-Total gross proceeds from the transaction, before
payment of transaction expenses, expected to be up to $82
million assuming no redemptions, combining a possible PIPE
financing of up to $40 million and up to $42 million held in
First Light trust account
-Cash resources will fund Calidi’s NeuroNova
(CLD-101) and SuperNova (CLD-201) development programs into the
1st half of 2025 through multiple clinical milestones
-Calidi’s novel platform addresses a critical
obstacle in traditional oncolytic virotherapy, overcoming virus
inactivation through allogeneic stem cell delivery mechanism to
successfully target a wide range of cancers, including
high-grade gliomas and solid tumors
-Business combination expected to be completed in
the second quarter of 2023; combined company expected to be
listed on the NYSE American under the ticker “CLDI”
LA JOLLA, Calif. and RESTON, Va., Jan. 09, 2023 (GLOBE
NEWSWIRE) — Calidi Biotherapeutics,
Inc. (“Calidi” or the “Company”), a
clinical-stage biotechnology company that is pioneering the
development of allogeneic cell-based delivery of oncolytic viruses,
and First Light Acquisition Group (“FLAG”) (NYSE
American: FLAG), a special purpose acquisition company organized to
acquire or merge with one or more businesses, today announced they
have entered into a definitive merger agreement to create a public
company focused on developing oncolytic viral therapies with stem
cell-based delivery platforms to treat a wide range of cancers with
significant unmet needs. Upon closing of the transaction,
anticipated to occur in the second quarter of 2023, the combined
company will be named Calidi Biotherapeutics, Inc. and led
by Allan Camaisa, CEO and Chairman of the Board. In addition,
the combined company’s common stock intends to list on the
NYSE American under the ticker “CLDI.”
Calidi Biotherapeutics is revolutionizing the clinical development of
first-in-class allogenic stem cell-based delivery platforms to
protect, deliver, and potentiate oncolytic viruses for the treatment
of cancer. Calidi’s technology directly addresses a critical
obstacle in traditional oncolytic virotherapy, overcoming the
oncolytic virus inactivation by a patient’s immune system
through an allogeneic stem cell delivery mechanism to successfully
target a wide range of cancers, including high-grade gliomas (HGG)
and solid tumors. Calidi’s pipeline includes two
“off-the-shelf” clinical programs, NeuroNova (CLD-101)
and SuperNova (CLD-201), which utilize allogeneic stem cell
technologies loaded with either vaccinia virus or adenovirus, being
developed in partnership with leading research institutions.
“We are excited to partner with FLAG which we believe will
accelerate our ability to bring life-changing therapies to patients,
pairing our first-in-class, allogeneic stem cell-based technology
with strategic partnering opportunities, to advance our goal of
revolutionizing cancer treatment,” said Allan Camaisa, CEO and
Chairman of the Board of Calidi Biotherapeutics. “This
business combination positions us well as we build upon the momentum
generated to date from our NeuroNova and SuperNova platforms, which
have the potential to overcome the limitations of first-generation
oncolytic virus therapies. Furthermore, the merger will allow us to
leverage FLAG’s comprehensive network in both the private and
public sectors, capital markets and operational experience, and
successful track record addressing missions of U.S. national and
global importance. We believe recent legislative progress supporting
federal funding for new cancer treatments provides an immediate
opportunity to showcase our combined synergy, where our strong
backgrounds align with a shared goal of bringing novel therapeutic
options to cancer patients in need.”
“We are very pleased to announce this merger with Calidi
Biotherapeutics as their differentiated technology shows potential
to enable improved quality of care, extend survival, and lower cost
of treatment in a market with a high unmet need,” said Tom
Vecchiolla, CEO of FLAG. “Our goal is to invest in people and
technologies that address the most important priorities and to
deliver results with national and global effect. We believe that
Calidi’s innovative technology offers a differentiated
immuno-oncology solution with a proprietary allogeneic stem
cell-based universal delivery system that harnesses the potential of
oncolytic viruses to address therapeutic needs in hard-to-treat
cancers.”
The transaction includes gross proceeds of up to $42 million in trust
with FLAG (assuming no redemptions by existing FLAG shareholders).
The parties will attempt to arrange a PIPE Investment from
institutional investors of up to $40 million.
Net proceeds from the transaction are expected to provide Calidi with
capital into the first half of 2025 to advance its pipeline of
therapeutic candidates through multiple clinical milestones,
including:
- NeuroNova (CLD-101): allogeneic neural stem
cells loaded with an oncolytic adenovirus for the treatment of
HGG. A 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.In August
2022, City of Hope received U.S. Food and Drug Administration
(FDA) authorization to proceed with another Phase 1
physician-sponsored clinical trial that will use Calidi’s
CLD-101 platform in patients with recurrent HGG. The trial will
assess 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.
- SuperNova (CLD-201): 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 CLD-201 was well
tolerated and showed early signs of efficacy in 24 patients with
advanced solid tumors and two patients with acute myeloid
leukemia (AML).In December 2022, Calidi was awarded $3.1 million
from the California Institute for Regenerative Medicine (CIRM)
to support the clinical development of CLD-201 through an
Investigational New Drug (IND) application, which the company
anticipates submitting in the second half of 2023. Additionally,
Calidi expects interim results from a CLD-201 Phase 1 trial in
the first half of 2024.
- Proceeds from the transaction are also expected to support
expansion of Calidi’s stem cell-based delivery platforms
into additional indications
Key Transaction Terms
Upon closing of the
business combination (the “Business Combination”),
shareholders of Calidi (assuming the conversion of all derivative
securities other than unvested options) will be entitled to receive
25,000,000 shares of FLAG common stock, subject to adjustments and
after the closing, shareholders of Calidi may be entitled up to
18,000,000 additional shares of FLAG common stock (the
“Escalation Shares”) during a five year period with
incremental releases of 4,500,000 shares if the trading price of
FLAG common stock is $12, $14, $16 and $18 for a period for any 20
days within any 30 consecutive day trading period. Furthermore,
holders of FLAG Class A common stock who do not redeem their shares
may be entitled to their pro rata portion of up to an additional
2,000,000 shares of FLAG common stock during a five-year period with
incremental releases of up to 500,000 shares if the trading price of
FLAG common stock is $12, $14, $16 and $18 for a period for any 20
days within any 30 consecutive day trading period. Assuming no
redemptions of shares of FLAG by its public shareholders and a
possible PIPE Investment from institutional investors of up to $40
million, Calidi expects to have cash and cash equivalents, prior to
transaction expenses, of up to $82 million and an anticipated pro
forma enterprise valuation of approximately $335 million.
The boards of directors of Calidi and FLAG unanimously approved the
proposed transaction, which is anticipated to close in the second
quarter of 2023. The closing of the transaction is subject to the
approval of FLAG shareholders, regulatory approval, a minimum cash
condition of $15 million, after the payment of transaction expenses,
and the satisfaction or waiver of certain other customary closing
conditions.
A Current Report on Form 8-K, filed by FLAG with the Securities and
Exchange Commission (SEC), will provide additional information about
the proposed business combination and will be available on the
SEC’s website at www.sec.gov. In addition, FLAG intends
to file a registration statement on Form S-4 with the SEC, including
a proxy statement/prospectus, and will file other documents
regarding the proposed transaction with the SEC.
Advisors
Lewis Brisbois Bisgaard & Smith
LLP acted as legal counsel to Calidi. Weil, Gotshal & Manges LLP
acted as legal counsel to FLAG.
About Calidi Biotherapeutics
Calidi Biotherapeutics is a clinical-stage immuno-oncology company
with proprietary technology that is revolutionizing the effective
delivery and potentiation of oncolytic viruses for targeted therapy
against difficult-to-treat cancers. Calidi Biotherapeutics is
advancing in clinical development a potent allogeneic stem cell and
oncolytic virus combination for use in multiple oncology
indications. Calidi’s off-the-shelf, universal cell-based
delivery platforms are designed to protect, amplify, and potentiate
oncolytic viruses currently in development leading to enhanced
efficacy and improved patient safety. Calidi Biotherapeutics is
headquartered in La Jolla, California. For more information,
please visit calidibio.com.
About First Light Acquisition Group
First Light Acquisition Group is a blank check company organized for
the purpose of effecting a merger, share exchange, asset
acquisition, share purchase, recapitalization, reorganization, or
other similar business combination with one or more businesses or
entities. The company is sponsored by a group of former industry and
federal leaders with extensive experience operating public companies
and organizations in highly regulated industries, and is led
by Thomas Vecchiolla, Chief Executive Officer of FLAG.
Forward-Looking Statements
This press release contains forward-looking statements for
purposes of the “safe harbor” provisions under the
United States Private Securities Litigation Reform Act of 1995.
Terms such as “anticipates,” “believe,”
“continue,” “could,” “estimate,”
“expect,” “intends,” “may,”
“might,” “plan,” “possible,”
“potential,” “predicts,”
“project,” “should,” “would” as
well as similar terms, are forward-looking in nature. The
forward-looking statements contained in this discussion are based on
Calidi’s current expectations and beliefs concerning future
developments and their potential effects. There can be no assurance
that future developments affecting Calidi will be those that it has
anticipated. These forward-looking statements involve a number of
risks, uncertainties (some of which are beyond Calidi’s
control) or other assumptions that may cause actual results or
performance to be materially different from those expressed or
implied by these forward-looking statements. Factors that may cause
actual results to differ materially from current expectations
include, but are not limited to: the occurrence of any event, change
or other circumstances that could give rise to the termination of
negotiations and any subsequent definitive agreements with respect
to the Business Combination with FLAG; the outcome of any legal
proceedings that may be instituted against FLAG, Calidi, the
combined company or others following the announcement of the
Business Combination, any private placement financing proposed to be
consummated concurrently with the Business Combination (the
“PIPE”), and any definitive agreements with respect
thereto; the inability to complete the Business Combination due to
the failure to obtain approval of the shareholders of FLAG, the
inability to complete any PIPE or other financing needed to complete
the Business Combination, or to satisfy other conditions to closing;
changes to the proposed structure of the Business Combination that
may be required or appropriate as a result of applicable laws or
regulations or as a condition to obtaining regulatory approval of
the Business Combination; the ability to meet stock exchange listing
standards following the consummation of the Business Combination;
the risk that the Business Combination disrupts current plans and
operations of Calidi as a result of the announcement and
consummation of the Business Combination; the ability to recognize
the anticipated benefits of the Business Combination or to realize
estimated pro forma results and underlying assumptions, including
with respect to estimated shareholder redemptions; costs related to
the Business Combination; changes in applicable laws or regulations;
the evolution of the markets in which Calidi competes; the inability
of Calidi to defend its intellectual property and satisfy regulatory
requirements; the ability to implement business plans, forecasts,
and other expectations after the completion of the proposed Business
Combination, and identify and realize additional opportunities; the
risk of downturns and a changing regulatory landscape in the highly
competitive pharmaceutical industry; the impact of potential global
conflicts (including the current conflict in Ukraine) may have on
capital markets or on Calidi’s or FLAG’s business; the
impact of the COVID-19 pandemic on Calidi’s business; and
other risks and uncertainties set forth in the section entitled
“Risk Factors” and “Cautionary Note Regarding
Forward-Looking Statements” in FLAG’s final prospectus
dated September 9, 2021 and Annual Report on Form 10-K for the year
ended December 31, 2021, as filed with the SEC on
March 31, 2022, and the risks and uncertainties indicated in
the Registration Statement and the definitive proxy statement to be
delivered to FLAG’s shareholders, including those set forth
under “Risk Factors” therein, and other documents filed
or to be filed with the SEC by FLAG.
Additional Information and Where to Find It
FLAG intends to file with the SEC a registration statement on Form
S-4 (as may be amended from time to time, the “Registration
Statement”), which will include a preliminary proxy
statement of FLAG, and a prospectus in connection with the proposed
business combination transaction (the “Business
Combination”) involving FLAG and Calidi. The
definitive proxy statement and other relevant documents will be
mailed to FLAG shareholders as of a record date to be established
for voting on the Business Combination. FLAG securityholders and
other interested persons are advised to read, when available, the
preliminary proxy statement/prospectus, and amendments thereto, and
the definitive proxy statement/prospectus in connection with
FLAG’s solicitation of proxies for the special meetings to be
held to approve the Business Combination because these documents
will contain important information about FLAG, Calidi, and the
Business Combination. Investors, securityholders and other
interested persons will also be able to obtain copies of the
Registration Statement, the proxy statement/prospectus and all other
relevant documents filed or that will be filed with the SEC by FLAG,
once such documents are filed, free of charge, on the SEC’s
website at www.sec.gov or by directing a request to: First Light
Acquisition Group, Inc., 11110 Sunset Hills Road #2278, Reston, VA
20190.
Participants in the Solicitation
FLAG and Calidi and their respective directors and officers and other
members of management and employees may be deemed participants in
the solicitation of proxies in connection with the proposed business
combination. FLAG shareholders and other interested persons may
obtain, without charge, more detailed information regarding
directors and officers of FLAG in FLAG’s Annual Report on Form
10-K for the year ended December 31, 2021, as filed with the
SEC on March 31, 2021. Information regarding the persons who
may, under SEC rules, be deemed participants in the solicitation of
proxies from FLAG’s shareholders in connection with the
proposed business combination will be included in the definitive
proxy statement/prospectus that FLAG intends to file with the SEC.
No Offer or Solicitation
This press release does not constitute (i) a solicitation of a
proxy, consent or authorization with respect to any securities or in
respect of the proposed Business Combination or (ii) an offer to
sell, a solicitation of an offer to buy, or a recommendation to buy
any security of Calidi, FLAG or any of their respective affiliates.
There shall not be any sale of any securities in any state or
jurisdiction in which such offer, solicitation, or sale would be
unlawful prior to registration or qualification under the laws of
such other jurisdiction. No offering of securities shall be made
except by means of a prospectus meeting the requirements of Section
10 of the Securities Act of 1933, as amended, or an exemption
therefrom.