Calidi Biotherapeutics, Inc. announced that it has entered into a convertible promissory note purchase agreement with an Accredited Investor to issue 12% convertible promissory note for the gross proceeds of $1,000,000 on January 26, 2024. In connection with the Loan, the Company issued a one-year convertible promissory note evidencing the aggregate principal amount of $1,000,000 under the Loan, which accrues at a 12.0% simple interest rate per annum. The Note also provides the Investor a voluntary right to convert all, but not less than all, the Principal Amount and accrued interest into shares of the Company?s common stock at a conversion rate equal to a 10% discount to the 10-day VWAP as determined immediately before January 26, 2024.

In addition, upon such voluntary conversion by the Investor, the Investor will be entitled to a warrant for 50% of the number of shares of the Company?s common stock issued upon the Note conversion at an exercise equal to 120% of the Conversion Price (the ?Warrant?). In the event the Company consummates a public offering prior to the maturity date of the Note, the Note and accrued interest will be subject to a mandatory conversion into the equity securities of the Company issued and sold to investors in such public offering, equal to the price per share of the equity security sold to other purchasers and subject to similar terms and conditions of such public offering, except that such equity securities received under a mandatory conversion will be restricted securities. The issuance of the Note and the shares of common stock that may be issuable upon conversion of the Note (the ?Securities?) were made to an accredited investor in reliance on the exemption from registration afforded by Section 4(a)(2) of the Securities Act, as amended (the ?Securities Act?) as provided in Rule 506(b) of Regulation D promulgated thereunder.

The offering of the Securities was not conducted in connection with a public offering, and no public solicitation nor advertisement was made or relied upon by the investor in connection with the offering. The entire Principal Amount of this Note, together with all accrued but unpaid interest payable thereon, shall be due and payable in full on the earlier of January 26, 2025 or an Event of Default (as defined below). Such payments shall be applied first to the payment of unpaid interest and second to reduce the outstanding Principal amount.