PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=5&type=section&id=Item%201.%20Financial%20Statements) The financial statements for the period ended June 30, 2025, reflect a significant increase in net loss, no revenue, and a strong cash position of **$122.8 million** Condensed Consolidated Balance Sheet Highlights (Unaudited) | Account | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $23,241,199 | $11,286,996 | | Marketable securities | $99,559,482 | $140,228,881 | | **Total Assets** | **$133,569,011** | **$170,481,086** | | **Total Liabilities** | **$28,591,955** | **$25,018,750** | | **Total Stockholders' Equity** | **$104,977,056** | **$145,462,336** | Condensed Consolidated Statements of Operations Highlights (Unaudited) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Total Revenue | $0 | $3,971,438 | $0 | $8,878,315 | | Research and development | $22,047,254 | $12,504,769 | $40,962,826 | $23,605,782 | | General and administrative | $5,671,880 | $3,057,888 | $11,739,256 | $7,129,654 | | **Net Loss** | **($25,910,791)** | **($10,999,782)** | **($50,302,385)** | **($20,793,855)** | | Net loss per share | ($0.57) | ($0.35) | ($1.10) | ($0.66) | Condensed Consolidated Statements of Cash Flows Highlights (Unaudited) | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($26,555,731) | ($13,556,939) | | Net cash provided by investing activities | $38,440,000 | $5,193,130 | | Net cash provided by financing activities | $69,934 | $4,357,315 | | **Net increase (decrease) in cash** | **$11,954,203** | **($4,006,494)** | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the FDA's **Complete Response Letter** for deramiocel, ongoing HOPE-3 trial, and the exosome platform, while reporting a **$50.3 million** net loss and **$122.8 million** in liquidity - In **July 2025**, the company received a **Complete Response Letter (CRL)** from the FDA for its deramiocel BLA, stating that the application did not meet the requirement for substantial evidence of effectiveness and required **additional clinical data**. A Type A meeting with the FDA is scheduled for August 2025[159](index=159&type=chunk)[160](index=160&type=chunk) - The company expects to report topline results from its ongoing **Phase 3 HOPE-3 clinical trial** in the **fourth quarter of 2025**. The study protocol was amended to designate **left ventricular ejection fraction (LVEF)** as the primary endpoint to focus on cardiac efficacy, in alignment with FDA feedback[164](index=164&type=chunk) - As of June 30, 2025, the company had approximately **$122.8 million** in cash, cash equivalents, and marketable securities. Management estimates these funds are sufficient to support operations and capital expenditures into the **fourth quarter of 2026**[173](index=173&type=chunk)[197](index=197&type=chunk) Financial Performance Summary (Six Months Ended June 30) | Metric | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | $0 | $8.9 million | | R&D Expenses | $41.0 million | $23.6 million | | G&A Expenses | $11.7 million | $7.1 million | | Net Loss | ($50.3 million) | ($20.8 million) | [Company Overview and Product Pipeline](index=39&type=section&id=Company%20Overview%20and%20Product%20Pipeline) Capricor, a clinical-stage biotech, focuses on cell and exosome therapies, with lead candidate deramiocel receiving an FDA CRL and StealthX™ entering Phase 1 trials - The company's lead program, **deramiocel**, is an **allogeneic cell therapy** for treating cardiomyopathy in **DMD patients**. Its therapeutic effect is primarily mediated by secreted exosomes that are immunomodulatory, anti-inflammatory, and anti-fibrotic[155](index=155&type=chunk) - Following a rolling BLA submission in December 2024, the FDA granted Priority Review but later issued a **CRL** in **July 2025**, requesting **additional clinical data** to demonstrate substantial evidence of effectiveness[157](index=157&type=chunk)[159](index=159&type=chunk) - The company's **StealthX™ exosome platform** is being developed for vaccines and other therapies. A **Phase 1 trial** for its COVID-19 vaccine, sponsored by NIAID under Project NextGen, initiated in **August 2025**[170](index=170&type=chunk)[171](index=171&type=chunk) [Results of Operations](index=44&type=section&id=Results%20of%20Operations) The company reported no revenue for Q2 2025, with R&D expenses increasing **76%** to **$22.0 million** and G&A expenses rising **85%** to **$5.7 million** due to higher operational costs - The company recognized **no clinical development income** in Q2 2025, as the **$50.0 million** in development milestone payments from the U.S. Distribution Agreement with Nippon Shinyaku had been fully recognized by the end of 2024[180](index=180&type=chunk) Research & Development Expenses Breakdown (Three Months Ended June 30) | Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Compensation & personnel | $7,510,545 | $3,596,825 | 109% | | DMD program (deramiocel) | $9,838,927 | $5,965,495 | 65% | | Stock-based compensation | $1,930,467 | $852,472 | 126% | | **Total R&D Expenses** | **$22,047,254** | **$12,504,769** | **76%** | General & Administrative Expenses Breakdown (Three Months Ended June 30) | Category | 2025 | 2024 | Change (%) | | :--- | :--- | :--- | :--- | | Compensation & personnel | $2,139,615 | $837,474 | 155% | | Stock-based compensation | $1,716,687 | $1,300,321 | 32% | | Other corporate expenses | $1,043,895 | $328,363 | 218% | | **Total G&A Expenses** | **$5,671,880** | **$3,057,888** | **85%** | [Liquidity and Capital Resources](index=50&type=section&id=Liquidity%20and%20Capital%20Resources) Capricor held **$122.8 million** in liquidity as of June 30, 2025, projected to fund operations into **Q4 2026**, despite increased cash usage in operating activities Liquidity and Capital Resources Summary (in thousands) | Metric | June 30, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $23,241 | $11,287 | | Marketable securities | $99,559 | $140,229 | | Working capital | $95,729 | $142,359 | - Cash used in operating activities increased to **$26.6 million** for the six months ended June 30, 2025, compared to **$13.6 million** for the same period in 2024, primarily due to a higher net loss[201](index=201&type=chunk) - In February 2025, the company elected to convert its approximately **$3.4 million** CIRM grant award into a loan. The terms are under discussion, and accrued interest could reach up to approximately **$7.1 million**[220](index=220&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risk](index=64&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company's market risk primarily stems from interest rate sensitivity on its **$122.8 million** cash and marketable securities portfolio, with minimal impact from rate changes due to short-term investments - The company's market risk is primarily from interest rate sensitivity on its **$122.8 million** portfolio of cash, cash equivalents, and marketable securities[248](index=248&type=chunk) - The investment policy focuses on **high credit quality issuers** and **short-term maturities** to mitigate default and market risk. The company does not currently hedge interest rate exposure[249](index=249&type=chunk) [Item 4. Controls and Procedures](index=66&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of June 30, 2025, with no material changes to internal control over financial reporting during the quarter - The CEO and CFO concluded that as of June 30, 2025, the company's disclosure controls and procedures were **effective** at the **reasonable assurance level**[251](index=251&type=chunk) - **No material changes** to the company's internal control over financial reporting occurred during the quarter ended June 30, 2025[252](index=252&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=67&type=section&id=Item%201.%20Legal%20Proceedings) The company faces new legal challenges, including a securities class action filed July 17, 2025, and a derivative action filed August 1, 2025, both alleging federal securities law violations or fiduciary duty breaches - A putative **securities class action** was filed on **July 17, 2025**, against the company and its CEO, alleging violations of U.S. federal securities laws[255](index=255&type=chunk) - A **derivative action** was filed on **August 1, 2025**, against the company's Board of Directors, alleging breaches of fiduciary duties[256](index=256&type=chunk) [Item 1A. Risk Factors](index=67&type=section&id=Item%201A.%20Risk%20Factors) A new risk factor highlights the potential for significant costs and management distraction from recently filed securities class action and derivative lawsuits, which could harm the business - A new risk factor has been identified concerning the costs and management distraction associated with defending against the recently filed **securities class action** and **derivative claims**[258](index=258&type=chunk) [Item 5. Other Information](index=67&type=section&id=Item%205.%20Other%20Information) No directors or executive officers adopted or terminated Rule 10b5-1 trading plans during the second quarter of 2025 - No directors or executive officers adopted or terminated any **Rule 10b5-1 trading arrangements** during the three months ended June 30, 2025[262](index=262&type=chunk)

Corporate Update and Recent Highlights The company advanced its Deramiocel regulatory path, initiated clinical trials for its StealthX™ platform, and achieved commercial manufacturing readiness [Deramiocel Program Update](index=1&type=section&id=Deramiocel%20Program%20Update) The company is advancing the regulatory pathway for Deramiocel with the FDA while reporting positive long-term clinical data - **A Type A meeting with the U.S. FDA is scheduled for August 2025** to discuss the Deramiocel BLA path forward after receiving a Complete Response Letter (CRL)[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - The company aims to resubmit the BLA based on HOPE-2 data, with **HOPE-3 topline data expected in Q4 2025** as potential support[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) - **Four-year HOPE-2 extension data showed continued preservation of cardiac function** (LVEF) and slowed skeletal muscle decline in patients treated with Deramiocel[7](index=7&type=chunk) - The FDA granted **Orphan Drug Designation for Deramiocel in Becker muscular dystrophy** (BMD)[13](index=13&type=chunk) [StealthX™ Platform Update](index=1&type=section&id=StealthX%E2%84%A2%20Platform%20Update) The StealthX™ exosome platform entered the clinical stage with FDA clearance and the initiation of a Phase 1 vaccine trial - **The FDA cleared the IND for the StealthX™ exosome-based vaccine**, marking its first-in-human use[3](index=3&type=chunk)[5](index=5&type=chunk)[13](index=13&type=chunk) - A **Phase 1 clinical trial was initiated in August 2025**, conducted and funded by NIAID as part of the Project NextGen initiative[3](index=3&type=chunk)[13](index=13&type=chunk) [Manufacturing and Commercial Readiness](index=1&type=section&id=Manufacturing%20and%20Commercial%20Readiness) Capricor successfully resolved all FDA Pre-License Inspection observations, confirming its commercial manufacturing readiness - **All 483 Pre-License Inspection observations have been resolved and accepted by the FDA**, a key manufacturing milestone[3](index=3&type=chunk)[5](index=5&type=chunk)[6](index=6&type=chunk) Second Quarter 2025 Financial Results The company reported zero revenue and a wider net loss for Q2 2025, while maintaining a cash runway into late 2026 [Key Financial Metrics](index=3&type=section&id=Key%20Financial%20Metrics) The company reported zero revenue and a wider net loss in Q2 2025 due to increased operating expenses and prior milestone recognition Quarterly Financial Performance | Financial Metric | Q2 2025 | Q2 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $0 | $4.0M | -100% | | Total Operating Expenses | $27.7M | $15.6M | +77.8% | | Net Loss | ($25.9M) | ($11.0M) | +135.5% | | Net Loss Per Share | ($0.57) | ($0.35) | +62.9% | Half-Year Financial Performance | Financial Metric | H1 2025 | H1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenues | $0 | $8.9M | -100% | | Total Operating Expenses | $52.7M | $30.7M | +71.6% | | Net Loss | ($50.3M) | ($20.8M) | +141.9% | | Net Loss Per Share | ($1.10) | ($0.66) | +66.7% | [Financial Position and Outlook](index=3&type=section&id=Financial%20Position%20and%20Outlook) The company holds a strong cash position of $122.8 million, sufficient to fund operations into the fourth quarter of 2026 - **Cash and equivalents totaled $122.8 million** as of June 30, 2025, compared to $151.5 million at year-end 2024[8](index=8&type=chunk) - The current cash balance is expected to **fund operations into the fourth quarter of 2026**[5](index=5&type=chunk)[12](index=12&type=chunk) Company and Product Information This section details the company's focus on rare disease therapeutics, its lead candidate Deramiocel, and its StealthX™ platform [About Deramiocel (CAP-1002)](index=5&type=section&id=About%20Deramiocel) Deramiocel is an allogeneic cell therapy for dystrophinopathies that has received multiple special regulatory designations - Deramiocel is an allogeneic cardiosphere-derived cell (CDC) therapy with **immunomodulatory and anti-fibrotic actions**[17](index=17&type=chunk) - The therapy holds multiple key regulatory designations, including **Orphan Drug, RMAT, and Rare Pediatric Disease designations**[18](index=18&type=chunk) [About Capricor Therapeutics](index=5&type=section&id=About%20Capricor%20Therapeutics) Capricor Therapeutics is a biotechnology company developing cell and exosome-based therapies for rare diseases - Capricor is a biotechnology company focused on **cell and exosome-based therapeutics for rare diseases**[19](index=19&type=chunk) - The company's pipeline is led by **Deramiocel for DMD** and the **StealthX™ exosome platform** for vaccines and targeted delivery[19](index=19&type=chunk) Financial Statements This section presents the company's unaudited consolidated statements of operations and summary balance sheets for the period [Consolidated Statements of Operations and Comprehensive Loss](index=8&type=section&id=CONSOLIDATED%20STATEMENTS%20OF%20OPERATIONS%20AND%20COMPREHENSIVE%20LOSS) The statement of operations shows zero revenue and a higher net loss for the three and six months ended June 30, 2025 Unaudited Consolidated Statements of Operations and Comprehensive Loss | (In thousands, except per share data) | Three Months Ended June 30, | Six Months Ended June 30, | | :--- | :--- | :--- | | | **2025** | **2024** | **2025** | **2024** | | **Revenue** | **$0** | **$3,971** | **$0** | **$8,878** | | **Operating Expenses** | | | | | | Research and development | $22,047 | $12,505 | $40,963 | $23,606 | | General and administrative | $5,672 | $3,058 | $11,739 | $7,130 | | **Total Operating Expenses** | **$27,719** | **$15,563** | **$52,702** | **$30,735** | | **Loss from Operations** | **($27,719)** | **($11,591)** | **($52,702)** | **($21,857)** | | **Net Loss** | **($25,911)** | **($11,000)** | **($50,302)** | **($20,794)** | | **Net Loss Per Share** | **($0.57)** | **($0.35)** | **($1.10)** | **($0.66)** | [Summary Balance Sheets](index=8&type=section&id=SUMMARY%20BALANCE%20SHEETS) The balance sheet reflects a decrease in cash and total assets, resulting in lower stockholders' equity as of June 30, 2025 Unaudited Summary Balance Sheets | (In thousands) | June 30, 2025 (unaudited) | December 31, 2024 | | :--- | :--- | :--- | | Cash, cash equivalents and marketable securities | $122,801 | $151,516 | | **Total Assets** | **$133,569** | **$170,481** | | **Total Liabilities** | **$28,592** | **$25,019** | | **Total Stockholders' Equity** | **$104,977** | **$145,462** | | **Total Liabilities and Stockholders' Equity** | **$133,569** | **$170,481** |

Core Insights - Capricor Therapeutics is focused on developing therapies for Duchenne cardiomyopathy and has faced regulatory challenges but is working on a clear path forward for approval [2][4] - The company has made significant progress with its exosome platform, StealthX™, which has received FDA clearance for clinical trials [4][6] - Financial results indicate a net loss for the second quarter of 2025, with revenues dropping to zero compared to the previous year [8][10] Corporate Update - Capricor aims to resubmit its Biologics License Application (BLA) for Deramiocel based on existing data, with additional data from the HOPE-3 trial expected in Q4 2025 [4][5] - The FDA has accepted all observations from the Pre-License Inspection, marking a milestone in regulatory progress [4][5] - The company is preparing for a Type A meeting with the FDA to discuss the approval pathway [4][5] Financial Performance - Cash position as of June 30, 2025, was approximately $122.8 million, down from $151.5 million at the end of 2024 [7][26] - Revenues for Q2 2025 were $0, a decrease from approximately $4.0 million in Q2 2024, and for the first half of 2025, revenues were also $0 compared to approximately $8.9 million in the first half of 2024 [8][10] - Total operating expenses for Q2 2025 were approximately $27.7 million, up from $15.6 million in Q2 2024 [9][10] Clinical Development - The HOPE-3 Phase 3 clinical trial is ongoing, with topline data expected in Q4 2025 [5][6] - The FDA has cleared the IND for the StealthX™ exosome-based vaccine, marking its first clinical entry [4][6] - Orphan Drug Designation has been granted for Deramiocel in Becker muscular dystrophy, expanding its therapeutic strategy [5][6]

DEADLINE: September 15, 2025 Shareholders should not delay in registering for this class action. Register your information here: https://securitiesclasslaw.com/securities/capricor-loss-submission-form/? id=160430&from=4 NEXT STEPS FOR SHAREHOLDERS: Once you register as a shareholder who purchased shares of CAPR during the timeframe listed above, you will be enrolled in a portfolio monitoring software to provide you with status updates throughout the lifecycle of the case. The deadline to seek to be a lead p ...

Core Viewpoint - The complaint alleges that Capricor and its executives violated federal securities laws by making false or misleading statements regarding the drug deramiocel, which is intended for treating cardiomyopathy associated with Duchenne muscular dystrophy (DMD) [2] Group 1: Company Conduct - Capricor allegedly provided investors with overly positive statements about its ability to obtain a Biologics License Application (BLA) from the FDA while concealing adverse facts related to the safety and efficacy data from its Phase 2 HOPE-2 trial [2] - On July 11, 2025, Capricor received a Complete Response Letter (CRL) from the FDA, denying the BLA due to insufficient evidence of effectiveness and the need for additional clinical data [3] Group 2: Market Reaction - Following the announcement of the CRL, Capricor's stock price fell from $11.40 per share on July 10, 2025, to $7.64 per share on July 11, 2025, reflecting a significant decline in investor confidence [4]

Core Viewpoint - Capricor Therapeutics is advancing its lead cell therapy candidate, Deramiocel, for treating cardiomyopathy associated with Duchenne muscular dystrophy (DMD) and has scheduled a Type A meeting with the FDA to discuss its regulatory path for the Biologics License Application (BLA) [1][4][7] Financial Results and Corporate Update - The release of Capricor's financial results for the second quarter ended June 30, 2025, has been rescheduled to August 11, 2025, after market close [2][3] - A conference call and webcast will be held on the same day at 4:30 p.m. ET to review the financial results and provide a corporate update [2][3] Company Overview - Capricor Therapeutics focuses on developing cell and exosome-based therapeutics for rare diseases, with Deramiocel being a key product candidate showing immunomodulatory and anti-fibrotic effects in muscular dystrophies [4] - The company is also utilizing its proprietary StealthX™ platform for preclinical development in areas such as vaccinology and targeted delivery of therapeutics [4] Commercialization Agreement - Capricor has entered into an exclusive agreement with Nippon Shinyaku Co., Ltd. for the commercialization and distribution of Deramiocel for DMD in the United States and Japan, pending regulatory approval [7]

Core Viewpoint - The Gross Law Firm is notifying shareholders of Capricor Therapeutics, Inc. regarding a potential class action lawsuit due to misleading statements related to the company's lead cell therapy candidate, deramiocel, and its subsequent FDA response [1][3]. Group 1: Allegations and Impact - Shareholders who purchased shares of Capricor during the class period from October 9, 2024, to July 10, 2025, are encouraged to contact the firm for possible lead plaintiff appointment [1][3]. - The complaint alleges that Capricor provided investors with misleading information about deramiocel's potential to receive a Biologics License Application (BLA) from the FDA while concealing adverse facts regarding its Phase 2 HOPE-2 trial data [3]. - Following the announcement of a Complete Response Letter (CRL) from the FDA on July 11, 2025, which denied the BLA due to insufficient evidence of effectiveness, Capricor's stock price fell from $11.40 to $7.64 per share [3]. Group 2: Next Steps for Shareholders - The deadline for shareholders to register for the class action is September 15, 2025, and they will be enrolled in a portfolio monitoring system for updates on the case [4]. - There is no cost or obligation for shareholders to participate in the case, and registration is encouraged to ensure they are informed throughout the legal process [4]. Group 3: Firm's Commitment - The Gross Law Firm is a nationally recognized class action law firm dedicated to protecting investors' rights against deceit and fraud, ensuring companies adhere to responsible business practices [5].

Core Viewpoint - Capricor Therapeutics, Inc. is facing a class action securities lawsuit due to alleged securities fraud related to its lead cell therapy candidate, deramiocel, which is intended for treating cardiomyopathy associated with Duchenne muscular dystrophy (DMD) [1][2] Group 1: Lawsuit Details - The lawsuit aims to recover losses for investors affected by alleged fraud between October 9, 2024, and July 10, 2025 [1] - Defendants allegedly provided misleading information regarding Capricor's ability to secure a Biologics License Application (BLA) from the FDA for deramiocel while concealing adverse facts about its Phase 2 HOPE-2 trial data [2] - Following the announcement of a Complete Response Letter (CRL) from the FDA on July 11, 2025, which denied the BLA due to insufficient evidence of effectiveness, Capricor's stock price fell from $11.40 to $7.64 per share [2] Group 2: Next Steps for Investors - Investors who suffered losses during the specified timeframe have until September 15, 2025, to request appointment as lead plaintiff, although participation in any recovery does not require this [3] - Class members may be entitled to compensation without any out-of-pocket costs or fees [3] Group 3: Firm Background - Levi & Korsinsky has a history of securing significant settlements for shareholders and is recognized as one of the top securities litigation firms in the United States [4]

NEW YORK, Aug. 5, 2025 /PRNewswire/ -- Levi & Korsinsky, LLP notifies investors in Capricor Therapeutics, Inc. ("Capricor" or the "Company") (NASDAQ: CAPR) of a class action securities lawsuit. WHAT'S NEXT? If you suffered a loss in Capricor during the relevant time frame, you have until September 15, 2025 to request that the Court appoint you as lead plaintiff. Your ability to share in any recovery doesn't require that you serve as a lead plaintiff. NO COST TO YOU: If you are a class member, you may be ent ...

Core Viewpoint - Capricor Therapeutics, Inc. is facing a class action lawsuit due to allegations of misleading statements regarding its lead cell therapy candidate, deramiocel, which was intended for treating cardiomyopathy associated with Duchenne muscular dystrophy (DMD) [3][4]. Group 1: Allegations and Impact - The lawsuit claims that Capricor provided investors with overly positive information about deramiocel's potential to obtain a Biologics License Application (BLA) from the FDA while concealing adverse facts related to its Phase 2 HOPE-2 trial data [3][4]. - Following the announcement of a Complete Response Letter (CRL) from the FDA on July 11, 2025, which denied the BLA due to insufficient evidence of effectiveness and the need for additional clinical data, Capricor's stock price dropped from $11.40 to $7.64 per share [3][4]. Group 2: Class Action Details - The class period for the lawsuit is defined as October 9, 2024, to July 10, 2025, and shareholders are encouraged to register for participation by September 15, 2025 [3][4]. - Shareholders who register will receive updates on the case's progress and can seek lead plaintiff status without any cost or obligation [4]. Group 3: Law Firm Information - The Gross Law Firm, which is handling the case, is a nationally recognized class action law firm dedicated to protecting investors' rights against deceit and fraud [5]. - The firm aims to ensure companies adhere to responsible business practices and seeks recovery for investors who suffered losses due to misleading statements [5].