Capricor Therapeutics, Inc 10-Q for FY2023 Q1

Capricor Therapeutics, Inc. (CAPR)

10-Q 2023-05-12 For: 2023-03-31

Added on April 10, 2026

About this 10-Q

Capricor Therapeutics, Inc filed this 10-Q on May 12, 2023, covering the quarter ended March 31, 2023 (FY2023 Q1).

Headline figures

Quarter ended March 31, 2023, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $2.99M
Net loss: $7.77M; compared with a net loss of $7.82M a year earlier
Diluted EPS: -$0.31; compared with -$0.32 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 March 31, 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 March 31, 2023 and December 31, 2022		5
Condensed Consolidated Statements of Operations and Comprehensive Loss for the Three Months Ended March 31, 2023 and 2022		6
Condensed Consolidated Statements of Stockholders’ Equity for the Three Months Ended March 31, 2023 and 2022		7
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 2023 and 2022		8
Notes to Unaudited Condensed Consolidated Financial Statements		9
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations		27
Item 3. Quantitative and Qualitative Disclosures about Market Risk		40
Item 4. Controls and Procedures		40

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		40
Item 1A. Risk Factors		40
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		41
Item 3. Defaults Upon Senior Securities		41
Item 4. Mine Safety Disclosures		41
Item 5. Other Information		41
Item 6. Exhibits		42
Signatures		43



ASSETS
	March 31, 2023
	(unaudited)		December 31, 2022

CURRENT ASSETS
Cash and cash equivalents	$	10,605,528	$	9,603,242
Marketable securities		34,566,342		31,818,020
Receivables		547,580		547,580
Prepaid expenses and other current assets		875,092		919,892

TOTAL CURRENT ASSETS		46,594,542		42,888,734

PROPERTY AND EQUIPMENT, net		4,811,044		4,588,030

OTHER ASSETS
Lease right-of-use assets, net		2,189,651		2,349,974
Other assets		268,172		268,172

TOTAL ASSETS	$	53,863,409	$	50,094,910

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	5,407,016	$	4,834,683
Accounts payable and accrued expenses, related party		18,716		89,234
Lease liabilities, current		693,652		682,039
Deferred revenue, current		31,012,773		17,980,599

TOTAL CURRENT LIABILITIES		37,132,157		23,586,555

LONG-TERM LIABILITIES
CIRM liability		3,376,259		3,376,259
Lease liabilities, net of current		1,699,682		1,878,070
Deferred revenue, net of current		5,449,062		9,467,932

TOTAL LONG-TERM LIABILITIES		10,525,003		14,722,261

TOTAL LIABILITIES		47,657,160		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, 25,255,154 and 25,241,402 shares issued and outstanding, respectively		25,255		25,241
Additional paid-in capital		150,934,085		148,735,420
Accumulated other comprehensive income		94,986		105,244
Accumulated deficit		(144,848,077)		(137,079,811)

TOTAL STOCKHOLDERS’ EQUITY		6,206,249		11,786,094

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	53,863,409	$	50,094,910


	Three months ended March 31,
	2023		2022

REVENUE
Revenue	$	2,986,696	$	—

TOTAL REVENUE		2,986,696		—

OPERATING EXPENSES
Research and development		7,661,519		5,115,699
General and administrative		3,509,885		2,715,835

TOTAL OPERATING EXPENSES		11,171,404		7,831,534

LOSS FROM OPERATIONS		(8,184,708)		(7,831,534)

OTHER INCOME (EXPENSE)
Investment income		416,442		13,440

TOTAL OTHER INCOME (EXPENSE)		416,442		13,440

NET LOSS		(7,768,266)		(7,818,094)

OTHER COMPREHENSIVE INCOME (LOSS)
Net unrealized loss on marketable securities		(10,258)		—

COMPREHENSIVE INCOME (LOSS)	$	(7,778,524)	$	(7,818,094)

Net loss per share, basic and diluted	$	(0.31)	$	(0.32)
Weighted average number of shares, basic and diluted		25,247,354		24,282,743


	For the Three Months Ended March 31, 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


	March 31,		December 31,
	2023		2022
Furniture and fixtures	$	143,573	$	139,336
Laboratory equipment		4,566,146		4,237,089
Leasehold improvements		1,498,655		1,393,230
		6,208,374		5,769,655
Less accumulated depreciation		(1,397,330)		(1,181,625)
Property and equipment, net	$	4,811,044	$	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.


	March 31, 2023
	Level I		Level II		Level III		Total
Marketable Securities	$	34,566,342	$	—	$	—	$	34,566,342


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


		Warrants Outstanding
		March 31,	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	2,220,979		3.91
Exercised	(19,688)		1.52	$	54,741
Expired/Cancelled	(112,355)		4.66
Outstanding at March 31, 2023	7,865,775	$	3.22	$	8,303,587
Exercisable at March 31, 2023	3,091,952	$	2.69	$	4,890,171


2023 (remainder)	$	601,801
2024		765,986
2025		710,259
2026		547,948
Total minimum lease payments		2,625,994
Less: imputed interest		(232,660)
Total operating lease liabilities	$	2,393,334
Included in the condensed consolidated balance sheet:
Current portion of lease liabilities	$	693,652
Lease liabilities, net of current		1,699,682
Total operating lease liabilities	$	2,393,334

Other Information:
Weighted average remaining lease term		3.36 years
Weighted average discount rate		5.36%


Liquidity and capital resources	March 31, 2023		December 31, 2022
Cash and cash equivalents	$	10,606	$	9,603
Marketable securities	$	34,566	$	31,818
Working capital	$	9,462	$	19,302
Stockholders’ equity	$	6,206	$	11,786


	Three months ended March 31,
Cash flow data	2023		2022
Cash provided by (used in):
Operating activities	$	4,210	$	24,047
Investing activities		(3,212)		(625)
Financing activities		4		27
Net increase in cash and cash equivalents	$	1,002	$	23,449


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).

10.1		Japan Commercialization and Distribution Agreement, dated as of February 10, 2023, by and among Capricor Therapeutics, Inc., Capricor, Inc., and Nippon Shinyaku Co. Ltd. (incorporated by reference to Exhibit 10.55 to the Company’s Annual Report on Form 10-K, filed with the SEC on March 17, 2023). †

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 March 31, 2023 formatted in Inline eXtensible Business Reporting Language (iXBRL): (i) Condensed Consolidated Balance Sheets as of March 31, 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: May 12, 2023	By:	/s/ Linda Marbán, Ph.D.
		Linda Marbán, Ph.D.
		Chief Executive Officer
		(Principal Executive Officer)

Date: May 12, 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