Calidi Biotherapeutics plans roughly 67% staff cut
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Calidi Biotherapeutics, Inc. reported a nine-month net loss of $11.914 million, compared with $16.004 million in 2025. Net cash used in operating activities was $10.807 million versus $16.249 million, and operating expenses were $12.682 million versus $15.774 million.
At September 30, cash and restricted cash totaled $4.166 million, and accumulated deficit was $153.535 million. Calidi said substantial doubt exists about its ability to continue as a going concern within 12 months from issuance. It depends on additional funding and said it may not secure financing timely or on favorable terms.
On November 6, Calidi implemented a restructuring plan that will reduce headcount by approximately 67%, with stated goals of reducing costs, extending operating runway and preserving capital while pursuing financing. Its September registered direct offering was for 1,025,640 shares at $1.17 per share, with approximately $1.2 million in net proceeds; as of September 30, 230,769 shares had been issued and 794,871 remained to be issued.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Moderate pointNine-month net loss narrowed to $11.914 million from $16.004 million.
- Moderate pointNine-month operating cash use fell to $10.807 million from $16.249 million.
Negative
- Major point. Forward-looking: it has not happened yet and may not happen.Going-concern warning: substantial doubt about continuing within 12 months from issuance.
- Moderate point. Forward-looking: it has not happened yet and may not happen.Headcount reduction: restructuring plan will reduce staff by approximately 67%.
Filing Explained
The at-the-market channel has no remaining share-sale capacity, while outstanding warrants preserve a conditional path to additional shares.
After its
The warrant total included 755,915 Series J warrants and 755,915 Series K warrants, each with a
The filing lists
Key Figures
Key Terms
going concern financial
substantial doubt financial
operating runway financial
registered direct offering financial
restricted cash financial
oncolytic virus medical
FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were the terms of CLDI's September 2026 registered direct offering?
How does CLDI plan to address its going-concern uncertainty?
AI-generated analysis. How Rhea-AI works. Not financial advice.
Table of Contents
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
FOR THE QUARTERLY PERIOD ENDED
or
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number
(Exact name of registrant as specified in its charter)
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(State or other jurisdiction of incorporation or organization) |
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(IRS Employer Identification No.) |
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(Address of principal executive offices) |
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(Zip Code) |
(Registrant’s telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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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.
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).
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 |
☐ |
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Accelerated filer |
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Smaller reporting company |
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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 11, 2026, the registrant had
Table of Contents
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION |
1 |
Item 1. Financial Statements |
1 |
Condensed Consolidated Balance Sheets |
1 |
Condensed Consolidated Statements of Operations |
2 |
Condensed Consolidated Statements of Total Equity |
4 |
Condensed Consolidated Statements of Cash Flows |
6 |
Notes to Condensed Consolidated Financial Statements |
7 |
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations |
33 |
Item 3. Quantitative and Qualitative Disclosures About Market Risk |
43 |
Item 4. Controls and Procedures |
44 |
PART II — OTHER INFORMATION |
45 |
Item 1. Legal Proceedings |
45 |
Item 1A. Risk Factors |
45 |
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds |
45 |
Item 3. Defaults Upon Senior Securities |
45 |
Item 4. Mine Safety Disclosures |
45 |
Item 5. Other Information |
45 |
Item 6. Exhibits |
46 |
Signatures |
47 |
i
Table of Contents
EXPLANATORY NOTE
On July 30, 2026, the Company effected a reverse stock split (the “2026 Reverse Stock Split”) of its shares of Common Stock, par value $0.0001 per share (“Common Stock”). As a result of the 2026 Reverse Stock Split, every sixteen (16) 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 2026 Reverse Stock Split. Any fractional shares that would otherwise have resulted from the 2026 Reverse Stock Split were rounded up to the next whole number. Immediately following the effectiveness of the 2026 Reverse Stock Split, there were approximately 2,445,427 shares of Common Stock outstanding, inclusive of 9,375 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 July 31, 2026.
All references in this Quarterly Report to the number of shares, and per share amounts, as well as option and warrant amounts and exercise prices, including the condensed consolidated financial statements and accompanying notes, have also been restated to give retroactive effect to the 2026 Reverse Stock Split.
ii
Table of Contents
PART I. Financial Information
Item 1. Financial Statements
CALIDI BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands, except par value data)
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September 30, |
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December 31, |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
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$ |
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$ |
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Restricted cash, current |
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Prepaid expenses and other current assets |
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Total current assets |
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Noncurrent assets: |
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Restricted cash, noncurrent |
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Machinery and equipment, net |
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Operating lease right-of-use assets, net |
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Other noncurrent assets |
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Total assets |
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$ |
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$ |
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LIABILITIES AND TOTAL EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Related party accounts payable |
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Accrued expenses and other current liabilities |
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Related party accrued expenses and other current liabilities |
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Promissory note and accrued interest, current |
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Operating leases, current |
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Finance leases, current |
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Total current liabilities |
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Noncurrent liabilities: |
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Operating leases, noncurrent |
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Finance leases, noncurrent |
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Promissory note, noncurrent |
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Warrant liability |
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Related party warrant liability |
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Total liabilities |
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Total equity |
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Common stock, $ |
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- |
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- |
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Additional paid-in capital |
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Common stock to be issued |
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Accumulated other comprehensive loss, net of tax |
|
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( |
) |
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( |
) |
Accumulated deficit |
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( |
) |
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( |
) |
Total equity |
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Total liabilities and total equity |
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$ |
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$ |
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||
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The accompanying notes are an integral part of these condensed consolidated financial statements.
1
Table of Contents
CALIDI BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
(unaudited)
|
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Three months ended September 30, |
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Nine months ended September 30, |
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2026 |
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2025 |
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2026 |
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2025 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
|
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( |
) |
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( |
) |
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( |
) |
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( |
) |
Other income (expense), net: |
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Interest expense |
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( |
) |
|
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( |
) |
|
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( |
) |
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( |
) |
Interest expense - related party |
|
|
( |
) |
|
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( |
) |
|
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( |
) |
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( |
) |
Change in fair value of other liabilities and |
|
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( |
) |
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( |
) |
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Change in fair value of other liabilities and |
|
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( |
) |
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( |
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Grant income |
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Other income (expense), net |
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( |
) |
|||
Total other income (expense), net |
|
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( |
) |
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( |
) |
||
Loss before income taxes |
|
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( |
) |
|
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( |
) |
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( |
) |
|
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( |
) |
Provision for income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net loss attributable to noncontrolling interest |
|
|
|
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|
( |
) |
|
|
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( |
) |
||
Net loss attributable to controlling interest |
|
|
( |
) |
|
|
( |
) |
|
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( |
) |
|
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( |
) |
Deemed dividend on warrants |
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|
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( |
) |
|
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( |
) |
|
|
( |
) |
|
Net loss attributable to common stockholders |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Net loss per share - basic and diluted |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Weighted average shares outstanding - basic |
|
|
|
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||||
|
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||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
2
Table of Contents
CALIDI BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS
(In thousands)
(unaudited)
|
|
Three months ended September 30, |
|
|
Nine months ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
Other comprehensive (expense) income, net of tax: |
|
|
|
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|
|
|
|
|
|
|
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||||
Foreign currency translation adjustment |
|
|
( |
) |
|
|
|
|
|
( |
) |
|
|
|
||
Comprehensive loss |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Comprehensive loss attributable to noncontrolling |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Comprehensive loss attributable to common |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
3
Table of Contents
CALIDI BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF TOTAL EQUITY
For the three and nine months ended September 30, 2026 and 2025 (unaudited)
(In thousands, except shares)
|
Common Stock |
|
|
Additional |
|
|
Common Stock |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
||||||||||
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
to be Issued, Net |
|
|
Income (Loss) |
|
|
Deficit |
|
|
Equity |
|
|||||||
Balances at January 1, 2026 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|||
Issuance of common stock through the March Confidentially Marketed Public |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Issuance of common stock in connection with the exercise of pre-funded |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Foreign currency translation adjustments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balances at March 31, 2026 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
- |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|||
Issuance of common stock through the At the Market Offering |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Issuance of common stock in connection with the exercise of pre-funded |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Foreign currency translation adjustments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balances at June 30, 2026 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock through the At the Market Offering |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Issuance of common stock in connection with the exercise of warrants |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|||
Issuance of common stock in connection with the 2026 Registered Direct |
|
|
|
|
- |
|
|
|
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
||||
Issuance of common stock for 2026 Reverse Stock Split fractional shares |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
||
Issuance of common stock in connection with release of restricted stock units |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
||
Foreign currency translation adjustments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
- |
|
|
|
( |
) |
Net loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
Balances at September 30, 2026 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
||||
4
Table of Contents
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Accumulated |
|
|
Total |
|
|
Non-Controlling |
|
|
Total |
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|||||||||||
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Shares |
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|
Amount |
|
|
Capital |
|
|
Income (Loss) |
|
|
Deficit |
|
|
Equity |
|
|
Interest |
|
|
Equity |
|
||||||||
Balances at January 1, 2025 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Issuance of common stock through the At the Market Offering |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Issuance of common stock through the January Confidentially Marketed |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Issuance of common stock in connection with the 2025 Registered |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Issuance of common stock in connection with release of restricted |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Foreign currency translation adjustments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Net loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances at March 31, 2025 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Issuance of common stock in connection with the exercise of |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Foreign currency translation adjustments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Net loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances at June 30, 2025 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
Issuance of common stock for Reverse Stock Split fractional shares |
|
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
Issuance of common stock through August Public Offering |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Exercise of pre-funded warrants |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Issuance of common shares through July Inducement Offer, net of |
|
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
||||
Stock-based compensation |
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
- |
|
|
|
|
|
|
- |
|
|
|
|
|||
Foreign currency translation adjustments |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
Net loss |
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
- |
|
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Balances at September 30, 2025 |
|
|
|
$ |
- |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
|
|
$ |
|
|
$ |
|
|||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
5
Table of Contents
CALIDI BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(unaudited)
|
|
Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Depreciation and amortization |
|
|
|
|
|
|
||
Stock-based compensation |
|
|
|
|
|
|
||
Change in fair value of other liabilities and derivatives |
|
|
( |
) |
|
|
|
|
Loss on disposal of fixed assets |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
( |
) |
Accounts payable |
|
|
|
|
|
( |
) |
|
Accrued expenses and other current liabilities |
|
|
( |
) |
|
|
( |
) |
Operating lease liabilities |
|
|
( |
) |
|
|
( |
) |
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of machinery and equipment |
|
|
( |
) |
|
|
( |
) |
Proceeds from the sale of machinery and equipment |
|
|
|
|
|
|
||
Net cash used in investing activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from public offerings |
|
|
|
|
|
|
||
Proceeds from at the market offering |
|
|
|
|
|
|
||
Proceeds from registered direct offering |
|
|
|
|
|
|
||
Proceeds from warrant inducement financing |
|
|
|
|
|
|
||
Proceeds from the exercise of warrants and pre-funded warrants |
|
|
|
|
|
|
||
Payment of financing costs |
|
|
( |
) |
|
|
( |
) |
Repayment of principal on term notes payable |
|
|
|
|
|
( |
) |
|
Repayment of principal on related party term notes payable |
|
|
|
|
|
( |
) |
|
Repayment of principal on related party bridge loan payable |
|
|
|
|
|
( |
) |
|
Repayment of financing lease activities |
|
|
( |
) |
|
|
( |
) |
Net cash provided by financing activities |
|
|
|
|
|
|
||
Effect of exchange rate changes on cash |
|
|
( |
) |
|
|
|
|
Net (decrease) increase in cash and restricted cash |
|
|
( |
) |
|
|
|
|
Cash and restricted cash at beginning of period |
|
|
|
|
|
|
||
Cash and restricted cash at end of period |
|
$ |
|
|
$ |
|
||
Supplemental disclosures of cash flow information: |
|
|
|
|
|
|
||
Cash paid for interest |
|
$ |
|
|
$ |
|
||
Cash paid for income taxes |
|
$ |
|
|
$ |
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Deemed dividend on warrants |
|
$ |
|
|
$ |
|
||
Financing fees included in accounts payable and accrued liabilities |
|
$ |
|
|
$ |
|
||
Machinery and equipment acquired through financing leases |
|
$ |
|
|
$ |
|
||
Reduction to lease liabilities due to remeasurements |
|
$ |
( |
) |
|
$ |
|
|
Reduction to right-of-use assets due to remeasurements |
|
$ |
( |
) |
|
$ |
|
|
|
|
|
|
|
|
|
||
The accompanying notes are an integral part of these condensed consolidated financial statements.
6
Table of Contents
CALIDI BIOTHERAPEUTICS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Calidi Biotherapeutics, Inc. is a biotechnology company that is pioneering the development of targeted therapies with the potential to deliver genetic medicines to distal sites of disease. The Company’s proprietary RedTail platform features an engineered enveloped oncolytic virus designed for systemic delivery and targeting of metastatic sites. This advanced enveloped technology is intended to shield the virus from immune clearance, allowing virotherapy to effectively reach tumor sites, induce tumor lysis, and deliver potent genetic medicine(s) to metastatic locations.
As used herein, the “Company” or “Calidi” refers collectively to Calidi Biotherapeutics, Inc., a Delaware corporation, and its consolidated subsidiaries, which include (i) Calidi Biotherapeutics (Nevada), Inc. (“Calidi Nevada”), (ii) StemVac GmbH (“StemVac”), a German company, (iii) Calidi Biotherapeutics Australia Pty Ltd (“Calidi Australia”), an Australian company, and (iv) Redtail Biopharma, Inc. (“Redtail Biopharma”), a Nevada corporation.
The Company’s operations to date have focused on organization and staffing, business planning, raising capital, licensing, acquiring and developing technology, establishing an intellectual property portfolio, identifying potential product candidates and undertaking preclinical studies, process development and manufacturing for preclinical and clinical trials.
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 is for conducting certain clinical enabling activities in Australia. Redtail Biopharma was incorporated in May 2024 as a potential vehicle to facilitate a spinoff or out license of the RedTail technology, should partnering activities develop. To date, the Company has not transferred any intellectual property or assets to Redtail Biopharma, and Redtail Biopharma has had no activity to date.
Reverse Stock Split
On July 27, 2026, the Company filed a Third 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
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 2026 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 $
7
Table of Contents
and restricted cash of $
The Company 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 these 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.
The Company’s ability to continue as a going concern is dependent upon its ability to raise additional funding. The Company plans to raise additional capital through public or private equity or debt financings to fulfill its operating and capital requirements for the next 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.
Unaudited Interim Financial Information
The accompanying unaudited condensed consolidated financial statements as of September 30, 2026, and for the three and nine months ended September 30, 2026 and 2025, have been prepared in accordance with the rules and regulations of the Securities and Exchange Commission (the “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 the Company’s audited consolidated financial statements for the year ended December 31, 2025, included in the Company’s Form 10-K, which was filed with the SEC on March 27, 2026.
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 Financial Accounting Standards Board (“FASB”).
Principles of Consolidation
The accompanying unaudited condensed consolidated financial statements of the Company include the accounts of Calidi and its wholly owned subsidiaries, Calidi Nevada, StemVac, Calidi Australia and Redtail Biopharma.
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 VIE's 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
8
Table of Contents
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.
In May 2024, the Company established and incorporated a wholly owned subsidiary, Nova Cell, Inc. (“Nova Cell”), which was incorporated in the state of Nevada. 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. Prior to October 27, 2025, 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 had a controlling financial interest and was deemed to be the primary beneficiary of Nova Cell and therefore consolidated Nova Cell’s financial statements. Since the Company owned less than 100% of Nova Cell, the Company recorded net loss attributable to noncontrolling interest in its consolidated statements of operations equal to the percentage of the economic or ownership interests retained in Nova Cell by the noncontrolling party.
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 Nova Cell, pursuant to which the Company sold and transferred its investment in Nova Cell, as further detailed in Note 8. Following the closing of the transactions contemplated by the Agreements, Nova Cell ceased to be a subsidiary of the Company.
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 U.S. 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.
Reclassification
Certain prior year financial statement amounts have been reclassified for consistency with the current year presentation. These reclassifications had no effect on our previously reported results of operations or accumulated deficit.
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's restricted cash balances relate to (i) collateral for a letter of credit issued by the Company's financial institution to its landlord for the lease of office and laboratory space and (ii) for collateral to its financial institution for the Company’s corporate credit card program with that financial institution.
9
Table of Contents
The following table provides a reconciliation of cash and restricted cash shown in the accompanying unaudited condensed consolidated statements of cash flows to the cash and restricted cash balances reported within the balance sheets as of such dates (in thousands):
|
|
September 30, |
|
|
September 30, |
|
||
Cash |
|
$ |
|
|
$ |
|
||
Restricted cash, current |
|
|
|
|
|
|
||
Restricted cash, noncurrent |
|
|
|
|
|
|
||
Total cash and restricted cash as shown in the unaudited |
|
$ |
|
|
$ |
|
||
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 three to
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 within “Depreciation and amortization” 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 within “Depreciation and amortization” on the unaudited condensed consolidated statements of cash flows.
See Note 11 for further disclosures in accordance with ASC 842.
10
Table of Contents
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.
Fair Value Measurements
The Company follows ASC 820, Fair Value Measurement, which among other things, defines fair value, establishes a consistent framework for measuring fair value and expands disclosure for each major asset and liability category measured at fair value on either a recurring or nonrecurring basis. Fair value is an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Accordingly, fair value is a market-based measurement determined based on assumptions that market participants would use in pricing an asset or liability. The fair value hierarchy requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.
ASC 820 establishes a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value, which are as follows:
|
Level 1: |
Quoted prices in active markets for identical assets and liabilities; |
|
Level 2: |
Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted market prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and |
|
Level 3: |
Unobservable inputs in which there is little or no market data and that are significant to the fair value of the assets or liabilities, which require the reporting entity to develop its own assumptions. |
When quoted market prices are available in active markets, the fair value of assets and liabilities is estimated within Level 1 of the valuation hierarchy. If quoted prices are not available, then fair values are estimated by using pricing models, quoted prices of assets and liabilities with similar characteristics, or discounted cash flows, within Level 2 of the valuation hierarchy. In cases where Level 1 or Level 2 inputs are not available, the fair values are estimated by using inputs within Level 3 of the hierarchy. See Note 3 for fair value measurements.
Derivative Financial Instruments
The Company does not use derivative instruments to hedge exposures to cash flow, market, or foreign currency risks. The Company evaluates all of its financial instruments, including warrants, to determine if such instruments are derivatives or contain features that qualify as embedded derivatives in accordance with ASC 815. The Company values its derivatives using the Black-Scholes option-pricing model (“Black-Scholes model”) or other acceptable valuation models, as applicable, with the assistance of valuation specialists, which includes Level 3 inputs. 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, Derivatives and Hedging, 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. 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, are initially measured at fair value on the grant date, and are not subject to remeasurement provided that the Company continues to meet the criteria for equity
11
Table of Contents
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 liability-classified warrants is recorded and presented under change in fair value of other liabilities and derivatives or change in fair value of other liabilities and derivatives – related party, as applicable, in the unaudited condensed consolidated statements of operations.
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 $
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 nine months ended September 30, 2025, the Company recognized approximately $
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, 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 compensation-related expenses for personnel in executive, finance and accounting, 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 is located and operates in Germany, and its functional currency is the Euro. Calidi Australia 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, 2026 and 2025, comprehensive loss includes such foreign currency translation adjustments and was insignificant for all periods presented.
12
Table of Contents
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, in the accompanying condensed consolidated statements of operations and were insignificant for all periods presented.
Stock-Based Compensation
The Company recognizes compensation expense related to employee stock option grants and restricted stock unit grants, if any, in accordance with ASC 718, Compensation — Stock Compensation.
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 stock-based 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 stock-based compensation expense 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 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 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 (i) the two-class method or (ii) 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 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, stock option awards, restricted stock units, and earnout shares were antidilutive.
13
Table of Contents
As a result of the Company reporting 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 common share for the nine months ended September 30, 2026 and 2025 because including them would have been antidilutive:
|
|
Nine Months Ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Warrants for common stock |
|
|
|
|
|
|
||
Employee stock options |
|
|
|
|
|
|
||
Earnout shares |
|
|
|
|
|
|
||
Total common stock equivalents |
|
|
|
|
|
|
||
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 Chief Executive Officer, Chief Financial Officer, and Chief Scientific Officer and Head of Technical Operations.
The Company views its operations and manages its business as a single reportable segment whose operations include the research, development and commercialization efforts of cell-based platforms to potentiate oncolytic virus therapies on a consolidated basis, as further described in Note 1.
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, 2026 and 2025:
|
|
Three Months Ended September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Operating Expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Salaries and benefits |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
Insurance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Legal |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Consulting |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Rent and Maintenance |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Clinical & research and development |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Depreciation expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other operating expense (1) |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total operating expenses |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Loss from operations |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Other income (expense), net |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Change in fair value of other liabilities and |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Other non-operating income (expense), net (2) |
|
|
|
|
|
( |
) |
|
|
|
|
|
( |
) |
||
Provision for income taxes |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
|
|
( |
) |
Net Loss |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
|
$ |
( |
) |
14
Table of Contents
Recently Adopted Accounting Pronouncements
There were no new accounting pronouncements adopted during the nine months ended September 30, 2026.
Recently Issued Accounting Pronouncements Not Yet Adopted
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 December 2025, the FASB issued ASU No. 2025-10, Government Grants (Topic 832): Accounting for Government Grants Received by Business Entities. This ASU establishes guidance on the recognition, measurement, presentation, and disclosure of government grants received by business entities, including guidance for grants related to an asset and grants related to income. The new guidance leverages the principles in the accounting framework for government assistance in International Accounting Standard (“IAS”) 20, Accounting for Government Grants and Disclosure of Government Assistance, makes certain targeted improvements, and modifies certain of the existing disclosure requirements in ASC 832, Government Assistance. Specifically, the ASU defines the criteria that need to be met in order to recognize government grant proceeds and prescribes that a business entity present a grant related to income and a grant related to an asset for which the deferred income approach is elected as part of earnings either (1) separately under a general heading such as other income or (2) deducted from the related expense. ASU 2025-10 is effective for annual periods beginning after December 15, 2028, including interim reporting periods within those annual periods, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-10.
In December 2025, the FASB issued ASU No. 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which is intended to improve the navigability of the guidance in ASC 270 and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-11.
The following table presents the Company’s liabilities that are measured at fair value on a recurring basis, inclusive of related party components, as of September 30, 2026 and December 31, 2025 (in thousands):
Description |
|
Level |
|
September 30, |
|
|
December 31, |
|
||
Public Warrants |
|
1 |
|
$ |
|
|
$ |
|
||
Private Warrants |
|
2 |
|
|
|
|
|
|
||
Total warrant liabilities at fair value |
|
|
|
$ |
|
|
$ |
|
||
The Company’s financial instruments consist of cash, restricted 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.
15
Table of Contents
Accrued Expenses and Other Current Liabilities
As of September 30, 2026 and December 31, 2025, accrued expenses and other current liabilities were comprised of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Accrued compensation |
|
$ |
|
|
$ |
|
||
Accrued vendor and other expenses |
|
|
|
|
|
|
||
Total accrued expenses and other current |
|
$ |
|
|
$ |
|
||
Prepaid Expenses and Other Current Assets
As of September 30, 2026 and December 31, 2025, prepaid expenses and other current assets were comprised of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Prepaid expenses |
|
$ |
|
|
$ |
|
||
Prepaid insurance |
|
|
|
|
|
|
||
CAM receivable |
|
|
|
|
|
|
||
Other |
|
|
|
|
|
|
||
Total prepaid expenses and other current assets |
|
$ |
|
|
$ |
|
||
As of September 30, 2026 and December 31, 2025, machinery and equipment, net, was comprised of the following (in thousands):
|
|
September 30, |
|
|
December 31, |
|
||
Machinery and equipment |
|
$ |
|
|
$ |
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Machinery and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense was approximately $
The following table presents the various significant related party transactions and investments in the Company for the periods presented (in thousands):
|
Description of investment or transaction |
|
September 30, |
|
|
December 31, |
|
||
Director F |
Severance accrual(1) |
|
$ |
|
|
$ |
|
||
Director F |
Lease guaranty(2) |
|
$ |
|
|
$ |
|
||
Director F and Director A |
Warrant liability(3) |
|
$ |
|
|
$ |
|
||
Officer G |
Severance accrual(4) |
|
$ |
|
|
$ |
|
||
Officer A |
Severance accrual(5) |
|
$ |
|
|
$ |
|
||
Company A related to Director G |
Accounts payable and accrued expenses(6) |
|
$ |
|
|
$ |
|
||
16
Table of Contents
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 $
17
Table of Contents
promissory note dated July 1, 2024 (the “Promissory Note”), which bears a simple interest rate at
The Company’s outstanding debt obligations as of September 30, 2026 and December 31, 2025 are as follows (in thousands):
|
|
September 30, 2026 |
|
|||||||||
|
|
Unpaid |
|
|
Accrued |
|
|
Net Carrying |
|
|||
Promissory note |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Less: current portion of long-term debt |
|
|
|
|
|
|
|
|
( |
) |
||
Long-term debt, net of current portion |
|
|
|
|
|
|
|
$ |
|
|||
|
|
December 31, 2025 |
|
|||||||||
|
|
Unpaid |
|
|
Accrued |
|
|
Net Carrying |
|
|||
Promissory note |
|
$ |
|
|
$ |
|
|
$ |
|
|||
Less: current portion of long-term debt |
|
|
|
|
|
|
|
|
( |
) |
||
Long-term debt, net of current portion |
|
|
|
|
|
|
|
$ |
|
|||
Scheduled maturities of outstanding debt, net of discounts, as of September 30, 2026 are as follows (in thousands):
Year ending December 31, |
|
Amount |
|
|
2026 (October - December) |
|
$ |
|
|
2027 |
|
|
|
|
Plus: accrued interest |
|
|
|
|
Total debt |
|
$ |
|
|
The weighted average interest rate related to the Company’s outstanding debt was approximately
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
Common Stock
Pursuant to the Amended Articles, the Company is authorized to issue
18
Table of Contents
As of September 30, 2026 and December 31, 2025, common stock reserved for future issuance consisted of the following:
|
|
September 30, |
|
|
December 31, |
|
||
Common stock warrants outstanding |
|
|
|
|
|
|
||
Common stock options issued and outstanding |
|
|
|
|
|
|
||
Shares available for future issuance under the 2023 |
|
|
|
|
|
|
||
Shares reserved under the 2023 Employee |
|
|
|
|
|
|
||
|
|
|
|
|
|
|
||
Nova Cell Investment
On July 26, 2024, the Board of Directors of the Company acknowledged a strategic investment of approximately $
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 Nova Cell. In accordance with the Agreements, the Company sold and transferred all
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 $
The Company agreed to pay Ladenburg a cash commission of
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
19
Table of Contents
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 $
January 2025 Confidentially Marketed Public Offering (CMPO)
On January 9, 2025, the Company entered into a placement agency agreement with Ladenburg acting as the “Placement Agent,” pursuant to which the Company issued and sold in a public offering
The shares of common stock 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 SEC on October 10, 2024.
The Company issued the Placement Agent common stock warrants to purchase up to
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 in a registered direct offering
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 SEC on February 7, 2025. The Series G Warrants were issued 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 Ladenburg, acting as the “Placement Agent”, common stock warrants to purchase up to
July 2025 Warrant Inducement Offer
On July 9, 2025, the Company entered into an inducement offer letter agreement (the “July Warrant Inducement Offer”) with seven 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
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
20
Table of Contents
register the shares underlying the Series H Warrants, which registration statement was declared effective by the SEC on July 25, 2025.
August 2025 Public Offering
On August 20, 2025, the Company entered into an underwriting agreement with Ladenburg, as representative of the various underwriters (the “Representative”), in connection with the issuance and public sale of various securities (the “August Public Offering”), including: (i)
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 SEC 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
March 2026 Confidentially Marketed Public Offering (CMPO)
On March 6, 2026, the Company entered into an underwriting agreement with Ladenburg as sole “Underwriter”, in connection with the issuance and sale (the “March 2026 Offering”) of: (i)
Each Common Stock Unit comprised (i) one share of Common Stock, (ii) one Series J common stock warrant (“Series J Warrant”) to purchase one share of Common Stock, (iii) one Series K common stock warrant (“Series K Warrant”) to purchase one share of Common Stock, and (iv) one Series L common stock warrant (“Series L Warrant” and together with the Series J Warrants and the Series K Warrants, the “Common Warrants”) to purchase one share of Common Stock. Each Pre-Funded Unit comprised (i) one pre-funded warrant (the “Pre-Funded Warrant” or “PFW”), (ii) one Series J Warrant, (iii) one Series K Warrant, and (iv) one Series L Warrant. The Common Warrants included in the Pre-Funded Units were identical to the Common Warrants included in the Common Stock Units.
Each of the Common Warrants included provisions in relation to the reset of the exercise price on two separate occasions: (i) on the forty-fifth (45th) calendar day following the date of issuance (April 23, 2026) and (ii) the sixth (6th) trading day immediately following the date on which a reverse stock split of the Common Stock is approved and deemed effective during the fiscal year ended December 31, 2026, to a price equal to the lesser of (i) the then exercise price and (ii) 90% of the lowest five-day volume weighted average prices for the five (5) trading days immediately preceding the date that is forty-five calendar days after issuance of the Series J Warrants, the Series K Warrants, and the Series L Warrants, as applicable. Notwithstanding the foregoing, in no event at any time prior to, or including, the first reset trigger date, could the exercise price be adjusted to a price that is lesser than $
The Common Stock Units, the Pre-Funded Units, the shares of Common Stock comprising the Common Stock Units, the Common Warrants, the Pre-Funded Warrants, the shares of Common Stock issuable upon exercise of the Common
21
Table of Contents
Warrants, and the Pre-Funded Warrants were offered by the Company pursuant to a shelf registration statement on Form S-3 (File No. 333-284229), that was filed with the SEC on January 10, 2025 and declared effective on February 7, 2025, including the prospectus forming a part of the registration statement, a final prospectus supplement thereto, which was filed with the SEC on March 9, 2026, pursuant to Rule 424(b) under the Securities Act, and the related registration statement filed with the SEC on March 5, 2026 under Rule 462(b) of the Securities Act, which became automatically effective upon filing. The Offering closed on March 9, 2026.
On March 6, 2026, the Company also entered into a warrant agency agreement (the “Warrant Agency Agreement”) with Equiniti Trust Company, LLC, as warrant agent (the “Warrant Agent”).
Warrant Amendment
On March 5, 2026, the Company entered into an Amendment to Common Stock Purchase Warrants Agreement (the “Warrant Amendment”) with certain investors, that participated in the March 2026 CMPO described above, in connection with the terms of certain of the Company’s outstanding common warrants to purchase shares of Common Stock (the “Existing Warrants”). As originally issued, the Existing Warrants provided for the purchase of:
Per the Warrant Amendment, the exercise price for each of such Existing Warrants was reduced to $
Unregistered Warrant Issuance
On May 6, 2026, the Company issued a warrant (the “Warrant”) to purchase up to
The Warrant is exercisable beginning on the date that is six months from the issue date and is subject to certain vesting conditions as described below.
The holder of the Warrant may from time to time prior to July 8, 2026, agree to acquire, and the Company may agree to sell to such holder, up to an aggregate of $
On May 28, 2026, the Company amended and restated the Warrant to, among other things: (i) condition the exercise of the Warrant and the issuance of the Common Stock upon exercise pursuant to the terms of the Warrant, to the receipt of the approval of the stockholders of the Company; (ii) increase the Minimum Vesting Acquisition Amount, as such term is defined in the Warrant, from $
2026 Registered Direct Offering
On September 17, 2026, the Company entered into a stock purchase agreement with certain accredited investors and/or qualified institutional buyers (the "Purchasers"), pursuant to which the Company agreed to issue and sell directly to the Purchasers in a registered direct offering (the "2026 RDO") an aggregate of
22
Table of Contents
Warrants
As of September 30, 2026 and December 31, 2025, the Company has outstanding warrants to purchase
|
|
September 30, |
|
|
December 31, |
|
|
Exercise |
|
|
Issuance |
|
Expiration |
|||
Private Warrants(1) |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Public Warrants(2) |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Warrants to purchase Restricted Shares |
|
|
|
|
|
$ |
|
|
|
|||||||
Warrants to purchase Restricted Shares |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Placement Agent Warrants |
|
|
|
|
|
$ |
|
|
|
|||||||
Placement Agent Warrants |
|
|
|
|
|
$ |
|
|
|
|||||||
Placement Agent Warrants |
|
|
|
|
|
$ |
|
|
|
|||||||
Placement Agent Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Placement Agent Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Placement Agent Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Representative Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Underwriter Warrants |
|
|
|
|
|
|
$ |
|
|
|
||||||
Series A Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series B-1 Warrants |
|
|
|
|
|
$ |
|
|
|
|||||||
Series C-1 Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series C-1 Warrants |
|
|
|
|
|
$ |
|
|
|
|||||||
Series C-1 Warrants |
|
|
|
|
|
$ |
|
|
|
|||||||
Series D Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series G Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series H Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series I Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series J Warrants |
|
|
|
|
|
|
|
$ |
|
|
|
|||||
Series K Warrants |
|
|
|
|
|
|
|
$ |
|
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|
|||||
|
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23
Table of Contents
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 requires that the Company record a derivative liability upon the closing of the FLAG Merger (see Note 2).
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.
The following table summarizes the Company’s aggregate warrant activity for the nine months ended September 30, 2026.
|
|
Number of |
|
|
Weighted |
|
|
Weighted |
||
Outstanding at January 1, 2026 |
|
|
|
|
$ |
|
|
|||
Issued |
|
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
Cancelled |
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2026 |
|
|
|
|
$ |
|
|
|||
Issued |
|
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
Cancelled |
|
|
|
|
|
|
|
|
||
Outstanding at June 30, 2026 |
|
|
|
|
$ |
|
|
|||
Issued |
|
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
Expired |
|
|
( |
) |
|
|
|
|
|
|
Outstanding at September 30, 2026 |
|
|
|
|
$ |
|
|
|||
The following table summarizes the Company’s aggregate warrant activity for the nine months ended September 30, 2025.
24
Table of Contents
|
|
Number of |
|
|
Weighted |
|
|
Weighted |
||
Outstanding at January 1, 2025 |
|
|
|
|
$ |
|
|
|||
Issued |
|
|
|
|
|
|
|
|
||
Exercised |
|
|
|
|
|
|
|
|
||
Cancelled |
|
|
|
|
|
|
|
|
||
Outstanding at March 31, 2025 |
|
|
|
|
$ |
|
|
|||
Issued |
|
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
Cancelled |
|
|
( |
) |
|
|
|
|
|
|
Outstanding at June 30, 2025 |
|
|
|
|
$ |
|
|
|||
Issued |
|
|
|
|
|
|
|
|
||
Exercised |
|
|
( |
) |
|
|
|
|
|
|
Cancelled |
|
|
|
|
|
|
|
|
||
Outstanding at September 30, 2025 |
|
|
|
|
$ |
|
|
|||
2023 Equity Incentive Plan
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 the Board of Directors acting as the Compensation Committee, as the administrator of the plan (the “Administrator”), to issue up to
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.
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.
Inducement Grants
On April 22, 2025, the Company granted Eric Poma, the Company’s Chief Executive Officer, an inducement grant for the purchase of
On July 6, 2026, the Company granted Sandra Gurrola, the Company’s Vice President of Finance and Controller, an inducement grant for the purchase of
The Inducement Grants vest over four years with twenty-five percent of the stock options vesting on the one-year anniversary of the date of grant, and the remaining stock options vesting in 36 substantially equal monthly installments
25
Table of Contents
thereafter, subject to continued employment with the Company. The Inducement Grants were granted as an inducement material to both Dr. Poma and Ms. Gurrola entering into employment with the Company in accordance with Section 711 of NYSE American LLC Company Guide.
2023 Employee Stock Purchase Plan (“ESPP”)
On August 28, 2023, the Company approved the 2023 Employee Stock Purchase Plan (the “2023 ESPP”). Under the 2023 ESPP, eligible employees may purchase a limited number of shares of common stock at a discount of up to
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 as 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 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,
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 2023 Plan. The Company will not receive any proceeds from the sale of the shares offered by the Reoffer Prospectus.
Stock-Based Compensation Expense
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 September 30, |
|
|
Nine Months Ended September 30, |
|
||||||||||
|
|
2026 |
|
|
2025 |
|
|
2026 |
|
|
2025 |
|
||||
Research and development |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
General and administrative |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
26
Table of Contents
On January 18, 2023, the Board approved a repricing of approximately
The weighted-average estimated fair value of stock options with service-conditions granted during the three months ended September 30, 2026 and 2025 was $
|
|
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
||||
|
|
2026 |
|
2025 |
|
2026 |
|
2025 |
Weighted average volatility |
|
|
|
|
||||
Weighted average risk-free rate |
|
|
|
|
||||
Expected term (in years) |
|
|
|
|
||||
Dividend yield |
|
|
|
|
||||
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.
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, 2026 and 2025, the Company did not record any U.S. 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.
Operating and Financing Leases
The Company leased approximately
Upon execution of the Executive Drive Lease, the Company provided the landlord with a letter of credit of approximately $
Also to secure the Executive Drive Lease, the Company's former Chief Executive Officer provided a guaranty of the Company's obligations under the lease. As consideration, the Company issued a Guaranty Note as discussed more fully in Note 6. In April 2025, the Company paid down approximately $
27
Table of Contents
On July 10, 2026, the Company entered into a lease for approximately
Also on July 10, 2026, the Company entered into a lease termination agreement (the "Termination Agreement") with the landlord to the Executive Drive Lease, pursuant to which, the Executive Drive Lease terminated September 30, 2026 (the “Termination Date”), with no early termination fee payable on the Executive Drive Lease. The Termination Agreement also reduced the remaining base rent obligations under the Executive Drive Lease from June 1, 2026 through the Termination Date from approximately $
In connection with the Termination Agreement, the former Chief Executive Officer entered into the Guaranty Termination Agreement, effective on September 30, 2026, pursuant to which, the guaranty is of no further force or effect. The Company also paid the remaining balance of the Guaranty Note of approximately $
The Company evaluated the Termination Agreement and the Morehouse Lease as a single transaction and accounted for the arrangement as a lease modification under ASC 842. As a result of the modification, the Company remeasured its operating lease liability using a current discount rate of
StemVac leases office and laboratory space in Germany, which is scheduled to expire on March 31, 2027, but automatically renews for one year unless Stemvac provides notice of nonrenewal at least six months before expiration. Because StemVac did not provide the required notice by September 30, 2026, the lease automatically renewed through March 31, 2028. The Company accounted for the renewal as a lease modification and recognized an additional operating lease liability and corresponding right-of-use asset of approximately $
The Company also leases certain laboratory equipment under finance lease agreements with lease terms expiring between January 2027 and May 2029, which represent the non-cancelable periods of the leases and any renewal options that are reasonably certain to be exercised. The Company’s finance leases contain certain renewal options that can extend the lease term by an additional twelve months. The Company excludes extension, termination, and purchase options that are not reasonably certain to be exercised from its lease terms.
Operating lease expense recognized during the three months ended September 30, 2026 and 2025 was approximately $
The following table presents supplemental cash flow information related to operating and financing leases:
|
|
Nine months ended September 30, |
|
|||||
|
|
2026 |
|
|
2025 |
|
||
Cash paid for amounts included in the measurement of lease |
|
|
|
|
|
|
||
Operating cash flows from operating leases |
|
$ |
|
|
$ |
|
||
Operating cash flows from financing leases |
|
$ |
|
|
$ |
|
||
Financing cash flows from financing leases |
|
$ |
|
|
$ |
|
||
The following table presents supplemental balance sheet information related to operating and financing leases for the periods presented (in thousands, except weighted averages):
28
Table of Contents
Operating leases |
|
September 30, |
|
|
December 31, |
|
||
Right-of-use assets, net |
|
$ |
|
|
$ |
|
||
Right-of-use lease liabilities, current |
|
$ |
|
|
$ |
|
||
Right-of-use lease liabilities, noncurrent |
|
|
|
|
|
|
||
Total operating lease liabilities |
|
$ |
|
|
$ |
|
||
Financing leases |
|
September 30, |
|
|
December 31, |
|
||
Machinery and equipment, gross |
|
$ |
|
|
$ |
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Machinery and equipment, net |
|
$ |
|
|
$ |
|
||
Current liabilities |
|
$ |
|
|
$ |
|
||
Noncurrent liabilities |
|
$ |
|
|
$ |
|
||
Total financing lease liabilities |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Weighted average remaining lease term |
|
|
|
|
|
|
||
Operating leases |
|
|
|
|
||||
Financing leases |
|
|
|
|
||||
Weighted average discount rate |
|
|
|
|
|
|
||
Operating leases |
|
|
% |
|
|
% |
||
Financing leases |
|
|
% |
|
|
% |
||
The following table presents future minimum lease commitments as of September 30, 2026 (in thousands):
Year Ending December 31, |
|
Operating |
|
|
Financing |
|
||
2026 (October - December) |
|
$ |
|
|
$ |
|
||
2027 |
|
|
|
|
|
|
||
2028 |
|
|
|
|
|
|
||
2029 |
|
|
|
|
|
|
||
Total payments |
|
|
|
|
|
|
||
Less imputed interest |
|
|
( |
) |
|
|
( |
) |
Present value of net minimum lease payments |
|
$ |
|
|
$ |
|
||
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 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.
29
Table of Contents
Camaisa, the Company’s former director and 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, conversion, 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, conversion, 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 Corporation Law due to the Company’s failure to remove a restrictive legend from
The Primary Case, Kalajian Arbitration, Sanchez Case, and Conversion Case were deemed related and ultimately consolidated. A trial date has been set for May 14, 2027.
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. A trial has been scheduled for May 21, 2027. The Company 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 U.S. District Court, Southern District of California (Case Number 3:24-cv-02026-H-KSC) (the "Zeng Federal Case"). 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 been completed. A pre-trial conference has been set for October 19, 2026, but no trial date has been set. On June 1, 2026, the Company filed a Motion for Summary Judgment (the “MSJ”), seeking to dismiss all claims. On June 2, 2026, Mr. Zeng filed a Motion for Voluntary Dismissal Without Prejudice (the “MTD”), with each party to bear their own fees and costs. The Company opposed the MTD because it is without prejudice, and the Company seeks to preserve its rights to recover attorneys’ fees and costs. The Court denied Plaintiff's MTD. The Company is awaiting a ruling on its MSJ. At this time, the Company is unable to evaluate the outcome of this case or estimate the amount or range of potential loss.
On October 5, 2026, Mr. Zeng filed a Second Amended Complaint in the Superior Court of the State of California County of San Diego against the Company, Mr. Camaisa, individually and as trustee of his trust, and third party JBM Propco,
30
Table of Contents
Inc. alleging breach of fiduciary duty, voidable transfer and recission under California securities laws (Case No. 26CU045958C.) This complaint makes allegations and claims similar to the Zeng Federal Case. Mr. Zeng purports to seeks damages that would not be recoverable in the Zeng Federal Case and seeks to set aside alleged property transfers between Mr. Camaisa and the third party. 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. During 2025, the Company incurred severance obligations for certain executive officers and other employees. See Note 6 for information on the accruals for such severance obligations.
License Agreements with Northwestern University
On June 7, 2021, the Company entered into a License Agreement (the “Northwestern Agreement”) with Northwestern University (“Northwestern”) 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 $
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: (i) a
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.
31
Table of Contents
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 City of Hope and 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 $
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 the 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, 2026 and December 31, 2025.
On
32
Table of Contents
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 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, 2026 (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, 2025 (“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 publicly traded biotechnology company pioneering the development of targeted therapies with the potential to deliver genetic medicines to distal sites of disease. Our proprietary RedTail platform features an engineered enveloped oncolytic virus designed for systemic delivery and targeting of metastatic sites. This advanced enveloped technology is intended to shield the virus from immune clearance, allowing virotherapy to effectively reach tumor sites, induce tumor lysis, and deliver potent genetic medicine(s) to metastatic locations. We expect to enter the clinic in the second half of 2027 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:
Our legacy SuperNova and NeuroNova stem cell based oncolytic virus platforms are designed to:
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 oncolytic viruses 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 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.
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More recently, we used the learnings from NeuroNova and SuperNova to create RedTail, a novel oncolytic viral platform that avoids immune clearance allowing for systemic delivery. RedTail utilizes a proprietary form of enveloped virus with genetic modifications, including engineered expression of CD55 on the enveloped virus, to avoid immune clearance. The virus used in RedTail has been further proprietarily engineered to specifically replicate only in tumor tissue where the virus also has the ability to deliver genetic medicines to the tumor microenvironment. 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 is the first lead derived from the RedTail platform. CLD-401 is enveloped and overexpressed CD55 on its outer membrane. It is tropic for tumor cells and, when replicating, 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. We are developing additional leads from the RedTail platform including CLD-501 (anti-TROP2) and CLD-502 (anti-EpCAM), which co-express an in situ TCE and an IL-15 superagonist.
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 $11.9 million for the nine-months ended September 30, 2026. As of September 30, 2026, we had an accumulated deficit of $153.5 million. We expect to continue to incur significant 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 clinical resources 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, 2026. 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,
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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
NYSE American Stockholders' Equity Deficiency
On September 21, 2026, we received a letter (the “Notice”) from staff of NYSE American LLC (the “Exchange”). The Notice stated that we are not in compliance with the stockholders’ equity continued listing standard in Section 1003(a)(ii) of the NYSE American Company Guide (the “Company Guide”). Section 1003(a)(ii) requires a listed company to maintain stockholders’ equity of $4.0 million or more if it has reported losses from continuing operations and/or net losses in three of its four most recent fiscal years. The Notice stated that we reported stockholders’ equity of $3.1 million as of June 30, 2026, and net losses in three of its four most recent fiscal years ended December 31, 2025. It also stated that we are not currently eligible for any exemption from the stockholders’ equity requirements of Section 1003(a) of the Company Guide.
We had until October 21, 2026, to submit a plan (the “Plan”) of actions we have taken or will take to regain compliance with the continued listing standards by March 21, 2028. We timely delivered such Plan to the Exchange. If the Exchange accepts the Plan, we will be subject to periodic reviews, including quarterly monitoring for compliance with the Plan. If the Plan is not accepted, delisting proceedings will commence. If the Plan is accepted but we are not in compliance with the continued listing standards by March 21, 2028, or do not make progress consistent with the Plan, the Exchange staff will initiate delisting proceedings as appropriate. We may appeal a staff delisting determination in accordance with the Company Guide.
Restructuring of Operations
On November 6, 2026, we implemented a restructuring plan, which will result in a reduction of approximately 67% of our headcount, to reduce costs, extend our operating runway, and preserve capital while pursuing additional financing. We expect the restructuring plan to be substantially completed during the fourth quarter of 2026 and to generate approximately $3.0 million of annualized savings in compensation-related expenses. We expect one-time termination benefit charges associated with the restructuring to be de minimis. We are also evaluating strategic alternatives to maximize stockholder value, including, but not limited to, a merger, acquisition, business combination, or other strategic transactions involving us and/or our assets.
Reverse Stock Split
On July 30, 2026, we effected a reverse stock split of our outstanding shares of common stock at a ratio of 1-for-16. Our common stock commenced trading on a split-adjusted basis on July 31, 2026 under the existing symbol of “CLDI."
2026 Registered Direct Offering
On September 17, 2026, we entered into a stock purchase agreement with certain accredited investors and/or qualified institutional buyers (the "Purchasers"), pursuant to which we agreed to issue and sell directly to the Purchasers in a registered direct offering (the "2026 RDO") an aggregate of 1,025,640 shares of our common stock at a purchase price of $1.17 per share for net proceeds of approximately $1.2 million. The 2026 RDO closed on September 21, 2026.
New Facility Lease
On July 10, 2026, we entered into a new lease agreement for approximately 9,000 rentable square feet of office and laboratory space located at 5580 Morehouse Drive, Suite 120, San Diego, California, with an initial term of 44 months commencing October 1, 2026, and expiring May 31, 2030, with one option to extend for an additional three years at the then-prevailing fair market rate. We are required to make monthly base rental payments of approximately $52,000 per month for the first 12 months, with an annual 3% increase in such amount on each anniversary of the commencement date. We will also pay our share of operating expenses, property taxes and insurance, as well as a 3% management fee. We are required to deliver an irrevocable letter of credit of approximately $0.1 million.
Concurrently, we also entered into a lease termination agreement (the "Lease Termination Agreement") with respect to our existing lease at 4475 Executive Drive, Suite 200, San Diego, California, which terminated on September 30, 2026 (the
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“Termination Date”), with no early termination fee payable. The Lease Termination Agreement also reduced the remaining base rent payments due under the existing lease from June 1, 2026 through the Termination Date from approximately $118,000 per month to approximately $26,000 per month, and it also reduced the monthly estimated payment for expenses, taxes and insurance to a flat monthly fee of approximately $10,000 per month.
In connection with the Lease Termination Agreement, our former Chief Executive Officer entered into a Guaranty Termination Agreement effective on September 30, 2026, pursuant to which, the guaranty under the existing lease terminated and is of no further force or effect.
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 and preclinical studies under our research programs, which include:
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.
External costs include fees paid to consultants, contractors and vendors, including contract development and manufacturing organizations (“CDMOs”), and clinical research organizations (“CROs”), in connection with our preclinical 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:
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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 in the 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, 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, 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 these expenses continuing and 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 (Expense), Net
Other income (expense), net, primarily includes interest income, interest expense, and 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 (expense), net, in the unaudited condensed consolidated statements of operations.
Interest expense primarily consists of interest expense on our promissory and other notes, including from related parties, and other interest expense incurred from financing leases and other obligations.
Other income (expense), net, 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 development expenses are incurred.
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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 Form 10-Q. The income tax provision in the periods presented is entirely attributable to amounts recorded from StemVac, GmbH 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, 2026 and 2025
The following table summarizes our results of operations for the three months ended September 30, 2026 and 2025 (in thousands):
|
|
Three months ended September 30, |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
2,703 |
|
|
$ |
2,361 |
|
|
$ |
342 |
|
General and administrative |
|
|
1,642 |
|
|
|
2,687 |
|
|
|
(1,045 |
) |
Total operating expenses |
|
|
4,345 |
|
|
|
5,048 |
|
|
|
(703 |
) |
Loss from operations |
|
|
(4,345 |
) |
|
|
(5,048 |
) |
|
|
703 |
|
Total other income (expense), net |
|
|
708 |
|
|
|
(123 |
) |
|
|
831 |
|
Loss before income taxes |
|
|
(3,637 |
) |
|
|
(5,171 |
) |
|
|
1,534 |
|
Provision for income taxes |
|
|
(9 |
) |
|
|
(10 |
) |
|
|
1 |
|
Net loss |
|
$ |
(3,646 |
) |
|
$ |
(5,181 |
) |
|
$ |
1,535 |
|
Research and Development Expenses
Research and development expenses increased by approximately $0.3 million during the three months ended September 30, 2026 primarily due to an increase in expense of approximately $0.6 million related to drug manufacturing and preclinical expenses, offset by a decrease in rent expense of approximately $0.2 million in connection with the Lease Termination Agreement and a decrease of approximately $0.1 million stock-based compensation expense when compared to the three months ended September 30, 2025.
General and Administrative Expenses
General and administrative expenses decreased $1.0 million during the three months ended September 30, 2026 when compared to the same period in 2025 primarily due to a decrease in salaries and benefits expense of approximately $0.8 million related to a reduction in headcount, decreased rent expense of $0.1 million related to the Lease Termination Agreement, and decreased accounting and audit fees of approximately $0.1 million.
Other Income (Expense), Net
Other income (expense), net increased by approximately $0.8 million in income for the three months ended September 30, 2026 compared to the same period in 2025, primarily due to a $0.6 million research allowance refund received by our German subsidiary, StemVac, and $0.2 million of income from changes in the fair value of other liabilities and derivatives.
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Comparison of Nine Months Ended September 30, 2026 and 2025
The following table summarizes our results of operations for the nine months ended September 30, 2026 and 2025 (in thousands):
|
|
Nine months ended September 30, |
|
|
|
|
||||||
|
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
7,848 |
|
|
$ |
7,379 |
|
|
$ |
469 |
|
General and administrative |
|
|
4,834 |
|
|
|
8,395 |
|
|
|
(3,561 |
) |
Total operating expenses |
|
|
12,682 |
|
|
|
15,774 |
|
|
|
(3,092 |
) |
Loss from operations |
|
|
(12,682 |
) |
|
|
(15,774 |
) |
|
|
3,092 |
|
Total other income (expense), net |
|
|
786 |
|
|
|
(213 |
) |
|
|
999 |
|
Loss before income taxes |
|
|
(11,896 |
) |
|
|
(15,987 |
) |
|
|
4,091 |
|
Provision for income taxes |
|
|
(18 |
) |
|
|
(17 |
) |
|
|
(1 |
) |
Net loss |
|
$ |
(11,914 |
) |
|
$ |
(16,004 |
) |
|
$ |
4,090 |
|
Research and Development Expenses
We recognized an increase of approximately $0.5 million in research and development expense for the nine months ended September 30, 2026 primarily due to an increase in drug manufacturing and preclinical expenses of $1.6 million, partially offset by a decrease in consulting expenses of $0.5 million, rent expenses of $0.4 million, and salaries and benefits expenses of $0.2 , when compared to the nine months ended September 30, 2025.
General and Administrative Expenses
The $3.6 million decrease in general and administrative expense during the nine months ended September 30, 2026 was primarily due to a decrease in salaries and benefits of $2.5 million due to reduced headcount, accounting and audit fees of $0.4 million, legal fees of $0.3 million, rent expenses of $0.2 million, consulting expenses of $0.1 million, and other miscellaneous expenses of $0.1 million, net, when compared to the nine months ended September 30, 2025.
Other Income (Expense), Net
Other income (expense), net increased by approximately $1.0 million in income for the nine months ended September 30, 2026 compared to the same period in 2025, primarily due to a $0.6 million research allowance refund received by StemVac, an increase of $0.1 million in interest income, $0.2 million of income from changes in the fair value of other liabilities and derivatives and approximately $0.1 less interest expense due to lower debt balances.
Liquidity and Capital Resources
As of September 30, 2026, we had a cash balance of $3.9 million and a restricted cash balance of $0.2 million. Our debt and liability obligations as of September 30, 2026 include $2.9 million in accounts payable and accrued expenses and other current liabilities, $0.4 million in operating and finance lease liabilities, and $0.7 million in promissory notes and accrued interest maturing on July 1, 2027.
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.
During the nine months ended September 30, 2026, we received approximately $5.1 million in net proceeds from the March 2026 confidentially marketed public offering, $3.1 million in net proceeds from the At the Market Offering and approximately $1.2 million in net proceeds from the 2026 RDO.
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We may receive proceeds from the exercise of the 1,863,820 outstanding warrants if the holders elect to exercise such warrants. However, the exercise prices of a substantial portion of our outstanding warrants significantly exceed the current market price of our common stock. Accordingly, we do not expect the exercise of our warrants to be a material source of liquidity unless the market price of our common stock increases significantly above the applicable exercise prices. There can be no assurance that any warrants will be exercised, and we have not assumed the receipt of any such proceeds in our liquidity assessment.
On November 6, 2026, we implemented a restructuring plan, which will result in a reduction of approximately 67% of our headcount, to reduce costs, extend our operating runway, and preserve capital while pursuing additional financing. We expect the restructuring plan to be substantially completed during the fourth quarter of 2026 and to generate approximately $3.0 million of annualized savings in compensation-related expenses.
Commitments and Contingencies
As described more fully in Note 11- Commitments and Contingencies - Operating and Financing Leases, to our accompanying unaudited condensed consolidated financial statements, on July 10, 2026, the Company entered into a new lease agreement effective October 1, 2026, which provides for an aggregate of approximately $2.4 million in base rent payments over the term of the lease, plus a management fee equal to 3% of the base rent and our share of operating expenses, property taxes and insurance.
We further entered into separate license agreements with Northwestern University and City of Hope and the University of Chicago, wherein we 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, 2026, we do not believe it probable that we will incur these payments.
Cash Flow Summary for the Nine Months Ended September 30, 2026 and 2025
The following table shows a summary of our cash flows for the nine months ended September 30, 2026 and 2025 (in thousands):
|
|
For the nine months ended September 30, |
|
|
|
|
||||||
(in thousands) |
|
2026 |
|
|
2025 |
|
|
Change |
|
|||
Net cash (used in) provided by: |
|
|
|
|
|
|
|
|
|
|||
Operating activities |
|
$ |
(10,807 |
) |
|
$ |
(16,249 |
) |
|
$ |
5,442 |
|
Investing activities |
|
|
(61 |
) |
|
|
(91 |
) |
|
|
30 |
|
Financing activities |
|
|
9,236 |
|
|
|
17,119 |
|
|
|
(7,883 |
) |
Effect of exchange rate on cash |
|
|
(21 |
) |
|
|
6 |
|
|
|
(27 |
) |
Net (decrease) increase in cash and cash equivalents |
|
$ |
(1,653 |
) |
|
$ |
785 |
|
|
$ |
(2,438 |
) |
Operating activities
Cash used in operating activities decreased $5.4 million for the nine months ended September 30, 2026 compared to the nine months ended September 30, 2025, due to a $2.7 million decrease in net loss, after giving effect to adjustments made for non-cash transactions, primarily related to reductions in headcount and professional fees, and a decrease of $2.7 million in cash used in operating assets and liabilities primarily as a result of $2.5 million less paid towards accounts payable and accrued expenses and other current liabilities in 2026 compared to the same period in 2025.
Investing activities
Net cash used in investing activities was $61,000 and $91,000 for the nine months ended September 30, 2026 and 2025, respectively, which primarily related to the purchase of certain machinery and equipment.
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Financing activities
Net cash provided by financing activities was $9.2 million for the nine months ended September 30, 2026, which primarily related to proceeds from the March 2026 confidentially marketed public offering of $5.4 million, proceeds from the at the market offering of $3.2 million, and proceeds from the 2026 RDO of $1.2 million, partially offset by payment of financing costs of $0.4 million and repayment of finance lease obligations of $0.1 million.
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 $12.7 million, proceeds from the 2025 RDO and Concurrent Private Placement of $3.5 million, and proceeds from the July Warrant 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.
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 and available cash, 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, 2026 appearing elsewhere in this Form 10-Q. 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 Form 10-Q for additional information on our assessment.
Our future capital requirements will depend on a number of factors, including:
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Our existing cash will not be sufficient to complete development of our current product candidates. 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.
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.
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, 2025. 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, 2025. There were no material changes to our critical accounting estimates during the three and nine months ended September 30, 2026.
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. Our operations may be subject to fluctuations in foreign currency exchange rates in the future.
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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, 2026 and 2025.
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 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 is less than $700 million and our annual revenue was less than $100 million during the most recently completed fiscal year. We may continue to be a smaller reporting company 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 Form 10-Q, 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 Risk.
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.
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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 as of September 30, 2026.
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, 2026 that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II — OTHER INFORMATION
Item 1. Legal Proceedings.
We are subject to litigation and contingencies in the ordinary course of our business, including those related to our 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, 2025, which was filed with the SEC on March 27, 2026. 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 third quarter ended September 30, 2026.
Item 1A. Risk Factors.
During the three and nine months ended September 30, 2026, 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 year ended December 31, 2025, which was filed with the SEC on March 27, 2026.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not Applicable.
Item 5. Other Information.
(a) Effective November 9, 2026, the Company’s Chief Executive Officer (“CEO”), Chief Financial Officer (“CFO”), and Chief Scientific Officer and Head of Technical Operations (“CSO”) voluntarily agreed to defer receipt of a portion of their base salaries for a period ending on the earlier of (i) the expiration of two months from November 9, 2026 and (ii) the Company’s completion of a financing resulting in gross proceeds to the Company of at least $5.0 million (the “Deferral Period”). During the Deferral Period, the CEO, CFO, and CSO will each receive base salary payments calculated at an annualized rate of $250,000, with the difference between those payments and the amounts otherwise payable at their respective base salary rates of $535,000, $430,000, and $400,000 being deferred. All amounts deferred during the Deferral Period will be paid to the CEO, CFO, and CSO at the conclusion of the Deferral Period, at which time regular payment of their full base salaries will resume.
On November 6, 2026, the Company implemented a restructuring plan, which will result in a reduction of approximately 67% of its headcount, to reduce costs, extend the Company's operating runway, and preserve capital while pursuing additional financing. The Company expects the restructuring plan to be substantially completed during the fourth quarter of 2026 and to generate approximately $3.0 million of annualized savings in compensation-related expenses. The Company expects one-time termination benefit charges associated with the restructuring to be de minimis.
(b) None.
(c) During the three and nine months ended September 30, 2026, no director or officer of the Company
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Item 6. Exhibits
Exhibit |
|
Description |
|
Incorporated By Reference |
3.1 |
|
Form of Certificate of Amendment. |
|
Exhibit 3.1 to Form 8-K filed on July 31, 2026 |
10.1 |
|
Lease Agreement, dated July 10, 2026, by and between BP3-SD4 5580 Morehouse Drive LLC and Calidi Biotherapeutics, Inc. |
|
Exhibit 10.1 to Form 8-K filed on July 16, 2026 |
10.2 |
|
Lease Termination Agreement, dated July 10, 2026, by and between 4475 Executive Drive LLC and Calidi Biotherapeutics, Inc. |
|
Exhibit 10.2 to Form 8-K filed on July 16, 2026 |
10.3 |
|
Form of Securities Purchase Agreement |
|
Exhibit 10.1 to Form 8-K filed on September 22, 2026 |
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 |
|
Filed herewith |
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 |
|
Filed herewith |
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 |
|
Furnished herewith |
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 |
|
Furnished herewith |
101 |
|
Inline XBRL Document Set for the financial statements and accompanying notes in Part I, Item 1, of this Quarterly Report on Form 10-Q. |
|
Filed herewith |
104 |
|
Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101). |
|
|
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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 hereunto duly authorized.
|
Calidi Biotherapeutics, Inc. |
|
|
|
|
Date: November 13, 2026 |
By: |
/s/ Eric Poma |
|
|
Eric Poma |
|
|
Chief Executive Officer |
|
|
(Principal Executive Officer) |
Date: November 13, 2026 |
By: |
/s/ Andrew Jackson |
|
|
Andrew Jackson |
|
|
Chief Financial Officer |
|
|
(Principal Financial and Accounting Officer) |
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