Calidi Biotherapeutics, Inc. executed a term sheet to acquire First Light Acquisition Group, Inc. (NYSEAM:FLAG) from group of sellers for approximately $440 million in a reverse merger transaction on October 15, 2022. Calidi Biotherapeutics, Inc. entered into an agreement and plan of merger to acquire First Light Acquisition Group, Inc. (NYSEAM:FLAG) from group of sellers for approximately $440 million in a reverse merger transaction on January 9, 2023. Upon closing of the business combination, shareholders of Calidi 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. Upon closing of the transaction, the combined company will be named Calidi Biotherapeutics, Inc. and led by Allan Camaisa, Chief Executive Officer and Chairman of the Board. In addition, the combined company's common stock intends to list on the NYSE American under the ticker “CLDI.”

The consummation of the Transactions is subject to customary closing conditions, including, among others; approval by FLAG's stockholders and the Company's stockholders; the expiration or termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended; FLAG having at least $5,000,001 of net tangible assets as of the closing of the Transactions; appointment of the members of the post-combination board of directors; shares of FLAG's common stock being listed on the NYSE American LLC or other stock exchange mutually agreed between FLAG and Calidi; the Registration Statement becoming effective in accordance with the Securities Act of 1933, as amended (the “ Securities Act ”) and customary closing conditions. The boards of directors of Calidi and FLAG unanimously approved the proposed transaction. Business combination expected to be completed in the second quarter of 2023.

Scott E. Bartel, Eric J. Stiff, Deborah K. Seo and Daniel B. Eng of Lewis Brisbois Bisgaard & Smith LLP acted as legal counsel to Calidi. Raymond O. Gietz, Alexander D. Lynch, Amy M. Rubin, Corey Chivers, David F. Levy, Dennis F. Adams III, Joe Pari, John O'Loughlin, Olivia J. Greer, Raymond O. Gietz, Steven A. Newborn, Steven M. Margolis, Alexis Brown-Reilly, Celine Chan, Christina A. De Vuono, Kane Wishart of Weil, Gotshal & Manges LLP acted as legal counsels to FLAG. The Benchmark Company, LLC acted as financial advisor and fairness opinion provider to FLAG. Mackenzie Partners, Inc. acted as proxy solicitor to FLAG, for which FLAG will pay a fee of $10,000. Continental Stock Transfer & Trust Company acted as transfer agent to FLAG. FLAG will pay a fee of $0.3 million to Benchmark for rendering its opinion, out of which Benchmark has received fees of $150,000 to date and will receive $150,000 upon the earlier of (i) the closing of the Transactions or (ii) April 15, 2023, which is not contingent upon either the conclusion expressed in the Benchmark opinion or on the consummation of the transaction.