Capricor Therapeutics, Inc 10-Q for FY2021 Q3

Capricor Therapeutics, Inc. (CAPR)

10-Q 2021-11-12 For: 2021-09-30

Added on April 10, 2026

About this 10-Q

Capricor Therapeutics, Inc filed this 10-Q on November 12, 2021, covering the quarter ended September 30, 2021 (FY2021 Q3).

Headline figures

Quarter ended September 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Net loss: $3.93M; compared with a net loss of $3.91M a year earlier
Diluted EPS: -$0.21; compared with -$0.23 a year earlier

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☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	for the quarterly period ended September 30, 2021

or

☐	Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	for the transition period from to


Delaware		88-0363465
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
		Emerging growth company	☐


Title of Each Class	Trading Symbol(s)	Name of Each Exchange on Which Registered
Common Stock, par value $0.001 per share	CAPR	The Nasdaq Capital Market


		PAGES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements		5
Condensed Consolidated Balance Sheets at September 30, 2021 (unaudited) and December 31, 2020		5
Condensed Consolidated Statements of Operations and Comprehensive Loss (unaudited)		6
Condensed Consolidated Statements of Stockholders’ Equity (unaudited)		7
Condensed Consolidated Statements of Cash Flows (unaudited)		9
Notes to Condensed Consolidated Financial Statements (unaudited)		10
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		28
Item 3. Quantitative and Qualitative Disclosures about Market Risk		45
Item 4. Controls and Procedures		45

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		46
Item 1A. Risk Factors		46
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		46
Item 3. Defaults Upon Senior Securities		46
Item 4. Mine Safety Disclosures		46
Item 5. Other Information		46
Item 6. Exhibits		47
Signatures		48


ASSETS
	September 30, 2021		December 31, 2020
	(Unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	40,839,158	$	32,665,874
Receivables		180,178		—
Prepaid expenses and other current assets		278,909		1,011,209

TOTAL CURRENT ASSETS		41,298,245		33,677,083

PROPERTY AND EQUIPMENT, net		1,513,575		850,847

OTHER ASSETS
Intangible assets, net of accumulated amortization of $259,682 and $257,517, respectively		—		2,165
Other assets		288,701		88,701

TOTAL ASSETS	$	43,100,521	$	34,618,796

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	2,988,292	$	2,724,593
Note payable, current		—		246,689

TOTAL CURRENT LIABILITIES		2,988,292		2,971,282

LONG-TERM LIABILITIES
Note payable, net of current		—		71,471
CIRM liability		3,376,259		3,376,259

TOTAL LONG-TERM LIABILITIES		3,376,259		3,447,730

TOTAL LIABILITIES		6,364,551		6,419,012

COMMITMENTS AND CONTINGENCIES (NOTE 7)

STOCKHOLDERS’ EQUITY
Preferred stock, $0.001 par value, 5,000,000 shares authorized, none issued and outstanding		—		—
Common stock, $0.001 par value, 50,000,000 shares authorized, 24,149,155 and 20,577,123 shares issued and outstanding, respectively		24,149		20,577
Additional paid-in capital		138,581,576		116,216,966
Accumulated deficit		(101,869,755)		(88,037,759)

TOTAL STOCKHOLDERS’ EQUITY		36,735,970		28,199,784

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	43,100,521	$	34,618,796


	Three months ended September 30,				Nine months ended September 30,
	2021		2020		2021		2020

REVENUE
Revenue	$	—	$	16,863	$	244,898	$	252,420

TOTAL REVENUE		—		16,863		244,898		252,420

OPERATING EXPENSES
Research and development		2,513,915		2,629,267		9,307,512		5,711,896
General and administrative		1,800,630		1,301,673		5,496,186		4,049,955

TOTAL OPERATING EXPENSES		4,314,545		3,930,940		14,803,698		9,761,851

LOSS FROM OPERATIONS		(4,314,545)		(3,914,077)		(14,558,800)		(9,509,431)

OTHER INCOME (EXPENSE)
Other income		367,168		—		367,168		—
Investment income		15,570		3,953		41,476		30,335
Forgiveness of debt		—		—		318,160		—

TOTAL OTHER INCOME (EXPENSE)		382,738		3,953		726,804		30,335

NET LOSS		(3,931,807)		(3,910,124)		(13,831,996)		(9,479,096)

OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized gain on marketable securities		—		—		—		757

COMPREHENSIVE LOSS	$	(3,931,807)	$	(3,910,124)	$	(13,831,996)	$	(9,478,339)

Net loss per share, basic and diluted	$	(0.17)	$	(0.20)	$	(0.61)	$	(0.68)
Weighted average number of shares, basic and diluted		23,095,375		19,801,841		22,731,638		13,958,507


	For the Nine Months Ended September 30, 2021
								TOTAL
	COMMON STOCK			ADDITIONAL PAID-		ACCUMULATED		STOCKHOLDERS'
	SHARES	AMOUNT		IN CAPITAL		DEFICIT		EQUITY

Balance at December 31, 2020	20,577,123	$	20,577	$	116,216,966	$	(88,037,759)	$	28,199,784

Issuance of common stock, net of fees	2,218,874		2,219		12,576,307		—		12,578,526

Stock-based compensation	—		—		752,962		—		752,962

Stock options exercised	1,933		2		1,434		—		1,436

Net loss	—		—		—		(5,151,923)		(5,151,923)

Balance at March 31, 2021	22,797,930	$	22,798	$	129,547,669	$	(93,189,682)	$	36,380,785

Issuance of common stock, net of fees	200,504		200		1,035,112		—		1,035,312

Stock-based compensation	—		—		712,299		—		712,299

Net loss	—		—		—		(4,748,266)		(4,748,266)

Balance at June 30, 2021	22,998,434	$	22,998	$	131,295,080	$	(97,937,948)	$	33,380,130

Issuance of common stock, net of fees	1,146,971		1,147		6,561,006		—		6,562,153

Stock-based compensation	—		—		720,281		—		720,281

Stock options exercised	3,750		4		5,209		—		5,213

Net loss	—		—		—		(3,931,807)		(3,931,807)

Balance at September 30, 2021	24,149,155	$	24,149	$	138,581,576	$	(101,869,755)	$	36,735,970


	For the Nine Months Ended September 30, 2020
						OTHER				TOTAL
	COMMON STOCK			ADDITIONAL PAID-		COMPREHENSIVE		ACCUMULATED		STOCKHOLDERS'
	SHARES	AMOUNT		IN CAPITAL		INCOME (LOSS)		DEFICIT		EQUITY

Balance at December 31, 2019	5,227,398	$	5,227	$	81,215,647	$	(757)	$	(74,380,731)	$	6,839,386

Issuance of common stock, net of fees	444,500		446		4,459,764		—		—		4,460,210

Exercise of pre-funded common stock warrants	3,158,304		3,158		—		—		—		3,158

Exercise of common warrants	78,304		78		86,056		—		—		86,134

Issuance of shares in abeyance	280,000		280		(280)		—		—		—

Stock-based compensation	—		—		287,807		—		—		287,807

Unrealized gain on marketable securities	—		—		—		757		—		757

Net loss	—		—		—		—		(2,084,818)		(2,084,818)

Balance at March 31, 2020	9,188,506	$	9,189	$	86,048,994	$	—	$	(76,465,549)	$	9,592,634

Issuance of common stock, net of fees	3,059,959		3,060		19,492,179		—		—		19,495,239

Exercise of common warrants	4,172,390		4,172		5,340,016		—		—		5,344,188

Issuance of shares in abeyance	3,275,500		3,276		(3,276)		—		—		—

Stock-based compensation	—		—		704,350		—		—		704,350

Stock options exercised	1,221		1		1,696		—		—		1,697

Net loss	—		—		—		—		(3,484,154)		(3,484,154)

Balance at June 30, 2020	19,697,576	$	19,698	$	111,583,959	$	—	$	(79,949,703)	$	31,653,954

Issuance of common stock, net of fees	343,498		343		1,952,477		—		—		1,952,820

Exercise of common warrants	126,525		127		193,659		—		—		193,786

Stock-based compensation	—		—		486,777		—		—		486,777

Stock options exercised	44,003		44		30,662		—		—		30,706

Net loss	—		—		—		—		(3,910,124)		(3,910,124)

Balance at September 30, 2020	20,211,602	$	20,212	$	114,247,534	$	—	$	(83,859,827)	$	30,407,919


	September 30,		December 31,
	2021		2020
Furniture and fixtures	$	55,440	$	48,676
Laboratory equipment		2,294,559		1,473,708
Leasehold improvements		47,043		47,043
		2,397,042		1,569,427
Less accumulated depreciation		(883,467)		(718,580)
Property and equipment, net	$	1,513,575	$	850,847


Level Input:		Input Definition:

Level I		Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date.
Level II		Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date.
Level III		Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date.


		Weighted Average
	Warrants	Exercise Price
Outstanding at December 31, 2020	126,173	$	1.32
Granted	—		—
Exercised	—		—
Outstanding at September 30, 2021	126,173	$	1.32


		Warrants Outstanding
		September 30,	December 31,	Exercise Price		Expiration
Type	Grant Date	2021	2020	per Share		Date

Common Warrants	12/19/2019	61,173	61,173	$	1.10	12/19/2024
Common Warrants	3/27/2020	65,000	65,000	$	1.5313	3/27/2025
		126,173	126,173


	September 30, 2021		September 30, 2020
Expected volatility	123% - 124	%	104% - 123	%
Expected term	6 years		5 - 6 years
Dividend yield	0	%	0	%
Risk-free interest rates	0.5 - 1.1	%	0.4 - 1.5	%


	Number of	Weighted Average		Aggregate
	Options	Exercise Price		Intrinsic Value
Outstanding at December 31, 2020	2,361,873	$	1.89	$	4,236,737
Granted	1,636,324		3.95
Exercised	(5,883)		1.39	$	22,761
Expired/Cancelled	(149,941)		3.89
Outstanding at September 30, 2021	3,842,373	$	2.69	$	5,737,004
Exercisable at September 30, 2021	1,454,788	$	1.92	$	3,161,020


Years ended	Operating Leases
2021 (3 month)	$	32,120
2022		74,946


12-Month Difference in Change from Baseline†
	Δ, CAP-1002 vs. Placebo
	(n=8, n=12)	p-value
Skeletal-Muscle (Upper Limb Function)
Mid-level PUL (version 1.2)	2.6	0.01
Shoulder + Mid + Distal PUL (version 1.2)	3.2	0.02
Shoulder + Mid + Distal PUL (version 2.0)	1.8	0.04

Cardiac Function
LV Ejection Fraction %	4.0	0.002
LV End-Diastolic Volume, Indexed mL/m²	-12.4‡	0.03
LV End-Systolic Volume, Indexed mL/m²	-4.2‡	0.01
Creatine Kinase-MB (% of total CK)	-2.2‡	0.02


Liquidity and capital resources	September 30, 2021		December 31, 2020
Cash and cash equivalents	$	40,839	$	32,666
Working capital	$	38,310	$	30,706
Stockholders’ equity	$	36,736	$	28,200


	Nine months ended September 30,
Cash flow data	2021		2020
Cash provided by (used in):
Operating activities	$	(11,182)	$	(6,212)
Investing activities		(828)		5,727
Financing activities		20,183		31,886
Net increase in cash and cash equivalents	$	8,173	$	31,401


2.1		Agreement and Plan of Merger, dated as of August 15, 2007, by and among SMI Products, Inc., Nile Merger Sub, Inc. and Nile Therapeutics, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 17, 2007).

2.2		Agreement and Plan of Merger and Reorganization, dated as of July 7, 2013, by and among Nile Therapeutics, Inc., Bovet Merger Corp. and Capricor, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on July 9, 2013).

2.3		First Amendment to Agreement and Plan of Merger and Reorganization, dated as of September 27, 2013, by and between Nile Therapeutics, Inc., Bovet Merger Corp. and Capricor, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed with the SEC on October 3, 2013).

3.1		Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on February 9, 2007).

3.2		Certificate of Amendment of Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on November 26, 2013).

3.3		Certificate of Amendment of Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on June 4, 2019).

3.4		Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed with the SEC on August 25, 2020).

31.1		Certification of Principal Executive Officer.*

31.2		Certification of Principal Financial Officer.*

32.1		Certification of Principal Executive Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

32.2		Certification of Principal Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101		The following financial information from Capricor Therapeutics, Inc.’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2021 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets as of September 30, 2021 and December 31, 2020, (ii) Condensed Consolidated Statements of Operations, (iii) Condensed Consolidated Statement of Changes in Stockholders’ Equity, (iv) Condensed Consolidated Statements of Cash Flows, and (v) Notes to Condensed Consolidated Financial Statements.*

104		Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)


	CAPRICOR THERAPEUTICS, INC.

Date: November 10, 2021	By:	/s/ Linda Marbán, Ph.D.
		Linda Marbán, Ph.D.
		Chief Executive Officer
		(Principal Executive Officer)

Date: November 10, 2021	By:	/s/ Anthony J. Bergmann
		Anthony J. Bergmann
		Chief Financial Officer
		(Principal Financial and Accounting Officer)