XML 22 R12.htm IDEA: XBRL DOCUMENT
v3.23.3

COMMITMENTS AND CONTINGENCIES | 9 Months Ended
--- | ---
Sep. 30, 2023
COMMITMENTS AND CONTINGENCIES |
COMMITMENTS AND CONTINGENCIES | 6. COMMITMENTS AND CONTINGENCIES Short-Term Operating Leases Capricor leases 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. Commencing in July 2022, the monthly lease payment was $7,869 per month. Effective July 1, 2023, the monthly lease payment was reduced to $7,619 per month. Expenses incurred under short-term operating leases to unrelated parties for the three months ended September 30, 2023 and 2022 were $22,857 and $23,340, respectively. Expenses incurred under short-term operating leases to unrelated parties for the nine months ended September 30, 2023 and 2022 were $70,071 and $58,128, respectively. Long-Term Operating Leases Capricor leases facilities in Los Angeles, California from Cedars-Sinai Medical Center (“CSMC”), a related party (see Note 8 – “Related Party Transactions”), pursuant to a lease (the “Facilities Lease”) entered into in 2014. Capricor has subsequently entered into several amendments modifying certain terms of the lease. In July 2022, we entered into an amendment for an additional 24-month period extending the term through July 31, 2024 with a monthly lease payment of $10,707. Additionally, in September 2023, we entered into an amendment pursuant to which Capricor was granted an option to extend the lease for an additional 24-month period extending the term through July 31, 2026 with a monthly lease payment of $11,028 commencing on August 1, 2024. The Company entered into a lease agreement commencing October 1, 2021 with Altman Investment Co, LLC (“Altman”) for office and laboratory space located at 10865 Road to the Cure, Suite 150, in San Diego, California (the “San Diego Lease”). The rent is subject to a 3.0% annual rent increase during the initial lease term of five years, plus certain operating expenses and taxes. The San Diego Lease contains an option for Capricor to renew it for an additional term of five years. The Company has subsequently entered into several amendments to the San Diego Lease increasing the square footage of the premises and effective July 1, 2022, the monthly lease payment was increased to $49,322 per month. Effective December 1, 2022, the monthly lease payment was increased to $51,444 per month. Effective October 1, 2023, the monthly lease payment was increased to $58,409 per month. Effective November 1, 2021, the Company entered into a vivarium agreement with Explora BioLabs, Inc. (“Explora”), a Charles River Company, for vivarium space and services. Under the terms of the agreement, the Company is obligated to pay a base rent of $4,021 per month for an exclusive large vivarium room located in San Diego, California. The lease term is for one-year and will automatically renew for additional successive one-year renewal terms unless either party provides the other party with 60-day written notice of its election not to renew prior to the end of the then-current term. In December 2022, we were notified by Explora of a monthly rent escalation of 4.5% bringing the base rent to approximately $4,202 per month effective January 1, 2023. For ASC 842 purposes, we applied a lease term of five years. The long-term real estate operating leases are included in “lease right-of-use assets, net” on the Company’s condensed 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 condensed consolidated balance sheet. The table below excludes short-term operating leases. The following table summarizes maturities of lease liabilities and the reconciliation of lease liabilities as of September 30, 2023: ​
​ | ​ | ​ | ​
2023 (remainder) | ​ | $ | 219,952
2024 | ​ | ​ | 886,672
2025 | ​ | ​ | 910,106
2026 | ​ | ​ | 676,908
2027 | ​ | ​ | —
Total minimum lease payments | ​ | ​ | 2,693,638
Less: imputed interest | ​ | ​ | (280,415)
Total operating lease liabilities | ​ | $ | 2,413,223
Included in the condensed consolidated balance sheet: | ​ | ​ | ​
Current portion of lease liabilities | ​ | $ | 729,567
Lease liabilities, net of current | ​ | ​ | 1,683,656
Total operating lease liabilities | ​ | $ | 2,413,223
​ | ​ | ​ | ​
Other Information: | ​ | ​ | ​
Weighted average remaining lease term | ​ | ​ | 2.98 years
Weighted average discount rate | ​ | ​ | 7.24%
​ As of September 30, 2023, ROU assets for operating leases were approximately $2.2 million and operating lease liabilities were approximately $2.4 million. 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: ​
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
​ | ​ | Three months ended September 30, | ​ | Nine months ended September 30,
​ |  | 2023 |  | 2022 |  | 2023 |  | 2022
​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​ | ​
Lease costs, unrelated parties | ​ | $ | 165,921 | ​ | $ | 157,924 | ​ | $ | 486,894 | ​ | $ | 474,092
Lease costs, related parties | ​ |  | 32,120 | ​ |  | 32,120 | ​ | ​ | 96,359 | ​ | ​ | 96,359
Lease payments, unrelated parties | ​ | ​ | 166,938 | ​ |  | 135,137 | ​ | ​ | 500,814 | ​ | ​ | 305,840
Lease payments, related parties | ​ | ​ | 32,120 | ​ |  | 32,120 | ​ | ​ | 96,359 | ​ | ​ | 96,359
​ Legal Contingencies The Company is not a party to any material legal proceedings at this time. From time to time, the Company may become involved in various legal proceedings that arise in the ordinary course of its business or otherwise. 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. 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 – “License and Distribution Agreements”). Additionally, the Company is a party to various agreements with contract research, manufacturing and other organizations that generally provide for termination upon notice, 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 of Directors approves severance packages for specific full-time employees based on their length of service and position ranging up to six 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 September 30, 2023.

X
- References No definition available. + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- Definition The entire disclosure for commitments and contingencies. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482648/440-10-50-4 Reference 2: http://www.xbrl.org/2009/role/commonPracticeRef -Topic 450 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//450/tableOfContent Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Topic 954 -SubTopic 440 -Name Accounting Standards Codification -Section 50 -Paragraph 1 -Subparagraph (a) -Publisher FASB -URI https://asc.fasb.org//1943274/2147480327/954-440-50-1 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Topic 440 -SubTopic 10 -Name Accounting Standards Codification -Section 50 -Paragraph 4 -Subparagraph (c) -Publisher FASB -URI https://asc.fasb.org//1943274/2147482648/440-10-50-4 Reference 5: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 440 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//440/tableOfContent + Details
Name: | us-gaap_CommitmentsAndContingenciesDisclosureTextBlock
Namespace Prefix: | us-gaap_
Data Type: | dtr-types:textBlockItemType
Balance Type: | na
Period Type: | duration