Calidi Biotherapeutics, Inc 10-Q for FY2023 Q2
Calidi Biotherapeutics, Inc. (CLDI)
About this 10-Q
Calidi Biotherapeutics, Inc filed this 10-Q on August 21, 2023, covering the quarter ended June 30, 2023 (FY2023 Q2).
Headline figures
Quarter ended June 30, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.
- Net loss
- $4.27M
- compared with net income of $4.16M a year earlier
Table of Contents
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) | |
(Address of principal executive offices) |
(Zip Code) | |
Title of each class |
Trading Symbols |
Name of each exchange on which registered | ||
| Large accelerated filer | ☐ | Accelerated filer | ☐ | |||
| ☒ | Smaller reporting company | |||||
| Emerging growth company | ||||||
Table of Contents
First Light Acquisition Group, Inc.
QUARTERLY REPORT ON FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 2023
Table of Contents
i
Table of Contents
| Item 1. | Financial Statements |
June 30, 2023 |
December 31, 2022 |
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(unaudited) |
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ASSETS |
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Current assets: |
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Cash |
$ | $ | ||||||
Accounts receivable |
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Prepaid expenses |
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Total Current Assets |
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Non-current assets: |
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Marketable securities held in trust account |
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Total Non-current Assets |
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TOTAL ASSETS |
$ |
$ |
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LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accrued expenses |
$ | $ | ||||||
Accounts payable |
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Accrued interest payable |
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Promissory notes – related parties, net of debt discount |
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Contingent interest liability |
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Total Current Liabilities |
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Non-current liabilities: |
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Warrant liability |
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Forward purchase unit liability |
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Total Non-current Liabilities |
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TOTAL LIABILITIES |
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Commitments and Contingencies (Note 8) |
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Class A common stock subject to possible redemption, outstanding as of |
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Stockholders’ Deficit |
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Preferred stock, $ |
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Class A common stock, $ shares subject to possible redemption as of June 30, 2023 and December 31, 2022) |
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Class B common stock, $ |
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Additional paid-in capital |
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Accumulated deficit |
( |
) | ( |
) | ||||
Total Stockholders’ Deficit |
( |
) |
( |
) | ||||
TOTAL LIABILITIES, CLASS A COMMON STOCK SUBJECT TO POSSIBLE REDEMPTION AND STOCKHOLDERS’ DEFICIT |
$ |
$ |
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For the Three Months Ended June 30, |
For the Six Months Ended June 30, |
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2023 |
2022 |
2023 |
2022 |
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Operating costs |
$ | $ | $ | $ | ||||||||||||
Loss from operations |
( |
) |
( |
) |
( |
) |
( |
) | ||||||||
Other income (expense): |
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Unrealized gain on marketable securities held in Trust Account |
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Earnings on marketable securities held in Trust Account |
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Change in fair value of contingent interest liability |
( |
) | — | ( |
) | — | ||||||||||
Change in fair value of warrant liability |
( |
) | ( |
) | ||||||||||||
Change in fair value of forward purchase unit liability |
( |
) | ( |
) | ||||||||||||
Amortization of debt discount |
( |
) | — | ( |
) | — | ||||||||||
Other (loss) income |
( |
) |
( |
) |
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(Loss) income before provision for income taxes |
) |
( |
) |
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Provision for income taxes |
( |
) | ( |
) | ||||||||||||
Net (loss) income |
( |
) |
( |
) |
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Weighted average shares outstanding of redeemable Class A common stock |
||||||||||||||||
Basic and diluted net (loss) income per share, redeemable Class A common stock |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||
Weighted average shares outstanding of non-redeemable Class B common stock |
||||||||||||||||
Basic and diluted net (loss) income per share, non-redeemable Class B common stock |
$ |
( |
) |
$ |
$ |
( |
) |
$ |
||||||||
Class A Common stock Subject to Possible Redemption |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
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Shares |
Amount |
Shares |
Amount |
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| Balance – December 31, 2022 |
$ |
|
$ |
$ |
|
$ |
( |
) |
|
$ |
( |
) | ||||||||||||||||||||
| Remeasurement of Class A common stock to redemption value |
— | — | |
— | |
( |
) | |
( |
) | ||||||||||||||||||||||
| Net loss |
— | — | — | |
— | |
( |
) | |
( |
) | |||||||||||||||||||||
| |
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| Balance – March 31, 2023 |
|
|
( |
) |
|
( |
) | |||||||||||||||||||||||||
| Cancellation of promissory notes |
— | — | — | |
— | |
— | |
||||||||||||||||||||||||
| Remeasurement of Class A common stock to redemption value |
— | — | |
— | ( |
) | |
— | |
( |
) | |||||||||||||||||||||
| Net loss |
— | — | — | |
— | |
( |
) | |
( |
) | |||||||||||||||||||||
| |
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|
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| Balance – June 30, 2023 |
$ |
|
$ |
$ |
|
$ |
( |
) |
|
$ |
( |
) | ||||||||||||||||||||
| |
|
|
|
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Class A Common stock Subject to Possible Redemption |
Class B Common Stock |
Additional Paid-in Capital |
Accumulated Deficit |
Total Stockholders’ Deficit |
||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
| Balance – December 31, 2021 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||||
| Remeasurement of Class A common stock to redemption value |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
| Net income |
— | — | — | — | ||||||||||||||||||||||||||||
| |
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|
|
|
|
|
|
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| Balance – March 31, 2022 |
$ |
( |
) |
( |
) | |||||||||||||||||||||||||||
| Remeasurement of Class A common stock to redemption value |
— | — | — | ( |
) | ( |
) | |||||||||||||||||||||||||
| Net income |
— | — | — | — | ||||||||||||||||||||||||||||
| |
|
|
|
|
|
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|
|
|
|
|
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| Balance – June 30, 2022 |
$ |
$ |
$ |
$ |
( |
) |
$ |
( |
) | |||||||||||||||||||||||
| |
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Six Months Ended June 30, |
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2023 |
2022 |
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| Cash Flows from Operating Activities: |
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| Net (l o ss) income |
$ | ( |
) | $ | ||||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||||||
| Interest earned on marketable securities held in Trust Account |
( |
) | ||||||
| Change in unrealized gain on marketable securities held in Trust Account |
( |
) | ( |
) | ||||
| Change in fair value of warrant liability |
( |
) | ||||||
| Change in fair value of forward purchase unit liability |
( |
) | ||||||
| Change in fair value of contingent interest liability |
||||||||
| Amortization of debt discount |
|
|||||||
| Changes in operating assets and liabilities: |
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| Prepaid expenses |
||||||||
| Accrued expenses |
( |
) | ||||||
| Accrued interest payable |
||||||||
| Accounts payable |
( |
) | ||||||
| |
|
|
|
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| Net cash provided by (used in) operating activities |
( |
) | ||||||
| |
|
|
|
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| Cash Flows from Investing Activities: |
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| Purchase of marketable securities in Trust Account |
( |
) | ||||||
| Proceeds from sale of marketable securities in Trust Account |
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| |
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|
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| Net cash (used in) provided by investing activities |
( |
) |
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| |
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| Cash Flows from Financing Activities: |
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| Proceeds from promissory note – related party |
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| |
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| Net cash provided by (used in) financing activities |
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| |
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| Net Change in Cash |
( |
) | ||||||
| Cash – Beginning |
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| |
|
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| Cash – Ending |
$ |
$ |
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| |
|
|
|
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| Non-Cash Investing and Financing Activities: |
||||||||
| Remeasurement Class A common stock subject to possible redemption |
$ | $ | ||||||
| Initial measurement of contingent interest liability |
$ | $ | ||||||
| Initial measurement of debt discount |
$ | $ | ||||||
| • | greater than or equal to $ |
| • | greater than or equal to $ |
| • | greater than or equal to $ |
| • | greater than or equal to $ |
Three Months Ended June 30, 2023 |
||||
Net loss |
$ | ( |
) | |
Accretion of temporary equity to redemption value |
( |
) | ||
Net loss including accretion of temporary equity to redemption value |
$ | ( |
) | |
Three Months Ended |
||||||||
June 30, 2023 |
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Class A |
Class B |
|||||||
Allocation of net loss including accretion of temporary equity |
$ | ( |
) | $ | ( |
) | ||
Plus: Accretion applicable to Class A redeemable shares |
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Total loss by Class |
$ | ( |
) | $ | ( |
) | ||
Weighted average number of shares |
||||||||
Loss per share |
$ | ( |
) | $ | ( |
) | ||
| Six Months Ended June 30, 2023 |
||||
Net loss |
$ | ( |
) | |
Accretion of temporary equity to redemption value |
( |
) | ||
Net loss including accretion of temporary equity to redemption value |
$ | ( |
) | |
Six Months Ended |
||||||||
June 30, 2023 |
||||||||
Class A |
Class B |
|||||||
Allocation of net loss including accretion of temporary equity |
$ | ( |
) | $ | ( |
) | ||
Plus: Accretion applicable to Class A redeemable shares |
||||||||
Total loss by Class |
$ | ( |
) | $ | ( |
) | ||
Weighted average number of shares |
||||||||
Loss per share |
$ | ( |
) | $ | ( |
) | ||
Three Months Ended June 30, 2022 |
||||
Net income |
$ | |||
Accretion of temporary equity to redemption value |
( |
) | ||
Net income including accretion of temporary equity to redemption value |
$ | |||
| Three Months Ended June 30, 2022 |
||||||||
| Class A | Class B | |||||||
Allocation of net income including accretion of temporary equity |
$ | $ | ||||||
Plus: Accretion applicable to Class A redeemable shares |
||||||||
Total income by Class |
$ | $ | ||||||
Weighted average number of shares |
||||||||
Income per share |
$ | $ | ||||||
| Six Months Ended June 30, 2022 |
||||
Net income |
$ | |||
Accretion of temporary equity to redemption value |
( |
) | ||
Net income including accretion of temporary equity to redemption value |
$ | |||
| Six Months Ended June 30, 2022 |
||||||||
| Class A | Class B | |||||||
Allocation of net income including accretion of temporary equity |
$ | $ | ||||||
Plus: Accretion applicable to Class A redeemable shares |
||||||||
Total income by Class |
$ | $ | ||||||
Weighted average number of shares |
||||||||
Income per share |
$ | $ | ||||||
| • | Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; |
| • | Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and |
| • | Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Account would be used to repay such loaned amounts. Up to $
| • | in whole and not in part; |
| • | at a price of $ |
| • | upon not less than |
| • | if, and only if, the last reported sale price of the Class A common stock for any |
| • | in whole and not in part; |
| • | at $ |
| • | upon a minimum of |
| • | if, and only if, the Reference Value (as defined above under “—Redemption of warrants when the price per share of our Class A common stock equals or exceeds $18.00”) equals or exceeds $ |
| • | if the Reference Value is less than $ |
Forward Purchase Units |
Private Placement Warrants |
Contingent Interest Liability |
Total Level 3 Financial Instruments |
|||||||||||||
Level 3 financial instruments as of December 31, 2022 |
$ |
$ |
$ |
$ |
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Change in fair value |
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Level 3 financial instruments as of March 31, 2023 |
||||||||||||||||
Change in fair value |
||||||||||||||||
Level 3 financial instruments as of June 30, 2023 |
$ |
$ |
$ |
$ |
||||||||||||
Forward Purchase Units |
Private Placement Warrants |
Contingent Interest Liability |
Total Level 3 Financial Instruments |
|||||||||||||
Level 3 financial instruments as of December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||
Change in fair value |
( |
) | ( |
) | ||||||||||||
Level 3 financial instruments as of March 31, 2022 |
||||||||||||||||
Change in fair value |
( |
) | ( |
) | ( |
) | ||||||||||
Transfer to Level 2 |
— | ( |
) | — | ( |
) | ||||||||||
Level 3 financial instruments as of June 30, 2022 |
$ |
$ |
$ |
$ |
||||||||||||
June 30, 2023 |
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Level 1 |
Level 2 |
Level 3 |
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Assets |
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Marketable securities held in trust account |
$ | $ | — | $ | — | |||||||
Liabilities |
||||||||||||
Public Warrants |
$ | $ | — | $ | — | |||||||
Private Placement Warrants |
$ | — | $ | $ | ||||||||
Forward Purchase Units |
$ | — | $ | — | $ | |||||||
Contingent Interest Liabilities |
$ | — | $ | — | $ | |||||||
December 31, 2022 |
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Level 1 |
Level 2 |
Level 3 |
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Assets |
||||||||||||
Cash and marketable securities held in trust account |
$ | $ | — | $ | — | |||||||
Liabilities |
||||||||||||
Public Warrants |
$ | $ | — | $ | — | |||||||
Private Placement Warrants |
$ | — | $ | $ | ||||||||
Forward Purchase Units |
$ | — | $ | — | $ | |||||||
Contingent Interest Liabilities |
$ | — | $ | — | $ | |||||||
Public Warrants |
Private Placement Warrants |
Forward Purchase Units |
Contingent Interest Liability |
|||||||||||||
Derivative liabilities as of December 31, 2022 |
$ |
$ |
$ |
$ |
||||||||||||
Change in fair value |
( |
) | ( |
) | ||||||||||||
Derivative liabilities as of March 31, 2023 |
||||||||||||||||
Change in fair value |
||||||||||||||||
Derivative liabilities as of June 30, 2023 |
$ |
$ |
$ |
$ |
||||||||||||
Public Warrants |
Private Placement Warrants |
Forward Purchase Units |
Contingent Interest Liability |
|||||||||||||
Derivative liabilities as of December 31, 2021 |
$ |
$ |
$ |
$ |
||||||||||||
Change in fair value |
( |
) | ( |
) | ||||||||||||
Derivative liabilities as of March 31, 2022 |
||||||||||||||||
Change in fair value |
( |
) | ( |
) | ( |
) | ||||||||||
Derivative liabilities as of June 30, 2022 |
$ |
$ |
$ |
$ | ||||||||||||
Private Placement Warrants |
||||||||
June 30, 2023 |
December 31, 2022 |
|||||||
Ordinary share price |
$ | $ | ||||||
Exercise price |
$ | $ | ||||||
Risk-free rate of interest |
% | % | ||||||
Volatility |
% | % | ||||||
Term |
||||||||
Warrant to buy one share |
$ | $ | ||||||
Dividend yield |
% | % | ||||||
Forward Purchase Liability |
||||||||
June 30, 2023 |
December 31, 2022 |
|||||||
Input |
||||||||
Probability of an acquisition occurring |
% | % | ||||||
Unit price |
$ | $ | ||||||
Risk-free rate of interest |
% | % | ||||||
Time to expiration |
||||||||
Contingent Interest Liability |
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June 30, 2023 |
December 31, 2022 |
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Input |
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Valuation date |
||||||||
Inception date |
||||||||
Aggregate principal amount |
$ | $ | ||||||
Contractual interest |
% | |||||||
Maturity date |
||||||||
Estimated business combination date |
||||||||
Estimated probability of a business combination |
% | % | ||||||
Estimated market yield |
% | % | ||||||
Table of Contents
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations |
References to the “Company,” “First Light Acquisition Group, Inc.,” “our,” “us” or “we” refer to First Light Acquisition Group, Inc. The following discussion and analysis of the Company’s financial condition and results of operations should be read in conjunction with the financial statements and the notes thereto contained elsewhere in this report. Certain information contained in the discussion and analysis set forth below includes forward-looking statements that involve risks and uncertainties.
Special Note Regarding Forward-Looking Statements
This Quarterly Report includes “forward-looking statements” that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected. All statements, other than statements of historical fact included in this Quarterly Report including, without limitation, statements in this “Management’s Discussion and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy and the plans and objectives of management for future operations, are forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Words such as “expect,” “believe,” “anticipate,” “intend,” “estimate,” “seek” and variations and similar words and expressions are intended to identify such forward-looking statements. Such forward-looking statements relate to future events or future performance, but reflect management’s current beliefs, based on information currently available. A number of factors could cause actual events, performance or results to differ materially from the events, performance and results discussed in the forward-looking statements. For information identifying important factors that could cause actual results to differ materially from those anticipated in the forward-looking statements, please refer to the Risk Factors section of the Company’s final prospectus for its Initial Public Offering filed with the U.S. Securities and Exchange Commission (the “SEC”). The Company’s securities filings can be accessed on the EDGAR section of the SEC’s website at www.sec.gov. Except as expressly required by applicable securities law, the Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.
Overview
Merger Agreement with Calidi
On January 9, 2023, we entered into an Agreement and Plan of Merger (the “Merger Agreement”), by and among FLAG, FLAG Merger Sub, Inc., a Nevada corporation and a direct, wholly owned subsidiary of FLAG (“Merger Sub”), Calidi Biotherapeutics, Inc., a Nevada corporation (“Calidi”), the Sponsor, in the capacity as the representative of the stockholders of FLAG and Allan Camaisa, in the capacity as the representative of the stockholders to Calidi. Pursuant to the Merger Agreement, the parties thereto will enter into a business combination transaction (the “Business Combination”) by which Merger Sub will merge with and into Calidi with Calidi surviving such merger as a wholly-owned subsidiary of the Company. We refer to the new public entity following consummation of the Business Combination as “New Calidi.” For further details on the Proposed Business Combination, see Note 1 under the heading “Proposed Business Combination” of the unaudited condensed financial statements included herein and also refer to the Annual Report on Form 10-K for the year ended December 31, 2022, filed by the Company with the SEC on March 31, 2023.
The proposed Business Combination is subject to, among other things, the approval of the proposed Business Combination by the Company’s stockholders, satisfaction of the conditions stated in the Merger Agreement and other customary closing conditions, including the receipt of certain regulatory approvals and the approval by the NYSE to list the securities of the combined company.
Extension
The Company’s Initial Public Offering prospectus and amended and restated certificate of incorporation provided that the Company had until September 14, 2022 to complete an initial business combination. As stated in the Current Report on Form 8-K filed with SEC on September 16, 2022, the Company held a special meeting of shareholders and (i) approved a proposal to amend the Company’s amended and restated certificate of incorporation to extend the date by which the Company had to consummate an initial business combination from September 14, 2022 to December 14, 2022 (the “September Extension”) and (ii) provided the Company’s Board the ability to further extend the date by which the Company must consummate a business combination up to three additional times for three months each time, for a maximum of 9 additional months, if the Sponsor pays an amount equal to 1% of the amount then on deposit in the Trust Account for each three-month extension, which amount will be deposited in the Trust Account (the “Extension Fee”). The Company’s Board subsequently approved extensions of the date by which the Company must complete its initial business combination from December 14, 2022 to March 14, 2023 (the “December Extension”), from March 14, 2023 to June 14, 2023, and from June 14, 2023 to September 14, 2023 (the “June Extension”). In connection with the approval of the December Extension and the June Extension, the Trust Account was funded by the Sponsor with payments of $415,626 and $423,186, respectively.
Promissory Notes
On September 13, 2022, FLAG issued two unsecured promissory notes in an aggregate principal amount of $490,000 to the Sponsor and Metric, $412,802 of which was used to fund the September Extension and for general working capital purposes. The Company deposited the funds into the Trust Account. On April 5, 2023, the Sponsor and Metric canceled the promissory notes and discharged all of the Company’s obligations thereunder. The Company accounted for the cancellation as a troubled debt restructuring and recorded the gain on extinguishment as a capital contribution from the Sponsor and Metric (refer to Note 5 of the Notes to the Financial Statements). Such Extension Fees will not be required to be repaid upon the consummation of the Business Combination.
In order to fund the extension fees in connection with the December Extension, the Company issued promissory notes to certain officers and directors of the Company in an aggregate principal amount of $710,000. Under the terms of these notes, the Company is required to pay interest on the notes at a per annum rate of 50% to 100% of the loan amount evidenced by such notes. On December 13, 2022, the Company issued a promissory note to Jackson Investment Group, LLC, an existing holder of Founder Shares, with an outstanding principal balance of $205,000 (the “Jackson Note”), the proceeds of which were used to fund the fees in connection with the December Extension. Under the terms of the Jackson Note, the Company is required to pay interest at a per annum rate of 50% of the loan amount evidenced by the note. Each of the foregoing promissory notes is payable in full on the earlier to occur of (i) the date on which the Company consummates its initial business combination and (ii) the date that the winding up of the Company is effective.
We are a blank check company formed as a Delaware corporation whose business purpose is to effect a merger, capital stock exchange, asset acquisition, stock purchase, reorganization or similar business combination with one or more businesses or entities.
Our sponsors are First Light Acquisition Group, LLC (“Sponsor”) and Metric Finance Holdings I, LLC (“Metric”), an affiliate of Guggenheim Securities, LLC. The registration statement for our Initial Public Offering was declared effective on September 9, 2021. On September 14, 2021, we consummated the Initial Public Offering of 23,000,000 units (the “Units” and, with respect to the Class A common stock included in the Units being offered, the “Class A common stock” or “public shares”), including the issuance of 3,000,000 Units as a result of the underwriter’s exercise of its over- allotment option, at $10.00 per Unit, generating gross proceeds of approximately $230 million, and incurring offering costs of approximately $22,517,064, consisting of $2,335,058 underwriter fees, $8,050,000 deferred underwriting commissions, $640,129 of actual offering costs, and $11,491,877 of excess fair value of Founder Shares.
Simultaneously with the closing of the Initial Public Offering, we consummated the private placement (“Private Placement”) of 3,397,155 warrants (each, a “Private Placement Warrant” and collectively, the “Private Placement Warrants”), at a price of $1.50 per Private Placement Warrant with our Sponsor, generating gross proceeds of approximately $5,095,733 million.
Following the closing of the Initial Public Offering, the full exercise of the over-allotment option and the sale of the Private Placement Warrants, an amount of $230 million ($10.00 per Unit) from the net proceeds of the sale of the Units in the Initial Public Offering and the sale of the Private Placement Warrants was placed in the Trust Account located in the United States, which is and will be invested in U.S. government securities, within the meaning set forth in Section 2(a)(16) of the Investment Company Act, with a maturity of 180 days or less or in any open-ended investment company that holds itself out as a money market fund selected by the Company meeting the conditions of Rule 2a-7 of the Investment Company Act, as determined by the Company, until the earlier of: (i) the completion of a Business Combination and (ii) the redemption of any Public Shares properly submitted in connection with a stockholder vote to amend the Company’s amended and restated certificate of incorporation. On September 13, 2022, the Company’s stockholders approved the Charter Amendment Proposal to extend the date by which the Company must consummate a business combination transaction from September 14, 2022 (the date which was 12 months from the closing date of the Company’s initial public offering of units) to December 14, 2022 (or up to September 14, 2023 if we were to exercise the three three-month extensions available to us pursuant to our amended and restated certificate of incorporation, of which no extensions remain unexercised). In connection with the Charter Amendment Proposal, stockholders elected to redeem 18,871,976 shares of common stock. We have until September 14, 2023 to consummate a Business Combination. However, if we have not completed a Business Combination within the completion window, we will (i) cease all operations except for the purpose of winding up, (ii) as promptly as reasonably possible but not more than ten business days thereafter, redeem 100% of the public shares, at a per-share price, payable in cash, equal to the aggregate amount then on deposit in the Trust Account, including interest earned and not previously released to us to pay our taxes, if any (less up to $100,000 of interest to pay dissolution expenses), divided by the number of then issued and outstanding public shares, which redemption will completely extinguish the rights of the public shareholders as shareholders (including the right to receive further liquidating distributions, if any), and (iii) as promptly as reasonably possible following such redemption, subject to the approval of the Company’s remaining public shareholders and its Board of Directors, liquidate and dissolve, subject in each case to the Company’s obligations under Delaware law to provide for claims of creditors and the requirements of other applicable law.
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Results of Operations
Our entire activity from inception through June 30, 2023 relates to our formation, the Initial Public Offering and, since the closing of the Initial Public Offering, a search for a Business Combination candidate. We will not be generating any operating revenues until the closing and completion of our Business Combination at the earliest.
For the three months ended June 30, 2023, we had net loss of approximately $4.3 million, which consisted of $1.5 million in operating costs, a $1.8 million loss on the change in the fair value of forward purchase unit liability, a $0.1 million loss on the change in fair value of contingent interest liability, a $0.1 million provision for income taxes, and a $1.3 million loss on the change in the fair value of warrant liability, offset by $0.5 million earnings and unrealized gain on marketable securities held in the trust account.
For the six months ended June 30, 2023, we had net loss of approximately $6.5 million, which consisted of $3.5 million in operating costs, a $2.3 million loss on the change in the fair value of forward purchase unit liability, a $0.2 million loss on the change in fair value of contingent interest liability, a $0.1 million provision for income taxes, a $1.2 million loss on the change in the fair value of warrant liability, and a $0.1 million financing expense, offset by $1.0 million earnings and unrealized gain on marketable securities held in the trust account.
For the three months ended June 30, 2022, we had net income of approximately $4.2 million, which consisted of $0.4 million in general and administrative expenses, offset by a $4.0 million gain on the change in the fair value of warrant liability, a $0.3 million gain on the change in the fair value of the forward purchase unit liability, and a $0.2 million interest income and unrealized gain on marketable securities held in the trust account.
For the six months ended June 30, 2022, we had net income of approximately $5.6 million, which consisted of $0.9 million in general and administrative expenses, offset by a $6.1 million gain on the change in the fair value of warrant liability, a $0.2 million gain on the change in the fair value of the forward purchase unit liability, and a $0.2 million interest income and unrealized gain on marketable securities held in the trust account.
Going Concern
As of June 30, 2023, the Company had $669,867 in operating cash and working capital deficit of $7,386,962.
The Company’s liquidity needs since September 14, 2021 had been satisfied through a payment from the Sponsor and Metric of $25,000 for Class B common stock, par value $0.0001 per share (“Class B common stock” and shares thereof, “Founder Shares”) (see Note 5 to the unaudited condensed financial statements included herein), the Initial Public Offering and the issuance of the Private Placement Warrants. Additionally, the Company drew on unsecured promissory notes to pay certain offering costs and unsecured promissory notes to pay for the Company’s extension and working capital needs.
The Company has incurred and expects to continue to incur significant costs in pursuit of its financing and acquisition plans. The Company lacks the financial resources it needs to sustain operations for a reasonable period of time, which is considered to be one year from the issuance date of the financial statements. Although no formal agreement exists, the Sponsor is committed to extend Working Capital Loans as needed. The Company cannot assure stockholders that its plans to consummate an initial Business Combination will be successful. In addition, management is currently evaluating the impact of the Russia-Ukraine war and rising interest rates and increased inflation and their macro-economic impact, and their effect on the Company’s financial position, results of its operations and/or search for a target company.
These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern one year from the date these financial statements are issued. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Contractual Obligations
We do not have any long-term debt, capital lease obligations, operating lease obligations or long-term liabilities as of June 30, 2023 other than an agreement for an optional payment to an affiliate of our sponsor a monthly fee of $10,000 for office space and administrative support to the Company. We began incurring these fees on September 13, 2021 and will continue to incur these fees monthly until the earlier of the completion of the business combination and the Company’s liquidation.
On September 13, 2022, the Company entered into promissory note agreements with the Sponsor and Metric (“Related Party Promissory Notes”) for an aggregate $490,000. The Related Party Promissory Notes are non-interest bearing and are payable on the earlier of the date on which a business combination is consummated or the date that the winding up of the Company is effective. On April 5, 2023, the Sponsor and Metric cancelled the full amounts due by the Company under the promissory note agreements. The cancellation of the promissory note agreements was considered a capital contribution and recorded to additional paid-in capital. As of June 30, 2023 and December 31, 2022, there was $0 and $490,000 outstanding under the promissory notes.
In November 2022, December 2022, January 2023, and June 2023, the Company entered into promissory note agreements with various parties (“Promissory Notes”) for an aggregate borrowing capacity of $1,490,000. The Promissory Notes include a zero interest bearing note, notes that accrue interest at a 50% rate per annum, and notes that have 100% interest payable upon the consummation of an initial Business Combination. The zero interest bearing notes and the notes that accrue interest at a 50% rate per annum are payable on the earliest to occur of (i) the date on which the Company consummates its initial Business Combination or (ii) the date that the winding up of the Company is effective. The notes that have 100% interest payable upon consummation of an initial Business combination are due and payable upon the consummation of the Company’s initial Business Combination. As of June 30, 2023 and December 31, 2022, the Company has drawn down an aggregate $1,490,000 and $767,500, respectively, on the Promissory Notes. As of June 30, 2023 and December 31, 2022, the Company had accrued $143,589 and $7,719 interest related to the 50% per annum interest rate Promissory Notes, respectively, and $273,448 and $32,865 for the contingent interest embedded derivative liability related to the 100% interest rate Promissory Notes, respectively, payable upon consummation of an initial Business Combination. The contingent interest liability is treated as an issuance cost and is recorded against a debt discount. The Promissory Notes are recorded net of debt discount, with the debt discount being amortized into the Promissory Note balance through the maturity date.
The underwriter of the IPO is entitled to a deferred discount of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred discount will become payable to the underwriter from the amounts held in the Trust Account solely in the event that we complete a Business Combination, subject to the terms of the underwriting agreement. On December 6, 2022, the underwriter waived its right to the deferred fee of $8,050,000 it was entitled to upon the consummation of the Business Combination. As such, the deferred underwriter fee payable has been reduced to zero as of December 31, 2022.
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Commitments and Contingencies
Registration and Shareholder Rights
The holders of the founder shares and Private Placement Warrants (and any shares of Class A common stock issuable upon the exercise of the Private Placement Warrants and warrants that may be issued upon conversion of the Working Capital Loans and upon conversion of the founder shares) will be entitled to registration rights pursuant to a registration rights and shareholder agreement dated September 9, 2021, requiring the Company to register such securities for resale (in the case of the founder shares, only after conversion to shares of Class A common stock). The holders of these securities will be entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders will have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the completion of a Business Combination and rights to require the Company to register for resale such securities pursuant to Rule 415 under the Securities Act. However, the registration and shareholder rights agreement provides that the Company will not permit any registration statement filed under the Securities Act to become effective until termination of the applicable lock-up period. The Company will bear the expenses incurred in connection with the filing of any such registration statements.
Underwriter agreement
The Company granted the underwriter a 45-day option from the date of the Initial Public Offering to purchase up to 3,000,000 additional Units to cover over-allotments at the Initial Public Offering price less the underwriting discount, which the underwriter has exercised. The underwriter was entitled to a cash underwriting discount of $2,335,058 in the aggregate, paid on the closing of the Initial Public Offering. In addition, the underwriter will be entitled to a deferred fee of $0.35 per Unit, or $8,050,000 in the aggregate. The deferred fee will become payable to the underwriter from the amounts held in the Trust Account solely in the event that the Company completes a Business Combination, subject to the terms of the underwriting agreement. On December 6, 2022, the underwriter waived its right to the deferred fee of $8,050,000 it was entitled to upon the consummation of the Business Combination. As such, the deferred underwriter fee payable has been reduced to zero as of December 31, 2022.
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Forward Purchase Agreement
In August 2021, the Company entered into a forward purchase agreement with Franklin Strategic Series—Franklin Small Cap Growth Fund (the “forward purchase agreement”), a Delaware statutory trust (“Franklin”), whereby Franklin has agreed to purchase (subject to certain conditions set forth therein) 5,000,000 shares of Class A common stock plus 2,500,000 forward purchase warrants, exercisable to purchase one share of Class A common stock at $11.50 per share, for an aggregate purchase price of $50,000,000, or $10.00 for one share of Class A common stock and one-half of one warrant, in a private placement to occur concurrently with the closing of the initial business combination. The obligations under the forward purchase agreement do not depend on whether any shares of Class A common stock are redeemed by the Company’s public stockholders.
Subject to certain conditions set forth in the forward purchase agreement, Franklin may transfer the rights and obligations under the forward purchase agreement, in whole or in part, to forward transferees, provided that upon such transfer the forward transferees assume the rights and obligations of Franklin under the forward purchase agreement. The proceeds from the sale of the forward purchase securities may be used as part of the consideration to the sellers in the Company’s initial Business Combination, for expenses in connection with its initial Business Combination or for working capital in the post-transaction company. However, Franklin retains the right to purchase shares under the agreement at a later date.
In connection with the Business Combination with Calidi, Franklin is not obligated under its forward purchase agreement to purchase the forward purchase shares and has informed the Company that it has determined not to purchase such shares in connection with the consummation of the Business Combination.
Critical Accounting Estimates
The preparation of financial statements and related disclosures in conformity with accounting principles generally accepted in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially differ from those estimates. We have identified the following critical accounting estimates.
Warrant Liability
The Company accounts for the 14,897,155 warrants issued in connection with the Initial Public Offering and the Private Placement Warrants (collectively, the “Warrants”) as either equity-classified or liability-classified instruments based on an assessment of the Warrant’s specific terms and applicable authoritative guidance in ASC 480 and ASC 815, “Derivatives and Hedging” (“ASC 815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the company’s own common stock, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. The Warrants were determined to be liability-classified instruments which are measured at fair value with changes in the fair value at subsequent reporting dates recorded to the statement of operations. The Company transferred Public Warrants from a Level 3 financial measurement to a Level 1 measurement for the period from March 24, 2021 (inception) through December 31, 2021 as a result of the Public Warrants detaching from the Units and becoming separately tradable with quoted prices observable in active markets. The Company transferred Private Placement Warrants from a Level 3 measurement to a Level 2 measurement during the year ended December 31, 2022 as the valuation inputs are largely driven by the fair value of the Public Warrants for which quoted prices are observable in active markets.
Forward Purchase Units
The company accounts for the 5,000,000 forward purchase units in accordance with ASC Topic 815 as a liability-classified instrument at fair value with changes in fair value at subsequent reporting dates recorded to the statement of operations. The forward purchase agreement is a plain vanilla forward contract with delivery of the Units and payment contingent on the consummation of an acquisition. The value per forward purchase unit is equal to the probability of an acquisition occurring, multiplied by the value of the unit at the initial public offering date, multiplied by (1 - exp(-rt)) where r is the risk-free rate of interest and t is the time to acquisition. The forward purchase units are classified as Level 3 measurements as of June 30, 2023 and December 31, 2022.
Contingent Interest Liability
The Company accounts for interest on promissory notes that are payable upon a successful business combination in accordance with ASC Topic 470, “Debt” and ASC 815. The contingent interest meets the criteria of an embedded derivative which requires bifurcation and separate accounting as a liability-classified instrument at fair value with changes in the fair value at subsequent reporting dates recorded to the statement of operations. The contingent interest liability is also treated as an issuance cost of the promissory notes and is recorded against a debt discount. The contingent interest liability is classified as a Level 3 measurement as of June 30, 2023 and December 31, 2022 as valuation inputs are largely driven by the timing and probability of a successful business combination.
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Recent Accounting Pronouncements
Refer to Recent Accounting Pronouncements disclosure in Note 2. Summary of Significant Accounting Policies in the notes to the financial statements.
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk |
Not required for smaller reporting companies.
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| Item 4. | Controls and Procedures |
Evaluation of Disclosure Controls and Procedures
Disclosure controls and procedures are designed to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.
As required by Rules 13a-15 and 15d-15 under the Exchange Act, our Chief Executive Officer and Chief Financial Officer carried out an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures as of June 30, 2023. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) were not effective, due to the material weaknesses in our internal control over financial reporting as of December 31, 2022 and June 30, 2023. As previously disclosed, we identified a material weakness in internal controls over financial reporting related to the fact that the Company has not yet designed and maintained effective controls relating to the accounting for derivatives and presentation of our statement of cash flows due to the lack of a sufficient number of trained professionals with an appropriate level of accounting knowledge, training and experience to appropriately analyze, record and disclose accounting matters timely and accurately. In addition, during the quarter ended June 30, 2023, we identified material weaknesses in internal controls due to the fact that we had not yet designed and maintained effective internal controls related to the evaluation and recording of troubled debt restructuring within the financial statements and recording of accrued expenses. As a result, we performed additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with GAAP. Accordingly, management believes that the financial statements included in this Quarterly Report present fairly in all material respects our financial position, results of operations and cash flows for the period presented.
Remediation Activities
Following the determination of the material weaknesses discussed above, our Chief Financial Officer performed additional post-closing review procedures including consulting with subject matter experts related to the accounting for derivatives, marketable securities, debt, and accrued expenses. The Company’s management has also retained an additional consultant to provide additional review and subject matter expertise. The Company’s management has expended, and will continue to expend, a substantial amount of effort and resources for the remediation and improvement of our internal control over financial reporting. While we have processes to properly identify and evaluate the appropriate accounting technical pronouncements and other literature for all significant or unusual transactions, we have improved, and will continue to improve, these processes to ensure that the nuances of such transactions are effectively evaluated in the context of the increasingly complex accounting standards. We plan to continue to enhance our review procedures of evaluating and implementing the accounting standards that apply to our financial statements, including through additional analyses by our personnel and third-party professionals with whom we consult regarding complex accounting. The elements of our remediation plan can only be accomplished over time, and we can offer no assurance that these initiatives will ultimately have the intended effects.
Changes in Internal Control over Financial Reporting
Other than the matters discussed above, there was no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2023 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II. OTHER INFORMATION
| Item 1. | Legal Proceedings |
None.
| Item 1A. | Risk Factors |
There have been no material changes in our risk factors from those disclosed in “Part I. Item 1A. Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2022, except as described below.
Adverse developments affecting the financial services industry, including events or concerns involving liquidity, defaults or non-performance by financial institutions, could adversely affect our business, financial condition, or our prospects.
The funds in our operating account and our Trust Account are held in banks or other financial institutions. Our cash held in non-interest bearing and interest-bearing accounts exceed any applicable Federal Deposit Insurance Corporation (“FDIC”) insurance limits. Should events, including limited liquidity, defaults, non-performance or other adverse developments occur with respect to the banks or other financial institutions that hold our funds, or that affect financial institutions or the financial services industry generally, or concerns or rumors about any events of these kinds or other similar risks, our liquidity may be adversely affected. For example, in response to the rapidly declining financial condition of regional banks Silicon Valley Bank, First Republic Bank and Signature Bank, the California Department of Financial Protection and Innovation closed Silicon Valley Bank and First Republic Bank on March 10, 2023 and May 1, 2023, respectively, and the New York State Department of Financial Services closed Signature Bank on March 12, 2023. The FDIC was then appointed as receiver for each bank. Although we did not have any funds in Silicon Valley Bank, Signature Bank, First Republic Bank or other institutions that have been closed we cannot guarantee that the banks or other financial institutions that hold our funds will not experience similar issues.
In addition, investor concerns regarding the U.S. or international financial systems could result in less favorable commercial financing terms, including higher interest rates or costs and tighter financial and operating covenants, or systemic limitations on access to credit and liquidity sources, thereby making it more difficult for us to acquire financing on terms favorable to us in connection with a potential business combination, or at all, and could have material adverse impacts on our liquidity, financial condition, and our prospects. Our business may be adversely impacted by these developments in ways that we cannot predict at this time, there may be additional risks that we have not yet identified, and we cannot guarantee that we will be able to avoid negative consequences directly or indirectly from any failure of one or more banks or other financial institutions.
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| Item 2. | Unregistered Sales of Equity Securities, Use of Proceeds and Issuer Purchases of Equity Securities |
On September 14, 2021, simultaneously with the consummation of the closing of the Offering, the Company consummated the private placement of an aggregate of 3,397,155 Private Placement Warrants (the “Private Warrants”) to certain funds and accounts managed by First Light Acquisition Group, LLC, the sponsor of the Company (the “Sponsor”) and Metric Finance Holdings I, LLC (“Metric”), at a price of $1.50 per Private Warrant, generating total gross proceeds of $5,095,733. No underwriting discounts or commissions were paid with respect to such sale. The issuance of the Private Warrants was made pursuant to the exemption from registration contained in Section 4(a)(2) of the Securities Act of 1933, as amended.
The Private Placement Warrants are identical to the Public Warrants underlying the Units being sold in the Initial Public Offering, except that the Private Placement Warrants and the shares of Class A common stock issuable upon the exercise of the Private Placement Warrants are not transferable, assignable or saleable until 30 days after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Placement Warrants are exercisable for cash or on a cashless basis, at the holder’s option, and are non-redeemable so long as they are held by the initial purchasers or their permitted transferees (except for a number of shares of Class A common stock as described above under Redemption of warrants for Class A common stock). If the Private Placement Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Placement Warrants will be redeemable by the Company in all redemption scenarios and exercisable by such holders on the same basis as the Public Warrants.
| Item 3. | Defaults Upon Senior Securities |
None.
| Item 4. | Mine Safety Disclosures |
None.
| Item 5. | Other Information |
None.
| Item 6. | Exhibit Index |
The exhibits on the Exhibit Index to this Form 10-Q are incorporated by reference herein.
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EXHIBIT INDEX
The following exhibits are filed as part of, or incorporated by reference into, this Quarterly Report on Form 10-Q.
| * | Filed herewith. |
| ** | Furnished herewith. |
| (1) | Previously filed as an exhibit to our current Report on Form 8-K filed on September 15, 2021. |
| (2) | Previously filed as an exhibit to our current Report on Form 8-K filed on September 16, 2022. |
| (3) | Previously filed as an exhibit to our Registration Statement on Form S-1 filed on August 24, 2021. |
| (4) | Previously filed as an exhibit to our current Report on Form 8-K filed on January 9, 2023. |
| (5) | Previously filed as an exhibit to our current Report on Form 8-K filed on February 10, 2023. |
| (6) | Previously filed as an exhibit to our current Report on Form 8-K filed on June 23, 2023. |
| (7) | Previously filed as an exhibit to our current Report on Form 8-K filed on April 13, 2023. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| FIRST LIGHT ACQUISITION GROUP, INC. | ||||||
| Date: August 21, 2023 | By: | /s/ Tom Vecchiolla | ||||
| Tom Vecchiolla | ||||||
| Chief Executive Officer | ||||||
| (Principal Executive Officer) | ||||||
| Date: August 21, 2023 | By: | /s/ Michael J. Alber | ||||
| Michael J. Alber | ||||||
| Chief Financial Officer | ||||||
| (Principal Financial and Accounting Officer) |
29
EXHIBIT 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Tom Vecchiolla, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of First Light Acquisition Group, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d—15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| August 21, 2023 | /s/ Tom Vecchiolla | |
| Tom Vecchiolla | ||
| Chief Executive Officer |
EXHIBIT 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO
RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,
AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002
I, Michael J. Alber, certify that:
| 1. | I have reviewed this quarterly report on Form 10-Q of First Light Acquisition Group, Inc.; |
| 2. | Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
| 3. | Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report; |
| 4. | The registrant’s other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d—15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d- 15(f)) for the registrant and have: |
| a) | Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
| b) | Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
| c) | Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
| d) | Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and |
| 5. | The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions): |
| a) | All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and |
| b) | Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting. |
| August 21, 2023 | /s/ Michael J. Alber | |
| Michael J. Alber | ||
| Chief Financial Officer |
EXHIBIT 32.1
CERTIFICATION OF CEO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of First Light Acquisition Group, Inc. (the “Company”) for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Tom Vecchiolla, as Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Tom Vecchiolla |
| Tom Vecchiolla |
| Chief Executive Officer |
| August 21, 2023 |
EXHIBIT 32.2
CERTIFICATION OF CFO PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report on Form 10-Q of First Light Acquisition Group, Inc. (the “Company”) for the quarterly period ended June 30, 2023 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), Michael J. Alber, as Chief Financial Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that, to the best of his knowledge:
| (1) | The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
| (2) | The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
| /s/ Michael J. Alber |
| Michael J. Alber |
| Chief Financial Officer |
| August 21, 2023 |