Cartesian Therapeutics, Inc.

Current report

Issuing additional equity securities may cause dilution to our stockholders.

Current report

Until such time, if ever, as we can generate sufficient product revenue to fund our operations, we expect to finance our operations with our existing cash, cash equivalents and marketable securities, any current or future equity or debt financings, including under the Sales Agreement and Loan Agreement, and upfront and milestone and royalties payments, if any, received under any licenses or collaborations. If we raise additional capital through the sale of equity or convertible debt securities, are required to issue equity securities in conversion of our outstanding obligations pursuant to the Loan Agreement, or issue any equity or convertible debt securities in connection with a collaboration agreement or other contractual arrangement, your ownership interest will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect your rights as a holder of our common stock. In addition, the possibility of such issuance may cause the market price of our common stock to decline.

Current report

The terms of our Loan Agreement place restrictions on our operating and financial flexibility. If we raise additional capital through debt financing, the terms of any new debt could further restrict our operating and financial flexibility.

Current report

In May 2026, we entered into the Loan Agreement with K2HV. Our obligations under the Loan Agreement are secured by a security interest in substantially all of our assets, other than intellectual property assets.

Current report

The Loan Agreement includes customary affirmative and negative covenants, as well as standard events of default, including an event of default based on the occurrence of a material adverse event. The negative covenants include, among others, restrictions on additional indebtedness, liens, dividends, investments, asset sales, repurchase of equity, certain affiliate transactions, changes of control and mergers or acquisitions. Beginning April 1, 2027, the Loan Agreement requires us to maintain a minimum unrestricted cash balance at all times when our market capitalization is less than $750.0 million of 80% of our outstanding obligations to the lenders, subject to reduction to 50% upon achievement of certain Second Tranche Milestones, and will revert to 80% if certain Third Tranche Milestones are not achieved by the applicable date. Beginning on January 1, 2029, the Loan Agreement requires us to maintain compliance with a minimum trailing three-month net product revenue covenant of $40.0 million, tested as of the last day of each calendar quarter, with required quarter-over-quarter growth. These restrictive covenants could limit our flexibility in operating our business and our ability to pursue business opportunities that we or our stockholders may consider beneficial. In addition, K2HV could declare a default upon the occurrence of any event that it interprets could be expected to have a material adverse effect, subject to the limitations specified in the Loan Agreement. Upon the occurrence and continuance of an event of default, K2HV may declare all outstanding obligations immediately due and payable and take such other actions as set forth in the Loan Agreement. Any declaration of an event of default could significantly harm our business and prospects and could cause the price of our common stock to decline. If we are liquidated, the rights of the lenders to repayment would be senior to the rights of the holders of our common stock to receive any proceeds from liquidation. We may not have enough available cash or be able to raise additional funds through equity or debt financings to repay these outstanding obligations at the time any event of default occurs. Further, if we raise any additional capital through debt financing, the terms of such additional debt could further restrict our operating and financial flexibility.