On September 13, 2023 Calidi Biotherapeutics, Inc. (NYSE American: CLDI or "Calidi"), a clinical-stage biotechnology company developing a new generation of targeted immunotherapies, reported the completion of its business combination with First Light Acquisition Group (FLAG), a special purpose acquisition company (Press release, Calidi Biotherapeutics, SEP 13, 2023, View Source [SID1234635155]). The common stock and warrants of Calidi are expected to commence trading on the New York Stock Exchange American under the ticker symbols "CLDI" and "CLDI WS," respectively, on September 13, 2023. The stockholders of FLAG approved the transaction on August 28, 2023, following approval by Calidi shareholders. Calidi’s existing management team, including Chief Executive Officer and Chairman Allan Camaisa, will lead the combined company.

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As a result of this business combination, gross proceeds made available to Calidi Biotherapeutics, prior to the payment of transaction expenses and debt repayments, are approximately $28 million, which consists of $25 million in a private capital raise, cash proceeds of approximately $1 million from FLAG’s trust account, and approximately $2 million in PIPE and non-redemption agreements. Estimated transaction expenses and debt repayments include approximately $13 million and, in addition thereto, a $5 million working capital adjustment for expenses incurred prior to closing. The Company believes that the proceeds available to the Company from the transactions will be sufficient to fund its operations into 2025.

"We founded Calidi in 2014 with a mission to develop a new generation of targeted immunotherapies that could revolutionize the treatment of cancer," said Allan Camaisa, CEO and Chairman of the Board of Calidi Biotherapeutics. "Our team has worked diligently to build on decades of research with human stem cells and develop two novel off-the-shelf platforms designed to directly target and attack tumor cells throughout the body, and we are proud of our promising clinical results to-date. Calidi’s cutting-edge platforms NeuroNova, targeting high-grade gliomas, and SuperNova, targeting solid tumors, use allogeneic stem cells in our clinical efforts to bring a universal cancer treatment to a broad patient population who need access to new treatment options. We look forward to pushing the boundaries of cell-based virotherapies and continuing to research novel ways to eradicate cancer in this next step as a public company."

"We are proud of this collaboration with Calidi and the successful outcome of our combination, driven in part by confidence among our initial FLAG shareholders, who have made additional financial commitments to further support the company going forward," said Tom Vecchiolla, Chief Executive Officer of First Light Acquisition Group. "We are excited to see Calidi continue to grow as they transition into a public company and look forward to their clinical pursuit of new treatment options for patients everywhere in need."

Calidi is developing in the clinic first-in-class allogeneic stem cell-based delivery platforms designed to deliver a new generation of targeted immunotherapies for the treatment of cancer. These platforms include:

CLD-101 (NeuroNova): allogeneic neural stem cells loaded with an oncolytic adenovirus for the treatment of high-grade gliomas (HGG). In June 2023, the first brain tumor patient was treated at City of Hope in a multicenter, Phase 1 clinical trial evaluating CLD-101 for the treatment of HGG. The trial is assessing the safety and tolerability of administering serial doses of CLD-101 in adult patients with recurrent histologically confirmed HGG (WHO grade III or IV). Secondary endpoints will evaluate treatment efficacy, including progression-free and overall survival as well as any immune response. Interim clinical results are expected in the first half of 2024. A previously completed open-label, Phase 1, dose-escalation clinical trial in patients with newly diagnosed high-grade gliomas demonstrated that CLD-101 was well tolerated and showed promising preliminary clinical results of efficacy (Study published in the peer-reviewed journal, The Lancet Oncology, 2021).
CLD-201 (SuperNova): allogeneic adipose-derived mesenchymal stem cells (AD-MSC) loaded with tumor-selective CAL1 oncolytic vaccinia virus for the treatment of advanced metastatic solid tumors. A previously conducted physician-sponsored clinical trial using autologous adipose-derived stromal cells demonstrated that the therapeutic approach was well tolerated and showed early signs of efficacy in 24 patients with advanced solid tumors and two patients with acute myeloid leukemia (AML). (Study published in the peer-reviewed journal: Journal of Translational Medicine, 2019). In December 2022, Calidi was awarded $3.1 million from the California Institute for Regenerative Medicine (CIRM) to support the clinical development of the allogeneic off-the-shelf product CLD-201 through an Investigational New Drug (IND) application (Allogeneic platform published in the peer-reviewed journal: Cancers, 2022). Calidi has conducted the pre-IND meeting with the FDA and expects cGMP final drug product manufacturing to be completed in the first quarter of 2024. In the second half of 2024, Calidi anticipates initiating a Phase 1/2 study evaluating CLD-201 in patients with advanced metastatic solid tumors, including triple-negative breast cancer, unresectable melanoma, and squamous cell head and neck carcinoma.
Proceeds from the business combination are also expected to support the expansion of Calidi’s stem cell-based delivery platforms into additional indications.
Transaction Summary

Calidi Biotherapeutics, a private biotechnology company, and First Light Acquisition Group, a special purpose acquisition company, entered into a definitive business combination agreement on January 9, 2023.

As a result of this business combination, gross proceeds made available to Calidi Biotherapeutics, prior to the payment of transaction expenses and debt repayments, are approximately $28 million, which consists of $25 million in a private capital raise, cash proceeds of approximately $1 million from FLAG’s trust account, and approximately $2 million in PIPE and non-redemption agreements. Estimated transaction expenses and debt repayments include approximately $13 million and, in addition thereto, a $5 million working capital adjustment for expenses incurred prior to closing. In addition, Calidi has entered into a forward purchase agreement with a consortium including Meteora Capital LLC, Great Point Capital LLC, and Funicular Funds, LP for up to $10 million, and Calidi intends to enter into a purchase agreement for up to $50 million with Lincoln Park Capital Fund, LLC, subject to an effective registration statement to be filed with the Securities and Exchange Commission. Both of these opportunities have the potential to add cash to the balance sheet in the future. The Company believes that the proceeds available to the Company from the transactions will be sufficient to fund its operations into 2025.

The description of the business combination contained herein is only a high-level summary and is qualified in its entirety by reference to the underlying documents filed with the U.S. Securities and Exchange Commission. A more detailed description of the terms of the transaction has been provided in a registration statement on Form S-4 filed with the U.S. Securities and Exchange Commission by First Light Acquisition Group.

Advisors

Brookline Capital Markets, a Division of Arcadia Securities, LLC, acted as placement agent for the private capital raise, a Calidi Series B Preferred Stock Financing, and as an advisor to First Light Acquisition Group, Inc. Lewis Brisbois Bisgaard & Smith LLP acted as legal counsel to Calidi. Weil, Gotshal & Manges LLP acted as legal counsel to FLAG.