Please wait

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

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

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2026

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

Commission File Number 001-40789

Calidi Biotherapeutics, Inc.

(Exact name of registrant as specified in its charter)

Delaware		86-2967193
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

4475 Executive Drive, Suite 200, San Diego, California		92121
(Address of principal executive offices)		(Zip Code)

(858) 794-9600

(Registrant’s telephone number, including area code)

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

Title of each class

Trading

Symbol(s)

Name of each exchange on which registered

Common Stock, $0.0001 par value

CLDI

NYSE American LLC

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

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

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

Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		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 May 8, 2026, the registrant had 19,311,625 shares of common stock, $0.0001 par value, outstanding, excluding 150,000 non-voting shares of common stock held in escrow.

Calidi Biotherapeutics, Inc.

FORM 10-Q

TABLE OF CONTENTS

PART I - FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Changes in Total Equity	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	35
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	47
Item 4.	Controls and Procedures	47

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	47
Item 1A.	Risk Factors	47
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47
Item 3.	Defaults Upon Senior Securities	48
Item 4.	Mine Safety Disclosures	48
Item 5.	Other Information	48
Item 6.	Exhibits	48
	Signatures	49

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

CALIDI BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands, except for par value data)

	March 31, 2026			December 31, 2025
	(Unaudited)
ASSETS
CURRENT ASSETS
Cash	$	6,631		$	5,600
Prepaid expenses and other current assets		722			656
Total current assets		7,353			6,256
NONCURRENT ASSETS
Machinery and equipment, net		758			781
Operating lease right-of-use assets, net		1,342			1,682
Other noncurrent assets		138			138
TOTAL ASSETS	$	9,591		$	8,857
LIABILITIES AND TOTAL EQUITY
CURRENT LIABILITIES
Accounts payable	$	849		$	595
Related party accounts payable		51			18
Accounts payable		51			18
Accrued expenses and other current liabilities		1,313			1,276
Related party accrued expenses and other current liabilities		119			530
Accrued expenses and other current liabilities		119			530
Finance lease liability, current		154			111
Operating lease right-of-use liability, current		1,350			1,405
Total current liabilities		3,836			3,935
NONCURRENT LIABILITIES
Operating lease right-of-use liability, noncurrent		6			277
Finance lease liability, noncurrent		147			171
Promissory note		600			600
Warrant liability		62			107
Related party warrant liability		5			8
TOTAL LIABILITIES		4,656			5,098
Commitments and contingencies (Note 11)		-			-
TOTAL EQUITY
Common stock, $0.0001 par value, 330,000 shares authorized; 11,787 and 7,217 shares issued and outstanding as of March 31, 2026 and December 31, 2025, respectively		1			1
Additional paid-in capital		150,685			145,392
Accumulated other comprehensive loss, net of tax		(22	)		(13	)
Accumulated deficit		(145,729	)		(141,621	)
Total equity		4,935			3,759
TOTAL LIABILITIES AND TOTAL EQUITY	$	9,591		$	8,857

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

CALIDI BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share data)

	2026			2025
	Three Months Ended March 31,
	2026			2025
	(Unaudited)
OPERATING EXPENSES
Research and development	$	(2,587	)	$	(2,425	)
General and administrative		(1,600	)		(2,637	)
Total operating expense		(4,187	)		(5,062	)
Loss from operations		(4,187	)		(5,062	)
OTHER INCOME, NET
Interest expense		(33	)		(34	)
Interest expense – related party		(5	)		(38	)
Interest expense		(5	)		(38	)
Change in fair value of other liabilities and derivatives		45			32
Change in fair value of other liabilities and derivatives – related party		3			3
Change in fair value of other liabilities and derivatives		3			3
Grant income		—			50
Other income (expense), net		73			(10	)
Total other income, net		83			3
LOSS BEFORE INCOME TAXES		(4,104	)		(5,059	)
Income tax provision		(4	)		(3	)
NET LOSS	$	(4,108	)	$	(5,062	)
Net loss attributable to noncontrolling interest		—			(76	)
NET LOSS ATTRIBUTABLE TO CONTROLLING INTEREST		(4,108	)		(4,986	)
Deemed dividend on warrants		(309	)		—
NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS		(4,417	)		(4,986	)
Net loss per share; basic and diluted	$	(0.43	)	$	(2.21	)
Weighted average common shares outstanding; basic and diluted		10,308			2,257

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

CALIDI BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS

(In thousands)

	2026			2025
	Three Months Ended March 31,
	2026			2025
	(Unaudited)
NET LOSS	$	(4,108	)	$	(5,062	)
Other comprehensive income, net of tax:
Foreign currency translation adjustment		(9	)		2
COMPREHENSIVE LOSS	$	(4,117	)	$	(5,060	)
Comprehensive loss attributable to noncontrolling interest		—			(76	)
COMPREHENSIVE LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS	$	(4,117	)	$	(4,984	)

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

CALIDI BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF TOTAL EQUITY

(Unaudited)

(In thousands, except share amounts)

	Shares		Amount		Capital		Income (Loss)			Deficit				Equity
	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated				Total
	Shares		Amount		Capital		Income (Loss)			Deficit				Equity
Balance at December 31, 2025		7,216,994	$	1	$	145,392	$	(13	)	$	(141,621	)	-	$	3,759
Issuance of common stock through March Confidentially Marketed Public Offering, net of financing costs		2,278,731		—		5,057		—			—				5,057
Exercise of pre-funded warrants		2,291,000		—		5		—			—				5
Issuance of common stock through At the Market Offering
Issuance of common stock through At the Market Offering, shares
Issuance of common stock and warrants through January Confidentially Marketed Public Offering, net of financing costs
Issuance of common stock and warrants through January Confidentially Marketed Public Offering, net of financing costs, shares
Issuance of common stock and warrants for March Registered Direct Offering and Concurrent Private Placement, net of financing costs
Issuance of common stock and warrants for March Registered Direct Offering and Concurrent Private Placement, net of financing costs, shares
Restricted stock unit shares released
Restricted stock unit shares released, shares
Stock-based compensation		—		—		231		—			—				231
Foreign currency translation adjustments		—		—		—		(9	)		—				(9	)
Net loss		—		—		—		—			(4,108	)	-		(4,108	)
Balance at March 31, 2026		11,786,725	$	1	$	150,685	$	(22	)	$	(145,729	)	-	$	4,935

	Shares		Amount		Capital		Income (Loss)			Deficit			Equity			Interest			Equity
	Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’			Non controlling			Total
	Shares		Amount		Capital		Income (Loss)			Deficit			Equity			Interest			Equity
Balance at December 31, 2024		1,730,051	$	—	$	123,277	$	(28	)	$	(121,715	)	$	1,534		$	434		$	1,968
Balance		1,730,051	$	—	$	123,277	$	(28	)	$	(121,715	)	$	1,534		$	434		$	1,968
Issuance of common stock through At the Market Offering		223,583		—		2,754		—			—			2,754			—			2,754
Issuance of common stock and warrants through January Confidentially Marketed Public Offering, net of financing costs		416,667		—		3,607		—			—			3,607			—			3,607
Issuance of common stock and warrants for March Registered Direct Offering and Concurrent Private Placement, net of financing costs		277,084		—		3,423		—			—			3,423			—			3,423
Restricted stock unit shares released		2,038		—		—		—			—			—			—			—
Stock-based compensation		—		—		607		—			—			607			—			607
Foreign currency translation adjustments		—		—		—		2			—			2			—			2
Net loss		—		—		—		—			(4,986	)		(4,986	)		(76	)		(5,062	)
Balance at March 31, 2025		2,649,423	$	—	$	133,668	$	(26	)	$	(126,701	)	$	6,941		$	358		$	7,299
Balance		2,649,423	$	—	$	133,668	$	(26	)	$	(126,701	)	$	6,941		$	358		$	7,299

CALIDI BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(In thousands)

	2026			2025
	Three Months Ended March 31,
	2026			2025
	(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(4,108	)	$	(5,062	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization expense		426			394
Stock-based compensation		231			607
Change in fair value of other liabilities and derivatives		(48	)		(35	)
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		(66	)		(317	)
Accounts payable		232			(752	)
Accrued expenses and other current liabilities		(458	)		(1,687	)
Operating lease right of use liability		(325	)		(279	)
Net cash used in operating activities		(4,116	)		(7,131	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of machinery and equipment		(5	)		(7	)
Net cash used in investing activities		(5	)		(7	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from public offerings		5,369			3,793
Proceeds from at the market offering		—			2,780
Proceeds from exercise of pre-funded warrants		5			—
Repayment of financing lease obligations		(44	)		(17	)
Payment of financing costs		(171	)		(301	)
Proceeds from registered direct offering		—			3,503
Repayment of principal on related party term notes payable		—			(1,250	)
Repayment of principal on term notes payable		—			(200	)
Repayment of principal on related party bridge loan payable		—			(200	)
Net cash provided by financing activities		5,159			8,108
Effect of exchange rate changes on cash		(7	)		—
NET INCREASE IN CASH AND RESTRICTED CASH		1,031			970
CASH AND RESTRICTED CASH BALANCE:
At beginning of the period		5,819			9,809
At end of the period	$	6,850		$	10,779
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid for interest	$	101		$	639
Cash paid for income taxes	$	4		$	3
SUPPLEMENTAL SCHEDULE OF NONCASH FINANCING AND INVESTING ACTIVITIES
Deemed dividend on warrants	$	309		$	—
Financing fees included in accounts payable and accrued liabilities	$	168		$	80
Machinery and equipment acquired through financing leases	$	66		$	—

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

CALIDI BIOTHERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

1. Organization and Nature of Operations

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

The Company is a 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.

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

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

Reverse Stock Split

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

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

Liquidity and Going Concern

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

The Company has experienced recurring losses from operations and negative cash flows from operating activities, has a significant accumulated deficit and expects to continue to incur net losses into the foreseeable future. The Company had an accumulated deficit of $145.7 million at March 31, 2026. During the three months ended March 31, 2026, the Company used $4.1 million of cash for operating activities. As of March 31, 2026, the Company had cash of $6.6 million and restricted cash of $0.2 million. The Company expects operating losses and negative cash flows to continue for the foreseeable future.

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.

2. Summary of Significant Accounting Policies

Unaudited Interim Financial Information

The accompanying unaudited condensed consolidated financial statements as of March 31, 2026, and for the three months ended March 31, 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 its wholly owned subsidiary, Calidi Biotherapeutics (Nevada), Inc., a company incorporated in the state of Nevada and Calidi Biotherapeutics, Inc., StemVac GmbH (“StemVac”), a company organized under the laws of Germany, and Calidi Biotherapeutics Australia Pty Ltd (“Calidi Australia”), a wholly owned Australian subsidiary, and Redtail Biopharma, Inc. (“Redtail Biopharma”), a wholly owned subsidiary incorporated in the state of Nevada. StemVac’s primary operating activities include process development and other research and development activities for the Company under a cost-plus intercompany development agreement funded by the Company. Calidi Australia’s principal purpose is for conducting certain parts of the SNV1 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. To date and as of March 31, 2026, Redtail Biopharma has had no activity.

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

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

In May 2024, the Company established and incorporated a wholly owned subsidiary, Nova Cell, Inc. (“Nova Cell”), a subsidiary 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 classifies restricted cash as either part of prepaids and other current assets, or as part of other noncurrent assets, depending on the term and nature of the underlying contract with a financial institution, which requires the Company to hold a fixed amount of funds in a restricted money market account as collateral to the financial institution for the Company’s corporate credit card program with that financial institution.

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

Schedule of Cash and Cash Equivalents

	March 31, 2026		March 31, 2025
Cash	$	6,631	$	10,561
Restricted cash included within prepaid expenses and other current assets		100		100
Restricted cash included within other noncurrent assets		119		118
Total cash and restricted cash as shown in the unaudited condensed consolidated statements of cash flows	$	6,850	$	10,779

Machinery and Equipment

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

Leases

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

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

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 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 $3.1 million of CIRM funding conditioned that the Company co-fund approximately $0.8 million under the requirements of the CIRM application. On December 28, 2022, the Company received the Notice of Award from CIRM for this grant.

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, net, on the Company’s unaudited condensed consolidated statements of operations when the related research and development expenses are incurred.

During the three months ended March 31, 2026 and 2025, the Company recognized approximately $0 and $50,000, respectively, in grant income in the accompanying unaudited condensed consolidated statements of operations.

Research and Development Expenses

Research and development expenses are expensed as incurred. Research and development expenses consist of costs incurred to discover, research and develop drug candidates, including compensation-related expenses for research and development personnel, 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, the Company’s wholly owned subsidiary, is located and operates in Germany and its functional currency is the Euro. Calidi Australia, the Company’s wholly owned subsidiary, is located and operates in Australia and its functional currency is the Australian Dollar (“AUD”). Accordingly, StemVac’s and Calidi Australia’s assets and liabilities are translated using respective published exchange rates in effect at the unaudited condensed consolidated balance sheet date. Expenses and cash flows are translated using respective approximate weighted average exchange rates for the reporting period. Resulting foreign currency translation adjustments are recorded as other comprehensive income or loss, net of tax, in the unaudited condensed consolidated statements of comprehensive income or loss and included as a component of accumulated other comprehensive income or loss on the unaudited condensed consolidated balance sheets. For the three months ended March 31, 2026 and 2025, comprehensive loss includes such foreign currency translation adjustments and was insignificant for all periods presented.

Foreign Currency Transaction Gains and Losses

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

Stock-Based Compensation

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

The Company measures all stock options and other stock-based awards granted based on the fair value of the award on the date of the grant and recognizes compensation expense for those awards over the requisite service period, which is generally the vesting period of the respective award. The Company has elected to recognize forfeitures as they occur. The reversal of compensation cost previously recognized for an award that is forfeited because of a failure to satisfy a service condition is recognized in the period of the forfeiture. Generally and unless otherwise specified, the Company 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 (a) the two-class method or (b) the if-converted method and treasury stock method, as applicable. In periods in which the Company reports a net loss attributable to common stockholders, diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since dilutive common 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, earnout shares, and contingently issuable warrants were antidilutive.

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 three months ended March 31, 2026 and 2025 because including them would have been antidilutive (in thousands):

	2026		2025
	Three Months Ended March 31,
	2026		2025
Warrants for common stock		49,440		1,461
Employee stock options		271		76
Earnout shares		150		150
Contingently issuable warrants⁽¹⁾		—		—
Total common stock equivalents		49,861		1,687

(1)

The contingently issuable warrant was not included for purposes of calculating the number of diluted shares outstanding as of March 31, 2025, as the number of dilutive shares was based on a contingency not yet resolved as of period end and the contingently resulting number of dilutive shares is not determinable until the contingency is resolved. As of March 31, 2026, the contingency was resolved in full and there were no contingently issuable warrants outstanding.

Segments

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

	●	Chief Executive Officer
	●	Chief Financial Officer
	●	Chief Scientific Officer and Head of Technical Operations

The Company views its operations and manages its business as a single reportable segment whose operations 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 Company manages its Research and Development (“R&D”) activities on a consolidated basis. The Company expects to generate future income from a combination of license fees and other upfront payments, funded R&D agreements, milestone payments, product sales, government and other third-party funding, and royalties, which depend on the results, regulatory approval, and timing of the successful commercialization of the Company’s products.

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

The following table presents selected financial information with respect to the Company’s single operating segment for the three months ended March 31, 2026 and 2025:

Schedule of Operating Segment

	2026			2025
	Three Months Ended March 31,
	2026			2025
OPERATING EXPENSES
Salaries and benefits	$	(1,700	)	$	(2,190	)
Insurance		(181	)		(236	)
Legal		(264	)		(299	)
Consulting		(284	)		(619	)
Rent and maintenance		(567	)		(565	)
Clinical & research and development		(774	)		(463	)
Depreciation expense		(87	)		(91	)
Change in fair value of other liabilities and derivatives		48			35
Other segment items⁽¹⁾		(295	)		(631	)
Income tax provision		(4	)		(3	)
NET LOSS	$	(4,108	)	$	(5,062	)

⁽¹⁾

Other segment items include interest expense, grant income, office expenses, marketing expenses, and other income, net.

Recently Adopted Accounting Pronouncements

There were no new accounting pronouncements adopted during the three months ended March 31, 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 September 2025, the FASB issued ASU No. 2025-07, Derivatives and Hedging (Topic 815) and Revenue from Contracts with Customers (Topic 606): Derivatives Scope Refinements and Scope Clarification for Share-Based Noncash Consideration from a Customer in a Revenue Contract. ASU 2025-07 refines the scope of derivative accounting under Topic 815 and clarifies the treatment of share-based noncash consideration under ASC 606. This ASU is effective for annual periods and interim periods beginning after December 15, 2026, with early adoption permitted. The guidance may be applied on a prospective or retrospective basis and early adoption is permitted. The Company is currently evaluating the impact of adopting ASU 2025-07.

In November 2025, the FASB issued ASU No. 2025-09, Derivatives and Hedging (Topic 815): Hedge Accounting Improvements. ASU 2025-09 clarifies certain aspects of the guidance on hedge accounting and addresses several incremental hedge accounting issues arising from global reference rate reform. This ASU is effective for annual periods beginning after December 15, 2026, and interim periods within those annual reporting periods The Company is currently evaluating the impact of adopting ASU 2025-07.

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.

3. Fair Value Measurements

The following table presents the Company’s assets and liabilities that are measured at fair value on a recurring basis, inclusive of related party components, as of March 31, 2026 and December 31, 2025 (in thousands):

	Level 1		Level 2		Level 3		Total
	March 31, 2026 (unaudited)
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash held in a money market account	$	219	$	—	$	—	$	219
Total assets, at fair value	$	219	$	—	$	—	$	219
Liabilities:
Public Warrants	$	58	$	—	$	—	$	58
Private warrants		—		9		—		9
Total warrant liabilities, at fair value	$	58	$	9	$	—	$	67

	Level 1		Level 2		Level 3		Total
	December 31, 2025
	Level 1		Level 2		Level 3		Total
Assets:
Restricted cash held in money market accounts	$	219	$	—	$	—	$	219
Total assets, at fair value	$	219	$	—	$	—	$	219
Liabilities:
Public Warrants	$	99	$	—	$	—	$	99
Private Warrants		—		16		—		16
Total warrant liabilities, at fair value	$	99	$	16	$	—	$	115

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

The following table presents the changes in fair value of valued instruments for the three months ended March 31, 2026 (in thousands):

	Public Warrants, at fair value			Private Warrants, at fair value
Balance at January 1, 2026	$	99			16
Change in fair value		(41	)		(7	)
Balance at March 31, 2026		58			9

The following table presents the changes in fair value of valued instruments for the three months ended March 31, 2025 (in thousands):

	Forward Purchase Agreement Derivative Asset, at fair value			Public Warrants, at fair value			Private Warrants, at fair value
Balance at January 1, 2025	$	(11	)	$	110		$	18
Beginning, Balance,	$	(11	)	$	110		$	18
Change in fair value		6			(35	)		(6	)
Balance at March 31, 2025	$	(5	)		75			12
Ending, Balance,	$	(5	)		75			12

4. Selected Balance Sheet Components

Accrued Expenses and Other Current Liabilities

As of March 31, 2026 and December 31, 2025, accrued expenses and other current liabilities were comprised of the following (in thousands):

	March 31, 2026		December 31, 2025
Accrued compensation	$	715	$	884
Accrued vendor and other expenses		717		922
Accrued expenses and other current liabilities	$	1,432	$	1,806

See Note 11 for additional commitments.

Prepaid Expenses and Other Current Assets

As of March 31, 2026 and December 31, 2025, prepaid expenses and other current assets were comprised of the following (in thousands):

	March 31, 2026		December 31, 2025
Prepaid expenses	$	192	$	120
Prepaid insurance		292		302
Other		238		234
Prepaid expenses and other current assets	$	722	$	656

5. Machinery and Equipment, net

As of March 31, 2026 and December 31, 2025, machinery and equipment, net, was comprised of the following (in thousands):

	March 31, 2026			December 31, 2025
Machinery and equipment	$	2,511		$	2,575
Accumulated depreciation		(1,753	)		(1,794	)
Machinery and equipment, net	$	758		$	781

Depreciation expense amounted to approximately $0.1 million for the three months ended March 31, 2026 and 2025.

6. Related Party Transactions

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

Schedule of Related Party Transactions

Related Party	Description of investment or transaction	March 31, 2026		December 31, 2025
Director F	Severance accrual⁽¹⁾	$	63	$	195
Director F	Lease guaranty⁽²⁾	$	20	$	14
Director F and Director A	Warrant liability⁽³⁾	$	5	$	8
Officer G	Severance accrual⁽⁴⁾	$	4	$	65
Officer A	Severance accrual⁽⁵⁾	$	52	$	158
Company A related to Director G	Accounts payable and accrued expenses⁽⁶⁾	$	51	$	130

(1)	On April 22, 2025, the Company executed a General Release of Claims and Transition Agreement (“Release Agreement”) with Mr. Camaisa, (Director F referenced above), and is obligated to pay Director F $0.5 million separation pay in the form of compensation continuation over 12 months pursuant to the Company’s regular and customary payroll schedule, less all regular and customary payroll withholdings and shall also be liable to pay Director F COBRA premiums for 12 months, commencing May 2025, of which $0.1 million and $0.2 million was outstanding as of March 31, 2026 and December 31, 2025, respectively. Director F shall also be entitled to receive transition and consulting pay of $10,000 per month during the transition period. The agreement terminated on December 31, 2025 and $0.1 million was expensed under the agreement.

(2)	In October 2022, in order for the Company to secure and execute the San Diego Lease discussed in Note 11, Director F, provided a personal Guaranty of Lease of (the “Guaranty”) up to $0.9 million to the lessor for the Company’s future performance under the San Diego Lease agreement. As consideration for the Guaranty, the Company agreed to pay Director F 10% of the Guaranty amount for the first year of the San Diego Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the termination of the San Diego Lease or release of Director F from the Guaranty by the lessor, whichever occurs first. As of March 31, 2026 and December 31, 2025, the amounts shown in the table above represent the present value, including accrued interest as of the period shown, of approximately $20,000 and $14,000, respectively. Payment is due to Director F upon the release or termination of the Guaranty, which is included in operating lease right-of-use liability, noncurrent. The amount due to Director F was partially settled in April 2025.

(3)	See Note 8 for disclosures related to Warrants.

(4)	On August 8, 2025, the Company executed a General Release of Claims and Separation Agreement with Officer G, and is obligated to pay to Officer G $0.1 million in relation to a negotiated bonus for the NNV1 and SNV1 IND approvals and $0.2 million severance pay in the form of compensation continuation over six months pursuant to the Company’s regular and customary payroll schedule, less all regular and customary payroll withholdings and shall pay Officer G’s COBRA premiums for six months, commencing August 2025. As of March 31, 2026, $4,000 of related benefits were included in related party accrued expenses and other liabilities.

(5)	On September 17, 2025, the Company executed a General Release of Claims and Separation Agreement with Officer A, and is obligated to pay to Officer A i) a bonus in the amount of $0.1 million, upon the successful and effective corporate spin-off, out-licensing, or similar transaction relating to Nova Cell prior to October 31, 2025, and (ii) $0.2 million severance pay in the form of compensation continuation over six months pursuant to the Company’s regular and customary payroll schedule, less all regular and customary payroll withholdings and shall pay Officer A’s COBRA premiums for six months, commencing October 2025. As of March 31, 2026 and December 31, 2025, $0.1 million and $0.2 million, respectively, of severance pay and related benefits were included in related party accrued expenses and other liabilities.

(6)	On December 13, 2024, the Company executed a Master Services Agreement with Company A, related to Director G, to engage Company A for contract research organization (“CRO”) services and other clinical development services. As part of the Master Services Agreement, the Company is obligated to pay to Company A i) all reimbursable expenses, and (ii) all undisputed invoiced amounts for services. As of March 31, 2026 and December 31, 2025, the Company accrued $0.1 million due to Company A, included in related party accounts payable and accrued expenses. Furthermore, during the year ended December 31, 2025, the Company incurred $0.6 million in expenses related to services from Company A. No expenses were incurred during the three months ended March 31, 2026.

7. Debt

The Company’s outstanding debt obligations as of March 31, 2026 and December 31, 2025 are as follows (in thousands):

	March 31, 2026
	Unpaid Balance		Accrued Interest		Net Carrying Value
Promissory note	$	600	$	23	$	623
Less: current portion of long-term debt						(23	)
Long-term debt, net of current portion					$	600

	December 31, 2025
	Unpaid Balance		Accrued Interest		Net Carrying Value
Promissory note	$	600	$	90	$	690
Less: current portion of long-term debt						(90	)
Long-term debt, net of current portion					$	600

Scheduled maturities of outstanding debt, net of discounts as of March 31, 2026 are as follows (in thousands):

Year Ending December 31:
2026 (April — December)		—
2027		600
2028 and thereafter		—
Plus: accrued interest		23
Total debt	$	623

The following discussion includes a description of the Company’s outstanding debt as of March 31, 2026 and December 31, 2025. The weighted average interest rate related to the Company’s outstanding debt was approximately 15% as of March 31, 2026 and December 31, 2025. Interest expense related to the Company’s outstanding debt totaled approximately $22,500 and $0.1 million for the three months ended March 31, 2026 and 2025, respectively, which is reported within other income, net, in the unaudited condensed consolidated statements of operations.

Promissory Note Loan Agreement

On July 1, 2024, the Company entered into a Loan Agreement with a third party lender (the “Lender”). Under the Loan Agreement, the Lender agreed to loan the Company the principal amount of $0.6 million pursuant to the terms of the promissory note dated July 1, 2024 (the “Promissory Note”), which bears a simple interest rate at 15% per annum and matures on the third calendar year from July 1, 2024 (the “Maturity Date”) unless due earlier due to an event of a default. The Company agreed to pay annual payments of accrued interest after each calendar year from the Payment Date until any remaining interest is paid in full on the Maturity Date.

As of March 31, 2026 and December 31, 2025, the total carrying value of the promissory note, including accrued interest, was $0.6 million and $0.7 million, respectively.

8. Convertible Preferred Stock, Common Stock and Stockholders’ Equity

Preferred Stock

Pursuant to the Second Amended and Restated Certificate of Incorporation filed on September 19, 2023 (“the Amended Articles”), the Company is authorized to issue a total of 1,000,000 shares of preferred stock, par value $0.0001 per share. As of March 31, 2026 and December 31, 2025, there were no shares of preferred stock outstanding.

Common Stock

Pursuant to the Amended Articles, the Company is authorized to issue 330,000,000 shares of common stock, par value $0.0001 per share, of which 312,000,000 shares are designated as Voting Common Stock (“Common Stock”) and 18,000,000 are designated as Non-Voting Common Stock (the “Non-Voting Common Stock”). As of March 31, 2026 and December 31, 2025, there were 11,786,725 and 7,216,994 shares of common stock issued and outstanding, respectively, and 150,000 shares of non-voting common stock outstanding. Since inception to date, no dividends have been declared or paid. Issuance costs related to common stock issuances during all periods presented were immaterial.

As of March 31, 2026 and December 31, 2025, common stock reserved for future issuance consisted of the following:

Schedule of Common Stock Reserved

	March 31, 2026		December 31, 2025
Common stock warrants outstanding		49,440,138		5,026,613
Common stock options issued and outstanding		271,162		277,822
Shares available for future issuance under the 2023 Equity Incentive Plan		96,724		96,497
Shares reserved under the 2023 Employee Stock Purchase Plan		32,815		32,815
		49,840,839		5,433,747

Nova Cell Investment

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

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 22,500,000 of its shares of common stock in Nova Cell (the “Repurchased Shares”), representing an ownership interest of 75%, back to Nova Cell, for a purchase price of $6.0 million (the “Purchase Price”). The Purchase Price for the Repurchased Shares was or shall be satisfied (A) in part by cancellation of indebtedness under the September 17, 2024, promissory note, net of specified offsets (including a $50 thousand cash offset), resulting in an Indebtedness Cancellation Amount of $1.2 million, and (B) the balance, by Deferred Consideration of $4.8 million payable after closing, as more fully described in the SRA. As of March 31, 2026, no Deferred Consideration has been recognized, and the full amount remains constrained until underlying uncertainties are resolved. After the Deferred Consideration is fully satisfied, the SRA also provides for an ongoing royalty at a fixed percentage of Covered Gross Revenue attributable to or derivative of the materials listed on Schedule A to the MPA, ending on the tenth anniversary of Nova Cell’s first product sale. Furthermore, as part of the Agreements, the Company sold and transferred certain materials to Nova Cell as listed on Schedule 1 to the MPA. Following the closing of the Agreements, Nova Cell is no longer a subsidiary of the Company.

At the Market Offering

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

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

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

On February 4, 2025, the Company increased the maximum aggregate offering amount of the shares of the Company’s common stock, par value $0.0001 per share, issuable under the Sales Agreement from $5.1 million to $11.2 million by filing a prospectus supplement under the Sales Agreement for an aggregate of $6.1 million. During the three months ended March 31, 2026, no shares of common stock were sold under the Sales Agreement.

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 416,667 shares of the Company’s common stock, par value $0.0001 per share, at a purchase price of $10.20 per Share. The gross proceeds from the offering, which closed on January 10, 2025, were approximately $4.3 million, before deducting placement agent fees and other offering expenses payable by the Company and excluding the net proceeds, if any, from the exercise of the Placement Agent Warrants.

The shares of common stock were offered by the Company pursuant to a shelf registration statement on Form S-3 (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 20,834 shares of common stock. See further warrant details below.

March 2025 Registered Direct Offering and Concurrent Private Placement

On March 28, 2025, the Company entered into a Securities Purchase Agreement with a single institutional investor, pursuant to which the Company agreed to issue to the Purchaser, (i) in a registered direct offering, 277,084 shares of the Company’s common stock (the “Shares”), par value $0.0001 per share, at a purchase price of $7.80 per Share, (ii) pre-funded warrants (“PFW”) to purchase up to an aggregate of 227,334 shares of Common Stock at a purchase price of $7.788 per Pre-funded Warrant and an exercise price of $0.001 per share (the “Pre-funded Warrant Shares” or the “PFW Shares”) and (iii) in a concurrent private placement, Series G common stock purchase warrants to purchase up to 504,417 shares of common stock (the “Series G Warrants” or the “Common Warrants”). Such registered direct offering and concurrent private placement are referred to herein as the “March Registered Direct Offering and Concurrent Private Placement.”

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

The Company issued Ladenburg, acting as the “Placement Agent”, common stock warrants to purchase up to 25,221 shares of common stock. See further warrant details below.

July 2025 Warrant Inducement Offer

On July 9, 2025, the Company entered into 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 549,596 shares of the Company’s common stock, at a reduced exercise price of $8.40, for total gross proceeds of approximately $4.6 million, prior to deducting placement agent fees and offering expenses. Ladenburg acted as the “Placement Agent” in the July Warrant Inducement Offer.

In consideration for the immediate exercise of some or all of the Existing Warrants for cash, the Company issued unregistered new Series H common stock warrants (“Series H Warrants”) to purchase up to 549,587 shares of common stock. See further warrant details below. The Company filed a resale registration statement on Form S-3 (File No. 333-288784), to register the shares underlying the Series H Warrants, which registration statement was declared effective by the 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) 1,922,764 common stock units (“Common Stock Unit”), which includes the 450,000 Common Stock Units purchased pursuant to the exercise, in full, of the Over-Allotment Option and (ii) 1,528,000 pre-funded warrant units (“Pre-Funded Unit”), resulting in gross proceeds of approximately $6.9 million, before deducting underwriting discounts and commissions and other estimated offering expenses. The August Public Offering closed on August 21, 2025

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

The Common Stock Units and Pre-Funded Units were offered by the Company pursuant to a registration statement on Form S-1 (File No. 333- 289670), which was declared effective by the 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 172,538 shares of common stock. See further warrant details below.

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) 2,278,731 common stock units (“Common Stock Units”), which includes 1,575,000 Common Stock Units purchased pursuant to the exercise, in full, of the Over-Allotment Option, sold to the public at a price of $0.50 per Common Stock Unit, and (ii) 9,815,900 pre-funded warrant units (“Pre-Funded Units”), sold to the public at a price of $0.499 per Pre-Funded Unit, resulting in gross proceeds of approximately $6.0 million, before deducting underwriting discounts and commissions and other estimated offering expenses. In connection with the March 2026 Offering, the Company also issued to the Underwriter (or its designees) a warrant (the “Underwriter’s Warrant”) to purchase up to 604,732 shares of Common Stock of the Company, par value $0.0001. The Underwriter’s Warrant has an exercise price of $0.625, is exercisable on or after the date of issuance, and will expire on March 9, 2031.

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 $0.25 per share. On April 23, 2026, the exercise prices of the Series J Warrants, the Series K Warrants, and the Series L Warrants were reset to $0.25.

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 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 Offering 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:

	●	504,417 shares of common stock, on exercise of the Series G common stock warrants at an exercise price of $8.3448 per share;

	●	279,168 shares of common stock, on exercise of the Series H common stock warrants at an exercise price of $8.40 per share; and

	●	2,190,000 shares of common stock, on exercise of the Series I common stock warrants at an exercise price of $2.00 per share.

Per the Warrant Amendment, the exercise price for each of such Existing Warrants was reduced to $0.50 per share, subject to further adjustment as set forth in the Existing Warrants and any other document governing the terms thereunder. All other terms and conditions of the Existing Warrants remain unchanged and in full force and effect. As a result, the incremental fair value associated with the Warrant Amendment totaling $0.3 million was recorded as a deemed dividend to the warrant holders, and accordingly was treated as a reduction from total loss attributable to common stockholders in the calculations of net loss per share in the unaudited condensed consolidated statements of operations.

Warrants

As of March 31, 2026 and December 31, 2025, the Company has outstanding warrants to purchase 49,440,138 and 5,026,613 shares of Common Stock, respectively, consisting of the following:

Schedule of Outstanding Warrants

	March 31, 2026		December 31, 2025		Exercise Price		Issuance date	Expiration date
Private Warrants to purchase Common Stock⁽¹⁾		15,938		15,938	$	1,380.00	September 12, 2023	September 12, 2028
Public Warrants to purchase Common Stock⁽²⁾		95,834		95,834	$	1,380.00	September 12, 2023	September 12, 2028
Warrants to purchase Restricted Shares		3,334		3,334	$	158.40	February 21, 2024	February 21, 2029
Warrants to purchase Restricted Shares		50,000		50,000	$	22.80	July 28, 2024	July 28, 2027
Placement Agent Warrants to purchase Common Stock		6,333		6,333	$	79.20	April 18, 2024	April 18, 2029
Placement Agent Warrants to purchase Common Stock		4,458		4,458	$	45.00	June 3, 2024	June 3, 2029
Placement Agent Warrants to purchase Common Stock		8,542		8,542	$	15.00	October 24, 2024	April 24, 2030
Placement Agent Warrants to purchase Common Stock		18,492		18,492	$	25.35	November 15, 2024	May 15, 2030
Placement Agent Warrants to purchase Common Stock		20,834		20,834	$	12.75	January 10, 2025	January 10, 2030
Placement Agent Warrants to purchase Common Stock		25,221		25,221	$	9.75	March 31, 2025	March 31, 2030
Representative Warrants to purchase Common Stock		172,538		172,538	$	3.00	August 21, 2025	August 21, 2030
Underwriter Warrants to purchase Common Stock		604,732		—	$	0.625	March 9, 2026	March 9, 2031
Series A Warrants to purchase Common Stock		54,308		54,308	$	18.24	April 18, 2024	April 18, 2029
Series B-1 Warrants to purchase Common Stock		1,442		1,442	$	18.24	June 3, 2024	June 3, 2029
Series C-1 Warrants to purchase Common Stock		17,918		17,918	$	18.24	June 3, 2024	June 3, 2029
Series C-1 Warrants to purchase Common Stock		4,167		4,167	$	18.24	August 8, 2024	August 7, 2029
Series C-1 Warrants to purchase Common Stock		4,168		4,168	$	18.24	August 16, 2024	August 15, 2029
Series D Warrants to purchase Common Stock		18,318		18,318	$	18.24	June 3, 2024	December 3, 2029
Series G Warrants to purchase Common Stock		504,417		504,417	$	0.50	March 31, 2025	September 30, 2032
Series H Warrants to purchase Common Stock		549,587		549,587	$	0.50 – $ 8.40	July 10, 2025	January 10, 2031
Series I Warrants to purchase Common Stock		3,450,764		3,450,764	$	0.50 – $ 2.00	August 21, 2025	August 21, 2030
Series J Warrants to purchase Common Stock		12,094,631		—	$	0.50	March 9, 2026	March 9, 2031
Series K Warrants to purchase Common Stock		12,094,631		—	$	0.50	March 9, 2026	March 9, 2027
Series L Warrants to purchase Common Stock		12,094,631		—	$	0.50	March 9, 2026	September 9, 2026
Pre-funded Warrants to purchase Common Stock⁽³⁾		7,524,900		—	$	0.001	March 9, 2026	No expiration
Total		49,440,138		5,026,613

(1)

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

(2)

The Public Warrants became exercisable 30 days after the closing of the FLAG Merger. Each whole share of the warrant is exercisable for one share of the Company’s common stock.

The Company may redeem the outstanding Public Warrants for $0.12 per warrant upon at least 30 days’ prior written notice of redemption given after the warrants become exercisable, if the reported last sale price of the common stock equals or exceeds $2,160.00 per share (as adjusted for stock dividends, sub-divisions, reorganizations, recapitalizations and the like) for any 20 trading days within a 30-trading day period commencing after the warrants become exercisable and ending on the third trading day before the Company sends the notice of redemption to the warrant holders. Upon issuance of a redemption notice by the Company, the warrant holders may, at any time after the redemption notice, exercise the public warrants on a cashless basis.

The Company accounts for the Public Warrants in accordance with the guidance contained in ASC 815-40. Such guidance provides that because the warrants do not meet the criteria for equity treatment thereunder, each warrant must be recorded as a liability.

The accounting treatment of derivative financial instruments in accordance with ASC 815 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 three months ended March 31, 2026.

Schedule of Warrant Activity

	Number of Warrants			Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at January 1, 2026		5,026,613		$	34.97		4.79
Issued		46,704,525
Exercised		(2,291,000	)
Cancelled		—
Outstanding at March 31, 2026		49,440,138		$	3.74		2.07

The following table summarizes the Company’s aggregate warrant activity for the three months ended March 31, 2025.

	Number of Warrants		Weighted Average Exercise Price		Weighted Average Remaining Contractual Life (Years)
Outstanding at January 1, 2025		910,299	$	185.16		3.63
Issued		777,806
Exercised		—
Expired		—
Outstanding at March 31, 2025		1,688,105	$	103.68		4.13

9. Stock-Based Compensation

Equity Incentive Plans

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 32,815 equity awards, including stock options (“Options”), restricted stock awards (“Restricted Stock”), dividend equivalents awards, stock payment awards, restricted stock units (“RSUs”) and/or stock appreciation rights (“SARs”, together with Options, Restricted Stock and RSUs, “Awards”), according to its discretion. On July 9, 2025, the Company’s stockholders approved an amendment to the 2023 Plan to increase the aggregate number of shares of common stock authorized for grant under the 2023 Plan from 32,815 to 282,815. Awards may be granted under the 2023 Plan to the Company’s employees, directors, and consultants. As of March 31, 2026, the Administrator has issued RSUs and stock options under the 2023 Plan.

Under the 2023 Plan, Awards may vest and thereby become exercisable or have restrictions on forfeiture lapse on the date of grant or in periodic installments or upon the attainment of performance goals, or upon the occurrence of specified events depending on the Administrator’s discretion. The Administrator has broad authority to determine the terms and conditions of any Award granted pursuant to the 2023 Plan.

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.

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 15% of the market value of such stock at pre-determined and plan-defined dates. There have been no issuances of common stock under the 2023 ESPP to date.

Stock Options

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

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

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

Employee Benefit Plans Securities Registration Statement

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

Option Awards Activity

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

Summary of Stock Option Activity

	Number of Options Outstanding			Weighted Average Exercise Price		Weighted- Average Remaining Contractual Life (Years)		Aggregate Intrinsic Value
Outstanding at January 1, 2026		277		$	49.57		8.39	$	—
Options granted		—
Options exercised		—
Options forfeited or cancelled		(6	)		438.90
Outstanding at March 31, 2026		271		$	40.01		8.26	$	—
Exercisable at March 31, 2026		84		$	117.93		6.03	$	—

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):

	2026		2025
	Three Months Ended March 31,
	2026		2025
Research and development	$	55	$	147
General and administrative		176		460
Total stock-based compensation expense	$	231	$	607

On January 18, 2023, the Board approved a repricing of approximately 0.2 million stock options previously granted at an exercise price of $1,112.40 per share to the then current fair value of $853.20 per share pursuant to an updated valuation report. The three months ended March 31, 2026 and 2025 include a noncash compensation charge of approximately $7,000 and $17,000, respectively, in connection with this repricing. The stock option repricing and the acceleration of vesting were accounted for as a modification.

As of March 31, 2026, the total unamortized stock-based compensation expense related to stock options was approximately $0.6 million, expected to be amortized over an estimated weighted average life of 2.2 years. There were no stock options granted during the three months ended March 31, 2026. The weighted-average estimated fair value of stock options with service-conditions granted during the three months ended March 31, 2025 was $7.80 per share, using the Black-Scholes model with the following weighted-average assumptions:

	Three Months Ended March 31,
	2026⁽¹⁾			2025
Expected volatility		—	%		86.90	%
Risk-free interest rate		—	%		4.13	%
Expected option life (in years)		—			6.01
Expected dividend yield		—	%		0.0	%

(1)	As noted above, there were no stock options with service-conditions granted during the three months ended March 31, 2026.

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

10. Income Taxes

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

For the three months ended March 31, 2026 and 2025, the Company did not record any federal or state income tax provision or benefit due to net losses incurred for all periods presented. The Company’s net deferred tax assets generated mainly from net operating losses are fully offset by a valuation allowance as the Company believes it is not more likely than not that the benefit will be realized. StemVac’s income tax provision in Germany for all periods presented was insignificant.

11. Commitments and Contingencies

Operating and Financing Leases

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

To secure and execute the San Diego Lease, Mr. Allan J. Camaisa (or “Mr. Camaisa”) provided a personal Guaranty of Lease of up to $0.9 million (the “Guaranty”) to the lessor for the Company’s future performance under the San Diego Lease agreement. As consideration for the Guaranty, the Company agreed to pay Mr. Camaisa 10% of the Guaranty amount for the first year of the San Diego Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the termination of the San Diego Lease or release of Mr. Camaisa from the Guaranty by the lessor, whichever occurs first. Mr. Camaisa received $0.2 million during the fiscal year ended 2025 in connection with the lease guarantee.

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

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

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

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

On April 1, 2022, StemVac entered into an office lease which includes laboratory space which expires on March 31, 2027, with monthly payments of €4,047 Euros per month.

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 be extend the lease term 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 March 31, 2026 and 2025 was approximately $0.4 million.

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

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


	Three Months Ended March 31,
Cash paid for amounts included in the measurement of lease liabilities:	2026		2025
Operating cash flows from operating leases	$	372	$	362
Operating cash flows from financing leases	$	7	$	6
Financing cash flows from financing leases	$	44	$	17

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

	March 31, 2026			December 31, 2025
	(Unaudited)
Operating leases
Right-of-use assets, net	$	1,342		$	1,682
Right-of-use lease liabilities, current	$	1,350		$	1,405
Right-of-use lease liabilities, noncurrent		6			277
Total operating lease liabilities	$	1,356		$	1,682
Financing Leases
Machinery and equipment, gross	$	835		$	779
Accumulated depreciation		(489	)		(463	)
Machinery and equipment, net	$	346		$	316
Current liabilities	$	154		$	111
Noncurrent liabilities		147			171
Total financing lease liabilities	$	301		$	282
Weighted average remaining lease term
Operating leases		0.9 years			1.2 years
Financing leases		2.3 years			2.7 years
Weighted average discount rate
Operating leases		11.69	%		11.70	%
Financing leases		8.78	%		9.05	%

The following table presents future minimum lease commitments as of March 31, 2026 (in thousands):

	Operating Leases			Financing Leases
Year Ending December 31,
2026 (April – December)		1,138			148
2027		295			93
2028		3			75
2029		—			17
2030		—			—
2031 and thereafter		—			—
Total minimum lease payments		1,436			333
Less: amounts representing interest		(80	)		(32	)
Present value of net minimum lease payments	$	1,356		$	301

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. Camaisa, the Company’s director and former Chief Executive Officer, and Ms. Pizarro, the Company’s former Chief Corporate Development Officer and Chief Legal Officer, alleging defamation and constructive discharge of Mr. Kalajian’s position of Chief Accounting Officer and interim Chief Financial Officer (Case No. 37-2023-00049813-CU-DF-CTL) (the “Primary Case”). Mr. Kalajian is seeking an unspecified amount in damages under his employment contract, damages to be proven at trial, punitive damages, and attorney’s fees.

On November 21, 2023, the Company initiated arbitration proceedings against Mr. Kalajian for breach of fiduciary duty, constructive fraud, 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, conversation, and declaratory relief seeking to recover the Accounting Bonuses.

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

On May 1, 2024, Mr. Kalajian filed a complaint in the Superior Court of the State of California, County of San Diego against the Company alleging intentional conversion and violation of Section 158 of the Delaware General Corporations Code due to the Company’s failure to remove a restrictive legend from 1,162 shares of the Company’s Common Stock. Mr. Kalajian is seeking compensatory damages to be proven at trial, punitive damages and attorney’s fees, and an order requiring removal of the restrictive legend from his share certificates. The Company intends to vigorously defend itself. This case is deemed related to and consolidated with the Primary Case above.

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. 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 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. 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.

Manufacturing and Other Supplier Contracts

The Company has entered into certain manufacturing and other supplier agreements with vendors principally for manufacturing drug products for clinical trials and continued development of the Company’s programs.

As of March 31, 2026, and December 31, 2025, the remaining expected commitments are approximately $0.4 million and $0.5 million, respectively.

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

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

On December 15, 2024, the Company entered into an Investigator-Initiated Clinical Trial Agreement for Northwestern to conduct a clinical trial (the “CTA”) under the protocol referenced “A Phase I Study of Repeated Neural Stem Cell Based Virotherapy in Combination with N-Acetylcysteine amid and Standard Radiation and Chemotherapy for Newly Diagnosed High Grade Glioma” (the “Study”). In connection with the Study, Northwestern granted the Company a non-exclusive, transferable and sublicensable license to use all available de-identified data collected from the Study, including, but not limited to, survival data, patient pathology, and immune studies data. Under the CTA, among other rights, Northwestern also granted to the Company a worldwide, twelve-year exclusive license to the data, a right of reference to Northwestern’s IND application which relates to the treatment of newly diagnosed HGG, and right of reference to Northwestern’s IND 17365.

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

The Company has the right to terminate the CTA upon 30 days’ notice, and the right to terminate the License and Material Transfer Agreements upon 90 days’ notice.

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

License Agreement with 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 $18.7 million if certain milestones are achieved during the clinical trials and post commercialization of the licensed product. The Company is further obligated to pay a sublicensing royalty of 20% of any sublicensing revenue resulting from the grant of rights, and in the event of an assignment or transfer of licensed data, with the consent of Northwestern, a low single digit percentage of the fair market value of any consideration received.

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

Indemnification

In the normal course of business, the Company may provide indemnification of varying scope under the Company’s agreements with other companies or consultants, typically the Company’s clinical research organizations, investigators, clinical sites, suppliers and others. Pursuant to these agreements, the Company will generally agree to indemnify, hold harmless, and reimburse the indemnified parties for losses and expenses suffered or incurred by the indemnified parties arising from claims of third parties that relate to certain situations such as Company’s negligent actions, breaching agreements, failure to comply with laws and regulations, and third party infringement claims with respect to patent rights, copyrights, or other intellectual property pertaining to the Company. The Company’s office and laboratory facility leases also will generally contain indemnification obligations, including obligations for indemnification of the lessor for environmental law matters and injuries to persons or property of others, arising from the Company’s use or occupancy of the leased property. The term of these indemnification agreements will generally continue in effect after the termination or expiration of the particular research, development, services, lease, or other agreement to which they relate. The potential future payments the Company could be required to make under these indemnification agreements will generally not be subject to any specified maximum amounts. Historically, the Company has not been subject to any claims or demands for indemnification. The Company also maintains various liability insurance policies that limit the Company’s financial exposure. As a result, the Company’s management believes that the fair value of these indemnification agreements is minimal. Accordingly, the Company has not recorded any liabilities for these agreements as of March 31, 2026 and December 31, 2025.

12. Subsequent Events

Pre-Funded Warrants Exercised

In April 2026, in connection with the March 2026 CMPO, 7,524,900 pre-funded warrants were exercised.

Unregistered Warrant Issuance

On May 6, 2026, the Company issued a warrant (the “Warrant”) to purchase up to 17,391,304 shares of common stock of the Company (the “Common Stock”), with an exercise price of $0.23 to an accredited investor in a private placement transaction.

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 $4 million of Common Stock in issuances registered under the Securities Act of 1933, as amended (the “Securities Act”). The Warrant will vest in proportion to issuances described in the preceding sentence that are consummated. Neither the holder of the Warrant nor the Company has any obligation to agree to or consummate any such issuances.

At the Market Offering

In May 2026, the Company issued 990,462 common shares for $0.2 million of net proceeds.

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

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and related notes thereto included elsewhere in this Quarterly Report on Form 10-Q for the period ended March 31, 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 file an investigational new drug (“IND”) application for a Phase I trial by the end of 2026 with CLD-401, the first compound from the RedTail platform, delivering IL-15 superagonist to the tumor microenvironment (“TME”).

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

	●	Survive in circulation and home to metastatic tumor sites;

	●	Only replicates in tumor cells;

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

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

		Our legacy SuperNova and NeuroNova stem cell based oncolytic virus platforms are designed to:

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

	●	Enhance oncolytic viral amplification inside the allogeneic cells; and

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

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

We have been working on 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.

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, 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 compounds that simultaneously express a bispecific T-cell engager (“TCE”) and a T-cell activator as well as compounds for use outside of oncology.

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

Since inception, we have incurred significant operating losses. Our net loss was $4.1 million for the period ended March 31, 2026. As of March 31, 2026, we had an accumulated deficit of $145.7 million. We expect to continue to incur significant and increasing expenses and operating losses for the foreseeable future, as we advance our current and future product candidates through preclinical and clinical development, manufacture drug product and drug supply, seek regulatory approval for our current and future product candidates, maintain and expand our intellectual property portfolio, hire additional research and development and business personnel and operate as a public company.

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

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

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

Based on our operating plan, we believe we do not have sufficient cash on hand to support current operations for at least one year from the date of issuance of our unaudited condensed consolidated financial statements as of and for the three months ended March 31, 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, adversely affect the share price that we may obtain in future financings, and may adversely affect our ability to conduct and complete future financings.

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

Recent Developments

On March 5, 2026, we entered into an Amendment to Common Stock Purchase Warrants Agreement (the “Warrant Amendment”) with certain investors that participated in the March Confidentially Marketed Public Offering described below, in connection with the terms of certain of our outstanding common warrants to purchase shares of Common Stock (the “Existing Warrants”). As originally issued, the Existing Warrants provided for the purchase of:

	-	504,417 shares of common stock, on exercise of the Series G common stock warrants at an exercise price of $8.3448 per share;

	-	279,168 shares of common stock, on exercise of the Series H common stock warrants at an exercise price of $8.40 per share; and

	-	2,190,000 shares of common stock, on exercise of the Series I common stock warrants at an exercise price of $2.00 per share.

On March 6, 2026, we entered into an Underwriting Agreement with Ladenburg Thalmann & Co. Inc. (“Ladenburg”), the “Underwriter”, in connection with the Offering of: (i) 2,278,731 Common Stock Units, which includes 1,575,000 Common Stock Units purchased pursuant to the exercise, in full, of the Over-Allotment Option, sold to the public at a price of $0.50 per Common Stock Unit, and (ii) 9,815,900 pre-funded warrant units Pre-Funded Units, sold to the public at a price of $0.499 per Pre-Funded Unit, resulting in gross proceeds of approximately $6.0 million, before deducting underwriting discounts and commissions and other estimated offering expenses. For additional discussion of this March Confidentially Marketed Public Offering, see “Liquidity and Capital Resources – Financing Activities” below.

On March 29, 2026, Mr. Allan J. Camaisa, a member of our Board of Directors (the “Board”), informed the Nominating and Corporate Governance Committee of the Board that he intends to allow the term of his Director position on the Board to expire, which expiration date is scheduled to be at the date of our 2026 annual stockholder meeting. Mr. Camaisa’s decision to allow his Director term to expire did not result from any disagreement with us on any matter relating to our operations, policies or practices. In connection with Mr. Camaisa’s decision, effective on the date of our 2026 annual stockholder meeting, the Board reduced the size of the Board from six (6) to five (5) directors.

On April 1, 2026, the Board on the recommendation of the Nominating and Corporate Governance Committee, appointed Scott Leftwich, a Class III director, to the Audit Committee of the Board effective immediately.

On May 6, 2026, we issued a warrant (“Warrant”) to an accredited investor to purchase up to 17,391,304 shares of our common stock (“Common Stock”) with an exercise price of $0.23 in a private placement transaction. 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 further. The holder of the Warrant may from time to time prior to July 8, 2026, agree to acquire, and we may agree to sell to such holder, up to an aggregate of $4 million of Common Stock in issuances registered under the Securities Act of 1933, as amended (the “Securities Act”). The Warrant will vest in proportion to issuances described in the preceding sentence that are consummated. Neither the holder of the Warrant nor we have any obligation to agree to or consummate any such issuances.

Components of Operating Results

Research and Development Expenses

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

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

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

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

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

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

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

	●	costs related to compliance with clinical regulatory requirements;

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

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

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

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

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

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

	●	establishing an appropriate safety profile;

	●	successful enrollment in and completion of clinical trials;

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

	●	receipt of marketing approvals from applicable regulatory authorities;

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

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

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

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

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

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

General and Administrative Expenses

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

Other Income, Net

Other income, 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, 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, net, for 2025, also includes grant income generated from a grant awarded to us by the California Institute for Regenerative Medicine (“CIRM”) in December 2022. Proceeds from the CIRM grant are recognized over the period necessary to match the related research and development expenses when it is probable that we have complied with the CIRM conditions and will receive the proceeds pursuant to the milestones defined in the grant as reimbursement of those expenditures. Any CIRM grant proceeds received in advance of having incurred the related research and development expenses are recorded in accrued expenses and other current liabilities and recognized as grant income on our unaudited condensed consolidated statements of operations when the related research and developments expenses are incurred.

Income Tax Provision

Since inception, we have incurred net operating losses primarily for U.S. federal and state income tax purposes and have not reflected any benefit of such net operating loss carryforwards for any periods presented in this 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 March 31, 2026 and 2025

The following table summarizes our results of operations for the three months ended March 31, 2026 and 2025 (in thousands):

	Three Months Ended March 31,						Change
	2026			2025			$			%
Operating expenses:
Research and development	$	(2,587	)	$	(2,425	)	$	(162	)		7	%
General and administrative		(1,600	)		(2,637	)		1,037			(39	)%
Total operating expenses		(4,187	)		(5,062	)		875			(17	)%
Loss from operations		(4,187	)		(5,062	)		875			(17	)%
Other income, net
Total other income, net		83			3			80			2,667	%
Loss before income taxes		(4,104	)		(5,059	)		955			(19	)%
Income tax provision		(4	)		(3	)		(1	)		33	%
Net loss	$	(4,108	)	$	(5,062	)	$	954			(19	)%

Research and Development Expenses

Research and development expenses for the three months ended March 31, 2026 and 2025 were $2.6 million and $2.4 million, respectively. The $0.2 million increase was primarily attributable to an increase in drug manufacturing and preclinical expenses of $0.3 million, rent expenses of $0.1 million, and salaries and benefits of $0.1 million, partially offset by decrease in regulatory consulting costs of $0.3 million.

General and Administrative Expenses

General and administrative expenses for the three months ended March 31, 2026 and 2025 were $1.6 million and $2.6 million, respectively. The $1.0 million decrease was primarily due to a decrease in salaries and benefits of $0.6 million, accounting expenses of $0.2 million, consulting costs of $0.1 million, and rent expenses of $0.1 million.

Other Income, Net

Other income, net for the three months ended March 31, 2026 and 2025 were $0.1 million and $3,000, respectively. The $0.1 million increase was primarily due to an increase in interest income and a decrease of interest expense due to lower principal amounts owed on our debt.

Liquidity and Capital Resources

Sources of Liquidity

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

As of March 31, 2026, we had a cash balance of $6.6 million and restricted cash of $0.2 million. Our debt and liability obligations as of March 31, 2026 include $2.3 million in accounts payable and accrued expenses and other current liabilities, including related party amounts, $1.4 million in operating lease liabilities, $0.6 million in promissory notes, $0.3 million in finance lease liabilities, and $0.1 million in warrant liabilities, including related party amounts.

Financing and Financing-Related Transactions During the Three Months Ended March 31, 2026

During the three months ended March 31, 2026, we undertook certain financing and financing-related transactions. Approximately $5.1 million in net proceeds were received from the March 2026 confidentially marketed public offering.

Debt Obligations

Calidi’s outstanding debt obligations as of March 31, 2026, are as follows (in thousands):

	March 31, 2026
	Unpaid Balance		Accrued Interest		Net Carrying Value
Promissory note		600		23		623
Total debt	$	600	$	23	$	623
Less: current portion of long-term debt						(23	)
Long-term debt, net of current portion					$	600

Warrants

As of March 31, 2026, Calidi had outstanding warrants to purchase 49,440,138 shares of Common Stock, consisting of the following:

	March 31, 2026
Private Warrants to purchase Common Stock		15,938
Public Warrants to purchase Common Stock		95,834
Warrants to purchase Restricted Shares		53,334
Placement Agent Warrants to purchase Common Stock		861,150
Series A Warrants to purchase Common Stock		54,308
Series B-1 Warrants to purchase Common Stock		1,442
Series C-1 Warrants to purchase Common Stock		26,253
Series D Warrants to purchase Common Stock		18,318
Series G Warrants to purchase Common Stock		504,417
Series H Warrants to purchase Common Stock		549,587
Series I Warrants to purchase Common Stock		3,450,764
Series J Warrants to purchase Common Stock		12,094,631
Series K Warrants to purchase Common Stock		12,094,631
Series L Warrants to purchase Common Stock		12,094,631
Pre-funded Warrants to purchase Common Stock		7,524,900
		49,440,138

Commitments and Contingencies

On October 10, 2022, we entered into an Office Lease Agreement (the “San Diego Lease”) that serves as our principal executive and administrative offices and laboratory facility. To secure and execute the San Diego Lease, Mr. Allan J. Camaisa, former Chief Executive Officer, provided a personal Guaranty of Lease of up to $0.9 million (the “Guaranty”) to the lessor for our future performance under the San Diego Lease agreement. As consideration for the Guaranty, we agreed to pay Mr. Camaisa 10% of the Guaranty amount for the first year of the San Diego Lease, and 5% per annum of the Guaranty amount thereafter through the life of the lease, with all amounts accrued and payable at the termination of the San Diego Lease or release of Mr. Camaisa from the Guaranty by the lessor, whichever occurs first. The amount due was partially settled in April 2025. The San Diego Lease has an initial term of 4 years.

On July 1, 2025, StemVac, GmbH entered into a finance lease agreement for laboratory equipment with an initial term that expires on May 31, 2029, with total payments of approximately €0.1 million.

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 March 31, 2026, we do not believe it probable that we will incur these payments.

Other commitments and contingencies include various operating and financing leases for equipment, office facilities, and other property containing future minimum lease payments totaling $1.8 million and certain manufacturing and other supplier agreements with vendors principally for manufacturing drug products for clinical trials and continuing the development of our programs totaling $0.4 million.

Related Party Transactions

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

Cash Flow Summary for the three months ended March 31, 2026 and 2025

The following table shows a summary of our cash flows for the three months ended March 31, 2026 and 2025 (in thousands):

	Three Months Ended March 31,						Change
	2026			2025			$			%
Net cash (used in) provided by:
Operating activities	$	(4,116	)	$	(7,131	)	$	3,015			(42	)%
Investing activities		(5	)		(7	)		2			(29	)%
Financing activities		5,159			8,108			(2,949	)		(36	)%
Effect of exchange rate on cash		(7	)		—			(7	)		(100	)%
Net increase in cash and restricted cash	$	1,031		$	970		$	61			6	%

Operating activities

Net cash used in operating activities was $4.1 million for the three months ended March 31, 2026, primarily resulting from our net loss of $4.1 million. Our net loss was reduced by certain non-cash items that included $0.4 million in depreciation and amortization expense, $0.2 million in stock-based compensation, partially increased by $0.6 million from the change in our operating assets and liabilities.

Net cash used in operating activities was $7.1 million for the three months ended March 31, 2025, primarily resulting from our net loss of $5.1 million. Our net loss was reduced by certain non-cash items that included $0.6 million in stock-based compensation, $0.4 million in depreciation and amortization expense, partially increased by $3.0 million from the change in our operating assets and liabilities.

Investing activities

Net cash used in investing activities was $5,000 for the three months ended March 31, 2026, which primarily related to the purchase of certain machinery and equipment.

Net cash used in investing activities was $7,000 for the three months ended March 31, 2025, which primarily related to the purchase of certain machinery and equipment.

Financing activities

Net cash provided by financing activities was $5.2 million for the three months ended March 31, 2026, which primarily related to proceeds from the March 2026 confidentially marketed public offering of $5.4 million, partially offset by payment of financing costs of $0.2 million.

Net cash provided by financing activities was $8.1 million for the three months ended March 31, 2025, which primarily related to proceeds from the January confidentially marketed public offering of $3.8 million, proceeds from the March 2025 registered direct offering and concurrent private placement of $3.5 million, and proceeds from the at-the-market offering of $2.8 million, partially offset by repayment of term notes payable of $1.5 million, including related party amounts, payment of financing costs of $0.3 million, and repayment of bridge loan payable of $0.2 million.

Funding Requirements

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

Based on our current operating plan, available cash and additional access to capital discussed above under the “Liquidity and Capital Resources” section, we believe we do not have sufficient cash on hand to support current operations for at least one year from the date of issuance of the unaudited condensed consolidated financial statements as of and for the three months ended March 31, 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:

	●	the costs of conducting preclinical studies and clinical trials;

	●	the costs of manufacturing;

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

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

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

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

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

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

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

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

	●	the costs of operating as a public company.

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.

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 months ended March 31, 2026.

Off-Balance Sheet Arrangements

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

We enter into agreements in the normal course of business with vendors for preclinical and clinical studies, preclinical and clinical supply and manufacturing services, professional consultants for expert advice, and other vendors for other services for operating purposes. We have certain manufacturing and other supplier agreements with vendors principally for manufacturing drug products for clinical trials and continuing the development of our product candidates totaling $0.4 million in future purchase commitments. However, these contracts do not contain any minimum purchase commitments and are cancellable at any time by us, generally upon 30 days prior written notice, and therefore we believe that our non-cancelable obligations under these agreements are not material.

In addition, we have entered into license and royalty agreements for intellectual property with certain parties. Such arrangements require ongoing payments, including payments upon achieving certain development, regulatory and commercial milestones, receipt of sublicense income, as well as royalties on commercial sales. Payments under these arrangements are expensed as incurred and are recorded as research and development expenses. We may pay amounts under such agreements at the time of execution or annual fees. We have not paid any royalties under these agreements to date. We have not included the annual license fee payments contractual obligations because the license agreements are cancelable by us and therefore, we believe that our non-cancelable obligations under these agreements are not material. We have not included potential royalties or milestone obligations because they are contingent upon the occurrence of future events and the timing and likelihood of such potential obligations are not known with certainty. For further information regarding these agreements and amounts that could become payable in the future under these agreements, please see the sub-section entitled “License Agreements” within the “Item 1. Business” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025.

Quantitative and Qualitative Disclosures about Market Risk

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

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

Inflation generally affects us by increasing our cost of labor. We do not believe that inflation had a material effect on our business, financial condition or results of operations during the three months ended March 31, 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 are presenting only two years of audited financial statements and only two years of related Management’s Discussion and Analysis of Financial Condition and Results of Operations;

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

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

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

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

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

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

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

Recent Accounting Pronouncements

Other than as disclosed in Note 2 to our unaudited condensed consolidated financial statements appearing elsewhere in this 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 RISKS

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

ITEM 4. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

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

Based on such evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 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 March 31, 2026 that materially affected, or were reasonably likely to materially affect, the Company’s internal control over financial reporting.

PART II — OTHER INFORMATION

Item 1. Legal Proceedings.

Legal Proceedings

We are subject to litigation and contingencies in the ordinary course of 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 first quarter ended March 31, 2026.

Item 1A. Risk Factors

During the three months ended March 31, 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.

Unregistered Sales of Equity Securities

None.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Mine Safety Disclosures.

Not applicable.

Item 5. Other Information.

Rule 10b5-1 Trading Arrangement

During the three months ended March 31, 2026, no director or officer of the Company adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.

Item 6. Exhibits.

EXHIBIT INDEX

Exhibit No.		Description
4.1		Form of Pre-funded Warrant (incorporated herein by reference to Exhibit 4.1 to Form 8-K filed with the SEC on March 11, 2026).

4.2		Form of Series J Common Warrant (incorporated herein by reference to Exhibit 4.2 to Form 8-K filed with the SEC on March 11, 2026).

4.3		Form of Series K Common Warrant (incorporated herein by reference to Exhibit 4.3 to Form 8-K filed with the SEC on March 11, 2026).

4.4		Form of Series L Common Warrant (incorporated herein by reference to Exhibit 4.4 to Form 8-K filed with the SEC on March 11, 2026).

4.5		Form of Series Representative Warrant (incorporated herein by reference to Exhibit 4.5 to Form 8-K filed with the SEC on March 11, 2026).

4.6		Form of Warrant Amendment (incorporated herein by reference to Exhibit 4.6 to Form 8-K filed with the SEC on March 11, 2026).

10.1		Underwriting Agreement, dated March 6, 2026 (incorporated herein by reference to Exhibit 1.1 to Form 8-K filed with the SEC on March 11, 2026).

10.2		Form of Warrant Agency Agreement (incorporated herein by reference to Exhibit 10.1 to Form 8-K filed with the SEC on March 11, 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

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

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

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

101.INS		Inline XBRL Instance Document

101. SCH		Inline XBRL Taxonomy Extension Schema Document

101.CAL		Inline XBRL Taxonomy Extension Calculation Linkbase Document.

101.DEF		Inline XBRL Taxonomy Extension Definition Linkbase Document.

101.LAB		Inline XBRL Taxonomy Extension Labels Linkbase Document.

101.PRE		Inline XBRL Taxonomy Extension Presentation Linkbase Document.

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Filed herewith
**	Furnished herewith.

SIGNATURES

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

	Calidi Biotherapeutics, Inc.

Date: May 14, 2026	By:	/s/ Eric Poma
	Name:	Eric Poma
	Title:	Chief Executive Officer (Principal Executive Officer)

Date: May 14, 2026	By:	/s/ Andrew Jackson
	Name:	Andrew Jackson
	Title:	Chief Financial Officer (Principal Financial and Accounting Officer)