S-1/A: Calidi Biotherapeutics Announces Proposed Offering of Common Stock Units and Warrants

Calidi Biotherapeutics plans to offer common stock units and warrants to raise capital, as detailed in its S-1/A filing.

Summary

• Calidi Biotherapeutics is planning an offering of common stock units, pre-funded warrant units, and associated warrants.
• Each common stock unit includes one share of common stock, a Series A warrant, a Series B warrant (for a Series B unit), and a Series C warrant (for a Series C unit).
• The Series B unit consists of one share of common stock and a Series B-1 warrant.
• The Series C unit consists of one share of common stock and a Series C-1 warrant.
• Pre-funded warrant units are offered to purchasers who would exceed a 4.99% ownership threshold, and each unit includes a pre-funded warrant and the same series of warrants as the common stock units.
• The exercise price for the Series A, B, and C warrants is initially set at $0.69 per share, subject to adjustment after a reverse stock split.
• The offering is expected to terminate on April 30, 2024, unless terminated earlier.
• Two promissory note holders have expressed interest in purchasing up to $1.6 million of the offered securities.
• The company intends to use proceeds from the sale of securities to the Promissory Noteholders to repay such Promissory Noteholders Promissory Notes.
• The company has engaged Ladenburg Thalmann & Co., Inc. as the exclusive placement agent for the offering.
• The placement agent will receive a cash fee equal to 8% of the gross proceeds raised from the sale of Common Stock Units and/or PFW Units in this offering.
• The placement agent will also receive warrants to purchase 5% of the number of shares of common stock issued in this offering.
• The company intends to use the net proceeds from this offering for working capital and general corporate purposes, and pre-clinical and clinical trials.

Sentiment

Score: 6

Explanation: The document is primarily descriptive, outlining the terms of a proposed offering. While the offering itself is a positive step for the company's financial position, the document also acknowledges risks and uncertainties, resulting in a neutral sentiment score.

Positives

• The offering provides an opportunity for Calidi Biotherapeutics to raise capital for working capital and general corporate purposes, and pre-clinical and clinical trials.
• The inclusion of warrants in the units may make the offering more attractive to investors.
• The expression of interest from promissory note holders provides a potential source of demand for the offering.

Negatives

• The offering is on a 'reasonable best efforts' basis, meaning there is no guarantee that all securities will be sold.
• The company has broad discretion in the use of the net proceeds from this offering and may not use them effectively.
• New investors will experience immediate and substantial dilution.
• The price of the stock may be volatile, which could result in substantial losses for investors.
• There is no public market for the Pre-Funded Warrants and Common Warrants to purchase common stock in this offering.

Risks

• The offering is on a 'reasonable best efforts' basis, meaning there is no guarantee that all securities will be sold.
• The company has broad discretion in the use of the net proceeds from this offering and may not use them effectively.
• New investors will experience immediate and substantial dilution.
• The price of the stock may be volatile, which could result in substantial losses for investors.
• There is no public market for the Pre-Funded Warrants and Common Warrants to purchase common stock in this offering.
• If the company fails to comply with the continued listing standards of the NYSE American, our common stock could be delisted.
• The Sponsor, Metric, anchor investors and other investors purchased or received as an inducement to facilitate the Business Combination the Sponsor Shares that were acquired by the Sponsor, Metric or anchor investors at $0.004 per share price which is significantly below the current market price of a share of our common stock and such holder could sell their shares and generate a significant profit while causing the trading price of our common stock to decline significantly.
• We have registered in another registration statement filed with the SEC 23,301,960 shares of our common stock, among other securities, for resale by certain selling securityholders, which such sale a substantial number of shares of common stock could result in a significant decline in the public trading price of our common stock.
• After 180 days after the issuance thereof, we have agreed to file a resale registration statement for the shares of common stock issuable upon conversion of the convertible promissory notes issued on March 8, 2024 in the principal amounts of $1.5 million and $2.0 million pursuant to a Settlement Agreement and Release of All Claims Agreement dated on March 8, 2024. In the event we complete a financing (i) of at least $8 million in an offering registered with the SEC; or (ii) of at least $2 million with a non-affiliated purchaser at an effective price of at least 150% of the initial note conversion price, then the convertible notes will be subject to mandatory conversion, subject to certain conditions, at the lower of the then effective conversion price and the effective sales price of the securities sold in the financing. Sales pursuant to an effective registration statement or under Rule 144 of the Securities Act would result in a significant decline in the public trading price of our common stock.

Future Outlook

The company anticipates advancing three clinical development programs over the next six-to-24 months, namely, i) CLD-101 in a Phase1b/Phase 2 clinical trial for the treatment of newly diagnosed HGG; ii) CLD-101 in a Phase 1 clinical trial in patients with recurrent HGG; and iii) an IND application filing with the FDA for CLD-201 and, pending the acceptance of our IND application, entering into a Phase 1 clinical trial in patients with triple-negative breast cancer (TNBC), metastatic / unresectable melanoma (IIB-IV), head & neck squamous cell carcinoma (HNSCC), advanced soft tissue sarcoma and advanced basal cell carcinoma (BCC).

Industry Context

The document relates to the financing of a clinical-stage immuno-oncology company, a sector with significant investment and competition. The success of the company depends on the clinical trial outcomes and regulatory approvals of its product candidates.

Stakeholder Impact

• Shareholders will be impacted by potential dilution from the offering and the exercise of warrants.
• The company's ability to fund its operations and advance its product candidates will be affected by the success of the offering.

Next Steps

• The company will seek to close the offering by April 30, 2024.
• The company will use the net proceeds from this offering for working capital and general corporate purposes, and pre-clinical and clinical trials.

Key Dates

Keywords

common stock, warrants, offering, securities, exercise price, pre-funded warrants, placement agent, Calidi Biotherapeutics