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DECEMBER 31, 2012 AND 2011

Friday, January 24, 2014 5 min read
Key Takeaway: FINANCIAL STATEMENTS DECEMBER 31, 2012 AND 2011 (A DEVELOPMENT STAGE COMPANY) PAGE INDEPENDENT AUDITORS' REPORT 1 BALANCE SHEETS 2 STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 3 STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) 4 - 6 STATEMENTS OF CASH FLOWS 7

Full Press Release Details

FINANCIAL STATEMENTS
DECEMBER 31, 2012 AND 2011
(A DEVELOPMENT STAGE COMPANY)
PAGE
INDEPENDENT AUDITORS' REPORT 1
BALANCE SHEETS 2
STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS 3
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY (DEFICIT) 4 - 6
STATEMENTS OF CASH FLOWS 7
NOTES TO FINANCIAL STATEMENTS 8 - 17
INDEPENDENT AUDITORS' REPORT
To the Board of Directors and Shareholders
We have audited the accompanying financial statements of Capricor,
Inc. (a Delaware corporation), which comprise the balance sheets as of December 31, 2012 and 2011, and the related statements
of operations and comprehensive loss, shareholders' equity (deficit), and cash flows for the years then ended and for the
period from July 5, 2005 (inception) through December 31, 2012, and the related notes to the financial statements.
Management's Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation
of these financial statements in accordance with accounting principles generally accepted in the United States of America; this
includes the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of
financial statements that are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these financial
statements based on our audits. We conducted our audits in accordance with auditing standards generally accepted in the United
States of America as established by the Auditing Standards Board (United States) and in accordance with auditing standards of
the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence
about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment,
including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In
making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation
of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose
of expressing an opinion on the effectiveness of the entity's internal control. Capricor, Inc. is not required to have,
nor were we engaged to perform, an audit of its internal control over financial reporting. Accordingly, we express no such opinion.
An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting
estimates made by management, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our audit opinion.
In our opinion, the financial statements referred to above
present fairly, in all material respects, the financial position of Capricor, Inc. as of December 31, 2012 and 2011, and the results
of its operations and its cash flows for the years then ended and for the period from July 5, 2005 (inception) through December
31, 2012, in accordance with accounting principles generally accepted in the United States of America.
/s/ Rose, Snyder & Jacobs LLP
Rose, Snyder & Jacobs LLP
15821 Ventura Boulevard, Suite 490, Encino, California 91436
P hone : (818) 461-0600 F ax : (818) 461-0610
(A DEVELOPMENT STAGE COMPANY)
DECEMBER 31, 2012 AND 2011
2012 2011
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 170,106 $ 1,550,248
Marketable securities 4,192,726 -
Grants receivable 767,163 407,616
Interest receivable 25,215 -
Prepaid expenses and other current assets 38,042 11,358
TOTAL CURRENT ASSETS 5,193,252 1,969,222
PROPERTY AND EQUIPMENT, at cost
Furniture and equipment 29,623 27,202
Laboratory equipment 68,878 57,871
98,501 85,073
Less accumulated depreciation (64,558 ) (48,551 )
NET PROPERTY AND EQUIPMENT 33,943 36,522
OTHER ASSETS
Patents, net of accumulated amortization of $28,145 and $23,815, respectively 178,307 93,087
Deposits 18,088 9,108
TOTAL ASSETS $ 5,423,590 $ 2,107,939
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 264,707 $ 187,532
Accounts payable and accrued expenses, related party 164,484 159,930
Sub-award payable, related party 75,072 80,421
Accrued royalties 24,904 24,904
TOTAL CURRENT LIABILITIES 529,167 452,787
COMMITMENTS AND CONTINGENCIES, note 6
SHAREHOLDERS' EQUITY
Series A-1 Preferred stock, $0.001 par, 940,000 shares authorized, issued and outstanding 940 940
Series A-2 Preferred stock, $0.001 par, 736,844 shares authorized, issued and outstanding 737 737
Series A-3 Preferred stock, $0.001 par, 3,750,000 shares authorized, 1,500,000 and 250,000 shares issued and outstanding, respectively 1,500 250
Common stock, $0.001 par, 10,074,450 shares authorized, 1,812,078 shares issued and outstanding 1,812 1,812
Additional paid-in capital 12,120,051 6,788,954
Subscription receivable (2,211 ) (2,185 )
Accumulated other comprehensive loss (21,795 ) -
Deficit accumulated during the development stage (7,206,611 ) (5,135,356 )
TOTAL SHAREHOLDERS' EQUITY 4,894,423 1,655,152
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 5,423,590 $ 2,107,939
See independent auditors' report
and notes to financial statements.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF OPERATIONS AND COMPREHENSIVE
FOR THE YEARS ENDED DECEMBER 31, 2012 AND
FROM JULY 5, 2005 (INCEPTION) THROUGH DECEMBER
Years Ended December 31, July 5, 2005 (inception) through December 31,
2012 2011 2012
GRANT INCOME $ 1,898,764 $ 1,205,702 $ 3,677,737
OPERATING EXPENSES
Research and development 2,634,222 1,666,309 6,302,417
General and administrative 1,364,582 690,543 4,744,712
TOTAL OPERATING EXPENSES 3,998,804 2,356,852 11,047,129
LOSS FROM OPERATIONS (2,100,040 ) (1,151,150 ) (7,369,392 )
OTHER INCOME (EXPENSES)
Investment income 28,785 1,830 162,781
TOTAL OTHER INCOME (EXPENSES) 28,785 1,830 162,781
NET LOSS (2,071,255 ) (1,149,320 ) (7,206,611 )
OTHER COMPREHENSIVE LOSS
Net unrealized loss on marketable securities (21,795 ) - (21,795 )
COMPREHENSIVE LOSS $ (2,093,050 ) $ (1,149,320 ) $ (7,228,406 )
Net loss attributable to common stockholders per share, basic and diluted $ (1.58 ) $ (0.88 )
Weighted average number of shares, basic and diluted 1,812,078 1,812,078
See independent auditors' report
and notes to financial statements.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 5, 2005 (INCEPTION)
THROUGH DECEMBER 31, 2012
Deficit
Accumulated
Other During the
Series A-1 Preferred Stock Series A-2 Preferred Stock Series A-3 Preferred Stock Common Stock Additional Subcription Comprehensive Development
Shares Amount Shares Amount Shares Amount Shares Amount Paid-In Capital Receivable Loss Stage Total
Balance, July 5, 2005 - $ - - $ - - $ - - $ - $ - $ - $ - $ - $ -
Common stock issued to founders - - - - - - 1,800,000 1,800 - (1,800 ) - - -
Interest on subscription receivable - - - - - - - - - (36 ) - - (36 )
Net income - - - - - - - - - - - 36 36
Balance, December 31, 2005 - - - - - - 1,800,000 1,800 - (1,836 ) - 36 -
Series A-1 preferred stock issued for cash at $3.20 per share 940,000 940 - - - - - - 3,007,060 - - - 3,008,000
Interest on subscription receivable - - - - - - - - - (86 ) - - (86 )
Net loss - - - - - - - - - - - (1,171,419 ) (1,171,419 )
Balance, December 31, 2006 940,000 940 - - - - 1,800,000 1,800 3,007,060 (1,922 ) - (1,171,383 ) 1,836,495
Interest on subscription receivable - - - - - - - - - (71 ) - - (71 )
Stock-based compensation - - - - - - - - 5,820 - - - 5,820
Net loss - - - - - - - - - - - (979,076 ) (979,076 )
Balance, December 31, 2007 940,000 940 - - - - 1,800,000 1,800 3,012,880 (1,993 ) - (2,150,459 ) 863,168
Common stock issued for services at $0.32 per share - - - - - - 12,078 12 3,846 - - - 3,858
Interest on subscription receivable - - - - - - - - - (37 ) - - (37 )
Stock-based compensation - - - - - - - - 16,422 - - - 16,422
Net loss - - - - - - - - - - - (630,859 ) (630,859 )
Balance, December 31, 2008 940,000 940 - - - - 1,812,078 1,812 3,033,148 (2,030 ) - (2,781,318 ) 252,552
See independent auditors' report
and notes to financial statements.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 5, 2005 (INCEPTION)
THROUGH DECEMBER 31, 2012
Deficit
Accumulated
Other During the
Series A-1 Preferred Stock Series A-2 Preferred Stock Series A-3 Preferred Stock Common Stock Additional Subcription Comprehensive Development
Shares Amount Shares Amount Shares Amount Shares Amount Paid-In Capital Receivable Loss Stage Total
Balance, December 31, 2008 940,000 940 - - - - 1,812,078 1,812 3,033,148 (2,030 ) - (2,781,318 ) 252,552
Series A-2 preferred stock and warrants issued for cash at $3.80 per unit - - 210,528 210 - - - - 799,797 - - - 800,007
Interest on subscription receivable - - - - - - - - - (69 ) - - (69 )
Stock-based compensation - - - - - - - - 8,251 - - - 8,251
Net loss - - - - - - - - - - - (148,970 ) (148,970 )
Balance, December 31, 2009 940,000 940 210,528 210 - - 1,812,078 1,812 3,841,196 (2,099 ) - (2,930,288 ) 911,771
Series A-2 preferred stock issued for cash at $3.80 per share - - 526,316 527 - - - - 1,999,473 - - - 2,000,000
Equity offering transaction costs - - - - - - - - (91,155 ) - - - (91,155 )
Interest on subscription receivable - - - - - - - - - (57 ) - - (57 )
Stock-based compensation - - - - - - - - 24,163 - - - 24,163
Net loss - - - - - - - - - - - (1,055,748 ) (1,055,748 )
Balance, December 31, 2010 940,000 940 736,844 737 - - 1,812,078 1,812 5,773,677 (2,156 ) - (3,986,036 ) 1,788,974
Series A-3 preferred stock issued for cash at $4.00 per share - - - - 250,000 250 - - 999,750 - - - 1,000,000
Interest on subscription receivable - - - - - - - - - (29 ) - - (29 )
Stock-based compensation - - - - - - - - 15,527 - - - 15,527
Net loss - - - - - - - - - - - (1,149,320 ) (1,149,320 )
Balance, December 31, 2011 940,000 940 736,844 737 250,000 250 1,812,078 1,812 6,788,954 (2,185 ) - (5,135,356 ) 1,655,152
See independent auditors' report
and notes to financial statements.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CHANGES IN SHAREHOLDERS' EQUITY
FOR THE PERIOD FROM JULY 5, 2005 (INCEPTION)
THROUGH DECEMBER 31, 2012
Deficit
Accumulated
Other During the
Series A-1 Preferred Stock Series A-2 Preferred Stock Series A-3 Preferred Stock Common Stock Additional Subcription Comprehensive Development
Shares Amount Shares Amount Shares Amount Shares Amount Paid-In Capital Receivable Loss Stage Total
Balance, December 31, 2011 940,000 940 736,844 737 250,000 250 1,812,078 1,812 6,788,954 (2,185 ) - (5,135,356 ) 1,655,152
Series A-3 preferred stock issued for cash at $4.00 per share - - - - 1,250,000 1,250 - - 4,998,750 - - - 5,000,000
Interest on subscription receivable - - - - - - - - - (26 ) - - (26 )
Stock-based compensation - - - - - - - - 332,347 - - - 332,347
Unrealized loss on marketable securities - - - - - - - - - - (21,795 ) - (21,795 )
Net loss - - - - - - - - - - - (2,071,255 ) (2,071,255 )
Balance, December 31, 2012 940,000 $ 940 736,844 $ 737 1,500,000 $ 1,500 1,812,078 $ 1,812 $ 12,120,051 $ (2,211 ) $ (21,795 ) $ (7,206,611 ) $ 4,894,423
See independent auditors' report
and notes to financial statements.
(A DEVELOPMENT STAGE COMPANY)
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2012 AND
FROM JULY 5, 2005 (INCEPTION) THROUGH DECEMBER
Years Ended December 31, July 5, 2005 (inception) through December 31,
2012 2011 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (2,071,255 ) $ (1,149,320 ) $ (7,206,611 )
Adjustments to reconcile net loss to net cash used in operating activities:
Gain on sale of property and equipment - - (3,707 )
Depreciation and amortization 20,337 21,098 137,809
Common stock issued for services - - 3,858
Stock-based compensation 332,347 15,527 402,530
Change in assets - (increase) decrease:
Grants receivable (359,547 ) (56,091 ) (767,163 )
Interest receivable (25,215 ) - (25,215 )
Prepaid expenses and other current assets (26,684 ) (1,518 ) (38,042 )
Deposits (8,980 ) - (18,088 )
Change in liabilities - increase (decrease):
Accounts payable and accrued expenses 77,149 57,343 264,296
Accounts payable and accrued expenses, related party 4,554 - 164,484
Sub-award payable, related party (5,349 ) 29,341 75,072
Accrued royalties - 11,353 24,904
NET CASH USED IN OPERATING ACTIVITIES (2,062,643 ) (1,072,267 ) (6,985,873 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities (4,214,521 ) - (4,214,521 )
Proceeds from sale of property and equipment - - 88,908
Payments for purchase of property and equipment (13,428 ) (14,584 ) (228,808 )
Payments for patents (89,550 ) (42,028 ) (206,452 )
NET CASH USED IN INVESTING ACTIVITIES (4,317,499 ) (56,612 ) (4,560,873 )
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the sale of series A-1 preferred stock - - 3,008,000
Proceeds from the sale of series A-2 preferred stock - - 2,800,007
Proceeds from the sale of series A-3 preferred stock 5,000,000 1,000,000 6,000,000
Costs related to the issuance of preferred stock and warrants - - (91,155 )
NET CASH PROVIDED BY FINANCING ACTIVITIES 5,000,000 1,000,000 11,716,852
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (1,380,142 ) (128,879 ) 170,106
Cash and cash equivalents balance at beginning of period 1,550,248 1,679,127 -
Cash and cash equivalents balance at end of period $ 170,106 $ 1,550,248 $ 170,106
SUPPLEMENTAL DISCLOSURES:
Interest paid in cash $ - $ - $ -
Income taxes paid in cash $ - $ - $ -
See independent auditors' report
and notes to financial statements.
(A DEVELOPMENT STAGE
Capricor, Inc. (the "Company") was incorporated
on July 5, 2005 in the State of Delaware. The Company develops products for the treatment of cardiovascular disease. Capricor's
lead product candidate, a stem cell treatment for heart disease following a myocardial infarction, is currently in the development
Development Stage Activities
Since inception, the Company has not generated revenues
other than revenues from various government research grants. All of the operating results and cash flows reported in the accompanying
financial statements from July 5, 2005 (inception) through December 31, 2012 are considered to be those related to the development
stage activities and represent the cumulative from inception' amounts required to be reported pursuant to the accounting
standards for Development Stage Companies.
The preparation of financial statements in conformity
with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions
that affect the reported amounts and disclosures. Management uses its historical records and knowledge of its business in making
these estimates. Accordingly, actual results may differ from these estimates.
Government Research Grants
Government research grants that provide for payments
to the Company for work performed are recognized as income when the related expenses are incurred.
Cash and Cash Equivalents
The Company considers all highly liquid investments
with a maturity of three months or less at the date of purchase to be cash equivalents.
Marketable Securities
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Last updated: Jan 24, 2014