CLDI

What is the risk of dilution from potential convertible securities or options outstanding?

Created August 08, 2025 at 08:16 PM

Short answer:

The press release you provided does not contain any figures or commentary on Calidi Biotherapeutics’ (CLDI) potentially dilutive securities (e.g., convertible debt, warrants, stock‑options, or RSUs). Consequently, we cannot quantify the dilution risk from those instruments based solely on the information in the announcement.

What “dilution risk” normally means

Source of dilution	How it works	Typical disclosure point
Convertible debt / notes	Debt that can be turned into common shares at a preset conversion price. When conversion occurs, the share count rises, potentially lowering earnings‑per‑share (EPS).	“Convertible debt” schedule in the footnotes of the 10‑Q/10‑K; “diluted EPS” calculation.
Warrants / convertible preferred	Holders can purchase or convert into common stock, usually at a price set when the warrant/preferred was issued.	“Warrants” or “Convertible securities” footnote; “Weighted‑average anti‑dilution protection” terms.
Stock‑option plans & RSUs	Employees can exercise options or receive RSU shares, increasing the outstanding share count.	“Stock‑based compensation” footnote; “Option‑share‑based awards” table; “Weighted‑average exercise price”.
Restricted stock awards	Shares granted but subject to vesting; they become outstanding once vested.	Same as above – disclosed in the equity compensation footnote.

When a company has a material amount of any of the above, analysts typically calculate “potentially dilutive shares” (the “as‑if‑converted” shares) and compare them to the current basic share count. The difference gives a sense of the maximum dilution that could occur if every convertible instrument were exercised.

How you can find Calidi’s specific dilution exposure

SEC Filings – Form 10‑Q (Quarterly) & Form 10‑K (Annual)
- Look for the “Liquidity and Capital Resources” and “Equity” sections.
- Check footnotes titled “Convertible Debt, Preferred Stock and Warrants” and “Stock‑Based Compensation.”
- The “Weighted‑average anti‑dilution provisions” will tell you at what price conversion could happen.
Diluted EPS vs. Basic EPS
- The press release (or the accompanying earnings release) will normally show Basic EPS and Diluted EPS.
- The difference between the two provides a quick gauge of the actual dilution for the reported period.
Schedule of Potentially Dilutive Securities
- Many companies include a table that lists:
  - Outstanding common shares
  - Options/warrants outstanding (incl. exercise price, expiry)
  - Convertible notes (principal, conversion price)
  - Convertible preferred (conversion ratio, liquidation preference)
- Adding the “as‑if‑converted” shares to the basic share count yields the “diluted share count.”
Management Discussion & Outlook
- In the MD&A, management may comment on any upcoming financing rounds, stock‑based compensation plans, or expirations of warrants that could impact dilution.

Typical dilution ranges for a clinical‑stage biotech like Calidi

Stock‑option pool: 10‑15 % of the current outstanding shares is common for early‑stage biotechs that need to attract and retain talent.
Convertible notes/warrants: If Calidi has raised capital via private placements, it may have issued Series A/B convertible preferred or senior convertible notes. These can add anywhere from a few percent up to >20 % of the share base, depending on the size and conversion terms.
RSUs/Restricted Stock: Usually a smaller portion (1‑5 %) but can increase as the company matures and expands compensation programs.

What to watch for in Calidi’s next disclosures

Indicator	Why it matters
Increase in “Weighted‑average anti‑dilution protection”	Suggests that future conversions could be triggered at a lower price, raising dilution risk.
New warrant issuances (e.g., as part of a financing)	Directly adds potentially dilutive shares that may be exercisable soon.
Stock‑based compensation expense trends	Higher expense often signals larger option grants, leading to future dilution when options vest/exercise.
Convertible note maturity dates	Near‑term conversions or cash‑settlements could materially change the share count.
Share repurchase program	If Calidi is buying back shares, it can offset some dilution pressure.

Bottom line

From the press release alone: No quantitative data on convertible securities, warrants, or options is provided, so we cannot compute the specific dilution risk.
To assess the risk accurately: Review Calidi’s most recent Form 10‑Q (likely filed shortly after the quarter’s end) for the detailed schedules of potentially dilutive securities and compare the basic vs. diluted EPS figures reported in the earnings release.
Practical next step: Download Calidi’s Q2 2025 Form 10‑Q from the SEC’s EDGAR database, locate the footnotes on Convertible Debt and Equity Securities and Stock‑Based Compensation, and calculate the potentially dilutive share count. That will give you the precise percentage increase in shares that could occur if every convertible instrument were exercised.

If you need help interpreting those filings once you have them, feel free to share the relevant excerpts and I can walk you through the dilution calculation.

What is the risk of dilution from potential convertible securities or options outstanding?

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