Calidi Biotherapeutics Inc

This management proposal asks shareholders to approve a charter amendment authorizing the Board to effect, at its discretion, a reverse stock split of Common Stock at any whole-number ratio between 1-for-2 and 1-for-16. Management seeks this approval primarily to provide the Board flexibility to raise the per-share trading price — addressing the NYSE American’s $1.00 minimum per-share listing requirement and to broaden the pool of potential institutional and other investors that avoid low-priced stocks. The company discloses that its trailing trading price was $0.275 as of the record date and that prior reverse splits (including a 1-for-12 in August 2025) temporarily increased the price but did not sustain it above $1.00 long-term, highlighting both the potential benefit and the risk that a split may not produce durable price appreciation. The Board will retain full discretion on whether and when to implement the split and which ratio within the approved range to select, enabling it to respond to contemporaneous market conditions, expected stability of the post-split share price, and listing considerations. The proposal also explains that the reverse split will proportionally reduce outstanding shares and adjust equity awards and warrants, resulting in a relative increase in authorized but unissued shares, with attendant dilution risk if the Board later issues additional shares. Management argues the split may facilitate capital raising by increasing the per-share price and potentially increasing liquidity and investor interest, but it cautions that there is no guarantee of improved market capitalization or sustained price performance. The Board recommends approval because it views the flexibility as important to preserving listing status and supporting future financing options; however, shareholders should weigh the dilution and anti-takeover implications of a relatively larger pool of authorized but unissued shares and the historical context that prior splits did not ensure sustained price improvements.

This management proposal seeks shareholder approval to expand the 2023 Equity Incentive Plan’s share reserve from 282,815 to 1,950,000 shares to provide additional equity awards for employees, consultants, officers and directors. Management frames the increase as necessary to retain and motivate existing personnel and to attract new talent, estimating the enlarged pool would support awards for approximately the next two years under current grant practices and share price assumptions. The proposal outlines the types of awards permitted (ISOs, NSOs, RSUs, SARs, restricted stock, and cash-based awards), the administrator’s broad discretion (including repricing authority), and annual limits applicable to non-employee directors, but also notes potential dilution to existing shareholders and the mechanics for reloading reserved shares when awards lapse or are withheld for taxes. The Company discloses that approval is required for the increase and that failure to approve would likely force the Company to rely more heavily on cash compensation or other retention tools, which management argues would be less effective given market practice in the biotech sector. From a governance perspective, shareholders should consider the dilution impact of adding ~1.67 million shares relative to ~15.2 million outstanding shares (pre-amendment), the potential for heightened dilution if the Board exercises repricing or issues additional shares, and the interaction with outstanding warrants and equity awards which will be proportionally adjusted. The Board’s recommendation reflects the company’s need to preserve competitive compensation flexibility against a backdrop of capital constraints and hiring needs, but sophisticated investors should weigh the trade-off between dilution risk and the operational need to maintain an adequate equity incentive currency.

This management proposal requests authorization to adjourn the Annual Meeting, if needed, to solicit additional proxies to obtain approval for the Reverse Stock Split and 2023 Plan Amendment proposals. The practical intent is procedural: if votes in favor of those two substantive proposals are insufficient at the scheduled meeting, the Board would have the flexibility to continue solicitation and reconvene the meeting to seek the required majority. Management highlights that Proposal 4 is “non-routine” such that broker non-votes may occur absent broker instructions, increasing the risk that initial voting could fail to pass the proposal, and that additional solicitations could be necessary to achieve a favorable outcome. Approving the adjournment is a common governance practice that preserves the Board’s ability to pursue strategic actions (e.g., capital-raising flexibility and compensation plan capacity) contingent on shareholder approval. Investors should note that adjournment to continue solicitation can extend the period of uncertainty regarding implementation of the reverse split or plan increase and may entail additional proxy solicitation costs; however, it does not itself change the substance of any proposal or the rights of shareholders. The Board recommends the adjournment proposal to ensure it can obtain a definitive shareholder decision on these key, potentially dilutive proposals if initial votes are insufficient.