Capricor Therapeutics, Inc 10-Q for FY2023 Q2

Capricor Therapeutics, Inc. (CAPR)

10-Q 2023-08-08 For: 2023-06-30

Added on April 10, 2026

About this 10-Q

Capricor Therapeutics, Inc filed this 10-Q on August 8, 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.

Revenue: $3.92M
Net loss: $7.37M; compared with a net loss of $7.11M a year earlier
Diluted EPS: -$0.29; compared with -$0.29 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 June 30, 2023

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 June 30, 2023 and December 31, 2022		5
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three and Six Months Ended June 30, 2023 and 2022		6
Condensed Consolidated Statements of Stockholders’ Equity for the Six Months Ended June 30, 2023 and 2022		7
Condensed Consolidated Statements of Cash Flows for the Six Months Ended June 30, 2023 and 2022		9
Notes to Unaudited Condensed Consolidated Financial Statements		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		42
Item 4. Controls and Procedures		42

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		43
Item 1A. Risk Factors		43
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		43
Item 3. Defaults Upon Senior Securities		43
Item 4. Mine Safety Disclosures		43
Item 5. Other Information		43
Item 6. Exhibits		44
Signatures		45



ASSETS
	June 30, 2023
	(unaudited)		December 31, 2022

CURRENT ASSETS
Cash and cash equivalents	$	9,837,133	$	9,603,242
Marketable securities		27,956,325		31,818,020
Receivables		547,580		547,580
Prepaid expenses and other current assets		583,835		919,892

TOTAL CURRENT ASSETS		38,924,873		42,888,734

PROPERTY AND EQUIPMENT, net		4,789,786		4,588,030

OTHER ASSETS
Lease right-of-use assets, net		2,028,367		2,349,974
Other assets		268,172		268,172

TOTAL ASSETS	$	46,011,198	$	50,094,910

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	5,115,182	$	4,834,683
Accounts payable and accrued expenses, related party		18,628		89,234
Lease liabilities, current		707,425		682,039
Deferred revenue, current		29,312,439		17,980,599

TOTAL CURRENT LIABILITIES		35,153,674		23,586,555

LONG-TERM LIABILITIES
CIRM liability		3,376,259		3,376,259
Lease liabilities, net of current		1,518,173		1,878,070
Deferred revenue, net of current		3,231,929		9,467,932

TOTAL LONG-TERM LIABILITIES		8,126,361		14,722,261

TOTAL LIABILITIES		43,280,035		38,308,816

COMMITMENTS AND CONTINGENCIES (NOTE 6)

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, 25,764,312 and 25,241,402 shares issued and outstanding, respectively		25,764		25,241
Additional paid-in capital		154,740,362		148,735,420
Accumulated other comprehensive income		179,693		105,244
Accumulated deficit		(152,214,656)		(137,079,811)

TOTAL STOCKHOLDERS’ EQUITY		2,731,163		11,786,094

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	46,011,198	$	50,094,910


	Three months ended June 30,				Six months ended June 30,
	2023		2022		2023		2022

REVENUE
Revenue	$	3,917,467	$	—	$	6,904,163	$	—

TOTAL REVENUE		3,917,467		—		6,904,163		—

OPERATING EXPENSES
Research and development		8,817,389		4,965,088		16,478,908		10,080,787
General and administrative		2,847,337		2,356,666		6,357,222		5,072,501

TOTAL OPERATING EXPENSES		11,664,726		7,321,754		22,836,130		15,153,288

LOSS FROM OPERATIONS		(7,747,259)		(7,321,754)		(15,931,967)		(15,153,288)

OTHER INCOME (EXPENSE)
Other income		—		190,582		—		190,582
Investment income		380,680		21,761		797,122		35,201

TOTAL OTHER INCOME (EXPENSE)		380,680		212,343		797,122		225,783

NET LOSS		(7,366,579)		(7,109,411)		(15,134,845)		(14,927,505)

OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized gain on marketable securities		84,707		22,830		74,449		22,830

COMPREHENSIVE LOSS	$	(7,281,872)	$	(7,086,581)	$	(15,060,396)	$	(14,904,675)

Net loss per share, basic and diluted	$	(0.29)	$	(0.29)	$	(0.60)	$	(0.61)
Weighted average number of shares, basic and diluted		25,335,342		24,324,156		25,291,591		24,303,564


	For the Six Months Ended June 30, 2023
						OTHER				TOTAL
	COMMON STOCK			ADDITIONAL PAID-		COMPREHENSIVE		ACCUMULATED		STOCKHOLDERS'
	SHARES	AMOUNT		IN CAPITAL		INCOME		DEFICIT		EQUITY


Balance at December 31, 2022	25,241,402	$	25,241	$	148,735,420	$	105,244	$	(137,079,811)	$	11,786,094

Stock-based compensation	—		—		2,194,784		—		—		2,194,784

Stock options exercised	13,752		14		3,881		—		—		3,895

Unrealized loss on marketable securities	—		—		—		(10,258)		—		(10,258)

Net loss	—		—		—		—		(7,768,266)		(7,768,266)

Balance at March 31, 2023	25,255,154	$	25,255	$	150,934,085	$	94,986	$	(144,848,077)	$	6,206,249

Issuance of common stock, net of fees	452,385		452		2,129,943		—		—		2,130,395

Stock-based compensation	—		—		1,618,712		—		—		1,618,712

Stock options exercised	56,773		57		57,622		—		—		57,679

Unrealized gain on marketable securities	—		—		—		84,707		—		84,707

Net loss	—		—		—		—		(7,366,579)		(7,366,579)

Balance at June 30, 2023	25,764,312	$	25,764	$	154,740,362	$	179,693	$	(152,214,656)	$	2,731,163


	For the Six Months Ended June 30, 2022
						OTHER				TOTAL
	COMMON STOCK			ADDITIONAL PAID-		COMPREHENSIVE		ACCUMULATED		STOCKHOLDERS'
	SHARES	AMOUNT		IN CAPITAL		INCOME		DEFICIT		EQUITY


Balance at December 31, 2021	24,185,001	$	24,185	$	139,404,060	$	—	$	(108,060,279)	$	31,367,966

Stock-based compensation	—		—		1,065,329		—		—		1,065,329

Stock options exercised	139,155		139		27,326		—		—		27,465

Net loss	—		—		—		—		(7,818,094)		(7,818,094)

Balance at March 31, 2022	24,324,156	$	24,324	$	140,496,715	$	—	$	(115,878,373)	$	24,642,666

Stock-based compensation	—		—		1,157,904		—		—		1,157,904

Stock options exercised	10,796		11		14,995		—		—		15,006

Unrealized gain on marketable securities	—		—		—		22,830		—		22,830

Net loss	—		—		—		—		(7,109,411)		(7,109,411)

Balance at June 30, 2022	24,334,952	$	24,335	$	141,669,614	$	22,830	$	(122,987,784)	$	18,728,995


	June 30,		December 31,
	2023		2022
Furniture and fixtures	$	143,573	$	139,336
Laboratory equipment		4,698,136		4,237,089
Leasehold improvements		1,596,225		1,393,230
		6,437,934		5,769,655
Less accumulated depreciation		(1,648,148)		(1,181,625)
Property and equipment, net	$	4,789,786	$	4,588,030


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.


	June 30, 2023
	Level I		Level II		Level III		Total
Marketable Securities	$	27,956,325	$	—	$	—	$	27,956,325


		Weighted Average
	Warrants	Exercise Price
Outstanding at December 31, 2022	105,782	$	1.37
Granted	—		—
Exercised	—		—
Outstanding at June 30, 2023	105,782	$	1.37


		Warrants Outstanding
		June 30,	December 31,	Exercise Price		Expiration
Type	Grant Date	2023	2022	per Share		Date

Common Warrants	12/19/2019	40,782	40,782	$	1.10	12/19/2024
Common Warrants	3/27/2020	65,000	65,000	$	1.5313	3/27/2025
		105,782	105,782


	Number of	Weighted Average		Aggregate
	Options	Exercise Price		Intrinsic Value
Outstanding at December 31, 2022	5,776,839	$	2.97
Granted	2,505,479		4.00
Exercised	(147,819)		2.62	$	228,597
Expired/Cancelled	(455,347)		3.80
Outstanding at June 30, 2023	7,679,152	$	3.26	$	11,815,022
Exercisable at June 30, 2023	3,430,336	$	2.76	$	7,008,821


	Six months ended June 30,
	2023		2022
Cash flows from operating activities:
Net loss	$	(15,134,845)	$	(14,927,505)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization		484,803		204,501
Stock-based compensation		3,813,496		2,223,233
Changes in lease liabilities		(12,904)		145,466
Changes in operating assets and liabilities:
Receivables		—		(155,830)
Prepaid expenses and other current assets		336,057		500,668
Other assets		—		7,550
Accounts payable and accrued expenses		280,499		11,465
Accounts payable and accrued expenses, related party		(70,607)		(505,253)
Deferred revenue		5,095,837		30,000,000
Net cash provided by (used in) operating activities		(5,207,664)		17,504,295

Cash flows from investing activities:
Purchase of marketable securities		(52,863,856)		(49,012,053)
Proceeds from sales and maturities of marketable securities		56,800,000		14,012,000
Purchases of property and equipment		(483,563)		(748,575)
Payments for leasehold improvements		(202,995)		(289,345)
Net cash provided by (used in) investing activities		3,249,586		(36,037,973)

Cash flows from financing activities:
Net proceeds from sale of common stock		2,130,395		—
Proceeds from exercise of stock awards		61,574		42,471
Net cash provided by financing activities		2,191,969		42,471

Net increase (decrease) in cash and cash equivalents		233,891		(18,491,207)

Cash and cash equivalents balance at beginning of period		9,603,242		34,885,274

Cash and cash equivalents balance at end of period	$	9,837,133	$	16,394,067

Supplemental disclosures of cash flow information:
Interest paid in cash	$	—	$	—
Income taxes paid in cash	$	—	$	—


2023 (remainder)	$	402,744
2024		765,986
2025		710,259
2026		547,948
Total minimum lease payments		2,426,937
Less: imputed interest		(201,339)
Total operating lease liabilities	$	2,225,598
Included in the condensed consolidated balance sheet:
Current portion of lease liabilities	$	707,425
Lease liabilities, net of current		1,518,173
Total operating lease liabilities	$	2,225,598

Other Information:
Weighted average remaining lease term		3.12 years
Weighted average discount rate		5.37%


	Three month ended June 30,
	2023		2022		Change ($)		Change (%)

Stock-based compensation	$	1,168,262	$	910,638	$	257,624		28	%
Compensation and other personnel expenses		861,130		710,487		150,643		21	%
Professional services		441,874		475,837		(33,963)		(7)	%
Facility expenses		162,090		61,095		100,995		165	%
Other corporate expenses		213,981		198,609		15,372		8	%
Total general and administrative expenses	$	2,847,337	$	2,356,666	$	490,671		21	%


Liquidity and capital resources	June 30, 2023		December 31, 2022
Cash and cash equivalents	$	9,837	$	9,603
Marketable securities	$	27,956	$	31,818
Working capital	$	3,771	$	19,302
Stockholders’ equity	$	2,731	$	11,786


	Six months ended June 30,
Cash flow data	2023		2022
Cash provided by (used in):
Operating activities	$	(5,208)	$	17,504
Investing activities		3,250		(36,038)
Financing activities		2,192		43
Net increase (decrease) in cash and cash equivalents	$	234	$	(18,491)


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 June 30, 2023 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets as of June 30, 2023 and December 31, 2022, (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: August 8, 2023	By:	/s/ Linda Marbán, Ph.D.
		Linda Marbán, Ph.D.
		Chief Executive Officer
		(Principal Executive Officer)

Date: August 8, 2023	By:	/s/ Anthony J. Bergmann
		Anthony J. Bergmann
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


/s/ Linda Marbán, Ph.D.
Name: Linda Marbán, Ph.D.
Title: Chief Executive Officer and Principal Executive Officer


/s/ Anthony J. Bergmann
Name: Anthony J. Bergmann
Title: Chief Financial Officer and Principal Financial Officer