UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q


☒	Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
	for the quarterly period ended March 31, 2022

or

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

Commission File Number: 001-34058

CAPRICOR THERAPEUTICS, INC.

(Exact Name Of Registrant As Specified In Its Charter)


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

10865 Road to the Cure, Suite 150, San Diego, California 92121

(Address of principal executive offices including zip code)

(310) 358-3200

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. ☒ Yes ☐ No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


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

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). ☐ Yes ☒ No

Securities registered pursuant to Section 12(b) of the Act:


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

As of May 10, 2022, there were 24,324,156 shares of the registrant’s common stock, par value $0.001 per share, issued and outstanding.

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INDEX TO QUARTERLY REPORT ON FORM 10-Q


		PAGES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements		5
Condensed Consolidated Balance Sheets at March 31, 2022 (unaudited) and December 31, 2021		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)		8
Notes to Condensed Consolidated Financial Statements (unaudited)		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		37
Item 4. Controls and Procedures		37

PART II. OTHER INFORMATION
Item 1. Legal Proceedings		38
Item 1A. Risk Factors		38
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds		38
Item 3. Defaults Upon Senior Securities		38
Item 4. Mine Safety Disclosures		38
Item 5. Other Information		38
Item 6. Exhibits		39
Signatures		40

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains 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, which statements involve substantial risks and uncertainties. Forward-looking statements generally relate to future events or our future financial or operating performance. In some cases, you can identify forward-looking statements because they contain words such as “may,” “will,” “should,” “expects,” “plans,” “anticipates,” “could,” “intends,” “target,” “projects,” “contemplates,” “believes,” “estimates,” “predicts,” “potential” or “continue” or the negative of these words or other similar terms or expressions that concern our expectations, strategy, plans or intentions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

●

how long we expect to maintain liquidity to fund our planned level of operations and our ability to obtain additional funds for our operations;

●

the development of our drug and vaccine candidates, including when we expect to undertake, initiate and complete clinical trials of our drug and vaccine candidates;

●

the expectation, plans, projections, initiation, timing, progress and results of our research and development programs, preclinical studies, any clinical trials, compassionate uses, Investigational New Drug (“IND”) filings, Clinical Trial Application (“CTA”) filings, New Drug Application (“NDA”) filings, and other regulatory submissions;

●

regulatory developments involving products, including the ability to obtain regulatory approvals or otherwise bring products to market;

●

the regulatory status of our drug and vaccine candidates, including our ability to obtain and maintain orphan drug, rare pediatric and Regenerative Medicine Advanced Therapy (“RMAT”) designations for our lead product candidate, CAP-1002;

●

our use of clinical research centers, third party manufacturers and other contractors;

●

our ability to find collaborative partners for research, development and commercialization of potential products and retain commercial rights for our product candidates in the collaborations;

●

our ability to manufacture products for clinical and commercial use;

●

our ability to procure materials necessary for the manufacture of our product candidates;

●

our ability to protect our patents and other intellectual property;

●

the potential impact of COVID-19 on our business, including our ability to conduct clinical trials and further product candidate development;

●

our ability to raise additional financing and the terms of any additional financing;

●

our ability to market any of our products;

●

the implementation of our business model and strategic plans for our business, technologies and product candidates;

●

our estimates of our expenses, ongoing losses, future revenue and capital requirements;

●

the impact of taxes on our business;

●

our ability to compete against other companies and research institutions;

●

our ability to expand our operations internationally;

●

the effect of potential strategic transactions on our business;

●

acceptance of our products by doctors, patients or payors and the availability of reimbursement for our product candidates;

●

our ability to attract and retain key personnel; and

●

the volatility of our stock price.

We caution you that the forward-looking statements highlighted above do not encompass all of the forward-looking statements made in this Quarterly Report on Form 10 - Q.

You should not rely upon forward-looking statements as predictions of future events. We have based the forward-looking statements contained in this Quarterly Report on Form 10-Q primarily on our current expectations and projections about future events and trends that we believe may affect our business, financial condition, results of operations and prospects. The outcome of the events described in these forward-looking statements is subject to risks, uncertainties and

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other factors. Moreover, we operate in a very competitive and challenging environment. New risks and uncertainties emerge from time to time, and it is not possible for us to predict all risks and uncertainties that could have an impact on the forward-looking statements contained in this Quarterly Report on Form 10-Q. We cannot assure you that the results, events and circumstances reflected in the forward-looking statements will be achieved or occur, and actual results, events or circumstances could differ materially from those described in the forward-looking statements. Additionally, final data may differ significantly from preliminary data reported in this document.

The forward-looking statements made in this Quarterly Report on Form 10-Q relate only to events as of the date on which the statements are made. We undertake no obligation to update any forward-looking statements made in this Quarterly Report on Form 10-Q to reflect events or circumstances after the date of this Quarterly Report on Form 10-Q or to reflect new information or the occurrence of unanticipated events, except as required by law. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on our forward-looking statements. Our forward-looking statements do not reflect the potential impact of any future acquisitions, mergers, dispositions, joint ventures or investments we may make, if any.

This Quarterly Report on Form 10-Q also contains data, estimates and forecasts that are based on independent industry publications or other publicly available information, as well as other information based on our internal sources. Although we believe that the third-party sources referred to in this Quarterly Report on Form 10-Q are reliable, we have not independently verified the information provided by these third parties. While we are not aware of any misstatements regarding any third-party information presented in this report, their estimates, in particular, as they relate to projections, involve numerous assumptions, are subject to risks and uncertainties, and are subject to change based on various factors.

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PART I — FINANCIAL INFORMATION

Item 1. Financial Statements.

CAPRICOR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS



ASSETS
	March 31, 2022		December 31, 2021
	(Unaudited)

CURRENT ASSETS
Cash and cash equivalents	$	58,333,945	$	34,885,274
Receivables		356,997		391,750
Prepaid expenses and other current assets		943,246		1,159,937

TOTAL CURRENT ASSETS		59,634,188		36,436,961

PROPERTY AND EQUIPMENT, net		2,328,565		1,795,696

OTHER ASSETS
Lease right-of-use assets, net		2,683,443		2,821,944
Other assets		275,722		275,722

TOTAL ASSETS	$	64,921,918	$	41,330,323

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES
Accounts payable and accrued expenses	$	3,523,574	$	3,116,371
Accounts payable and accrued expenses, related party		574,848		599,388
Lease liabilities, current		498,374		417,632
Deferred revenue, current		9,726,501		—

TOTAL CURRENT LIABILITIES		14,323,297		4,133,391

LONG-TERM LIABILITIES
CIRM liability		3,376,259		3,376,259
Lease liabilities, net of current		2,306,197		2,452,707
Deferred revenue, net of current		20,273,499		—

TOTAL LONG-TERM LIABILITIES		25,955,955		5,828,966

TOTAL LIABILITIES		40,279,252		9,962,357

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, 24,324,156 and 24,185,001 shares issued and outstanding, respectively		24,324		24,185
Additional paid-in capital		140,496,715		139,404,060
Accumulated deficit		(115,878,373)		(108,060,279)

TOTAL STOCKHOLDERS’ EQUITY		24,642,666		31,367,966

TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY	$	64,921,918	$	41,330,323

See accompanying notes to the unaudited condensed consolidated financial statements.

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CAPRICOR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(UNAUDITED)


	Three months ended March 31,
	2022		2021

REVENUE
Revenue	$	—	$	40,816

TOTAL REVENUE		—		40,816

OPERATING EXPENSES
Research and development		5,115,699		3,296,322
General and administrative		2,715,835		1,905,582

TOTAL OPERATING EXPENSES		7,831,534		5,201,904

LOSS FROM OPERATIONS		(7,831,534)		(5,161,088)

OTHER INCOME (EXPENSE)
Investment income		13,440		9,165

TOTAL OTHER INCOME (EXPENSE)		13,440		9,165

NET LOSS	$	(7,818,094)	$	(5,151,923)

Net loss per share, basic and diluted	$	(0.32)	$	(0.23)
Weighted average number of shares, basic and diluted		24,282,743		22,228,723

See accompanying notes to the unaudited condensed consolidated financial statements.

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CAPRICOR THERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

(UNAUDITED)


	For the Three Months Ended March 31, 2022
								TOTAL
	COMMON STOCK			ADDITIONAL PAID-		ACCUMULATED		STOCKHOLDERS'
	SHARES	AMOUNT		IN CAPITAL		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


	For the Three Months Ended March 31, 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