What changed in this filing

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Item 1A. Risk Factors

2026-03-17 compared with 2025-03-26 · 241 added, 208 removed, 1049 unchanged (30% of the section changed)

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Summary Risk Factors

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or may adversely affect our business, clinical and commercialization activities, the manufacturing of our product candidates, intellectual property, third-party relationships, competition factors, product and environmental liability, and common stock.

Our business is subject to a number of risks, including risks that may prevent us from achieving our business objectives or adversely affect our business, financial condition, results of operations and prospects.

These risks include those related to the development, regulatory approval and potential commercialization of our product candidates, our manufacturing activities, intellectual property, third-party relationships, competitive factors, product and environmental liability, and our common stock.

These risks are discussed more fully below and include, but are not limited to, risks related to:

Risks Related to Our Business

● substantial additional funding is needed to complete the development and commercialization of our product candidates within and outside the United States;

● the Company has incurred significant losses and may never be profitable;

● the occurrence of security breaches, improper access to or disclosure of our data or user data, and other cyber incidents or undesirable cyber activity related to our, or our third-party vendor’s systems and data;

● we may not have adequate personnel and may not be able to attract or retain personnel needed to develop our products.

● substantial additional funding may be required to complete the development and potential commercialization of our product candidates in the United States and internationally;

● the Company has incurred significant losses and may never achieve or sustain profitability;

● the occurrence of security breaches, improper access to or disclosure of our data or third-party data, and other cyber incidents or undesirable cyber activity related to our systems or those of our third-party vendors;

● we may not have adequate personnel and may not be able to attract or retain personnel necessary to develop and potentially commercialize our product candidates.

Risks Related to Clinical and Commercialization Activities

● our success depends upon the viability of our product candidates, all of which require regulatory approval to commercialize and we cannot be certain any of them will receive regulatory approval to be commercialized;

● delays in commencement, enrollment, and completion of clinical testing could result in increased costs to us and delay or limit our ability to obtain regulatory approval for our product candidates;

● we may not be able to manufacture deramiocel in sufficient quantities to meet market demand;

● product candidates can fail to meet their efficacy endpoints at any time during the clinical development process, which would likely make them ineligible for becoming commercial products;

● we may not be able to satisfy clinical and/or regulatory requirements necessary for the approval of our product in the U.S., Europe, Japan or other select territories;

● we may not be able to reach the milestones set forth in our distribution agreements therefore preventing us from receiving the financial benefits of those agreements;

● our exosome technologies are unproven in their ability to achieve sufficient biological activity or scale in development to date;

● our partners may not perform as expected and therefore deny us the financial benefits of those agreements.

● our success depends upon the viability of our product candidates, which require regulatory approval prior to commercialization, and we cannot be certain that any of them will receive such approval;

● delays in the commencement, enrollment or completion of clinical testing could result in increased costs to us and may delay or limit our ability to obtain regulatory approval for our product candidates;

● we may not be able to manufacture Deramiocel in sufficient quantities or at acceptable cost to meet market demand;

● product candidates can fail to meet safety or efficacy endpoints at any time during the clinical development process, which would likely prevent them from becoming commercial products;

● we may not be able to satisfy clinical or regulatory requirements necessary for the approval of our product candidates in the U.S., Europe, Japan or other select territories;

● we may not be able to reach the milestones set forth in our distribution agreements and therefore may not receive the financial benefits associated with those agreements;

● our exosome technologies may not demonstrate sufficient biological activity or scalability in development;

● our partners may not perform as expected and therefore we may not realize the anticipated benefits of those agreements;

● the successful commercialization of our product candidates will depend in part on the extent to which governmental authorities and health insurers establish coverage, adequate reimbursement levels and pricing policies, including potential most-favored-nation pricing pilots or proposals that could require additional rebates for our product candidates, if approved.

Risks Related to the Manufacturing of our Product Candidates

● the manufacturing of our product candidates is heavily reliant on supply chain requirements including the availability of donor hearts and other raw materials that are critical for the manufacturing of our product candidates;

● we may need to rely upon third-party manufacturers for the expansion of our manufacturing capabilities for later-stage clinical trials and for ultimate commercialization;

● we may not have adequate manufacturing facilities required for any scale-up of manufacturing which may be required in the future;

● we may not be able to replicate our manufacturing processes;

● we may not be able to comply with cGMP regulations;

● the manufacturing of our product candidates is dependent on complex supply chains, including the availability of donor hearts and other raw materials that are critical for the manufacturing of our product candidates;

● we may need to rely upon third-party manufacturers to expand our manufacturing capabilities for later-stage clinical trials and potential commercialization;

● we may not have sufficient manufacturing capacity or facilities required for any future scale-up of manufacturing;

● we may not be able to successfully replicate or scale our manufacturing processes;

● we may not be able to comply with current Good Manufacturing Practice (“cGMP”) regulations;

● we may not be able to identify or retain necessary manufacturing personnel;

● the FDA may not accept the viability or comparability of our manufacturing processes;

● the FDA may not approve our manufacturing facilities for the manufacture of commercial products .

● the FDA may not ultimately determine that our manufacturing processes are comparable or acceptable, or approve our manufacturing facilities for commercial production.

Risks Related to Our Intellectual Property

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Risks Related to Our Relationships with Third Parties

● we depend on our relationships with our licensors, collaborators, and other third parties and there is no guarantee that such relationships will continue;

● we depend on our relationships with our licensors, collaborators, and other third parties and these relationships may not continue or may not be successful;

● we will depend on the ability of Nippon Shinyaku to perform according to the terms of the U.S.

Distribution and Japan Distribution Agreements and all applicable laws, and to successfully commercialize our lead product deramiocel in DMD.

Distribution and Japan Distribution Agreements and all applicable laws, and to successfully commercialize Deramiocel for the treatment of DMD.

Risks Related to Competitive Factors

● our products, if approved, will likely face intense competition;

● any of our product candidates for which we receive regulatory approval may not achieve broad market acceptance, which could limit the revenue that we will generate from their sales, if any.

● our products, if approved, will likely face significant competition;

● any of our product candidates for which we receive regulatory approval may not achieve broad market acceptance, which could limit the revenue we may generate from their sales, if any.

Risks Related to Product and Environmental Liability

● our products may expose us to potential product liability.

● our products or product candidates may expose us to potential product liability.

Risks Related to Our Common Stock

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Risks Related to Our Business

We need substantial additional funding before we can complete the development of our product candidates.

We need additional funding before we can complete the development of our product candidates.

If we are unable to obtain such additional capital, we will be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business.

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As of December 31, 2025, we had cash, cash equivalents, and marketable securities totaling approximately $318.1 million.

Additionally, we received a milestone payment of $10.0 million in the first quarter of 2025 under the terms of our U.S.

Distribution Agreement with Nippon Shinyaku and we may potentially receive other additional development and sales-based milestones.

We have not generated any revenues from the commercial sale of products.

We have not generated any

revenues from the commercial sale of products.

We will not be able to generate any product revenues until, and only if, we receive approval to sell our drug candidates from the FDA or other regulatory authorities.

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We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available to us, that such additional financing will be sufficient to meet our needs.

Moreover, to the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional significant dilution, and debt financing, if available, may involve restrictive

To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or our product candidates, or grant licenses on terms that may not be favorable to us.

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We have a history of net losses, expect to continue to incur substantial net losses for the foreseeable future, and may never achieve or maintain profitability.

Our operations to date have been primarily limited to organizing and staffing our company, developing our technology, and undertaking preclinical studies and clinical trials of our product candidates.

Our operations to date have been primarily limited to organizing and staffing

our company, developing our technology, and undertaking preclinical studies and clinical trials of our product candidates.

We have not yet obtained regulatory approval for any of our product candidates.

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Factors relating to our business that may contribute to these fluctuations include the following factors:

● our need for substantial additional capital to fund our trials and development programs;

● our need for additional capital to fund our trials and development programs;

● delays in the commencement, enrollment, and timing of clinical testing;

● the viability of Deramiocel as a potential product candidate and its development through all stages of clinical development;

● the viability of our exosome technologies as potential product candidates and the advancement of our exosome technologies through all stages of its preclinical and clinical development;

● the viability of our exosome technologies as potential product candidates and the advancement of our exosome technologies through all stages of their preclinical and clinical development;

● any delays in regulatory review and approval of our product candidates in clinical development;

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The Company’s failure to establish efficacy of Deramiocel would have a material adverse effect on the Company.

We cannot predict with any certainty the results of such clinical testing, including the results of our ongoing Phase 3 trial of our deramiocel product candidate for DMD.

Additionally, we cannot predict with any certainty if, or when, we might commence any clinical trials of our exosome product candidates, whether we will be able to secure additional strategic partners, or whether our current trials will yield sufficient data to permit us to proceed with additional clinical development and ultimately submit an application for regulatory approval of our exosome product candidates in the United States or abroad, or whether such applications will be accepted by the appropriate regulatory agencies.

Additionally, we cannot predict with any certainty if, or when, we might commence any additional clinical trials of our exosome product candidates, whether we will be able to secure additional strategic partners, or whether our current trials will yield sufficient data to permit us to proceed with additional clinical development and ultimately submit an application for regulatory approval of our exosome product candidates in the United States or abroad, or whether such applications will be accepted by the appropriate regulatory agencies.

Our business depends entirely on the successful development and commercialization of our product candidates.

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● our ability to develop, validate and maintain a commercially viable manufacturing process that is compliant with cGMP at a scale sufficient to meet anticipated demand;

● establishment of arrangements with potential manufacturers who are able to develop, validate and maintain a commercially viable manufacturing process that is compliant with cGMP at a scale sufficient to meet anticipated demand and over time enable us to reduce our cost of manufacturing, if necessary;

● successful launch of commercial sales following marketing approval;

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Business disruptions such as natural disasters, widespread infectious diseases, or pandemics or geopolitical conflicts could seriously harm our future revenues and financial condition and increase our costs and expenses.

Our corporate headquarters and our manufacturing and research facilities are located in San Diego and in the greater Los Angeles, California area, a region known for seismic activity, as well as being susceptible to drought and fires.

A significant natural disaster, such as an earthquake, flood or fire, occurring at our headquarters or manufacturing facilities, or at the facilities of any third-party manufacturer or vendor, could have a material adverse effect on our business, financial condition and results of operations.

the Middle East, could cause damage or disruption to us, our employees, facilities, contractors and collaborators, which could have a material adverse effect on our business, financial condition and results of operations.

Our corporate headquarters and our manufacturing and research facilities are located in San Diego and in the Los Angeles, California area, a region known for seismic activity, as well as being susceptible to drought and fires.

A significant natural disaster, such as an earthquake, flood or fire, occurring at our headquarters or manufacturing facilities,

or at the facilities of any third-party manufacturer or vendor, could have a material adverse effect on our business, financial condition and results of operations.

In addition, outbreaks of viruses, infectious diseases or pandemics (including, for example, the outbreak of the novel coronavirus (COVID-19)), terrorist acts or acts of war targeted at the United States, and specifically in the California region, or geopolitical conflicts, such as the Russia-Ukraine conflict, Venezuela, and the conflicts in Gaza, Iran, and across the Middle East, could cause damage or disruption to us, our employees, facilities, contractors and collaborators, which could have a material adverse effect on our business, financial condition and results of operations.

Tariffs imposed by foreign governments in retaliation for U.S.

trade measures could adversely affect our international sales, results of operations, and financial condition.

In response to tariffs and other trade measures imposed by the United States, certain foreign governments have implemented, and may in the future implement, retaliatory tariffs or other trade restrictions on products imported from the United States.

To the extent such measures apply to our products, they may increase the cost of our products to customers in affected markets, reduce demand for our products, and make our products less competitive relative to locally sourced or other non-U.S.

Retaliatory tariffs and related trade actions could also disrupt our supply chains, require us to modify pricing, sourcing, or distribution strategies, or result in the loss of customers or market share in impacted jurisdictions.

In addition, uncertainty regarding the scope, duration, and potential escalation of trade disputes may negatively affect customer purchasing decisions and our ability to forecast demand.

Any of these factors could adversely affect our revenues, margins, cash flows, and overall financial condition.

The ultimate impact of retaliatory tariffs and related trade measures will depend on various factors, including the magnitude and duration of the tariffs on our products, and broader macroeconomic conditions.

A breakdown, corruption or breach of our information technology systems or computer systems, or those used or hosted by our CROs, contractors, consultants or third-party vendors could subject us to liability or interrupt the operation of our business.

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While we have not experienced any such material system failure or security breach to date, if such an event were to occur and cause interruptions in our operations, it could result in a material disruption of our development programs and our business operations.

For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and significantly increase our costs to recover or reproduce the data.

For example, the loss of clinical trial data from completed or future clinical trials could result in delays in our regulatory approval efforts and

significantly increase our costs to recover or reproduce the data.

To the extent that any disruption or security breach were to result in a loss of, or damage to, our data or applications, or inappropriate disclosure of confidential or proprietary information, we could incur liability and the further development and commercialization of our product candidates could be significantly delayed.

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Should we achieve our near-term product development milestones, of which no assurance can be given, our long-term viability will depend upon the expansion of our operations and the effective management of our growth, which will place a significant strain on our management and on our administrative, operational and financial resources, especially if we expand our business and operations internationally.

To manage this growth, we may need to expand our facilities, augment our operational, financial and management systems and hire and train additional qualified personnel.

To manage this growth, we will need to expand our facilities, augment our operational, financial and management systems and hire and train additional qualified personnel, including people and companies with expertise in commercialization activities, some of whom may be outside consultants who are not our full-time employees.

If we are unable to manage our growth effectively, our business would be harmed.

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We will need FDA approval to market and sell any of our product candidates in the United States and approvals from FDA-equivalent regulatory authorities in foreign jurisdictions to commercialize our product candidates in those jurisdictions.

In order to obtain FDA approval of any of our product candidates, we submitted to the FDA a BLA for potential approval of deramiocel, which BLA has been accepted by the FDA for review.

In order to obtain FDA approval of Deramiocel for the treatment of DMD, we submitted to the FDA a BLA for potential approval of Deramiocel, which currently is under review.

This application requires significant research and animal testing, which are referred to as preclinical studies, as well as human testing, which are referred to as clinical trials.

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The FDA and other foreign regulatory agencies have substantial discretion in the approval process and may require us to conduct additional preclinical and clinical testing or to perform post-marketing studies.

In addition, for biologic and cell therapy products, regulatory review may include scrutiny of our CMC package, manufacturing controls and facility readiness, and may require process changes, comparability data, or other remediation that could delay approval or limit the scope of an approved indication.

The approval process may also be delayed by changes in government regulation, future legislation, administrative action or changes in FDA policy that occur prior to or during our regulatory review.

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Our failure or the failure of our collaborators to conduct clinical trials successfully or our failure to capitalize on the results of clinical trials for our product candidates would have a material adverse effect on the Company.

If our clinical trials of our product candidates or future product candidates do not sufficiently enroll or produce results necessary to support regulatory approval in the United States or elsewhere, or if they show undesirable side effects, we will be unable to commercialize these product candidates.

If our clinical trials of our product candidates or future product candidates do not

sufficiently enroll or produce results necessary to support regulatory approval in the United States or elsewhere, or if they show undesirable side effects, we will be unable to commercialize these product candidates.

To receive regulatory approval for the commercial sale of our product candidates, we must conduct adequate and well-controlled clinical trials to demonstrate efficacy and safety in humans.

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It is therefore difficult to accurately predict the developmental challenges we may face for our exosome technologies as they proceed through preclinical studies and clinical trials.

In addition, because we have only conducted preclinical studies with our exosome technologies, we have not yet been able to assess their safety in humans, and there may be short-term or long-term effects from treatment with our exosomes that we cannot predict at this time.

In addition, because we have only conducted preclinical studies and, in collaboration with NIAID, recently initiated a Phase 1 clinical study, with our exosome technologies, we have not yet been able to assess their safety in humans, and there may be short-term or long-term effects from treatment with our exosomes that we cannot predict at this time.

Also, animal models for the indications we may explore may not exist or may be difficult to obtain for our preclinical studies.

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There can be no assurance that any development problems we experience in the future related to our exosomes or any of our research programs will not cause significant delays or unanticipated costs, or that such development problems can be solved.

We may also decide to discontinue exosome development programs if we believe that there is excessive competition in a disease target.

We may also decide to discontinue exosome development programs if we

believe that there is excessive competition in a disease target.

Any of these factors may prevent us from completing our preclinical studies or any clinical trials that we may initiate or commercializing any product candidates we may develop on a timely or profitable basis, if at all.

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Exosome-based therapeutics and vaccines are novel and unproven therapies which may not gain the acceptance of the public, patients or the medical community.

To date, efforts by others to leverage natural exosomes have generally

demonstrated an inability to generate exosomes with predictable biologically active properties or to manufacture exosomes at suitable scale to treat more than a small number of patients.

To date, efforts by others to leverage natural exosomes have generally demonstrated an inability to generate exosomes with predictable biologically active properties or to manufacture exosomes at suitable scale to treat more than a small number of patients.

Our success will depend on our ability to demonstrate that our exosome technologies can overcome these challenges.

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We may not be able to file INDs to commence additional clinical trials on the timelines we expect, and even if we are able to do so, the FDA may not permit us to proceed.

We hope to file additional INDs over the next several years, including with respect to our exosome technologies in one or more indications.

We hope to file additional INDs over the next several years, including with respect to our exosome technologies in one or more indications as well as potentially in BMD.

However, the timing of our filing of these INDs is primarily dependent on receiving further data from our preclinical studies, having sufficient processes in place in connection with the manufacturing of the exosomes and the availability of necessary funding for any potential clinical trial.

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Any IND we submit could be denied by the FDA or the FDA could place any future investigation of ours on clinical hold until we provide additional information, either before or after clinical trials are initiated.

Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trial set forth in an IND or clinical trial application, we cannot guarantee that such regulatory authorities will not change their requirements in the future.

Additionally, even if such regulatory authorities agree with the design and implementation of the clinical trial set forth in an IND or clinical trial application, we cannot

guarantee that such regulatory authorities will not change their requirements in the future.

The FDA may also impose clinical holds at any time before or during clinical trials due to unacceptable and significant risks to clinical trial subjects or non-compliance with FDA requirements.

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karyotypic abnormalities in our cell product;

or contamination in our manufacturing facilities, all of which events would necessitate disposal of all cells made from that source;

or contamination in our manufacturing facilities, as well as equipment failures, operator error, variability in yields or cell viability,

or other deviations that may result in lot failures or product loss, all of which events would necessitate disposal of all cells made from that source;

● availability of materials provided by third parties necessary to manufacture our product candidates;

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On June 28, 2024, the U.S.

Supreme Court issued an opinion holding that courts reviewing agency action pursuant to the Administrative Procedure Act (APA) “must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The decision will have a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by U.S.

Supreme Court issued an opinion holding that courts reviewing agency action pursuant to the Administrative Procedure Act (APA) “must exercise their independent judgment” and “may not defer to an agency interpretation of the law simply because a statute is ambiguous.” The decision may have a significant impact on how lower courts evaluate challenges to agency interpretations of law, including those by the U.S.

Department of Health and Human Services, CMS, FDA and other agencies with significant oversight of the biopharmaceutical industry.

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As a result, significant regulatory policies may be subject to increased litigation and judicial scrutiny.

In addition, federal agency priorities, leadership, policies, rulemaking, communications, spending, and staffing may be significantly impacted by election cycles.

For example, the current presidential administration’s commitment to significantly reduce government spending through cuts to federal healthcare programs and reductions in the workforces of key government agencies, such as the U.S.

In addition, federal agency activities, priorities, leadership, policies, rulemaking, communications, spending, and staffing may be significantly impacted by election cycles and legislative developments.

For example, the current presidential administration has signaled its continued commitment to significantly reduce government spending through cuts to federal healthcare programs and reductions in the workforces of key government agencies, such as the U.S.

Department of Health and Human Services, CMS and FDA.

Efforts by the current administration to limit federal agency budgets or personnel may result in reductions to agency budgets, employees, and operations, which may lead to slower response times and longer review periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates.

Efforts by the current administration to further limit federal agency budgets or personnel may result in reductions to agency budgets, employees, and operations.

The administration and agencies have also made abrupt announcements about new or changed regulatory policies, such as policies related to use of AI to review product applications.

And, federal government shutdowns may prevent the FDA or other regulatory authorities from conducting their regular inspections, reviews or other regulatory activities, and may significantly impact the ability of the FDA to timely review and process our regulatory submissions.

These developments may lead to slower response times and longer review

periods, potentially affecting our ability to progress development of our product candidates or obtain regulatory approval for our product candidates.

Any resulting changes in regulation may result in unexpected delays, increased costs, or other negative impacts on our business that are difficult to predict.

In addition, changes in the administration’s policies and personnel could result in decisions that differ from, or supersede, those made by government personnel under prior administrations.

There are also a number of healthcare-related legislative and regulatory initiatives and reforms in the United States that significantly affect the biopharmaceutical industry.

For example, there has been heightened governmental scrutiny in the U.S.

of pharmaceutical pricing practices in light of the rising cost of prescription drugs and biologics.

Such scrutiny has resulted in several congressional inquiries and proposed and enacted federal and state legislation designed to, among other things, bring more transparency to product pricing, review the relationship between pricing and manufacturer patient programs, and reform government program reimbursement methodologies for products.

Any resulting changes in regulation may result in unexpected delays, increased costs, or other negative impacts on our business that are difficult to predict.

Also, changes in the administration’s policies and personnel may result in decisions contrary to or overriding decisions previously made by government personnel under prior administrations.

The outcome of preclinical testing and early clinical trials may not be predictive of the success of later clinical trials, interim results of a clinical trial do not necessarily predict final results, and the results of our clinical trials may not satisfy the requirements of the FDA or comparable foreign regulatory authorities.

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In addition, the design of a clinical trial can determine whether its results will support approval of a drug and flaws in the design of a clinical trial may not become apparent until the clinical trial is well advanced.

We have limited

experience in designing late-stage clinical trials and may be unable to design and conduct a clinical trial to support marketing approval.

We have limited experience in designing late-stage clinical trials and may be unable to design and conduct a clinical trial to support marketing approval.

Further, if our product candidates are found to be unsafe or lack efficacy, we will not be able to obtain marketing approval for them and our business would be harmed.

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In the event that an adverse safety issue, clinical hold or other adverse finding occurs in one or more of our clinical trials, once initiated, or in a clinical trial conducted by a third-party sponsor or investigator using the same product candidate, such event could adversely affect our other clinical trials and ability to obtain marketing approval.

Moreover, there is a relatively limited safety data set for product candidates using an exosome platform.

there is a relatively limited safety data set for product candidates using an exosome platform.

An adverse safety issue or other adverse finding in a clinical trial conducted by a third-party with a product candidate similar to ours could adversely affect our clinical trials.

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● the product’s convenience and ease of administration for patients and healthcare practitioners compared to alternative treatments;

● site-of-care requirements, infusion logistics, and the ability of treatment centers and payors to support administration and access on a timely basis;

● the willingness of the target patient population to try, and of physicians to prescribe, the product;

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These competitors also compete with us in recruiting and retaining qualified scientific and management personnel and establishing clinical trial sites and patient registration for clinical trials, as well as in acquiring technologies complementary to, or that may be necessary for, our programs.

There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies and research organizations that compete with us in developing various approaches to the treatment of DMD which includes competitors both in the United States and internationally.

With deramiocel, we expect to face competition from existing products and products in development.

At this time, there are four FDA conditionally approved exon skipping drugs:

EXONDYS 51 (eteplirsen), AMONDYS 45 (casimersen) and VYONDYS 53 (golodirsen), which are PMOs approved for the treatment of DMD patients amenable to Exon 51, Exon 45 and Exon 53 skipping, respectively, and are marketed by Sarepta Therapeutics, Inc., and VILTEPSO (vitolarsen), a PMO approved for the treatment of DMD patients amenable to Exon 53 skipping, which is marketed by Nippon Shinyaku through its U.S.

There are numerous pharmaceutical and biotechnology companies, academic institutions, government agencies and research organizations developing therapies for Duchenne muscular dystrophy (“DMD”) in the United States and internationally.

If approved, Deramiocel will compete with both currently approved therapies and product candidates in development.

Several exon-skipping therapies have received accelerated approval from the FDA for genetically defined subsets of DMD patients, including EXONDYS 51® (eteplirsen), AMONDYS 45® (casimersen), and VYONDYS 53® (golodirsen), which are phosphorodiamidate morpholino oligomers (“PMOs”) marketed by Sarepta Therapeutics, as well as VILTEPSO® (viltolarsen), a PMO marketed by Nippon Shinyaku through its U.S.

subsidiary, NS Pharma, Inc.

Currently, Sarepta’s microdystrophin gene therapy, Elevidys (delandistrogene moxeparvovec) is approved for the treatment of ambulant individuals with Duchenne who are at least 4 years of age and conditionally approved for non-ambulant individuals with Duchenne.

There are multiple other companies focused on developing genetic based therapies that target dystrophin mechanisms and non-dystrophin mechanisms for the treatment of DMD.

In addition, gene therapy approaches are being developed to deliver functional microdystrophin to muscle cells, including ELEVIDYS® (delandistrogene moxeparvovec), also developed by Sarepta Therapeutics, which is approved in the United States for certain individuals with DMD aged four years and older.

Numerous other companies are developing genetic and non-genetic therapies designed to target dystrophin expression or other mechanisms associated with disease progression in DMD.

Our commercial opportunity could be reduced or eliminated if our competitors develop and commercialize drugs that are safer, more effective, have fewer or less severe side effects, are more convenient or are less expensive than any drugs that we may develop.

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If a biological product that has orphan drug designation subsequently receives the first FDA approval for the disease for which it has such designation, the product is entitled to orphan product exclusivity, which means that the FDA may not approve any other applications, including a full BLA, to market the same biologic for the same indication for seven years, except in limited circumstances, such as a showing of clinical superiority to the product with orphan drug exclusivity.

We have received orphan drug status for deramiocel for the treatment of DMD.

Even though we have received orphan drug designation (“ODD”) as described above, we may not be the first to obtain marketing approval for the orphan-designated indication due to the uncertainties associated with developing pharmaceutical products.

We have received orphan drug status for Deramiocel for the treatment of DMD from the U.S.

Even though we have received orphan drug designation (“ODD”) as described above, we may not be the first to obtain marketing

approval for the orphan-designated indication due to the uncertainties associated with developing pharmaceutical products.

For any product candidate for which we have been or will be granted ODD in a particular indication, it is possible that another company also holding ODD for the same product candidate will receive marketing approval for the same indication before we do.

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primarily under the age of 18 years old.

Under the FDA's Rare Pediatric Disease Priority Review Voucher program, upon the approval of a BLA or NDA for the treatment of a rare pediatric disease, the sponsor of such application would be eligible for a Rare Pediatric Disease Priority Review Voucher that can be used to obtain priority review for a

subsequent BLA or NDA.

The Priority Review Voucher may be sold or transferred an unlimited number of times, as long as the sponsor making the transfer has not yet submitted the application.

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within one year following the date of approval.

Congress has only authorized the rare pediatric disease priority review voucher program until September 30, 2024.

However, if a drug candidate receives Rare Pediatric Disease designation before September 30, 2024, it is eligible to receive a voucher if it is approved before September 30, 2026.

This program has been subject to criticism, including by the FDA, and it is possible that even if we obtain approval for deramiocel and qualify for such a Priority Review Voucher, the program may no longer be in effect at the time of approval.

Congress had only authorized the rare pediatric disease priority review voucher program until September 30, 2024.

However, the program was reauthorized by the Consolidated Appropriations Act, 2026, extending the FDA’s authority to award rare pediatric disease priority review vouchers until September 30, 2029.

Accordingly, the prior sunset deadlines tied to designations and approvals have been superseded, and voucher eligibility will depend on satisfaction of applicable statutory requirements at the time of approval.

Providing product for use in third-party trials or for compassionate use poses risks to our product candidates.

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Department of Health and Human Services to advance a pipeline of new, innovative vaccines for COVID-19.

As part of Project NextGen, the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, will conduct a Phase 1 clinical study with our StealthX™ vaccine, subject to regulatory approval.

NIAID's Division of Microbiology and Infectious Diseases (“DMID”) would oversee the study.

As part of Project NextGen, the National Institute of Allergy and Infectious Diseases, part of the National Institutes of Health, is conducting a Phase 1 clinical study with our StealthX™ vaccine.

NIAID's Division of Microbiology and Infectious Diseases (“DMID”) is overseeing the study.

Providing product for clinical trials sponsored by third parties poses significant risks for the Company as we will not have control over the conduct of the trial even though we have used our commercially reasonable efforts to ensure that the investigative sites are contractually bound to follow the protocol and other procedures established by Capricor.

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Our business faces significant government regulation, and there is no guarantee that our product candidates will receive regulatory approval.

Our research and development activities, preclinical studies, clinical trials, and manufacturing and marketing of our potential products are subject to extensive regulation by the FDA and other regulatory authorities in the United States,

as well as by regulatory authorities in other countries.

In the United States, our product candidates are subject to regulation as biological products or as combination biological products/medical devices under the Federal Food, Drug and Cosmetic Act, the Public Health Service Act and other statutes, and as further provided in the Code of Federal Regulations.

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The FDA may determine that we will need to undertake clinical trials beyond those currently planned.

Furthermore, the FDA may determine that results of clinical trials do not support approval for the product.

Furthermore, the FDA may determine that results of clinical trials do not support approval for the product or they may determine that our trials were not well-controlled or were deficient in some other way.

Similar determinations may be encountered in foreign countries including determinations that our manufacturing processes being utilized in the United States are not compliant with the regulations adopted in those foreign countries.

The FDA will continue to monitor products in the market after approval, if any, and may determine to withdraw its approval or otherwise seriously affect the marketing efforts for any such product.

The same possibilities exist for trials to be conducted outside of the United States that are subject to regulations established by local authorities and local law.

The same possibilities exist for trials to be conducted outside of the United States that are

subject to regulations established by local authorities and local law.

Any such determinations would delay or deny the introduction of our product candidates to the market and have a material adverse effect on our business, financial condition, and results of operations.

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There are additional risks involved in conducting clinical trials internationally.

Regulatory authorities in the United States and other jurisdictions may not accept clinical data generated outside their jurisdiction, and obtaining foreign approvals may require additional studies or clinical trials.

If we decide to expand or conduct one or more of our clinical trials to investigative sites in Europe, Japan, or other countries outside of the United States, we will have additional regulatory requirements that we will have to meet in connection with our manufacturing, distribution, use of data and other matters.

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The GDPR enhances data protection obligations for processors and controllers of personal data, including, for example, expanded disclosures about how personal information is to be used, limitations on retention of information, mandatory data breach notification requirements and onerous new obligations on services providers.

Non-compliance with the GDPR may result in monetary penalties of up to €20 million or 4% of worldwide

revenue, whichever is higher.

Non-compliance with the GDPR may result in monetary penalties of up to €20 million or 4% of worldwide revenue, whichever is higher.

The GDPR and other changes in laws or regulations associated with the enhanced protection of certain types of personal data, such as healthcare data or other sensitive information, could greatly increase our cost of providing our products and services or even prevent us from offering certain services in jurisdictions in which we operate.

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The scope of the FCPA includes interactions with certain healthcare professionals in many countries.

Other countries have enacted similar anti-corruption laws and/or regulations.

Other countries have enacted similar anti-

corruption laws and/or regulations.

As we expand our business outside of the United States, ensuring compliance with the FCPA and the laws of other countries will involve additional monetary and time commitments on behalf of the Company.

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Approval procedures vary among countries and can involve additional product testing and additional administrative review periods.

The time required to obtain approval in other countries might differ from that required to obtain FDA approval.

The time required to obtain approval in other countries might differ from that required to

obtain FDA approval.

The regulatory approval process in other countries may include all of the risks detailed above regarding FDA approval in the United States as well as other risks.

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If we or current or future collaborators, manufacturers, or service providers fail to comply with healthcare laws and regulations, we or they could be subject to enforcement actions and substantial penalties, which could affect our ability to develop , market, and sell our products and may harm our reputation.

Although we do not currently have any products on the market, if our therapeutic candidates or clinical trials become covered by federal health care programs, we will be subject to additional healthcare statutory and regulatory requirements and enforcement by the federal, state and foreign governments of the jurisdictions in which we conduct our business.

Although we do not currently have any products on the market, if our therapeutic candidates or clinical trials become covered by federal healthcare programs, we will be subject to additional healthcare statutory and regulatory requirements and enforcement by the federal, state and foreign governments of the jurisdictions in which we conduct our business.

Healthcare providers, physicians and third-party payors play a primary role in the recommendation and prescription of any therapeutic candidates for which we obtain marketing approval.

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Some of our pre-commercial activities also may be subject to some of these laws.

For more information on potentially applicable healthcare laws and regulations, See Part I, Item 1 – Other Healthcare Fraud and Abuse Laws.

For more information on potentially applicable healthcare laws and regulations, See Part I, Item 1 – Other U.S.

Healthcare Laws and Compliance Requirements.

The scope and enforcement of each of these laws is uncertain and subject to rapid change in the current environment of healthcare reform.

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In many countries, the pricing review period begins after marketing or product licensing approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval is granted.

In some foreign markets, prescription pharmaceutical pricing remains subject to continuing governmental control even after initial approval

As a result, we might obtain regulatory approval for a product in a particular country but then be subject to price regulations that delay our commercial launch of the product and negatively impact the revenues we are able to generate from the sale of the product in that country.

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Self-administered outpatient drugs are typically reimbursed under Medicare Part D, and drugs that are administered in an inpatient hospital setting are typically reimbursed under Medicare Part A under a bundled payment.

It is difficult for us to predict how Medicare coverage and reimbursement policies will be applied to our products in the future and coverage and reimbursement under different

federal healthcare programs are not always consistent.

It is difficult for us to predict how Medicare coverage and reimbursement policies will be applied to our products in the future and coverage and reimbursement under different federal healthcare programs are not always consistent.

Medicare reimbursement rates may also reflect budgetary constraints placed on the Medicare program.

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These coverage policies and limitations may rely, in part, on compendia listings for approved therapeutics.

Our inability to promptly obtain relevant compendia listings, coverage, and adequate reimbursement from both government-funded and private payors for new drugs that we develop and for which we obtain regulatory approval could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our financial condition.

There have been, and continue to be, several legislative and regulatory changes and proposed changes regarding the healthcare system that could prevent or delay marketing approval of product candidates, restrict or regulate post approval activities and affect our ability to profitably sell any product candidates for which we obtain marketing approval.

Among policy makers and payors in the United States there is significant interest in promoting changes in healthcare systems with the stated goals of containing healthcare costs, improving quality of care and/or expanding access to care and the pharmaceutical industry has been a particular focus of these efforts and has been significantly affected by major legislative initiatives.

We expect that these and other healthcare reform measures that may be adopted in the future, may result in more rigorous coverage criteria and lower reimbursement, and in additional downward pressure on the price that we receive for any approved product.

Any reduction in reimbursement from Medicare or other government-funded programs may result in a similar reduction in payments from private payors.

The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue, attain profitability or commercialize our drugs, once marketing approval is obtained.

See Part I, Item 1 – Healthcare Reform for additional detail on recent legislative and regulatory changes that could affect our operations.

could have a material adverse effect on our operating results, our ability to raise capital needed to commercialize products and our financial condition.

See Part I, Item 1 – Healthcare Reform for additional detail on legislative and regulatory changes that could affect our operations.

Our risk mitigation measures cannot guarantee that we effectively manage all operational risks and that we are in compliance with all potentially applicable U.S.

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federal government agencies currently face potentially significant spending reductions.

For example, as a result of the Budget Control Act of 2011, the Bipartisan Budget Act (“BBA”), and the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), an annual 2% reduction to Medicare payments took effect on April 1, 2013, and has been extended into through the first eight months of the fiscal year 2032 sequestration order.

federal budget remains in flux, which could, among other things, result in additional cuts to Medicare payments to providers and otherwise affect federal spending on clinical and preclinical research and development.

For example, through the process created by the Budget Control Act of 2011, there are automatic reductions of Medicare payments to providers up to 2% per fiscal year, which went into effect on April 1, 2013 and will remain in effect through the first eleven months of fiscal year 2032, unless additional Congressional action is taken (with the exception of a temporary suspension, and subsequent reduction, due to the COVID-19 pandemic).

In January 2013, the American Taxpayer Relief Act of 2012 was signed into law, which, among other things, further reduced Medicare payments to several types of providers, including hospitals, imaging centers, and cancer treatment centers, and increased the statute of limitations period for the government to recover overpayments to providers from three to five years.

federal budget remains subject to uncertainty and change, which could, among other things, result in additional reductions in Medicare payments to providers and otherwise affect federal spending on clinical and preclinical research and development.

The Medicare program is frequently mentioned as a target for spending cuts.

The full impact on our business of any future cuts in Medicare or other programs is uncertain.

In addition, we cannot predict any impact which the actions of the current Trump administration and the U.S.

In addition, we cannot predict the impact that the actions of the current Trump administration and the U.S.

Congress may have on the federal budget.

If federal spending is reduced, and staffing reductions are put into effect, these actions will also impact the ability of relevant agencies, such as the FDA, CMS, HHS, or the National Institutes of Health, to continue to function at current levels.

If federal spending is reduced, and staffing reductions are put into effect, these actions will also impact the ability of relevant agencies, such as the FDA, CMS, the Department of Health and Human Services, or the National Institutes of Health, to continue to function at current levels.

Amounts allocated to federal grants and contracts may be reduced or eliminated.

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election and resulting changes in the Department of Health and Human Services may impact funding for vaccine research and development, reimbursement for vaccines and their administration, vaccine mandates and recommendations and public perception of vaccine importance.

Federal legislative and regulatory efforts to implement reference pricing or most-favored-nation pricing models could impact our future product revenues and materially harm our business.

On May 12, 2025, President Trump issued an executive order calling on pharmaceutical manufacturers to voluntarily reduce the prices of medicines in the U.S.

and directing the Secretary of Health and Human Services (HHS) to communicate most-favored-nation (MFN) price targets to pharmaceutical manufacturers to align prices with those in comparably developed nations and, in the event significant progress towards MFN pricing is not delivered, to propose rulemaking to impose MFN pricing.

Since the May 12, 2025 order, the Trump administration has continued to exert pressure on drug manufacturers to implement MFN pricing, including by suggesting that the administration may impose significant tariffs on pharmaceuticals if such manufacturers do not reach agreements to implement MFN pricing.

Further, in November 2025, the Centers for Medicare & Medicaid Services (CMS) introduced the GENEROUS (GENErating cost Reductions fOr U.S.

Medicaid) Model, a voluntary Medicaid payment initiative under which participating drug manufacturers may voluntarily offer supplemental rebates to participating state Medicaid programs that are intended to provide such Medicaid programs with an MFN price for the manufacturers’ products.

Additionally, in December 2025, CMS announced proposals for new mandatory demonstration payment models through two proposed rules under its Center for Medicare and Medicaid Innovation (“CMMI”) authority, the Global Benchmark for Efficient Drug Pricing (GLOBE) for Medicare Part B and Guarding U.S.

Medicare Against Rising Drug Costs (GUARD) for Medicare Part D.

If finalized, these models would impose additional mandatory rebates on manufacturers of certain Medicare Part B and Medicare Part D drugs, for select Medicare populations intended to represent 25% of Medicare patients, if the Medicare prices for such products exceed those paid in economically comparable countries.

Both the GLOBE and GUARD models have proposed seven-year testing periods, with the GLOBE model proposed to begin on October 1, 2026 and the GUARD model proposed to begin on January 1, 2027.

If the GLOBE and GUARD models are finalized as proposed under CMMI authority, we could be required to pay additional rebates on our product candidates, if approved, that are reimbursed by Medicare for the covered populations during the applicable model periods.

In addition, if MFN pricing or similar reference pricing policies are enacted or implemented in the U.S.

outside of the CMMI framework and applied more broadly, we could be required to pay rebates on our product candidates, if approved, based on utilization by a broader portion of U.S.

patients to align with prices in certain reference countries.

We expect to derive a substantial portion of our revenue from U.S.

sales, and any requirement to pay additional rebates in the U.S.

to match international reference prices would impact our future overall net revenue.

MFN pricing models in the U.S.

could also affect our international commercial strategy, directly and/or through our commercial partners, and future decisions on reimbursement and commercialization in certain jurisdictions.

These reforms remain subject to change, potential legal challenges, or expansion through additional rulemaking or sub regulatory guidance, creating uncertainty for our overall commercial strategy.

It remains to be seen whether and how these drug pricing initiatives will apply to our product candidates, if approved, how they will affect the broader pharmaceutical industry, and whether similar reform measures may be adopted in the future.

Risks Related to the Manufacturing of our Product Candidates

We have limited manufacturing capability and may not be able to maintain our manufacturing licenses.

In 2022, we completed construction of our new primary manufacturing facility located within our Research and Development Facility in San Diego, California as we prepare for potential commercial launch.

This facility is designed to produce GMP deramiocel product for clinical and potential commercial use, subject to FDA approval.

It is to be determined whether the FDA will ultimately approve commercial manufacturing at this facility.

We are using product manufactured from our San Diego facility to support Cohort B of the ongoing HOPE-3 trial and supporting our OLE trials.

We recently entered into an amendment to our lease adding an additional approximate 22,000 square feet of space for continued

manufacturing expansion.

We plan to build additional cleanrooms in this expanded space suitable for commercial manufacturing, subject to FDA approval.

Additionally, we also maintain a portion of our laboratories, research and manufacturing facilities in leased premises at CSMC in Los Angeles, California.

In that portion of the leased premises where we manufacture deramiocel, we believe that we follow current good manufacturing practices to the extent that they are applicable to the stage of our clinical programs, although our facility at CSMC is not current Good Manufacturing Practices (“cGMP”) qualified for commercial manufacturing.

Capricor has been manufacturing deramiocel in this facility for our current and previous studies including Cohort A of the HOPE-3 trial.

Our plans to use the CSMC facility for future trials could change if we fail to meet the specifications necessary to produce our product in a qualified manner.

Currently, our CSMC Facilities Lease is scheduled to expire on July 31, 2026.

We have been given no assurances that the CSMC Facilities Lease for the manufacturing space will be continued beyond July 31, 2026.

In addition, the FDA may consider the data we provide as part of our BLA is insufficient to prove that the drug used in our San Diego facility is comparable to the drug produced in our Los Angeles facility and used in our prior clinical studies.

This could result in us being required to conduct further testing and may result in us being required to conduct additional clinical and/or nonclinical studies prior to BLA approval.

Even if we do complete the clinical trial, the study may not meet its prespecified endpoints, and even if it does, the FDA may still disagree with our determination that the trial is sufficient to support the approval of our BLA application.

We have limited commercial manufacturing experience and our manufacturing facilities may not receive or maintain the regulatory approvals required to support commercialization.

In 2022, we completed construction of our primary manufacturing facility within our research and development facility in San Diego, California as we prepare for a potential commercial launch.

This facility is designed to produce GMP Deramiocel for clinical and potential commercial use, subject to FDA approval.

The FDA conducted a pre-license inspection (“PLI”) of our San Diego manufacturing facility as part of the BLA review process.

The inspection concluded with a Form 483 containing several observations, to which the Company provided written responses.

The FDA subsequently confirmed that all responses to the Form 483 observations were found acceptable.

While this inspection represents an important step in the regulatory review process, there can be no assurance that the FDA will ultimately determine that our facility, manufacturing processes and controls are acceptable for commercial manufacturing, or that additional information, remediation or follow-up inspections will not be required prior to approval.

Product manufactured from our San Diego facility was used to support Cohort B of the HOPE-3 trial and our open-label extension (“OLE”) trials.

We recently entered into an amendment to our lease adding approximately 22,000 square feet of space to support additional manufacturing expansion, including the potential construction of additional cleanrooms for commercial manufacturing, subject to FDA approval.

We also maintain laboratory, research and manufacturing facilities in leased premises at Cedars-Sinai Medical Center (“CSMC”) in Los Angeles, California.

Deramiocel manufactured at this facility has been used to support our current and prior clinical studies, including Cohort A of the HOPE-3 trial.

Although we believe that we follow current good manufacturing practices applicable to the stage of our clinical programs at the CSMC facility, the facility is not qualified for commercial cGMP manufacturing.

Our lease at the CSMC facility is scheduled to expire on July 31, 2026, and we currently plan to vacate the premises and cease manufacturing operations at that location at that time.

The FDA may determine that the manufacturing process used at our San Diego facility is not sufficiently comparable to the process used to manufacture product at our Los Angeles facility that supplied earlier clinical trials.

If the FDA does not agree that these processes are comparable, we may be required to conduct additional analytical testing, nonclinical studies or clinical trials prior to approval of our BLA.

Even if our clinical trials are completed and meet their prespecified endpoints, the FDA may disagree with our conclusions regarding the sufficiency of the data to support approval of our BLA.

We obtain the donor hearts from which our CDCs are manufactured from organ procurement organizations (“OPOs”).

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Additionally, OPOs are subject to regulations of various government agencies.

There is no guarantee that laws and regulations pursuant to which our OPOs provide donor hearts will not change, making it more difficult or even impossible for the OPOs to continue to supply us with the hearts we need to produce our product candidates.

There is no guarantee that laws and regulations pursuant to which our OPOs provide donor hearts will not change, making it more difficult or even

impossible for the OPOs to continue to supply us with the hearts we need to produce our product candidates.

There are also no guarantees that the OPOs which supply hearts have followed federal or state regulations addressing the donation of human organs and other regulatory matters.

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If we were denied any required license or if any of our licenses were to be revoked or forfeited, we would suffer significant harm.

Additionally, if a serious adverse event in any of our clinical trials were to occur during the period in which any required license was not in place, we could be exposed to additional liability if it were determined that the event was due to our fault and we had not secured the required license.

Other states may impose additional licensing requirements upon us which, until obtained, would limit our ability to conduct our trials in such states.

The process of manufacturing our products is complex and we may encounter difficulties in production, particularly with respect to process development or scaling-up of our manufacturing capabilities.

Additionally, if a serious adverse event in any of our clinical trials or during any time when our product is being commercially distributed were to occur during the period in which any required license was not in place, we could be exposed to additional liability if it were determined that the event was due to our fault and we had not secured the required license.

Other states may impose additional licensing requirements upon us which, until obtained, would limit our ability to conduct our trials or sell our product in such states.

The manufacture of cell-based therapies such as Deramiocel is complex, highly regulated and subject to multiple operational and technical risks.

We are currently producing doses of Deramiocel in order to conduct our ongoing clinical trials as well as prepare for potential commercial launch.

The process of manufacturing our products is complex, highly regulated and subject to multiple risks.

The complex processes associated with the manufacture of our product candidates expose us to various manufacturing challenges and risks, which may include delays in manufacturing adequate supply of our product candidates, limits on our ability to increase manufacturing capacity, and the potential for product failure and product variation that may interfere with preclinical and clinical trials, along with additional costs.

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For instance, changes in our process during the course of clinical development may require us to show the comparability of the product used in earlier clinical trials or at earlier portions of a trial to the product used in later clinical trials or later portions of the trial.

We may also make further changes to our manufacturing process before or after commercialization, and such changes may require us to show the comparability of the resulting product to the product

used in the clinical trials using earlier processes.

We may also make further changes to our manufacturing process before or after commercialization, and such changes may require us to show the comparability of the resulting product to the product used in the clinical trials using earlier processes.

We may be required to collect additional clinical data from any modified process prior to obtaining marketing approval for the product candidate produced with such modified process.

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We may never be successful in manufacturing product candidates in sufficient quantities or with sufficient quality for commercial use.

Our manufacturing capabilities could be affected by cost-overruns, unexpected delays, equipment failures, labor shortages, operator error, natural disasters, unavailability of qualified personnel, difficulties with logistics and shipping, problems regarding yields or stability of product, contamination or other quality control issues, power failures, and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business.

Our manufacturing capabilities could be affected by cost-overruns, unexpected delays, supply chain failures, equipment failures, labor shortages, operator error, natural disasters, unavailability of qualified personnel, difficulties with logistics and shipping, problems regarding yields or stability of product, contamination or other quality control issues, power failures, and numerous other factors that could prevent us from realizing the intended benefits of our manufacturing strategy and have a material adverse effect on our business.

Furthermore, compliance with cGMP requirements and other quality issues may arise during our internal efforts to scale-up manufacturing, and with our current suppliers, or any future CMOs.

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and other global markets, we will need to continue to increase our manufacturing capabilities.

Scaling manufacturing from clinical to commercial production may introduce additional process variability, equipment requirements, and regulatory scrutiny.

We may encounter technical challenges to increasing the scale at which we manufacture Deramiocel, including with respect to material procurement and quality control and assurance.

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In addition, regardless of the level of insurance coverage, damage to our facilities or any disruption that impedes our ability to manufacture Deramiocel in a timely manner could materially and adversely affect our business, financial condition, operating results, cash flows and prospects.

Additionally, we rely on third-party vendors for certain tests (sterility, etc.) required for product release.

If these vendors are unable to perform the services, whether due to capacity, availability of materials, regulatory or other constraints, including federal and state regulations, we will not be able to sell deramiocel until we can retain an alternative vendors to supply these services.

We may be unable to transition to alternative methods in a timely or cost-effective manner or at all, which could harm our business and results of operations.

We are subject to a number of manufacturing risks, any of which could substantially increase our costs and limit supply of our product candidates.

The process of manufacturing our product candidates is complex, highly regulated, and subject to several risks.

For example, the process of manufacturing our product candidates is extremely susceptible to product loss due to contamination, equipment failure or improper installation or operation of equipment, or vendor or operator error.

Even minor deviations from normal manufacturing processes for any of our product candidates could result in reduced production yields, product defects, and other supply disruptions.

If microbial, viral, or other contaminations are discovered in our product candidates or in the manufacturing facilities in which our product candidates are made, such manufacturing facilities may need to be closed for an extended period of time to investigate and remedy the contamination.

In addition, the manufacturing facilities in which our product candidates are made could be adversely affected by supply chain issues, equipment failures, labor shortages, natural disasters, power failures and numerous other factors.

Cell therapy medicines are novel and any product candidates we develop may be complex and difficult to manufacture.

Additionally, we rely on third-party vendors to perform certain tests (such as sterility testing) required for product release.

If these vendors are unable to perform the required services due to capacity limitations, availability of materials, regulatory constraints or other factors, we may be unable to release product for clinical or commercial use until alternative vendors are retained.

We may be unable to transition to alternative vendors in a timely or cost-effective manner, or at all, which could harm our business and results of operations.

Cell therapy medicines are complex biologic products that may be difficult to manufacture consistently.

We could experience delays in satisfying regulatory authorities or production problems that result in delays in our development or commercialization programs, limit the supply of our product candidates we may develop, or otherwise harm our business.

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Our current and anticipated future reliance on a limited number of third-party manufacturers exposes us to the following risks:

● We may be unable to identify manufacturers needed to manufacture our product candidates on acceptable terms or at all because the number of potential manufacturers is limited, and subsequent to approval of an BLA or NDA, the FDA must approve any replacement contractor.

● We may be unable to identify manufacturers needed to manufacture our product candidates on acceptable terms or at all because the number of potential manufacturers is limited, and subsequent to approval of a BLA or NDA, the FDA must approve any replacement contractor.

This approval would require new testing and compliance inspections.

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The loss of a material supplier could significantly disrupt our business.

Some specialized raw materials used in cell therapy manufacturing may be available only from one or a limited number of suppliers.

In some cases, we obtain components used in certain of our products from single sources.

If we experience difficulties acquiring sufficient quantities of required materials or products from our existing suppliers, or if our suppliers are found to be non-compliant with the FDA, EMA or other comparable applicable foreign bodies, then qualifying and obtaining the required regulatory approvals to use alternative suppliers may be a lengthy and uncertain process during which production could be delayed and we could lose sales.

If we experience difficulties acquiring sufficient quantities of required materials or products from our existing suppliers, if our suppliers stop manufacturing one or more of our raw materials, or if our suppliers are found to be non-compliant with the FDA, EMA or other comparable applicable foreign bodies, then qualifying and obtaining the required regulatory approvals to use alternative suppliers may be a lengthy and uncertain process during which production could be delayed and we could lose sales.

Our sources of supply for raw materials may be threatened by shortages and other market forces, tariffs and other trade barriers, by natural disasters, climate impacts, public health crises or other disruptive events, by the supplier’s failure to maintain adequate quality, or a recall initiated by the supplier.

Even when substitute suppliers are available, the need to verify the substitute supplier’s regulatory compliance and the quality standards of the replacement material could significantly delay production and materially reduce our sales.

Substitute suppliers may not be available and even if substitute suppliers are available, the need to verify the substitute supplier’s regulatory compliance and the quality standards of the replacement material could significantly delay production and materially reduce our sales.

Any failure by us to forecast demand for, or to maintain an adequate supply of, raw material and finished product could result in an interruption in the supply of certain products, which could impact potential sales of that product.

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If a regulatory agency discovers previously unknown problems with a product, such as adverse events of unanticipated severity or frequency or problems with the facility where the product is manufactured, a regulatory agency may impose restrictions on that product or us, including requiring withdrawal of the product from the market.

If our product candidates fail to comply with applicable regulatory requirements, such as cGMPs, a regulatory agency may:

If our product candidates or manufacturing operations fail to comply with applicable regulatory requirements, including cGMPs:

● issue warning letters or untitled letters;

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There can also be no assurance that our proposed technology will not infringe upon valid and enforceable patents or proprietary rights owned by others, with the result that others may bring infringement claims against us and require us to license such proprietary rights, which may not be available on commercially reasonable terms, if at all.

litigation, if instituted, could have a material adverse effect, potentially including monetary penalties, diversion of management resources, and injunction against continued manufacture, use, or sale of certain products or processes.

Any such litigation, if instituted, could have a material adverse effect, potentially including monetary penalties, diversion of management resources, and injunction against continued manufacture, use, or sale of certain products or processes.

Some of our technology has resulted and/or will result from research funded by agencies of the U.S.

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Our commercial viability will depend, in part, on obtaining and maintaining patent protection and trade secret protection of our product candidates, and the methods used to manufacture and utilize them, as well as successfully defending these patents against third-party challenges.

Our ability to stop third parties from making, using, selling, offering to sell, or importing our products is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these products and activities.

Our ability to stop third parties from making, using, selling, offering

to sell, or importing our products is dependent upon the extent to which we have rights under valid and enforceable patents or trade secrets that cover these products and activities.

We have licensed certain patent and other intellectual property rights that cover cardiospheres, and cardiosphere-derived cells, (including our Deramiocel product candidate) from the University of Rome, JHU, and CSMC.

We have also licensed certain patent and other intellectual property rights from CSMC that cover extracellular vesicles, such as exosomes and microvesicles.

We have also licensed certain patent and other intellectual property rights from CSMC that cover certain aspects of certain extracellular vesicles, such as exosomes and microvesicles.

Under the license agreements with the University of Rome and JHU, those institutions prosecute and maintain their patents and patent applications in collaboration with us.

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The patent positions of pharmaceutical and biopharmaceutical companies can be highly uncertain and involve complex legal and factual questions for which important legal principles remain uncertain and unclear.

No clear statutes or common law regarding the breadth of claims allowed in biopharmaceutical patents has clearly emerged to date in the

United States.

No clear statutes or common law regarding the breadth of claims allowed in biopharmaceutical patents has clearly emerged to date in the United States.

The biopharmaceutical patent situation outside the United States may be more uncertain.

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To help protect our proprietary know-how and our inventions for which patents may be unobtainable or difficult to obtain, we rely on trade secret protection and confidentiality agreements.

To this end, we require all of our employees, consultants, advisors and contractors to enter into agreements which prohibit unauthorized disclosure and use of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business.

To this end, we require all of our employees, consultants, advisors and contractors to enter into

agreements which prohibit unauthorized disclosure and use of confidential information and, where applicable, require disclosure and assignment to us of the ideas, developments, discoveries and inventions important to our business.

These agreements are often limited in duration and may not provide adequate protection for our trade secrets, know-how or other proprietary information in the event of any unauthorized use or disclosure or the lawful development by others of such information.

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Supreme Court has modified certain legal tests so as to make it harder to obtain patents from the USPTO, and to defend issued patents against invalidity challenges.

As a consequence, issued patents may be found by federal courts to contain invalid claims according to the revised legal

As a consequence, issued patents may be found by federal courts to contain invalid claims according to the revised legal standards.

Some of our own or in-licensed patents may be subject to challenge and subsequent invalidation in a variety of post-grant proceedings, before the Patent Trial and Appeal Board of the USPTO or in litigation under the revised legal standards, which make it more difficult to defend the patentability or validity of claims in already issued patents.

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Risks Related to Our Relationships with Third Parties

We will depend on our exclusive distributor, Nippon Shinyaku, for the commercial sale of our lead product deramiocel in DMD in the United States and Japan, if we receive regulatory approval in those territories.

We believe that a substantial portion of our revenue for the foreseeable future will depend on milestones and other payments received from our distributor, Nippon Shinyaku.

We will depend on our exclusive distributor, Nippon Shinyaku, for the commercial sale of Deramiocel in Duchenne muscular dystrophy (“DMD”) in the United States and Japan, if regulatory approval is obtained in those territories.

A substantial portion of our potential revenue for the foreseeable future is expected to depend on milestone, revenue sharing and other payments received from Nippon Shinyaku under our distribution agreements.

Nippon Shinyaku has exclusive distribution rights for Deramiocel in the United States and Japan for a significant period of time, with only limited rights of either party to terminate these agreements.

In the event that Nippon Shinyaku fails to adequately commercialize deramiocel in the United States or Japan because it lacks financial or other resources, decides to focus on other initiatives or otherwise, our ability to successfully commercialize deramiocel in the United States and Japan would be limited, which would adversely affect our business, financial condition and results of operations.

If Nippon Shinyaku fails to successfully commercialize Deramiocel in the United States or Japan, whether due to strategic priorities, financial constraints, insufficient commercial resources, inadequate performance or other factors, our ability to generate revenue from Deramiocel in those territories would be materially limited, which would adversely affect our business, financial condition and results of operations.

If we enter into strategic partnerships, we may be required to relinquish important rights to and control over the development of our product candidates or otherwise be subject to terms unfavorable to us.

We are actively looking into potential additional strategic partnerships for our product candidates, particularly for Deramiocel in additional territories outside the United States and Japan, and for our exosomes product candidates.

example, we are in negotiations pursuant to a binding term sheet with Nippon Shinyaku for the distribution of Deramiocel in the European region.

If we do not establish strategic partnerships, we potentially will have to undertake development and commercialization efforts with respect to our product candidates on our own, which would be costly and adversely impact our ability to commercialize any future products or product candidates.

If we enter into any strategic partnerships with pharmaceutical, biotechnology or other life science companies, we will be subject to a number of risks, including:

● we may not be able to control the amount and timing of resources that our strategic partners devote to the development or commercialization of product candidates;

● strategic partners may delay clinical trials, provide insufficient funding, terminate a clinical trial or abandon a product candidate, repeat or conduct new clinical trials or require a new version of a product candidate for clinical testing;

● strategic partners may not pursue further development and commercialization of products resulting from the strategic partnering arrangement or may elect to discontinue research and development programs;

● strategic partners may not commit adequate resources to necessary pre-launch activities or the marketing and distribution of any future products, limiting our potential revenues from these products;

● disputes may arise between us and our strategic partners that result in the delay or termination of the research, development or commercialization of our product candidates or that result in costly litigation or arbitration that diverts management’s attention and consumes resources;

● strategic partners may experience financial difficulties;

● strategic partners may not properly maintain or defend our intellectual property rights or may use our proprietary information in a manner that could jeopardize or invalidate our proprietary information or expose us to potential litigation;

● business combinations or significant changes in a strategic partner’s business strategy may also adversely affect a strategic partner’s willingness or ability to complete its obligations under any arrangement;

● strategic partners could independently move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors.

Our results of operations could be materially harmed if we or our distributor are unable to accurately forecast customer demand for our products and manage our inventory.

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Conversely, if we underestimate patient demand for Deramiocel or our own requirements for materials, our manufacturing partners and suppliers may not be able to deliver components or other materials to meet our requirements and our manufacturing may be affected by the impact of inflation and labor shortages on our suppliers, which could result in inadequate inventory levels or interruptions, delays or cancellations of deliveries, any of which would damage our reputation and business.

able to allocate sufficient capacity in order to meet our increased requirements, any of which could have an adverse effect on our ability to meet demand for our products and our results of operations.

In addition, several materials incorporated into our products require lengthy order lead times and additional supplies or materials may not be available when required on terms that are acceptable to us or our manufacturing partners, or at all, and our manufacturing partners and suppliers may not be able to allocate sufficient capacity in order to meet our increased requirements, any of which could have an adverse effect on our ability to meet demand for our products and our results of operations.

We are dependent on our relationships with our licensors and collaborators and there is no guarantee that such relationships will be maintained or continued.

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Agreements have been entered into with the University of Rome, JHU and CSMC.

Each of those agreements provides for an exclusive license to certain patents and other intellectual property and requires the payment of fees, milestone payments and/or royalties to the institutions that will reduce our net revenues, if and to the extent that we have future revenues.

Each of those agreements provides for an exclusive license to certain patents and other intellectual

property and requires the payment of fees, milestone payments and/or royalties to the institutions that will reduce our net revenues, if and to the extent that we have future revenues.

Each of those agreements also contains additional obligations that we are required to satisfy.

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The Company accounts for this award as a liability rather than income.

We are actively looking into potential additional strategic partnerships for our product candidates, particularly for deramiocel in additional territories outside the United States and Japan, and for our exosomes product candidates.

For example, we are in advanced negotiations pursuant to a binding term sheet with Nippon Shinyaku for the distribution of deramiocel in the European region.

If we enter into any strategic partnerships with pharmaceutical, biotechnology or other life science companies, we will be subject to a number of risks, including:

● we may not be able to control the amount and timing of resources that our strategic partners devote to the development or commercialization of product candidates;

● strategic partners may not commit adequate resources to the marketing and distribution of any future products, limiting our potential revenues from these products;

● strategic partners may experience financial difficulties;

● strategic partners could independently move forward with a competing product candidate developed either independently or in collaboration with others, including our competitors.

We rely and will rely on third parties to conduct our clinical trials.

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We depend and will depend upon independent investigators and collaborators, such as universities, medical institutions, CROs, vendors and strategic partners to conduct our preclinical and clinical trials under agreements with us.

We have limited ability to directly control the performance of these third parties.

We negotiate budgets and contracts with CROs, vendors and trial sites which may result in delays to our development timelines and increased costs.

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Nevertheless, we are responsible for ensuring that each of our studies is conducted in accordance with applicable protocol, legal, regulatory and scientific standards, and our reliance on third parties does not relieve us of our regulatory responsibilities.

We and these third parties are required to comply with current good clinical practices (“cGCPs”), which are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development.

We and these third parties are required to comply with current good clinical practices (“cGCPs”), which

are regulations and guidelines enforced by the FDA and comparable foreign regulatory authorities for product candidates in clinical development.

Regulatory authorities enforce these cGCPs through periodic inspections of trial sponsors, principal investigators and trial sites.

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Biologic products for commercial purposes must also be produced under cGMP.

Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat

clinical trials, which would delay the regulatory approval process.

Our failure or any failure by these third parties to comply with these regulations or to recruit a sufficient number of patients may require us to repeat clinical trials, which would delay the regulatory approval process.

Moreover, our business may be implicated if any of these third parties violates federal or state fraud and abuse or false claims laws and regulations or healthcare privacy and security laws and regulations.

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As we advance our programs through potential commercial launch, we have substantial fixed costs associated with third party contracts that will increase and will not be able to be terminated, even if our product candidates are not ultimately approved.

As we advance our programs, in particular our lead product candidate deramiocel, we have incurred and will continue to incur substantial costs associated with those programs.

As we advance our programs toward potential commercial launch, in particular our lead product candidate Deramiocel, we have incurred and will continue to incur substantial costs associated with those programs.

For example, we are increasing our spending on manufacturing-related costs as we prepare to be able to manufacture Deramiocel for a potential commercial launch following potential regulatory approval.

We have continued to expand our use of real estate as we expand our capacity to manufacture and otherwise support Deramiocel.

While we seek to be prudent with our spending programs, many of our agreements are for agreed upon amounts with our counterparties and are not able to be terminated by us, even if we ultimately are unable to commercially launch deramiocel due to failure to receive regulatory approvals.

We have also increased our spending on certain pre-commercial activities, including in the expansion of our manufacturing, regulatory and marketing support capabilities.

While we seek to be prudent with our spending programs, many of our agreements are for agreed upon amounts with our counterparties and may not be terminable by us without significant financial penalties, even if we ultimately are unable to commercially launch Deramiocel due to failure to receive regulatory approvals.

Risks Related to Competitive Factors

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The pharmaceutical industry is highly competitive, with a number of established, large pharmaceutical companies, as well as many smaller companies.

Many of these organizations competing with us have substantially greater financial resources, larger research and development staffs and facilities, greater clinical trial experience, longer drug development history in obtaining regulatory approvals, and greater manufacturing, distribution, sales and marketing capabilities than we do.

sales and marketing capabilities than we do.

There are many pharmaceutical companies, biotechnology companies, public and private universities, government agencies, and research organizations actively engaged in research and development of products which may target the same indications as our product candidates.

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Our future success will depend in part on our ability to maintain a competitive position with respect to evolving therapies as well as other novel technologies.

Existing or future therapies developed by others may render our potential

products obsolete or noncompetitive.

Existing or future therapies developed by others may render our potential products obsolete or noncompetitive.

The drugs that we are attempting to develop will have to compete with existing therapies.

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We have entered into the U.S.

Distribution Agreement and the Japan Distribution Agreement with Nippon Shinyaku for the exclusive commercialization and distribution rights

in the United States and Japan, respectively, of deramiocel for DMD.

Distribution Agreement and the Japan Distribution Agreement with Nippon Shinyaku for the exclusive commercialization and distribution rights in the United States and Japan, respectively, of Deramiocel for DMD.

We continue to evaluate additional potential partners for this program in other territories outside of these territories, subject to any rights of Nippon Shinyaku.

We have no experience selling, marketing, or distributing products and no current internal capability to do so.

The Company currently has no sales, marketing, or distribution capabilities.

We do not anticipate having resources in the foreseeable future to allocate to the sales and marketing of our proposed products.

To date, the Company has had no sales, marketing, or distribution capabilities.

As we prepare for launch, we are allocating certain resources, in order to enhance the organization in preparation for commercial readiness.

Our future success depends, in part, on our ability to enter into and maintain sales and marketing collaborative relationships, or on our ability to build sales and marketing capabilities internally.

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In the United States, no uniform policy of coverage and reimbursement for products exists among third-party payors.

Many third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies but also have their own methods and approval processes to decide which drugs they will pay for and establish reimbursement levels.

Third-party payors often rely upon Medicare coverage policy and payment limitations in setting their own coverage and reimbursement policies but also have their own methods and approval processes to decide which drugs they will pay for and establish reimbursement levels.

Coverage decisions may depend upon clinical and economic standards that disfavor new drug products when more established or lower cost therapeutic alternatives are already available or subsequently become available.

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However, decisions regarding the extent of coverage and amount of reimbursement to be provided for any product candidates that we develop through approval will be made on a plan-by-plan basis.

One payor’s determination to provide coverage for a product does not assure that other payors will also provide coverage and adequate reimbursement for the product.

As a result, the coverage determination process will require us to provide scientific and clinical support for the use of our products to each payor separately and will likely be a time-consuming process.

Each plan determines whether or not it will provide coverage for a drug, what amount it will pay for the drug, the applicable formulary tier, and whether to require step therapy or other utilization management controls.

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Patients may be unlikely to use and prescribers unlikely to prescribe our products unless adequate coverage is provided and reimbursement is available.

Additionally, a third-party payor’s decision to provide coverage for a drug does not imply that an adequate reimbursement rate will be approved.

The process for determining whether a third-party payor will provide coverage for a product may be separate from the process for setting the price of a product or for establishing the reimbursement rate that such a payor will pay for the product.

Third-party payors, such as government or private healthcare insurers, carefully review and increasingly question the coverage of, and challenge the prices charged for, drug products.

A primary trend in the U.S.

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Government authorities and third-party payors have attempted to control costs by limiting coverage and the amount of reimbursement for particular medications.

Increasingly, third-party payors are requiring that pharmaceutical companies provide them with predetermined discounts from list prices and are challenging the prices charged for products.

We may also be required to conduct expensive pharmacoeconomic studies to justify the coverage and the amount of reimbursement for particular medications.

We cannot be sure that coverage and reimbursement will be available for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be.

We cannot be sure that coverage and reimbursement will be available

for any product that we commercialize and, if reimbursement is available, what the level of reimbursement will be.

Inadequate coverage or reimbursement may impact the demand for, or the price of, any product for which we obtain marketing approval.

If coverage and adequate reimbursement are not available, or are available only to limited levels, we may not be able to successfully commercialize any product candidates that we develop.

Further, there have been a number of legislative and regulatory proposals to change the healthcare system that could affect our ability to sell any future drugs profitably.

government, state legislatures, and foreign governments

have shown significant interest in implementing cost-containment programs, including price controls, restrictions on reimbursement, and requirements for substitution by generic products.

We anticipate additional state and federal healthcare reform measures will be adopted in the future.

These may include price controls and cost-containment measures, or more restrictive policies in jurisdictions with existing controls and measures, any of which could limit the amounts that federal and state governments will pay for healthcare products and services, and potentially could reduce demand for our products once approved, create additional pricing pressures, or ultimately limit our net revenue and results.

There can be no assurance that any of our product candidates, if approved, will be considered medically reasonable and necessary, that they will be considered cost-effective by third-party payors, that coverage or an adequate level of reimbursement will be available, or that reimbursement policies and practices in the United States and in foreign countries where our products are sold will not harm our ability to sell our product candidates profitably, if they are approved for sale.

Risks Related to Product and Environmental Liability

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We expect that our stock price will continue to fluctuate significantly.

The stock market, particularly in recent years, has experienced significant volatility, particularly with respect to pharmaceutical, biotechnology and other life sciences company stocks.

The stock market, particularly for pharmaceutical, biotechnology and other life sciences companies, has experienced significant volatility in recent years.

Our operating results may fluctuate from period to period for a number of reasons, and as a result our stock price may be subject to significant fluctuations.

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or foreign regulatory actions affecting us or our industry;

● the risks and costs of increased operations, including clinical and manufacturing operations, on an international basis;

● the risks and costs associated with expanding our operations, including clinical and manufacturing activities internationally;

● market acceptance of our drugs when they enter the market;

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● additions or departures of key personnel;

● short reports or other negative commentary issued by third parties;

● potential delisting of our stock from the Nasdaq Stock Market;

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We have never paid dividends on our capital stock and do not anticipate paying any dividends for the foreseeable future.

We anticipate that the Company will retain its earnings, if any, for future growth.

We expect to retain any future earnings, if any, to fund the development and expansion of our business.

Investors seeking cash dividends should not invest in the Company’s common stock for that purpose.

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We may issue shares of blank check preferred stock without stockholder approval in the future.

Our certificate of incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock, none of which are currently issued or currently outstanding.

Our certificate of incorporation authorizes the issuance of up to 5,000,000 shares of preferred stock, none of which are currently issued or outstanding.

If issued, our Board of Directors will have the authority to fix and determine the relative rights and preferences of preferred shares, as well as the authority to issue such shares, without further stockholder approval.

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Market and economic conditions may adversely affect our industry, business and ability to obtain financing.

Recent global market and economic conditions have been unpredictable and challenging.

Global financial markets have experienced periods of volatility and uncertainty in recent years.

These conditions and any adverse impact on the financial markets may adversely affect our liquidity and financial condition, including our ability to access the capital markets to meet our liquidity needs.

If securities analysts do not publish research or reports about our business or if they publish negative evaluations of our stock, the price of our stock could decline.

The trading market for our common stock will rely in part on the research and reports that industry or financial analysts publish about us or our business.

The trading market for our common stock may depend in part on the research and reports that industry or financial analysts publish about us or our business.

If no or few analysts maintain coverage of us, the trading price of our stock could decrease.

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There will be differences between actual and projected results, and actual results may be materially different from those contained in the projections.

The inclusion of the projections in (or incorporated by reference in) this prospectus should not be regarded as an indication that we or our management or representatives considered or consider the projections to be a reliable prediction of future events, and the projections should not be relied upon as such.

The inclusion of such projections in our public disclosures should not be regarded as an indication that we consider them to be reliable predictions of future events.

Additionally, final data may differ significantly from preliminary reported data.

Our certificate of incorporation and by-laws contain provisions that may discourage, delay or prevent a change in our management team that stockholders may consider favorable.

Our certificate of incorporation, our bylaws and Delaware law contain provisions that may have the effect of preserving our current management, such as:

Our certificate of incorporation, our bylaws and Delaware law contain provisions that may have the effect of preserving our current management and board structure, such as:

● authorizing the issuance of “blank check” preferred stock without any need for action by stockholders;

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As of December 31, 2025, there were approximately 57.4 million shares of common stock outstanding and approximately 3.3 million common warrants outstanding, as well as outstanding awards to purchase approximately 12.3 million shares of common stock under various incentive stock plans of the Company.

Additionally, as of December 31, 2024, there were 59,850 shares of common stock available for future issuance under our incentive plans.

Additionally, as of December 31, 2025, there were approximately 3.6 million shares of common stock available for future issuance under our incentive plans.

This number of shares available for future issuance under those plans was subsequently increased by 2,868,420 shares on January 1, 2026 in accordance with the terms of our 2025 Equity Incentive Plan which include an automatic increase previously approved by our Board and stockholders.

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We may also issue additional shares to fund potential acquisitions or in connection with additional stock options or other equity awards granted to our employees, officers, directors and consultants under our various incentive plans.

The issuance of additional shares of common stock, warrants or other convertible securities and the perception that such issuances may occur or exercise of outstanding warrants or options may have a dilutive impact on other stockholders and could have a material negative effect on the market price of our common stock.

The issuance of additional shares of common stock, warrants or other convertible securities and the perception that such issuances may occur or the exercise of outstanding warrants or options may have a dilutive impact on other stockholders and could have a material negative effect on the market price of our common stock.

The Company’s ability to utilize Nile’s net operating loss and tax credit carryforwards in the future is subject to substantial limitations and may further be limited as a result of the merger with Capricor.

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These limitations could, in turn, result in increased future tax payments for the Company, which could have a material adverse effect on the business, financial condition, or results of operations of the Company.

The requirements of being a public company may strain our resources and divert management’s attention.

As a public company, we are subject to the reporting requirements of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and other applicable securities rules and regulations, and are subject to the listing

requirements of The Nasdaq Stock Market LLC (“Nasdaq”).

The requirements of being a public company may strain our resources and divert management’s attention from operating our business.

Compliance with these rules and regulations will increase our legal and financial compliance costs, make some activities more difficult, time-consuming or costly and increase demand on our systems and resources.

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You may experience future dilution as a result of future equity offerings.

In order to raise additional capital, we may in the future offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share paid by any investor.

In order to raise additional capital, we may offer additional shares of our common stock or other securities convertible into or exchangeable for our common stock at prices that may not be the same as the price per share paid by any investor.

We may sell shares or other securities in any other offering at a price per share that is less than the price per share paid by any investor, and investors purchasing shares or other securities in the future could have rights superior to you.

The price per share at which we sell additional shares of our common stock, or securities convertible or exchangeable into common stock, in future transactions may be higher or lower than the price per share paid by any investor.

If our business plans are not successful, our stockholders may lose their entire investment in us.

If our business plans are unsuccessful, our stockholders could lose all or a substantial portion of their investment in us.

We have historically incurred substantial losses to fund our business operations including our research and development activities.

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If our business plans are not successful, our stockholders may lose their entire investment in us.

Short sellers may engage in market manipulating activities and seek to drive down the market price of our common shares.

Short selling is the practice of selling securities that the seller does not own, but rather has borrowed or intends to borrow from a third party with the intention of buying identical securities at a later date to return to the lender.

A short seller hopes to profit from a decline in the value of the securities between the sale of the borrowed securities and the purchase of the replacement shares, as the short seller expects to pay less in that purchase than it received in the sale.

It is therefore in the short seller’s interest for the price of the stock to decline, and some short sellers publish, or arrange for the publication of, opinions or characterizations regarding the relevant issuer, often involving misrepresentations of the issuer’s business prospects and similar matters calculated to create negative market momentum, which may permit them to obtain profits for themselves as a result of selling the stock short.

As a public entity, we may be the subject of concerted efforts by short sellers to spread negative information in order to gain a market advantage.

In addition, the publication of misinformation could also lead to litigation, the uncertainty and expense of which could adversely impact our reputation, business, financial condition, and operating results.

There are no assurances that we will not face short sellers’ efforts or similar tactics in the future, and the market price of our common shares may decline as a result of their actions.

We may be at risk of securities class action litigation or litigation initiated by individual stockholders.

We may subject to securities class action litigation or litigation initiated by individual stockholders.

This risk is especially relevant due to our dependence on positive clinical trial outcomes and regulatory approvals.

We may be subject to securities class action litigation or litigation initiated by individual stockholders.

This risk is especially relevant due to our dependence on clinical trial outcomes and regulatory approvals.

In the past, biotechnology and pharmaceutical companies have experienced significant stock price volatility, particularly when associated with binary events such as clinical trials and product approvals.

Additionally, we may be subject to litigation and business challenges in the operation of our company due to actions instituted by activist stockholders.

uncertainties as to our future direction as a result of stockholder activism may lead to the perception of a change in the direction of the business or other instability and may affect our relationships with vendors, distributors, collaborators, prospective and current employees and others.

Perceived uncertainties as to our future direction as a result of stockholder activism may lead to the perception of a change in the direction of the business or other instability and may affect our relationships with vendors, distributors, collaborators, prospective and current employees and others.

Responding to legal and/or business challenges related to securities class action litigation, or litigation initiated by individual stockholders, including activist stockholders, could be costly and time-consuming, may not align with our business strategies, and could divert management’s attention and resources from the pursuit of our business strategies, any of which could harm our business and result in a decline in the market price of our common stock.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors