# EDGAR Filing Document

**Accession Number:** 0001855485
**File Stem:** 0001493152-25-022372
**Filing Date:** 2025-11
**Character Count:** 389292
**Document Hash:** 87e8562e2427ab57b6a94aa37be0e629
**Contains OCR:** False
**Source Format:** 

## Filing Content

## Filing Summary
**0001493152-25-022372.hdr.sgml**: 20251113

**ACCESSION NUMBER**: 0001493152-25-022372

**CONFORMED SUBMISSION TYPE**: 10-Q

**PUBLIC DOCUMENT COUNT**: 80

**CONFORMED PERIOD OF REPORT**: 20250930

**FILED AS OF DATE**: 20251113

**DATE AS OF CHANGE**: 20251113

**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:** 251479325

**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 SEPTEMBER 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 November 10, 2025, the registrant had 7,167,721 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**](#ak_001) | [**PART I - FINANCIAL INFORMATION**](#ak_001) |  |
| Item 1. | [Condensed Consolidated Financial Statements (unaudited)](#a_001) | 4 |
|  | [Condensed Consolidated Balance Sheets](#a_002) | 4 |
|  | [Condensed Consolidated Statements of Operations](#a_003) | 5 |
|  | [Condensed Consolidated Statements of Changes in Total Equity](#a_004) | 7 |
|  | [Condensed Consolidated Statements of Cash Flows](#a_005) | 8 |
|  | [Notes to Condensed Consolidated Financial Statements](#a_006) | 9 |
| Item 2. | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#a_007) | 44 |
| Item 3. | [Quantitative and Qualitative Disclosures About Market Risk](#a_008) | 57 |
| Item 4. | [Controls and Procedures](#a_009) | 57 |
| [**PART II - OTHER INFORMATION**](#a_010) | [**PART II - OTHER INFORMATION**](#a_010) |  |
| Item 1. | [Legal Proceedings](#a_011) | 58 |
| Item 1A. | [Risk Factors](#a_012) | 58 |
| Item 2. | [Unregistered Sales of Equity Securities and Use of Proceeds](#a_013) | 58 |
| Item 3. | [Defaults Upon Senior Securities](#a_014) | 58 |
| Item 4. | [Mine Safety Disclosures](#a_015) | 58 |
| Item 5. | [Other Information](#a_016) | 58 |
| Item 6. | [Exhibits](#a_017) | 58 |
|  | [Signatures](#a_018) | 59 |

---

**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 retrospectively restated to give 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*)

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | **(Unaudited)** | |
| **ASSETS** |  |  |
| CURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Cash | $10375 | $9591 |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | 653 | 636 |
| Total current assets | 11028 | 10227 |
| NONCURRENT ASSETS |  |  |
| &nbsp;&nbsp;&nbsp;Machinery and equipment, net | 849 | 869 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use assets, net | 2012 | 2934 |
| &nbsp;&nbsp;&nbsp;Other noncurrent assets | 140 | 152 |
| TOTAL ASSETS | $14029 | $14182 |
| **LIABILITIES AND TOTAL EQUITY** |  |  |
| CURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Accounts payable | $1143 | $2072 |
| &nbsp;&nbsp;&nbsp;Related party accounts payable | 5 | 2 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | 1396 | 1858 |
| &nbsp;&nbsp;&nbsp;Related party accrued expenses and other current liabilities | 778 | 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 | 405 | 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 | 112 | 66 |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use liability, current | 1354 | 1204 |
| Total current liabilities | 5193 | 9496 |
| NONCURRENT LIABILITIES |  |  |
| &nbsp;&nbsp;&nbsp;Operating lease right-of-use liability, noncurrent | 640 | 1845 |
| &nbsp;&nbsp;&nbsp;Finance lease liability, noncurrent | 197 | 145 |
| &nbsp;&nbsp;&nbsp;Promissory note | 600 | 600 |
| &nbsp;&nbsp;&nbsp;Warrant liability | 186 | 119 |
| &nbsp;&nbsp;&nbsp;Related party warrant liability | 15 | 9 |
| TOTAL LIABILITIES | 6831 | 12214 |
| Commitments and contingencies (Note 11) |  |  |
| **TOTAL EQUITY** |  |  |
| &nbsp;&nbsp;&nbsp;Common stock, $0.0001 par value, 330,000 shares authorized; 6,906 and 1,730 shares issued and outstanding as of September 30, 2025, and December 31, 2024, respectively | 1 |  |
| &nbsp;&nbsp;&nbsp;Additional paid-in capital | 144495 | 123277 |
| &nbsp;&nbsp;&nbsp;Accumulated other comprehensive income loss, net of tax | (13) | (28) |
| &nbsp;&nbsp;&nbsp;Accumulated deficit | (137565) | (121715) |
| &nbsp;&nbsp;&nbsp;Total stockholders' equity | 6918 | 1534 |
| &nbsp;&nbsp;&nbsp;Noncontrolling interest | 280 | 434 |
| &nbsp;&nbsp;&nbsp;Total equity | 7198 | 1968 |
| **TOTAL LIABILITIES AND TOTAL EQUITY** | $14029 | $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> **September 30,** | **Three Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| **OPERATING EXPENSES** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $(2361) | $(2153) | $(7379) | $(7063) |
| &nbsp;&nbsp;&nbsp;General and administrative | (2687) | (3073) | (8395) | (10687) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating expense | (5048) | (5226) | (15774) | (17750) |
| Loss from operations | (5048) | (5226) | (15774) | (17750) |
| **OTHER INCOME (EXPENSES), NET** |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Interest expense | (31) | (98) | (94) | (304) |
| &nbsp;&nbsp;&nbsp;Interest expense – related party | (10) | (134) | (71) | (454) |
| &nbsp;&nbsp;&nbsp;Change in fair value of other liabilities and derivatives | (93) | 352 | (79) | 240 |
| &nbsp;&nbsp;&nbsp;Change in fair value of other liabilities and derivatives – related party | (7) | 28 | (5) | 36 |
| &nbsp;&nbsp;&nbsp;Grant income |  |  | 50 | 181 |
| &nbsp;&nbsp;&nbsp;Other income (expense), net | 18 | 8 | (14) | 1 |
| &nbsp;&nbsp;&nbsp;Total other income (expenses), net | (123) | 156 | (213) | (300) |
| **LOSS BEFORE INCOME TAXES** | (5171) | (5070) | (15987) | (18050) |
| &nbsp;&nbsp;&nbsp;Income tax provision | (10) | 1 | (17) | (11) |
| **NET LOSS** | $(5181) | $(5069) | $(16004) | $(18061) |
| &nbsp;&nbsp;&nbsp;Net loss attributable to noncontrolling interest | (32) | (15) | (154) | (15) |
| **NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST** | (5149) | (5054) | (15850) | (18046) |
| &nbsp;&nbsp;&nbsp;Deemed dividend on warrants | (5673) |  | (5673) | (1671) |
| **NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $(10822) | $(5054) | $(21523) | $(19717) |
| **Net loss per share; basic and diluted** | $(2.21) | $(7.75) | $(6.40) | $(42.40) |
| **Weighted average common shares outstanding; basic and diluted** | 4907 | 652 | 3362 | 465 |

---

*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> **September 30,** | **Three Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** | **(Unaudited)** |
| **NET LOSS** | $(5181) | $(5069) | $(16004) | $(18061) |
| Other comprehensive income (expense), net of tax: |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Foreign currency translation adjustment |  | (47) | 15 | (27) |
| **COMPREHENSIVE LOSS** | $(5181) | $(5116) | $(15989) | $(18088) |
| Comprehensive loss attributable to noncontrolling interest | (32) | (15) | (154) | (15) |
| **COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS** | $(5149) | $(5101) | $(15835) | $(18073) |

---

*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 | $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(13) | $(132416) | $&nbsp;&nbsp;&nbsp;&nbsp;1764 | $&nbsp;&nbsp;&nbsp;&nbsp; 312 | $2076 |
| Issuance of common stock for Reverse Stock Split fractional shares | 25029 |  |  |  |  |  |  |  |
| Issuance of common stock through August Public Offering | 1922764 | 1 | 5767 |  |  | 5768 |  | 5768 |
| Exercise of pre-funded warrants | 1532166 |  | 2 |  |  | 2 |  | 2 |
| Issuance of common shares through July Inducement Offer, net of financing costs | 549596 |  | 4004 |  |  | 4004 |  | 4004 |
| Stock-based compensation |  |  | 529 |  |  | 529 |  | 529 |
| Foreign currency translation adjustments |  |  |  |  |  |  |  |  |
| Net loss |  |  |  |  | (5149) | (5149) | (32) | (5181) |
| Balance at September 30, 2025 | 6906312 | $&nbsp;&nbsp;&nbsp;&nbsp; 1 | $144495 | $(13) | $(137565) | $&nbsp;&nbsp;&nbsp;&nbsp; 6918 | $280 | $7198 |

---

---

| | | | | | | | | |
|:---|:---|:---|:---|:---|:---|:---|:---|:---|
|  | **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; (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) |
| Exercise of common stock warrants | 144798 |  | 2736 |  |  | 2736 |  | 2736 |
| Issuance of common stock for liability settlement | 10074 |  | 282 |  |  | 282 |  | 282 |
| Issuance of common stock for legal settlement | 1667 |  | 150 |  |  | 150 |  | 150 |
| Issuance of common stock for Reverse Stock Split fractional shares | 6621 |  |  |  |  |  |  |  |
| Issuance of common shares and warrants per subscription agreement | 58235 |  | 1000 |  |  | 1000 |  | 1000 |
| Issuance of common stock per Convertible Note conversion | 15401 |  | 211 |  |  | 211 |  | 211 |
| Investment in Nova Cell |  |  | 1500 |  |  | 1500 | 500 | 2000 |
| Stock-based compensation |  |  | 691 |  |  | 691 |  | 691 |
| Foreign currency translation adjustment |  |  |  | (47) |  | (47) |  | (47) |
| Net loss |  |  |  |  | (5054) | (5054) | (15) | (5069) |
| Balance at September 30, 2024 | 775893 | $&nbsp;&nbsp;&nbsp;&nbsp;— | $107409 | $&nbsp;&nbsp;&nbsp;&nbsp; (74) | $(117618) | $(10283) | $&nbsp;&nbsp;&nbsp;&nbsp; 485 | $(9798) |

---

**CALIDI BIOTHERAPEUTICS, INC.**

**CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS**

*(In thousands)*

---

| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
|  | **(Unaudited)** | **(Unaudited)** |
| **CASH FLOWS FROM OPERATING ACTIVITIES:** |  |  |
| Net loss | $(16004) | $(18061) |
| Adjustments to reconcile net loss to net cash used in operating activities: |  |  |
| &nbsp;&nbsp;&nbsp;Depreciation and amortization expense | 1228 | 1142 |
| &nbsp;&nbsp;&nbsp;Amortization of debt discount and financing costs |  | 41 |
| &nbsp;&nbsp;&nbsp;Stock-based compensation | 1658 | 2331 |
| &nbsp;&nbsp;&nbsp;Change in fair value of debt, other liabilities and derivatives | 84 | (276) |
| Changes in operating assets and liabilities: |  |  |
| &nbsp;&nbsp;&nbsp;Prepaid expenses and other current assets | (38) | 2050 |
| &nbsp;&nbsp;&nbsp;Accounts payable | (924) | 537 |
| &nbsp;&nbsp;&nbsp;Accrued expenses and other current liabilities | (1185) | (1285) |
| &nbsp;&nbsp;&nbsp;Operating lease right of use liability | (1068) | (750) |
| Net cash used in operating activities | (16249) | (14271) |
| **CASH FLOWS FROM INVESTING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Purchases of machinery and equipment | (91) | (11) |
| Net cash used in investing activities | (91) | (11) |
| **CASH FLOWS FROM FINANCING ACTIVITIES:** |  |  |
| &nbsp;&nbsp;&nbsp;Proceeds from public offerings | 12663 | 5406 |
| &nbsp;&nbsp;&nbsp;Proceeds from warrant inducement financing | 4136 | 2140 |
| &nbsp;&nbsp;&nbsp;Proceeds from registered direct offering | 3503 |  |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of pre-funded warrants | 5 | 2 |
| &nbsp;&nbsp;&nbsp;Repayment of financing lease obligations | (63) | (63) |
| &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;Payment of financing costs | (725) | (1052) |
| &nbsp;&nbsp;&nbsp;Repayment of principal on related party term notes payable | (2000) |  |
| &nbsp;&nbsp;&nbsp;Proceeds from exercise of common stock warrants |  | 2835 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of noncontrolling interest in Nova Cell |  | 2000 |
| &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;Proceeds from issuance of common shares and warrants per subscription agreement |  | 1000 |
| &nbsp;&nbsp;&nbsp;Proceeds from issuance of promissory note |  | 600 |
| &nbsp;&nbsp;&nbsp;Repayment of convertible note payable |  | (1500) |
| &nbsp;&nbsp;&nbsp;Payment of debt issuance costs |  | (9) |
| Net cash provided by financing activities | 17119 | 14259 |
| &nbsp;&nbsp;&nbsp;Effect of exchange rate changes on cash | 6 | (29) |
| **NET INCREASE (DECREASE) IN CASH AND RESTRICTED CASH** | 785 | (52) |
| **CASH AND RESTRICTED CASH BALANCE:** |  |  |
| &nbsp;&nbsp;&nbsp;At beginning of the period | 9809 | 2167 |
| &nbsp;&nbsp;&nbsp;At end of the period | $10594 | $2115 |
| **SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION** |  |  |
| &nbsp;&nbsp;&nbsp;Cash paid for interest | $846 | $124 |
| &nbsp;&nbsp;&nbsp;Cash paid for income taxes | $12 | $10 |
| **SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES** |  |  |
| Deemed dividend on warrants | $5673 | $1671 |
| Machinery and equipment acquired through financing leases | $152 | $— |
| Financing fees included in accounts payable and accrued liabilities | $111 | $289 |
| Issuance of common stock in lieu of cash for services | $— | $311 |
| Issuance of common stock in lieu of cash for SEPA commitment fee | $— | $81 |
| Issuance of warrants for legal settlement | $— | $158 |
| Issuance of common stock for legal settlement | $— | $150 |
| Issuance of convertible note for legal settlement | $— | $1500 |
| Discount on convertible note payable | $— | $149 |
| Issuance of common stock per conversion of convertible note | $— | $1239 |
| 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, 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 $137.6 million at September 30, 2025. During the nine months ended September 30, 2025, the Company used $16.2 million of cash for operating activities. As of September 30, 2025, the Company had cash of $10.4 million and restricted cash of $0.2 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 September 30, 2025, and for the three and nine months ended September 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 were 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. 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 owned 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 was a VIE, the Company has a controlling financial interest and is deemed to be the primary beneficiary of Nova Cell and therefore consolidated Nova Cell's financial statements. Since the Company owns less than 100% of Nova Cell, the Company recorded net loss attributable to noncontrolling interest in its unaudited condensed consolidated statements of operations equal to the percentage of the economic or ownership interests retained in Nova Cell by the noncontrolling party. On October 27, 2025, the Company sold its ownership interest in Nova Cell and Nova Cell ceased to be a subsidiary of the Company (see Note 12).

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):

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| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **September 30,**<br> **2024** |
| Cash | $10375 | $1897 |
| Restricted cash included within prepaid expenses and other current assets | 100 | 100 |
| Restricted cash included within other noncurrent assets | 119 | 118 |
| Total cash and restricted cash as shown in the unaudited condensed consolidated statements of cash flows | $10594 | $2115 |

---

*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:

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| | |
|:---|:---|
| 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 the three and nine months ended September 30, 2025, the Company recognized approximately $0 and $50,000 in grant income in the accompanying unaudited condensed consolidated statements of operations, respectively.

During the three and nine months ended September 30, 2024, the Company recognized approximately $0 and $0.2 million, respectively, in grant income in the accompanying unaudited condensed consolidated statement of operations.

*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 nine months ended September 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 unaudited condensed 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 nine months ended September 30, 2025 and 2024 because including them would have been antidilutive (in thousands):

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| | | |
|:---|:---|:---|
|  | **Nine Months Ended September 30,** | **Nine Months Ended September 30,** |
|  | **2025** | **2024** |
| Warrants for common stock | 5027 | 612 |
| Employee stock options | 282 | 76 |
| Earnout shares | 150 | 150 |
| Convertible notes payable |  | 139 |
| Restricted stock units |  | 3 |
| Contingently issuable warrants<sup>(1)</sup> |  |  |
| &nbsp;&nbsp;&nbsp;Total common stock equivalents | 5459 | 980 |

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(1) The
 contingently issuable warrant was not included for purposes of calculating the number of diluted shares outstanding as of September
 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 September 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 Scientific Officer and Head of Technical Operations

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 nine months ended September 30, 2025 and 2024:

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| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **September 30,** | **Three Months Ended**<br> **September 30,** | **Nine Months Ended** <br> **September 30,** | **Nine Months Ended** <br> **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| **OPERATING EXPENSES** |  |  |  |  |
| Salaries and benefits | $(2486) | $(2443) | $(7632) | $(8266) |
| Insurance | (134) | (396) | (608) | (1197) |
| Legal | (373) | (370) | (1022) | (1587) |
| Consulting | (364) | (380) | (1575) | (1221) |
| Rent and Maintenance | (584) | (538) | (1759) | (1610) |
| Clinical & research and development | (402) | (334) | (1292) | (1385) |
| Depreciation | (105) | (99) | (292) | (302) |
| Change in fair value of other liabilities and derivatives | (100) | 380 | (84) | 276 |
| Other segment items <sup>(1)</sup> | (623) | (890) | (1723) | (2758) |
| Income tax provision | (10) | 1 | (17) | (11) |
| **NET LOSS** | $(5181) | $(5069) | $(16004) | $(18061) |

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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 nine months ended September 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 No. 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.

In September 2025, the FASB issued ASU No. 2025-07, *Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract*. ASU 2025-07 refines the scope of derivative accounting under Topic 815 and clarifies the treatment of share-based noncash consideration under ASC 606. This ASU is effective for annual periods and interim periods beginning after December 15, 2026, with early adoption permitted. 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 2025-07.

**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 September 30, 2025 and December 31, 2024 (in thousands):

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **September 30, 2025**<br> **(unaudited)** | **September 30, 2025**<br> **(unaudited)** | **September 30, 2025**<br> **(unaudited)** | **September 30, 2025**<br> **(unaudited)** |
|  | **Level 1** | **Level 2** | **Level 3** | **Total** |
| **Assets:** | | | | |
| Restricted cash held in money market and certificate of deposit accounts | $219 | $— | $— | $219 |
| Forward Purchase Agreement Derivative Asset included in other noncurrent assets |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Total assets, at fair value | $219 | $— | $— | $219 |
| **Liabilities:** |  |  |  |  |
| Public Warrants | $173 | $— | $— | $173 |
| Private warrants |  | 28 |  | 28 |
| &nbsp;&nbsp;&nbsp;Total warrant liabilities, at fair value | $173 | $28 | $— | $201 |

---

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **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 nine months ended September 30, 2025 (in thousands):

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended September 30, 2025** | **Three Months Ended September 30, 2025** | **Three Months Ended September 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 July 1, 2025 | $2 | $89 | $14 |
| Change in fair value | (2) | 84 | 14 |
| Balance at September 30, 2025 | $— | $173 | $28 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 30, 2025** | **Nine Months Ended September 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 | 11 | 63 | 10 |
| Balance at September 30, 2025 | $— | $173 | $28 |

---

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

---

| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** | **Three Months Ended September 30, 2024** |
|  | **Forward Purchase Agreement Derivative Asset,**<br> **at fair value** | **Public Warrants, at fair value** | **Private warrants,**<br> **at fair value** |
| Balance at July 1, 2024 | $(20) | $484 | $81 |
| Change in fair value | 9 | (333) | (56) |
| Balance at September 30, 2024 | $(11) | $151 | $25 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 30, 2024** | **Nine Months Ended September 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 | 219 | (424) | (71) |
| Balance at September 30, 2024 | $(11) | $151 | $25 |

---

**4. Selected Balance Sheet Components**

*Accrued Expenses and Other Current Liabilities*

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

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
| Accrued compensation | $1334 | $1344 |
| Accrued vendor and other expenses | 840 | 994 |
| Accrued expenses and other current liabilities | $2174 | $2338 |

---

See Note 11 for additional commitments.

*Prepaid Expenses and Other Current Assets*

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

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
| Prepaid expenses | $133 | $99 |
| Prepaid insurance | 252 | 288 |
| Other | 268 | 249 |
| Prepaid expenses and other current assets | $653 | $636 |

---

**5. Machinery and Equipment, net**

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

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
| Machinery and equipment | $2561 | $2224 |
| Accumulated depreciation | (1712) | (1355) |
| Machinery and equipment, net | $849 | $869 |

---

Depreciation and amortization expense amounted to approximately $0.1 million and $0.3 million for the three and nine months ended September 30, 2025, respectively. Depreciation and amortization expense amounted to approximately $0.1 million and $0.3 million for the three and nine months ended September 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, 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** | **September 30, 2025** | **December 31, 2024** |
| Director A and Director E Current term notes payable, net of discount, including accrued interest<sup>(1)</sup> | 405 | 2702 |
| Director F and relative of Officer A Accounts payable and accrued expenses<sup>(2)</sup> | 11 | 30 |
| Director F Severance accrual<sup>(3)</sup> | 344 |  |
| Director D Severance accrual<sup>(4)</sup> |  | 434 |
| Director A Advisory services included in accrued expenses<sup>(5)</sup> |  | 18 |
| Director F Lease guaranty<sup>(6)</sup> | 9 | 186 |
| Director A Other liabilities<sup>(7)</sup> |  | 638 |
| Director F and Director A Warrant liability<sup>(8)</sup> | 15 | 9 |
| Relative of Officer A Loan payable<sup>(9)</sup> |  | 223 |
| Officer G Severance accrual<sup>(10)</sup> | 179 |  |
| Officer A Severance accrual<sup>(11)</sup> | 249 |  |

---

(1) As
 of September 30, 2025, related party term note accrued interest payable due to Director A totaling $0.4 million has 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 the relative of Officer A as of September 30, 2025 and Director F and the relative of Officer A as of 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 $0.5 million 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, of which $0.3 million is
 outstanding as of September 30, 2025 . Director F shall also be entitled to receive a transition and consulting pay of $10,000 per month during the transition period. The Company expensed $30,000 and $50,000 for the three and nine months ended September 30, 2025, respectively.

(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 September 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 $9,000 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.

(10) On
 August 8, 2025, the Company executed a General Release of Claims and Separation Agreement with Officer G, and
 is obligated to pay to Officer G $0.1 million in relation to a negotiated bonus for the NNV1 and SNV1 IND approvals and $0.2 million
 separation pay in the form of compensation continuation over six months pursuant to the Company's regular and customary payroll
 schedule, less all regular and customary payroll withholdings and shall pay Officer G's COBRA premiums for six months, commencing
 August 2025. As of September 30, 2025, the Company accrued $0.2 million in severance pay, as shown in table above.

(11) On
 September 17, 2025, the Company executed a General Release of Claims and Separation Agreement with Officer A, and is obligated to pay to Officer A i) a bonus in the amount of $0.1 million, upon the successful and effective corporate
 spin-off, out-licensing, or similar transaction relating to Nova Cell prior to October 31, 2025, and (ii) $0.2 million severance
 pay in the form of compensation continuation over six months pursuant to the Company's regular and customary payroll schedule,
 less all regular and customary payroll withholdings and shall pay Officer A's COBRA premiums for six months, commencing
 October 2025. As of September 30, 2025, the Company accrued $0.2 million in severance pay, as shown in table above.

**7. Debt**

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

---

| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Unpaid**<br> **Balance** | **Accrued**<br> **Interest** | **Net Carrying**<br> **Value** |
| Term notes payable | $— | $405 | $405 |
| Promissory note | 600 | 67 | 667 |
| Total debt | $600 | $472 | $1072 |
| Less: current portion of long-term debt |  |  | (472) |
| Long-term debt, net of current portion |  |  | $600 |

---

---

| | | | |
|:---|:---|:---|:---|
|  | **December 31, 2024** | **December 31, 2024** | **December 31, 2024** |
|  | **Unpaid**<br> **Balance** | **Accrued**<br> **Interest** | **Net 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 September 30, 2025 are as follows (in thousands):

---

| | |
|:---|:---|
| **Year Ending December 31:** | |
| 2025 (October — December) | $— |
| 2026 |  |
| 2027 | 600 |
| 2028 and thereafter |  |
| Plus: accrued interest | 472 |
| **Total debt** | $1072 |

---

The following discussion includes a description of the Company's outstanding debt as of September 30, 2025 and December 31, 2024. The weighted average interest rate related to the Company's outstanding debt was approximately 15.0% and 14.4% as of September 30, 2025 and December 31, 2024, respectively. Interest expense related to the Company's outstanding debt totaled approximately $27,000 and $0.2 million for the three months ended September 30, 2025 and 2024, respectively, and approximately $0.1 million and $0.6 million for the nine months ended September 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. As of September 30, 2025, the total outstanding principal of the 2023 Term Notes of $1.0 million was fully paid in accordance with this agreement. As noted below, $0.4 million in accrued interest remains outstanding as of September 30, 2025.

As of September 30, 2025, the principal of the 2023 Term Notes had been fully repaid, and the note will no longer accrue additional interest. As of December 31, 2024, the interest rate was 14% per annum for a total principal of $1.2 million and 18% per annum for a total principal of $0.2 million, respectively. As of September 30, 2025 and December 31, 2024, the total carrying value, including accrued interest and net of debt discount, was $0.4 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 September 30, 2025 and December 31, 2024, the total carrying value of the promissory note, including accrued interest, was $0.7 million and $0.6 million, respectively.

**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 September 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 September 30, 2025 and December 31, 2024, there were 6,906,312 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 nine months ended September 30, 2025, the Company issued 1,922,764 shares through the August Public Offering, 25,029 shares of common stock for 2025 reverse stock split fractional shares, 1,759,500 shares upon the exercise of Pre-funded Warrants, 549,596 shares of common stock issued in connection with the Company's July Inducement Offer, 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, 223,583 shares of common stock through an At The Market Offering, and 2,038 shares of common stock pursuant to a release of Restricted Stock Units.

During the nine months ended September 30, 2024, the Company issued 417 shares of common stock in lieu of cash for certain 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 shares issued in connection with the Company's April Offering, 36,809 shares of common stock pursuant to Convertible Notes conversion, 89,151 shares of common stock issued in connection with the Company's May Inducement Offer, 148,965 shares of common stock from exercises of warrants, 16,375 shares of common stock from exercises of pre-funded warrants, 10,074 shares of common stock issued for a liability settlement, 1,667 shares of common stock issued for a legal settlement, 6,621 shares of common stock for reverse stock split fractional shares, and 58,235 shares of common stock issued pursuant to a subscription agreement entered into with a related-party.

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

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
| Common stock warrants outstanding | 5026613 | 910299 |
| Common stock options issued and outstanding | 282536 | 77245 |
| Restricted stock units vested and unreleased |  | 2039 |
| Shares available for future issuance under the 2023 Equity Incentive Plan | 95284 | 7409 |
| Shares reserved under the 2023 Employee Stock Purchase Plan | 32815 | 32815 |
|  | 5437248 | 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 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.

*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. On October 27, 2025, the Company sold its ownership interest in Nova Cell and Nova Cell ceased to be a subsidiary of the Company (see Note 12).

*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 nine months ended September 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.

*July 2025 Warrant Inducement Offer*

 

On July 9, 2025, the Company entered into a warrant inducement offer agreement (the "July Warrant Inducement Offer") with 7 holders of the Company's existing Series A warrants, Series B-1 warrants, Series C-1 warrants, Series D warrants, Series E warrants, and Series F warrants (together the "Existing Warrants"). Pursuant to the July Warrant Inducement Offer, such warrant holders immediately exercised some, or all, of their respective outstanding Existing Warrants to purchase an aggregate of 549,596 shares of the Company's common stock, at a reduced exercise price of $8.40, for total gross proceeds of approximately $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, the Company issued unregistered new Series H common stock warrants ("Series H Warrants") to purchase up to 549,587 shares of common stock. See further warrant details below. The Company filed a resale registration statement on Form S-3 (File No. 333-288784), to register the shares underlying the Series H Warrants, which registration statement was declared effective by the Securities Exchange Commission on July 25, 2025.

*August 2025 Public Offering*

 

On August 20, 2025, the Company entered into an underwriting agreement with Ladenburg Thalmann & Co. Inc., as representative of the various underwriters (the "Representative"), in connection with the issuance and public sale offering of various securities (the "August Public Offering"), including: (i) 1,922,764 common stock units ("Common Stock Unit"), which includes the 450,000 Common Stock Units purchased pursuant to the exercise, in full, of the Over-Allotment Option and (ii) 1,528,000 pre-funded warrant units ("Pre-Funded Unit"), resulting in gross proceeds of approximately $6.9 million, before deducting underwriting discounts and commissions and other estimated offering expenses.

Each Common Stock Unit consists of (i) one share of common stock of the Company, par value $0.0001, and (ii) one Series I warrant, and each Pre-Funded Unit consists of (i) one pre-funded warrant and (ii) one Series I warrant. Each Common Stock Unit was sold to the public at a price of $2.00 per Common Stock Unit and each Pre-Funded Unit was sold to the public at a price of $1.999 per Pre-Funded Unit. See further warrant details below.

The Common Stock Units and Pre-Funded Units were offered by the Company pursuant to a registration statement on Form S-1 (File No. 333- 289670), which was declared effective by the Securities Exchange Commission on August 20, 2025.

In connection with the August Public Offering, the Company also issued to the Representative (or its designees) certain warrants (the "Representative Warrants") to purchase up to 172,538 shares of Common Stock. See further warrant details below.

***Warrants***

As of September 30, 2025 and December 31, 2024, the Company has outstanding warrants to purchase 5,026,613 and 910,299 shares of Common Stock, respectively, consisting of the following:

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| | | | | | |
|:---|:---|:---|:---|:---|:---|
|  | **September 30, 2025** | **December 31, 2024** | **Exercise Price** | **Issuance date** | **Expiration date** |
| Private Warrants to purchase Common Stock<sup>(1)</sup> | 15938 | 15938 | $1380.00 | September 12, 2023 | September 12, 2028 |
| Public Warrants to purchase 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 |
| Representative Warrants to purchase Common Stock | 172538 |  | $3.00 | August 21, 2025 | August 21, 2030 |
| Series A Warrants to purchase Common Stock<sup>(3)</sup> | 54308 | 87643 | $18.24 | April 18, 2024 | April 18, 2029 |
| Series B Warrants to purchase 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> | 1442 | 22276 | $18.24 | June 3, 2024 | June 3, 2029 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> |  | 16667 | $18.24 | July 19, 2024 | July 19, 2029 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> |  | 8334 | $18.24 | July 22, 2024 | July 22, 2029 |
| Series B-1 Warrants to purchase Common Stock<sup>(5)</sup> |  | 16251 | $18.24 | November 13, 2024 | November 13, 2029 |
| Series C-1 Warrants to purchase Common Stock<sup>(6)</sup> | 17918 | 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 7, 2029 |
| Series C-1 Warrants to purchase Common Stock<sup>(6)</sup> | 4168 | 4168 | $18.24 | August 16, 2024 | August 15, 2029 |
| Series D Warrants to purchase Common Stock<sup>(7)</sup> | 18318 | 89153 | $18.24 | June 3, 2024 | December 3, 2029 |
| Series E Warrants to purchase Common Stock<sup>(8)</sup> |  | 170836 | $13.56 | October 24, 2024 | April 24, 2026 |
| Series F Warrants to purchase Common Stock<sup>(8)</sup> |  | 170836 | $13.56 | October 24, 2024 | April 24, 2030 |
| Series G Warrants to purchase Common Stock | 504417 |  | $8.34 | March 31, 2025 | September 30, 2032 |
| Series H Warrants to purchase Common Stock | 549587 |  | $8.40 | July 10, 2025 | January 10, 2031 |
| Series I Warrants to purchase Common Stock | 3450764 |  | $2.00 | August 21, 2025 | August 21, 2030 |
|  | 5026613 | 910299 |  |  |  |

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(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. During
 the nine months ended September 30, 2025, Series A warrants to purchase 33,335 shares of common stock were exercised at a reduced
 exercise price of $8.40 per share through the July Inducement Offer and the Company received gross proceeds of approximately $0.3 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. The
 outstanding Series B warrants to purchase 57,451 shares of common stock expired in April 2025. As of September 30, 2025, no Series
 B warrants remained outstanding.

(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. During
 the nine months ended September 30, 2025, Series B-1 warrants to purchase 62,086 shares of common stock were exercised at a reduced
 exercise price of $8.40 per share through the July Inducement Offer 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. During
 the nine months ended September 30, 2025, Series C-1 warrants to purchase 41,668 shares of common stock were exercised at a reduced
 exercise price of $8.40 per share through the July Inducement Offer and the Company received gross proceeds of approximately $0.4 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 part of 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. During
 the nine months ended September 30, 2025, Series D warrants to purchase 70,835 shares of common stock were exercised at a reduced
 exercise price of $8.40 per share through the July Inducement Offer and the Company received gross proceeds of approximately $0.6 million.

(8) During
 the nine months ended September 30, 2025, Series E warrants and Series F warrants to purchase 341,672 shares of common stock each
 were exercised at a reduced exercise price of $8.40 per share through the July Inducement Offer and the Company received total gross
 proceeds of approximately $2.8 million.

During the nine months ended September 30, 2025, Series G Pre-funded warrants to purchase 227,334 shares of common stock were exercised at $0.012 per share for gross proceeds of approximately $3,000, and Series I Pre-funded warrants to purchase 1,528,000 shares of common stock were exercised at $0.001 per share for gross proceeds of approximately $1,500. As such, no Series G Pre-funded warrants or Series I Pre-funded warrants were outstanding as of September 30, 2025.

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

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| | | | |
|:---|:---|:---|:---|
|  | **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 |
| Issued | 5700889 |  |  |
| Exercised | (2077596) |  |  |
| Expired |  |  |  |
| **Outstanding at September 30, 2025** | 5026613 | $34.97 | 5.04 |

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The following table summarizes the Company's aggregate warrant activity for the nine months ended September 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 |
| Issued | 134375 |  |  |
| Exercised | (148959) |  |  |
| Cancelled | (28053) |  |  |
| **Outstanding at September 30, 2024** | 612401 | $268.68 | 3.81 |

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**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 September 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 | 217 | 4.23 |  |  |
| &nbsp;&nbsp;&nbsp;Options exercised |  |  |  |  |
| &nbsp;&nbsp;&nbsp;Options forfeited or cancelled | (12) | 248.86 |  |  |
| Outstanding at September 30, 2025 | 282 | $53.10 | 8.44 | $— |
| Exercisable at September 30, 2025 | 69 | $190.30 | 5.12 | $— |

---

*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 September 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> **September 30,** | **Three Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Research and development | $97 | $182 | $354 | $588 |
| General and administrative | 432 | 509 | 1304 | 1743 |
| &nbsp;&nbsp;&nbsp;Total stock-based compensation expense | $529 | $691 | $1658 | $2331 |

---

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 nine months ended September 30, 2025 include a noncash compensation charge of approximately $15,000 and $48,000, in connection with this repricing. The three and nine months ended September 30, 2024 include a noncash compensation charge of approximately $17,000 and $56,000, respectively, in connection with this repricing. The stock option repricing and the acceleration of vesting were accounted for as a modification.

As of September 30, 2025, the total unamortized stock-based compensation expense related to stock options was approximately $1.4 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 September 30, 2025 and 2024 was $2.67 and $9.60 per share, respectively, and during the nine months ended September 30, 2025 and 2024 was $3.11 and $17.52 per share, respectively, using the Black-Scholes option pricing model with the following weighted-average assumptions:

---

| | | | | |
|:---|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **September 30,** | **Three Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,** |
|  | **2025** | **2024** | **2025** | **2024** |
| Expected volatility | 88.50% | 86.26% | 87.84% | 85.62% |
| Risk-free interest rate | 3.83% | 3.68% | 3.93% | 4.23% |
| Expected option life (in years) | 5.59 | 5.37 | 5.78 | 5.69 |
| 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 nine months ended September 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 the 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 September 30, 2025 and 2024 was approximately $0.4 million and $0.3 million, respectively, and during the nine months ended September 30, 2025 and 2024 was approximately $1.2 million and $1.1 million, respectively.

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):

---

| | | |
|:---|:---|:---|
|  | **Nine Months**<br> **Ended September 30,** | **Nine Months**<br> **Ended September 30,** |
|  | **2025** | **2024** |
| **Cash paid for amounts included in the measurement of lease liabilities:** |  |  |
| &nbsp;&nbsp;&nbsp;Operating cash flows from operating leases | $1099 | $1068 |
| &nbsp;&nbsp;&nbsp;Operating cash flows from financing leases | $21 | $23 |
| &nbsp;&nbsp;&nbsp;Financing cash flows from financing leases | $63 | $63 |

---

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):

---

| | | |
|:---|:---|:---|
|  | **September 30,**<br> **2025** | **December 31,**<br> **2024** |
|  | **(Unaudited)** |  |
| **Operating leases** |  |  |
| &nbsp;&nbsp;&nbsp;Right-of-use assets, net | $2012 | $2934 |
| &nbsp;&nbsp;&nbsp;Right-of-use lease liabilities, current | $1354 | $1204 |
| &nbsp;&nbsp;&nbsp;Right-of-use lease liabilities, noncurrent | 640 | 1845 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total operating lease liabilities | $1994 | $3049 |
| **Financing Leases** |  |  |
| &nbsp;&nbsp;&nbsp;Machinery and equipment, gross | $779 | $588 |
| &nbsp;&nbsp;&nbsp;Accumulated depreciation | (432) | (333) |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Machinery and equipment, net | $347 | $255 |
| &nbsp;&nbsp;&nbsp;Current liabilities | $112 | $66 |
| &nbsp;&nbsp;&nbsp;Noncurrent liabilities | 197 | 145 |
| &nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;Total financing lease liabilities | $309 | $211 |
| **Weighted average remaining lease term** |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 1.4 years | 2.2 years |
| &nbsp;&nbsp;&nbsp;Financing leases | 3.0 years | 3.2 years |
| **Weighted average discount rate** |  |  |
| &nbsp;&nbsp;&nbsp;Operating leases | 11.71% | 11.75% |
| &nbsp;&nbsp;&nbsp;Financing leases | 9.26% | 12.13% |

---

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

---

| | | |
|:---|:---|:---|
|  | **Operating**<br> **Leases** | **Financing**<br> **Leases** |
| **Year Ending December 31,** | | |
| 2025 (October – December) | $369 | $34 |
| 2026 | 1512 | 132 |
| 2027 | 295 | 94 |
| 2028 | 2 | 76 |
| 2029 |  | 17 |
| 2030 and thereafter |  |  |
| Total minimum lease payments | 2178 | 353 |
| Less: amounts representing interest | (184) | (44) |
| Present value of net minimum lease payments | $1994 | $309 |

---

*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, and Controller*

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 former 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 an unspecified amount in damages under his employment contract, damages to be proven at trial, punitive damages, and attorney's fees.

On November 21, 2023, the Company initiated arbitration proceedings against Mr. Kalajian for breach of fiduciary duty, constructive fraud, conversation, and declaratory relief, seeking to recover from Mr. Kalajian bonuses Mr. Kalajian caused to be paid to himself, Hazel Sanchez, the former Controller, and his accounting team. The bonuses (the "Accounting Bonuses") were not authorized by the Company's Board of Directors or Compensation Committee.

On November 30, 2023, Hazel Sanchez, the Company's prior Controller, filed a complaint in the Superior Court of the State of California County of San Diego against the Company, Mr. Camaisa, and Ms. Pizarro, alleging defamation, constructive discharge, violation of California Family Rights Act, and wrongful discharge. Ms. Sanchez is seeking an unspecified amount in damages under her employment contract, damages to be proven at trial, punitive damages, and attorney's fees. In February 2024, the Company filed a Cross-Complaint against Ms. Sanchez for breach of fiduciary duty, constructive fraud, conversation, and declaratory relief seeking to recover the Accounting Bonuses.

On February 29, 2024, Mr. Kalajian also 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.

*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, constructive fraud, conversion, and misappropriation and improper disclosure of confidential and proprietary information in violation of her proprietary information and inventions agreement, non-disclosure 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 under California Corporations Code §25401, breach of covenant of good faith and fair dealing, unjust enrichment, restitution, breach of fiduciary duty, and constructive fraud in the 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, although a final pre-trial conference has been set for April 9, 2026. 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 September 30, 2025, the Company incurred severance obligations for certain executive officers and other employees, as discussed below. See Note 6 for further information on the accruals for such severance obligations.

 

*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 September 30, 2025, and December 31, 2024, the remaining expected commitments were approximately $0.3 million.

*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 with a non-exclusive license to data generated from Northwestern's phase 1 clinical trial treating malignant glioma 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 exclusive license for the commercial development of NSC-CRAd-S-pk7 or other oncolytic viruses for therapeutic and preventive uses in oncology, a right of reference to Northwestern's IND application which relates to the treatment of newly diagnosed High Grade Glioma ("HGG"), and right of reference to Northwestern's IND 17365.

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 low single digit 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. Under the CTA, among other rights, Northwestern also granted to the Company a worldwide, twelve-year exclusive license to the data, a right of reference to Northwestern's IND application which relates to the treatment of newly diagnosed HGG, and right of reference to Northwestern's IND 17365.

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; (c) sublicensing royalty of 20% of any sublicensing revenue resulting from the grant of rights hereunder; and (d) in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a low single digit percentage of the fair market value of any consideration received. 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 Company has the right to terminate the CTA upon 30 days' notice, and the right to terminate the License and Material Transfer Agreements upon 90 days' notice.

As of the date of issuance of these unaudited condensed consolidated financial statements, it is not probable that the Company will incur 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 the University of Chicago*

On July 22, 2021, the Company entered into an Exclusive License Agreement with the University of Chicago (the "University of Chicago Agreement") for patents jointly owned by the University of Chicago, City of Hope, and the University of Alabama at Birmingham covering cancer therapies using an oncolytic adenovirus loaded into allogeneic neural stem cells for treatment of HGG. Pursuant to the University of Chicago Agreement, University of Chicago transferred its IND to the Company for the commercial development of a licensed product, as defined in the University of Chicago Agreement. This agreement grants to the Company commercial sublicensable exclusive license to neural stem cells with the adenovirus known as CRAd-S-pk7 for oncolytic virotherapy, as well as a non-exclusive license to associated know-how.

The University of Chicago 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. The Company is further obligated to pay a sublicensing royalty of 20% of any sublicensing revenue resulting from the grant of rights, and in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a low single digit percentage of the fair market value of any consideration received.

As of the date of the issuance of these unaudited condensed consolidated financial statements, it is not probable that the Company will incur 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 that relate to certain situations such as Company's negligent actions, breaching agreements, failure to comply with laws and regulations, and 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 September 30, 2025 and December 31, 2024.

*Separation Agreement with Former Chief Operating Officer and President*

On June 23, 2023, the Company entered into a Separation and Release Agreement ("Separation Agreement") with George Ng, former 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.

*General Release of Claims and Transition Agreement with Former Chief Executive Officer*

On April 22, 2025, the Company executed a General Release of Claims and Transition Agreement ("Release Agreement") with Mr. Camaisa, former Chief Executive Officer, and is obligated to pay Mr. Camisa $0.5 million separation pay in the form of compensation continuation over 12 months pursuant to the Company's regular and customary payroll schedule, less all regular and customary payroll withholdings and shall also be liable to pay Mr. Camisa COBRA premiums for 12 months, commencing May 2025. Mr. Camaisa shall also be entitled to receive a transition/consulting pay of $10,000 per month during the transition period.

*General Release of Claims and Separation Agreement with Former Executive Officer*

On August 8, 2025, the Company executed a General Release of Claims and Separation Agreement with Dr. Minev (the "Agreement"), Executive Officer, effective August 15, 2025. Pursuant to the terms of the Agreement, the Company is obligated to pay Dr. Minev, (i) $0.1 million in relation to a negotiated bonus for the NNV1 and SNV1 IND approvals within 10 days following the Revocation Period (which is seven business days from August 8, 2025, and excluding such date), and (ii) $0.2 million separation pay in the form of compensation continuation over six months pursuant to the Company's regular and customary payroll schedule, less all regular and customary payroll withholdings and shall pay Dr. Minev's COBRA premiums for six months, commencing August 2025, upon timely election.

*General Release of Claims and Separation Agreement with Former Chief Legal Officer*

 

On September 17, 2025, the Company executed a General Release of Claims and Separation Agreement (the "Agreement") with Ms. Campbell, former Chief Legal Officer, effective September 24, 2025. Pursuant to the terms of the Agreement, on the Effective Date, the Company is obligated to pay i) a bonus in the amount of approximately $0.1 million, upon the successful and effective corporate spin-off, out-licensing, or similar transaction relating to Nova Cell prior to October 31, 2025, and (ii) $0.2 million severance pay in the form of compensation continuation over six months pursuant to the Company's regular and customary payroll schedule, less all regular and customary payroll withholdings and shall pay Ms. Campbell's COBRA premiums for six months, commencing October 2025, upon timely election.

**12. Subsequent Events**

*Sale of ownership interest in Nova Cell*

On October 27, 2025, the Company entered into a Stock Repurchase Agreement (the "SRA") and Material Purchase Agreement (the "MPA" and together with the SRA the "Agreements"), with its majority owned subsidiary, Nova Cell. In accordance with the Agreements, the Company sold and transferred all 22,500,000 of its shares of common stock in Nova Cell (the "Repurchased Shares"), representing an ownership interest of 75%, back to Nova Cell, for a purchase price of $6.0 million (the "Purchase Price"). The Purchase Price for the Repurchased Shares was or shall be satisfied (A) in part by cancellation of indebtedness under the September 17, 2024, promissory note, net of specified offsets (including a $0.1 million cash offset), resulting in an Indebtedness Cancellation Amount of $1.2 million, and (B) the balance, by Deferred Consideration of $4.8 million payable after closing, as more fully described in the SRA. After the Deferred Consideration is fully satisfied, the SRA also provides for an ongoing royalty at a fixed percentage of Covered Gross Revenue attributable to or derivative of the materials listed on Schedule A to the MPA, ending on the tenth anniversary of Nova Cell's first product sale. Furthermore, as part of the Agreements, the Company sold and transferred certain materials to Nova Cell as listed on Schedule 1 to the MPA. Following the closing of the Agreements, Nova Cell is no longer a subsidiary of the Company.

*At the Market Offering*

 

During the period from October 1, 2025 through November 10, 2025, the Company issued 261,409 common shares for $0.4 million of net proceeds.

**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 September 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). We expect to file an IND for a Phase I trial by the end of 2026 with (CLD-401), the first compound from the RedTail platform, 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 immuogenic kill in 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 and funded 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 $5.2 million and $16.0 million for the three and nine months ended September 30, 2025, respectively. As of September 30, 2025, we had an accumulated deficit of $137.6 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 nine months ended September 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 Developments**

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 Offer") with seven holders of our existing Series A warrants, Series B-1 warrants, Series C-1 warrants, Series D warrants, Series E warrants, and Series F warrants (together the "Existing Warrants"). Pursuant to the Warrant Inducement Offer, such warrant holders immediately exercised some or all of their respective outstanding Existing Warrants at a reduced exercise price, to purchase an aggregate of 549,596 shares of our common stock. The gross proceeds from the exercise of the induced warrants were $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 issued unregistered new Series H common stock warrants ("Series H Warrants") to purchase up to 549,587 shares of common stock. We filed a resale registration statement on Form S-3 (File No. 333-288784), to register the shares underlying the Series H Warrants, which registration statement was declared effective by the Securities Exchange Commission on July 25, 2025. The Warrant Inducement Offer closed on July 10, 2025. For additional discussion of this Warrant Inducement Offer, see the section below and further disclosures in the section titled *"Liquidity and Capital Resources – Financing Activities"* included herein.

On July 24, 2025, the Compensation Committee of Calidi approved the elimination of the position of President, Medical and Scientific Affairs, held by Dr. Boris Minev. As a result, Dr. Minev ceased to serve as an executive officer and a Section 16 officer of Calidi, effective July 29, 2025. On August 8, 2025, we executed a General Release of Claims and Separation Agreement with Dr. Minev effective on August 15, 2025. Pursuant to the terms of the Agreement, we are obligated to pay Dr. Minev, (i) $0.1 million in relation to a negotiated bonus for the NNV1 and SNV1 IND approvals within 10 days following the Revocation Period (which is seven business days from August 8, 2025, and excluding such date), and (ii) $0.2 million separation pay in the form of compensation continuation over six months pursuant to our regular and customary payroll schedule, less all regular and customary payroll withholdings and shall pay Dr. Minev's COBRA premiums for six months, commencing August 2025, upon timely election.

On August 20, 2025, we entered into an underwriting agreement with Ladenburg Thalmann & Co. Inc., as representative of the various underwriters, in connection with the issuance and public sale offering of various securities (the "August Public Offering"), including: (i) 1,922,764 common stock units ("Common Stock Unit"), which includes the 450,000 Common Stock Units purchased pursuant to the exercise, in full, of the Over-Allotment Option and (ii) 1,528,000 pre-funded warrant units, resulting in gross proceeds of approximately $6.9 million, before deducting underwriting discounts and commissions and other estimated offering expenses. The August Public Offering closed on August 21, 2025. For additional discussion of this Warrant Inducement Offer, see the section below and further disclosures in the section titled "*Liquidity and Capital Resources – Financing Activities*" included herein.

On September 16, 2025, the Board approved the elimination of the position of Chief Legal Officer and, as a result, the termination of the employment agreement with Ms. Wendy Pizarro Campbell (the "Employment Agreement"), effective as of October 17, 2025 ("Effective Date"). Per the terms of the Employment Agreement, Ms. Campbell was given a 30-day written notice of termination. On the Effective Date, and as a result of the termination of the Employment Agreement, Ms. Campbell ceased to serve as an executive officer and Section 16 officer of Calidi. On September 17, 2025, we executed a General Release of Claims and Separation Agreement ("Agreement") with Ms. Campbell effective on September 24, 2025. Pursuant to the terms of the Agreement, on the Effective Date, we are obligated to pay i) a bonus in the amount of $0.1 million, upon the successful and effective corporate spin-off, out-licensing, or similar transaction relating to Nova Cell prior to October 31, 2025, and (ii) $0.2 million severance pay in the form of compensation continuation over six months pursuant to our regular and customary payroll schedule, less all regular and customary payroll withholdings and shall pay Ms. Campbell's COBRA premiums for six months, commencing October 2025, upon timely election.

On October 27, 2025, we entered into a Stock Repurchase Agreement (the "SRA") and Material Purchase Agreement (the "MPA" and together with the SRA the "Agreements"), with our majority owned subsidiary, Nova Cell. In accordance with the Agreements, we sold and transferred all 22,500,000 of our shares of common stock in Nova Cell (the "Repurchased Shares"), representing an ownership interest of 75%, back to Nova Cell, for a purchase price of $6.0 million (the "Purchase Price"). The Purchase Price for the Repurchased Shares was or shall be satisfied (A) in part by cancellation of indebtedness under the September 17, 2024, promissory note, net of specified offsets (including a $0.1 million cash offset), resulting in an Indebtedness Cancellation Amount of $1.2 million, and (B) the balance, by Deferred Consideration of $4.8 million payable after closing, as more fully described in the SRA. After the Deferred Consideration is fully satisfied, the SRA also provides for an ongoing royalty at a fixed percentage of Covered Gross Revenue attributable to or derivative of the materials listed on Schedule A to the MPA ending on the tenth anniversary of Nova Cell's first product sale. Furthermore, as part of the Agreements, we sold and transferred certain materials to Nova Cell as listed on Schedule 1 to the MPA. Following the closing of the Agreements, Nova Cell is no longer our subsidiary.

**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 September 30, 2025 and 2024**

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

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| | | | |
|:---|:---|:---|:---|
|  | **Three Months Ended**<br> **September 30,** | **Three Months Ended**<br> **September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $(2361) | $(2153) | 10% |
| &nbsp;&nbsp;&nbsp;General and administrative | (2687) | (3073) | (13)% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (5048) | (5226) | (3)% |
| Loss from operations | (5048) | (5226) | (3)% |
| Other income (expense), net |  |  |  |
| &nbsp;&nbsp;&nbsp;Total other income (expenses), net | (123) | 156) | (179)% |
| Loss before income taxes | (5171) | (5070) | 2% |
| &nbsp;&nbsp;&nbsp;Income tax provision | (10) | 1) | (1100)% |
| Net loss | $(5181) | $(5069) | 2% |

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***Research and Development Expenses***

Research and development expenses for the three months ended September 30, 2025 and 2024 were $2.4 million and $2.2 million, respectively. The $0.2 million increase was primarily attributable to an increase in consulting expenses of $0.1 million and rent and maintenance expenses of $0.1 million.

***General and Administrative Expenses***

General and administrative expenses for the three months ended September 30, 2025 and 2024 were $2.7 million and $3.1 million, respectively. The $0.4 million decrease was primarily due to a decrease in insurance expenses of $0.3 million and consulting expenses of $0.1 million.

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

Other income (expense), net for the three months ended September 30, 2025 and 2024 were $0.1 million other expense and $0.2 million other income, respectively. The $0.3 million decrease in net other income was primarily due to a net change in fair value of other liabilities and derivatives of $0.5 million, partially offset by a decrease in interest expense of $0.2 million.

**Results of Operations**

**Comparison of Nine Months Ended September 30, 2025 and 2024**

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

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** |
| Operating expenses: |  |  |  |
| &nbsp;&nbsp;&nbsp;Research and development | $(7379) | $(7063) | 4% |
| &nbsp;&nbsp;&nbsp;General and administrative | (8395) | (10687) | (21)% |
| &nbsp;&nbsp;&nbsp;Total operating expenses | (15774) | (17750) | (11)% |
| Loss from operations | (15774) | (17750) | (11)% |
| Other income (expense), net |  |  |  |
| &nbsp;&nbsp;&nbsp;Total other income (expenses), net | (213) | (300) | (29)% |
| Loss before income taxes | (15987) | (18050) | (11)% |
| &nbsp;&nbsp;&nbsp;Income tax provision | (17) | (11) | 55% |
| Net loss | $(16004) | $(18061) | (11)% |

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***Research and Development Expenses***

Research and development expenses for the nine months ended September 30, 2025 and 2024 were $7.4 million and $7.1 million, respectively. The $0.3 million increase was primarily attributable to an increase in consulting expenses of $0.5 million, rent expenses of $0.2 million, and office 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 nine months ended September 30, 2025 and 2024 were $8.4 million and $10.7 million, respectively. The $2.3 million decrease was primarily due to a decrease in legal fees of $0.6 million, insurance expenses of $0.6 million, salaries and benefits of $0.3 million, public company expenses of $0.3 million, investor relations expenses of $0.3 million, and consulting expenses of $0.2 million.

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

Other income (expense), net for the nine months ended September 30, 2025 and 2024 were $0.2 million and $0.3 million other expense, respectively. The $0.1 million decrease primarily relates to a decrease in interest expense of $0.6 million, partially offset by a net change in fair value of other liabilities and derivatives of $0.4 million and 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 September 30, 2025, we had a cash balance of $10.4 million and restricted cash of $0.2 million. Our debt and liability obligations as of September 30, 2025 include $3.3 million in accounts payable and accrued expenses and other current liabilities, including related party amounts, $2.0 million in operating lease liabilities, $0.6 million in promissory notes, $0.4 million in related party term notes accrued interest payable, $0.3 million in finance lease liabilities, and $0.2 million in warrant liabilities, including related party amounts.

***Financing and Financing-Related Transactions During the Nine Months Ended September 30, 2025***

 ****

During the nine months ended September 30, 2025, we undertook certain financing and financing-related transactions. Approximately $12.7 million in proceeds were received from the public offerings of our securities, $3.5 million in proceeds were received from the March Registered Direct Offering and Concurrent Private Placement, and $4.1 million in proceeds were received from the July Warrant Inducement Offer.

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

*At the Market Offering*

During the period from October 1, 2025 through November 10, 2025, Calidi issued 261,409 common shares for $0.4 million of net proceeds.

*Sale of shares in Nova Cell*

On October 27, 2025, Calidi entered into a Stock Repurchase Agreement (the "SRA") and Material Purchase Agreement (the "MPA" and together with the SRA the "Agreements"), with our majority owned subsidiary, Nova Cell. In accordance with the Agreements, we sold and transferred all 22,500,000 of our shares of common stock in Nova Cell (the "Repurchased Shares"), representing an ownership interest of 75%, back to Nova Cell, for a purchase price of $6.0 million (the "Purchase Price"). The Purchase Price for the Repurchased Shares was or shall be satisfied (A) in part by cancellation of indebtedness under the September 17, 2024, promissory note, net of specified offsets (including a $0.1 million cash offset), resulting in an Indebtedness Cancellation Amount of $1.2 million, and (B) the balance, by Deferred Consideration of $4.8 million payable after closing, as more fully described in the SRA. After the Deferred Consideration is fully satisfied, the SRA also provides for an ongoing royalty at a fixed percentage of Covered Gross Revenue attributable to or derivative of the materials listed on Schedule A to the MPA, ending on the tenth anniversary of Nova Cell's first product sale. Furthermore, as part of the Agreements, the Company sold and transferred certain materials to Nova Cell as listed on Schedule 1 to the MPA. Following the closing of the Agreements, Nova Cell is no longer a subsidiary of the Company.

*Debt Obligations*

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

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| | | | |
|:---|:---|:---|:---|
|  | **September 30, 2025** | **September 30, 2025** | **September 30, 2025** |
|  | **Unpaid**<br> **Balance** | **Accrued**<br> **Interest** | **Net**<br> **Carrying**<br> **Value** |
| Term notes payable | $— | $405 | $405 |
| Promissory note | 600 | 67 | 667 |
| Total debt | $600 | $472 | $1072 |
| Less: current portion of long-term debt |  |  | (472) |
| Long-term debt, net of current portion |  |  | $600 |

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*Warrants*

 

As of September 30, 2025, Calidi had outstanding warrants to purchase 5,026,613 shares of Common Stock, consisting of the following:

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| | |
|:---|:---|
|  | **September 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 | 256418 |
| Series A Warrants to purchase Common Stock | 54308 |
| Series B-1 Warrants to purchase Common Stock | 1442 |
| Series C-1 Warrants to purchase Common Stock | 26253 |
| Series D Warrants to purchase Common Stock | 18318 |
| Series G Warrants to purchase Common Stock | 504417 |
| Series H Warrants to purchase Common Stock | 549587 |
| Series I Warrants to purchase Common Stock | 3450764 |
|  | 5026613 |

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*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 September 30, 2025, we do not believe it probable that we will incur 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 $2.5 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 and CLD-201 programs totaling $0.3 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 nine months ended September 30, 2025 and 2024**

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

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| | | | |
|:---|:---|:---|:---|
|  | **Nine Months Ended**<br> **September 30,** | **Nine Months Ended**<br> **September 30,**<br>**Change** | **Change** |
|  | **2025** | **2024** | **%** |
| Net cash (used in) provided by: |  |  |  |
| &nbsp;&nbsp;&nbsp;Operating activities | $(16249) | $(14271) | 14% |
| &nbsp;&nbsp;&nbsp;Investing activities | (91) | (11) | 727% |
| &nbsp;&nbsp;&nbsp;Financing activities | 17119 | 14259 | 20% |
| Effect of exchange rate on cash | 6 | (29) | (121)% |
| Net increase (decrease) in cash and restricted cash | $785 | $(52) | (1610)% |

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**Operating activities**

Net cash used in operating activities was $16.2 million for the nine months ended September 30, 2025, primarily resulting from our net loss of $16.0 million. Our net loss was reduced by certain non-cash items that included $1.7 million in stock-based compensation, $0.9 million in amortization of right of use assets, $0.3 million in depreciation and amortization expense, and $0.1 million in net change in fair value of other liabilities and derivatives, partially offset by an increase of $3.2 million from the change in our operating assets and liabilities.

Net cash used in operating activities was $14.3 million for the nine months ended September 30, 2024, primarily resulting from our net loss of $18.1 million. Our net loss was reduced by certain non-cash items that included $2.3 million in stock-based compensation, $0.9 million in amortization of right of use assets and amortization of debt discount and financing costs, $0.6 million from the change in our operating assets and liabilities, and $0.3 million in depreciation expense, partially offset by $0.3 million of change in fair value of other liabilities and derivatives.

**Investing activities**

Net cash used in investing activities was $0.1 million and $11,000 for the nine months ended September 30, 2025 and 2024, which were both primarily related to the purchase of certain machinery and equipment.

**Financing activities**

Net cash provided by financing activities was $17.1 million for the nine months ended September 30, 2025, which primarily related to proceeds from public offerings of our securities of $12.7 million, proceeds from the March Registered Direct Offering and Concurrent Private Placement of $3.5 million, and proceeds from July Inducement Offer of $4.1 million, partially offset by repayment of term notes payable of $2.2 million, including related party amounts, payment of financing costs of $0.7 million, repayment of bridge loan payable of $0.2 million and repayment of finance lease obligations of $0.1 million.

Net cash provided by financing activities was $14.3 million for the nine months ended September 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 exercise of common stock warrants of $2.8 million, proceeds from the May Inducement Offer of $2.1 million, proceeds from issuance of noncontrolling interest of $2.0 million, proceeds from the issuance of common shares and warrants per subscription agreement of $1.0 million, proceeds from issuance of promissory note of $0.6 million, and related party proceeds from issuance of a bridge loan payable of $0.2 million, partially offset by repayment of convertible notes payable of $1.5 million, payment of financing costs of $1.0 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 nine months ended September 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 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-401. 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 nine months ended September 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 and CLD-201 programs totaling $0.3 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 nine months ended September 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 September 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 September 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 September 30, 2025.

**Item 1A. Risk Factors**

During the three and nine months ended September 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 nine months ended September 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**

---

| | |
|:---|:---|
| **Exhibit No.** | **Description** |
| 1.1\* | [Underwriting Agreement, dated August 20, 2025](ex1-1.htm) |
| 4.1 | [Form of Pre-funded Warrant (incorporated herein by reference to Exhibit 4.21 to Form S-1 filed with the SEC on August 15, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225024489/ex4-21.htm) |
| 4.2 | [Form of Series I Common Warrant (incorporated herein by reference to Exhibit 4.20 to Form S-1 filed with the SEC on August 15, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225024489/ex4-20.htm) |
| 4.3 | [Form of Representative Warrant (incorporated herein by reference to Exhibit 4.22 to Form S-1 filed with the SEC on August 15, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225024489/ex4-22.htm) |
| 10.1 | [General Release of Claims and Separation Agreement by and between the Company and Dr. Boris Minev dated August 8, 2025 (incorporated by reference to Exhibit 10.1 to Form 8-K filed with the SEC on August 14, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225024190/ex10-1.htm) |
| 10.2 | [Form of Warrant Agency Agreement (incorporated herein by reference to Exhibit 4.23 to Form S-1 filed with the SEC on August 15, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000164117225024489/ex4-23.htm) |
| 10.3 | [General Release of Claims and Separation Agreement by and between the Company and Wendy Pizarro Campbell dated September 17, 2025 (incorporated herein by reference to Exhibit 101 to Form 8-K filed with the SEC on September 19, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000149315225014293/ex10-1.htm) |
| 10.4 | [Consultation Agreement by and between the Company and Wendy Pizarro Campbell effective October 18, 2025 (incorporated herein by reference to Exhibit 10.2 to Form 8-K filed with the SEC on September 19, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000149315225014293/ex10-2.htm) |
| 10.5\*\*\* | [Stock Repurchase Agreement dated October 27, 2025 (incorporated herein by reference to Exhibit 10.1 to Form 8-K filed with the SEC on October 31, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000149315225020390/ex10-1.htm) |
| 10.6 | [Material Purchase Agreement dated October 27, 2025 (incorporated herein by reference to Exhibit 10.2 to Form 8-K filed with the SEC on October 31, 2025)](https://www.sec.gov/Archives/edgar/data/1855485/000149315225020390/ex10-2.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

\*\* Furnished herewith.

\*\*\* Pursuant to Item 601(b)(10) of Regulation S-K, certain information has been redacted or omitted, and marked by brackets and asterisks. The Company agrees to furnish, on a supplemental basis, a complete unredacted copy of such exhibit to the Securities and Exchange Commission upon request.

**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: November 13, 2025 | By: | */s/ Eric Poma* |
|  | Name: | Eric Poma |
|  | Title: | Chief Executive Officer<br> (Principal Executive Officer) |
| Date: November 13, 2025 | By: | */s/ Andrew Jackson* |
|  | Name: | Andrew Jackson |
|  | Title: | Chief Financial Officer<br> (Principal Financial and Accounting Officer) |

---

## Exhibit 1.1

**Exhibit 1.1**

**1,472,764 SHARES of Common Stock, pre-funded Warrants exercisable into** **1,528,000 shares of common stock**

**AND** 

**Warrants exercisable into** **3,000,764 shares of common stock** 

**of**

**CALIDI BIOTHERAPEUTICS, INC.**

**UNDERWRITING AGREEMENT**

<br> August 20, 2025

Ladenburg Thalmann & Co. Inc.

As the Representative of the Several underwriters, if any, named in <u>Schedule I</u> hereto

640 Fifth Avenue, 4th Floor

New York, New York 10019

Ladies and Gentlemen:

The undersigned, Calidi Biotherapeutics, Inc., a Delaware corporation (collectively with its subsidiaries, including, without limitation, all entities disclosed or described in the Registration Statement as being a subsidiary of Calidi Biotherapeutics, Inc., the "<u>Company</u>"), hereby confirms its agreement (this "<u>Agreement</u>") with the several underwriters, if any (such underwriters, including the Representative (as defined below), the "<u>Underwriters</u>" and each an "<u>Underwriter</u>") named in <u>Schedule I</u> hereto for which Ladenburg Thalmann & Co. Inc. is acting as representative to the several Underwriters (the "<u>Representative</u>" and if there are no Underwriters other than the Representative, references to multiple Underwriters shall be disregarded and the term Representative as used herein shall have the same meaning as Underwriter) on the terms and conditions set forth herein.

It is understood that the several Underwriters are to make a public offering of the Public Securities (as defined below) as soon as the Representative deems it advisable to do so. The Public Securities are to be initially offered to the public at the public offering price set forth in the Prospectus. The Representative may from time to time thereafter change the public offering price and other selling terms.

It is further understood that you will act as the Representative for the other Underwriters, if any, in the offering and sale of the Closing Securities and, if any, the Option Securities in accordance with this Agreement.

**ARTICLE I.**

**DEFINITIONS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;1.1 <u>Definitions</u>. In addition to the terms defined elsewhere in this Agreement, for all purposes of this Agreement, the following terms have the meanings set forth in this Section 1.1:

"<u>Action</u>" shall have the meaning ascribed to such term in Section 3.1(k).

"<u>Affiliate</u>" means with respect to any Person, any other Person that, directly or indirectly through one or more intermediaries, controls or is controlled by or is under common control with such Person as such terms are used in and construed under Rule 405 under the Securities Act.

"<u>Board of Directors</u>" means the board of directors of the Company.

"<u>Business Day</u>" means any day other than Saturday, Sunday or other day on which commercial banks in The City of New York are authorized or required by law to remain closed; <u>provided</u>, <u>however</u>, for clarification, commercial banks shall not be deemed to be authorized or required by law to remain closed due to "stay at home", "shelter-in-place", "non-essential employee" or any other similar orders or restrictions or the closure of any physical branch locations at the direction of any governmental authority so long as the electronic funds transfer systems (including for wire transfers) of commercial banks in The City of New York generally are open for use by customers on such day.

"<u>Closing</u>" means the closing of the purchase and sale of the Closing Securities pursuant to Section 2.1.

"<u>Closing Date</u>" means the hour and the date on the Trading Day on which all conditions precedent to (i) the Underwriters' obligations to pay the Closing Purchase Price and (ii) the Company's obligations to deliver the Closing Securities, in each case, have been satisfied or waived, but in no event later than 10:00 a.m. (New York City time) on the first (1st) Trading Day following the date hereof (or the second (2<sup>nd</sup>) Trading Day following the date hereof if this Agreement is signed on a day that is not a Trading Day or after 4:00 p.m. (New York City time) and before midnight (New York City time) on a Trading Day) or at such earlier time as shall be agreed upon by the Representative and the Company.

"<u>Closing Purchase Price</u>" shall have the meaning ascribed to such term in Section 2.1(b), which aggregate purchase price shall be net of the underwriting discounts and commissions.

"<u>Closing Securities</u>" shall have the meaning ascribed to such term in Section 2.1(a)(iii).

"<u>Closing Shares</u>" shall have the meaning ascribed to such term in Section 2.1(a)(i).

"<u>Closing Warrants</u>" shall have the meaning ascribed to such term in Section 2.1(a)(iii).

"<u>Combined Purchase Price</u>" shall have the meaning ascribed to such term in Section 2.1(b).

"<u>Commission</u>" means the United States Securities and Exchange Commission.

"<u>Common Stock</u>" means the common stock of the Company, par value $0.0001 per share, and any other class of securities into which such securities may hereafter be reclassified or changed.

"<u>Common Stock Equivalents</u>" means any securities of the Company or the Subsidiaries which would entitle the holder thereof to acquire at any time Common Stock, including, without limitation, any debt, preferred stock, right, option, warrant or other instrument that is at any time convertible into or exercisable or exchangeable for, or otherwise entitles the holder thereof to receive, Common Stock.

"<u>Common Warrants</u>" means the Common Stock purchase warrants delivered to the Underwriters in accordance with Section 2.1(a)(iii) and Section 2.2, which Common Warrants shall be exercisable at any time on or after the date of issuance and have a term of exercise equal to five (5) years from the initial exercise date, in the form of <u>Exhibit C</u> attached hereto.

"<u>Common Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Common Warrants.

"<u>Company Auditor</u>" means Marcum LLP, with offices located at 750 Third Avenue, New York, New York 10017.

"<u>Company Corporate Counsel</u>" means Sichenzia Ross Ference Carmel LLP, with offices located at 1185 Avenue of the America, 31<sup>st</sup> Floor, New York, New York 10036.

"<u>Company IP Counsel</u>" means Womble Bond Dickinson (US) LLP, with offices located at 400 Spectrum Center Drive, Suite 1700, Irvine, CA 92618.

"<u>Effective Date</u>" shall have the meaning ascribed to such term in Section 3.1(f).

"<u>Exchange Act</u>" means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.

"<u>Execution Date</u>" shall mean the date on which the parties execute and enter into this Agreement.

"<u>Exempt Issuance</u>" means the issuance of (a) shares of Common Stock or options, restricted stock units or other equity-based awards to employees, officers, consultants or directors of the Company pursuant to any equity compensation plan duly adopted for such purpose by a majority of the non-employee members of the Board of Directors or a majority of the members of a committee of non-employee directors established for such purpose, (b) warrants issued to the Representative pursuant to this Agreement and any shares of Common Stock upon exercise of such warrants, securities upon the exercise or exchange of any Securities issued hereunder and/or other securities exercisable or exchangeable for or convertible into shares of Common Stock issued and outstanding on the date of this Agreement, provided that such securities have not been amended since the date of this Agreement to increase the number of such securities or to decrease the exercise price, exchange price or conversion price of such securities (except for such decreases in exercise, exchange or conversion price in accordance with the terms of such securities) or to extend the term of such securities and (c) securities issued pursuant to acquisitions or strategic transactions approved by a majority of the disinterested directors of the Company, provided that such securities are issued as "restricted securities" (as defined in Rule 144) and carry no registration rights that require or permit the filing of any registration statement in connection therewith during the prohibition period in Section 4.19(a) herein, and provided that any such issuance shall only be to a Person (or to the equity holders of a Person) which is, itself or through its subsidiaries, an operating company or an owner of an asset in a business synergistic with the business of the Company and shall provide to the Company additional benefits in addition to the investment of funds, but shall not include a transaction in which the Company is issuing securities primarily for the purpose of raising capital or to an entity whose primary business is investing in securities.

"<u>FCPA</u>" means the Foreign Corrupt Practices Act of 1977, as amended.

"<u>FINRA</u>" means the Financial Industry Regulatory Authority.

"<u>GAAP</u>" shall have the meaning ascribed to such term in Section 3.1(i).

"<u>Indebtedness</u>" means (a) any liabilities for borrowed money or amounts owed in excess of $50,000 (other than trade accounts payable incurred in the ordinary course of business), (b) all guaranties, endorsements and other contingent obligations in respect of indebtedness of others, whether or not the same are or should be reflected in the Company's consolidated balance sheet (or the notes thereto), except guaranties by endorsement of negotiable instruments for deposit or collection or similar transactions in the ordinary course of business; and (c) the present value of any lease payments in excess of $50,000 due under leases required to be capitalized in accordance with GAAP.

"<u>Liens</u>" means a lien, charge, pledge, security interest, encumbrance, right of first refusal, preemptive right or other restriction.

"<u>Lock-Up Agreements</u>" means the lock-up agreements, in the form of <u>Exhibit A</u> attached hereto, delivered on the date hereof by each of the Company's officers and directors.

"<u>Material Adverse Effect</u>" means (i) a material adverse effect on the legality, validity or enforceability of any Transaction Document, (ii) a material adverse effect on the results of operations, assets, business, prospects or condition (financial or otherwise) of the Company and the Subsidiaries, taken as a whole or (iii) a material adverse effect on the Company's ability to perform in any material respect on a timely basis its obligations under any Transaction Document.

"<u>Offering</u>" shall have the meaning ascribed to such term in Section 2.1(c).

"<u>Option Closing Date</u>" shall have the meaning ascribed to such term in Section 2.2(c).

"<u>Option Closing Purchase Price</u>" shall have the meaning ascribed to such term in Section 2.2(b), which aggregate purchase price shall be net of the underwriting discounts and commissions.

"<u>Option Securities</u>" shall have the meaning ascribed to such term in Section 2.2(a).

"<u>Option Shares</u>" shall have the meaning ascribed to such term in Section 2.2(a)(i).

"<u>Option Warrants</u>" shall have the meaning ascribed to such term in Section 2.2(a).

"<u>Over-Allotment Option</u>" shall have the meaning ascribed to such term in Section 2.2.

"<u>Person</u>" means an individual or corporation, partnership, trust, incorporated or unincorporated association, joint venture, limited liability company, joint stock company, government (or an agency or subdivision thereof) or other entity of any kind.

"<u>Pre-Funded Warrants</u>" means, collectively, the pre-funded Common Stock purchase warrants delivered to the Underwriters in accordance with Section 2.1(a)(ii), which Pre-Funded Warrants shall be exercisable immediately and shall be exercisable until exercised in full, in the form of <u>Exhibit B</u> attached hereto.

"<u>Pre-Funded Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Pre-Funded Warrants.

"<u>Preliminary Prospectus</u>" means any preliminary prospectus relating to the Securities included in the Registration Statement or filed with the Commission pursuant to Rule 424(b).

"<u>Proceeding</u>" means an action, claim, suit, investigation or proceeding (including, without limitation, an informal investigation or partial proceeding, such as a deposition), whether commenced or, to the Company's knowledge, threatened.

"<u>Prospectus</u>" means the final prospectus filed for the Registration Statement.

"<u>Prospectus Supplement</u>" means, if any, any supplement to the Prospectus complying with Rule 424(b) of the Securities Act that is filed with the Commission.

"<u>Public Securities</u>" means, collectively, the Closing Securities and, if any, the Option Securities.

"<u>Registration Statement</u>" means, collectively, the various parts of the registration statement prepared by the Company on Form S-1 (File No. 333-289670) with respect to the Securities, each as amended as of the date hereof, including the Prospectus and Prospectus Supplement, if any, the Preliminary Prospectus, all exhibits filed with or incorporated by reference into such registration statement, and includes any Rule 462(b) Registration Statement.

"<u>Required Approvals</u>" shall have the meaning ascribed to such term in Section 3.1(e).

"<u>Rule 424</u>" means Rule 424 promulgated by the Commission pursuant to the Securities Act, as such Rule may be amended or interpreted from time to time, or any similar rule or regulation hereafter adopted by the Commission having substantially the same purpose and effect as such Rule.

"<u>Rule 462(b) Registration Statement</u>" means any registration statement prepared by the Company registering additional Public Securities, which was filed with the Commission on or prior to the date hereof and became automatically effective pursuant to Rule 462(b) promulgated by the Commission pursuant to the Securities Act.

"<u>SEC Reports</u>" shall have the meaning ascribed to such term in Section 3.1(i).

"<u>Securities</u>" means the Closing Securities, the Option Securities and the Warrant Shares.

"<u>Securities Act</u>" means the Securities Act of 1933, as amended, and the rules and regulations promulgated thereunder.

"<u>Share Purchase Price</u>" shall have the meaning ascribed to such term in Section 2.1(b).

"<u>Shares</u>" means, collectively, the shares of Common Stock delivered to the Underwriters in accordance with Section 2.1(a)(i) and Section 2.2(a).

"<u>SMRH</u>" means Sheppard, Mullin, Richter & Hampton LLP, with offices located at 30 Rockefeller Plaza, New York, New York 10112.

"<u>Subsidiary</u>" means any subsidiary of the Company and shall, where applicable, also include any direct or indirect subsidiary of the Company formed or acquired after the date hereof.

"<u>Trading Day</u>" means a day on which the principal Trading Market is open for trading.

"<u>Trading Market</u>" means any of the following markets or exchanges on which the Common Stock is listed or quoted for trading on the date in question: the NYSE American, the Nasdaq Capital Market, the Nasdaq Global Market, the Nasdaq Global Select Market, or the New York Stock Exchange (or any successors to any of the foregoing).

"<u>Transaction Documents</u>" means this Agreement, the Warrants, the Warrant Agency Agreement, the Lock-Up Agreements, and any other documents or agreements executed in connection with the transactions contemplated hereunder.

"<u>Transfer Agent</u>" means Equiniti Trust Company, LLC, the current transfer agent of the Corporation with a mailing address of 48 Wall Street, 23rd floor, New York, NY 10043 and any successor transfer agent of the Company.

"<u>Warrant Agency Agreement</u>" means the warrant agency agreement dated on or about the Closing Date, between the Company and the Transfer Agent pursuant to which the Transfer Agent will act as warrant agent for the Warrants, in the form of <u>Exhibit D</u> attached hereto.

"<u>Warrant Purchase Price</u>" shall have the meaning ascribed to such term in Section 2.1(b).

"<u>Warrants</u>" means, collectively, the Common Warrants and the Pre-Funded Warrants.

"<u>Warrant Shares</u>" means the shares of Common Stock issuable upon exercise of the Warrants.

**ARTICLE II.**

**PURCHASE AND SALE**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.1 <u>Closing</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) Upon the terms and subject to the conditions set forth herein, the Company agrees to sell in the aggregate 1,472,764 shares of Common Stock, Pre-Funded Warrants exercisable into 1,528,000 shares of Common Stock and Common Warrants exercisable into 3,000,764 shares of Common Stock, and each Underwriter agrees to purchase, severally and not jointly, at the Closing, the following securities of the Company:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the number of shares of Common Stock (the "<u>Closing Shares</u>") set forth opposite the name of such Underwriter on <u>Schedule I</u> hereof under "Closing Shares";

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) Pre-Funded Warrants to purchase up to the number of Pre-Funded Warrant Shares set forth opposite the name of such Underwriter on <u>Schedule I</u> hereof (the "<u>Pre-Funded Warrants</u>"), which Pre-Funded Warrants shall have an exercise price of $0.0001, subject to adjustment as provided therein; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) Common Warrants to purchase up to the number of Warrant Shares equal to 100% of the sum of the number of Closing Shares and the number of shares of Common Stock underlying the Pre-Funded Warrants set forth opposite the name of such Underwriter on <u>Schedule I</u> hereof (the "<u>Closing A Warrants,</u>" together with the Pre-Funded Warrants, the "<u>Closing Warrants</u>," and collectively with the Closing Shares and Pre-Funded Warrants, the "<u>Closing Securities</u>")), which Common Warrants shall have an exercise price of $2.00, subject to adjustment as provided therein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) The aggregate purchase price for the Closing Securities purchased by such Underwriter shall equal the amount set forth opposite the name of such Underwriter on Schedule I hereto (the "<u>Closing Purchase Price</u>"). The combined purchase price for one Share and one Common Warrant shall be $2.00 (the "<u>Combined Purchase Price</u>") which shall be allocated as $1.99 per Share (the "<u>Share Purchase Price</u>") and $0.01 per Common Warrants (the "<u>Warrant Purchase Price</u>"). The combined purchase price for one Pre-Funded Warrant $1.989 per Pre-Funded Warrant and $0.01 per Common Warrant.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) On the Closing Date, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, immediately available funds equal to such Underwriter's Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter its respective Closing Securities and the Company shall deliver the other items required pursuant to Section 2.3 deliverable at the Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Closing shall occur at the offices of SMRH or such other location as the Company and Representative shall mutually agree. The Public Securities are to be offered initially to the public at the offering price set forth on the cover page of the Prospectus (the "<u>Offering</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) The Company acknowledges and agrees that, with respect to any Notice(s) of Exercise (as defined in the Pre-Funded Warrants) delivered by a Holder (as defined in the Pre-Funded Warrants) on or prior to 12:00 p.m. (New York City time) on the Closing Date, which Notice(s) of Exercise may be delivered at any time after the time of execution of this Agreement, the Company shall deliver the Warrant Shares subject to such notice(s) to the Holder by 4:00 p.m. (New York City time) on the Closing Date and the Closing Date shall be the Warrant Share Delivery Date (as defined in the Pre-Funded Warrants). The Company acknowledges and agrees that the Holders are third-party beneficiaries of this covenant of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.2 <u>Over-Allotment Option</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) For the purposes of covering any over-allotments in connection with the distribution and sale of the Closing Securities, the Representative is hereby granted an option (the "<u>Over-Allotment Option</u>") to purchase, in the aggregate, up to 450,000 shares of Common Stock (the "<u>Option Shares</u>"), and Common Warrants to purchase up to 450,000 shares of Common Stock (the "<u>Option Warrants</u>" and, together with the Option Shares, the "<u>Option Securities</u>") which may be purchased in any combination of Option Shares and/or Option Warrants at the Share Purchase Price and/or Warrant Purchase Price, respectively.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) In connection with an exercise of the Over-Allotment Option, (a) the purchase price to be paid for the Option Shares is equal to the product of the Share Purchase Price multiplied by the number of Option Shares to be purchased, and (b) the purchase price to be paid for the Option Warrants is equal to the product of the Warrant Purchase Price multiplied by the number of Option Warrants to be purchased (the aggregate purchase price to be paid on an Option Closing Date, the "<u>Option Closing Purchase Price</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) The Over-Allotment Option granted pursuant to this Section 2.2 may be exercised by the Representative as to all (at any time) or any part (from time to time) of the Option Securities within 45 days after the Execution Date. An Underwriter will not be under any obligation to purchase any Option Securities prior to the exercise of the Over-Allotment Option by the Representative. The Over-Allotment Option granted hereby may be exercised by the giving of oral notice to the Company from the Representative, which must be confirmed in writing by overnight mail or facsimile or other electronic transmission setting forth the number of Option Shares and/or Option Warrants to be purchased and the date and time for delivery of and payment for the Option Securities (each, an "<u>Option Closing Date</u>"), which will not be later than one (1) full Business Day after the date of the notice or such other time as shall be agreed upon by the Company and the Representative, at the offices of SMRH or at such other place (including remotely by facsimile or other electronic transmission) as shall be agreed upon by the Company and the Representative. Each Option Closing Date will be as set forth in the notice. Upon exercise of the Over-Allotment Option, the Company will become obligated to convey to the Underwriters, and, subject to the terms and conditions set forth herein, the Underwriters will become obligated to purchase, the number of Option Shares and/or Option Warrants specified in such notice. The Representative may cancel the Over-Allotment Option at any time prior to the expiration of the Over-Allotment Option by written notice to the Company. On each Option Closing Date, if any, each Underwriter shall deliver or cause to be delivered to the Company, via wire transfer, immediately available funds equal to such Underwriter's Option Closing Purchase Price and the Company shall deliver to, or as directed by, such Underwriter its respective Option Shares and the Company shall deliver the other items required pursuant to Section 2.3 deliverable at the Option Closing. Upon satisfaction of the covenants and conditions set forth in Sections 2.3 and 2.4, the Option Closing shall occur at the offices of SMRH or such other location as the Company and Representative shall mutually agree.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.3 <u>Deliveries</u>. The Company shall deliver or cause to be delivered to each Underwriter (if applicable) the following:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) At the Closing Date, the Closing Shares and, as to each Option Closing Date, if any, the applicable Option Shares, which shares shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) At the Closing Date, the Pre-Funded Warrants shall be delivered via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) At the Closing Date, the Closing Warrants and, as to each Option Closing Date, if any, the applicable Option Warrants via The Depository Trust Company Deposit or Withdrawal at Custodian system for the accounts of the several Underwriters;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) At the Closing Date, the Warrant Agency Agreement duly executed by the parties thereto;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) At the Closing Date, a legal opinion of Company Corporate Counsel addressed to the Underwriters, including, without limitation, a negative assurance letter, in form and substance reasonably satisfactory to the Representative and as to each Option Closing Date, if any, a bring-down opinion from Company Corporate Counsel in form and substance reasonably satisfactory to the Representative, including, without limitation, a negative assurance letter, in form and substance reasonably satisfactory to the Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) At the Closing Date, a legal opinion of Company IP Counsel addressed to the Underwriters, including, without limitation, a negative assurance letter, in form and substance reasonably satisfactory to the Representative and as to each Option Closing Date, if any, a bring-down opinion from Company IP Counsel in form and substance reasonably satisfactory to the Representative, including, without limitation, a negative assurance letter, in form and substance reasonably satisfactory to the Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) At the Closing Date, and each Option Closing Date, if any, to the Representative only, a warrant to purchase up to a number of shares of Common Stock equal to 5.0% of the Closing Shares, Pre-Funded Warrants and Option Shares, if any, issued on such Closing Date and Option Closing Date, as applicable, for the account of the Representative (or its designees), which warrant shall have an exercise price of $3.00, subject to adjustment therein, and registered in the name of the Representative, in form reasonably acceptable to the Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(viii) Contemporaneously herewith, a cold comfort letter, addressed to the Underwriters and in form and substance satisfactory in all respects to the Representative from the Company Auditor dated, respectively, as of the date of this Agreement and a bring-down letter dated as of the Closing Date and each Option Closing Date, if any;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ix) At the Closing Date and at each Option Closing Date, if any, the duly executed and delivered Officers' Certificate in form and substance satisfactory in all respects to the Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) At the Closing Date and at each Option Closing Date, if any, the duly executed and delivered Secretary's Certificate in form and substance satisfactory in all respects to the Representative; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(xi) Contemporaneously herewith, the duly executed and delivered Lock-Up Agreements.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;2.4 <u>Closing Conditions</u>. The respective obligations of each Underwriter hereunder in connection with the Closing and each Option Closing Date, if any, are subject to the following conditions being met:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) the accuracy in all material respects when made and on the date in question (other than representations and warranties of the Company already qualified by materiality, which shall be true and correct in all respects) of the representations and warranties of the Company contained herein (unless as of a specific date therein);

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) all obligations, covenants and agreements of the Company required to be performed at or prior to the date in question shall have been performed in all material respects;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iii) the delivery by the Company of the items set forth in Section 2.3 of this Agreement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(iv) the Registration Statement shall be effective on the date of this Agreement and at each of the Closing Date and each Option Closing Date, if any, no stop order suspending the effectiveness of the Registration Statement shall have been issued and no proceedings for that purpose shall have been instituted or, to the Company's knowledge, shall be pending or contemplated by the Commission and any request on the part of the Commission for additional information shall have been complied with to the reasonable satisfaction of the Representative;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) by the Execution Date, if required by FINRA, the Underwriters shall have received clearance from FINRA as to the amount of compensation allowable or payable to the Underwriters as described in the Registration Statement;

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vi) the Closing Shares, the Option Shares and the Warrant Shares have been approved for listing on the Trading Market, subject only to official notice of issuance; and

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(vii) prior to and on each of the Closing Date and each Option Closing Date, if any: (i) there shall have been no material adverse change or development involving a prospective material adverse change in the condition or prospects or the business activities, financial or otherwise, of the Company from the latest dates as of which such condition is set forth in the Registration Statement and Prospectus; (ii) no action suit or proceeding, at law or in equity, shall have been pending or threatened against the Company or any Affiliate of the Company before or by any court or federal or state commission, board or other administrative agency wherein an unfavorable decision, ruling or finding may materially adversely affect the business, operations, prospects or financial condition or income of the Company, except as set forth in the Registration Statement and Prospectus; (iii) no stop order shall have been issued under the Securities Act and no proceedings therefor shall have been initiated or threatened by the Commission with respect to the Registration Statement; and (iv) the Registration Statement and the Prospectus and any amendments or supplements thereto shall contain all material statements which are required to be stated therein in accordance with the Securities Act and the rules and regulations thereunder and shall conform in all material respects to the requirements of the Securities Act and the rules and regulations thereunder, and neither the Registration Statement nor the Prospectus nor any amendment or supplement thereto shall contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading.

**ARTICLE III.**

**REPRESENTATIONS AND WARRANTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;3.1 <u>Representations and Warranties of the Company</u>. The Company represents and warrants to the Underwriters as of the Execution Date, as of the Closing Date and as of each Option Closing Date, if any, as follows:

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Subsidiaries</u>. None of the Subsidiaries is a "significant subsidiary" as defined in Rule 1-02(w) of Regulation S-X promulgated under the Securities Act. If the Company has no "significant subsidiaries", all other references, except as set forth in this Section 3.1(a), to the Subsidiaries or any of them in the Transaction Documents shall be disregarded. No Subsidiary owns any material assets or incurs any material liabilities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Organization and Qualification</u>. The Company and each of the Subsidiaries is an entity duly incorporated or otherwise organized, validly existing and in good standing under the laws of the jurisdiction of its incorporation or organization, with the requisite power and authority to own and use its properties and assets and to carry on its business as currently conducted. Neither the Company nor any Subsidiary is in violation nor default of any of the provisions of its respective certificate or articles of incorporation, bylaws or other organizational or charter documents. Each of the Company and the Subsidiaries is duly qualified to conduct business and is in good standing as a foreign corporation or other entity in each jurisdiction in which the nature of the business conducted or property owned by it makes such qualification necessary, except where the failure to be so qualified or in good standing, as the case may be, could not have or reasonably be expected to result in a Material Adverse Effect and no Proceeding has been instituted in any such jurisdiction revoking, limiting or curtailing or seeking to revoke, limit or curtail such power and authority or qualification.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Authorization; Enforcement</u>. The Company has the requisite corporate power and authority to enter into and to consummate the transactions contemplated by this Agreement and each of the other Transaction Documents to which it is a party and otherwise to carry out its obligations hereunder and thereunder. The execution and delivery of this Agreement and each of the other Transaction Documents by the Company and the consummation by it of the transactions contemplated hereby and thereby have been duly authorized by all necessary action on the part of the Company and no further action is required by the Company, the Board of Directors or the Company's stockholders in connection herewith or therewith other than in connection with the Required Approvals. This Agreement and each other Transaction Document to which the Company is a party has been (or upon delivery will have been) duly executed by the Company and, when delivered in accordance with the terms hereof and thereof, will constitute the valid and binding obligation of the Company enforceable against the Company in accordance with its terms, except (i) as limited by general equitable principles and applicable bankruptcy, insolvency, reorganization, moratorium and other laws of general application affecting enforcement of creditors' rights generally, (ii) as limited by laws relating to the availability of specific performance, injunctive relief or other equitable remedies and (iii) insofar as indemnification and contribution provisions may be limited by applicable law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>No Conflicts</u>. The execution, delivery and performance by the Company of this Agreement and the other Transaction Documents to which it is a party, the issuance and sale of the Securities and the consummation by it of the transactions contemplated hereby and thereby do not and will not (i) conflict with or violate any provision of the Company's or any Subsidiary's certificate or articles of incorporation, bylaws or other organizational or charter documents, or (ii) conflict with, or constitute a default (or an event that with notice or lapse of time or both would become a default) under, result in the creation of any Lien upon any of the properties or assets of the Company or any Subsidiary, or give to others any rights of termination, amendment, anti-dilution or similar adjustments, acceleration or cancellation (with or without notice, lapse of time or both) of, any agreement, credit facility, debt or other instrument (evidencing a Company or Subsidiary debt or otherwise) or other understanding to which the Company or any Subsidiary is a party or by which any property or asset of the Company or any Subsidiary is bound or affected, or (iii) subject to the Required Approvals, conflict with or result in a violation of any law, rule, regulation, order, judgment, injunction, decree or other restriction of any court or governmental authority to which the Company or a Subsidiary is subject (including federal and state securities laws and regulations), or by which any property or asset of the Company or a Subsidiary is bound or affected; except in the case of each of clauses (ii) and (iii), such as could not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(e) <u>Filings, Consents and Approvals</u>. The Company is not required to obtain any consent, waiver, authorization or order of, give any notice to, or make any filing or registration with, any court or other federal, state, local or other governmental authority or other Person in connection with the execution, delivery and performance by the Company of the Transaction Documents, other than (i) the filing with the Commission of the Prospectus or Prospectus Supplement, if any, and (ii) such as have been obtained or made by the Company and are in full force and effect under the Securities Act and such as may be required under applicable state securities or blue sky laws, FINRA or the Trading Market(collectively, the "<u>Required Approvals</u>").

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(f) <u>Registration Statement</u>. The Company has filed with the Commission the Registration Statement, including any related Prospectus or Prospectuses, for the registration of the Securities under the Securities Act, which Registration Statement has been prepared by the Company in all material respects in conformity with the requirements of the Securities Act and the rules and regulations of the Commission under the Securities Act. The Registration Statement has been declared effective by the Commission on August 20, 2025 (the "<u>Effective Date</u>"). The Company has advised the Representative of all further information (financial and other) with respect to the Company required to be set forth therein in the Registration Statement and Prospectus. No stop order suspending the effectiveness of the Registration Statement or the use of the Prospectus has been issued, and no proceeding for any such purpose is pending or has been initiated or, to the Company's knowledge, is threatened by the Commission. For purposes of this Agreement, "<u>free writing prospectus</u>" has the meaning set forth in Rule 405 under the Securities Act. The Company will not, without the prior consent of the Representative, prepare, use or refer to, any free writing prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(g) <u>Issuance of Securities</u>. The Securities are duly authorized and, when issued and paid for in accordance with the applicable Transaction Documents, will be duly and validly issued, fully paid and nonassessable, and free and clear of all Liens imposed by the Company. The Warrant Shares, when issued in accordance with the terms of the Warrants, will be validly issued, fully paid and nonassessable, free and clear of all Liens imposed by the Company. The Company has reserved from its duly authorized capital stock the maximum number of shares of Common Stock issuable pursuant to this Agreement and the Warrants. The holder of the Securities will not be subject to personal liability by reason of being such holders. The Securities are not and will not be subject to the preemptive rights of any holders of any security of the Company or similar contractual rights granted by the Company. All corporate action required to be taken for the authorization, issuance and sale of the Securities has been duly and validly taken. The Securities conform in all material respects to all statements with respect thereto contained in the Registration Statement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(h) <u>Capitalization</u>. The capitalization of the Company is as set forth in the SEC Reports. The Company has not issued any capital stock since the filing of its most recently filed periodic or current report under the Exchange Act, other than pursuant to the exercise of employee stock options, the issuance of equity-based awards pursuant to the Company's equity compensation plans and pursuant to the conversion and/or exercise of Common Stock Equivalents outstanding as of the filing date of the most recently filed periodic report under the Exchange Act. Other than with respect to the rights granted to the Representative pursuant to the Investment Banking Agreement (as defined herein), no Person has any right of first refusal, preemptive right, right of participation, or any similar right to participate in the transactions contemplated by the Transaction Documents, except for such rights as have been waived and as may be disclosed in the Registration Statement or the Prospectus. Except as a result of the purchase and sale of the Securities and as set forth in the Registration Statement and the SEC Reports, there are no outstanding options, warrants, scrip rights to subscribe to, calls or commitments of any character whatsoever relating to, or securities, rights or obligations convertible into or exercisable or exchangeable for, or giving any Person any right to subscribe for or acquire, any shares of Common Stock, or contracts, commitments, understandings or arrangements by which the Company or any Subsidiary is or may become bound to issue additional shares of Common Stock or Common Stock Equivalents. Except as set forth in the Registration Statement and Prospectus, the issuance and sale of the Securities will not obligate the Company to issue shares of Common Stock or other securities to any Person (other than the Underwriters). Except as set forth in the SEC Reports, the Registration Statement or the Prospectus, there are no outstanding securities or instruments of the Company or any Subsidiary with any provision that adjusts the exercise, conversion, exchange or reset price of such security or instrument upon an issuance of securities by the Company or any Subsidiary. All of the outstanding shares of capital stock of the Company are duly authorized, validly issued, fully paid and nonassessable, have been issued in compliance with all federal and state securities laws, and none of such outstanding shares was issued in violation of any preemptive rights or similar rights to subscribe for or purchase securities. The authorized shares of the Company conform in all material respects to all statements relating thereto contained in the Registration Statement and the Prospectus. The offers and sales of the Company's securities were at all relevant times either registered under the Securities Act and the applicable state securities or Blue Sky laws or, based in part on the representations and warranties of the purchasers, exempt from such registration requirements. Except for the Shareholder Approval, if required, no further approval or authorization of any stockholder, the Board of Directors or others is required for the issuance and sale of the Securities. Except as set forth in the Registration Statement and the SEC Reports, there are no stockholders agreements, voting agreements or other similar agreements with respect to the Company's capital stock to which the Company is a party or, to the knowledge of the Company, between or among any of the Company's stockholders.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(i) <u>SEC Reports; Financial Statements</u>. The Company has filed all reports, schedules, forms, statements and other documents required to be filed by the Company under the Securities Act and the Exchange Act, including pursuant to Section 13(a) or 15(d) thereof, for the two years preceding the date hereof (or such shorter period as the Company was required by law or regulation to file such material) (the foregoing materials, including the exhibits thereto and documents incorporated by reference therein, together with the Prospectus and any Prospectus Supplement, being collectively referred to herein as the "<u>SEC Reports</u>") on a timely basis or has received a valid extension of such time of filing and has filed any such SEC Reports prior to the expiration of any such extension, except as could not have or reasonably be expected to result in a Material Adverse Effect. As of their respective dates, the SEC Reports complied in all material respects with the requirements of the Securities Act and the Exchange Act, as applicable, and none of the SEC Reports, when filed, contained any untrue statement of a material fact or omitted to state a material fact required to be stated therein or necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The financial statements of the Company included in the SEC Reports comply in all material respects with applicable accounting requirements and the rules and regulations of the Commission with respect thereto as in effect at the time of filing. Such financial statements have been prepared in accordance with United States generally accepted accounting principles applied on a consistent basis during the periods involved ("<u>GAAP</u>"), except as may be otherwise specified in such financial statements or the notes thereto and except that unaudited financial statements may not contain all footnotes required by GAAP, and fairly present in all material respects the financial position of the Company and its consolidated Subsidiaries as of and for the dates thereof and the results of operations and cash flows for the periods then ended, subject, in the case of unaudited statements, to normal, immaterial, year-end audit adjustments. The agreements and documents described in the Registration Statement, the Prospectus, any Prospectus Supplement and the SEC Reports conform to the descriptions thereof contained therein and there are no agreements or other documents required by the Securities Act and the rules and regulations thereunder to be described in the Registration Statement, the Prospectus, any Prospectus Supplement or the SEC Reports or to be filed with the Commission as exhibits to the Registration Statement, that have not been so described or filed. Each agreement or other instrument (however characterized or described) to which the Company is a party or by which it is or may be bound or affected and (i) that is referred to in the Registration Statement, the Prospectus, or the SEC Reports, or (ii) is material to the Company's business, has been duly authorized and validly executed by the Company, is in full force and effect in all material respects and is enforceable against the Company and, to the Company's knowledge, the other parties thereto, in accordance with its terms, except (x) as such enforceability may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors' rights generally, (y) as enforceability of any indemnification or contribution provision may be limited under the federal and state securities laws, and (z) that the remedy of specific performance and injunctive and other forms of equitable relief may be subject to the equitable defenses and to the discretion of the court before which any proceeding therefore may be brought. None of such agreements or instruments has been assigned by the Company, and neither the Company nor, to the best of the Company's knowledge, any other party is in default thereunder and, to the best of the Company's knowledge, no event has occurred that, with the lapse of time or the giving of notice, or both, would constitute a default thereunder. To the best of the Company's knowledge, performance by the Company of the material provisions of such agreements or instruments will not result in a violation of any existing applicable law, rule, regulation, judgment, order or decree of any governmental agency or court, domestic or foreign, having jurisdiction over the Company or any of its assets or businesses, including, without limitation, those relating to environmental laws and regulations.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(j) <u>Material Changes; Undisclosed Events, Liabilities or Developments</u>. Since the date of the latest audited financial statements included within the SEC Reports, except as specifically disclosed in a subsequent SEC Report filed prior to the date hereof, (i) there has been no event, occurrence or development that has had or that could reasonably be expected to result in a Material Adverse Effect, (ii) the Company has not incurred any material liabilities (contingent or otherwise) other than (A) trade payables and accrued expenses incurred in the ordinary course of business consistent with past practice and (B) liabilities not required to be reflected in the Company's financial statements pursuant to GAAP or disclosed in filings made with the Commission, (iii) the Company has not altered its method of accounting, (iv) the Company has not declared or made any dividend or distribution of cash or other property to its stockholders or purchased, redeemed or made any agreements to purchase or redeem any shares of its capital stock, (v) the Company has not issued any equity securities to any officer, director or Affiliate, except pursuant to existing Company equity compensation plans and (vi) no officer or director of the Company has resigned from any position with the Company. The Company does not have pending before the Commission any request for confidential treatment of information. Except for the issuance of the Securities contemplated by this Agreement and as otherwise disclosed in the Registration Statement, the Prospectus, the Prospectus Supplement and the SEC Reports, no event, liability, fact, circumstance, occurrence or development has occurred or exists or is reasonably expected to occur or exist with respect to the Company or its Subsidiaries or their respective businesses, prospects, properties, operations, assets or financial condition that would be required to be disclosed by the Company under applicable securities laws at the time this representation is made or deemed made that has not been publicly disclosed at least 1 Trading Day prior to the date that this representation is made. Unless otherwise disclosed in an SEC Report filed prior to the date hereof, the Company has not: (i) issued any securities or incurred any liability or obligation, direct or contingent, for borrowed money; or (ii) declared or paid any dividend or made any other distribution on or in respect to its capital stock.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(k) <u>Litigation</u>. Except as disclosed in the Registration Statement or the Prospectus, there is no action, suit, inquiry, notice of violation, proceeding or investigation pending or, to the knowledge of the Company, threatened against or affecting the Company, any Subsidiary or any of their respective properties before or by any court, arbitrator, governmental or administrative agency or regulatory authority (federal, state, county, local or foreign) (collectively, an "<u>Action</u>") which (i) adversely affects or challenges the legality, validity or enforceability of any of the Transaction Documents or the Securities or (ii) could, if there were an unfavorable decision, have or reasonably be expected to result in a Material Adverse Effect. Neither the Company nor any Subsidiary, nor any director or officer thereof, is or has been the subject of any Action involving a claim of violation of or liability under federal or state securities laws or a claim of breach of fiduciary duty. There has not been, and to the knowledge of the Company, there is not pending or contemplated, any investigation by the Commission involving the Company or any current or former director or officer of the Company. The Commission has not issued any stop order or other order suspending the effectiveness of any registration statement filed by the Company or any Subsidiary under the Exchange Act or the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(l) <u>Labor Relations</u>. No labor dispute exists or, to the knowledge of the Company, is imminent with respect to any of the employees of the Company, which could reasonably be expected to result in a Material Adverse Effect. None of the Company's or its Subsidiaries' employees is a member of a union that relates to such employee's relationship with the Company or such Subsidiary, and neither the Company nor any of its Subsidiaries is a party to a collective bargaining agreement, and the Company and its Subsidiaries believe that their relationships with their employees are good. To the knowledge of the Company, no executive officer of the Company or any Subsidiary, is, or is now expected to be, in violation of any material term of any employment contract, confidentiality, disclosure or proprietary information agreement or non-competition agreement, or any other contract or agreement or any restrictive covenant in favor of any third party, and the continued employment of each such executive officer does not subject the Company or any of its Subsidiaries to any liability with respect to any of the foregoing matters. The Company and its Subsidiaries are in compliance with all U.S. federal, state, local and foreign laws and regulations relating to employment and employment practices, terms and conditions of employment and wages and hours, except where the failure to be in compliance could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(m) <u>Compliance</u>. Neither the Company nor any Subsidiary: (i) is in default under or in violation of (and no event has occurred that has not been waived that, with notice or lapse of time or both, would result in a default by the Company or any Subsidiary under), nor has the Company or any Subsidiary received notice of a claim that it is in default under or that it is in violation of, any indenture, loan or credit agreement or any other agreement or instrument to which it is a party or by which it or any of its properties is bound (whether or not such default or violation has been waived), (ii) is in violation of any judgment, decree or order of any court, arbitrator or other governmental authority or (iii) is or has been in violation of any statute, rule, ordinance or regulation of any governmental authority, including without limitation all foreign, federal, state and local laws relating to taxes, environmental protection, occupational health and safety, product quality and safety and employment and labor matters, except in each case as could not have or reasonably be expected to result in a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(n) <u>Regulatory Permits</u>. The Company and the Subsidiaries possess all certificates, authorizations and permits issued by the appropriate federal, state, local or foreign regulatory authorities necessary to conduct their respective businesses as described in the SEC Reports, except where the failure to possess such permits could not reasonably be expected to result in a Material Adverse Effect (each, a "<u>Material Permit</u>"), and neither the Company nor any Subsidiary has received any notice of proceedings relating to the revocation or modification of any Material Permit. The disclosures in the Registration Statement concerning the effects of Federal, State, local and all foreign regulation on the Company's business as currently contemplated are correct in all material respects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(o) <u>Title to Assets</u>. The Company and the Subsidiaries have good and marketable title in fee simple to, or have valid and marketable rights to lease or otherwise use, all real property and all personal property (excluding Intellectual Property Rights which are addressed below) that is material to the business of the Company and the Subsidiaries, in each case free and clear of all Liens, except for (i) Liens as do not materially affect the value of such property and do not materially interfere with the use made and proposed to be made of such property by the Company and the Subsidiaries and (ii) Liens for the payment of federal, state or other taxes, for which appropriate reserves have been made in accordance with GAAP, and the payment of which is neither delinquent nor subject to penalties. Any real property and facilities held under lease by the Company and the Subsidiaries are held by them under valid, subsisting and enforceable leases with which the Company and the Subsidiaries are in compliance, except where failure to be in compliance could not reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(p) <u>Intellectual Property</u>. To its knowledge, the Company and the Subsidiaries have, or have rights to use, all patents, patent applications, trademarks, trademark applications, service marks, trade names, trade secrets, inventions, copyrights, licenses and other intellectual property rights and similar rights necessary or required for use in connection with their respective businesses as described in the SEC Reports and which the failure to do so could have a Material Adverse Effect (collectively, the "<u>Intellectual Property Rights</u>"). None of, and neither the Company nor any Subsidiary has received a notice (written or otherwise) that any of, the Intellectual Property Rights has expired, terminated or been abandoned, or is expected to expire or terminate or be abandoned, within two (2) years from the date of this Agreement. Neither the Company nor any Subsidiary has received, since the date of the latest audited financial statements included within the SEC Reports, a written notice of a claim or otherwise has any knowledge that the Intellectual Property Rights violate or infringe upon the rights of any Person, except where failure to do so could not, individually or in the aggregate reasonably be expected to have a Material Adverse Effect. To the knowledge of the Company, all such Intellectual Property Rights are enforceable and there is no existing infringement by another Person of any of the Intellectual Property Rights. The Company and its Subsidiaries have taken reasonable security measures to protect the secrecy, confidentiality and value of all of their intellectual properties, except where failure to do so could not, individually or in the aggregate, reasonably be expected to have a Material Adverse Effect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(q) <u>Insurance</u>. The Company and the Subsidiaries are insured by insurers of recognized financial responsibility against such losses and risks and in such amounts as are prudent and customary in the businesses in which the Company and the Subsidiaries are engaged, including, but not limited to, directors and officers insurance coverage. Neither the Company nor any Subsidiary has any reason to believe that it will not be able to renew its existing insurance coverage as and when such coverage expires or to obtain similar coverage from similar insurers as may be necessary to continue its business without a significant increase in cost.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(r) <u>Transactions With Affiliates and Employees</u>. Except as set forth in the Registration Statement, the Prospectus, the Prospectus Supplement, or the SEC Reports, none of the officers or directors of the Company or any Subsidiary and, to the knowledge of the Company, none of the employees of the Company or any Subsidiary is presently a party to any transaction with the Company or any Subsidiary (other than for services as employees, officers and directors), including any contract, agreement or other arrangement providing for the furnishing of services to or by, providing for rental of real or personal property to or from, providing for the borrowing of money from or lending of money to or otherwise requiring payments to or from, any officer, director or such employee or, to the knowledge of the Company, any entity in which any officer, director, or any such employee has a substantial interest or is an officer, director, trustee, stockholder, member or partner, in each case in excess of $120,000 other than for (i) payment of salary, bonus or consulting fees for services rendered, (ii) reimbursement for expenses incurred on behalf of the Company and (iii) other employee benefits, including equity based award agreements under any equity compensation plan of the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(s) <u>Sarbanes-Oxley; Internal Accounting Controls</u>. The Company and the Subsidiaries are in compliance in all material respects with any and all applicable requirements of the Sarbanes-Oxley Act of 2002 that are effective as of the date hereof and applicable to the Company, and any and all applicable rules and regulations promulgated by the Commission thereunder that are effective as of the date hereof and as of the Closing Date. The Company and the Subsidiaries maintain a system of internal accounting controls designed to provide reasonable assurance that: (i) transactions are executed in accordance with management's general or specific authorizations, (ii) transactions are recorded as necessary to permit preparation of financial statements in conformity with GAAP and to maintain asset accountability, (iii) access to assets is permitted only in accordance with management's general or specific authorization, and (iv) the recorded accountability for assets is compared with the existing assets at reasonable intervals and appropriate action is taken with respect to any differences. The Company and the Subsidiaries have established disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the Company and the Subsidiaries and designed such disclosure controls and procedures to ensure that information required to be disclosed by the Company in the reports it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms. The Company's certifying officers have evaluated the effectiveness of the disclosure controls and procedures of the Company and the Subsidiaries as of the end of the period covered by the most recently filed periodic report under the Exchange Act (such date, the "<u>Evaluation Date</u>"). The Company presented in its most recently filed periodic report under the Exchange Act the conclusions of the certifying officers about the effectiveness of the disclosure controls and procedures based on their evaluations as of the Evaluation Date. Since the Evaluation Date, there have been no changes in the internal control over financial reporting (as such term is defined in the Exchange Act) of the Company and its Subsidiaries that have materially affected, or is reasonably likely to materially affect, the internal control over financial reporting of the Company and its Subsidiaries.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(t) <u>Certain Fees</u>. Except as set forth in the Preliminary Prospectus or Prospectus, no brokerage or finder's fees or commissions are or will be payable by the Company, or any Subsidiary or Affiliate of the Company to any broker, financial advisor or consultant, finder, placement agent, investment banker, bank or other Person with respect to the transactions contemplated by the Transaction Documents. Notwithstanding the foregoing, on the Closing Date and the Option Closing Date, the Company shall pay the Underwriters a cash fee of in the form of a discount to the Combined Purchase Price as set forth in the Investment Banking Agreement (as defined herein) (the "<u>Underwriters Discount</u>"). The Underwriters Discount shall be allocated between the Underwriters on the Closing Date and the Option Closing Date as set forth in the Investment Banking Agreement, provided however the Underwriters Discount will be reduced for investors identified on <u>Schedule B</u> annexed to the Investment Banking Agreement. This reduced Underwriters Discount shall be allocated between the Underwriters on the Closing Date and the Option Closing Date as set forth in the Investment Banking Agreement. Further, in the event that a reduction to the Underwriters Discount is required by FINRA Rule 5110 or otherwise, the Underwriters have agreed to allocate such reduction in the Underwriters Discount as set forth in the Investment Banking Agreement. The Company has also agreed to pay the Representative a management fee and reimburse the Representative for certain of its offering-related expenses as set forth in the Investment Banking Agreement. To the Company's knowledge, there are no other arrangements, agreements or understandings of the Company or, to the Company's knowledge, any of its stockholders that may affect the Underwriters' compensation, as determined by FINRA. Except as set forth in the Registration Statement, the Prospectus, the Prospectus Supplement, or the SEC Reports, the Company has not made any direct or indirect payments (in cash, securities or otherwise) to: (i) any person, as a finder's fee, consulting fee or otherwise, in consideration of such person raising capital for the Company or introducing to the Company persons who raised or provided capital to the Company; (ii) any FINRA member; or (iii) any person or entity that has any direct or indirect affiliation or association with any FINRA member, within the twelve months prior to the Execution Date. None of the net proceeds of the Offering will be paid by the Company to any participating FINRA member or its affiliates, except as specifically authorized herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(u) <u>Investment Company</u>. The Company is not, and is not an Affiliate of, and immediately after receipt of payment for the Securities will not be or be an Affiliate of, an "investment company" within the meaning of the Investment Company Act of 1940, as amended. The Company shall conduct its business in a manner so that it will not become an "investment company" subject to registration under the Investment Company Act of 1940, as amended.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(v) <u>Registration Rights</u>. Except as set forth in the SEC Reports, the Registration Statement or the Prospectus, no Person has any right to cause the Company or any Subsidiary to effect the registration under the Securities Act of any securities of the Company or any Subsidiary.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(w) <u>Listing and Maintenance Requirements</u>. The Common Stock is registered pursuant to Section 12(b) of the Exchange Act, and the Company has taken no action designed to, or which to its knowledge is likely to have the effect of, terminating the registration of the Common Stock under the Exchange Act nor has the Company received any notification that the Commission is contemplating terminating such registration. Except as set forth in the SEC Reports, the Registration Statement or the Prospectus, the Company has not, in the 12 months preceding the date hereof, received notice from any Trading Market on which the Common Stock is or has been listed or quoted to the effect that the Company is not in compliance with the listing or maintenance requirements of such Trading Market. Except as set forth in the SEC Reports, the Registration Statement or the Prospectus, the Company is, and has no reason to believe that it will not in the foreseeable future continue to be, in compliance with all such listing and maintenance requirements. The Common Stock is currently eligible for electronic transfer through the Depository Trust Company or another established clearing corporation and the Company is current in payment of the fees of the Depository Trust Company (or such other established clearing corporation) in connection with such electronic transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(x) <u>Application of Takeover Protections</u>. The Company and the Board of Directors have taken all necessary action, if any, in order to render inapplicable any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or other similar anti-takeover provision under the Company's certificate of incorporation (or similar charter documents) or the laws of its state of incorporation that is or could become applicable as a result of the Underwriters and the Company fulfilling their obligations or exercising their rights under the Transaction Documents.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(y) <u>Disclosure; 10b-5</u>. The Registration Statement (and any further documents to be filed with the Commission in connection with the Offering) contains all exhibits and schedules as required by the Securities Act. Each of the Registration Statement and any post-effective amendment thereto, if any, at the time it became effective, complied in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations under the Securities Act and did not and, as amended or supplemented, if applicable, will not, contain any untrue statement of a material fact or omit to state a material fact required to be stated therein or necessary to make the statements therein not misleading. Each of the Preliminary Prospectus and the Prospectus, as of its respective date, complies in all material respects with the Securities Act and the Exchange Act and the applicable rules and regulations. The Prospectus, as amended or supplemented, did and or will not contain as of the date thereof any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. The SEC Reports incorporated by reference in the Prospectus, if any, when they were filed with the Commission, conformed in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, and none of such documents, if any, when they were filed with the Commission, contained any untrue statement of a material fact or omitted to state a material fact necessary to make the statements therein in light of the circumstances under which they were made, not misleading; and any further documents so filed and incorporated by reference in the Prospectus, if any, when such documents are filed with the Commission, will conform in all material respects to the requirements of the Exchange Act and the applicable rules and regulations, as applicable, and will not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements therein, in light of the circumstances under which they were made not misleading. No post-effective amendment to the Registration Statement reflecting any facts or events arising after the date thereof which represent, individually or in the aggregate, a fundamental change in the information set forth therein is required to be filed with the Commission as of the date hereof. There are no documents required to be filed with the Commission in connection with the transaction contemplated hereby that (x) have not been filed as required pursuant to the Securities Act or (y) will not be filed within the requisite time period. There are no contracts or other documents required to be described in the Prospectus, or to be filed as exhibits or schedules to the Registration Statement, which have not been described or filed as required.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(z) <u>No Integrated Offering</u>. Neither the Company, nor any of its Affiliates, nor any Person acting on its or their behalf has, directly or indirectly, made any offers or sales of any security or solicited any offers to buy any security, under circumstances that would cause this offering of the Securities to be integrated with prior offerings by the Company for purposes of any applicable shareholder approval provisions of any Trading Market on which any of the securities of the Company are listed or designated.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(aa) <u>Solvency</u>. Based on the consolidated financial condition of the Company as of the Closing Date, after giving effect to the receipt by the Company of the proceeds from the sale of the Securities hereunder, (i) the fair saleable value of the Company's assets exceeds the amount that will be required to be paid on or in respect of the Company's existing debts and other liabilities (including known contingent liabilities) as they mature and (ii) the Company's assets do not constitute unreasonably small capital to carry on its business as now conducted and as proposed to be conducted including its capital needs taking into account the particular capital requirements of the business conducted by the Company, consolidated and projected capital requirements and capital availability thereof. The Company does not intend to incur debts beyond its ability to pay such debts as they mature (taking into account the timing and amounts of cash to be payable on or in respect of its debt). The Company has no knowledge of any facts or circumstances which lead it to believe that it will file for reorganization or liquidation under the bankruptcy or reorganization laws of any jurisdiction within six months from the Closing Date. The SEC Reports sets forth as of the date hereof all outstanding secured and unsecured Indebtedness of the Company or any Subsidiary, or for which the Company or any Subsidiary has commitments.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(bb) <u>Tax Status</u>. Except for matters that would not, individually or in the aggregate, have or reasonably be expected to result in a Material Adverse Effect, the Company and its Subsidiaries each (i) has made or filed, or secured all extensions for the filing of, all applicable United States federal, state and local income and all foreign income and franchise tax returns, reports and declarations required to be filed through the date hereof in any jurisdiction to which it is subject, (ii) has paid all taxes and other governmental assessments and charges that are material in amount, shown or determined to be due on such returns, reports and declarations and (iii) has set aside on its books provision reasonably adequate for the payment of all material taxes for periods subsequent to the periods to which such returns, reports or declarations apply. There are no unpaid taxes in any material amount claimed to be due by the taxing authority of any jurisdiction, and the officers of the Company or of any Subsidiary know of no basis for any such claim. The provisions for taxes payable, if any, shown on the financial statements filed with or as part of the Registration Statement are sufficient for all material accrued and unpaid taxes, whether or not disputed, and for all periods to and including the dates of such consolidated financial statements. The term "taxes" means all federal, state, local, foreign, and other net income, gross income, gross receipts, sales, use, ad valorem, transfer, franchise, profits, license, lease, service, service use, withholding, payroll, employment, excise, severance, stamp, occupation, premium, property, windfall profits, customs, duties or other taxes, fees, assessments, or charges of any kind whatsoever, together with any interest and any penalties, additions to tax, or additional amounts with respect thereto. The term "returns" means all returns, declarations, reports, statements, and other documents required to be filed in respect to taxes.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(cc) <u>Foreign Corrupt Practices</u>. Neither the Company nor any Subsidiary, nor to the knowledge of the Company or any Subsidiary, any agent or other person acting on behalf of the Company or any Subsidiary, has (i) directly or indirectly, used any funds for unlawful contributions, gifts, entertainment or other unlawful expenses related to foreign or domestic political activity, (ii) made any unlawful payment to foreign or domestic government officials or employees or to any foreign or domestic political parties or campaigns from corporate funds, (iii) failed to disclose fully any contribution made by the Company or any Subsidiary (or made by any person acting on its behalf of which the Company is aware) which is in violation of law, or (iv) violated in any material respect any provision of FCPA. The Company has taken reasonable steps to ensure that its accounting controls and procedures are sufficient to cause the Company to comply in all material respects with the FCPA.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(dd) <u>Accountants</u>. To the knowledge and belief of the Company, the Company Auditor is an independent registered public accounting firm as required by the Exchange Act. The Company Auditor has not, during the periods covered by the financial statements included in the Prospectus, provided to the Company any non-audit services, as such term is used in Section 10A(g) of the Exchange Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ee) <u>FDA</u>. As to each product subject to the jurisdiction of the U.S. Food and Drug Administration ("<u>FDA</u>") under the Federal Food, Drug and Cosmetic Act, as amended, and the regulations thereunder ("<u>FDCA</u>") that is manufactured, packaged, labeled, tested, distributed, sold, and/or marketed by the Company or any of its Subsidiaries (each such product, a "<u>Product</u>"), such Product is being manufactured, packaged, labeled, tested, distributed, sold and/or marketed by the Company in compliance with all applicable requirements under FDCA and similar laws, rules and regulations relating to registration, investigational use, premarket clearance, licensure, or application approval, good manufacturing practices, good laboratory practices, good clinical practices, product listing, quotas, labeling, advertising, record keeping and filing of reports, except where the failure to be in compliance would not have a Material Adverse Effect. Except as set forth in the Registration Statement, the Prospectus, the Prospectus Supplement, or the SEC Reports, there is no pending, completed or, to the Company's knowledge, threatened, action (including any lawsuit, arbitration, or legal or administrative or regulatory proceeding, charge, complaint, or investigation) against the Company or any of its Subsidiaries, and none of the Company or any of its Subsidiaries has received any notice, warning letter or other communication from the FDA or any other governmental entity, which (i) contests the premarket clearance, licensure, registration, or approval of, the uses of, the distribution of, the manufacturing or packaging of, the testing of, the sale of, or the labeling and promotion of any Product, (ii) withdraws its approval of, requests the recall, suspension, or seizure of, or withdraws or orders the withdrawal of advertising or sales promotional materials relating to, any Product, (iii) imposes a clinical hold on any clinical investigation by the Company or any of its Subsidiaries, (iv) enjoins production at any facility of the Company or any of its Subsidiaries, (v) enters or proposes to enter into a consent decree of permanent injunction with the Company or any of its Subsidiaries, or (vi) otherwise alleges any violation of any laws, rules or regulations by the Company or any of its Subsidiaries, and which, either individually or in the aggregate, would have a Material Adverse Effect. The properties, business and operations of the Company have been and are being conducted in all material respects in accordance with all applicable laws, rules and regulations of the FDA. The Company has not been informed by the FDA that the FDA will prohibit the marketing, sale, license or use in the United States of any product proposed to be developed, produced or marketed by the Company nor has the FDA expressed any concern as to approving or clearing for marketing any product being developed or proposed to be developed by the Company.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ff) <u>Office of Foreign Assets Control</u>. Neither the Company nor any Subsidiary nor, to the Company's knowledge, any director, officer, agent, employee or affiliate of the Company or any Subsidiary is currently subject to any U.S. sanctions administered by the Office of Foreign Assets Control of the U.S. Treasury Department.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(gg) <u>U.S. Real Property Holding Corporation</u>. The Company is not and has never been a U.S. real property holding corporation within the meaning of Section 897 of the Internal Revenue Code of 1986, as amended, and the Company shall so certify upon the Representative's request.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(hh) <u>Bank Holding Company Act</u>. Neither the Company nor any of its Subsidiaries or Affiliates is subject to the Bank Holding Company Act of 1956, as amended (the "<u>BHCA</u>") and to regulation by the Board of Governors of the Federal Reserve System (the "<u>Federal Reserve</u>"). Neither the Company nor any of its Subsidiaries or Affiliates owns or controls, directly or indirectly, five percent (5%) or more of the outstanding shares of any class of voting securities or twenty-five percent (25%) or more of the total equity of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve. Neither the Company nor any of its Subsidiaries or Affiliates exercises a controlling influence over the management or policies of a bank or any entity that is subject to the BHCA and to regulation by the Federal Reserve.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ii) <u>Money Laundering</u>. The operations of the Company and its Subsidiaries are and have been conducted at all times in substantial compliance with applicable financial record-keeping and reporting requirements of the Currency and Foreign Transactions Reporting Act of 1970, as amended, applicable money laundering statutes and applicable rules and regulations thereunder (collectively, the "<u>Money Laundering Laws</u>"), and no action, suit or proceeding by or before any court or governmental agency, authority or body or any arbitrator involving the Company or any Subsidiary with respect to the Money Laundering Laws is pending or, to the knowledge of the Company or any Subsidiary, threatened.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(jj) <u>D&O Questionnaires</u>. To the Company's knowledge, all information contained in the questionnaires completed by each of the Company's directors and officers prior to the Offering as well as in the Lock-Up Agreement provided to the Underwriters in connection with the Offering is true and correct in all material respects and the Company has not become aware of any information which would cause the information disclosed in such questionnaires become inaccurate and incorrect.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(kk) <u>FINRA Affiliation</u>. To the Company's knowledge, no officer, director or any beneficial owner of 5% or more of the Company's unregistered securities has any direct or indirect affiliation or association with any FINRA member (as determined in accordance with the rules and regulations of FINRA) that is participating in the Offering. The Company will advise the Representative and SMRH if it learns that any officer, director or owner of 5% or more of the Company's outstanding shares of Common Stock or Common Stock Equivalents is or becomes an affiliate or associated person of a FINRA member firm.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(ll) <u>Officers' Certificate</u>. Any certificate signed by any duly authorized officer of the Company and delivered to the Representative or SMRH shall be deemed a representation and warranty by the Company to the Underwriters as to the matters covered thereby.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(mm) <u>Board of Directors</u>. The Board of Directors is comprised of the persons set forth under the heading captioned "Management" in the Registration Statement and Prospectus. The qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder applicable to the Company and the rules of the Trading Market. At least one member of the Board of Directors qualifies as a "financial expert" as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and the rules of the Trading Market. In addition, at least a majority of the persons serving on the Board of Directors qualify as "independent" as defined under the rules of the Trading Market.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(nn) <u>Stock Option Plans</u>. Each stock option granted by the Company under the Company's equity incentive plan was granted (i) in accordance with the terms of the Company's equity incentive plan and (ii) with an exercise price at least equal to the fair market value of the Common Stock on the date such stock option would be considered granted under GAAP and applicable law. No stock option granted under the Company's stock option plan has been backdated. The Company has not knowingly granted, and there is no and has been no Company policy or practice to knowingly grant, stock options prior to, or otherwise knowingly coordinate the grant of stock options with, the release or other public announcement of material information regarding the Company or its Subsidiaries or their financial results or prospects.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(oo) <u>Cybersecurity</u>. (i)(x) There has been no security breach or other compromise of or relating to any of the Company's or any Subsidiary's information technology and computer systems, networks, hardware, software, data (including the data of its respective customers, employees, suppliers, vendors and any third party data maintained by or on behalf of it), equipment or technology (collectively, "<u>IT Systems and Data</u>") and (y) the Company and the Subsidiaries have not been notified of, and has no knowledge of any event or condition that would reasonably be expected to result in, any security breach or other compromise to its IT Systems and Data; (ii) the Company and the Subsidiaries are presently in compliance with all applicable laws or statutes and all judgments, orders, rules and regulations of any court or arbitrator or governmental or regulatory authority, internal policies and contractual obligations relating to the privacy and security of IT Systems and Data and to the protection of such IT Systems and Data from unauthorized use, access, misappropriation or modification, except as would not, individually or in the aggregate, have a Material Adverse Effect; (iii) the Company and the Subsidiaries have implemented and maintained commercially reasonable safeguards to maintain and protect its material confidential information and the integrity, continuous operation, redundancy and security of all IT Systems and Data; and (iv) the Company and the Subsidiaries have implemented backup and disaster recovery technology consistent with industry standards and practices.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(pp) <u>Compliance with Data Privacy Laws</u>. (i) The Company and the Subsidiaries are, and at all times during the last three (3) years were, in compliance with all applicable state, federal and foreign data privacy and security laws and regulations, including, without limitation, the European Union General Data Protection Regulation ("<u>GDPR</u>") (EU 2016/679) (collectively, "<u>Privacy Laws</u>"); (ii) the Company and the Subsidiaries have in place, comply with, and take appropriate steps reasonably designed to ensure compliance with their policies and procedures relating to data privacy and security and the collection, storage, use, disclosure, handling and analysis of Personal Data (as defined below) (the "<u>Policies</u>"); (iii) the Company provides accurate notice of its applicable Policies to its customers, employees, third party vendors and representatives as required by the Privacy Laws; and (iv) applicable Policies provide accurate and sufficient notice of the Company's then-current privacy practices relating to its subject matter, and do not contain any material omissions of the Company's then-current privacy practices, as required by Privacy Laws. "Personal Data" means (i) a natural person's name, street address, telephone number, email address, photograph, social security number, bank information, or customer or account number; (ii) any information which would qualify as "personally identifying information" under the Federal Trade Commission Act, as amended; (iii) "personal data" as defined by GDPR; and (iv) any other piece of information that allows the identification of such natural person, or his or her family, or permits the collection or analysis of any identifiable data related to an identified person's health or sexual orientation. (i) None of such disclosures made or contained in any of the Policies have been inaccurate, misleading, or deceptive in violation of any Privacy Laws and (ii) the execution, delivery and performance of the Transaction Documents will not result in a breach of any Privacy Laws or Policies. Neither the Company nor the Subsidiaries (i) to the knowledge of the Company, has received written notice of any actual or potential liability of the Company or the Subsidiaries under, or actual or potential violation by the Company or the Subsidiaries of, any of the Privacy Laws; (ii) is currently conducting or paying for, in whole or in part, any investigation, remediation or other corrective action pursuant to any regulatory request or demand pursuant to any Privacy Law; or (iii) is a party to any order, decree, or agreement by or with any court or arbitrator or governmental or regulatory authority that imposed any obligation or liability under any Privacy Law.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(qq) <u>Environmental Laws</u>. The Company and its Subsidiaries (i) are in compliance with all federal, state, local and foreign laws relating to pollution or protection of human health or the environment (including ambient air, surface water, groundwater, land surface or subsurface strata), including laws relating to emissions, discharges, releases or threatened releases of chemicals, pollutants, contaminants, or toxic or hazardous substances or wastes (collectively, "<u>Hazardous Materials</u>") into the environment, or otherwise relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport or handling of Hazardous Materials, as well as all authorizations, codes, decrees, demands, or demand letters, injunctions, judgments, licenses, notices or notice letters, orders, permits, plans or regulations, issued, entered, promulgated or approved thereunder ("<u>Environmental Laws</u>"); (ii) have received all permits licenses or other approvals required of them under applicable Environmental Laws to conduct their respective businesses; and (iii) are in compliance with all terms and conditions of any such permit, license or approval where in each clause (i), (ii) and (iii), the failure to so comply could be reasonably expected to have, individually or in the aggregate, a Material Adverse Effect.

**ARTICLE IV.**

**OTHER AGREEMENTS OF THE PARTIES**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.1 <u>Amendments to Registration Statement</u>. The Company has delivered, or will as promptly as practicable deliver or make available, to the Underwriters complete conformed copies of the Registration Statement and of each consent and certificate of experts, as applicable, filed as a part thereof, and conformed copies of the Registration Statement (without exhibits), the Preliminary Prospectus, the Prospectus and the Prospectus Supplement, if any, as amended or supplemented, in such quantities and at such places as an Underwriter reasonably requests. Neither the Company nor any of its directors and officers has distributed and none of them will distribute, prior to the Closing Date, any offering material in connection with the offering and sale of the Securities other than the Preliminary Prospectus, the Prospectus, the Prospectus Supplement, if any, the Registration Statement, any Permitted Free Writing Prospectus, and copies of the documents incorporated by reference therein. The Company shall not file any such amendment or supplement to which the Representative shall reasonably object in writing.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.2 <u>Federal Securities Laws</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Compliance</u>. During the time when a Prospectus is required to be delivered under the Securities Act, the Company will use its best efforts to comply with all requirements imposed upon it by the Securities Act and the rules and regulations thereunder and the Exchange Act and the rules and regulations thereunder, as from time to time in force, so far as necessary to permit the continuance of sales of or dealings in the Securities in accordance with the provisions hereof and the Prospectus and any amendment or supplements thereto. If at any time when a Prospectus relating to the Securities is required to be delivered under the Securities Act, any event shall have occurred as a result of which, in the opinion of counsel for the Company or counsel for the Underwriters, the Prospectus, as then amended or supplemented, includes an untrue statement of a material fact or omits to state any material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, or if it is necessary at any time to amend the Prospectus to comply with the Securities Act, the Company will notify the Underwriters promptly and prepare and file with the Commission, subject to Section 4.1 hereof, an appropriate amendment or supplement in accordance with Section 10 of the Securities Act.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Filing of Final Prospectus</u>. The Company will file the final Prospectus (in form and substance satisfactory to the Representative) with the Commission pursuant to the requirements of Rule 424.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Exchange Act Registration</u>. For a period of three years from the Execution Date, the Company will use its reasonable best efforts to maintain the registration of the Common Stock under the Exchange Act. The Company will not deregister the Common Stock under the Exchange Act without the prior written consent of the Representative, subject to the exercise of its fiduciary duties.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(d) <u>Free Writing Prospectuses</u>. The Company represents and agrees that it has not made and will not make any offer relating to the Securities that would constitute an issuer free writing prospectus, as defined in Rule 433 of the rules and regulations under the Securities Act, without the prior written consent of the Representative. Any such free writing prospectus consented to by the Representative is herein referred to as a **"**<u>Permitted Free Writing Prospectus</u>." The Company represents that it will treat each Permitted Free Writing Prospectus as an "issuer free writing prospectus" as defined in rule and regulations under the Securities Act, and has complied and will comply with the applicable requirements of Rule 433 of the Securities Act, including timely Commission filing where required, legending and record keeping.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.3 <u>Delivery to the Underwriters of Prospectuses</u>. The Company will deliver to the Underwriters, without charge, from time to time during the period when the Prospectus is required to be delivered under the Securities Act or the Exchange Act such number of copies of each Prospectus as the Underwriters may reasonably request and, as soon as the Registration Statement or any amendment or supplement thereto becomes effective, deliver to you two original executed Registration Statements, including exhibits, and all post-effective amendments thereto and copies of all exhibits filed therewith or incorporated therein by reference and all original executed consents of certified experts.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.4 <u>Effectiveness and Events Requiring Notice to the Underwriters</u>. The Company will use its best efforts to cause the Registration Statement to remain effective with a current prospectus until the later of nine (9) months from the Execution Date and the date on which the Warrants are no longer outstanding, and will notify the Underwriters and holders of the Warrants promptly and confirm the notice in writing: (i) of the effectiveness of the Registration Statement and any amendment thereto; (ii) of the issuance by the Commission of any stop order or of the initiation, or the threatening, of any proceeding for that purpose; (iii) of the issuance by any state securities commission of any proceedings for the suspension of the qualification of the Securities for offering or sale in any jurisdiction or of the initiation, or the threatening, of any proceeding for that purpose; (iv) of the mailing and delivery to the Commission for filing of any amendment or supplement to the Registration Statement or Prospectus, provided that the filing of an amendment or supplement to the Registration Statement on the SEC's EDGAR system shall be deemed to be such notification; (v) of the receipt of any comments or request for any additional information from the Commission; and (vi) of the happening of any event during the period described in this Section 4.4 that, in the judgment of the Company, causes the Registration Statement or the Prospectus, as the case may be, to include an untrue statement of material fact or omit to state a material fact necessary in order to make the statements therein, in light of the circumstances under which they were made, not misleading. If the Commission or any state securities commission shall enter a stop order or suspend such qualification at any time, the Company will make every reasonable effort to obtain promptly the lifting of such order.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.5 <u>Expenses of the Offering</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>General Expenses Related to the Offering</u>. The Company hereby agrees to pay on each of the Closing Date and each Option Closing Date, if any, to the extent not paid at the Closing Date, all expenses incident to the performance of the obligations of the Company under this Agreement, including, but not limited to: (a) all filing fees and communication expenses relating to the registration of the Securities to be sold in the Offering (including the Option Securities) with the Commission; (b) all FINRA Public Offering Filing System fees associated with the review of the Offering by FINRA; all fees and expenses relating to the listing of the Closing Shares, Option Shares, and Warrant Shares on the Trading Market and such other stock exchanges as the Company and the Representative together determine; (c) all fees, expenses and disbursements relating to the registration or qualification of such Securities under the "blue sky" securities laws of such states and other foreign jurisdictions as the Representative may reasonably designate; (d) the costs of all mailing and printing of the underwriting documents (including, without limitation, the Underwriting Agreement, and, if appropriate, any Agreement Among Underwriters, Selected Dealers' Agreement, Underwriters' Questionnaire and Power of Attorney), Registration Statements, Prospectuses and all amendments, supplements and exhibits thereto and as many preliminary and final Prospectuses as the Representative may reasonably deem necessary; (e) the costs and expenses of the Company's public relations firm; (f) the costs of preparing, printing and delivering the Securities; (g) fees and expenses of the Transfer Agent for the Securities (including, without limitation, any fees required for same-day processing of any instruction letter delivered by the Company), including, without limitation, fees and expenses pursuant to the Warrant Agency Agreement; (h) the fees and expenses of the Company's accountants; and (i) the fees and expenses of the Company's legal counsel and other agents and representatives.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Expenses of the Representative</u>. The Company further agrees that, in addition to the expenses payable pursuant to Section 4.5(a), on the Closing Date it will reimburse the Representative for its out-of-pocket expenses related to the Offering in an amount up to $125,000 in the aggregate, which shall be paid by deduction from the proceeds of the Offering contemplated herein.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.6 <u>Application of Net Proceeds</u>. The Company will apply the net proceeds from the Offering received by it in a manner consistent with the application described under the caption "Use of Proceeds" in the Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.7 <u>Delivery of Earnings Statements to Security Holders</u>. The Company will make generally available to its security holders as soon as practicable, but not later than the first day of the fifteenth full calendar month following the Execution Date, an earnings statement (which need not be certified by independent public or independent certified public accountants unless required by the Securities Act or the Rules and Regulations under the Securities Act, but which shall satisfy the provisions of Rule 158(a) under Section 11(a) of the Securities Act) covering a period of at least twelve consecutive months beginning after the Execution Date.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.8 <u>Stabilization</u>. Neither the Company, nor, to its knowledge, any of its employees, directors or shareholders (without the consent of the Representative) has taken or will take, directly or indirectly, any action designed to or that has constituted or that might reasonably be expected to cause or result in, under the Exchange Act, or otherwise, stabilization or manipulation of the price of any security of the Company to facilitate the sale or resale of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.9 <u>Internal Controls</u>. The Company will maintain a system of internal accounting controls designed to provide reasonable assurances that: (i) transactions are executed in accordance with management's general or specific authorization; (ii) transactions are recorded as necessary in order to permit preparation of financial statements in accordance with GAAP and to maintain accountability for assets; (iii) access to assets is permitted only in accordance with management's general or specific authorization; and (iv) the recorded accountability for assets is compared with existing assets at reasonable intervals and appropriate action is taken with respect to any differences.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.10 <u>Accountants</u>. The Company shall continue to retain a nationally recognized independent certified public accounting firm for a period of at least three years after the Execution Date. The Underwriters acknowledge that each of the Company Auditor and CBIZ CPA is acceptable to the Underwriters.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.11 <u>FINRA</u>. The Company shall advise the Underwriters (who shall make an appropriate filing with FINRA) if it is aware that any 5% or greater shareholder of the Company becomes an affiliate or associated person of an Underwriter.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.12 <u>No Fiduciary Duties</u>. The Company acknowledges and agrees that the Underwriters' responsibility to the Company is solely contractual and commercial in nature, based on arms-length negotiations and that neither the Underwriters nor their affiliates or any selected dealer shall be deemed to be acting in a fiduciary capacity, or otherwise owes any fiduciary duty to the Company or any of its affiliates in connection with the Offering and the other transactions contemplated by this Agreement. Notwithstanding anything in this Agreement to the contrary, the Company acknowledges that the Underwriters may have financial interests in the success of the Offering that are not limited to the difference between the price to the public and the purchase price paid to the Company by the Underwriters for the shares and the Underwriters have no obligation to disclose, or account to the Company for, any of such additional financial interests. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against the Underwriters with respect to any breach or alleged breach of fiduciary duty.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.13 <u>Warrant Shares</u>. If all or any portion of a Warrant is exercised at a time when there is an effective registration statement to cover the issuance of the Warrant Shares or if the Warrant is exercised via cashless exercise at a time when such Warrant Shares would be eligible for resale under Rule 144 by a non-affiliate of the Company, the Warrant Shares issued pursuant to any such exercise shall be issued free of all restrictive legends. If at any time following the date hereof the Registration Statement (or any subsequent registration statement registering the sale or resale of the Warrant Shares) is not effective or is not otherwise available for the sale of the Warrant Shares, the Company shall promptly notify the holders of the Warrants in writing that such registration statement is not then effective and thereafter shall promptly notify such holders when the registration statement is effective again and available for the sale of the Warrant Shares (it being understood and agreed that the foregoing shall not limit the ability of the Company to issue, or any holder thereof to sell, any of the Warrant Shares in compliance with applicable federal and state securities laws).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.14 <u>Board Composition and Board Designations</u>. The Company shall ensure that: (i) the qualifications of the persons serving as board members and the overall composition of the Board of Directors comply with the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder and with the listing requirements of the Trading Market and (ii) if applicable, at least one member of the Board of Directors qualifies as a "financial expert" as such term is defined under the Sarbanes-Oxley Act of 2002 and the rules promulgated thereunder.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.15 <u>Securities Laws Disclosure; Publicity</u>. By 9:15 a.m. (New York City time) on the date hereof, the Company shall issue a press release disclosing the material terms of the Offering. The Company and the Representative shall consult with each other in issuing any other press releases with respect to the Offering, and neither the Company nor any Underwriter shall issue any such press release nor otherwise make any such public statement without the prior consent of the Company, with respect to any press release of such Underwriter, or without the prior consent of such Underwriter, with respect to any press release of the Company, which consent shall not unreasonably be withheld or delayed, except if such disclosure is required by law, in which case the disclosing party shall promptly provide the other party with prior notice of such public statement or communication. The Company will not issue press releases or engage in any other publicity, without the Representative's prior written consent, for a period ending at 5:00 p.m. (New York City time) on the first business day following the 45th day following the Closing Date, other than normal and customary releases issued in the ordinary course of the Company's business.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.16 <u>Shareholder Rights Plan</u>. No claim will be made or enforced by the Company or, with the consent of the Company, any other Person, that any Underwriter of the Securities is an "Acquiring Person" under any control share acquisition, business combination, poison pill (including any distribution under a rights agreement) or similar anti-takeover plan or arrangement in effect or hereafter adopted by the Company, or that any Underwriter of Securities could be deemed to trigger the provisions of any such plan or arrangement, by virtue of receiving Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.17 <u>Reservation of Common Stock</u>. As of the date hereof, the Company has reserved and the Company shall continue to reserve and keep available at all times, free of preemptive rights, a sufficient number of shares of Common Stock for the purpose of enabling the Company to issue Option Shares pursuant to the Over-Allotment Option and Warrant Shares pursuant to any exercise of the Warrants.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.18 <u>Listing of Common Stock</u>. The Company hereby agrees to use best efforts to maintain the listing or quotation of the Common Stock on the Trading Market on which it is currently listed, and concurrently with the Closing, the Company shall apply to list or quote all of the Closing Shares, Option Shares, and Warrant Shares on such Trading Market and promptly secure the listing of all of the Closing Shares, Option Shares, and Warrant Shares on such Trading Market. The Company further agrees, if the Company applies to have the Common Stock traded on any other Trading Market, it will then include in such application all of the Closing Shares, Option Shares, and Warrant Shares, and will take such other action as is necessary to cause all of the Closing Shares, Option Shares, and Warrant Shares to be listed or quoted on such other Trading Market as promptly as possible. The Company will then take all action reasonably necessary to continue the listing and trading of its Common Stock on a Trading Market and will comply in all respects with the Company's reporting, filing and other obligations under the bylaws or rules of the Trading Market. The Company agrees to maintain the eligibility of the Common Stock for electronic transfer through the Depository Trust Company or another established clearing corporation, including, without limitation, by timely payment of fees to the Depository Trust Company or such other established clearing corporation in connection with such electronic transfer.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.19 <u>Subsequent Equity Sales</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) From the date hereof until sixty (60) days following the Closing Date (the "<u>Standstill Period</u>"), neither the Company nor any Subsidiary shall issue, enter into any agreement to issue or announce the issuance or proposed issuance of any shares of Common Stock or Common Stock Equivalents or file any registration statement or amendment or supplement thereto, other than the Prospectus, except Exempt Issuances and as contemplated by this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) From the date hereof until the six (6) month anniversary of the Closing Date, the Company shall be prohibited from effecting or entering into an agreement to effect any issuance by the Company or any of its Subsidiaries of Common Stock or Common Stock Equivalents (or a combination of units thereof) involving a Variable Rate Transaction. "<u>Variable Rate Transaction</u>" means a transaction in which the Company (i) issues or sells any debt or equity securities that are convertible into, exchangeable or exercisable for, or include the right to receive, additional shares of Common Stock either (A) at a conversion price, exercise price or exchange rate or other price that is based upon, and/or varies with, the trading prices of or quotations for the shares of Common Stock at any time after the initial issuance of such debt or equity securities or (B) with a conversion, exercise or exchange price that is subject to being reset at some future date after the initial issuance of such debt or equity security or upon the occurrence of specified or contingent events directly or indirectly related to the business of the Company or the market for the Common Stock or (ii) enters into, or effects a transaction under, any agreement, including, but not limited to, an equity line of credit, whereby the Company may issue securities at a future determined price; <u>provided</u>, <u>however</u>, that, after the Standstill Period, the Company's issuance of shares of Common Stock pursuant to an at-the-market offering facility with the Representative shall not be deemed a Variable Rate Transaction hereunder. Any Underwriter shall be entitled to obtain injunctive relief against the Company to preclude any such issuance, which remedy shall be in addition to any right to collect damages.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) Notwithstanding the foregoing, this Section 4.19 shall not apply in respect of an Exempt Issuance.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;4.20 <u>Research Independence</u>. The Company acknowledges that each Underwriter's research analysts and research departments, if any, are required to be independent from their respective investment banking divisions and are subject to certain regulations and internal policies, and that such Underwriter's research analysts may hold and make statements or investment recommendations and/or publish research reports with respect to the Company and/or the offering that differ from the views of its investment bankers. The Company hereby waives and releases, to the fullest extent permitted by law, any claims that the Company may have against such Underwriter with respect to any conflict of interest that may arise from the fact that the views expressed by their independent research analysts and research departments may be different from or inconsistent with the views or advice communicated to the Company by such Underwriter's investment banking divisions. The Company acknowledges that the Representative is a full service securities firm and as such from time to time, subject to applicable securities laws, may effect transactions for its own account or the account of its customers and hold long or short position in debt or equity securities of the Company.

**ARTICLE V.**

**DEFAULT BY UNDERWRITERS**

If on the Closing Date or any Option Closing Date, if any, any Underwriter shall fail to purchase and pay for the portion of the Closing Securities or Option Securities, as the case may be, which such Underwriter has agreed to purchase and pay for on such date (otherwise than by reason of any default on the part of the Company), the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, shall use their reasonable efforts to procure within 36 hours thereafter one or more of the other Underwriters, or any others, to purchase from the Company such amounts as may be agreed upon and upon the terms set forth herein, the Closing Securities or Option Securities , as the case may be, which the defaulting Underwriter or Underwriters failed to purchase. If during such 36 hours the Representative shall not have procured such other Underwriters, or any others, to purchase the Closing Securities or Option Securities, as the case may be, agreed to be purchased by the defaulting Underwriter or Underwriters, then (a) if the aggregate number of Closing Securities or Option Securities, as the case may be, with respect to which such default shall occur does not exceed 10% of the Closing Securities or Option Securities, as the case may be, covered hereby, the other Underwriters shall be obligated, severally, in proportion to the respective numbers of Closing Securities or Option Securities, as the case may be, which they are obligated to purchase hereunder, to purchase the Closing Securities or Option Securities, as the case may be, which such defaulting Underwriter or Underwriters failed to purchase, or (b) if the aggregate number of Closing Securities or Option Securities, as the case may be, with respect to which such default shall occur exceeds 10% of the Closing Securities or Option Securities, as the case may be, covered hereby, the Company or the Representative will have the right to terminate this Agreement without liability on the part of the non-defaulting Underwriters or of the Company except to the extent provided in Article VI hereof. In the event of a default by any Underwriter or Underwriters, as set forth in this Article V, the applicable Closing Date may be postponed for such period, not exceeding seven days, as the Representative, or if the Representative is the defaulting Underwriter, the non-defaulting Underwriters, may determine in order that the required changes in the Prospectus or in any other documents or arrangements may be effected. The term "Underwriter" includes any person substituted for a defaulting Underwriter. Any action taken under this Section shall not relieve any defaulting Underwriter from liability in respect of any default of such Underwriter under this Agreement.

**ARTICLE VI.**

**INDEMNIFICATION**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.1 <u>Indemnification of the Underwriters</u>. Subject to the conditions set forth below, the Company agrees to indemnify and hold harmless the Underwriters, and each dealer selected by each Underwriter that participates in the offer and sale of the Securities (each a "<u>Selected Dealer</u>") and each of their respective directors, officers and employees and each Person, if any, who controls such Underwriter or any Selected Dealer ("<u>Controlling Person</u>") within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act, against any and all loss, liability, claim, damage and expense whatsoever (including but not limited to any and all legal or other expenses reasonably incurred in investigating, preparing or defending against any litigation, commenced or threatened, or any claim whatsoever, whether arising out of any action between such Underwriter and the Company or between such Underwriter and any third party or otherwise) to which they or any of them may become subject under the Securities Act, the Exchange Act or any other statute or at common law or otherwise or under the laws of foreign countries, arising out of or based upon any untrue statement or alleged untrue statement of a material fact contained in (i) any Preliminary Prospectus, if any, the Registration Statement or the Prospectus (as from time to time each may be amended and supplemented); (ii) any materials or information provided to investors by, or with the approval of, the Company in connection with the marketing of the offering of the Securities, including any "road show" or investor presentations made to investors by the Company (whether in person or electronically); or (iii) any application or other document or written communication (in this Article VI, collectively called "<u>application</u>") executed by the Company or based upon written information furnished by the Company in any jurisdiction in order to qualify the Securities under the securities laws thereof or filed with the Commission, any state securities commission or agency, Trading Market or any securities exchange; or the omission or alleged omission therefrom of a material fact required to be stated therein or necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, unless such statement or omission was made in reliance upon and in conformity with written information furnished to the Company with respect to the applicable Underwriter by or on behalf of such Underwriter expressly for use in any Preliminary Prospectus, if any, the Registration Statement or Prospectus, or any amendment or supplement thereto, or in any application, as the case may be. With respect to any untrue statement or omission or alleged untrue statement or omission made in the Preliminary Prospectus, if any, the indemnity agreement contained in this Section 6.1 shall not inure to the benefit of an Underwriter to the extent that any loss, liability, claim, damage or expense of such Underwriter results from the fact that a copy of the Prospectus was not given or sent to the Person asserting any such loss, liability, claim or damage at or prior to the written confirmation of sale of the Securities to such Person as required by the Securities Act and the rules and regulations thereunder, and if the untrue statement or omission has been corrected in the Prospectus, unless such failure to deliver the Prospectus was a result of non-compliance by the Company with its obligations under this Agreement. The Company agrees promptly to notify each Underwriter of the commencement of any litigation or proceedings against the Company or any of its officers, directors or Controlling Persons in connection with the issue and sale of the Public Securities or in connection with the Registration Statement or Prospectus.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.2 <u>Procedure</u>. If any action is brought against an Underwriter, a Selected Dealer or a Controlling Person in respect of which indemnity may be sought against the Company pursuant to Section 6.1, such Underwriter, such Selected Dealer or Controlling Person, as the case may be, shall promptly notify the Company in writing of the institution of such action and the Company shall assume the defense of such action, including the employment and fees of counsel (subject to the reasonable approval of such Underwriter or such Selected Dealer, as the case may be) and payment of actual expenses. Such Underwriter, such Selected Dealer or Controlling Person shall have the right to employ its or their own counsel in any such case, but the fees and expenses of such counsel shall be at the expense of such Underwriter, such Selected Dealer or Controlling Person unless (i) the employment of such counsel at the expense of the Company shall have been authorized in writing by the Company in connection with the defense of such action, or (ii) the Company shall not have employed counsel to have charge of the defense of such action, or (iii) such indemnified party or parties shall have reasonably concluded that there may be defenses available to it or them which are different from or additional to those available to the Company (in which case the Company shall not have the right to direct the defense of such action on behalf of the indemnified party or parties), in any of which events the reasonable fees and expenses of not more than one additional firm of attorneys selected by such Underwriter (in addition to local counsel), Selected Dealer and/or Controlling Person shall be borne by the Company. Notwithstanding anything to the contrary contained herein, if any Underwriter, Selected Dealer or Controlling Person shall assume the defense of such action as provided above, the Company shall have the right to approve the terms of any settlement of such action which approval shall not be unreasonably withheld.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.3 <u>Indemnification of the Company</u>. Each Underwriter severally and not jointly agrees to indemnify and hold harmless the Company, each of its directors, each of its officers who signed the Registration Statement, and each person, if any, who controls the Company within the meaning of Section 15 of the Securities Act or Section 20 of the Exchange Act against any and all loss, liability, claim, damage and expense described in the foregoing indemnity from the Company to such Underwriter, as incurred, but only with respect to untrue statements or omissions, or alleged untrue statements or omissions made in any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any application, in reliance upon, and in strict conformity with, written information furnished to the Company with respect to such Underwriter by or on behalf of such Underwriter expressly for use in such Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or in any such application. The parties acknowledge and agree such information consists solely of the following disclosure in the "Underwriting" section of the Prospectus; the last sentence of the third paragraph, the sentence constituting the sixth paragraph and the disclosure under "Stabilization, Short Positions and Penalty Bids". In case any action shall be brought against the Company or any other Person so indemnified based on any Preliminary Prospectus, if any, the Registration Statement or Prospectus or any amendment or supplement thereto or any application, and in respect of which indemnity may be sought against such Underwriter, such Underwriter shall have the rights and duties given to the Company, and the Company and each other Person so indemnified shall have the rights and duties given to such Underwriter by the provisions of this Article VI. Notwithstanding the provisions of this Section 6.3, no Underwriter shall be required to indemnify the Company for any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters' obligations in this Section 6.3 to indemnify the Company are several in proportion to their respective underwriting obligations and not joint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;6.4 <u>Contribution</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Contribution Rights</u>. In order to provide for just and equitable contribution under the Securities Act in any case in which (i) any Person entitled to indemnification under this Article VI makes a claim for indemnification pursuant hereto but it is judicially determined (by the entry of a final judgment or decree by a court of competent jurisdiction and the expiration of time to appeal or the denial of the last right of appeal) that such indemnification may not be enforced in such case notwithstanding the fact that this Article VI provides for indemnification in such case, or (ii) contribution under the Securities Act, the Exchange Act or otherwise may be required on the part of any such Person in circumstances for which indemnification is provided under this Article VI, then, and in each such case, the Company and each Underwriter, severally and not jointly, shall contribute to the aggregate losses, liabilities, claims, damages and expenses of the nature contemplated by said indemnity agreement incurred by the Company and such Underwriter, as incurred, in such proportions that such Underwriter is responsible for that portion represented by the percentage that the underwriting discount appearing on the cover page of the Prospectus bears to the initial offering price appearing thereon and the Company is responsible for the balance; provided, that, no Person guilty of a fraudulent misrepresentation (within the meaning of Section 11(f) of the Securities Act) shall be entitled to contribution from any Person who was not guilty of such fraudulent misrepresentation. For purposes of this Section, each director, officer and employee of such Underwriter or the Company, as applicable, and each Person, if any, who controls such Underwriter or the Company, as applicable, within the meaning of Section 15 of the Securities Act shall have the same rights to contribution as such Underwriter or the Company, as applicable. Notwithstanding the provisions of this Section 6.4, no Underwriter shall be required to contribute any amount in excess of the underwriting discounts and commissions applicable to the Securities purchased by such Underwriter. The Underwriters' obligations in this Section 6.4 to contribute are several in proportion to their respective underwriting obligations and not joint.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Contribution Procedure</u>. Within fifteen days after receipt by any party to this Agreement (or its representative) of notice of the commencement of any action, suit or proceeding, such party will, if a claim for contribution in respect thereof is to be made against another party ("<u>contributing party</u>"), notify the contributing party of the commencement thereof, but the failure to so notify the contributing party will not relieve it from any liability which it may have to any other party other than for contribution hereunder. In case any such action, suit or proceeding is brought against any party, and such party notifies a contributing party or its representative of the commencement thereof within the aforesaid fifteen days, the contributing party will be entitled to participate therein with the notifying party and any other contributing party similarly notified. Any such contributing party shall not be liable to any party seeking contribution on account of any settlement of any claim, action or proceeding affected by such party seeking contribution without the written consent of such contributing party. The contribution provisions contained in this Section 6.4 are intended to supersede, to the extent permitted by law, any right to contribution under the Securities Act, the Exchange Act or otherwise available.

**ARTICLE VII.**

**MISCELLANEOUS**

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.1 <u>Termination</u>.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(a) <u>Termination Right</u>. The Representative shall have the right to terminate this Agreement at any time prior to any Closing Date, (i) if any domestic or international event or act or occurrence has materially disrupted, or in its opinion will in the immediate future materially disrupt, general securities markets in the United States; or (ii) if trading on any Trading Market shall have been suspended or materially limited, or minimum or maximum prices for trading shall have been fixed, or maximum ranges for prices for securities shall have been required by FINRA or by order of the Commission or any other government authority having jurisdiction, or (iii) if the United States shall have become involved in a new war or an increase in major hostilities, or (iv) if a banking moratorium has been declared by a New York State or federal authority, or (v) if a moratorium on foreign exchange trading has been declared which materially adversely impacts the United States securities markets, or (vi) if the Company shall have sustained a material loss by fire, flood, accident, hurricane, earthquake, theft, sabotage or other calamity or malicious act which, whether or not such loss shall have been insured, will, in the Representative's opinion, make it inadvisable to proceed with the delivery of the Securities, or (vii) if the Company is in material breach of any of its representations, warranties or covenants hereunder, or (viii) if the Representative shall have become aware after the date hereof of such a material adverse change in the conditions or prospects of the Company, or such adverse material change in general market conditions as in the Representative's judgment would make it impracticable to proceed with the offering, sale and/or delivery of the Securities or to enforce contracts made by the Underwriters for the sale of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(b) <u>Expenses</u>. In the event this Agreement shall be terminated pursuant to Section 7.1(a), within the time specified herein or any extensions thereof pursuant to the terms herein, the Company shall be obligated to pay to the Representative its actual and accountable out of pocket expenses related to the transactions contemplated herein then due and payable, including the fees and disbursements of SMRH; provided, however, that such expenses shall not exceed $125,000 in the aggregate (<u>provided</u>, further, <u>however</u>, that such expense cap in no way limits or impairs the indemnification and contribution provisions of this Agreement).

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;(c) <u>Indemnification</u>. Notwithstanding any contrary provision contained in this Agreement, any election hereunder or any termination of this Agreement, and whether or not this Agreement is otherwise carried out, the provisions of Article VI shall not be in any way effected by such election or termination or failure to carry out the terms of this Agreement or any part hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.2 <u>Entire Agreement</u>. The Transaction Documents, together with the exhibits and schedules thereto, the Prospectus and the Prospectus Supplement, if any, contain the entire understanding of the parties with respect to the subject matter hereof and thereof and supersede all prior agreements and understandings, oral or written, with respect to such matters, which the parties acknowledge have been merged into such documents, exhibits and schedules. Notwithstanding anything herein to the contrary, the Investment Banking Agreement, dated October 16, 2024, as amended on November 12, 2024, January 7, 2025 and June 17, 2025 ("<u>Investment Banking Agreement</u>"), between the Company and the Representative, shall continue to be effective during its term and the terms therein, including, without limitation, Section 4(d) and Section 5 therein with respect to any future offerings, shall continue to survive and be enforceable by the Representative in accordance with its terms, provided that, in the event of a conflict between the terms and conditions of this Agreement and the Investment Banking Agreement, the terms and conditions of this Agreement shall control.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.3 <u>Notices</u>. Any and all notices or other communications or deliveries required or permitted to be provided hereunder shall be in writing and shall be deemed given and effective on the earliest of: (a) the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address set forth on the signature pages attached hereto at or prior to 5:30 p.m. (New York City time) on a Trading Day, (b) the next Trading Day after the time of transmission, if such notice or communication is delivered via facsimile at the facsimile number or e-mail attachment at the e-mail address as set forth on the signature pages attached hereto on a day that is not a Trading Day or later than 5:30 p.m. (New York City time) on any Trading Day, (c) the second (2<sup>nd</sup>) Trading Day following the date of mailing, if sent by U.S. nationally recognized overnight courier service or (d) upon actual receipt by the party to whom such notice is required to be given. The address for such notices and communications shall be as set forth on the signature pages attached hereto.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.4 <u>Amendments; Waivers</u>. No provision of this Agreement may be waived, modified, supplemented or amended except in a written instrument signed, in the case of an amendment, by the Company and the Representative. No waiver of any default with respect to any provision, condition or requirement of this Agreement shall be deemed to be a continuing waiver in the future or a waiver of any subsequent default or a waiver of any other provision, condition or requirement hereof, nor shall any delay or omission of any party to exercise any right hereunder in any manner impair the exercise of any such right.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.5 <u>Headings</u>. The headings herein are for convenience only, do not constitute a part of this Agreement and shall not be deemed to limit or affect any of the provisions hereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.6 <u>Successors and Assigns</u>. This Agreement shall be binding upon and inure to the benefit of the parties and their successors and permitted assigns.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.7 <u>Governing Law</u>. All questions concerning the construction, validity, enforcement and interpretation of the Transaction Documents shall be governed by and construed and enforced in accordance with the internal laws of the State of New York, without regard to the principles of conflicts of law thereof. Each party agrees that all legal proceedings concerning the interpretations, enforcement and defense of the transactions contemplated by this Agreement and any other Transaction Documents (whether brought against a party hereto or its respective affiliates, directors, officers, shareholders, partners, members, employees or agents) shall be commenced exclusively in the state and federal courts sitting in the City of New York. Each party hereby irrevocably submits to the exclusive jurisdiction of the state and federal courts sitting in the City of New York, Borough of Manhattan for the adjudication of any dispute hereunder or in connection herewith or with any transaction contemplated hereby or discussed herein (including with respect to the enforcement of any of the Transaction Documents), and hereby irrevocably waives, and agrees not to assert in any action, suit or proceeding, any claim that it is not personally subject to the jurisdiction of any such court, that such suit, action or proceeding is improper or is an inconvenient venue for such proceeding. Each party hereby irrevocably waives personal service of process and consents to process being served in any such suit, action or proceeding by mailing a copy thereof via registered or certified mail or overnight delivery (with evidence of delivery) to such party at the address in effect for notices to it under this Agreement and agrees that such service shall constitute good and sufficient service of process and notice thereof. Nothing contained herein shall be deemed to limit in any way any right to serve process in any other manner permitted by law. If either party shall commence an action or proceeding to enforce any provisions of the Transaction Documents, then, in addition to the obligations of the Company under Article VI, the prevailing party in such action, suit or proceeding shall be reimbursed by the other party for its reasonable attorneys' fees and other costs and expenses incurred with the investigation, preparation and prosecution of such action or proceeding.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.8 <u>Survival</u>. The representations and warranties contained herein shall survive the Closing and the Option Closing, if any, and the delivery of the Securities.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.9 <u>Execution</u>. This Agreement may be executed in two or more counterparts, all of which when taken together shall be considered one and the same agreement and shall become effective when counterparts have been signed by each party and delivered to each other party, it being understood that the parties need not sign the same counterpart. In the event that any signature is delivered by facsimile transmission or by e-mail delivery of a ".pdf" format data file, such signature shall create a valid and binding obligation of the party executing (or on whose behalf such signature is executed) with the same force and effect as if such facsimile or ".pdf" signature page were an original thereof.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.10 <u>Severability</u>. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction to be invalid, illegal, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions set forth herein shall remain in full force and effect and shall in no way be affected, impaired or invalidated, and the parties hereto shall use their commercially reasonable efforts to find and employ an alternative means to achieve the same or substantially the same result as that contemplated by such term, provision, covenant or restriction. It is hereby stipulated and declared to be the intention of the parties that they would have executed the remaining terms, provisions, covenants and restrictions without including any of such that may be hereafter declared invalid, illegal, void or unenforceable.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.11 <u>Remedies</u>. In addition to being entitled to exercise all rights provided herein or granted by law, including recovery of damages, the Underwriters and the Company will be entitled to specific performance under the Transaction Documents. The parties agree that monetary damages may not be adequate compensation for any loss incurred by reason of any breach of obligations contained in the Transaction Documents and hereby agree to waive and not to assert in any action for specific performance of any such obligation the defense that a remedy at law would be adequate.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.12 <u>Saturdays, Sundays, Holidays, etc</u>. If the last or appointed day for the taking of any action or the expiration of any right required or granted herein shall not be a Business Day, then such action may be taken or such right may be exercised on the next succeeding Business Day.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.13 <u>Construction</u>. The parties agree that each of them and/or their respective counsel have reviewed and had an opportunity to revise the Transaction Documents and, therefore, the normal rule of construction to the effect that any ambiguities are to be resolved against the drafting party shall not be employed in the interpretation of the Transaction Documents or any amendments thereto. In addition, each and every reference to share prices and shares of Common Stock in any Transaction Document shall be subject to adjustment for reverse and forward stock splits, stock dividends, stock combinations and other similar transactions of the Common Stock that occur after the date of this Agreement.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;7.14 **<u>WAIVER OF JURY TRIAL</u>. IN ANY ACTION, SUIT, OR PROCEEDING IN ANY JURISDICTION BROUGHT BY ANY PARTY AGAINST ANY OTHER PARTY ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY, THE PARTIES EACH KNOWINGLY AND INTENTIONALLY, TO THE GREATEST EXTENT PERMITTED BY APPLICABLE LAW, HEREBY ABSOLUTELY, UNCONDITIONALLY, IRREVOCABLY AND EXPRESSLY WAIVE FOREVER ANY RIGHT TO TRIAL BY JURY.** 

*(Signature Pages Follow)*

If the foregoing correctly sets forth the understanding between the Underwriters and the Company, please so indicate in the space provided below for that purpose, whereupon this letter shall constitute a binding agreement among the Company and the several Underwriters in accordance with its terms.

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| | |
|:---|:---|
| Very truly yours, | Very truly yours, |
| **CALIDI BIOTHERAPEUTICS, INC.** | **CALIDI BIOTHERAPEUTICS, INC.** |
| By: | */s/ Andrew Jackson* |
| Name: | Andrew Jackson |
| Title: | Chief Financial Officer |

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| |
|:---|
| Address for Notice: |
| Calidi Biotherapeutics, Inc. |
| 4475 Executive Drive, Suite 200 |
| San Diego, California 92121 |
| Attention: Andrew Jackson and Eric Poma |
| Email: <u>ajackson@calidibio.com</u> and <u>epoma@calidibio.com</u> |

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| |
|:---|
| Copy to: |
| Sichenzia Ross Ference Carmel LLP |
| 1185 Avenue of the Americas |
| New York, New York 10036 |
| E-mail: <u>mbalcombe@srfc.law</u> and <u>rsud@srfc.law</u> |
| Attention: Marcelle S. Balcombe and Rohini Sud |

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| | |
|:---|:---|
| Accepted on the date first above written. | Accepted on the date first above written. |
| **LADENBURG THALMANN & CO. INC.** | **LADENBURG THALMANN & CO. INC.** |
| As the Representative of the several | As the Representative of the several |
| Underwriters listed on Schedule I | Underwriters listed on Schedule I |
| By: | Ladenburg Thalmann & Co. Inc. |

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| | |
|:---|:---|
| By: | */s/ Nicholas Stergis* |
| Name: | Nicholas Stergis |
| Title: | Managing Director |

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| |
|:---|
| Address for Notice: |
| 640 Fifth Avenue, 4th Floor |
| New York, New York 10019 |
| Attn: General Counsel |

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| |
|:---|
| Copy to: |
| Sheppard, Mullin, Richter & Hampton LLP |
| 30 Rockefeller Plaza, 39<sup>th</sup> Floor |
| New York, New York 101112 |
| E-mail: <u>rafriedman@sheppardmullin.com</u> and <u>scohen@sheppardmullin.com</u> |
| Attention: Richard Friedman and Stephen Cohen |

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**SCHEDULE I**

Schedule of Underwriters

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| | | | | |
|:---|:---|:---|:---|:---|
| Underwriters | Closing <br> Shares | Pre-Funded<br> Warrants | Closing<br> Warrants | Closing<br> Purchase Price |
| Ladenburg Thalmann & Co. Inc. | 1030935 | 1069600 | 2100535 | $4200000.40 |
| Laidlaw & Co. (UK) Ltd. | 441829 | 458400 | 900229 | $1799999.6 |
| **Total** | **1472764** | **1528000** | **3000764** | $**6000000.00** |

---

**<u>EXHIBIT A</u>**

**<u>Form of Lock-up Agreement</u>**

**<u>EXHIBIT B</u>**

**<u>Form of Pre-funded Warrant</u>**

**<u>EXHIBIT C</u>**

**<u>Form of Common Warrant</u>**

**<u>EXHIBIT D</u>**

**<u>Form of Warrant Agency Agreement</u>**

## 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: November 13, 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: November 13, 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 September 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: November 13, 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 September 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: November 13, 2025

---

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

---