable, with the assistance of valuation specialists. Derivative instruments accounted for as liabilities are valued at inception and subsequent valuation dates for each reporting period the derivative instrument remains outstanding. The classification of derivative instruments, including whether such instruments should be recorded as liabilities, is reassessed at each reporting period.

The Company evaluates equity or liability classification for common stock warrants in accordance with ASC 480, *Distinguishing Liabilities from Equity*, and ASC 815 and accounts for common stock warrants as liabilities if the warrant requires net cash settlement or gives the holder the option of net cash settlement or it otherwise does not meet other equity classification criteria. The Company accounts for common stock warrants as equity if the contract requires physical settlement or net physical settlement or if the Company has the option of physical settlement or net physical settlement and the warrants meet the requirements to be classified as equity. Common stock warrants classified as liabilities are initially recorded at fair value and remeasured at fair value at each subsequent reporting period with the offset adjustments recorded in change in fair value of warrant liability within the unaudited condensed consolidated statements of operations. Common stock warrants classified as equity are initially measured at fair value on the grant date and are not subsequently remeasured.

*Government Grants* 

On October 27, 2022, the California Institute for Regenerative Medicine ("CIRM") approved the Company's application for a CIRM grant for the Company's continued development of the SNV1 program. CIRM awarded the Company approximately $3.1 million of CIRM funding conditioned that the Company co-fund approximately $0.8 million under the requirements of the CIRM application. On December 28, 2022, the Company received the Notice of Award from CIRM for this grant. The Company drew $3.1 million in funds based on the operational milestones defined in the grant.

Proceeds from the CIRM grant are recognized over the period necessary to match the related research and development expenses when it is probable that the Company has complied with the CIRM conditions and will receive the proceeds pursuant to the milestones defined in the grant as reimbursement of those expenditures. The CIRM grant proceeds, if any, received in advance of having incurred the related research and development expenses are recorded in accrued expenses and other current liabilities and recognized as grant income included in other income (expense), net, on the Company's unaudited condensed consolidated statements of operations when the related research and development expenses are incurred.

During both the three and six months ended June 30, 2025 and 2024, the Company recognized approximately $50,000 and $0.2 million in grant income in the accompanying unaudited condensed consolidated statements of operations, respectively.

*Research and Development Expenses* 

Research and development expenses are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including compensation-related expenses for research and development personnel, including stock-based compensation expense, preclinical and clinical activities, costs of manufacturing, overhead expenses including facilities and laboratory expenses, materials and supplies, amounts paid to consultants and outside service providers, and depreciation and amortization.

Upfront and annual license payments related to acquired technologies or technology licenses which have not yet reached technological feasibility and have no alternative future use are also included in research and development expense in the period in which they are incurred.

*General and Administrative Expenses* 

General and administrative expenses consist primarily of salaries and related costs, including stock-based compensation expense, for personnel in executive, finance and accounting, business development, operations and administrative functions. General and administrative expenses also include fees for legal, patent prosecution, legal settlements, consulting, accounting and audit services as well as insurance, outside service providers, direct and allocated facility-related costs and depreciation and amortization.

*Foreign Currency Translation Adjustments and Other Comprehensive Income or Loss*

StemVac, the Company's wholly owned subsidiary, is located and operates in Germany and its functional currency is the Euro. Calidi Australia, the Company's wholly owned subsidiary, is located and operates in Australia and its functional currency is the Australian Dollar ("AUD"). Accordingly, StemVac's and Calidi Australia's assets and liabilities are translated using respective published exchange rates in effect at the unaudited condensed consolidated balance sheet date. Expenses and cash flows are translated using respective approximate weighted average exchange rates for the reporting period. Resulting foreign currency translation adjustments are recorded as other comprehensive income or loss, net of tax, in the unaudited condensed consolidated statements of comprehensive income or loss and included as a component of accumulated other comprehensive income or loss on the unaudited condensed consolidated balance sheets. For the three and six months ended June 30, 2025 and 2024, comprehensive loss includes such foreign currency translation adjustments and was insignificant for all periods presented.

*Foreign Currency Transaction Gains and Losses*

For transactions denominated in currencies other than the U.S. dollar, the Company recognizes foreign currency transaction gains and losses in the unaudited condensed consolidated statements of operations and classifies the gain or loss based on the nature of the item that generated it. The Company's foreign currency transaction gains and losses are principally generated by intercompany transfers to StemVac denominated in Euros to pay for the research and development activities performed by StemVac under an intercompany development agreement with the Company. Furthermore, the Company's foreign currency transaction gains and losses include intercompany transfers to Calidi Australia denominated in AUD to pay for the research and development activities performed by Calidi Australia. These foreign currency remeasurement gains and losses are included in other income (expense), net, and were insignificant for all periods presented.

*Stock-Based Compensation*

The Company recognizes compensation expense related to employee option grants and restricted stock grants, if any, in accordance with ASC 718, *Compensation — Stock Compensation* ("ASC 718").

The Company measures all stock options and other stock-based awards granted based on the fair value of the award on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The Company has elected to recognize forfeitures as they occur. The reversal of compensation cost previously recognized for an award that is forfeited because of a failure to satisfy a service condition is recognized in the period of the forfeiture. Generally, and unless otherwise specified, the Company's grants stock options with service-based only vesting conditions and records the expense for these awards using the straight-line method over the requisite service period.

The Company classifies stock-based compensation expense in its consolidated statements of operations in the same manner in which the award recipient's payroll costs are classified or in which the award recipients' service payments are classified.

The fair value of each stock option grant is estimated using the Black-Scholes option-pricing model. The Company estimates its expected stock volatility based on the historical volatility of a publicly traded set of peer companies within the biotechnology industry with characteristics similar to the Company. The expected term of the Company's stock options has been determined utilizing the "simplified" method for awards that qualify as "plain-vanilla" options provided under Staff Accounting Bulletin, Topic 14, or SAB Topic 14, as necessary. The risk-free interest rate is determined by reference to the U.S. Treasury yield curve in effect at the time of grant of the award for time periods approximately equal to the expected term of the award. Expected dividend yield is zero, based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

*Net Loss per share of Common Stock*

Loss per share attributable to common stockholders is calculated using the two-class method, which is an earnings allocation formula that determines earnings per share for the holders of the Company's shares of Common Stock and participating securities. However, the participating securities do not include a contractual obligation to share in the losses of the Company and are not included in the calculation of net loss per share in the periods that have a net loss. In addition, common stock equivalent shares (whether or not participating) are excluded from the computation of diluted earnings per share in periods in which they have an anti-dilutive effect on net loss per share of Common Stock.

Diluted net loss per share is computed using the more dilutive of (a) the two-class method or (b) the if-converted method and treasury stock method, as applicable. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common stock shares are not assumed to have been issued if their effect is anti-dilutive. Diluted net loss per share is equivalent to basic net loss per share for the periods presented herein because common stock equivalent shares from the outstanding warrants, earnout shares, convertible notes, stock option awards, restricted stock units, and contingently issuable warrants (see Note 8) were antidilutive.

As a result of the Company reported net loss attributable to common stockholders for all periods presented herein, the following common stock equivalents were excluded from the computation of diluted net loss per share of Common Stock for the six months ended June 30, 2025 and 2024 because including them would have been antidilutive (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Six Months Ended June 30,** | **Six Months Ended June 30,** |
|  | **2025** | **2024** |
| Warrants for common stock | 1403 | 655 |
| Earnout shares | 150 | 150 |
| Convertible notes payable |  | 93 |
| Employee stock options | 131 | 71 |
| Restricted stock units |  | 3 |
| Commitments to issue common stock |  | 2 |
| Contingently issuable warrants<sup>(1)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;Total common stock equivalents | 1684 | 974 |

---

(1) The contingently issuable
 warrant was not included for purposes of calculating the number of diluted shares outstanding as of June 30, 2024, as the number
 of dilutive shares is based on a contingency not yet resolved as of period end and the contingently resulting number of dilutive
 shares is not determinable until the contingency is resolved. As of June 30, 2025, the contingency was resolved in full and there
 were no contingently issuable warrants outstanding.

*Segments* 

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker (or CODM), the Executive Management Team, consisting of the following individuals:

● Chief Executive Officer

● Chief Financial Officer

● Chief Legal Officer

● Chief Scientific Officer and Head of Technical Operations

● Chief Medical Officer, Consultant and Advisor

The Company views its operations and manages its business as a single reportable segment whose operations includes the research, development and commercialization efforts of platforms to potentiate oncolytic virus therapies on a consolidated basis, as further described in Note 1. The Company manages its Research and Development ("R&D") activities on a consolidated basis. The Company expects to generate future income from a combination of license fees and other upfront payments, funded R&D agreements, milestone payments, product sales, government and other third-party funding, and royalties, which depend on the results, regulatory approval, and timing of the successful commercialization of the Company's products.

Net loss is the measure of segment profit or loss used by CODM in making decisions regarding resource allocation and evaluating financial performance, which is also reported on the unaudited condensed consolidated statements of operations and comprehensive loss. The CODM does not evaluate its reportable segment using asset or liability information. The CODM uses net loss in making decisions regarding resource allocation and evaluating financial performance.

The following table presents selected financial information with respect to the Company's single operating segment for the three and six months ended June 30, 2025 and 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended <br> June 30,** | **Six Months Ended <br> June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **OPERATING EXPENSES** |  |  |  |  |
| Salaries and benefits | $(2957) | $(2837) | $(5147) | $(5823) |
| Insurance | (238) | (404) | (474) | (801) |
| Legal | (350) | (427) | (649) | (1217) |
| Consulting | (592) | (336) | (1211) | (841) |
| Rent and Maintenance | (610) | (554) | (1175) | (1072) |
| Clinical & research and development | (427) | (304) | (890) | (1051) |
| Depreciation | (96) | (101) | (187) | (202) |
| Change in fair value of other liabilities and derivatives | (19) | 95 | 16 | (104) |
| Other segment items <sup>(1)</sup> | (468) | (891) | (1099) | (1869) |
| Income tax provision | (4) | (8) | (7) | (12) |
| **NET LOSS** | $(5761) | $(5767) | $(10823) | $(12992) |

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<sup>(1)</sup> Other segment items include interest expense, grant income, and other income (expense).

*Recently Adopted Accounting Pronouncements* 

There were no new accounting pronouncements adopted during the six months ended June 30, 2025.

*Recently Issued Accounting Pronouncements Not Yet Adopted* 

In December 2023, the FASB issued ASU No. 2023-09, *Improvements to Income Tax Disclosures (Topic 740)*. The ASU requires disaggregated information about a reporting entity's effective tax rate reconciliation as well as additional information on income taxes paid. The ASU is effective on a prospective basis for annual periods beginning after December 15, 2024. Early adoption is also permitted for annual financial statements that have not yet been issued or made available for issuance. The Company is currently evaluating the impact of adopting ASU 2023-09.

In November 2024, the FASB issued ASU 2024-03, *Income Statement-Reporting Comprehensive Income-Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement* and in January 2025, issued ASU 2025-01 *Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date* to clarify the effective date of ASU 2024-03. ASU 2024-03 requires the disaggregation of certain costs and expenses in the notes to the financial statements to provide enhanced transparency into the expense captions presented on the face of the income statement. The ASU is effective for annual periods beginning after December 15, 2026 and for interim reporting periods within annual reporting periods beginning after December 15, 2027. The guidance may be applied on a prospective or retrospective basis and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2024-03.

**3. Fair Value Measurements**

The following table presents the Company's assets and liabilities that are measured at fair value on a recurring basis, inclusive of related party components, as of June 30, 2025 and December 31, 2024 (in thousands):

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **June 30, 2025<br> (unaudited)** | **June 30, 2025<br> (unaudited)** | **June 30, 2025<br> (unaudited)** | **June 30, 2025<br> (unaudited)** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets:** | | | | |
| Restricted cash held in a money market account | $100 | $— | $— | $100 |
| Forward Purchase Agreement Derivative Asset included in other noncurrent assets |  |  | 2 | 2 |
| &nbsp;&nbsp;&nbsp;Total assets, at fair value | $100 | $— | $2 | $102 |
| **Liabilities:** |  |  |  |  |
| Public Warrants | $89 | $— | $— | $89 |
| Private warrants |  | 14 |  | 14 |
| &nbsp;&nbsp;&nbsp;Total warrant liabilities, at fair value | $89 | $14 | $— | $103 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets:** | | | | |
| Restricted cash held in a money market account | $218 | $— | $— | $218 |
| Forward Purchase Agreement Derivative Asset included in other noncurrent assets |  |  | 11 | 11 |
| &nbsp;&nbsp;&nbsp;Total assets, at fair value | $218 | $— | $11 | $229 |
| **Liabilities:** |  |  |  |  |
| Public Warrants | $110 | $— | $— | $110 |
| Private warrants |  | 18 |  | 18 |
| &nbsp;&nbsp;&nbsp;Total warrant liabilities, at fair value | $110 | $18 | $— | $128 |

---

The Company's financial instruments consist of cash, prepaid expenses and other current assets, accounts payable, accrued expenses, and other current liabilities. The carrying value of these financial instruments is generally considered to approximate their fair values because of the short-term nature of those instruments.

The following table presents the changes in fair value of valued instruments for the three and six months ended June 30, 2025 (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** | **Three Months Ended June 30, 2025** |
|  | **Forward Purchase Agreement Derivative Asset, <br> at fair value** | **Public Warrants, <br> at fair value** | **Private Warrants,<br> at fair value** |
| Balance at April 1, 2025 | $(5) | $75 | $12 |
| Change in fair value | 3 | 14 | 2 |
| Balance at June 30, 2025 | $(2) | $89 | $14 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** | **Six Months Ended June 30, 2025** |
|  | **Forward Purchase Agreement Derivative Asset, <br> at fair value** | **Public Warrants, <br> at fair value** | **Private Warrants, <br> at fair value** |
| Balance at January 1, 2025 | $(11) | $110 | $18 |
| Change in fair value | 9 | (21) | (4) |
| Balance at June 30, 2025 | $(2) | $89 | $14 |

---

The following table presents the changes in fair value of valued instruments for the three and six months ended June 30, 2024 (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** | **Three Months Ended June 30, 2024** |
|  | **Forward Purchase Agreement Derivative Asset,<br> at fair value** | **Public Warrants, at fair value** | **Private warrants,<br> at fair value** |
| Balance at April 1, 2024 | $(57) | $598 | $99 |
| Change in fair value | 37 | (114) | (18) |
| Balance at June 30, 2024 | $(20) | $484 | $81 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** | **Six Months Ended June 30, 2024** |
|  | **Forward Purchase Agreement Derivative Asset, at fair value** | **Public Warrants, at fair value** | **Private warrants, at fair value** |
| Balance at January 1, 2024 | $(230) | $575 | $96 |
| Change in fair value | 210 | (91) | (15) |
| Balance at June 30, 2024 | $(20) | $484 | $81 |

---

**4. Selected Balance Sheet Components** 

*Accrued Expenses and Other Current Liabilities* 

As of June 30, 2025 and December 31, 2024, accrued expenses and other current liabilities were comprised of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Accrued compensation | $1276 | $1344 |
| Accrued vendor and other expenses | 658 | 994 |
| Accrued expenses and other current liabilities | $1934 | $2338 |

---

See Note 11 for additional commitments.

*Prepaid Expenses and Other Current Assets*

As of June 30, 2025 and December 31, 2024, prepaid expenses and other current assets were comprised of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
| Prepaid expenses | $163 | $99 |
| Prepaid insurance | 214 | 288 |
| CIRM receivable | 50 |  |
| Other | 343 | 249 |
| Prepaid expenses and other current assets | $770 | $636 |

---

**5. Machinery and Equipment, net** 

As of June 30, 2025 and December 31, 2024, machinery and equipment, net, was comprised of the following (in thousands):

---

| | | |
|:---|:---|:---|
|  | **June 30,<br> 2025** | **December 31,<br> 2024** |
| Machinery and equipment | $2536 | $2224 |
| Accumulated depreciation | (1607) | (1355) |
| Machinery and equipment, net | $929 | $869 |

---

Depreciation and amortization expense amounted to approximately $0.1 million and $0.2 million for the three and six months ended June 30, 2025, respectively. Depreciation and amortization expense amounted to approximately $0.1 million and $0.2 million for the three and six months ended June 30, 2024, respectively.

**6. Related Party Transactions** 

Prior to completing the Business Combination and becoming publicly traded in September 2023, the Company funded its operations primarily through issuances of convertible promissory notes and private sales of common stock. These investments included various related parties, including from AJC Capital and certain directors as further discussed below.

The following table presents the various significant related party transactions and investments in the Company for the periods presented (in thousands):

---

| | | |
|:---|:---|:---|
| **Related Party** | **June 30, 2025** | **December 31, 2024** |
| Director A and Director E Current term notes payable, net of discount, including accrued interest<sup>(1)</sup> | 775 | 2702 |
| Director F and relative of Officer A Accounts payable and accrued expenses<sup>(2)</sup> | 21 | 30 |
| Director F<br> Former Chief Executive Officer<sup>(3)</sup> | 432 |  |
| Director D Former President and Chief Operating Officer<sup>(4)</sup> |  | 434 |
| Director A Advisory services included in accrued expenses<sup>(5)</sup> |  | 18 |
| Director F Lease guaranty<sup>(6)</sup> | 4 | 186 |
| Director A Other liabilities<sup>(7)</sup> |  | 638 |
| Director F and Director A Warrant liability<sup>(8)</sup> | 7 | 9 |
| Relative of Officer A Loan payable<sup>(9)</sup> |  | 223 |

---

(1) As of June 30, 2025, related
 party term note payable amounts due to Directors A totaling $0.8 million, inclusive of principal amounts totaling $0.4 million and
 accrued interest amounts totaling $0.4 million, have been classified as a short term liability on the accompanying unaudited condensed
 consolidated balance sheets. As of December 31, 2024, related party term note payable amounts due to Directors A and E totaled $2.7 million. See Note 7 for further details.

(2) Amounts owed to Director F
 as of June 30, 2025 and December 31, 2024, for reimbursable expenses; in addition, amounts owed to a relative of Officer
 A for certain legal fees, included in accounts payable and accrued expenses. In April 2025, $28,000 was settled with Director F.

(3) On
 April 22, 2025, the Company executed a General Release of Claims and Transition Agreement
 ("Release Agreement") with Mr. Camaisa, (Director F referenced above), and is
 obligated to pay Director F $500,000 separation pay in the form of compensation continuation
 over 12 months pursuant to our regular and customary payroll schedule, less all regular and
 customary payroll withholdings and shall also be liable to pay Director F COBRA premiums
 for 12 months, commencing May 2025. Director F shall also be entitled to receive a transition/
 consulting pay of $10,000 per month during the transition period. The Company expensed $20,000 for the three and six months ended June 30, 2025.

(4) On February 1, 2022, the
 Company appointed a then current board member (Director D referenced above), George K. Ng, as President and Chief Operating Officer
 of the Company under an Employment Agreement (the "Ng Agreement"). Under the Ng Agreement, Mr. Ng was entitled to a base
 annual salary of $0.5 million and a signing bonus of $0.3 million, payable in three equal monthly installments. Mr. Ng was eligible
 for standard change in control and severance benefits. On June 23, 2023, the Company entered into a Separation and Release Agreement
 with Mr. Ng which included a severance accrual and accrued interest as of December 31, 2024 (see Note 11). The lump sum payment and
 accrued interest was settled in January 2025.

(5) On April 1, 2022, the Company
 entered into an Advisory Agreement with Scott Leftwich (Director A referenced above), for providing certain strategic and advisory
 services. Director A received an advisory fee of $9,166 per month not to exceed $0.1 million per annum, accrued and payable upon
 the Company raising $10 million or more in equity proceeds, as defined in the Advisory Agreement. The Advisory Agreement terminated
 on August 31, 2023. The accrued advisory fees were settled in January 2025.

(6) In
 October 2022, in order for the Company to secure and execute the San Diego Lease discussed in Note 11, Director F, provided a
 personal Guaranty of Lease of (the "Guaranty") up to $0.9 million to the lessor for the Company's future performance under the San Diego Lease agreement. As
 consideration for the Guaranty, the Company agreed to pay Director F 10% of the Guaranty amount for the first year of the San Diego
 Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the
 termination of the San Diego Lease or release of Director F from the Guaranty by the lessor, whichever occurs first. As of
 June 30, 2025 and December 31, 2024, the amounts shown in the table above represents the present value, including accrued interest as
 of the period shown, of approximately $4,000 and $0.2 million, respectively, payment due to Director F upon the release or termination of the Guaranty, which is included in non-current operating lease
 right-of-use liability. The amount due to Director F was partially settled in April 2025.

(7) In August 2023, the Company
 entered into an agreement with Director A for deferred compensation including advisory fees for $0.5 million, which was paid in January
 2025 (see Note 11). The $0.5 million note bore interest at 24 % through August 12, 2024, at which time the note was amended and replaced
 with an interest rate of 14 % per annum. The deferred compensation and advisory fees were settled in January 2025.

(8) See Note 8 for disclosures
 around Warrants.

(9) In January 2024, the Company
 entered into a loan agreement with a relative of Officer A for a loan payable for $0.2 million, which bears interest at 12 %. The
 loan was settled in full in January 2025.

**7. Debt**

The Company's outstanding debt obligations as of June 30, 2025 and December 31, 2024, including related party components, are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Unpaid**<br> **Balance** | **Accrued**<br> **Interest** | **Net**<br> **Carrying**<br> **Value** |
| Term notes payable | $375 | $400 | $775 |
| Promissory note | 600 | 45 | 645 |
| Total debt | $975 | $445 | $1420 |
| Less: current portion of long-term debt |  |  | (820) |
| Long-term debt, net of current portion |  |  | $600 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Unpaid**<br> **Balance** | **Accrued**<br> **Interest** | **Net**<br> **Carrying**<br> **Value** |
| Term notes payable | $2200 | $753 | $2953 |
| Bridge loan payable | 200 | 23 | 223 |
| Promissory note | 600 | 45 | 645 |
| Total debt | $3000 | $821 | $3821 |
| Less: current portion of long-term debt |  |  | (3221) |
| Long-term debt, net of current portion |  |  | $600 |

---

Scheduled maturities of outstanding debt, net of discounts as of June 30, 2025 are as follows (in thousands):

---

| | |
|:---|:---|
| **Year Ending December 31:** | |
| 2025 (July — December) | $375 |
| 2026 |  |
| 2027 | 600 |
| 2028 and thereafter |  |
| Plus: accrued interest | 445 |
| **Total debt** | $1420 |

---

The following discussion includes a description of the Company's outstanding debt as of June 30, 2025 and December 31, 2024. The weighted average interest rate related to the Company's outstanding debt was approximately 14.6% and 14.4% as of June 30, 2025 and December 31, 2024, respectively. Interest expense related to the Company's outstanding debt totaled approximately $40,000 and $0.2 million for the three months ended June 30, 2025 and 2024, respectively, and approximately $0.1 million and $0.4 million for the six months ended June 30, 2025 and 2024, respectively, which is reported within other income (expense), net, in the unaudited condensed consolidated statements of operations.

***Term Notes Payable***

*2021 Term Notes Payable*

In January 2021, Calidi entered into a note agreement with a related party investor and director to borrow up to $0.5 million ("2021 Term Note").

As of December 31, 2024, the interest rate of the 2021 Term Notes was 14%, and the total carrying value, including accrued interest was approximately $0.7 million. The total outstanding principal and accrued interest of 2021 Term Note of $0.7 million was settled in full in January 2025. As of that date, the 2021 Term Notes were no longer outstanding.

*2022 Term Notes Payable*

In November and December 2022, the Company issued $1.5 million of secured term notes payable (the "2022 Term Notes") to investors, including to related parties (see Note 6).

On October 3 and November 8, 2023, the Company settled in cash $0.1 million and $0.2 million, respectively, of principal of 2022 Term Notes plus accrued interest. Said term notes payable were no longer outstanding as of the settlement date.

As of December 31, 2024, the interest rate of the 2022 Term Notes was 14% per annum, for a total principal of $0.2 million, and 16% per annum, for a total principal of $0.2 million. As of December 31, 2024, the total carrying value, including accrued interest, was $0.4 million. The total outstanding principal and accrued interest of 2022 Term Notes of $0.4 million was settled in full in January 2025. As of that date, the 2022 Term Notes were no longer outstanding.

*2023 Term Notes Payable*

From January through September 2023, the Company issued $3.3 million of secured term notes payable (the "2023 Term Notes") to investors, including to related parties (see Note 6).

On October 3, 2023, as agreed upon above in connection with the Closing of the FLAG Merger, the Company settled in cash $0.6 million of principal of 2023 Term Notes plus accrued interest and said term notes payable were no longer outstanding as of that date.

During the year ended December 31, 2024, the Company settled in cash $0.3 million of principal of 2023 Term Notes plus accrued interest.

On December 23, 2024, pursuant to the debt amendment on $1.0 million of the 2023 Term Notes, commencing on February 1, 2025, the Company shall pay the holder, a related party, $0.1 million each month until the 2023 Term Notes' principal and interest are fully paid. The principal shall continue accruing interest of 14% per annum until fully paid. During the six months ended June 30, 2025, $0.6 million was paid in accordance with this agreement.

During the six months ended June 30, 2025, $0.5 million of the outstanding principal and accrued interest of the 2023 Term Notes was settled in cash.

As of June 30, 2025, the interest rate of the 2023 Term Notes was 14% per annum, for a total principal of $0.4 million. As of December 31, 2024, the interest rate was 14% and 18% per annum for a total principal of $1.2 million and $0.2 million, respectively. As of June 30, 2025 and December 31, 2024, the total carrying value, including accrued interest and net of debt discount, was $0.8 million and $1.9 million, respectively.

***2024 Bridge Loan***

On January 19, 2024, the Company received approximately $0.2 million in aggregate proceeds from the issuance of certain bridge loans (the "2024 Bridge Loan"), which mature one year from the issuance date and bear simple interest of 12% per annum. As consideration for the 2024 Term Loans, the Company issued an aggregate of 75 shares of restricted common stock to the Lender.

As of December 31, 2024, the total carrying value of the 2024 Bridge Loan, including accrued interest and net of debt discount, was $0.2 million.

The total outstanding principal and accrued interest of the 2024 Bridge Loan of $0.2 million was settled in full in January 2025. As of that date, the bridge loan was no longer outstanding.

***Convertible Promissory Notes***

On January 26, 2024, the Company entered into a convertible promissory note purchase agreement (the "2024 Purchase Agreement") with an Accredited Investor (the "Investor") for a loan in the principal amount of $1.0 million (the "2024 Convertible Note Loan"). In connection with the Convertible Note Loan, the Company issued a one-year convertible promissory note evidencing the aggregate principal amount of $1.0 million under the Loan, which accrues at a 12.0% simple interest rate per annum (the "2024 Convertible Note").

On April 18, 2024, pursuant to the April Public Offering, the Company's $1.0 million convertible note, inclusive of outstanding principal and accrued interest, was automatically converted into shares of Common Stock Unit shares, with terms identical to those sold in the April Public Offering. As of that date, the convertible note was no longer outstanding.

***Promissory Note Loan Agreement***

On July 1, 2024, the Company entered into a Loan Agreement with a third party lender (the "Lender"). Under the Loan Agreement, the Lender agreed to loan the Company the principal amount of $0.6 million pursuant to the terms of the promissory note dated July 1, 2024 which was issued to the Lender by the Company (the "Promissory Note").

The Promissory Note bears a simple interest rate at 15.0% per annum and matures on the third calendar year from July 1, 2024 (the "Maturity Date") unless due earlier due to an event of a default under the terms of the Promissory Note. The Company agreed to pay annual payments of accrued interest after each calendar year from the Payment Date until any remaining interest is paid in full on the Maturity Date.

As of June 30, 2025 and December 31, 2024, the total carrying value of the promissory note, including accrued interest, was $0.6 million.

**8. Total Equity**

***Preferred Stock***

Pursuant to the Second Amended and Restated Certificate of Incorporation filed on September 19, 2023 ("the Amended Articles"), the Company is authorized to issue a total of 1,000,000 shares of preferred stock, par value $0.0001 per share. As of June 30, 2025 and December 31, 2024, there were no shares of preferred stock outstanding.

***Common Stock***

Pursuant to the Amended Articles, the Company is authorized to issue 330,000,000 shares of common stock, par value $0.0001 per share, of which 312,000,000 shares are designated as Voting Common Stock ("Common Stock") and 18,000,000 are designated as Non-Voting Common Stock (the "Non-Voting Common Stock"). As of June 30, 2025 and December 31, 2024, there were 2,876,757 and 1,730,051 shares of common stock issued and outstanding, respectively, and 150,000 shares of non-voting common stock outstanding. Since inception to date, no dividends have been declared or paid. Issuance costs related to common stock issuances during all periods presented were immaterial.

During the six months ended June 30, 2025, the Company issued 223,583 shares of common stock through an At The Market Offering, 416,667 shares of common stock in connection with the Company's January Confidentially Marketed Public Offering, 277,084 shares of common stock in connection with the Company's March Registered Direct Offering and Concurrent Private Placement, 227,334 shares of common stock in connection with the exercise of Pre-funded Series G Warrants, and 2,038 shares of common stock pursuant to a release of Restricted Stock Units.

During the six months ended June 30, 2024, the Company issued 417 shares of common stock in lieu of cash for certain marketing services, 1,157 shares of common stock in lieu of cash for payment of a commitment fee related to the Company's SEPA agreement, 132 shares of common stock issued to a stockholder as a result of the FLAG Merger, 110,271 shares of common stock issued in connection with the Company's April Offering, 21,408 shares of common stock pursuant to Convertible Note conversion, 89,151 shares of common stock issued in connection with the Company's May Inducement Offer, 4,167 shares of common stock from exercises of warrants, and 16,375 shares of common stock from exercises of pre-funded warrants.

As of June 30, 2025 and December 31, 2024, common stock reserved for future issuance consisted of the following:

---

| | | |
|:---|:---|:---|
|  | **June 30,** <br> **2025** | **December 31,**<br> **2024** |
| Common stock warrants outstanding | 1403320 | 910299 |
| Common stock options issued and outstanding | 130686 | 77245 |
| Restricted stock units vested and unreleased |  | 2039 |
| Shares available for future issuance under the 2023 Equity Incentive Plan | 8099 | 7409 |
| Shares reserved under the 2023 Employee Stock Purchase Plan | 32815 | 32815 |
|  | 1574920 | 1029807 |

---

*April 2024 Public Offering*

On April 18, 2024, in connection with the April Public Offering, the Company sold an aggregate of 110,271 Common Stock Units and 16,375 Pre-Funded Warrant ("PFW") Units at an effective combined purchase price of $48.00 per Common Stock Unit or PFW Unit.

Each Common Stock Unit consists of: (i) one share of the Company's voting common, (ii) a Series A warrant to purchase one share common stock, (iii) a Series B warrant to purchase one Series B Unit, with each Series B Unit consisting of (a) one share of common stock and (b) a Series B-1 Warrant to purchase one share of common stock, and (iv) a Series C warrant to purchase one Series C Unit, with each Series C Unit consisting of (a) one share of common stock and (b) a Series C-1 Warrant to purchase one share of common stock. See further warrant details per each issued series below.

Each PFW Unit consists of: (i) a pre-funded warrant to purchase one share of common stock, (ii) a Series A warrant to purchase one share common stock, (iii) a Series B warrant to purchase one Series B Unit, with each Series B Unit consisting of (a) one share of common stock and (b) a Series B-1 Warrant to purchase one share of common stock, and (iv) a Series C warrant to purchase one Series C Unit, with each Series C Unit consisting of (a) one share of common stock and (b) a Series C-1 Warrant to purchase one share of common stock. See further warrant details per each issued series below.

The Company issued the Placement Agent common stock warrants to purchase up to 6,333 shares of Common Stock. See further warrant details below.

*May 2024 Warrant Inducement Offer*

 

On May 31, 2024, following the closing of the May 2024 Warrant Inducement Offer, warrant holders immediately exercised some or all of their respective outstanding Series B Warrants and Series C Warrants to purchase up to an aggregate of 89,153 shares of the Company's Common Stock, Series B-1 Warrants to purchase up to 22,275 shares of Common Stock and Series C-1 Warrants to purchase up to 66,878 shares of Common Stock, at a reduced exercise price of $24.00. In consideration for the immediate exercise of some or all of the Existing Warrants for cash, the Company agreed to issue unregistered new Series D Warrants to purchase up to 89,153 shares of Common Stock.

The Company accounted for the exercise price decrease of the Existing Warrants as a modification. Based on the nature of the modification (i.e., reduction in exercise price to induce exercise and raise additional capital), the modification was accounted for as an equity issuance cost on the date the offer was accepted by the Holders, calculated as the excess fair value of the modified warrants post modification.

The Company issued the Placement Agent common stock warrants to purchase up to 4,458 shares of common stock. See further warrant details below.

*Subscription Agreement*

 

On July 26, 2024, the Board of Directors of the Company approved a Subscription Agreement dated July 28, 2024 entered with an accredited investor, a related-party. Pursuant to the Agreement, the Company sold to the Investor and the Investor purchased, (i) 58,235 shares of Common Stock at a purchase price of $17.172 per share; and (ii) warrants to purchase 50,000 shares of the Company's common stock at an exercise price of $22.80, for an aggregate purchase price of $1.0 million.

*At the Market Offering*

On October 11, 2024, the Company entered into an At The Market Offering Agreement with Ladenburg Thalmann & Co. Inc. ("Ladenburg"), under which the Company may, from time to time, in its sole discretion, issue and sell through Ladenburg, acting as agent or principal, shares of the Company's common stock, par value $0.0001 per share, initially having an aggregate offering price of up to $5.1 million. Pursuant to the Sales Agreement, Ladenburg may sell the Shares by any method permitted by law deemed to be an "at the market" offering as defined in Rule 415 under the Securities Act of 1933, as amended (the "Securities Act"). Ladenburg will use commercially reasonable efforts consistent with its normal trading and sales practices to sell the Shares from time to time, based upon instructions from the Company (including any price or size limits or other customary parameters or conditions the Company may impose).

The Company will pay Ladenburg a cash commission of 3.0% of the aggregate gross sales proceeds of shares sold through Ladenburg under the Sales Agreement. The Company also agreed to reimburse Ladenburg for certain specified expenses, including the fees and disbursements of its counsel, in an amount not to exceed $50,000, in addition to certain ongoing disbursements of its legal counsel up to $7,500 in connection with diligence bring downs.

Under the terms of the Sales Agreement, the Company may also sell shares to Ladenburg as principal for its own account at prices agreed upon at the time of sale. If the Company sells shares to Ladenburg as principal, it will enter into a separate terms agreement with Ladenburg in substantially the form attached to the Sales Agreement. The Company is not obligated to sell any shares under the Sales Agreement. The offering of the shares pursuant to the Sales Agreement may be terminated by either the Company or Ladenburg, as permitted therein.

On February 4, 2025, the Company increased the maximum aggregate offering amount of the shares of the Company's common stock, par value $0.0001 per share issuable under the At The Market Offering Agreement with Ladenburg, dated October 11, 2024, from $5.1 million to $11.2 million, and filed a prospectus supplement under the Sales Agreement for an aggregate of $6.1 million. During the six-month period ended June 30, 2025, the Company sold 223,583 shares of common stock for gross proceeds of approximately $2.9 million under the Sales Agreement.

*October 2024 Public Offering*

On October 23, 2024, the Company entered into a Securities Purchase Agreement with certain institutional investors (the "Purchasers"), pursuant to which the Company agreed to issue to the Purchasers, (i) in a registered offering, 170,836 shares of the Company's common stock, par value $0.0001 per share, at a purchase price of $12.00 per share, and (ii) in a concurrent private placement, Series E common stock purchase warrants to purchase up to 170,836 shares of Common Stock (the "Series E Common Warrants") and Series F common stock purchase warrants to purchase up to 170,836 shares of Common Stock (the "Series F Common Warrants" and together with the Series E Common Warrants, the "Common Warrants"). Such registered direct offering and concurrent private placement are referred to herein as the "Transactions."

The closing of the Transactions took place on October 24, 2024. The gross proceeds from the Transactions were approximately $2.1 million, before deducting placement agent fees and other offering expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the Common Warrants or Placement Agent Warrants.

The shares were offered by the Company pursuant to a shelf registration statement on Form S-3 (File No. 333-282456), which was declared effective by the Securities Exchange Commission on October 10, 2024.

The Company issued the Placement Agent common stock warrants to purchase up to 8,542 shares of Common Stock. See further warrant details below.

*November 2024 Confidentially Marketed Public Offering (CMPO)*

On November 14, 2024, the Company conducted a CMPO with Ladenburg acting as the "Placement Agent", pursuant to which the Company agreed to issue in a public offering 369,823 shares of the Company's common stock, par value $0.0001 per share, at a purchase price of $20.28 per Share. The closing of the offering took place on November 15, 2024. The gross proceeds from the offering were approximately $7.5 million, before deducting placement agent fees and other offering expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the Placement Agent Warrants.

The shares of Common Stock were offered by the Company pursuant to a shelf-registration statement on Form S-3, which was declared effective by the Securities and Exchange Commission on October 10, 2024.

The Company issued the Placement Agent common stock warrants to purchase up to 18,492 shares of Common Stock. See further warrant details below.

 

*January 2025 Confidentially Marketed Public Offering (CMPO)*

On January 9, 2025, the Company conducted a CMPO Agreement with Ladenburg acting as the "Placement Agent", pursuant to which the Company agreed to issue and sell in a public offering 416,667 shares of the Company's common stock, par value $0.0001 per share, at a purchase price of $10.20 per Share. The closing of the offering took place on January 10, 2025. The gross proceeds from the offering were approximately $4.3 million, before deducting placement agent fees and other offering expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the Placement Agent Warrants.

The shares of Common Stock were offered by the Company pursuant to a shelf registration statement on Form S-3, which was declared effective by the Securities Exchange Commission on October 10, 2024.

The Company issued the Placement Agent common stock warrants to purchase up to 20,834 shares of Common Stock. See further warrant details below.

*March 2025 Registered Direct Offering and Concurrent Private Placement*

 

On March 28, 2025, the Company entered into a Securities Purchase Agreement with a single institutional investor, pursuant to which the Company agreed to issue to the Purchaser, (i) in a registered offering, 227,084 shares of the Company's common stock, par value $0.0001 per share, at a purchase price of $7.80 per Share, (ii) pre-funded warrants ("PFW") to purchase up to an aggregate of 227,334 shares of Common Stock at a purchase price of $7.788 per Pre-funded Warrant and an exercise price of $0.001 per share (the "Pre-funded Warrant Shares") and (iii) in a concurrent private placement, Series G common stock purchase warrants to purchase up to 504,417 shares of Common Stock (the "Series G Common Warrants" or the "Common Warrants"). Such registered direct offering and concurrent private placement are referred to herein as the "March Registered Direct Offering and Concurrent Private Placement".

The Shares, the PFW, and the PFW Shares were offered by the Company pursuant to a shelf registration statement on Form S-3 (File No. 333-284229), which was declared effective by the Securities Exchange Commission on February 7, 2025. The Series G Warrants and the Warrant Shares were issued in a concurrent private placement and without registration under the Securities Act, and in reliance on the exemption provided in Section 4(a)(2) under the Securities Act and Regulation D promulgated thereunder.

The Company issued the Placement Agent common stock warrants to purchase up to 25,221 shares of Common Stock. See further warrant details below.

*Nova Cell Investment*

On July 26, 2024, the Board of Directors of the Company acknowledged a strategic investment of approximately $2.0 million by an accredited investor, a related-party, into Nova Cell, a subsidiary of the Company, in exchange for the issuance of 7,500,000 shares of Nova Cell's common stock to the Investor, representing 25% of Nova Cell's current fully-diluted capitalization. Nova Cell's common stock was not adjusted when the Company effected its 2024 Reverse Stock Split and 2025 Reverse Stock Split.

***Warrants***

As of June 30, 2025 and December 31, 2024, the Company has outstanding warrants to purchase 1,403,320 and 910,299 shares of Common Stock, respectively, consisting of the following:

---

| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **June 30, <br> 2025** | **December 31, 2024** | **Exercise Price** | **Issuance date** | **Expiration date** |
| Private Warrants to purchase <br> Common Stock<sup>(1)</sup> | 15938 | 15938 | $1380.00 | September 12, 2023 | September 12, 2028 |
| Public Warrants to purchase <br> Common Stock<sup>(2)</sup> | 95834 | 95834 | $1380.00 | September 12, 2023 | September 12, 2028 |
| Warrants to purchase Restricted Shares | 3334 | 3334 | $158.40 | February 21, 2024 | February 21, 2029 |
| Warrants to purchase Restricted Shares | 50000 | 50000 | $22.80 | July 28, 2024 | July 28, 2027 |
| Placement Agent Warrants to purchase Common Stock | 6333 | 6333 | $79.20 | April 18, 2024 | April 18, 2029 |
| Placement Agent Warrants to purchase Common Stock | 4458 | 4458 | $45.00 | June 3, 2024 | June 3, 2029 |
| Placement Agent Warrants to purchase Common Stock | 8542 | 8542 | $15.00 | October 24, 2024 | April 24, 2030 |
| Placement Agent Warrants to purchase Common Stock | 18492 | 18492 | $25.35 | November 15, 2024 | May 15, 2030 |
| Placement Agent Warrants to purchase Common Stock | 20834 |  | $12.75 | January 10, 2025 | January 10, 2030 |
| Placement Agent Warrants to purchase Common Stock | 25221 |  | $9.75 | March 31, 2025 | March 31, 2030 |
| Series A Warrants to purchase <br> Common Stock<sup>(3)</sup> | 87643 | 87643 | $18.24 | April 18, 2024 | April 18, 2029 |
| Series B Warrants to purchase <br> Common Stock<sup>(4)</sup> |  | 57451 | $18.24 | April 18, 2024 | April 18, 2025 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> | 22276 | 22276 | $18.24 | June 3, 2024 | June 3, 2029 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> | 16667 | 16667 | $18.24 | July 19, 2024 | July 19, 2029 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> | 8334 | 8334 | $18.24 | July 22, 2024 | July 22, 2029 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> | 16251 | 16251 | $18.24 | November 13, 2024 | November 13, 2029 |
| Series C-1 Warrants to purchase Common Stock<sup>(6)</sup> | 59586 | 59586 | $18.24 | June 3, 2024 | June 3, 2029 |
| Series C-1 Warrants to purchase Common Stock<sup>(6)</sup> | 4167 | 4167 | $18.24 | August 8, 2024 | August 8, 2029 |
| Series C-1 Warrants to purchase Common Stock<sup>(6)</sup> | 4168 | 4168 | $18.24 | August 16, 2024 | August 16, 2029 |
| Series D Warrants to purchase <br> Common Stock<sup>(7)</sup> | 89153 | 89153 | $18.24 | June 3, 2024 | December 3, 2029 |
| Series E Warrants to purchase <br> Common Stock | 170836 | 170836 | $13.56 | October 24, 2024 | April 24, 2026 |
| Series F Warrants to purchase <br> Common Stock | 170836 | 170836 | $13.56 | October 24, 2024 | April 24, 2030 |
| Series G Warrants to purchase <br> Common Stock | 504417 |  | $8.34 | March 31, 2025 | September 30, 2032 |
| Series G Pre-Funded Warrants<sup>(8)</sup> |  |  | $0.012 | March 31, 2025 |  |
|  | 1403320 | 910299 |  |  |  |

---

(1) The Private Warrants (and
 shares of common stock issued or issuable upon exercise of the Private Warrants) in general, will not be transferable, assignable
 or salable until 30 days after the Closing (excluding permitted transferees) and they will not be redeemable under certain redemption
 scenarios by us so long as they are held by the Sponsor, Metric or their respective permitted transferees. Otherwise, the Private
 Warrants have terms and provisions that are identical to those of the Public Warrants, including as to exercise price, exercisability
 and exercise period. If the Private Warrants are held by holders other than the Company's sponsor, Metric or their respective
 permitted transferees, the Private Warrants will be redeemable by the Company under all redemption scenarios and exercisable by the
 holders on the same basis as the Public Warrants.

(2) The
 Public Warrants became exercisable 30 days after the closing of the FLAG Merger. Each whole share of the warrant is exercisable for
 one share of the Company's common stock. The
 Company may redeem the outstanding Public Warrants for $0.12 per warrant upon at least 30 days' prior written notice of redemption
 given after the warrants become exercisable, if the reported last sale price of the common stock equals or exceeds $2,160.00 per
 share (as adjusted for stock dividends, sub-divisions, reorganizations, recapitalizations and the like) for any 20 trading days within
 a 30-trading day period commencing after the warrants become exercisable and ending on the third trading day before the Company sends
 the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders may, at
 any time after the redemption notice, exercise the public warrants on a cashless basis . The
 Company accounts for the Public Warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because
 the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability. The
 accounting treatment of derivative financial instruments in accordance with ASC 815, *Derivatives and Hedging*, requires that
 the Company record a derivative liability upon the closing of the FLAG Merger. Accordingly, the Company classifies each warrant as
 a liability at its fair value and the warrants were allocated a portion of the proceeds from the issuance of the Units equal to its
 fair value. This liability is subject to re-measurement at each balance sheet date. With each such re-measurement, the warrant liability
 will be adjusted to fair value, with the change in fair value recognized in the Company's statement of operations. The Company
 will reassess the classification at each balance sheet date. If the classification changes as a result of events during the period,
 the warrants will be reclassified as of the date of the event that causes the reclassification. On
 October 17, 2024, the Company received notice from the NYSE that the Company's Public Warrants to purchase common stock are
 no longer suitable for listing pursuant to Section 1001 of the NYSE American Company Guide due to the low trading price of such public
 warrants, and that the NYSE Regulation has determined to commence proceedings to delist the public warrants. The Public Warrants
 may be traded on the OTC Pink Marketplace under the symbol CLDWW.

(3) During the year ended December
 31, 2024, Series A warrants to purchase 60,418 shares of common stock were exercised at $18.24 per share and the Company received
 gross proceeds of approximately $1.1 million.

(4) Series B warrants to purchase 22,275 shares of common stock were exercised at a reduced exercise price of $24.00 in connection with the May Inducement Offer. Pursuant
 to the issuance of common stock per the Series B warrant exercises, the Company received gross proceeds of approximately $0.5 million.
 During the year ended December 31, 2024, Series B warrants to purchase 68,335 shares of common stock were exercised at $18.24 per
 share and the Company received gross proceeds of approximately $1.2 million.

(5) During the year ended December
 31, 2024, Series B-1 warrants to purchase 27,082 shares of common stock were exercised at $18.24 per share and the Company received
 gross proceeds of approximately $0.5 million.

(6) In connection with the
 May Inducement Offer, Series C-1 warrants to purchase 4,167 shares of common stock were exercised at $24.00 per share and the Company
 received gross proceeds of approximately $0.1 million. During the year ended December 31, 2024, Series C-1 warrants to purchase 47,936 shares of common stock were exercised at $18.24 per share and the Company received gross proceeds of approximately $0.9 million.

(7) The Series D Warrants were
 issued as additional consideration to the Holders as part of the May Inducement Offer. The fair value of the Series D Warrants totaling
 $1.7 million was recorded as a deemed dividend to the warrant holders, and accordingly was treated as a reduction from total loss
 attributable to common stockholders in the calculations of net loss per share in the unaudited condensed consolidated statements
 of operations.

(8) During the six months ended
 June 30, 2025, Pre-funded Series G warrants to purchase 227,334 shares of common stock were exercised at $0.012 per share and the
 Company received gross proceeds of approximately $3,000 .

The following table summarizes the Company's aggregate warrant activity for the six months ended June 30, 2025.

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of**<br> **Warrants** | **Weighted**<br> **Average**<br> **Exercise**<br> **Price** | **Weighted**<br> **Average**<br> **Remaining**<br> **Contractual Life**<br> **(Years)** |
| **Outstanding at January 1, 2025** | 910299 | $185.16 | 3.63 |
| Issued | 777806 |  |  |
| Exercised |  |  |  |
| Cancelled |  |  |  |
| **Outstanding at March 31, 2025** | 1688105 | $103.68 | 4.13 |
| Issued |  |  |  |
| Exercised | (227334) |  |  |
| Expired | (57451) |  |  |
| **Outstanding at June 30, 2025** | 1403320 | $122.70 | 4.80 |

---

The following table summarizes the Company's aggregate warrant activity for the six months ended June 30, 2024.

---

| | | | |
|:---|:---|:---|:---|
|  | **Number of**<br> **Warrants** | **Weighted**<br> **Average**<br> **Exercise**<br> **Price** | **Weighted**<br> **Average**<br> **Remaining**<br> **Contractual Life**<br> **(Years)** |
| **Outstanding at January 1, 2024** | 111772 | $1380.00 | 4.72 |
| Issued | 3334 |  |  |
| Exercised |  |  |  |
| Expired |  |  |  |
| **Outstanding at March 31, 2024** | 115106 | $1345.20 | 4.47 |
| Issued | 633249 |  |  |
| Exercised | (93317) |  |  |
| Expired |  |  |  |
| **Outstanding at June 30, 2024** | 655038 | $284.40 | 3.46 |

---

**9. Stock-Based Compensation** 

*Equity Incentive Plans* 

Upon completion of the Business Combination on September 12, 2023, the Company adopted the 2023 Equity Incentive Plan (the "2023 Plan"). The 2023 Plan reserved the right for the Compensation Committee or by the Board of Directors acting as the Compensation Committee, as the administrator of the plan (the "Administrator") to issue up to 32,815 equity awards, including stock options ("Options"), restricted stock awards ("Restricted Stock"), dividend equivalents awards, stock payment awards, restricted stock units ("RSUs") and/or stock appreciation rights ("SARs", together with Options, Restricted Stock and RSUs, "Awards"), according to its discretion. On July 9, 2025, the Company's stockholders approved an amendment to the 2023 Plan to increase the aggregate number of shares of common stock authorized for grant under the 2023 Plan from 32,815 to 282,815. Awards may be granted under the 2023 Plan to our employees, directors, and consultants. As of June 30, 2025, the Administrator has issued RSUs and stock options under the 2023 Plan.

Under the 2023 Plan, Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse on the date of grant or in periodic installments or upon the attainment of performance goals, or upon the occurrence of specified events depending on the Administrator's discretion. The Administrator has broad authority to determine the terms and conditions of any Award granted pursuant to the 2023 Plan including, but not limited to, the exercise price, grant price, or purchase price, any reload provision, any restrictions or limitations on the Award, any schedule for lapse of forfeiture restrictions or restrictions on the exercisability of an Award, and accelerations or waivers thereof as the Administrator, in its sole discretion may determine.

No Awards may be granted under the 2023 Plan with a term of more than ten years and no Awards granted may be exercised after the expiration of ten years from the date of grant.

On July 15, 2024, the Company effected a 1-for-10 Reverse Stock Split. As a result, proportionate adjustments were made to the per share exercise price and the number of shares of Common Stock that may be purchased upon exercise of outstanding stock options granted by the Company, and the number of shares of Common Stock reserved for future issuance under the Company's 2023 Equity Incentive Plan. All stock option activity presented in these statements has been retrospectively adjusted to reflect the Reverse Stock Split.

On August 4, 2025, the Company effected a 1-for-12 Reverse Stock Split. As a result, proportionate adjustments were made to the per share exercise price and the number of shares of Common Stock that may be purchased upon exercise of outstanding stock options granted by the Company, and the number of shares of Common Stock reserved for future issuance under the Company's 2023 Equity Incentive Plan. All stock option activity presented in these statements has been retrospectively adjusted to reflect the Reverse Stock Split. Trading of the Company's shares of Common Stock on the NYSE American, LLC commenced on a split-adjusted basis on August 5, 2025.

*2023 Employee Stock Purchase Plan ("ESPP")*

On August 28, 2023, the Company approved the 2023 Employee Stock Purchase Plan, hereinafter the 2023 ESPP, which became effective on the consummation of the FLAG Merger. Under the 2023 ESPP, eligible employees may purchase a limited number of shares of common stock at a discount of up to 15% of the market value of such stock at pre-determined and plan-defined dates. There have been no shares issued under the 2023 ESPP to date.

 

*Stock Options*

Options granted under the 2023 Plan may be either "incentive stock options" within the meaning of Section 422(b) of the Internal Revenue Code of 1986, as amended (the "Code"), or "non-qualified" stock options that do not qualify incentive stock options. Incentive stock options may be granted only to the Company's employees and employees of domestic subsidiaries, as applicable. The exercise price of stock options shall be equal to or greater than the fair market value of common stock on the date the option is granted. In the case of an optionee who, at the time of grant, owns more than 10% of the combined voting power of all classes of stock, the exercise price of any incentive stock option must be at least 110% of the fair market value of the common stock on the grant date, and the term of the option may be no longer than five years. The aggregate fair market value of common stock (determined as of the grant date of the option) with respect to which incentive stock options become exercisable for the first time by an optionee in any calendar year may not exceed $0.1 million, otherwise it will be classified as a Non-Qualified Stock Option.

The exercise price of an option may be payable in cash or in common stock, or in a combination of cash and common stock, or other legal consideration for the issuance of stock as the Board or Administrator may approve.

Generally, options vest over four years and will be exercisable only while the optionee remains an employee, director or consultant, or during the three months thereafter, but in the case of the termination of an employee, director, or consultant's services due to death or disability, the period for exercising a vested option shall be extended to the earlier of twelve months after termination or the expiration date of the option.

*Employee Benefit Plans Securities Registration Statement* 

On October 1, 2024, the Company filed a Registration Statement on Form S-8, which includes a Reoffer Prospectus which may be used for reoffers and resales of shares of the Company. The Reoffer Prospectus covers the shares issuable to the holders pursuant to awards granted by the Company under the Calidi 2023 Equity Incentive Plan. The Company will not receive any proceeds from the sale of the shares offered by the Reoffer Prospectus.

*Option Awards Activity*

A summary of the 2023 Plan option activity and related information follows (in thousands except weighted average exercise price):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Number of**<br> **Options**<br> **Outstanding** | **Weighted**<br> **Average**<br> **Exercise Price** | **Weighted-<br> Average<br> Remaining<br> Contractual<br> Life<br> (Years)** | **Aggregate**<br> **Intrinsic Value** |
| Outstanding at January 1, 2025 | 77 | $220.92 | 5.67 | $5 |
| &nbsp;&nbsp;&nbsp;Options granted | 61 | 5.66 |  |  |
| &nbsp;&nbsp;&nbsp;Options exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Options forfeited or cancelled | (7) | 232.04 |  |  |
| Outstanding at June 30, 2025 | 131 | $118.80 | 7.43 | $— |
| Exercisable at June 30, 2025 | 59 | $228.52 | 4.77 | $— |

---

*Restricted Stock Units*

A summary of the 2023 Plan restricted stock unit (RSU) activity and related information follows (in thousands except weighted average grant date fair value):

---

| | | |
|:---|:---|:---|
|  | **Number of**<br> **Units**<br> **Outstanding** | **Weighted**<br> **Average**<br> **Grant-Date Fair Value** |
| Balance at January 1, 2025 | 2 | $13.80 |
| Vested and released | (2) | 13.80 |
| Balance at June 30, 2025 |  | $— |

---

The Company recorded stock-based compensation expense in the following categories on the accompanying unaudited condensed consolidated statements of operations for the periods presented (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Research and development | $111 | $203 | $258 | $406 |
| General and administrative | 411 | 548 | 871 | 1233 |
| &nbsp;&nbsp;&nbsp;Total stock-based compensation expense | $522 | $751 | $1129 | $1639 |

---

On January 18, 2023, the Board approved a repricing of approximately 0.2 million stock options previously granted at an exercise price of $1,112.40 per share to the then current fair value of $853.20 per share pursuant to an updated valuation report. The three and six months ended June 30, 2025 includes a noncash compensation charge of approximately $16,000 and $33,000, in connection with this repricing. The three and six months ended June 30, 2024 include a noncash compensation charge of approximately $18,000 and $39,000, respectively, in connection with this repricing. The stock option repricing and the acceleration of vesting were accounted for as a modification.

As of June 30, 2025, the total unamortized stock-based compensation expense related to stock options was approximately $1.6 million, expected to be amortized over an estimated weighted average life of 1.5 years. The weighted-average estimated fair value of stock options with service-conditions granted during the three months ended June 30, 2025 and 2024 was $4.23 and $17.64 per share, respectively, and during the six months ended June 30, 2025 and 2024 was $4.25 and $21.84 per share, respectively, using the Black-Scholes option pricing model with the following weighted-average assumptions:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **June 30,** | **Three Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Expected volatility | 87.2% | 87.0 - 87.6% | 87.0% | 84.8 - 88.5% |
| Risk-free interest rate | 3.90% | 4.50% | 4.06% | 3.93 - 4.50% |
| Expected option life (in years) | 6.08 | 6.02 - 6.08 | 6.03 | 3.50 - 6.10 |
| Expected dividend yield | 0.0% | 0.0% | 0.0% | 0.0% |

---

The Company does not recognize deferred income taxes for incentive stock option compensation expense and records a tax deduction only when a disqualified disposition has occurred.

**10. Income Taxes** 

The provision for income taxes for interim periods is determined using an estimated annual effective tax rate. The effective tax rate may be subject to fluctuations during the year as new information is obtained, which may affect the assumptions used to estimate the annual effective tax rate, including factors such as valuation allowances against deferred tax assets, the recognition or de-recognition of tax benefits related to uncertain tax positions, if any, and changes in or the interpretation of tax laws in jurisdictions where the Company conducts business.

For the three and six months ended June 30, 2025 and 2024, the Company did not record any federal or state income tax provision or benefit due to net losses incurred for all periods presented. The Company's net deferred tax assets generated mainly from net operating losses are fully offset by a valuation allowance as the Company believes it is not more likely than not that the benefit will be realized. StemVac's income tax provision in Germany for all periods presented was insignificant.

**11. Commitments and Contingencies** 

*Operating and Financing Leases* 

On October 10, 2022, the Company entered into an Office Lease Agreement (the "San Diego Lease") of a building containing 15,197 square feet of rentable space located in San Diego, California (the "Premises") that will serve as the Company's new principal executive and administrative offices and laboratory facility. The Company completed constructing tenant improvements at the Premises on February 27, 2023, and moved into the Premises by end of March 2023.

To secure and execute the San Diego Lease, Mr. Allan Camaisa provided a personal Guaranty of Lease of up to $0.9 million (the "Guaranty") to the lessor for the Company's future performance under the San Diego Lease agreement. As consideration for the Guaranty, the Company agreed to pay Mr. Camaisa 10% of the Guaranty amount for the first year of the San Diego Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the termination of the San Diego Lease or release of Mr. Camaisa from the Guaranty by the lessor, whichever occurs first.

The San Diego Lease has an initial term of 48 calendar months, from the first day of the first full month following which the "Commencement Date" occurs (the "Term"), which was March 1, 2023.

Beginning on the Commencement Date, the Company pays base monthly rent in the amount of $0.1 million during the first 12 months of the Term, plus a management fee equal to 3.0% of base rent. Base monthly rent will increase annually, over the base monthly rent then in effect, by 3.0%.

In addition to base monthly rent and management fees, the Company will pay in monthly installments its share of (a) all costs and expenses, other than certain excluded expenses, incurred by the lessor in each calendar year in connection with operating, maintaining, repairing (including replacements if repairs are not feasible or would not be effective) and managing the Premises and the building in which the Premises are located ("Expenses"), and (b) all real estate taxes and assessments on the Premises and the building in which the Premises are located, all personal property taxes for property that is owned by Landlord and used in connection with the operation, maintenance and repair of the Premises ("Taxes").

Upon execution of the San Diego Lease, the Company provided the lessor a payment of $0.1 million as first month base rent and prepaid operating expenses, and a letter of credit in the amount of $0.1 million issued by a bank in the name of the lessor. To obtain the letter of credit, the Company has provided the issuing bank with a restricted cash deposit that the bank will hold to cover its obligation to pay any draws on the letter of credit by the lessor. The restricted cash may not be used for any other purpose (see Note 2). The prepaid rent was included in the initial accounting of the San Diego Lease, as presented in the tables below.

On April 1, 2022, StemVac entered into an office lease which includes laboratory space which expires on March 31, 2027, with monthly payments of €4,047 Euros per month. On July 1, 2025, StemVac entered into a finance lease agreement for laboratory equipment with an initial term that expires on May 31, 2029, with monthly payments of approximately €2,976 Euros per month. The lease commencement date was June 1, 2025. The lease agreement includes an option to renew the lease for an additional twelve months, which must be exercised by providing six months' prior notice before the end of the initial lease term; however, the Company is not reasonably certain to extend the initial lease term and therefore additional lease payments associated with the automatic renewal are excluded from the lease term. The lease also contains a purchase option that the Company is not reasonably certain to exercise at the lease commencement date.

Operating lease expense recognized during the three months ended June 30, 2025 and 2024 was approximately $0.4 million, and during the six months ended June 30, 2025 and 2024 was approximately $0.8 million.

The Company is also party to certain financing leases for machinery and equipment (see Note 5).

The following table presents supplemental cash flow information related to operating and financing leases for the periods presented (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Six Months<br> Ended June 30,** | **Six Months<br> Ended June 30,** |
| **Cash paid for amounts included in the measurement of lease liabilities:** | **2025** | **2024** |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $730 | $707 |
| &nbsp;&nbsp;&nbsp;Operating cash flows from financing leases | $12 | $16 |
| &nbsp;&nbsp;&nbsp;Financing cash flows from financing leases | $34 | $45 |

---

The following table presents supplemental balance sheet information related to operating and financing leases for the periods presented (in thousands, except lease term and discount rate):

---

| | | |
|:---|:---|:---|
|  | **June 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | **(Unaudited)** |  |
| **Operating leases** |  |  |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net | $2333 | $2934 |
| &nbsp;&nbsp;&nbsp;Right-of-use lease liabilities, current | $1304 | $1204 |
| &nbsp;&nbsp;&nbsp;Right-of-use lease liabilities, noncurrent | 993 | 1845 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | $2297 | $3049 |
| **Financing Leases** |  |  |
| &nbsp;&nbsp;&nbsp;Machinery and equipment, gross | $779 | $588 |
| &nbsp;&nbsp;&nbsp;Accumulated depreciation | (402) | (333) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Machinery and equipment, net | $377 | $255 |
| &nbsp;&nbsp;&nbsp;Current liabilities | $113 | $66 |
| &nbsp;&nbsp;&nbsp;Noncurrent liabilities | 226 | 145 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total financing lease liabilities | $339 | $211 |
| **Weighted average remaining lease term** |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 1.7 years | 2.2 years |
| &nbsp;&nbsp;&nbsp;Financing leases | 3.2 years | 3.2 years |
| **Weighted average discount rate** |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 11.71% | 11.75% |
| &nbsp;&nbsp;&nbsp;Financing leases | 9.18% | 12.13% |

---

The following table presents future minimum lease commitments as of June 30, 2025 (in thousands):

---

| | | |
|:---|:---|:---|
|  | **Operating<br> Leases** | **Financing<br> Leases** |
| **Year Ending December 31,** |  |  |
| 2025 (July – December) | $738 | $71 |
| 2026 | 1512 | 132 |
| 2027 | 295 | 94 |
| 2028 | 2 | 76 |
| 2029 |  | 17 |
| 2030 and thereafter |  |  |
| Total minimum lease payments | 2547 | 390 |
| Less: amounts representing interest | (250) | (51) |
| Present value of net minimum lease payments | $2297 | 339 |

---

*Litigation — General* 

The Company is subject to various claims and contingencies in the ordinary course of its business, including those related to litigation, business transactions, employee-related matters, and other matters. At each reporting date, the Company evaluates whether or not a potential loss amount or a potential range of loss is probable and reasonably estimable under the provisions of the authoritative guidance that addresses accounting for contingencies. If it is probable that a loss will result and the amount of the loss can be reasonably estimated, the Company will record a liability for the loss. If the loss is not probable or the amount of the loss cannot be reasonably estimated, the Company discloses the claim if the likelihood of a potential loss is reasonably possible, and the amount involved could be material. The Company expenses the costs related to legal proceedings as incurred. See other legal matters discussed below. Other than the matters discussed below, the Company is not currently party to any material legal proceedings.

*Legal Proceedings* 

*Former Chief Accounting Officer and Interim Chief Financial Officer*

On November 15, 2023, Tony Kalajian, the Company's prior Chief Accounting Officer and interim Chief Financial Officer, filed a complaint in the Superior Court of the State of California County of San Diego against the Company, Mr. Camaisa, the Company's director and former Chief Executive Officer, and Ms. Pizarro, the Company's Chief Corporate Development Officer and Chief Legal Officer, alleging defamation and constructive discharge of Mr. Kalajian's position of Chief Accounting Officer and interim Chief Financial Officer (Case No. 37-2023-00049813-CU-DF-CTL) (the "Primary Case"). Mr. Kalajian is seeking $0.6 million in damages under his employment contract, damages to be proven at trial, punitive damages, and attorney's fees.

The Company successfully moved to disqualify Mr. Kalajian's previous counsel which is now on appeal. It also filed a claim against Mr. Kalajian in arbitration for breach of fiduciary duty, constructive fraud, conversion, and declaratory relief relating to bonuses Mr. Kalajian caused to be paid to himself and the accounting team. Due to the appeal, the Court in November 2024, issued a discretionary stay on this case and all related cases, as described below. The stay was lifted in March 2025 by stipulation when Mr. Kalajian engaged new counsel in connection with the proceedings.

The Company denies the allegations and, along with the director and named officer, continues to vigorously defend the lawsuit and related claims, prosecute its claims against Mr. Kalajian, and seek recovery of a $150,000 bonus Mr. Kalajian approved to be paid to himself without first obtaining proper authorization by the Company's Board of Directors. No trial date is scheduled. Discovery and regular law and motion have commenced. At this time, the Company is unable to evaluate the outcome of this case or estimate the amount or range of potential loss.

On February 29, 2024, Mr. Kalajian filed a Petition for Writ of Mandate in the Superior Court of California, County of San Diego, seeking to compel the production of certain corporate records from the Company. This case is deemed related to the Primary Case above and was dismissed by stipulation in March 2025.

On May 1, 2024, Mr. Kalajian filed a complaint in the Superior Court of the State of California, County of San Diego against the Company alleging intentional conversion and violation of Section 158 of the Delaware General Corporations Code due to the Company's failure to remove a restrictive legend from 1,162 shares of the Company's Common Stock. Mr. Kalajian is seeking compensatory damages to be proven at trial, punitive damages and attorney's fees, and an order requiring removal of the restrictive legend from his share certificates. The Company intends to vigorously defend itself. This case is deemed related to and consolidated with the Primary Case above. No trial date is scheduled.

*Former Executive Assistant*

 

In July 2025, the Company filed a lawsuit in San Diego Superior Court against a former executive assistant alleging breach of fiduciary duty to the Company and misappropriation and improper disclosure of confidential and proprietary information in violation of her proprietary information and inventions agreement and severance agreement with the Company (Case No. 25CU034887C). The Company is seeking injunctive relief and damages. The case is in its early stages, and the outcome is uncertain. Management does not currently expect this matter to have a material adverse effect on the Company's financial condition or results of operations.

*Securities Matter*

On October 29, 2024, Mr. Yian Zeng filed a complaint against the Company related to securities fraud in violation of the California Corporations Code, breach of covenant of good faith and fair dealing, unjust enrichment, restitution, breach of fiduciary duty, and constructive fraud in US District Court, Southern District of California (Case Number 3:24-cv-02026-H-KSC). The Company vigorously opposes this case and categorically denies all claims. On April 9, 2025, the parties engaged in a mandatory settlement conference which resulted in no resolution of the case. Discovery has commenced. No trial date has been set. At this time, the Company is unable to evaluate the outcome of this case or estimate the amount or range of potential loss.

*Employment Contracts*

The Company has entered into employment and severance benefit contracts with certain executive officers and other employees. Under the provisions of the contracts, the Company may be required to incur severance obligations for matters relating to changes in control, as defined, and certain terminations of those executives and employees. As of June 30, 2025 and December 31, 2024, the Company had not accrued any such benefits except for the severance accrual for Mr. Ng discussed below.

 

 

*Manufacturing and Other Supplier Contracts*

The Company has entered into certain manufacturing and other supplier agreements with vendors principally for manufacturing drug product for clinical trials and continued development of the CLD-101 and CLD-201 programs.

As of June 30, 2025, and December 31, 2024, the remaining expected commitments are approximately $0.5 million and $0.3 million, respectively.

*License Agreements with Northwestern University*

On June 7, 2021, the Company entered into a License Agreement with Northwestern University ("Northwestern") (the "Northwestern Agreement") for the exclusive commercialization rights to the investigational new drug ("IND") and data generated from Northwestern's phase 1 clinical trial treating brain tumor patients with an engineered oncolytic adenovirus delivered by neural stem cells ("NSC-CRAd-S-pk7"). Under the Northwestern Agreement, among other rights, Northwestern granted to the Company a worldwide, twelve-year exclusivity for the commercial development of NSC-CRAd-S-pk7 or other oncolytic viruses for therapeutic and preventive uses in oncology and a right of reference to Northwestern's IND application which relates to the treatment of newly diagnosed HGG.

Pursuant to the Northwestern Agreement, the Company agreed to a best-efforts commitment to fund up to $10 million towards a phase 2 clinical trial of NSC-CRAd-S-pk7 or other oncolytic viruses. Subject to the terms and conditions of the Northwestern Agreement, Northwestern may become entitled to receive contingent payments from the Company based on (i) sublicense royalty payments of double-digit percentage for any sublicensing revenue that the Company earns, if any, and, (ii) in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a small percentage of the fair market value of any consideration received.

On October 14, 2021, the Company entered into a Material License Agreement with Northwestern to license the NSC-CRAd-S-pk7 oncolytic virus materials which the Company intends to use to continue advancing its research, development and commercialization efforts of the NNV1 and NNV2 programs.

On December 15, 2024, the Company entered into an Investigator-Initiated Clinical Trial Agreement for Northwestern to conduct a clinical trial (the "CTA") under the protocol referenced "A Phase I Study of Repeated Neural Stem Cell Based Virotherapy in Combination with N-Acetylcysteine amid and Standard Radiation and Chemotherapy for Newly Diagnosed High Grade Glioma" (the "Study"). In connection with the Study, Northwestern granted the Company a non-exclusive, transferable and sublicensable license to use all available de-identified data collected from the Study, including, but not limited to, survival data, patient pathology, and immune studies data.

In consideration of the data use license granted by Northwestern to the Company under the CTA, the Company shall pay Northwestern the following: a non-creditable and non-refundable one-time milestone payment of $0.3 million upon reaching an aggregate of $2.0 million of net sales of a licensed product; (b) a non-creditable and nonrefundable one-time milestone payment of $0.5 million upon reaching an aggregate of $10.0 million of net sales of a licensed product; and (c) sublicensing royalty of 20% of any sublicensing revenue resulting from the grant of rights hereunder. This sublicensing royalty shall be cumulative, meaning it shall be imposed only once with respect to a single unit of sublicensing revenue, regardless of whether the sublicensing revenue derives from the CTA, or the June 7, 2021 Northwestern Agreement described above, or both.

The CTA shall terminate upon the completion of the parties' Study-related activities. Either party has the right to terminate the Study upon 30 days prior written notice to the other. The Study may also be terminated immediately at any time for cause, which includes the following: material breach, which cannot be cured, by either party of the terms and conditions of the CTA.

As of the date of issuance of these unaudited condensed consolidated financial statements, it is not probable that the Company will make these payments, if any at all. The Company will record the contingent payments if and when they become payable, in accordance with the applicable guidance.

*License Agreement with City of Hope and the University of Chicago*

On July 22, 2021, the Company entered into an Exclusive License Agreement with City of Hope ("COH") and the University of Chicago (the "City of Hope Agreement") for patents covering cancer therapies using an oncolytic adenovirus loaded into allogeneic neural stem cells for treatment of HGG. Pursuant to the City of Hope Agreement, COH transferred its IND to the Company for the commercial development of a licensed product, as defined in the City of Hope Agreement. This agreement grants to the Company commercial exclusivity in using neural stem cells with the adenovirus known as CRAd-S-pk7 for oncolytic virotherapy.

The City of Hope Agreement provides for the Company to pay royalties in low single digit percentage of net sales generated for any product of the licensed patents for specific periods, and to pay up to $18.7 million if certain milestones are achieved during the clinical trials and post commercialization of the licensed product.

As of the date of the issuance of these unaudited condensed consolidated financial statements, it is not probable that the Company will make these payments. The Company will record the contingent payments if and when they become payable, in accordance with the applicable guidance.

*Indemnification*

In the normal course of business, the Company may provide indemnification of varying scope under the Company's agreements with other companies or consultants, typically the Company's clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, the Company will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties. Indemnification provisions could also cover third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to the Company. The Company's office and laboratory facility leases also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from the Company's use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, lease, or other agreement to which they relate. The potential future payments the Company could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, the Company has not been subject to any claims or demands for indemnification. The Company also maintains various liability insurance policies that limit the Company's financial exposure. As a result, the Company's management believes that the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of June 30, 2025 and December 31, 2024.

*Separation Agreement with Chief Operating Officer and President*

On June 23, 2023, the Company entered into a Separation and Release Agreement ("Separation Agreement") with George Ng, Chief Operating Officer and President, effective on that date. In accordance with the provisions of the Separation Agreement, the Company will pay Mr. Ng in the amount of $0.5 million payable in a lump sum due one year after the effective date, and in the event that this amount is not paid when due, the unpaid amount will accrue interest at the rate of 8.0% per annum to be paid no later than the two year anniversary of the effective date. The Company also paid for certain benefits, including healthcare for six months following the effective date.

In June 2024, the Company made a payment of $50,000 and executed an Amendment to extend the due date to January 2025. The liability was settled in full in January 2025.

*Settlement, Deferral or Payment of Deferred Compensation of Certain Executives and a Director*

On August 31, 2023, Mr. Camaisa, Chief Executive Officer of the Company, and Mr. Leftwich, a director of the Company, entered into certain amendments with respect to their deferred compensation arrangements in connection with the FLAG Merger. Mr. Camaisa agreed to settle approximately $0.7 million of deferred compensation with 46,972 FLAG warrants which were issued at the closing of the FLAG Merger in September 2023, and Mr. Leftwich agreed to defer approximately $0.5 million of deferred compensation, combined with the deferral of certain term notes discussed above, to January 1, 2025, which include accrued interest at 24% per annum payable at maturity. All notes and deferred compensation of Mr. Leftwich were amended on August 12, 2024, to reduce the interest rate to 14% per annum. This deferred compensation was included in accrued expenses and other current liabilities in the unaudited condensed consolidated balance sheet at December 31, 2024. On January 3, 2025, $0.6 million of deferred compensation and accrued interest which were due to Mr. Leftwich was settled in its entirety.

*Standby Equity Purchase Agreement*

On December 10, 2023, the Company entered into a Standby Equity Purchase Agreement (the "SEPA") with YA II PN, Ltd., a Cayman Island exempt limited partnership ("Yorkville"). Pursuant to the SEPA, the Company will have the right, but not the obligation, to sell to Yorkville up to $25.0 million of its shares of Common Stock, par value $0.0001 per share, at the Company's request any time during the 36 months following the execution of the SEPA. The maximum advance under the SEPA is the lower of (i) an amount equal to 100% of the average of the daily traded amount during the five consecutive trading days immediately preceding an advance notice, or (ii) 41,667 shares. For the SEPA to be utilized, the shares underlying the agreement need to be registered on a Form S-1 filed with the SEC.

As consideration for Yorkville's commitment to purchase the Common Stock at the Company's direction upon the terms and subject to the conditions set forth in the SEPA, upon execution of the SEPA, the Company paid a structuring fee of $25,000 to an affiliate of Yorkville and issued 1,157 shares of Common Stock to Yorkville (the "Commitment Fee Shares"). The Commitment Fee Shares were determined by dividing $0.3 million by the lowest daily VWAP of the Common Stock during the 10 Trading Days immediately prior to December 10, 2023.

On January 23, 2025, the Company delivered to Yorkville a Notice of Termination of the SEPA, dated as of December 10, 2023, by and between the Company and Yorkville. Termination of the SEPA became effective as of January 23, 2025, as mutually agreed by the Company and Yorkville.

At the time of the termination, there were no outstanding borrowings, advance notices or shares of common stock to be issued under the SEPA.

**12. Subsequent Events** 

*2025 Reverse Stock Split*

 

On August 1, 2025, the Company filed a Second Certificate of Amendment to its Second Amended and Restated Certificate of Incorporation, as amended, with the Secretary of State of the State of Delaware to effect a 1-for-12 reverse stock split of the shares of the Company's common stock, par value $0.0001 per share ("Common Stock"), effective on August 4, 2025 (the "2025 Reverse Stock Split"). As a result of the 2025 Reverse Stock Split, every twelve shares of issued and outstanding Common Stock were automatically combined into one issued and outstanding share of Common Stock, without any change in the par value per share. No fractional shares were issued as a result of the 2025 Reverse Stock Split, and any fractional shares that would otherwise have resulted from the 2025 Reverse Stock Split were rounded up to the next whole number. The number of authorized shares of Common Stock under the Company's Second Amended and Restated Certificate of Incorporation, as amended, remained unchanged. Trading of the Company's shares of Common Stock on the NYSE American, LLC commenced on a split-adjusted basis on August 5, 2025.

All references to share and per share amounts for all periods presented in the unaudited condensed consolidated financial statements have been retrospectively restated to reflect this 2025 Reverse Stock Split.

*Material Definitive Agreement*

On July 9, 2025, Calidi entered into an inducement offer letter agreement (the "Inducement Letter") with 7 holders of the Company's existing Series A warrants ("Series A Warrants"), Series B-1 warrants ("Series B-1 Warrants"), Series C-1warrants ("Series C-1 Warrants"), Series D warrants, ("Series D Warrants"), Series E warrants ("Series E Warrants"), and Series F warrants ("Series F Warrants" and together with the Series A Warrants, Series B-1 Warrants, Series C-1 Warrants, Series D Warrants, and Series E Warrants, the "Existing Warrants"), which each of the Series A Warrants, the Series B-1 Warrants and the Series C-1 Warrants were issued pursuant to that certain Securities Purchase Agreement, dated April 16, 2024, the Series D Warrants were issued pursuant to that certain Letter Agreement dated May 31, 2024, and the Series E Warrants and Series F Warrants were issued pursuant to that certain Securities Purchase Agreement dated October 23, 2024. Pursuant to the Inducement Letter, such warrant holders immediately exercised some or all of their respective outstanding Series A Warrants, Series B-1 Warrants, Series C-1 Warrants, Series D Warrants, Series E Warrants, and Series F Warrants to purchase up to an aggregate of 549,596 shares of common stock, at a reduced exercise price of $8.40. The gross proceeds to the Company from the exercise of the Existing Warrants were $4.6 million, prior to deducting placement agent fees and estimated offering expenses.

In consideration for the immediate exercise of some or all of the Existing Warrants for cash, the Company agreed to issue unregistered new Series H common stock purchase warrants ("New Series H Warrants") to purchase up to 549,587 shares of common stock. The New Series H Warrants have an exercise price of $8.40 per share, will be initially exercisable on the 6 month anniversary of the issuance date and will have a term of 5.5 years from the issuance date.

The shares of the Company's common stock underlying the Series A Warrants, Series B-1 Warrants, and the Series C-1 Warrants have been registered pursuant to an existing registration statement on Form S-1, as amended (File No.: 333-276741) declared effective by the Securities and Exchange Commission (the "SEC") on April 15, 2024. The shares of the Company's common stock underlying the Series D Warrants, Series E Warrants and Series F Warrants have been registered pursuant to an existing registration statement on Form S-1, as amended (File No.: 333-283741) declared effective by the SEC on December 27, 2024. The shares of our common stock underlying the New Series H Warrants have been registered pursuant to a registration statement on Form S-1 (File No.: 333-288529) declared effective on July 11, 2025.

*2023 Plan*

On July 9, 2025, the Company's stockholders approved an amendment to the 2023 Plan to increase the aggregate number of shares of common stock authorized for grant under the 2023 Plan from 32,815 to 282,815.

*Executive Position Elimination*

On July 24, 2025, the Compensation Committee of the Company approved the elimination of the position of President, Medical and Scientific Affairs (the "Position"), held by Dr. Boris Minev (the "Executive"). As a result, the Executive ceased to serve as an executive officer and a Section 16 officer of the Company, effective July 29, 2025. The Company expects to enter into a Separation and General Release of Claims Agreement with Dr. Minev, and, to the extent any such agreement is entered into, the Company will file a Current Report on Form 8-K disclosing the material terms of such arrangement. The Position has been eliminated as part of the Company's ongoing review of its organizational structure and cost optimization efforts and not as a result of any disagreement between Dr. Minev and the Company or its board of directors or any matter relating to the Company's operations, policies, or practices. Dr. Guy Travis Clifton, the Company's Chief Medical Officer, Consultant and Advisor, will assume Dr. Minev's responsibilities.

**ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS**

*The following discussion and analysis of our financial condition and results of operations should be read in conjunction with (i) our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended June 30, 2025 (this "Quarterly Report"). This information should also be read in conjunction with our audited consolidated financial statements and related notes included in our Form 10-K for the fiscal year ended December 31, 2024 ("Form 10-K") filed with the Securities and Exchange Commission, or SEC. References to "Note" are to the notes included in our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report.*

**Company Overview**

We are a clinical stage biotechnology company that is developing genetic medicines and proprietary genetically-engineered oncolytic viruses. We are currently developing RedTail, an enveloped vaccinia virus platform designed to deliver genetic medicine to tumor sites, and two proprietary stem cell-based oncolytic virus platforms (SuperNova and NeuroNova). The RedTail platform is expected to commence a Phase I trial by the end of 2026 with the first compound (CLD-401) delivering IL-15 superagonist to the tumor microenvironment ("TME").

Our RedTail platform is the culmination of over a decade of work around genetic engineering of viruses and allows for the systemic administration of a proprietarily-modified oncolytic virus that can:

● Survive in circulation and home to metastatic tumor sites;

● Induce cell kill tumor cells and immune priming in the TME; and

● Deliver genetic medicine payloads like IL-15 superagonist for expression in the TME.

Our SuperNova and NeuroNova platforms are designed to:

● Protect oncolytic viruses from neutralizing antibodies and complement inactivation and innate immune cell inactivation;

● Enhance oncolytic viral amplification inside the allogeneic cells; and

● Modify the TME to allow improvements in cell targeting and viral amplification at the tumor site.

Oncolytic viruses have been pursued as therapeutic platforms in oncology because of their ability to preferentially infect and replicate within cancer cells, resulting in both direct lysis of the tumor cells as well as activation of an antitumor immune response, while leaving normal, healthy cells unharmed. Despite the promises of oncolytic viruses, a major obstacle against their therapeutic use has been their rapid elimination by the patient's immune system; this has meant that oncolytic viruses have been largely relegated to being used for local delivery to tumors but have not been successful in patients with extensive metastatic disease. The only approved oncolytic virus therapy is T-VEC (Imlygic®), a modified herpes simplex virus (HSV) for the treatment of patients with melanoma given intratumorally.

We have been working on protecting oncolytic viruses from immune clearance for over a decade. Our NeuroNova investigational drug candidate is currently in a Phase 1 trial being run by our partner, City of Hope, in an investigator-initiated trial and we have an open IND for a Phase 1 trial for our SuperNova investigational drug candidate (CLD-201). In July 2025 we were granted Fast Track Designation to CLD-201 by the U.S. Food and Drug Administration (FDA) for the treatment of patients with soft tissue sarcoma. The platforms used in NeuroNova and SuperNova use oncolytic viruses embedded in stem cells to avoid immune clearance and facilitate initial viral amplification and expansion at the tumor sites. This approach has shown substantial benefit over unprotected virus in preclinical studies of intratumoral delivery, but stem cell encapsulation does not allow for systemic delivery of virus to tumor metastases in animal models. The size of the stem cells prohibited efficient dissemination into metastatic sites.

More recently, we used the learnings from NeuroNova and SuperNova to create RedTail, a novel oncolytic viral platform for systemic delivery. The virus used in RedTail has been proprietarily engineered to avoid immune clearance and to specifically replicate in tumor tissue where the virus also has the ability to deliver genetic medicines to the tumor microenvironment. RedTail utilizes a proprietary form of enveloped virus with genetic modifications, including engineered expression of CD55 on the enveloped virus, to avoid immune clearance. Because the virus is not encapsulated in stem cells, it is thousands of times smaller than the NeuroNova or SuperNova products and disseminates efficiently into metastatic sites in syngeneic animal models. In addition, the virus can be engineered to express genetic medicines while replicating in the tumor.

CLD-401, the first lead derived from the RedTail platform, expresses IL-15 superagonist at high concentrations in the tumor microenvironment. In animal models, CLD-401 can be given systemically and clear metastatic sites in syngeneic tumor mouse models with demonstrated enhanced biological efficacy. The combination of the RedTail virus with its genetic payload drives complete tumor eradication in the tumor models compared to the RedTail virus alone. We believe that RedTail, given its systemic administration and targeting to metastatic sites and its delivery of genetic medicines, represents a major advancement in the space of oncolytic virus in oncology.

Since inception, our operations have focused on organizing and staffing our company, business planning, raising capital, acquiring and developing our technology, establishing our intellectual property portfolio, identifying potential product candidates and undertaking preclinical studies and manufacturing. We do not have any products approved for sale and have not generated any revenue from product sales. We have funded our operations primarily through private sales of common stock, warrants, convertible promissory notes, term debt, and the issuance of publicly traded securities. These investments have included and have been made by various related parties, including our former chief executive officer and former chairman of the Board of Directors.

Since inception, we have incurred significant operating losses. Our net loss was $5.8 million and $10.8 million for the three and six months ended June 30, 2025, respectively. As of June 30, 2025, we had an accumulated deficit of $132.4 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

Changes in economic conditions, including rising interest rates, public health issues, lower consumer confidence, volatile equity capital markets, tariffs, ongoing supply chain disruptions, and the impacts of geopolitical conflicts, may also affect our business.

We will not generate revenue from product sales unless and until we successfully complete clinical development and obtain regulatory approval for our product candidates. In addition, if we obtain regulatory approval for our product candidates and do not enter into a third-party commercialization partnership, we expect to incur significant expenses related to developing our commercialization capability to support product sales, marketing, manufacturing and distribution activities.

As a result, we will need substantial additional funding to support our continuing operations and pursue our growth strategy. Until we can generate significant revenue from product sales, if ever, we expect to finance our operations through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances, and licensing arrangements. We may be unable to raise additional funds or enter into such other agreements or arrangements when needed on acceptable terms, or at all. Our inability to raise capital or enter into such agreements as, and when needed, could have a material adverse effect on our business, results of operations and financial condition.

Based on our operating plan, we believe we do not have sufficient cash on hand to support current operations for at least one year from the date of issuance of our unaudited condensed consolidated financial statements as of, and for the three and six months ended June 30, 2025. We have concluded that this circumstance raises substantial doubt about our ability to continue as a going concern. See Note 1 to our unaudited condensed consolidated financial statements. In addition, we will be required to raise additional capital through the issuance of our equity securities to support our operations which will have an ownership and economic dilutive effect to our current shareholders who purchased their shares of common stock at prices above our current trading price, and such capital raising may adversely affect the price of our common stock. Further, the sale of or the perception of a sale of a substantial number of our common stock by certain selling securityholders pursuant to another registration statement filed with the SEC will adversely affect the price of our common stock due to our limited trading volume and adversely affect the share price that we may obtain in future financings and may adversely affect our ability to conduct and complete future financings.

For additional discussion on our liquidity, see the section below and further disclosures in the section titled *"Liquidity and Capital Resources"* included herein.

**Recent Development**

On April 17, 2025, Allan Camaisa notified the Board of Calidi Biotherapeutics, Inc. (the "Company") of his resignation as the Company's Chief Executive Officer and as Chairman of the Board and from all his positions with the Companies subsidiaries (except Nova Cell, Inc.), effective April 21, 2025, subject to finalization of the terms of the General Release of Claims and Transition Agreement, which agreement was fully-executed on April 22, 2025. Mr. Camaisa will continue to serve as a Class III director of the Company, and will assume the title of "CEO Emeritus". Mr. Camaisa's resignation is not the result of any disagreement with the Company or its Board or any matter relating to the Company's operations, policies, or practices.

On April 22, 2025, we executed a General Release of Claims and Transition Agreement ("Release Agreement") with Mr. Camaisa. The Release Agreement contains customary protections, including a general release of claims by Mr. Camaisa in favor of the Company and certain other related parties. The Release Agreement will only go effective after the Revocation Period (which is seven business days from April 22, 2025, and excluding such date) has expired. Pursuant to the terms of the Release Agreement, after the Revocation Period, we shall be obligated to pay Mr. Camaisa $500,000 separation pay in the form of compensation continuation over 12 months pursuant to our regular and customary payroll schedule, less all regular and customary payroll withholdings and shall also be liable to pay Mr. Camaisa's COBRA premiums for 12 months, commencing May 2025, upon timely election. Mr. Camaisa shall also be entitled to receive a transition/ consulting pay of $10,000 per month during the transition period, and may also be entitled to incentive payments for opportunities that Mr. Camaisa has developed, as more specifically described in the Release Agreement. Such incentive will be calculated and paid based on revenues, capital, or monies actually received by the Company on or before December 31, 2026. No incentive will be earned or paid for revenues, capital, or monies that are received by the Company after that date. Mr. Camaisa will not receive compensation as a member of the Board during the period that he receives consideration pursuant to the Release Agreement.

On April 17, 2025, the Board, by a unanimous vote, appointed Eric Poma, Ph.D. to serve as our CEO, effective April 22, 2025. In addition, on April 22, 2025, the Board, upon recommendation of the Nominating and Corporate Governance Committee of the Board, appointed Dr. Poma to serve as a Class I director of the Company, also effective April 22, 2025, with a term expiring at the annual meeting of stockholders to be held in 2027.

On April 22, 2025, the Board appointed James Schoeneck as chairman of the Board, effective April 22, 2025, to serve until his successor is duly elected and qualified, or until his earlier resignation or removal. As previously disclosed, Mr. Schoeneck has served on the Board since September 12, 2023.

On July 9, 2025, we held our 2025 Annual Meeting of Stockholders (the "Annual Meeting"). The stockholders elected James Schoeneck and George Peoples as Class II Directors of the Company by a plurality of the votes cast, and without contest, to serve a three-year term until the 2028 Annual Meeting of Stockholders or until their successor has been duly elected. Stockholders approved and ratified the appointment of CBIZ CPAs P.C. as our independent registered public accounting firm to audit the consolidated financial statements of the Company for the fiscal year ending December 31, 2025. Stockholders approved an amendment to our Second Amended and Restated Certificate of Incorporation, as amended, to, at the discretion of the Board of Directors, effect a reverse stock split with respect to our shares of issued and outstanding Common Stock, which consists of Voting Common Stock and Non-Voting Common Stock, at a ratio between 1-for-2 and 1-for-19 (the "Range"), with the ratio within such Range to be determined at the discretion of the Board. On July 25, 2025, we announced the reverse stock split of our outstanding shares of common stock will be at a ratio of 1-for-12. Our common stock commenced trading on a split-adjusted basis on August 5, 2025 under the existing symbol of "CLDI." At the Annual Meeting, the Stockholders also approved an amendment to our 2023 Equity Incentive Plan (the "2023 Plan"), to increase the aggregate number of shares of common stock authorized for grant under the 2023 Plan from 32,815 to 282,815.

On July 9, 2025, we entered into an inducement offer letter agreement (the "Warrant Inducement Letter") with seven holders of our various warrants. Pursuant to the Warrant Inducement Letter, such warrant holders immediately exercised some or all of their respective outstanding warrants at a reduced exercise price. The gross proceeds from the exercise of the induced warrants was $4.6 million, prior to deducting placement agent fees and offering expenses. For additional discussion of this Warrant Inducement Letter, see the section below and further disclosures in the section titled *"Liquidity and Capital Resources"* included herein.

On July 24, 2025, the Compensation Committee of Calidi approved the elimination of the position of President, Medical and Scientific Affairs (the "Position"), held by Dr. Boris Minev (the "Executive"). As a result, the Executive ceased to serve as an executive officer and a Section 16 officer of Calidi, effective July 29, 2025. We expect to enter into a Separation and General Release of Claims Agreement with Dr. Minev, and, to the extent any such agreement is entered into, we will file a Current Report on Form 8-K disclosing the material terms of such arrangement. The Position has been eliminated as part of our ongoing review of our organizational structure and cost optimization efforts and not as a result of any disagreement between Dr. Minev and us or our board of directors or any matter relating to our operations, policies, or practices. Dr. Guy Travis Clifton, our Chief Medical Officer, Consultant and Advisor, will assume Dr. Minev's responsibilities.

**Components of Operating Results**

*Research and Development Expenses*

Research and development expenses consist primarily of costs incurred for our research and development activities, including our product candidate discovery efforts, preclinical studies and clinical trials under our research programs, which include:

● personnel and related expenses, including salaries, benefits and stock-based compensation expense for our research and development personnel;

● costs of funding research performed by third parties that conduct research and development and preclinical and clinical activities on our behalf;

● costs of manufacturing drug product and drug supply related to our current or future product candidates;

● costs of conducting preclinical studies and clinical trials of our product candidates;

● consulting and professional fees related to research and development activities, including equity-based compensation to non-employees;

● costs of maintaining our laboratory, including purchasing laboratory supplies and non-capital equipment used in our preclinical studies;

● costs related to compliance with clinical regulatory requirements;

● facility costs and other allocated expenses, which include expenses for rent and maintenance of facilities, insurance, depreciation and other supplies; and

● fees for maintaining licenses and other amounts due under our third-party licensing agreements.

Research and development costs are expensed as incurred. Costs for certain activities are recognized based on an evaluation of the progress to completion of specific tasks using data such as information provided to us by our vendors and analyzing the progress of our preclinical and clinical studies or other services performed. Significant judgment and estimates are made in determining the accrued expense balances at the end of any reporting period.

We track external research and development costs on a program-by-program basis beginning, with respect to each program, upon our internal nomination of a candidate in that program for further preclinical and clinical development. External costs include fees paid to consultants, contractors and vendors, including contract manufacturing organizations ("CMOs"), and clinical research organizations ("CROs"), in connection with our preclinical, clinical and manufacturing activities and license milestone payments related to candidate development.

The successful development of our product candidates is highly uncertain. We cannot reasonably estimate or know the nature, timing, and estimated costs of the efforts that will be necessary to complete development of our current or future product candidates. We are also unable to predict when, if ever, material net cash inflows will commence from the sale of our product candidates, if they are approved. This is due to the numerous risks and uncertainties associated with developing product candidates, including the uncertainty of:

● the scope, rate of progress, and expenses of our ongoing research activities as well as any preclinical studies and clinical trials and other research and development activities;

● establishing an appropriate safety profile;

● successful enrollment in and completion of clinical trials;

● whether our product candidates show safety and efficacy in our clinical trials;

● receipt of marketing approvals from applicable regulatory authorities;

● establishing commercial manufacturing capabilities or making arrangements with third-party manufacturers;

● obtaining and maintaining patent and trade secret protection and regulatory exclusivity for our product candidates;

● commercializing product candidates, if and when approved, whether alone or in collaboration with others; and

● continued acceptable safety profile of the products following any regulatory approval.

A change in the outcome of any of these variables with respect to the development of our current and future product candidates would significantly change the costs and timing associated with the development of those product candidates.

Research and development activities are central to our business model. Product candidates in later stages of clinical development generally have higher development costs than those in earlier stages of clinical development, primarily due to the increased size and duration of later-stage clinical trials. We expect research and development costs to increase significantly for the foreseeable future as we commence clinical trials and continue the development of our current and future product candidates. However, we do not believe that it is possible at this time to accurately project expenses through commercialization. There are numerous factors associated with the successful commercialization of any of our product candidates, including future trial design and various regulatory requirements, many of which cannot be determined with accuracy at this time based on our stage of development. Additionally, future commercial and regulatory factors beyond our control will impact our clinical development programs and plans.

*General and Administrative Expenses*

General and administrative expenses include salaries and other compensation-related costs, including stock-based compensation, for personnel in executive, finance and accounting, business development, operations and administrative roles. Other significant costs include professional service and consulting fees including legal fees relating to intellectual property and corporate matters, accounting fees, recruiting costs and costs for consultants utilized to supplement our personnel, insurance costs, travel costs, facility and office-related costs not included in research and development expenses and depreciation and amortization.

We anticipate that our general and administrative expenses will increase in the future as our business expands to support expected growth in research and development activities, including our future clinical programs. These increases will likely include increased costs related to the hiring of additional personnel and fees to outside service providers, among other expenses. We also anticipate continued expenses associated with being a public company, including costs for audit, legal, regulatory and tax-related services related to compliance with the rules and regulations of the SEC, and listing standards applicable to companies listed on a national securities exchange, director and officer insurance premiums, and investor relations costs. In addition, if we obtain regulatory approval for any of our product candidates and do not enter into a third-party commercialization collaboration, we expect to incur significant expenses related to building a sales and marketing team to support product sales, marketing and distribution activities.

*Other Income (Expenses), Net*

Other income (expenses), net, primarily includes the changes in fair value of warrants and derivatives. The changes in the fair value of these instruments are recorded in change in fair value of other liabilities and derivatives, and change in fair value of other liabilities and derivatives – related party, included as a component of other income (expenses), net, in the unaudited condensed consolidated statements of operations.

Interest expense primarily consists of amortization of discounts on term notes, including from related parties, and other interest expense incurred from financing leases and other obligations.

Other income also includes grant income generated from a grant awarded to us by the California Institute for Regenerative Medicine ("CIRM") in December 2022. Proceeds from the CIRM grant are recognized over the period necessary to match the related research and development expenses when it is probable that we have complied with the CIRM conditions and will receive the proceeds pursuant to the milestones defined in the grant as reimbursement of those expenditures. Any CIRM grant proceeds received in advance of having incurred the related research and development expenses are recorded in accrued expenses and other current liabilities and recognized as grant income on our unaudited condensed consolidated statements of operations when the related research and developments expenses are incurred.

*Income Tax Provision*

Since inception, we have incurred net operating losses primarily for U.S. federal and state income tax purposes and have not reflected any benefit of such net operating loss carryforwards for any periods presented in this Quarterly Report. The income tax provision in the periods presented is entirely attributable to amounts recorded from StemVac operations, our wholly-owned German subsidiary that provides research and development services to us under a cost-plus development agreement.

**Results of Operations**

**Comparison of Three Months Ended June 30, 2025 and 2024**

The following table summarizes our results of operations for the three months ended June 30, 2025 and 2024 (in thousands):

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended** <br> **June 30,** | **Three Months Ended** <br> **June 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $(2593) | $(2167) | 20% |
| &nbsp;&nbsp;&nbsp;General and administrative | (3071) | (3605) | (15)% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (5664) | (5772) | (2)% |
| Loss from operations | (5664) | (5772) | (2)% |
| Other income (expense), net |  |  |  |
| &nbsp;&nbsp;&nbsp;Total other income (expenses), net | (93) | 13) | (815)% |
| Loss before income taxes | (5757) | (5759) | 0% |
| &nbsp;&nbsp;&nbsp;Income tax provision | (4) | (8) | (50)% |
| Net loss | $(5761) | $(5767) | 0% |

---

***Research and Development Expenses***

Research and development expenses for the three months ended June 30, 2025 and 2024 were $2.6 million and $2.2 million, respectively. The $0.4 million increase was primarily attributable to an increase in consulting expenses of $0.3 million and drug manufacturing and preclinical expenses of $0.1 million.

***General and Administrative Expenses***

General and administrative expenses for the three months ended June 30, 2025 and 2024 were $3.1 million and $3.6 million, respectively. The $0.5 million decrease was primarily due to a decrease in investor relations of $0.3 million, insurance expenses of $0.2 million, public company expenses of $0.1 million, and legal expenses of $0.1 million, partially offset by an increase in salaries and benefits of $0.2 million.

***Other Income (Expense), Net***

Other income (expense), net for the three months ended June 30, 2025 and 2024 were $0.1 million other expense and $13,000 other income, respectively. The $0.1 million decrease in net other income was primarily due to a decrease in grant income from the CIRM of $0.2 million and a net change in fair value in Forward Purchase Agreement Derivative Asset and Public and Private Placement Warrants of $0.1 million, partially offset by a decrease in interest expense of $0.2 million.

**Results of Operations**

**Comparison of Six Months Ended June 30, 2025 and 2024**

The following table summarizes our results of operations for the six months ended June 30, 2025 and 2024 (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $(5018) | $(4910) | 2% |
| &nbsp;&nbsp;&nbsp;General and administrative | (5708) | (7614) | (25)% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (10726) | (12524) | (14)% |
| Loss from operations | (10726) | (12524) | (14)% |
| Other income (expense), net |  |  |  |
| &nbsp;&nbsp;&nbsp;Total other income (expenses), net | (90) | (456) | (80)% |
| Loss before income taxes | (10816) | (12980) | (17)% |
| &nbsp;&nbsp;&nbsp;Income tax provision | (7) | (12) | (42)% |
| Net loss | $(10823) | $(12992) | (17)% |

---

***Research and Development Expenses***

Research and development expenses for the six months ended June 30, 2025 and 2024 were $5.0 million and $4.9 million, respectively. The $0.1 million increase was primarily attributable to an increase in consulting expenses of $0.5 million, and rent expenses of $0.1 million, partially offset by a decrease in salaries and benefits of $0.3 million, and drug manufacturing and preclinical expenses of $0.2 million.

***General and Administrative Expenses***

General and administrative expenses for the six months ended June 30, 2025 and 2024 were $5.7 million and $7.6 million, respectively. The $1.9 million decrease was primarily due to a decrease in legal fees of $0.6 million, salaries and benefits of $0.4 million, insurance expenses of $0.3 million, investor relations expenses of $0.2 million, public company expenses of $0.2 million, dues and subscriptions of $0.1 million, and consulting expenses of $0.1 million.

***Other Income (Expense), Net***

Other income (expense), net for the six months ended June 30, 2025 and 2024 were $0.1 million and $0.5 million other expense, respectively. The $0.4 million decrease primarily relates to a decrease in interest expense of $0.4 million and a net change in fair value in Forward Purchase Agreement Derivative Asset and Public and Private Placement Warrants of $0.1 million, partially offset by a decrease in grant income from the CIRM of $0.1 million.

**Liquidity and Capital Resources**

S*ources of Liquidity*

Since inception, we have funded our operations primarily through private sales of common stock, warrants, promissory notes, term debt, and the issuance of publicly traded securities. Certain of these investments were with various related parties.

As of June 30, 2025, we had a cash balance of $5.3 million and restricted cash of $0.1 million. Our debt and liability obligations as of June 30, 2025 include $3.2 million in accounts payable and accrued expenses and other current liabilities, including related party amounts, $2.3 million in operating lease liabilities, $0.8 million in related party term notes payable, $0.6 million in promissory notes, $0.3 million in finance lease liabilities, and $0.1 million in warrant liabilities, including related party amounts.

***Financing and Financing-Related Transactions During the Six Months Ended June 30, 2025***

 ****

During the six months ended June 30, 2025, we undertook certain financing and financing-related transactions. Approximately $6.6 million in proceeds were received from the Public Offerings and $3.5 million in proceeds received from the March Registered Direct Offering and Concurrent Private Placement.

***Financing and Financing-Related Transactions Subsequent to June 30, 2025***

On July 9, 2025, Calidi entered into an inducement offer letter agreement (the "Warrant Inducement Letter") with 7 holders of our existing Series A warrants ("Series A Warrants"), Series B-1 warrants ("Series B-1 Warrants"), Series C-1 warrants ("Series C-1 Warrants"), Series D warrants, ("Series D Warrants"), Series E warrants ("Series E Warrants"), and Series F warrants ("Series F Warrants" and together with the Series A Warrants, Series B-1 Warrants, Series C-1 Warrants, Series D Warrants, and Series E Warrants, the "Existing Warrants"), which each of the Series A Warrants, the Series B-1 Warrants and the Series C-1 Warrants were issued pursuant to that certain Securities Purchase Agreement, dated April 16, 2024, the Series D Warrants were issued pursuant to that certain Letter Agreement dated May 31, 2024, and the Series E Warrants and Series F Warrants were issued pursuant to that certain Securities Purchase Agreement dated October 23, 2024. Pursuant to the Warrant Inducement Letter, such warrant holders immediately exercised some or all of their respective outstanding Series A Warrants, Series B-1 Warrants, Series C-1 Warrants, Series D Warrants, Series E Warrants, and Series F Warrants to purchase up to an aggregate of 549,596 shares of common stock, at a reduced exercise price of $8.40. The gross proceeds from the exercise of the Existing Warrants was $4.6 million, prior to deducting placement agent fees and offering expenses.

In consideration for the immediate exercise of some or all of the Existing Warrants for cash, we agreed to issue unregistered new Series H common stock purchase warrants ("New Series H Warrants") to purchase up to 549,587 shares of common stock. The New Series H Warrants have an exercise price of $8.40 per share, will be initially exercisable on the 6 month anniversary of the issuance date and will have a term of 5.5 years from the issuance date.

The shares of our common stock underlying the Series A Warrants, Series B-1 Warrants, and the Series C-1 Warrants have been registered pursuant to an existing registration statement on Form S-1, as amended (File No.: 333-276741) declared effective by the Securities and Exchange Commission on April 15, 2024. The shares of our common stock underlying the Series D Warrants, Series E Warrants and Series F Warrants have been registered pursuant to an existing registration statement on Form S-1, as amended (File No.: 333-283741) declared effective on December 27, 2024. The shares of our common stock underlying the New Series H Warrants have been registered pursuant to a registration statement on Form S-1 (File No.: 333-288529) declared effective on July 11, 2025.

*Debt Obligations*

Calidi's outstanding debt obligations as of June 30, 2025, including related party components, are as follows (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **June 30, 2025** | **June 30, 2025** | **June 30, 2025** |
|  | **Unpaid**<br> **Balance** | **Accrued**<br> **Interest** | **Net**<br> **Carrying**<br> **Value** |
| Term notes payable | $375 | $400 | $775 |
| Promissory note | 600 | 45 | 645 |
| Total debt | $975 | $445 | $1420 |
| Less: current portion of long-term debt |  |  | (820) |
| Long-term debt, net of current portion |  |  | $600 |

---

*Warrants*

 

As of June 30, 2025, Calidi had outstanding warrants to purchase 1,403,320 shares of Common Stock, consisting of the following:

---

| | |
|:---|:---|
|  | **June 30,** <br> **2025** |
| Private Warrants to purchase Common Stock | 15938 |
| Public Warrants to purchase Common Stock | 95834 |
| Warrants to purchase Restricted Shares | 53334 |
| Placement Agent Warrants to purchase Common Stock | 83880 |
| Series A Warrants to purchase Common Stock | 87643 |
| Series B-1 Warrants to purchase Common Stock | 63528 |
| Series C-1 Warrants to purchase Common Stock | 67921 |
| Series D Warrants to purchase Common Stock | 89153 |
| Series E Warrants to purchase Common Stock | 170836 |
| Series F Warrants to purchase Common Stock | 170836 |
| Series G Warrants to purchase Common Stock | 504417 |
|  | 1403320 |

---

 

*Commitments and Contingencies*

On October 10, 2022, Calidi entered into an Office Lease Agreement (the "San Diego Lease") serves as Calidi's principal executive and administrative offices and laboratory facility. To secure and execute the San Diego Lease, Mr. Allan Camaisa, former Chief Executive Officer of Calidi, provided a personal Guaranty of Lease of up to $0.9 million (the "Guaranty") to the lessor for Calidi's future performance under the San Diego Lease agreement. As consideration for the Guaranty, Calidi agreed to pay Mr. Camaisa 10% of the Guaranty amount for the first year of the San Diego Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the termination of the San Diego Lease or release of Mr. Camaisa from the Guaranty by the lessor, whichever occurs first. The San Diego Lease has an initial term of 4 years.

On July 1, 2025, StemVac entered into a finance lease agreement for laboratory equipment with an initial term that expires on May 31, 2029, with total payments of approximately €143,011 Euros.

We further entered into separate license agreements with Northwestern University and City of Hope and the University of Chicago, wherein Calidi may be liable to make certain contingent payments, under certain conditions that are in our control, pursuant to the terms and conditions of the license agreements. As of June 30, 2025, we do not believe it probable that we will make these payments.

Other commitments and contingencies include various operating and financing leases for equipment, office facilities, and other property containing future minimum lease payments totaling $2.9 million and, certain manufacturing and other supplier agreements with vendors principally for manufacturing drug products for clinical trials and continuing the development of the CLD-101, CLD-201 programs totaling $0.5 million.

*Related Party Transactions*

Please see Note 6 to our unaudited condensed consolidated financial statements for more information on our related party transactions.

**Cash Flow Summary for the six months ended June 30, 2025 and 2024**

The following table shows a summary of our cash flows for the six months ended June 30, 2025 and 2024 (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Six Months Ended**<br> **June 30,** | **Six Months Ended**<br> **June 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** |
| Net cash (used in) provided by: |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating activities | $(12011) | $(9325) | 29% |
| &nbsp;&nbsp;&nbsp;Investing activities | (64) | (5) | 1180% |
| &nbsp;&nbsp;&nbsp;Financing activities | 7639 | 8213) | (7)% |
| Effect of exchange rate on cash | 6 | 4 | 50% |
| Net decrease in cash and restricted cash | $(4430) | $(1113) | 298% |

---

**Operating activities**

Net cash used in operating activities was $12.0 million for the six months ended June 30, 2025, primarily resulting from our net loss of $10.8 million. Our net loss was reduced by certain non-cash items that included $1.1 million in stock-based compensation, $0.6 million in amortization of right of use assets, and $0.2 million in depreciation and amortization expense, partially offset by an increase of $3.1 million from the change in our operating assets and liabilities.

Net cash used in operating activities was $9.3 million for the six months ended June 30, 2024, primarily resulting from our net loss of $13.0 million. Our net loss was reduced by certain non-cash items that included $1.6 million in stock-based compensation, $1.1 million from the change in our operating assets and liabilities, $0.6 million in amortization of right of use assets, $0.2 million in depreciation and amortization expense, and $0.1 million in change in fair value of debt, other liabilities, and derivatives.

**Investing activities**

Net cash used in investing activities was $64,000 for the six months ended June 30, 2025, which primarily related to the purchase of certain machinery and equipment.

Net cash used in investing activities was $5,000 for the six months ended June 30, 2024, which primarily related to the purchase of certain machinery and equipment.

**Financing activities**

Net cash provided by financing activities was $7.6 million for the six months ended June 30, 2025, which primarily related to proceeds from Public Offerings of $6.6 million, and proceeds from the March Registered Direct Offering and Concurrent Private Placement of $3.5 million, partially offset by repayment of term notes payable of $1.8 million, including related party amounts, payment of financing costs of $0.4 million, and repayment of bridge loan payable of $0.2 million.

Net cash provided by financing activities was $8.2 million for the six months ended June 30, 2024, which primarily related to proceeds from the April Public Offering of $5.4 million, proceeds from issuance of convertible notes payable of $3.0 million, proceeds from the May Inducement Offer of $2.1 million, related party proceeds from issuance of a bridge loan payable of $0.2 million, and proceeds from the exercise of common stock warrants of $0.1 million, partially offset by repayment of convertible notes payable of $1.5 million, payment of financing costs of $0.8 million, and repayment of term notes payable of $0.3 million.

**Funding Requirements**

We expect our expenses to increase in connection with our ongoing activities, particularly as we continue our research and development, initiate clinical trials, and seek marketing approval for our current and any of our future product candidates. In addition, if we obtain marketing approval for any of our current or our future product candidates, we expect to incur significant commercialization expenses related to product sales, marketing, manufacturing and distribution, which costs we may seek to offset through entry into collaboration agreements with third parties. Furthermore, we expect to continue to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial additional funding in connection with our continuing operations. If we are unable to raise capital when needed or on acceptable terms, we would be forced to delay, reduce or eliminate our research and development programs or future commercialization efforts.

Based on our current operating plan, available cash and additional access to capital discussed above under the "*Liquidity and Capital Resources*" section, we believe we do not have sufficient cash on hand to support current operations for at least one year from the date of issuance of the unaudited condensed consolidated financial statements as of and for the three and six months ended June 30, 2025 appearing elsewhere in this Quarterly Report. To finance our operations, we will need to raise substantial additional capital, which cannot be assured. We have concluded that this circumstance raises substantial doubt about our ability to continue as a going concern for at least one year from the date that our aforementioned unaudited condensed consolidated financial statements were issued. See Note 1 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report for additional information on our assessment.

Our future capital requirements will depend on a number of factors, including:

● the costs of conducting preclinical studies and clinical trials;

● the costs of manufacturing;

● the scope, progress, results and costs of discovery, preclinical and clinical development, laboratory testing, and clinical trials for product candidates we may develop, if any;

● the costs, timing, and outcome of regulatory review of our product candidates;

● our ability to establish and maintain collaborations on favorable terms, if at all;

● the achievement of milestones or occurrence of other developments that trigger payments under any license or collaboration agreements we might have at such time;

● the costs and timing of future commercialization activities, including product sales, marketing, manufacturing and distribution, for any of our product candidates for which we receive marketing approval;

● the amount of revenue, if any, received from commercial sales of our product candidates, should any of our product candidates receive marketing approval;

● the costs of preparing, filing and prosecuting patent applications, obtaining, maintaining and enforcing our intellectual property rights, and defending intellectual property-related claims;

● our headcount growth and associated costs as we expand our business operations and research and development activities;

● the continuing impacts of the recent COVID-19 pandemic and geopolitical conflicts; and

● the costs of operating as a public company.

Our existing cash will not be sufficient to complete development of CLD-101, CLD-201 and CLD-400. Accordingly, we will be required to obtain further funding to achieve our business objectives.

Until such time, if ever, as we can generate substantial product revenues, we expect to finance our cash needs through a combination of public or private equity offerings and debt financings or other sources, such as potential collaboration agreements, strategic alliances and licensing arrangements. To the extent that we raise additional capital through the sale of equity or convertible debt securities, ownership interests may be diluted, and the terms of these securities may include liquidation or other preferences that could adversely affect the rights as a common stockholder. Additional debt financing, if available, may involve agreements that include restrictive covenants that limit our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends, that could adversely impact our ability to conduct our business. If we raise funds through potential collaborations, strategic alliances or licensing arrangements with third parties, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs or product candidates, or to grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.

**Critical Accounting Estimates**

Our discussion and analysis of our financial condition and results of operations are based on our unaudited condensed consolidated financial statements, which have been prepared in accordance with United States generally accepted accounting principles ("U.S. GAAP"). The preparation of these unaudited condensed consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets and liabilities disclosure of contingent assets and liabilities as of the date of the balance sheet and the reported amounts of expenses during the reporting period. Our estimates are based on historical trends and on other factors that we believe are reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

Our significant accounting policies and estimates are described in more detail in Note 2 to the consolidated financial statements included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. The accounting estimates that are most critical to a full understanding and evaluation of our reported financial results are described in Management's Discussion and Analysis of Financial Condition and Results of Operations in Item 7 of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024. There were no material changes to our critical accounting estimates during the three and six months ended June 30, 2025.

**Off-Balance Sheet Arrangements**

We did not have during the periods presented, and we do not currently have, any off-balance sheet arrangements, as defined under SEC rules.

We enter into agreements in the normal course of business with vendors for preclinical and clinical studies, preclinical and clinical supply and manufacturing services, professional consultants for expert advice, and other vendors for other services for operating purposes. We have certain manufacturing and other supplier agreements with vendors principally for manufacturing drug products for clinical trials and continuing the development of the CLD-101, CLD-201 programs totaling $0.5 million in future purchase commitments. However, these contracts do not contain any minimum purchase commitments and are cancellable at any time by us, generally upon 30 days prior written notice, and therefore we believe that our non-cancelable obligations under these agreements are not material.

In addition, we have entered into license and royalty agreements for intellectual property with certain parties. Such arrangements require ongoing payments, including payments upon achieving certain development, regulatory and commercial milestones, receipt of sublicense income, as well as royalties on commercial sales. Payments under these arrangements are expensed as incurred and are recorded as research and development expenses. We may pay amounts under such agreements at the time of execution or annual fees. We have not paid any royalties under these agreements to date. We have not included the annual license fee payments contractual obligations because the license agreements are cancelable by us and therefore, we believe that our non-cancelable obligations under these agreements are not material. We have not included potential royalties or milestone obligations because they are contingent upon the occurrence of future events and the timing and likelihood of such potential obligations are not known with certainty. For further information regarding these agreements and amounts that could become payable in the future under these agreements, please see the sub-section entitled "License Agreements" within the "Item 1. Business" of our Annual Report on Form 10-K for the fiscal year ended December 31, 2024.

**Quantitative and Qualitative Disclosures about Market Risk**

We are not currently exposed to significant market risk related to changes in interest rates because we do not have any cash equivalents or interest-bearing investments at this time. Our debt typically contains a fixed interest rate or is issued to certain lenders, including related party lenders, with other equity instruments, such as warrants, in lieu of a stated cash interest rate. We currently do not have debt with an interest rate that is variable and fluctuates with changes in interest rates.

We are not currently exposed to significant market risk related to changes in foreign currency exchange rates; however, we have employees and are contracted with and may continue to contract with foreign vendors that are located in Europe, particularly in Germany, where we operate through our wholly-owned subsidiary, StemVac GmbH. In October 2022, we also formed Calidi Biotherapeutics Australia Pty Ltd, a wholly-owned subsidiary in Australia, for purposes of operating in that country for a portion of our planned clinical trial activities for our SNV1 program. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.

Inflation generally affects us by increasing our cost of labor. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three and six months ended June 30, 2025 and 2024.

**Emerging Growth Company and Smaller Reporting Company Status**

We are an "emerging growth company," ("EGC"), under the Jumpstart Our Business Startups Act of 2012, (the "JOBS Act"). Section 107 of the JOBS Act provides that an EGC can take advantage of the extended transition period provided in Section 7(a)(2)(B) of the Securities Act for complying with new or revised accounting standards. Thus, an EGC can delay the adoption of certain accounting standards until those standards would otherwise apply to private companies. We have elected to avail ourselves of the delayed adoption of new or revised accounting standards and, therefore, we will be subject to the same requirements to adopt new or revised accounting standards as private entities.

As an EGC, we may also take advantage of certain exemptions and reduced reporting requirements under the JOBS Act. Subject to certain conditions, as an EGC:

● we are presenting only two years of audited financial statements and only two years of related Management's Discussion and Analysis of Financial Condition and Results of Operations;

● we will avail ourselves of the exemption from providing an auditor's attestation report on our internal control over financial reporting pursuant to Section 404(b) of the Sarbanes-Oxley Act;

● we will avail ourselves of the exemption from complying with any requirement that may be adopted by the Public Company Accounting Oversight Board ("PCAOB"), regarding mandatory audit firm rotation or a supplement to the auditor's report providing additional information about the audit and the financial statements, known as the auditor discussion and analysis;

● we are providing reduced disclosure about our executive compensation arrangements; and

● we will not require nonbinding advisory votes on executive compensation or stockholder approval of any golden parachute payments.

We will remain an EGC until the earliest of (i) December 31, 2026, (ii) the last day of the fiscal year in which we have total annual gross revenues of $1.235 billion or more, (iii) the date on which we have issued more than $1 billion in non-convertible debt during the previous rolling three-year period, or (iv) the date on which we are deemed to be a large accelerated filer under the Securities Exchange Act of 1934, as amended, (the "Exchange Act").

We are also a "smaller reporting company," meaning that the market value of our stock held by non-affiliates plus the proposed aggregate amount of gross proceeds to us as a result of this offering is less than $700 million and our annual revenue was less our annual revenue is less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company after this offering if either (i) the market value of our stock held by non-affiliates is less than $250 million or (ii) our annual revenue is less than $100 million during the most recently completed fiscal year and the market value of our stock held by non-affiliates is less than $700 million.

If we are a smaller reporting company at the time we cease to be an EGC, we may continue to rely on exemptions from certain disclosure requirements that are available to smaller reporting companies. Specifically, as a smaller reporting company we may choose to present only the two most recent fiscal years of audited financial statements in our Annual Report on Form 10-K and, similar to EGCs, smaller reporting companies have reduced disclosure obligations regarding executive compensation.

**Recent Accounting Pronouncements**

Other than as disclosed in Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this Quarterly Report, we do not expect that any recently issued accounting standards will have a material impact on our financial statements or will otherwise apply to our operations.

**ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS**

The Company is a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and is not required to provide the information required under this item.

**ITEM 4. Controls and Procedures.**

**Evaluation of Disclosure Controls and Procedures**

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this report. The term "disclosure controls and procedures," as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives.

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025.

**Changes in Internal Control over Financial Reporting**

There were no changes in the Company's internal control over financial reporting identified in connection with the evaluation required by paragraph (d) of Exchange Act Rules 13a-15 or 15d-15 that occurred during the quarter ended June 30, 2025 that materially affected, or were reasonably likely to materially affect, the Company's internal control over financial reporting.

**PART II — OTHER INFORMATION**

**Item 1. Legal Proceedings.**

***Legal Proceedings***

We are subject to litigation and contingencies in the ordinary course of its business, including those related to its business, business transactions, employee-related matters, and other matters. See Item 3-Legal Proceedings to our Form 10-K for the year ended December 31, 2024, which was filed with the SEC on March 31, 2025. Other than the matters discussed in our annual report on Form 10-K, we are not currently party to any other material legal proceedings that occurred during the quarter ended June 30, 2025.

**Item 1A. Risk Factors**

During the three and six months ended June 30, 2025, there have been no material changes from the risk factors previously disclosed under the heading "Risk Factors" in the Company's Annual Report on Form 10-K for the for the year ended December 31, 2024, which was filed with the SEC on March 31, 2025.

**ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.**

**Unregistered Sales of Equity Securities**

None.

**Item 3. Defaults Upon Senior Securities.**

None.

**Item 4. Mine Safety Disclosures.**

Not applicable.

**Item 5. Other Information.**

***Rule 10b5-1 Trading Arrangement***

During the three and six months ended June 30, 2025, no director or officer of the Company adopted or terminated a "Rule 10b5-1 trading arrangement" or "non-Rule 10b5-1 trading arrangement," as each term is defined in Item 408(a) of Regulation S-K.

**Item 6. Exhibits.**

**EXHIBIT INDEX**

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| | |
|:---|:---|
| **Exhibit**<br> **No.** | **Description** |
| 3.1 | [Amendment to the Second Amended and Restated Certificate of Incorporation, as amended (incorporated by reference to Exhibit 3.1 to the Form 8-K filed with the SEC on August 7, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225022592/ex3-1.htm) |
| 4.1 | [Form of Series H Common Warrant (incorporated by reference to Exhibit 4.1 to the Form 8-K filed with the SEC on July 10, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225018553/ex4-1.htm) |
| 10.1 | [Form of Inducement Letter (incorporated by reference to Exhibit 10.1 to the Form 8-K filed with the SEC on July 10, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225018553/ex10-1.htm) |

---

---

| | |
|:---|:---|
| 31.1\* | [Certification of Chief Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-1.htm) |
| 31.2\* | [Certification of Chief Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002](ex31-2.htm) |
| 32.1\*\* | [Certificate of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-1.htm) |
| 32.2\*\* | [Certificate of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002](ex32-2.htm) |
| 101.INS | Inline XBRL Instance Document |
| 101. SCH | Inline XBRL Taxonomy Extension Schema Document |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase 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 (embedded within the Inline XBRL document) |

---

\* Filed herewith <br> \*\* Furnished herewith.

**SIGNATURES**

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

---

| | | |
|:---|:---|:---|
|  | Calidi Biotherapeutics, Inc. | Calidi Biotherapeutics, Inc. |
| Date: August 8, 2025 | By: | */s/ Eric Poma* |
|  | Name: | Eric Poma |
|  | Title: | Chief Executive Officer<br> (Principal Executive Officer) |
| Date: August 8, 2025 | By: | */s/ Andrew Jackson* |
|  | Name: | Andrew Jackson |
|  | Title: | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 31.1

**Exhibit 31.1**

**CERTIFICATIONS OF CHIEF EXECUTIVE OFFICER**

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Eric Poma, certify that:

1. I have reviewed this Quarterly
 Report on Form 10-Q of Calidi Biotherapeutics, Inc. (the "Registrant").

2. Based on my knowledge,
 this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
 made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
 report;

3. Based on my knowledge,
 the financial statements, and other financial information included in this report, fairly present in all material respects the financial
 condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure
 controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
 particularly during the period in which this report is being prepared;

b. Designed such internal
 control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
 external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness
 of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness
 of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report
 any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent
 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control
 over financial reporting.

5. The Registrant's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the
 equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies
 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
 affect the Registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not
 material, that involves management or other employees who have a significant role in the Registrant's internal control over
 financial reporting.

Date: August 8, 2025

---

| | |
|:---|:---|
| By: | */s/ Eric Poma* |
| Name: | Eric Poma |
| Title: | Chief Executive Officer <br> (Principal Executive Officer) |

---

## Exhibit 31.2

**Exhibit 31.2**

**CERTIFICATIONS OF CHIEF FINANCIAL OFFICER**

**PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002**

I, Andrew Jackson, certify that:

1. I have reviewed this Quarterly
 Report on Form 10-Q of Biotherapeutics, Inc. (the "Registrant").

2. Based on my knowledge,
 this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements
 made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
 report;

3. Based on my knowledge,
 the financial statements, and other financial information included in this report, fairly present in all material respects the financial
 condition, results of operations and cash flows of the Registrant as of, and for, the periods presented in this report;

4. The Registrant's
 other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in
 Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f)
 and 15d-15(f)) for the Registrant and have:

&nbsp;&nbsp;&nbsp;&nbsp;a. Designed such disclosure
 controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material
 information relating to the Registrant, including its consolidated subsidiaries, is made known to us by others within those entities,
 particularly during the period in which this report is being prepared;

b. Designed such internal
 control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision,
 to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for
 external purposes in accordance with generally accepted accounting principles;

c. Evaluated the effectiveness
 of the Registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness
 of the disclosure controls and procedures as of the end of the period covered by this report based on such evaluation; and

d. Disclosed in this report
 any change in the Registrant's internal control over financial reporting that occurred during the Registrant's most recent
 fiscal quarter that has materially affected, or is reasonably likely to materially affect, the Registrant's internal control
 over financial reporting.

5. The Registrant's
 other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting,
 to the Registrant's auditors and the audit committee of the Registrant's board of directors (or persons performing the
 equivalent functions):

&nbsp;&nbsp;&nbsp;&nbsp;a. All significant deficiencies
 and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely
 affect the Registrant's ability to record, process, summarize and report financial information; and

b. Any fraud, whether or not
 material, that involves management or other employees who have a significant role in the Registrant's internal control over
 financial reporting.

Date: August 8, 2025

---

| | |
|:---|:---|
| By: | */s/ Andrew Jackson* |
| Name: | Andrew Jackson |
| Title: | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 32.1

**Exhibit 32.1**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Calidi Biotherapeutics, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies
 with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained
 in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 8, 2025

---

| | |
|:---|:---|
| By: | */s/ Eric Poma* |
| Name: | Eric Poma |
| Title: | Chief Executive Officer <br> (Principal Executive Officer) |

---

## Exhibit 32.2

**Exhibit 32.2**

**CERTIFICATION PURSUANT TO**

**18 U.S.C. SECTION 1350**

**AS ADOPTED PURSUANT TO**

**SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002**

In connection with the Quarterly Report of Calidi Biotherapeutics, Inc. (the "Company") on Form 10-Q for the quarter ended June 30, 2025, as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned, in the capacities and on the date indicated below, hereby certifies pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to his knowledge:

1. The Report fully complies
 with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2. The information contained
 in the Report fairly presents, in all material respects, the financial condition and results of operation of the Company.

Date: August 8, 2025

---

| | |
|:---|:---|
| By: | */s/ Andrew Jackson* |
| Name: | Andrew Jackson |
| Title: | Chief Financial Officer <br> (Principal Financial and Accounting Officer) |

---