CAPRICOR THERAPEUTICS, INC. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA ​ CAPRICOR THERAPEUTICS, INC. INDEX TO FINANCIAL STATEMENTS ​ Page Report of Independent Registered Public Accounting Firm (PCAOB ID 468 ) 92 Consolidated Balance Sheets 93 Consolidated Statements of Operations and Comprehensive Loss 94 Consolidated Statements of Stockholders’ Equity 95 Consolidated Statements of Cash Flows 96 Notes to Consolidated Financial Statements 97 ​ ​ ​ 91 Table of Contents REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM ​ To the Board of Directors and Stockholders of Capricor Therapeutics, Inc. and Subsidiary ​ Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Capricor Therapeutics, Inc. and Subsidiary (the Company) as of December 31, 2025 and 2024, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2025, and the related notes (collectively referred to as the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2025 and 2024, and the consolidated results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved or especially challenging, subjective or complex judgments. We determined that there are no critical audit matters. ​ ​ /s/ Rose, Snyder & Jacobs LLP Rose, Snyder & Jacobs LLP ​ We have served as the Company’s auditor since 2011. ​ Encino, California March 17, 2026 ​ 92 Table of Contents CAPRICOR THERAPEUTICS, INC. CONSOLIDATED BALANCE SHEETS DECEMBER 31, 2025 AND 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ASSETS ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ December 31, 2024 ​ ​ ​ ​ ​ ​ ​ CURRENT ASSETS ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ $ 287,847,312 ​ $ 11,286,996 Marketable securities ​ 30,281,603 ​ 140,228,881 Receivables ​ 59,167 ​ 10,368,489 Prepaid expenses and other current assets ​ 4,751,674 ​ 1,500,901 ​ ​ ​ ​ ​ ​ ​ TOTAL CURRENT ASSETS ​ 322,939,756 ​ 163,385,267 ​ ​ ​ ​ ​ ​ ​ PROPERTY AND EQUIPMENT, net ​ 18,312,238 ​ 5,561,597 ​ ​ ​ ​ ​ ​ ​ OTHER ASSETS ​ ​ ​ ​ Lease right-of-use assets, net ​ ​ 13,537,820 ​ ​ 1,312,522 Other assets ​ 1,159,480 ​ 221,700 ​ ​ ​ ​ ​ ​ ​ TOTAL ASSETS ​ $ 355,949,294 ​ $ 170,481,086 ​ ​ ​ ​ ​ ​ ​ LIABILITIES AND STOCKHOLDERS’ EQUITY ​ ​ ​ ​ ​ ​ ​ CURRENT LIABILITIES ​ ​ ​ ​ Accounts payable ​ $ 1,654,754 ​ $ 3,283,712 Accrued expenses ​ ​ 15,557,646 ​ ​ 4,907,665 Lease liabilities, current ​ ​ 202,376 ​ ​ 834,799 CIRM liability, current ​ ​ 6,421,984 ​ ​ — Deferred revenue, current ​ ​ 12,000,000 ​ ​ 12,000,000 ​ ​ ​ ​ ​ ​ ​ TOTAL CURRENT LIABILITIES ​ 35,836,760 ​ 21,026,176 ​ ​ ​ ​ ​ ​ ​ LONG-TERM LIABILITIES ​ ​ ​ ​ CIRM liability, net of current ​ ​ — ​ ​ 3,376,259 Lease liabilities, net of current ​ ​ 14,320,389 ​ ​ 616,315 ​ ​ ​ ​ ​ ​ ​ TOTAL LONG-TERM LIABILITIES ​ 14,320,389 ​ 3,992,574 ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES ​ 50,157,149 ​ 25,018,750 ​ ​ ​ ​ ​ ​ ​ COMMITMENTS AND CONTINGENCIES (NOTE 15) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ STOCKHOLDERS’ EQUITY ​ ​ ​ ​ Preferred stock, $ 0.001 par value, 5,000,000 shares authorized, none issued and outstanding ​ — ​ — Common stock, $ 0.001 par value, 100,000,000 shares authorized, 57,370,909 and 45,582,288 shares issued and outstanding, respectively ​ 57,371 ​ 45,582 Additional paid-in capital ​ 610,330,105 ​ 344,224,338 Accumulated other comprehensive income ​ 283,154 ​ 1,026,955 Accumulated deficit ​ ( 304,878,485 ) ​ ( 199,834,539 ) ​ ​ ​ ​ ​ ​ ​ TOTAL STOCKHOLDERS’ EQUITY ​ 305,792,145 ​ 145,462,336 ​ ​ ​ ​ ​ ​ ​ TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY ​ $ 355,949,294 ​ $ 170,481,086 ​ See accompanying notes to the audited consolidated financial statements. ​ 93 Table of Contents CAPRICOR THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ ​ ​ ​ ​ REVENUE ​ ​ ​ ​ ​ ​ Revenue ​ $ — ​ $ 22,270,465 ​ ​ ​ ​ ​ ​ ​ TOTAL REVENUE ​ — ​ 22,270,465 ​ ​ ​ ​ ​ ​ ​ OPERATING EXPENSES ​ ​ ​ ​ Research and development ​ 84,454,595 ​ 49,968,585 General and administrative ​ 23,687,535 ​ 14,865,122 ​ ​ ​ ​ ​ ​ ​ TOTAL OPERATING EXPENSES ​ 108,142,130 ​ 64,833,707 ​ ​ ​ ​ ​ ​ ​ LOSS FROM OPERATIONS ​ ( 108,142,130 ) ​ ( 42,563,242 ) ​ ​ ​ ​ ​ ​ ​ OTHER INCOME (EXPENSE) ​ ​ ​ ​ Other income ​ 45,421 ​ 7,471 Investment income ​ ​ 6,257,607 ​ ​ 2,202,990 Interest expense ​ ​ ( 3,045,725 ) ​ ​ — Loss on disposal of fixed assets ​ ​ ( 157,519 ) ​ ​ ( 112,805 ) ​ ​ ​ ​ ​ ​ ​ TOTAL OTHER INCOME (EXPENSE) ​ 3,099,784 ​ 2,097,656 ​ ​ ​ ​ ​ ​ ​ LOSS BEFORE INCOME TAXES ​ ​ ( 105,042,346 ) ​ ​ ( 40,465,586 ) (Provision for) benefit from income taxes ​ ​ ( 1,600 ) ​ ​ ( 1,600 ) ​ ​ ​ ​ ​ ​ ​ NET LOSS ​ $ ( 105,043,946 ) ​ $ ( 40,467,186 ) ​ ​ ​ ​ ​ ​ ​ OTHER COMPREHENSIVE INCOME (LOSS) ​ ​ ​ ​ Net unrealized gain (loss) on marketable securities ​ ( 743,801 ) ​ 791,142 ​ ​ ​ ​ ​ ​ ​ COMPREHENSIVE LOSS ​ $ ( 105,787,747 ) ​ $ ( 39,676,044 ) ​ ​ ​ ​ ​ ​ ​ Net loss per share, basic and diluted ​ $ ( 2.26 ) ​ $ ( 1.15 ) Weighted average number of shares, basic and diluted ​ ​ 46,478,416 ​ ​ 35,218,628 ​ See accompanying notes to the audited consolidated financial statements. ​ ​ 94 Table of Contents CAPRICOR THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY FOR THE PERIOD FROM DECEMBER 31, 2023 THROUGH DECEMBER 31, 2025 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ OTHER ​ ​ ​ ​ TOTAL ​ ​ COMMON STOCK ​ ADDITIONAL PAID- ​ COMPREHENSIVE ​ ACCUMULATED ​ STOCKHOLDERS' ​ ​ ​ ​ SHARES ​ ​ ​ AMOUNT ​ ​ ​ IN CAPITAL ​ ​ ​ INCOME ​ ​ ​ DEFICIT ​ ​ ​ EQUITY ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2023 31,148,320 ​ $ 31,148 ​ $ 181,701,859 ​ $ 235,813 ​ $ ( 159,367,353 ) ​ $ 22,601,467 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock, net of fees 14,124,536 ​ 14,125 ​ 152,307,451 ​ — ​ — ​ 152,321,576 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercise of common warrants ​ 105,782 ​ ​ 106 ​ ​ 144,288 ​ ​ — ​ — ​ ​ 144,394 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — ​ 9,765,164 ​ — ​ — ​ 9,765,164 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised 203,650 ​ ​ 203 ​ ​ 305,576 ​ — ​ — ​ 305,779 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized gain on marketable securities — ​ — ​ — ​ 791,142 ​ — ​ 791,142 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ — ​ ( 40,467,186 ) ​ ( 40,467,186 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2024 45,582,288 ​ $ 45,582 ​ $ 344,224,338 ​ $ 1,026,955 ​ $ ( 199,834,539 ) ​ $ 145,462,336 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Issuance of common stock, net of fees 9,582,307 ​ 9,582 ​ 237,024,356 ​ — ​ — ​ 237,033,938 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Exercise of common warrants ​ 1,589,699 ​ ​ 1,590 ​ ​ 9,059,694 ​ ​ — ​ — ​ 9,061,284 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation — ​ — ​ 16,967,799 ​ — ​ — ​ 16,967,799 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Vesting of restricted stock awards ​ 17,210 ​ ​ 17 ​ ​ 257,444 ​ ​ — ​ ​ — ​ ​ 257,461 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock options exercised ​ 599,405 ​ ​ 600 ​ ​ 2,796,474 ​ ​ — ​ ​ — ​ ​ 2,797,074 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Unrealized loss on marketable securities ​ — ​ ​ — ​ ​ — ​ ​ ( 743,801 ) ​ ​ — ​ ​ ( 743,801 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net loss — ​ — ​ — ​ — ​ ( 105,043,946 ) ​ ( 105,043,946 ) ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Balance at December 31, 2025 57,370,909 ​ $ 57,371 ​ $ 610,330,105 ​ $ 283,154 ​ $ ( 304,878,485 ) ​ $ 305,792,145 ​ See accompanying notes to the audited consolidated financial statements. ​ 95 Table of Contents CAPRICOR THERAPEUTICS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Years ended December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Cash flows from operating activities: ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 105,043,946 ) ​ $ ( 40,467,186 ) Adjustments to reconcile net loss to net cash used in operating activities: ​ ​ ​ ​ Loss on disposal of fixed assets ​ ​ 157,519 ​ ​ 112,805 Depreciation and amortization ​ 1,889,041 ​ 1,425,214 Stock-based compensation ​ 16,967,799 ​ 9,765,164 Restricted stock awards granted ​ ​ 257,461 ​ ​ — Changes in lease liabilities ​ ​ 715,459 ​ ​ ( 47,261 ) Non-cash interest expense on CIRM liability ​ ​ 3,045,725 ​ ​ — Changes in operating assets and liabilities: ​ ​ ​ ​ Receivables ​ 10,309,322 ​ 3,504 Prepaid expenses and other assets ​ ( 4,093,633 ) ​ ( 458,653 ) Accounts payable and accrued expenses ​ ​ 5,983,992 ​ ​ 1,941,136 Deferred revenue ​ — ​ ( 12,270,465 ) Net cash used in operating activities ​ ( 69,811,261 ) ​ ( 39,995,742 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from investing activities: ​ ​ ​ ​ Purchase of marketable securities ​ ( 151,392,398 ) ​ ( 208,441,162 ) Proceeds from sales and maturities of marketable securities ​ 260,595,875 ​ 93,796,269 Purchases of property and equipment ​ ​ ( 2,904,461 ) ​ ​ ( 1,166,871 ) Payments for leasehold improvements ​ ( 383,539 ) ​ ( 372,104 ) Payments for construction in progress ​ ​ ( 8,436,196 ) ​ ​ — Net cash provided by (used in) investing activities ​ 97,479,281 ​ ( 116,183,868 ) ​ ​ ​ ​ ​ ​ ​ Cash flows from financing activities: ​ ​ ​ ​ Net proceeds from sale of common stock ​ 237,033,938 ​ 152,321,576 Proceeds from exercise of stock awards and warrants ​ 11,858,358 ​ 450,173 Net cash provided by financing activities ​ 248,892,296 ​ 152,771,749 ​ ​ ​ ​ ​ ​ ​ Net increase (decrease) in cash and cash equivalents ​ 276,560,316 ​ ( 3,407,861 ) ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents balance at beginning of period ​ 11,286,996 ​ 14,694,857 ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents balance at end of period ​ $ 287,847,312 ​ $ 11,286,996 ​ ​ ​ ​ ​ ​ ​ Supplemental disclosures of cash flow information: ​ ​ ​ ​ Interest paid in cash ​ $ — ​ $ — Income taxes paid in cash ​ $ 1,600 ​ $ 1,600 Initial recognition of right-of-use asset ​ $ 13,382,191 ​ $ — ​ ​ ​ See accompanying notes to the audited consolidated financial statements. ​ ​ 96 Table of Contents 1. ORGANIZATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Description of Business Capricor Therapeutics, Inc., a Delaware corporation (together with its wholly-owned subsidiary, referred to herein as “Capricor,” the “Company,” “we,” “us” or “our”), is a clinical-stage biotechnology company focused on the development and potential commercialization of transformative cell and exosome-based therapeutics for treating Duchenne muscular dystrophy (“DMD”) and other diseases with high unmet medical needs. The Company is a public company and currently trades under the symbol “CAPR” on the Nasdaq Global Select Market. Basis of Consolidation Our consolidated financial statements include the accounts of the Company and our wholly-owned subsidiary. All intercompany transactions have been eliminated in consolidation. Management has determined that the Company operates as a single reportable operating segment. Reclassification Certain prior period amounts have been reclassified to conform to the current year presentation. Specifically, accounts payable and accrued expenses, which were previously presented as a combined line item on the consolidated balance sheet, are now presented separately. Provision for income taxes, which was previously included in general and administrative expenses, has been reclassified and is now presented separately. These reclassifications had no effect on previously reported total liabilities, stockholders' equity, or net loss. Use of Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the consolidated financial statements. Estimates also affect the reported amounts of revenues and expenses during the reporting period. Management uses its historical records and knowledge of its business in making these estimates. Accordingly, actual results may differ from these estimates. Significant estimates include, but are not limited to, the determination of clinical trial accruals, fair value of stock-based compensation awards, useful lives of long-lived assets, revenue recognition under customer contracts, and the realizability of deferred tax assets. These estimates are based on historical experience and assumptions that management believes are reasonable; however, actual results may differ from these estimates. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of less than 30 days at the date of purchase to be cash equivalents. Concentration of Risk ​ Financial instruments, which potentially subject the Company to concentrations of credit risk, principally consist of cash, cash equivalents, and marketable securities. The Company maintains accounts at three financial institutions. These accounts are insured by the Federal Deposit Insurance Corporation (the “FDIC”) for up to $250,000 and/or the Securities Investor Protection Corporation, as applicable. The Company monitors the financial stability of the financial institutions with which it maintains accounts and believes it is not exposed to any significant credit risk in cash and cash equivalents. Historically, the Company has not experienced any significant losses in such accounts and does not believe it is exposed to any significant credit risk due to the quality nature of the financial instruments in which the money is held. ​ We are subject to supplier concentration risk, as we rely on a limited number of suppliers for our critical materials. Any disruption in the supply of materials from these key vendors could result in significant delays to our product development timelines and may require us to incur substantial additional costs to secure alternative sources for manufacturing. ​ 97 Table of Contents Marketable Securities The Company determines the appropriate classification of its marketable securities at the time of purchase and reevaluates such designation at each balance sheet date. All of the Company’s marketable securities are considered as available-for-sale and carried at estimated fair values. Realized gains and losses on the sale of debt and equity securities are determined using the specific identification method. Unrealized gains and losses on available-for-sale securities are presented as accumulated other comprehensive income (loss) as a separate component of stockholders’ equity. Cloud Computing Arrangements (“CCA”) ​ The Company accounts for CCAs in accordance with ASC Topic 350, Intangibles (“ASC 350”), and the capitalized implementation costs associated with these arrangements are included in prepaid expenses and other current assets and other assets on the consolidated balance sheets and are amortized on a straight-line basis over their estimated useful life. ​ Property and Equipment Property and equipment are stated at cost. Repairs and maintenance costs are expensed in the period incurred. Depreciation is computed using the straight-line method over the related estimated useful life of the asset, which such estimated useful lives range from five to ten years . Leasehold improvements are depreciated on a straight-line basis over the shorter of the useful life of the asset or the lease term. Long-Lived Assets The Company accounts for the impairment and disposition of long-lived assets in accordance with guidance issued by the Financial Accounting Standards Board (“FASB”). Long-lived assets to be held and used are reviewed for events or changes in circumstances that indicate that their carrying value may not be recoverable, or annually. ​ Leases The Company accounts for its leases in accordance with ASC Topic 842, Leases (“ASC 842”), which requires lessees to recognize most leases on the balance sheet with a corresponding right-to-use asset (“ROU asset”) and a lease liability for most leases. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease. ROU assets and lease liabilities are recognized at lease commencement based on present value of fixed lease payments over the lease term. Variable payments that do not depend on a rate or index, which usually represent operating expenses associated with the Company’s operating leases, are not included in the lease liability and are recognized as they are incurred. ​ At the inception of an arrangement, the Company evaluates the specific facts and circumstances to determine whether the arrangement constitutes or contains a lease. Leases are classified as either financing or operating leases. The Company’s leases are primarily operating leases. The Company elects the short-term lease exemption for leases with a term of twelve months or less. ​ The Company uses its incremental borrowing rate to measure lease liabilities when the implicit rate is not readily determinable. ​ The Company has elected the practical expedient to combine lease and non-lease components for real estate leases. This practical expedient is not elected for manufacturing facilities and equipment embedded in product supply arrangements. ​ Revenue Recognition The Company recognizes revenue in accordance with ASC Topic 606, Revenue from Contracts with Customers (“ASC 606”), using a five-step model to recognize revenue when control of promised goods or services is transferred to customers at an amount that reflects the consideration to which the entity expects to be entitled. The company’s arrangements may include fixed consideration, such as upfront payments and milestones, as well as variable consideration, such as sales-based royalties and shared revenues. Variable consideration is included in the transaction price only to the 98 Table of Contents extent that it is probable that a significant reversal of cumulative revenue recognized will not occur when the uncertainty is resolved. ​ Revenue is recognized either at a point in time or over time, depending on when control of the promised goods or services is transferred to the customer. For performance obligations satisfied over time, the Company recognizes revenue based on a measure of progress that depicts the transfer of services to the customer. Upfront payments received in advance of performance are recorded as deferred revenue. ​ Accounts Receivable Accounts receivable are recorded at invoiced amounts, net of an allowance for credit losses, if any. The Company evaluates the collectability of its accounts receivable and records an allowance when collection is not probable. Research and Development Costs relating to the design and development of new products are expensed as research and development as incurred in accordance with FASB ASC 730-10, Research and Development . Stock-Based Compensation The Company accounts for stock-based employee compensation arrangements in accordance with FASB ASC 718, Compensation – Stock Compensation, and recognizes compensation expense for all share-based payment awards on the grant-date fair value over the requisite service period. Income Taxes Income taxes are recognized for the amount of taxes payable or refundable for the current year and deferred tax liabilities and assets are recognized for the future tax consequences of transactions that have been recognized in the Company’s financial statements or tax returns. Deferred tax assets are reduced by a valuation allowance when, based on the weight of available evidence, it is more likely than not that some portion or all of the deferred tax assets will not be realized. The Company uses guidance issued by the FASB that clarifies the accounting for uncertainty in income taxes recognized in an enterprise’s financial statements and prescribes a recognition threshold of more likely than not and a measurement process for financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In making this assessment, a company must determine whether it is more likely than not that a tax position will be sustained upon examination, based solely on the technical merits of the position, and must assume that the tax position will be examined by taxing authorities. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense. Basic and Diluted Loss per Share The Company reports earnings per share in accordance with ASC 260-10, Earnings per Share. Basic earnings (loss) per share is computed by dividing income (loss) available to common stockholders by the weighted-average number of shares of common stock outstanding during the period. Diluted earnings (loss) per share is computed similarly to basic earnings (loss) per share except that the denominator is increased to include the number of additional shares of common stock that would have been outstanding if the potential shares of common stock had been issued and if the additional shares of common stock were dilutive. ​ 99 Table of Contents 2. FAIR VALUE MEASUREMENTS The Company measures certain assets and liabilities in accordance with ASC Topic 820, Fair Value Measurement (“ASC 820”). Assets and liabilities recorded at fair value in the balance sheet are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The categories are as follows: ​ Level Input: ​ ​ ​ Input Definition: Level I Inputs are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurement date. Level II Inputs, other than quoted prices included in Level I, that are observable for the asset or liability through corroboration with market data at the measurement date. Level III Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the asset or liability at the measurement date. ​ The following table summarizes the fair value measurements by level at December 31, 2025 and 2024 for assets and liabilities measured at fair value on a recurring basis: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Level I ​ ​ ​ Level II ​ ​ ​ Level III ​ ​ ​ Total Marketable Securities ​ $ 30,281,603 ​ $ — ​ $ — ​ $ 30,281,603 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Level I ​ ​ ​ Level II ​ ​ ​ Level III ​ ​ ​ Total Marketable Securities ​ $ 140,228,881 ​ $ — ​ $ — ​ $ 140,228,881 ​ Carrying amounts reported in the balance sheet of cash and cash equivalents, receivables, prepaid expenses and other current assets, accounts payable, accrued expenses, and deferred revenue approximate fair value due to their relatively short maturity. The carrying amounts of the Company’s marketable securities are based on market quotations from national exchanges at the balance sheet date. Interest and dividend income are recognized separately on the income statement based on classifications provided by the brokerage firm holding the investments. The fair value of borrowings is not considered to be significantly different from its carrying amount because the stated rates for such debt reflect current market rates and conditions. ​ 3. CASH, CASH EQUIVALENTS AND MARKETABLE SECURITIES The following table summarizes the Company’s cash, cash equivalents and marketable securities as of December 2025 and 2024, respectively: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2025 ​ ​ ​ ​ Amortized Cost ​ ​ ​ Unrealized Gains ​ ​ ​ Unrealized Losses ​ ​ ​ Fair Value Cash and money market funds ​ $ 287,847,312 ​ $ — ​ $ — ​ $ 287,847,312 U.S treasury securities ​ ​ 29,998,449 ​ ​ 283,154 ​ ​ — ​ ​ 30,281,603 Total cash, cash equivalents and marketable securities ​ $ 317,845,761 ​ $ 283,154 ​ $ — ​ $ 318,128,915 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classified as: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 287,847,312 Short-term marketable securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 30,281,603 Long-term marketable securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Total cash, cash equivalents and marketable securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 318,128,915 ​ ​ ​ ​ 100 Table of Contents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, 2024 ​ ​ ​ ​ Amortized Cost ​ ​ ​ Unrealized Gains ​ ​ ​ Unrealized Losses ​ ​ ​ Fair Value Cash and money market funds ​ $ 11,286,996 ​ $ — ​ $ — ​ $ 11,286,996 U.S treasury securities ​ ​ 139,201,926 ​ ​ 1,026,955 ​ ​ — ​ ​ 140,228,881 Total cash, cash equivalents and marketable securities ​ $ 150,488,922 ​ $ 1,026,955 ​ $ — ​ $ 151,515,877 ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Classified as: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Cash and cash equivalents ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 11,286,996 Short-term investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ 140,228,881 Long-term investments ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ — Total cash, cash equivalents and marketable securities ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ $ 151,515,877 ​ The contractual maturities of the Company's available-for-sale securities at December 31, 2025 were up to approximately six months. ​ The Company believes that it is more likely than not that investments in an unrealized loss position will be held until maturity and all interest and principal will be received. The Company does not intend to sell these investments and it is more likely than not that the Company will not be required to sell the investments before recovery of its amortized cost basis. ​ 4. RECEIVABLES AND OTHER CURRENT ASSETS Receivables ​ As of December 31, 2025, receivables primarily consisted of $ 59,167 related to funds due from Employee Retention Credit. As of December 31, 2024, accounts receivable primarily consisted of $ 10.0 million due from Nippon Shinyaku, related to the second milestone payment, as well as $ 366,551 related to funds due from the Employee Retention Credit. ​ Cloud Computing Arrangements ​ The Company’s CCAs primarily relate to its enterprise resource planning system and has an estimated useful life of seven years . As of December 31, 2025, capitalized implementation costs totaled approximately $ 1.1 million, with $ 20,800 of accumulated amortization recognized. Amortization expense totaled $ 20,800 for the year ended December 31, 2025. There were no capitalized CCA assets as of December 31, 2024. ​ 5. PROPERTY AND EQUIPMENT Property and equipment, net consisted of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Furniture and fixtures ​ $ 189,821 ​ $ 192,083 Laboratory equipment ​ 8,056,063 ​ 6,318,362 IT equipment ​ ​ 318,858 ​ ​ — Manufacturing equipment ​ ​ 675,741 ​ ​ — Leasehold improvements ​ 2,785,395 ​ 2,501,207 Construction in progress ​ ​ 11,436,953 ​ ​ — ​ ​ 23,462,831 ​ 9,011,652 Less accumulated depreciation ​ ( 5,150,593 ) ​ ( 3,450,055 ) Property and equipment, net ​ $ 18,312,238 ​ $ 5,561,597 ​ 101 Table of Contents Depreciation was $ 1,889,041 and $ 1,425,214 for the years ended December 31, 2025 and 2024, respectively. No impairment related to long-lived assets was recorded for the years ended December 31, 2025 and 2024. 6. LEASES Long-Term Operating Leases San Diego, California ​ Capricor leases 34,348 square feet of laboratory, manufacturing, and office space located at 10865 Road to the Cure, San Diego, California for our corporate headquarters from Altman Investment Co., LLC (“Altman”) (the “Altman Lease”). The lease agreement commenced on October 1, 2021 for an initial lease term of five years . On February 26, 2025, the Company entered into a fourth lease amendment, where the rent is subject to a 3.0 % annual rent increase commencing October 1, 2026 plus certain operating expenses and taxes. The fourth lease amendment extends the lease term to September 30, 2033, with an option to renew for an additional term of five years . The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025. The Fourth Amendment commenced on July 1, 2025, which resulted in an increase of approximately $ 13.5 million in operating lease liabilities and $ 13.4 million in right-of-use assets. ​ The Altman Lease, as amended, provides for a tenant improvement allowance from the landlord for a total of $ 1.3 million to be received in 2026. The Company has thus remeasured its lease liability and right-of-use assets reflecting such allowance. ​ Effective November 1, 2021, the Company entered into a vivarium agreement with Explora BioLabs, Inc. (“Explora”), a Charles River Company, for exclusive vivarium space ( 234 square feet) and services located in San Diego, California. The agreement has been amended to extend the term for an additional 12 months , through December 31, 2026. ​ Los Angeles, California ​ Capricor leases 1,892 square feet of laboratory, manufacturing and office facilities in Los Angeles, California from CSMC, pursuant to a lease entered into in 2014. Capricor subsequently entered into several amendments modifying certain terms of the lease. We entered into an amendment effective August 1, 2024 for an additional 24-month period extending the term through July 31, 2026 with a monthly lease payment of $ 11,028 . At this time, there is no intention of extending the term of the lease and the Company will vacate the premises as of the termination date. The long-term real estate operating leases are included in “lease right-of-use assets, net” on the Company’s Consolidated Balance Sheet and represent the Company’s right-to-use the underlying assets for the lease term. The Company’s obligation to make lease payments are included in “lease liabilities, current” and “lease liabilities, net of current” on the Company’s Consolidated Balance Sheets. ​ 102 Table of Contents The table below excludes short-term operating leases. The following table summarizes maturities of lease liabilities and the reconciliation of lease liabilities as of December 31, 2025: ​ ​ ​ ​ ​ 2026 ​ $ 1,120,564 2027 ​ ​ 2,411,889 2028 ​ ​ 2,482,464 2029 ​ ​ 2,555,156 2030 ​ ​ 2,630,029 Thereafter ​ ​ 7,629,341 Total minimum lease payments ​ ​ 18,829,443 Less: imputed interest ​ ​ ( 4,306,678 ) Total operating lease liabilities ​ $ 14,522,765 Included in the consolidated balance sheet: ​ ​ ​ Current portion of lease liabilities ​ $ 202,376 Lease liabilities, net of current ​ ​ 14,320,389 Total operating lease liabilities ​ $ 14,522,765 ​ ​ ​ ​ Other Information: ​ ​ ​ Weighted average remaining lease term ​ ​ 7.7 years Weighted average discount rate ​ ​ 6.3 % ​ The following table contains a summary of the lease costs recognized and lease payments pertaining to the Company’s operating leases under ASC 842 for the period indicated: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2025 ​ ​ ​ 2024 Operating lease costs $ 1,659,379 ​ $ 841,429 Variable lease costs ​ 879,165 ​ ​ 438,428 Lease payments ​ 943,920 ​ ​ 903,598 ​ Short-Term Operating Leases ​ Beverly Hills, California Capricor leases 1,627 square feet of office space in Beverly Hills, California from The Bubble Real Estate Company, LLC ("Bubble Real Estate") pursuant to a lease beginning in 2013. Capricor subsequently entered into several amendments modifying certain terms of the lease. Effective January 1, 2021, we entered into a month-to-month lease amendment with Bubble Real Estate, which is terminable by either party upon 90 days ’ written notice to the other party. In January 2026, the Company notified Bubble Real Estate that we will be terminating our lease and vacating the premises in April 2026. Vista, California Commencing March 13, 2024, we entered into a License and Services Agreement with Azzur Cleanrooms-on-Demand – San Diego, LLC (the “Azzur License Agreement”) pursuant to which we were granted an exclusive license to use certain space and the non-exclusive right to use certain equipment and property for our early phase clinical manufacturing purposes. Under this arrangement, Azzur operated the facility and had subleased the space from Shiraz Partners LP (“Shiraz”), the owner of the building. The initial license agreement term expired on September 26, 2024, which the Company extended through November 8, 2024. ​ Commencing on November 20, 2024, the Company entered into a lease directly with Shiraz for 18,188 square feet of laboratory and manufacturing space at the same Vista, California facility. The lease had an initial term of six months with an option to extend for an additional six months . The Company made several amendments extending the term of the lease and subsequently terminated the lease and vacated the premises as of January 31, 2026. ​ 103 Table of Contents San Diego, California ​ In December 2024, the Company entered into a sublease agreement with Entos Pharmaceuticals US, Inc. (“Entos”) for 11,173 square feet of office and research space located in San Diego, California. The lease had an original term of 12 months . In November 2025, the Company entered into an amendment with Entos to extend the sublease through June 30, 2026, with two options to extend through June 30, 2027. The Company is not reasonably certain that it will exercise this option to renew and therefore it is not included in right-of-use assets and liabilities as of December 31, 2025. ​ Short-term operating lease cost for the years ended December 31, 2025 and 2024 were $ 1,423,264 and $ 1,073,870 , respectively. 7. COLLABORATIONS, LICENSES AND REVENUE Intellectual Property Rights for Capricor’s Technology - Deramiocel and Exosomes Capricor has entered into exclusive license agreements for intellectual property rights related to certain cardiac-derived cells (“CDCs”) with Università Degli Studi Di Roma La Sapienza (the “University of Rome”), Johns Hopkins University (“JHU”), and Cedars-Sinai Medical Center (“CSMC”). Capricor is also a party to an exclusive license agreement for intellectual property rights related to exosomes with CSMC. In addition, Capricor has filed solely-owned patent applications related to the CDC and exosomes technology developed by its own scientists. University of Rome License Agreement ​ Capricor and the University of Rome entered into a License Agreement, dated June 21, 2006 (the “Rome License Agreement”), which provides for the grant of an exclusive, world-wide, royalty-bearing license by the University of Rome to Capricor (with the right to sublicense) to develop and commercialize licensed products under the licensed patent rights in all fields. Pursuant to the Rome License Agreement, Capricor paid the University of Rome a license issue fee, is currently paying minimum annual royalties in the amount of 20,000 Euros per year, and is obligated to pay a lower-end of a mid-range double-digit percentage on all royalties received as a result of sublicenses granted, which are net of any royalties paid to third parties under a license agreement from such third-party to Capricor until expiration of the license. The minimum annual royalties are creditable against future royalty payments. The Rome License Agreement remained in effect until the later of the last claim of any patent or until any patent application comprising licensed patent rights has expired or been abandoned. The last-to-expire patent licensed under the Rome License Agreement expired on January 4, 2026. The Johns Hopkins University License Agreement for CDCs Capricor and JHU entered into an Exclusive License Agreement, effective June 22, 2006 (the “JHU License Agreement”), which provides for the grant of an exclusive, world-wide, royalty-bearing license by JHU to Capricor (with the right to sublicense) to develop and commercialize licensed products and licensed services under the licensed patent rights in all fields and a nonexclusive right to the know-how. Various amendments were entered into to revise certain provisions of the JHU License Agreement. Under the JHU License Agreement, Capricor is required to exercise commercially reasonable and diligent efforts to develop and commercialize licensed products covered by the license from JHU. ​ Pursuant to the JHU License Agreement, JHU was paid an initial license fee and, thereafter, Capricor is required to pay minimum annual royalties on the anniversary dates of the JHU License Agreement. The minimum annual royalties are creditable against a low single-digit running royalty on net sales of products and net service revenues, which Capricor is also required to pay under the JHU License Agreement, which running royalty may be subject to further reduction in the event that Capricor is required to pay royalties on any patent rights to third parties in order to make or sell a licensed product. In addition, Capricor is required to pay a low double-digit percentage of the consideration received by it from sublicenses granted and is required to pay JHU certain defined development milestone payments upon the successful completion of certain phases of its clinical studies and upon receiving approval from the FDA. The maximum aggregate amount of milestone payments payable under the JHU License Agreement, as amended, is $ 1,850,000 . In December 2025, 104 Table of Contents Capricor accrued the $ 500,000 development milestone related to the Phase 3 study pursuant to the terms of the JHU License Agreement. Capricor’s next milestone payments will be triggered, if at all, upon receipt of a full FDA market approval, for which a payment of $ 1,000,000 will be due. The JHU License Agreement will, unless sooner terminated, continue in effect in each applicable country until the date of expiration of the last to expire patent within the patent rights, or, if no patents are issued, then for twenty years from the effective date. Under the terms of the JHU License Agreement, either party may terminate the agreement should the other party become insolvent or file a petition in bankruptcy or fail to cure a material breach within 30 days after notice. In addition, Capricor may terminate for any reason upon 60 days ’ written notice. ​ Cedars-Sinai Medical Center License Agreements License Agreement for CDCs On January 4, 2010, Capricor entered into an Exclusive License Agreement with CSMC (the “Original CSMC License Agreement”), for certain intellectual property related to its CDC technology. In 2013, the Original CSMC License Agreement was amended twice resulting in, among other things, a reduction in the percentage of sublicense fees which would have been payable to CSMC. Effective December 30, 2013, Capricor entered into an Amended and Restated Exclusive License Agreement with CSMC (the “Amended CSMC License Agreement”), which amended, restated, and superseded the Original CSMC License Agreement, pursuant to which, among other things, certain definitions were added or amended, the timing of certain obligations was revised and other obligations of the parties were clarified. The Amended CSMC License Agreement provides for the grant of an exclusive, world-wide, royalty-bearing license by CSMC to Capricor (with the right to sublicense) to conduct research using the patent rights and know-how and develop and commercialize products in the field using the patent rights and know-how. In addition, Capricor has the exclusive right to negotiate for an exclusive license to any future rights arising from related work conducted by or under the direction of Dr. Eduardo Marbán on behalf of CSMC. In the event the parties fail to agree upon the terms of an exclusive license for any future rights, Capricor will have a non-exclusive license to such future rights, subject to royalty obligations. Pursuant to the Original CSMC License Agreement, CSMC was paid a license fee and Capricor was obligated to reimburse CSMC for certain fees and costs incurred in connection with the prosecution of certain patent rights. Additionally, Capricor is required to meet certain spending and development milestones. Pursuant to the Amended CSMC License Agreement, Capricor remains obligated to pay low single-digit royalties on sales of royalty-bearing products as well as a low double-digit percentage of the consideration received from any sublicenses or other grant of rights. The above-mentioned royalties are subject to reduction in the event Capricor becomes obligated to obtain a license from a third party for patent rights in connection with the royalty-bearing product. The Amended CSMC License Agreement will, unless sooner terminated, continue in effect on a country by country basis until the last to expire of the patents covering the patent rights or future patent rights. Under the terms of the Amended CSMC License Agreement, unless waived by CSMC, the agreement shall automatically terminate: (i) if Capricor ceases, dissolves or winds up its business operations; (ii) in the event of the insolvency or bankruptcy of Capricor or if Capricor makes an assignment for the benefit of its creditors; (iii) if performance by either party jeopardizes the licensure, accreditation or tax exempt status of CSMC or the agreement is deemed illegal by a governmental body; (iv) within 30 days for non-payment of royalties; (v) after 90 days ’ notice from CSMC if Capricor fails to undertake commercially reasonable efforts to exploit the patent rights or future patent rights; (vi) if a material breach has not been cured within 90 days ; or (vii) if Capricor challenges any of the CSMC patent rights. If Capricor fails to undertake commercially reasonable efforts to exploit the patent rights or future patent rights and fails to cure that breach after 90 days ’ notice from CSMC, instead of terminating the license, CSMC has the option to convert any exclusive license to Capricor to a non-exclusive or co-exclusive license. Capricor may terminate the agreement if CSMC fails to cure any material breach within 90 days after notice. Capricor and CSMC have entered into several amendments to the Amended CSMC License Agreement, pursuant to which the parties agreed to add and delete certain patent applications from the list of scheduled patents and extend the timing of certain development milestones, among other things. Capricor reimbursed CSMC for certain attorneys’ fees and filing fees incurred in connection with the additional patent applications. 105 Table of Contents License Agreement for Exosomes ​ On May 5, 2014, Capricor entered into an Exclusive License Agreement with CSMC (the “Exosomes License Agreement”), for certain intellectual property rights related to CDC-derived exosomes technology. The Exosomes License Agreement provides for the grant of an exclusive, world-wide, royalty-bearing license by CSMC to Capricor (with the right to sublicense) in order to conduct research using the patent rights and know-how and to develop and commercialize products in the field using the patent rights and know-how. In addition, Capricor has the exclusive right to negotiate for an exclusive license to any future rights arising from related work conducted by or under the direction of Dr. Eduardo Marbán on behalf of CSMC. In the event the parties fail to agree upon the terms of an exclusive license, Capricor shall have a non-exclusive license to such future rights, subject to royalty obligations. Pursuant to the Exosomes License Agreement, CSMC was paid a license fee and Capricor reimbursed CSMC for certain fees and costs incurred in connection with the preparation and prosecution of certain patent applications. Additionally, Capricor is required to meet certain non-monetary development milestones and is obligated to pay low single-digit royalties on sales of royalty-bearing products as well as a single-digit percentage of the consideration received from any sublicenses or other grant of rights. The above-mentioned royalties are subject to reduction in the event Capricor becomes obligated to obtain a license from a third party for patent rights in connection with the royalty bearing product. The Exosomes License Agreement will, unless sooner terminated, continue in effect on a country by country basis until the last to expire of the patents covering the patent rights or future patent rights. Under the terms of the Exosomes License Agreement, unless waived by CSMC, the agreement shall automatically terminate: (i) if Capricor ceases, dissolves or winds up its business operations; (ii) in the event of the insolvency or bankruptcy of Capricor or if Capricor makes an assignment for the benefit of its creditors; (iii) if performance by either party jeopardizes the licensure, accreditation or tax exempt status of CSMC or the agreement is deemed illegal by a governmental body; (iv) within 30 days for non-payment of royalties; (v) after 90 days if Capricor fails to undertake commercially reasonable efforts to exploit the patent rights or future patent rights; (vi) if a material breach has not been cured within 90 days ; or (vii) if Capricor challenges any of the CSMC patent rights. If Capricor fails to undertake commercially reasonable efforts to exploit the patent rights or future patent rights and fails to cure that breach after 90 days ’ notice from CSMC, instead of terminating the license, CSMC has the option to convert any exclusive license to Capricor to a non-exclusive or co-exclusive license. Capricor may terminate the agreement if CSMC fails to cure any material breach within 90 days after notice. Capricor and CSMC have entered into several amendments to the Exosomes License Agreement. Collectively, these amendments added additional patent applications and patent families to the Exosomes License Agreement, added certain defined product development milestone payments, modified certain milestone deadlines, added certain performance milestones with respect to product candidates covered by certain future patent rights in order to maintain an exclusive license to those future patent rights, and converted certain exclusive rights to co-exclusive rights. These amendments also obligated Capricor to reimburse CSMC for certain attorneys’ fees and filing fees in connection with the additional patent applications and patent families. Cell Line License Agreement with Life Technologies ​ On March 7, 2022, Capricor entered into a non-exclusive cell line license agreement with Life Technologies Corporation, a subsidiary of Thermo Fisher Scientific, Inc., for the supply of certain cells which we will use in connection with the development of our exosomes platform. An initial license fee payment was made and additional milestone fees may become due based on the progress of our development program. ​ Revenue Recognition for Collaboration and Distribution Agreements The Company’s distribution agreements may entitle it to additional payments upon the achievement of milestones or shares of product revenue on sales. The milestones are generally categorized into two types: development milestones and sales-based milestones. The Company evaluates whether it is probable that the consideration associated with each milestone or shared revenue payments will not be subject to a significant reversal in the cumulative amount of revenue recognized. Amounts that meet this threshold are included in the transaction price using the most likely amount method, whereas amounts that do not meet this threshold are excluded from the transaction price until they meet this threshold. At the end of each subsequent reporting period, the Company re-evaluates the probability of a significant reversal of the cumulative revenue recognized for its milestones and shared revenue payments, and, if necessary, adjusts its estimate 106 Table of Contents of the overall transaction price. Any such adjustments are recorded on a cumulative catch-up basis, which would affect revenues and net income (loss) in the Company’s consolidated statements of operation and comprehensive loss. Typically, milestone payments and shared revenue payments are achieved after the Company’s performance obligations associated with the distribution agreements have been completed and after the customer has assumed responsibility for the commercialization program. Milestones or shared revenue payments achieved after the Company’s performance obligations have been completed are recognized as revenue in the period the milestone or shared revenue payments were achieved. If a milestone payment is achieved during the performance period, the milestone payment would be recognized as revenue to the extent performance had been completed at that point, and the remaining balance would be recorded as deferred revenue. The Company also evaluates whether a significant financing component exists in its collaboration agreements. Typically, a significant financing component does not exist because customers pay upfront for services and future shared revenue payments are not substantially within the control of the Company or the customer. Whenever the Company determines that goods or services promised in a contract represent a combined performance obligation over time, the Company determines the period over which the performance obligations will be performed and revenue will be recognized. Revenue is recognized using either the proportional performance method or on a straight-line basis if efforts will be expended evenly over time. Percentage of completion of patient visits in clinical trials are used as the measure of performance. The Company feels this method of measurement to be the best depiction of the transfer of services and recognition of revenue. Significant management judgment is required in determining the level of effort required under an arrangement and the period over which the Company is expected to complete its performance obligations. If the Company determines that the performance obligation is satisfied over time, any upfront payment received is initially recorded as deferred revenue on its consolidated balance sheets. Certain judgments affect the application of the Company’s revenue recognition policy. For example, the Company records short-term (less than one year) and long-term (over one year) deferred revenue based on its best estimate of when such revenue will be recognized. This estimate is based on the Company’s current operating plan, and the Company may recognize a different amount of deferred revenue over the next 12-month period if its operating plan changes in the future. Commercialization and Distribution Agreement (Nippon Shinyaku - United States) On January 24, 2022, Capricor entered into the U.S. Distribution Agreement with Nippon Shinyaku, a Japanese corporation and related party (see Note 8 – “Related Party Transactions”). Under the terms of the U.S. Distribution Agreement, Capricor appointed Nippon Shinyaku as its exclusive distributor in the United States of Deramiocel for the treatment of DMD. Pursuant to the U.S. Distribution Agreement, Nippon Shinyaku and NS Pharma, Inc. (its wholly-owned U.S. subsidiary) are responsible for the distribution of Deramiocel in the United States. Pursuant to the U.S. Distribution Agreement, Capricor received an upfront payment of $ 30.0 million. The first milestone payment of $ 10.0 million was paid upon completion of the futility analysis of the HOPE-3 trial whereby the outcome was determined to be not futile. The second milestone payment of $ 10.0 million was triggered in December 2024 upon submission of the BLA to the FDA seeking marketing approval of Deramiocel in the United States. Additionally, there is another potential milestone of $ 80.0 million due to Capricor upon receipt of marketing approval. The foregoing milestones are considered development milestones under the terms of the U.S. Distribution Agreement. Further, there are various potential sales-based milestones, if commercialized, tied to the achievement of certain sales thresholds for annual net sales of Deramiocel of up to $ 605.0 million. Subject to regulatory approval, Capricor will have the right to receive a share of product revenue which falls between 30 and 50 percent. The Company identified one distinct performance obligation. The Company determined that the performance obligation is the conduct of the HOPE-3, Phase 3 clinical study. The Company determined the transaction price totaled $ 40.0 million, which was the upfront payment of $ 30.0 million and first milestone payment of $ 10.0 million. The Company has excluded any future milestone or shared revenue payments from this transaction price to date based on probability. Revenue related to this performance obligation has been recognized using a proportional performance method in relation to the completion of the HOPE-3 clinical study, Cohort A arm, to determine the extent of progress towards completion. Under this method, the transaction price is recognized over 107 Table of Contents the contract’s entire performance period using a cost percentage per patient visit relative to the total estimated cost of patient visits. As of December 31, 2024, all of the $ 40.0 million has been recognized as revenue. In December 2024, the Company triggered its second milestone with Nippon Shinyaku under the U.S. Distribution Agreement, which related to a separate distinct performance obligation. The performance obligation was tied to the submission of our BLA to the FDA. As a result, the $ 10.0 million milestone payment is recognized as revenue within the Company’s consolidated statement of operations and comprehensive loss as of December 31, 2024. For the year ended December 31, 2025, the Company did no t recognize any revenue compared to approximately $ 22.3 million of revenue recognized for the year ended December 31, 2024 under the U.S. Distribution Agreement. There was no deferred revenue recorded as of December 31, 2025 or 2024 related to the U.S. Distribution Agreement. As of December 2024, the Company recorded a receivable of $ 10.0 million related to the second milestone, which payment was received in January 2025. The Company had no opening or closing contract asset balances recognized other than the accounts receivable mentioned above. The difference between the opening and closing balances of the Company’s contract liability results from the Company performance of services in connection to its performance obligation. ​ Commercialization and Distribution Agreement (Nippon Shinyaku - Japan) On February 10, 2023, Capricor entered into a Commercialization and Distribution Agreement (the “Japan Distribution Agreement”) with Nippon Shinyaku. Under the terms of the Japan Distribution Agreement, Capricor appointed Nippon Shinyaku as its exclusive distributor in Japan of Deramiocel for the treatment of DMD. Under the terms of the Japan Distribution Agreement, Capricor received an upfront payment of $ 12.0 million in 2023 and in addition, Capricor may potentially receive additional development and sales-based milestone payments of up to approximately $ 89.0 million, subject to foreign currency exchange rates, and a meaningful double-digit share of product revenue. Nippon Shinyaku will be responsible for the distribution of Deramiocel in Japan. Capricor will be responsible for the conduct of clinical development and regulatory approval in Japan, as may be required, as well as the manufacturing of Deramiocel. In addition, Capricor or its designee will hold the Marketing Authorization in Japan if the product is approved in that territory. The Company has evaluated the Japan Distribution Agreement in accordance with ASC 606, Revenue for Contracts from Customers . The Company determined the initial transaction price totaled $ 12.0 million, which was the upfront payment fee. The Company has excluded any future milestone or shared revenue payments from this transaction price to date based on probability. At this time, the Company is evaluating the regulatory pathway to achieve potential product approval in this territory. Until such time, the Company cannot identify any distinct performance obligation. As such, the Company has recorded the entire upfront payment fee of $ 12.0 million as current deferred revenue on the Company’s consolidated balance sheets as of December 31, 2025. ​ European Region Binding Term Sheet ​ On September 16, 2024, Capricor entered into a Binding Term Sheet (the “Term Sheet”) with Nippon Shinyaku for the commercialization and distribution of Deramiocel for the treatment of DMD in the European region, as defined in the Term Sheet. Subject to finalization of a definitive agreement, under the terms of the Term Sheet, Capricor would be responsible for the development and manufacturing of Deramiocel for potential approval in the European region. Nippon Shinyaku would be responsible for the sales and distribution of Deramiocel in the European region. Subject to regulatory approval, Capricor would receive a double-digit share of product revenue and additional development and sales-based milestone payments. If the definitive agreement is entered into, Capricor will receive an upfront payment of $ 20.0 million upon execution of the definitive agreement, with potential additional development and sales-based milestone payments of up to $ 715.0 million. Upon execution of the definitive agreement, the Company will evaluate the terms in accordance with ASC 606, Revenue for Contracts from Customers . As of December 31, 2025, nothing has been recorded or received. ​ Capricor and Nippon Shinyaku have entered into various amendments to the Term Sheet, pursuant to which the parties agreed to extend the date during which the parties shall negotiate the terms of the definitive agreement to April 1, 2026. ​ 108 Table of Contents Summary of Collaboration Revenue ​ In total, for the years ended December 31, 2025 and 2024, the Company recognized $ 0 and approximately $ 22.3 million, respectively, in revenue from its collaboration and distribution agreements, primarily related to the U.S. Distribution Agreement with Nippon Shinyaku. ​ As of December 31, 2025 and 2024, the Company had no deferred revenue related to the U.S. Distribution Agreement. The Company recorded $ 12.0 million of deferred revenue related to the Japan Distribution Agreement, which represents the upfront payment received for which no performance obligation had been satisfied as of December 31, 2025 or 2024. ​ As of December 31, 2024, the Company recorded accounts receivable of $ 10.0 million related to milestone payment earned under the U.S. Distribution Agreement, which were received in January 2025. ​ 8. RELATED PARTY TRANSACTIONS Consulting Agreements In 2013, Capricor entered into a Consulting Agreement with Dr. Frank Litvack, the Company’s Executive Chairman and a member of its Board of Directors, whereby Capricor agreed to pay Dr. Litvack $ 10,000 per month for consulting services. The agreement is terminable upon 30 days ’ notice. For the years ended December 31, 2025 and 2024, the Company paid Dr. Litvack $ 120,000 each year under this consulting arrangement. As of December 31, 2025 and 2024, $ 10,000 was recorded in accounts payable related to this Consulting Agreement. In January 2024, Capricor entered into a Consulting Agreement with Michael Kelliher, a member of its Board of Directors, related to business development services whereby he was granted an option to purchase 30,000 shares of the Company’s common stock. The services in connection with the consulting agreement were completed in 2024. Commercialization and Distribution Agreements As noted above, Capricor is party to two commercialization and distribution agreements with Nippon Shinyaku, which holds more than 10 % of the outstanding capital stock of Capricor Therapeutics (see Note 7 – “Collaborations, Licenses and Revenue”). There were no outstanding receivables or payables as of December 31, 2025. European Region Binding Term Sheet As noted above, on September 16, 2024, Capricor entered into the Term Sheet with Nippon Shinyaku for the commercialization and distribution of Deramiocel for the treatment of DMD in the European region, as defined in the Term Sheet (see Note 7 – “Collaborations, Licenses and Revenue”). Private Placement On September 16, 2024, the Company entered into a Subscription Agreement with Nippon Shinyaku pursuant to which the Company agreed to issue and sell to Nippon Shinyaku in the Private Placement, an aggregate of 2,798,507 shares of the common stock of the Company at a price per Share of $ 5.36 , which was issued at a 20 % premium to the 60-day volume-weighted average price, for an aggregate purchase price of approximately $ 15.0 million. In connection with the Private Placement, the Company also entered into the Registration Rights Agreement. Pursuant to the terms of the Registration Rights Agreement, the Company has filed with the SEC a registration statement to register for resale the shares sold in the Private Placement, which registration statement was declared effective on November 8, 2024. ​ 9. GOVERNMENT GRANTS AND OTHER INCOME CIRM Grant Award (HOPE) On June 16, 2016, Capricor entered into the CIRM Award with CIRM in the amount of approximately $ 3.4 million to fund, in part, Capricor’s Phase I/II HOPE-Duchenne clinical trial investigating Deramiocel for the treatment of DMD-associated cardiomyopathy. Pursuant to terms of the CIRM Award, the disbursements were tied to the achievement of specified operational milestones. In addition, the terms of the CIRM Award included a co-funding requirement pursuant 109 Table of Contents to which Capricor was required to spend approximately $ 2.3 million of its own capital to fund the CIRM funded research project. The CIRM Award is further subject to the conditions and requirements set forth in the CIRM Grants Administration Policy for Clinical Stage Projects. Such requirements include, without limitation, the filing of quarterly and annual reports with CIRM, the sharing of intellectual property pursuant to Title 17, California Code of Regulations (“CCR”) Sections 100600-100612, and potentially the sharing with the State of California of a fraction of licensing revenue received from a CIRM funded research project and net commercial revenue from a commercialized product which resulted from the CIRM funded research as set forth in Title 17, CCR Section 100608. The maximum royalty on net commercial revenue that Capricor could have been required to pay to CIRM was equal to nine times the total amount awarded and paid to Capricor. After completing the CIRM funded research project and at any time after the award period end date (but no later than the ten-year anniversary of the date of the award), Capricor had the right to convert the CIRM Award into a loan, the terms of which will be determined based on various factors, including the stage of the research and development of the program at the time the election is made. On June 20, 2016, Capricor entered into a Loan Election Agreement with CIRM whereby, among other things, CIRM and Capricor agreed that if Capricor elects to convert the grant into a loan, the term of the loan could be up to five years from the date of execution of the applicable loan agreement; provided that the maturity date of the loan will not surpass the ten-year anniversary of the grant date of the CIRM Award. Beginning on the date of the loan, the loan shall bear interest on the unpaid principal balance, plus the interest that has accrued prior to the election point according to the terms set forth in the CIRM Loan Policy and CIRM Grants Administration Policy for Clinical Stage Projects (the “New Loan Balance”), at a per annum rate equal to the LIBOR rate for a three-month deposit in U.S. dollars, as published by the Wall Street Journal on the loan date, plus one percent. Interest shall be compounded annually on the outstanding New Loan Balance commencing with the loan date and the interest shall be payable, together with the New Loan Balance, upon the due date of the loan. In 2019, Capricor completed all milestones and close-out activities associated with the CIRM Award and expended all funds received. The Company accounts for this award as a liability rather than income because Capricor had the option to convert the award into a loan. As of December 31, 2025, the total CIRM liability was approximately $ 6.4 million consisting of $ 3.4 million in principal and $ 3.0 million in accrued interest, of which the full amount is classified as current. On February 26, 2025, Capricor notified CIRM of its election to convert the CIRM Award into a loan. The terms of the loan agreement are currently under discussion with CIRM. Depending on the results of these discussions and based on our reasonable best estimate for the anticipated loan terms, accrued interest on the CIRM Award could reach up to approximately $ 7.7 million, and may continue to accrue over time until the final payout. This estimate is dependent on many factors, some of which have yet to be determined. As of December 31, 2025, approximately $ 3.0 million was recorded as accrued interest. ​ 10. ACCRUED EXPENSES AND CLINICAL TRIAL ACCRUALS Accrued Expenses ​ Accrued expenses consist of the following: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ ​ ​ December 31, ​ ​ ​ ​ 2025 ​ ​ ​ 2024 Accrued clinical expenses ​ $ 2,689,764 ​ $ 1,919,437 Accrued payroll and related costs ​ 6,710,578 ​ 2,552,516 Accrued construction in progress costs ​ ​ 3,011,034 ​ ​ — Other accrued expenses ​ ​ 3,146,270 ​ ​ 435,712 Total accrued expenses ​ $ 15,557,646 ​ $ 4,907,665 ​ 110 Table of Contents Clinical Trial Expense ​ As part of the process of preparing our consolidated financial statements, we are required to estimate our accrued expenses. Our clinical trial accrual process is designed to account for expenses resulting from our obligations under contracts with vendors, consultants, contract research organizations (“CROs”), and clinical site agreements in connection with conducting clinical trials. The financial terms of these contracts are subject to negotiations, which vary from contract to contract and may result in payment flows that do not match the periods over which materials or services are provided to us under such contracts. Our objective is to reflect the appropriate clinical trial expenses in our consolidated financial statements by matching the appropriate expenses with the period in which services are provided and efforts are expended. We account for these expenses according to the progress of the trial as measured by patient progression and the timing of various aspects of the trial. We determine accrual estimates through financial models that take into account discussions with applicable personnel and outside service providers as to the progress or state of completion of trials, or the services completed. During the course of a clinical trial, we adjust our clinical expense recognition if actual results differ from our estimates. We make estimates of our accrued expenses as of each balance sheet date in our consolidated financial statements based on the facts and circumstances known to us at that time. Our clinical trial accrual and prepaid assets are dependent, in part, upon the receipt of timely and accurate reporting from CROs and other third-party vendors. Although we do not expect our estimates to be materially different from amounts actually incurred, our understanding of the status and timing of services performed relative to the actual status and timing of services performed may vary and may result in us reporting amounts that are too high or too low for any particular period. ​ 11. STOCK-BASED COMPENSATION Stock-Based Compensation For stock options, the Company estimates the fair value of the awards on the date of grant using an option-pricing model. The value of the portion of the award that is ultimately expected to vest is recognized as an expense over the requisite service periods in the Company’s statements of operations and comprehensive loss. The Company estimates the fair value of stock-based compensation awards using the Black-Scholes model. This model requires the Company to estimate the expected volatility and value of its common stock and the expected term of the stock options, all of which are highly complex and subjective variables. The variables take into consideration, among other things, actual and projected stock option exercise behavior. For employees and directors, the expected life was calculated based on the simplified method as described by the SEC Staff Accounting Bulletin No. 110, Share-Based Payment. For other service providers, the expected life was calculated using the contractual term of the award. The Company’s estimate of expected volatility was based on the historical stock price of the Company. The Company has selected a risk-free rate based on the implied yield available on U.S. Treasury securities with a maturity equivalent to the expected term of the options. For restricted stock awards, the Company determines the fair value using the Company’s adjusted closing stock price on the grant date. ​ 111 Table of Contents Warrants The following table summarizes all warrant activity for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ ​ ​ Warrants ​ ​ ​ Exercise Price Outstanding at January 1, 2024 5,041,403 ​ $ 5.61 Expired — ​ — Granted ​ — ​ ​ — Exercised ​ ( 105,782 ) ​ ​ 1.37 Outstanding at December 31, 2024 4,935,621 ​ $ 5.70 Granted ​ — ​ ​ — Exercised ​ ( 1,589,699 ) ​ ​ 5.70 Outstanding at December 31, 2025 3,345,922 ​ $ 5.70 ​ The following table summarizes all outstanding warrants to purchase shares of the Company’s common stock at December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Warrants Outstanding ​ ​ ​ ​ ​ ​ ​ ​ ​ December 31, ​ December 31, ​ Exercise Price ​ Expiration Type ​ ​ ​ Grant Date ​ ​ ​ 2025 ​ ​ ​ 2024 ​ ​ ​ per Share ​ ​ ​ Date Common Warrants ​ 10/3/2023 ​ 3,345,922 ​ 4,935,621 ​ $ 5.70 ​ 10/3/2030 ​ Stock Awards The Company’s Board of Directors (the “Board”) has approved six stock option plans: (i) the 2006 Stock Option Plan, (ii) the 2012 Restated Equity Incentive Plan (which superseded the 2006 Stock Option Plan) (the “2012 Plan”), (iii) the 2012 Non-Employee Director Stock Option Plan (the “2012 Non-Employee Director Plan”), (iv) the 2020 Equity Incentive Plan (the “2020 Plan”), and (v) the 2021 Equity Incentive Plan (the “2021 Plan”), and (vi) the 2025 Equity Incentive Plan (the “2025 Plan”). At this time, the Company only issues stock options and restricted stock awards under the 2020 Plan, the 2021 Plan, and the 2025 Plan and no longer issues stock awards under the 2006 Stock Option Plan, the 2012 Plan, or the 2012 Non-Employee Director Plan. In June 2021, the Company’s stockholders approved the 2021 Plan, which authorized 3,500,000 shares of common stock reserved under the 2021 Plan for the issuance of stock awards. The number of shares available for issuance under the 2021 Plan was automatically increased on January 1 of each year, commencing with January 1, 2022, by an amount equal to the lesser of 5 % of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year or such number of shares determined by the compensation committee of the Board. On January 1, 2025 and 2024, 2,279,114 and 1,557,416 shares were added under the 2021 Plan, respectively. Once the 2025 Plan was approved on May 22, 2025, no new shares have been or will be added to the shares reserve under the 2021 Plan. ​ In May 2025, the Company’s stockholders approved the 2025 Plan which authorized 3,500,000 shares of common stock reserved under the 2025 Plan for the issuance of stock awards. The number of shares available for issuance under the 2025 Plan shall be automatically increased on January 1 of each year, commencing with January 1, 2026 and ending on January 1, 2035, by an amount equal to 5 % of the outstanding shares of common stock as of the last day of the immediately preceding fiscal year. ​ As of December 31, 2025, 3,636,282 shares remain available for issuance under the respective stock option plans. The Company’s stock option plans are administered by the Board, in conjunction with the compensation committee of the Board, which determines the recipients and types of awards to be granted, as well as the number of shares subject to the awards, the exercise price and the vesting schedule. Each stock award granted will be designated in the award agreement as either an incentive stock option, a nonstatutory stock option, or a restricted stock award. Notwithstanding such designation, however, to the extent that the aggregate fair market value of the shares with respect to which incentive stock options are exercisable for the first time by the participant during any calendar year (under all plans of the Company and any parent or subsidiary) exceeds $ 100,000 , such options will be treated as nonstatutory stock options. Stock options are granted with an exercise price not less than equal to the closing price of the Company’s common stock 112 Table of Contents on the date of grant, and generally vest over a period of one to four years . The term of stock options granted under each of the plans cannot exceed ten years . Stock Option Awards The estimated weighted average fair value of the options granted during 2025 and 2024 were approximately $ 12.24 and $ 5.89 per share, respectively. The Company estimates the fair value of each option award using the Black-Scholes option-pricing model. The company used the following assumptions to estimate the fair value of stock options issued during the year ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ 2024 ​ Expected volatility 104 - 130 % 109 - 119 % Expected term 5 - 6 years 5 - 7 years ​ Dividend yield 0 % 0 % Risk-free interest rates 3.7 - 4.5 % 3.7 - 4.5 % ​ Employee and non-employee stock-based compensation expense was as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ ​ ​ 2025 ​ 2024 General and administrative ​ $ 8,307,733 ​ $ 6,159,497 Research and development ​ 8,917,527 ​ 3,605,667 Total ​ $ 17,225,260 ​ $ 9,765,164 ​ The Company does not recognize an income tax benefit as the Company believes that an actual income tax benefit may not be realized. For non-qualified stock options, the loss creates a timing difference, resulting in a deferred tax asset, which is fully reserved by a valuation allowance. As of December 31, 2025, the total unrecognized fair value compensation cost related to non-vested stock options was approximately $ 31.8 million, which is expected to be recognized over a weighted average period of approximately 2.4 years. The following is a schedule summarizing employee and non-employee stock option activity for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Number of ​ Weighted Average ​ Aggregate ​ ​ ​ ​ Options ​ ​ ​ Exercise Price ​ ​ ​ Intrinsic Value Outstanding at January 1, 2024 8,232,404 ​ $ 3.46 ​ ​ Granted 3,236,726 ​ 6.81 ​ ​ Exercised ( 226,105 ) ​ 2.60 $ 1,973,252 Expired/Cancelled ( 511,842 ) ​ 5.79 ​ ​ Outstanding at December 31, 2024 10,731,183 ​ $ 4.38 ​ ​ Granted 2,606,527 ​ 14.35 ​ ​ Exercised ( 636,833 ) ​ 5.05 $ 11,778,237 Expired/Cancelled ( 387,770 ) ​ 10.31 ​ ​ Outstanding at December 31, 2025 12,313,107 ​ $ 6.27 ​ $ 278,173,887 Exercisable at December 31, 2025 8,356,779 ​ $ 4.53 ​ $ 203,301,006 ​ The aggregate intrinsic value represents the difference between the exercise price of the options and the estimated fair value of the Company’s common stock for each of the respective periods. ​ Restricted Stock Awards ​ The Company has granted restricted stock awards (“RSAs”) under the 2021 Plan. The stock awards are fully vested upon grant and each outstanding RSA will be exchanged for one share of the Company’s common stock. The 113 Table of Contents Company estimates the fair value of each restricted stock award using the Company’s adjusted closing stock price on the grant date. ​ The following table summarized the activity of the Company’s RSA for the year ended December 31, 2025: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Weighted Average ​ ​ Number of ​ Grant Date ​ ​ ​ ​ RSAs ​ Fair Value Outstanding at December 31, 2024 — ​ $ — Granted 17,210 ​ 14.96 Vested ( 17,210 ) ​ 14.96 Expired/Cancelled — ​ — Outstanding at December 31, 2025 — ​ $ — ​ ​ 12. STOCKHOLDERS’ EQUITY AND ACCUMULATED OTHER COMPREHENSIVE INCOME December 2025 Underwritten Public Offering On December 5, 2025, the Company entered into an underwriting agreement (the “2025 Underwriting Agreement”) with Piper Sandler & Co. (“Piper Sandler”) and Oppenheimer & Co., Inc. (“Oppenheimer”) as representatives of the underwriters (the “Underwriters”), pursuant to which the Company agreed to sell and issue, in a public offering an aggregate of 6,000,000 shares of common stock, including the exercise in full of the underwriters’ option to purchase additional 900,000 shares to cover over allotments, at a public offering price of $ 25.00 per share for total gross proceeds of approximately $ 172.5 million, before deducting underwriting commissions and other offering expenses payable by the Company. The Company paid cash commissions on the gross proceeds, plus reimbursement of expenses to the Underwriters, as well as legal and accounting fees in the aggregate amount of approximately $ 10.5 million. October 2024 Underwritten Public Offering On October 16, 2024, the Company entered into an underwriting agreement (the “2024 Underwriting Agreement”) with Piper Sandler and Oppenheimer as representatives of the underwriters (the “Underwriters”), pursuant to which the Company agreed to sell and issue, in a public offering an aggregate of 5,073,800 shares of common stock, including the exercise in full of the underwriters’ option to purchase additional shares to cover over allotments, at a public offering price of $ 17.00 per share for total gross proceeds of approximately $ 86.3 million, before deducting underwriting commissions and other offering expenses payable by the Company. The Company paid cash commissions on the gross proceeds, plus reimbursement of expenses to the Underwriters, as well as legal and accounting fees in the aggregate amount of approximately $ 5.4 million. September 2024 Private Placement On September 16, 2024, the Company entered into a Subscription Agreement with Nippon Shinyaku pursuant to which the Company agreed to issue and sell to Nippon Shinyaku in a private placement (the “Private Placement”), an aggregate of 2,798,507 shares of the common stock of the Company at a price per Share of $ 5.36 , which was issued at a 20 % premium to the 60-day volume-weighted average price, for an aggregate purchase price of approximately $ 15.0 million. The Subscription Agreement also included lock-up provisions restricting Nippon Shinyaku from selling or otherwise disposing of shares of the Company’s common stock until the six-month anniversary of the Closing Date which occurred on March 15, 2025. ​ In connection with the Private Placement, the Company also entered into a Registration Rights Agreement with Nippon Shinyaku on September 16, 2024 (the “Registration Rights Agreement”). Pursuant to the terms of the Registration Rights Agreement, the Company has filed with the SEC a registration statement to register for resale the shares sold in the Private Placement, which registration statement was declared effective on November 8, 2024. ​ 114 Table of Contents ATM Programs September 2025 ATM Program ​ On September 10, 2025, the Company established an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $ 150.0 million (the “September 2025 ATM Program”), pursuant to an Equity Distribution Agreement with Piper Sandler and Oppenheimer (collectively, the “Agents”), by which the Agents may sell our common stock at the market prices prevailing at the time of sale. The Agents are entitled to compensation for their services at a commission rate of 3.0 % of the gross sales price per share of common stock sold plus reimbursement of certain expenses. Effective December 5, 2025, the Company reduced the maximum offering amount from $ 150.0 million to $ 125.0 million. ​ Through December 31, 2025, the Company sold an aggregate of 2,682,307 shares of common stock under the September 2025 ATM Program at an average price of approximately $ 28.89 per share for gross proceeds of approximately $ 77.5 million. The Company paid approximately $ 2.4 million of aggregated fees related to this sale. Subsequent to December 31, 2025, no additional shares have been sold under the September 2025 ATM Program through the date of this filing. ​ June 2021 ATM Program ​ The Company established an at-the-market offering under a prospectus supplement for aggregate sales proceeds of up to $ 75.0 million (the “June 2021 ATM Program”) on June 21, 2021, pursuant to a Common Stock Sales Agreement with H.C. Wainwright & Co. LLC (“Wainwright”) by which Wainwright sold our common stock at the market prices prevailing at the time of sale. Wainwright was entitled to compensation for its services at a commission rate of 3.0 % of the gross sales price per share of common stock sold plus reimbursement of certain expenses. ​ From June 21, 2021 through October 1, 2024, the Company sold an aggregate of 9,228,383 shares of common stock under the June 2021 ATM Program at an average price of approximately $ 8.13 per share for gross proceeds of approximately $ 75.0 million which represents all amounts that were available to be sold under the June 2021 ATM program. Effective October 1, 2024, the June 2021 ATM Program was closed and terminated. The Company paid cash commissions on the gross proceeds, plus reimbursement of expenses to Wainwright, as well as legal and accounting fees in the aggregate amount of approximately $ 2.4 million. ​ Accumulated Other Comprehensive Income (Loss) Comprehensive income (loss) generally represents all changes in stockholders’ equity during the period except those resulting from investments by, or distributions to, stockholders. The Company’s comprehensive loss was approximately $ 105.8 million and $ 39.7 million for the years ended December 31, 2025 and 2024, respectively. The Company’s other comprehensive income (loss) is related to a net unrealized gain (loss) on marketable securities. For the years ended December 31, 2025 and 2024, the Company’s other comprehensive income (loss) was ($ 743,801 ) and $ 791,142 , respectively. The following summarizes the changes in accumulated other comprehensive loss: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Net Unrealized Gains/(Losses) ​ ​ ​ ​ Available-For-Sale Securities ​ Accumulated Other Comprehensive Income/(Loss) Balance at January 1, 2024 $ 235,813 ​ $ 235,813 Other comprehensive income 791,142 ​ 791,142 Outstanding at December 31, 2024 1,026,955 ​ ​ 1,026,955 Other comprehensive loss ( 743,801 ) ​ ( 743,801 ) Outstanding at December 31, 2025 $ 283,154 ​ $ 283,154 ​ Net Loss and Net Loss Per Share For the years ended December 31, 2025 and 2024, warrants and options to purchase 15,659,029 and 15,666,804 shares of common stock, respectively, have been excluded from the computation of potentially dilutive securities. Potentially dilutive shares of common stock, which primarily consist of stock options issued to employees, consultants, 115 Table of Contents and directors as well as warrants issued, have been excluded from the diluted loss per share calculation because their effect is anti-dilutive. Because the impact of these items is anti-dilutive during periods of net loss, there was no difference between basic and diluted loss per share for the years ended December 31, 2025 and 2024. ​ 13. INCOME TAXES The domestic and foreign components of income (loss) before income tax provision (benefit) were as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2025 ​ 2024 United States $ ( 105,042,346 ) ​ $ ( 40,465,586 ) Foreign — ​ — Total $ ( 105,042,346 ) ​ $ ( 40,465,586 ) ​ The federal and state income tax provision (benefit) is summarized as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2025 ​ 2024 Current ​ ​ ​ ​ ​ ​ ​ Federal $ — ​ $ — State and local ​ 1,600 ​ ​ 1,600 Total current tax expense ​ 1,600 ​ ​ 1,600 Deferred ​ ​ ​ ​ ​ Federal ​ — ​ ​ — State and local ​ — ​ ​ — Total deferred tax expense ​ — ​ ​ — Total ​ ​ ​ ​ ​ Federal ​ — ​ ​ — State and local ​ 1,600 ​ ​ 1,600 Total tax expense $ 1,600 ​ $ 1,600 ​ Deferred income taxes reflect the net tax effects of (a) temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and (b) operating losses and tax credit carryforwards. 116 Table of Contents The tax effects of significant items comprising the Company’s deferred taxes as of December 31 are as follows: ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2025 ​ 2024 Deferred tax assets: ​ ​ ​ ​ ​ ​ ​ Accrued expenses $ 1,061,030 ​ $ 722,851 Stock-based compensation ​ 5,236,924 ​ ​ 5,088,808 Research and development expense ​ 11,592,478 ​ ​ 15,993,708 Lease liabilities ​ 3,052,803 ​ ​ 406,366 Net operating losses ​ 54,428,383 ​ ​ 32,472,461 Credits ​ 28,848,564 ​ ​ 22,314,502 Deferred revenue ​ 2,522,497 ​ ​ 3,360,445 CIRM liability ​ 640,236 ​ ​ — Total deferred tax assets ​ 107,382,915 ​ ​ 80,359,141 ​ ​ ​ ​ ​ ​ Deferred tax liabilities: ​ ​ ​ ​ ​ Lease right-of-use assets ​ ( 2,845,759 ) ​ ​ ( 367,555 ) Fixed assets ​ ( 1,091,120 ) ​ ​ ( 1,357,352 ) Other comprehensive income ​ ( 59,521 ) ​ ​ ( 66,036 ) Total deferred tax liabilities ​ ( 3,996,400 ) ​ ​ ( 1,790,943 ) ​ ​ ​ ​ ​ ​ Valuation allowance ​ ( 103,386,515 ) ​ ​ ( 78,568,198 ) Net deferred taxes $ — ​ $ — ​ ASC 740 requires that the tax benefit of net operating losses, temporary differences and credit carryforwards be recorded as an asset to the extent that management assesses that realization is more likely than not. Realization of the future tax benefits is dependent on the Company's ability to generate sufficient taxable income within the carryforward period. Because of the Company's recent history of operating losses, management believes that recognition of the deferred tax assets is currently not likely to be realized and, accordingly, has provided a valuation allowance. The valuation allowance increased by approximately $ 24.8 million during 2025 and approximately $ 12.1 million during 2024. Net operating losses and tax credit carryforwards as of the December 31, 2025 are as follows: ​ ​ ​ ​ ​ ​ ​ Amount ​ Expiration Years Net operating losses, federal (post December 31, 2017) $ 160,690,929 ​ Do Not Expire Net operating losses, federal (prior to January 1, 2018) $ 39,383,370 ​ 2031 Net operating losses, state $ 177,927,620 ​ 2028 Tax credits, federal $ 27,054,520 ​ 2027 Tax credits, state $ 2,270,942 ​ Indefinite ​ ​ 117 Table of Contents The effective tax rate of the Company's provision (benefit) for income taxes differs from the federal statutory rate as follows: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ 2025 ​ 2024 ​ ​ Amount ​ Rate ​ ​ Amount ​ Rate U.S. federal statutory tax rate $ ( 22,058,893 ) ​ 21.0 % ​ $ ( 8,497,773 ) ​ 21.0 % State and local income taxes, net of federal income tax effect (1) ​ 1,264 ​ 0.0 % ​ ​ 1,264 ​ 0.0 % Tax credits ​ ​ ​ ​ ​ ​ ​ ​ ​ Orphan drug tax credit ​ ( 4,778,164 ) ​ 4.6 % ​ ​ ( 4,778,164 ) ​ 11.8 % Research and development tax credit ​ ( 399,695 ) ​ 0.4 % ​ ​ ( 399,695 ) ​ 1.0 % Change in valuation allowance ​ 26,851,125 ​ - 25.6 % ​ ​ 13,042,758 ​ - 32.2 % Nondeductible items ​ ​ ​ ​ ​ ​ ​ ​ ​ Stock-based compensation, including windfalls/shortfalls ​ 314,710 ​ - 0.3 % ​ ​ 612,474 ​ - 1.5 % Other ​ 71,253 ​ - 0.1 % ​ ​ 20,736 ​ - 0.1 % Effective income tax rate $ 1,600 ​ 0.0 % ​ $ 1,600 ​ 0.0 % (1) The majority of taxes in the state and local income taxes category is reported in California. The cash paid for income taxes (net of refunds) was $ 1,600 for both 2025 and 2024 and applied only to state of California. The tax years 2023 through 2025 remain open to examination by the Internal Revenue Service and certain state tax authorities, although net operating loss and tax credit carryforwards generated prior to 2007 may still be adjusted upon examination by the Internal Revenue Service or state tax authorities if they have or will be used in a future period. Under Section 382 of the Code, the Company’s ability to utilize NOL carryforwards or other tax attributes, such as federal tax credits, in any taxable year may be limited if the Company has experienced an “ownership change.” Generally, a Section 382 ownership change occurs if one or more stockholders or groups of stockholders who owns at least 5% of a corporation’s stock increases its ownership by more than 50 percentage points over its lowest ownership percentage within a specified testing period. Similar rules may apply under state tax laws. We have experienced an ownership change that we believe under Section 382 of the Code will result in limitation in our ability to utilize net operating losses and credits. In addition, the Company may experience future ownership changes as a result of future offerings or other changes in ownership of its stock. As a result, the amount of the NOLs and tax credit carryforward presented in the financial statement could be limited and may expire unutilized. The Company’s net operating loss carryforwards are subject to Internal Revenue Service (“IRS”) examination until they are fully utilized and such tax years are closed. The Company’s policy is to include interest and penalties related to unrecognized tax benefits in income tax expense. Interest and penalties were insignificant for the years ended December 31, 2025 and 2024. ​ 14. RECENT ACCOUNTING PRONOUNCEMENTS Recent Accounting Pronouncements In December 2024, the FASB issued ASU 2023-09, Improvements to Income Tax Disclosures (Topic 740) , which requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. ASU 2023-09 is effective on a prospective basis for annual periods beginning after December 15, 2024. The Company adopted ASU 2023-09 in the fourth quarter of 2025 and applied it retrospectively. Please refer to Note 13 - "Income Taxes” for further information and disclosure. ​ In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements , which is intended to improve the navigability of the guidance in ASC 270, Interim Reporting, and clarify when it applies. Under the amendments, an entity is subject to ASC 270 if it provides interim financial statements and notes in accordance with GAAP. ASU 2025-11 also addresses the form and content of such financial statements, interim disclosures requirements, and establishes a principle under which an entity must disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within 118 Table of Contents annual reporting periods beginning after December 15, 2027, and early adoption is permitted. The Company is currently evaluating the impact of this ASU on its financial statements. ​ In September 2025, the FASB issued ASU 2025-06, Intangibles - Goodwill and Other - Internal-Use Software (Subtopic 350-40): Targeted Improvements to the Accounting for Internal-Use Software , which amends the guidance in ASC 350-40, Intangibles – Goodwill and Other – Internal-Use Software. The amendments modernize the recognition and disclosure framework for internal-use software costs, removing the previous “development stage” model and introducing a more judgment-based approach. The ASU is effective for fiscal years beginning after December 15, 2027, and for interim periods within those annual reporting periods, with early adoption permitted. The Company is currently evaluating the impact this guidance will have on its financial statement. ​ In November 2024, the FASB issued ASU No. 2024-03, Disaggregation of Income Statement Expenses (Subtopic 220-40) . The ASU requires the disaggregated disclosure of specific expense categories, including purchases of inventory, employee compensation, depreciation, and amortization, within relevant income statement captions. This ASU also requires disclosure of the total amount of selling expenses along with the definition of selling expenses. The ASU is effective for annual periods beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Adoption of this ASU can either be applied prospectively to consolidated financial statements issued for reporting periods after the effective date of this ASU or retrospectively to any or all prior periods presented in the consolidated financial statements. Early adoption is also permitted. This ASU will likely result in the required additional disclosures being included in our consolidated financial statements, once adopted. The Company is currently evaluating the impact this guidance will have on its financial statement disclosures. ​ Other recent accounting pronouncements issued by the FASB, including its Emerging Issues Task Force, the American Institute of Certified Public Accountants, and the SEC, did not or are not believed by management to have a material impact on the Company’s present or future consolidated financial statement presentation or disclosures. ​ 15. COMMITMENTS AND CONTINGENCIES Legal Contingencies On July 17, 2025, a putative securities class action was filed in the Southern District of California, naming Capricor Therapeutics, Inc. and our chief executive officer, Linda Marbán. The action alleges certain violations of the U.S. federal securities laws and seeks unspecified damages. ​ On August 1, 2025, a derivative action was filed in the Southern District of California naming each of the Directors on the Board of Capricor Therapeutics, Inc. The action alleges, among other things, breaches of fiduciary duties and seeks unspecified damages. ​ On November 24, 2025, a second derivative action was filed in the Southern District of California naming each of the Directors on the Board of Capricor Therapeutics, Inc. The action alleges, among other things, breaches of fiduciary duties and seeks unspecified damages. ​ On October 2, 2025, the Company received a Section 220 Shareholder Demand Letter dated September 30, 2025 to inspect and make copies of certain books and records of the Company. The stockholder's demand is related to, among other things, alleged false and misleading statements purportedly made by officers and directors of the Company, as well as the alleged failure to disclose material adverse facts about the Company's business, operations, and prospects. ​ In addition, from time to time, the Company may become involved in various other legal proceedings that arise in the ordinary course of its business or otherwise. The Company records a loss contingency reserve for a legal proceeding when it considers the potential loss probable and it can reasonably estimate the amount of the loss or determine a probable range of loss. The Company has not recorded any material accruals for loss contingencies as of December 31, 2025. ​ Accounts Payable During the normal course of business, disputes with vendors may arise. If a vendor disputed payment is probable and able to be estimated, we will record an estimated liability. 119 Table of Contents Other Funding Commitments The Company is a party to various agreements, principally relating to licensed technology, that require future payments relating to milestones that may be met in subsequent periods or royalties on future sales of specific products (see Note 7 - "Collaborations, Licenses and Revenue"). Additionally, the Company is a party to various agreements with contract research, manufacturing and other organizations that generally provide for termination upon notice, subject to certain time periods, with the exact amounts owed in the event of termination to be based on the timing of termination and the terms of the agreement. Employee Severances The Board from time to time may approve severance packages for specific full-time employees based on their length of service and position ranging up to twelve months of their base salaries, in the event of termination of their employment, subject to certain conditions. No liability under these severance packages has been recorded as of December 31, 2025. ​ 16. SEGMENT INFORMATION ​ The Company operates as a single operating segment. The Company’s Chief Executive Officer, who serves as the Chief Operating Decision Maker (“CODM”), is responsible for allocating resources and assessing performance. The CODM reviews the Company’s operating results on an aggregate basis to make decisions about resource allocation, evaluate financial performance, and manage the overall business. Accordingly, the Company’s operations are managed as one reportable segment focused on the development and commercialization of its therapeutic candidates. ​ ​ 120 Table of Contents The following table represents consolidated net loss summarized by the significant segment expenses regularly reviewed by the CODM for the years ended December 31, 2025 and 2024: ​ ​ ​ ​ ​ ​ ​ ​ ​ ​ Year ended December 31, ​ ​ 2025 ​ 2024 Total revenue ​ $ — ​ $ 22,270,465 ​ ​ ​ ​ ​ ​ ​ Research and development expense: ​ ​ ​ ​ ​ ​ Compensation and benefits ​ ​ 28,260,696 ​ ​ 16,390,412 Duchenne muscular dystrophy program (Deramiocel) ​ ​ 34,254,585 ​ ​ 23,049,349 Exosomes platform research ​ ​ 5,225,572 ​ ​ 2,908,678 Other R&D segment expenses (1) ​ ​ 6,845,600 ​ ​ 3,240,494 Total research and development expense, excluding non-cash expense ​ ​ 74,586,453 ​ ​ 45,588,933 Stock-based compensation expense ​ ​ 8,917,527 ​ ​ 3,605,667 Depreciation and amortization ​ ​ 950,615 ​ ​ 773,985 Total research and development expense ​ ​ 84,454,595 ​ ​ 49,968,585 ​ ​ ​ ​ ​ ​ ​ General and administrative expense: ​ ​ ​ ​ ​ ​ Compensation and benefits ​ ​ 7,224,517 ​ ​ 4,446,897 Other G&A segment expenses (2) ​ ​ 7,216,396 ​ ​ 3,607,499 Total general and administrative expense, excluding non-cash expense ​ ​ 14,440,913 ​ ​ 8,054,396 Stock-based compensation expense ​ ​ 8,307,733 ​ ​ 6,159,497 Depreciation and amortization ​ ​ 938,889 ​ ​ 651,229 Total general and administrative expense ​ ​ 23,687,535 ​ ​ 14,865,122 ​ ​ ​ ​ ​ ​ ​ Operating loss ​ ​ ( 108,142,130 ) ​ ​ ( 42,563,242 ) ​ ​ ​ ​ ​ ​ ​ Investment income ​ ​ 6,257,607 ​ ​ 2,202,990 Interest expense ​ ​ ( 3,045,725 ) ​ ​ — Other income (expense) ​ ​ ( 112,098 ) ​ ​ ( 105,334 ) Total non-operating income, net ​ ​ 3,099,784 ​ ​ 2,097,656 ​ ​ ​ ​ ​ ​ ​ Loss before income taxes ​ ​ ( 105,042,346 ) ​ ​ ( 40,465,586 ) (Provision for) benefit from income taxes ​ ​ ( 1,600 ) ​ ​ ( 1,600 ) ​ ​ ​ ​ ​ ​ ​ Net loss ​ $ ( 105,043,946 ) ​ $ ( 40,467,186 ) ​ (1) Other R&D segment expenses primarily include other pipeline development costs and other facility costs. (2) Other G&A segment expenses primarily include accounting, legal and other professional fees, consulting expenses, business insurance, employee travel, and other facility and information technology costs. The asset information provided to the CODM for the single operating segment is consistent with the amounts reported in the consolidated balance sheets. ​ 17. SUBSEQUENT EVENTS Stock Award Grants In January 2026, the Company granted a total of 1,717,600 stock options and restricted stock awards to its employees, certain non-employee consultants, and directors. ​ 121 Table of Contents ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ​