Capricor Therapeutics (CAPR) Risk Analysis

Investment in our common stock involves significant risk. You should carefully consider the information described in the following risk factors, together with the other information appearing elsewhere in this Annual Report on Form 10-K, before making an investment decision regarding our common stock. If any of the events or circumstances described in these risks actually occur, our business, financial condition, results of operations and future growth prospects would likely be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or a part of your investment in our common stock. Moreover, the risks described below are not the only ones that we face.

We have filed a Complaint for Equitable Relief and Application for Preliminary Injunction (the "Complaint") in the Superior Court of New Jersey. The Complaint alleges that the defendants named therein, NS, have failed to adequately prepare for the commercial launch of the Company's product Deramiocel in the United States pursuant to the Commercialization and Distribution Agreement dated January 25, 2022, between the Company and NS (the "U.S. Distribution Agreement"), and have otherwise materially breached the terms of the U.S. Distribution Agreement. In the Complaint, the Company seeks rescission of the U.S. Distribution Agreement, declaratory judgment that the Company has the right to distribute Deramiocel directly or through distributors other than NS, and other equitable remedies. Capricor withdrew the motion, without prejudice, having determined that resolving this contractual dispute in arbitration following the FDA's decision would give the parties a more complete regulatory record to work from. The Company estimates arbitration to begin this fall. It is difficult to predict the outcome of any dispute, and there can be no assurance that we will prevail in this matter or obtain the remedies we seek. The arbitration process may continue for an extended period of time, may be expensive and time-consuming, and may divert the attention and resources of management and other personnel away from our business operations and strategic objectives. In addition, NS has asserted counterclaims against us. An adverse outcome in the arbitration or in any counterclaims could materially and adversely affect our business, financial condition, results of operations and prospects. If we are unsuccessful in the arbitration, we may be unable to prevent NS from engaging in activities that we believe are harmful to our business. Any unfavorable ruling could adversely affect our competitive position, reduce potential revenues, impair our ability to commercialize our products, or otherwise negatively impact the market price of our common stock. Regardless of the outcome, arbitration may generate negative publicity, create uncertainty among customers, distributors, suppliers or collaboration partners, and adversely affect our ability to enter into strategic transactions or obtain financing on favorable terms.

We need additional funding before we can complete the development of our product candidates. If we are unable to obtain such additional capital, we will be forced to delay, reduce or eliminate our product development and clinical programs and may not have the capital required to otherwise operate our business. Developing biopharmaceutical products, including conducting preclinical studies and clinical trials and establishing manufacturing capabilities and commercialization infrastructure, is expensive. As of December 31, 2025, we had cash, cash equivalents, and marketable securities totaling approximately $318.1 million. We have not generated any 30revenues from the commercial sale of products. We will not be able to generate any product revenues until, and only if, we receive approval to sell our drug candidates from the FDA or other regulatory authorities. From inception, we have financed our operations through private and public sales of our equity securities, government grants and payments from distribution agreements and collaboration partners. We may seek to raise additional funds through various potential sources, such as equity and debt financings, or through strategic collaborations and license agreements. We can give no assurances that we will be able to secure such additional sources of funds to support our operations or, if such funds are available to us, that such additional financing will be sufficient to meet our needs. Moreover, to the extent that we raise additional funds by issuing equity securities, our stockholders may experience additional significant dilution, and debt financing, if available, may involve restrictive covenants. To the extent that we raise additional funds through collaboration and licensing arrangements, it may be necessary to relinquish some rights to our technologies or our product candidates, or grant licenses on terms that may not be favorable to us. If we are unable to raise sufficient funds to support our current and planned operations, we may elect to discontinue certain of our ongoing activities or programs. The inability to raise additional funds could also prevent us from taking advantage of opportunities to pursue promising new or existing programs in the future. Our forecasts regarding our beliefs in the sufficiency of our financial resources to support our current and planned operations are forward-looking statements and involve significant risks and uncertainties, and actual results could vary as a result of a number of factors, including the factors discussed elsewhere in this “Risk Factors” section. We have based these estimates on assumptions that may prove to be wrong, and we could utilize our available capital resources sooner than we currently expect. Our future funding requirements will depend on many factors, including, but are not limited to: ?our ability to receive regulatory approval or commercialize our product candidates, within and outside the United States; ?the next steps in the regulatory and commercial development of our DMD program; ?the scope, rate of progress, cost and results of our research and development activities, especially our Deramiocel and exosomes programs; ?the costs of developing adequate manufacturing processes and facilities; ?the costs associated with and timing of regulatory approval; ?the costs of filing, prosecuting, defending and enforcing any patent claims and other intellectual property rights; ?the costs and risks involved in conducting clinical trials and manufacturing operations in the U.S. and internationally; ?the availability of funding and clinical trial sponsorship from government programs including NIAID, the NIH, DoD, and CIRM, if applicable; ?the effect of competing technological and market developments; ?the terms and timing of any collaboration, licensing or other arrangements that we may establish; ?our ability to manufacture commercial-scale GMP Deramiocel product at our San Diego manufacturing facility; ?the cost and timing of technology transfer for, and completion of, clinical and commercial-scale outsourced manufacturing activities; ?the costs of establishing sales, marketing and distribution capabilities, as applicable, for any product candidates for which we may receive regulatory approval; and ?the impact, if any, of any new programs initiated by the Trump administration and the reduction in force of government staffing, as well as proposed reductions in funding for programs in support of research and development of product and vaccine candidates. We have a history of net losses, and we expect losses to continue for the foreseeable future. In addition, a number of factors may cause our operating results to fluctuate on a quarterly and annual basis, which may make it difficult to predict our future performance. We have a history of net losses, expect to continue to incur substantial net losses for the foreseeable future, and may never achieve or maintain profitability. Our operations to date have been primarily limited to organizing and staffing our company, developing our technology, and undertaking preclinical studies and clinical trials of our product candidates. We have not yet obtained regulatory approval for any of our product candidates. Specifically, our financial condition and operating results have varied significantly in the past and will continue to fluctuate from quarter-to-quarter and year-to-year in the future due to a variety of factors, many of which are beyond our control. Factors relating to our business that may contribute to these fluctuations include the following factors: ?our need for additional capital to fund our trials and development programs; ?delays in the commencement, enrollment, and timing of clinical testing; ?the viability of Deramiocel as a potential product candidate and its development through all stages of clinical development; ?the viability of our exosome technologies as potential product candidates and the advancement of our exosome technologies through all stages of their preclinical and clinical development; ?any delays in regulatory review and approval of our product candidates in clinical development; ?our ability to receive regulatory approval or commercialize our product candidates, within and outside the United States; ?potential side effects of our current or future products and product candidates that could delay or prevent commercialization or cause an approved treatment to be taken off the market; ?market acceptance of our product candidates; ?our ability to establish an effective sales and marketing infrastructure once our products are commercialized, as necessary or to establish partnerships with other companies who have greater sales and marketing capabilities; ?the ability of our distribution partner, Nippon Shinyaku, to successfully market and sell our Deramiocel product if and to the extent it is approved; ?our ability to establish or maintain collaborations, licensing or other arrangements, including strategic partnerships for Deramiocel outside of DMD and our exosome technologies; ?our ability and third parties’ abilities to obtain and protect intellectual property rights; ?competition from existing products or new products that may emerge; ?guidelines and recommendations of therapies published by various organizations; ?the ability of patients to obtain coverage of, or sufficient reimbursement for, our product candidates; ?our ability to maintain adequate insurance policies; ?our ability to successfully manufacture our product candidates in sufficient quantities and on a timely basis to meet clinical trial and potential commercial demand; ?our dependency on third parties to formulate and manufacture our product candidates, as necessary; ?our ability to maintain and staff our current manufacturing facilities; ?our ability to build or secure new manufacturing facilities, if necessary, and achieve and maintain cGMP and obtain required certifications as required; ?costs related to and outcomes of potential intellectual property litigation; ?compliance with obligations under our licensing agreements with third parties; ?our ability to implement additional internal systems and infrastructure; ?our ability to adequately support future growth; ?if our products are approved for commercial sale, the ability to secure adequate reimbursement levels for our products; ?our ability to attract and retain key personnel to manage our business effectively; and ?the ability of members of our senior management to manage our business and operations.

Should we achieve our near-term product development milestones, of which no assurance can be given, our long-term viability will depend upon the expansion of our operations and the effective management of our growth, which will place a significant strain on our management and on our administrative, operational and financial resources, especially if we expand our business and operations internationally. The extent of our need to expand our operations, particularly with respect to a commercial sales organization, will heavily depend on the outcome of our dispute with NS and, if we are successful in such dispute, whether we commercialize Deramiocel in the United States directly or through one or more distributors. To manage this growth, we will need to expand our facilities, augment our operational, financial and management systems and hire and train additional qualified personnel, including people and companies with expertise in commercialization activities, some of whom may be outside consultants who are not our full-time employees. If we are unable to manage our growth effectively, our business would be harmed.