CAPRICOR THERAPEUTICS, INC. Leases Disclosure
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.
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.
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.
About Leases Disclosures
Lease disclosures under ASC 842 provide a comprehensive view of a company's leased asset portfolio, including the split between operating and finance leases, discount rates used to present-value future payments, and the maturity schedule of lease obligations. This section reveals a significant source of off-balance-sheet commitments that were largely hidden before the current standard.
Key signals: the weighted-average discount rate affects the size of recorded lease liabilities — a higher rate reduces the reported obligation, so compare the chosen rate against the company's incremental borrowing rate. The operating versus finance lease mix affects both EBITDA and operating income presentation. Watch the maturity table for concentration risk: large payment cliffs in specific years may create cash flow pressure. Variable lease payments excluded from the liability measurement represent real obligations that do not appear on the balance sheet. Compare total lease costs against prior-year operating lease expense to assess the true economic burden.