{"url_path":"/sec/jsprw/10-q/2026/item-1a","section_key":"item-1a","section_title":"Item 1A Risk Factors","topic":"sec","document":{"doc_type":"10-Q","doc_date":"2026-05-14","source_url":"https://www.sec.gov/Archives/edgar/data/1788028/0001213900-26-056595-index.html","accession_number":"0001213900-26-056595","cik":"0001788028","ticker":"JSPR","issuer_name":"Jasper Therapeutics, Inc.","edgar_url":"https://www.sec.gov/Archives/edgar/data/1788028/0001213900-26-056595-index.html","primary_entity_key":"0001788028","primary_entity_name":"Jasper Therapeutics, Inc."},"word_count":4349,"has_tables":true,"body_markdown":"Item 1A. Risk Factors\n\n \n\n*Our Annual Report on Form 10-K for the year\nended December 31, 2025, filed with the SEC on March 30, 2026, in Part I –Item 1A, Risk Factors, describes important risk factors\nthat could cause our business, financial condition, results of operations and growth prospects to differ materially from those indicated\nor suggested by forward-looking statements made in this Quarterly Report or presented elsewhere by management from time to time. Except\nas set forth below, there have been no material changes in the risk factors that appear in Part I - Item 1A of our Annual Report on Form\n10-K for the year ended December 31, 2025, filed with the SEC on March 30, 2026. Additional risks and uncertainties not currently known\nto us or that we currently deem to be immaterial may also materially and adversely affect our business.*\n\n* *\n\n37\n\n \n\n* *\n\nRisks Related to Our Financial Position and Need for Additional\nCapital\n\n \n\n*We have incurred significant net losses and negative operating\ncash flows since our inception which raises substantial doubt about our ability to continue as a going concern. We expect to incur net\nlosses for the foreseeable future and may never achieve or maintain profitability.*\n\n \n\nWe are a clinical-stage biotechnology company\ndedicated to enabling cures through therapeutics targeting mast and hematopoietic stem cells and have a limited operating history. Investment\nin biopharmaceutical product development is highly speculative because it entails substantial upfront capital expenditures and significant\nrisk that any potential product candidate will fail to demonstrate adequate effect or an acceptable safety profile, gain regulatory approval\nand become commercially viable. We have no products approved for commercial sale and have not generated any revenue from product sales\nto date, and we continue to incur significant research and development and other expenses related to our ongoing operations. As a result,\nwe are not profitable and have incurred losses and negative operating cash flows in each period since our inception, which raises substantial\ndoubt about our ability to continue as a going concern beyond one year from the date of filing of this Quarterly Report on Form 10-Q.\nSee below risk factor, “As a result of our history of losses and negative cash flows from operations, our management has performed\nan analysis and concluded that substantial doubt exists about our ability to continue as a going concern, and we will need to raise additional\nfinancing to continue our products’ development.” for additional details. For the three months ended March 31,\n2026 and 2025, we reported net losses of $1.2 million and $21.2 million, respectively. For the three months ended March 31,\n2026 and 2025, we reported negative operating cash flows of $14.5 million and $22.8 million, respectively. As of March 31, 2026, we had\nan accumulated deficit of $317.8 million. We have devoted all of our efforts to organizing and staffing our company, business and scientific\nplanning, raising capital, acquiring and developing technology, identifying potential product candidates, undertaking research and preclinical\nstudies of potential product candidates, developing manufacturing capabilities and evaluating a clinical path for our pipeline programs.\nWe expect to continue to incur significant expenses and increasing operating losses for the foreseeable future, and we expect these losses\nto increase as we continue our research and development of, and seek regulatory approvals for, our product candidates.\n\n \n\nThe net losses we incur may fluctuate significantly\nfrom quarter to quarter. We anticipate that our expenses will increase substantially if and as we:\n\n \n\n \n●\ncontinue the clinical development\nof briquilimab in chronic diseases such as CSU and Chronic Inducible Urticaria (“CIndU”);\n\n \n\n \n●\nelect to continue development of briquilimab in allergic\nasthma;\n\n \n\n \n●\ncontinue our current research programs and development\nof other potential product candidates from our current research programs;\n\n \n\n \n●\nseek to identify additional product candidates and\nresearch programs;\n\n \n\n \n●\ninitiate preclinical testing and clinical trials for\nany other product candidates we identify and develop;\n\n \n\n \n●\nmaintain, expand, enforce, defend and protect our intellectual\nproperty portfolio, and provide reimbursement of third-party expenses related to our patent portfolio;\n\n \n\n \n●\nseek marketing approvals for any product candidates\nthat successfully complete clinical trials;\n\n \n\n \n●\nultimately establish a sales, marketing and distribution\ninfrastructure to commercialize any product candidates for which we may obtain marketing approval;\n\n \n\n \n●\nadapt our regulatory compliance efforts to incorporate\nrequirements applicable to any approved product candidates;\n\n \n\n \n●\nhire additional research and development and clinical\npersonnel;\n\n \n\n \n●\nhire commercial personnel and advance market access\nand reimbursement strategies;\n\n \n\n \n●\nadd operational, financial and management information\nsystems and personnel, including personnel to support our product development;\n\n \n\n \n●\nacquire or in-license product candidates, intellectual\nproperty and technologies;\n\n \n\n \n●\ndevelop or in-license manufacturing and distribution\ntechnologies;\n\n \n\n \n●\nshould we decide to do so and receive approval for\nany of our product candidates, build and maintain, or purchase and validate, commercial-scale manufacturing facilities designed\nto comply with current Good Manufacturing Practices (“cGMP”) requirements; and\n\n \n\n \n●\nincur additional legal, accounting and other expenses\nin operating as a public company.\n\n \n\n38\n\n \n\n \n\nAs a company, we have not completed clinical development\nof any product candidate and expect that it will be several years, if ever, before we have a product candidate ready for commercialization.\nTo become and remain profitable, we must develop and, either directly or through collaborators, eventually commercialize a product or\nproducts with significant market potential. This will require us to be successful in a range of challenging activities, including identifying\nproduct candidates, completing preclinical testing and clinical trials of product candidates, obtaining marketing approval for these\nproduct candidates, manufacturing, marketing and selling those products for which we may obtain marketing approval and satisfying any\npost-marketing requirements.\n\n \n\nWe may never succeed in these activities and,\neven if we do, may never generate revenues that are significant or large enough to achieve profitability. Our product candidates and\nresearch programs are currently only in the early stages of development. Because of the numerous risks and uncertainties associated with\ndeveloping product candidates, we are unable to predict the extent of any future losses or when we will become profitable, if at all.\nIf we do achieve profitability, we may not be able to sustain or increase profitability on a quarterly or annual basis. Our failure to\nbecome and remain profitable would decrease the value of our company and could impair our ability to raise capital, maintain our research\nand development efforts, expand our business or continue our operations. A decline in the value of our company could also cause\nyou to lose all or part of your investment.\n\n  \n\n*We will need substantial additional funding, which may not be\navailable on acceptable terms, or at all. If we are unable to raise capital when needed, we would be forced to delay, reduce or eliminate\nour research and product development programs or future commercialization efforts.*\n\n \n\nWe expect to spend substantial amounts of cash\nto conduct further research and development and preclinical testing and clinical trials of our product candidates, to seek regulatory\napprovals for our product candidates and to launch and commercialize any product candidates for which we receive regulatory approval.\nFurthermore, we expect to incur additional costs associated with operating as a public company. Accordingly, we will need to obtain substantial\nadditional funding in order to maintain our continuing operations. If we are unable to raise capital when needed or on attractive terms,\nwe would be forced to delay, reduce or eliminate our research and product development programs or future commercialization efforts. For\nexample, advancing any future clinical studies in asthma would be based on an evaluation of the competitive landscape, the potential\nfor strategic partnerships and capital availability. As of March 31, 2026, our cash and cash equivalents were $14.1 million and we had\nan accumulated deficit of $317.8 million. We will need to raise additional financing to continue our products’ development for\nthe foreseeable future, and will continue to need to do so until we become profitable. Our future financing requirements will depend\non many factors, including:\n\n \n\n \n●\nthe initiation, progress, timing, costs and results\nof preclinical studies and clinical trials for our product candidates;\n\n \n\n \n●\nthe costs of continuing to build our technology platform\nfor use in developing our product candidates;\n\n \n\n \n●\nthe costs of developing, acquiring or in-licensing additional\ntargeted therapies to use in combination with briquilimab and other product candidates we may develop;\n\n \n\n \n●\nthe costs of preparing, filing and prosecuting patent\napplications, maintaining and enforcing our intellectual property and proprietary rights and defending intellectual property-related claims\nin the United States and internationally;\n\n \n\n \n●\nthe number and characteristics of product candidates\nthat we develop or may in-license;\n\n \n\n \n●\nour ability to establish and maintain collaborations\non favorable terms, if at all;\n\n \n\n39\n\n \n\n \n\n \n●\nthe achievement of milestones or occurrence of other\ndevelopments that trigger payments under any collaboration agreements we enter into;\n\n \n\n \n●\nthe outcome, timing and cost of meeting regulatory\nrequirements established by the U.S. Food and Drug Administration (the “FDA”), the European Medicines Agency (the\n“EMA”) and other comparable foreign regulatory authorities;\n\n  \n\n \n●\nthe cost and timing of completion of commercial-scale outsourced\nmanufacturing activities;\n\n \n\n \n●\nthe cost of establishing sales, marketing and distribution\ncapabilities for any product candidates for which we may receive regulatory approval in regions where we choose to commercialize\nour products on our own; and\n\n \n\n \n●\nthe costs of operating as a public company.\n\n  \n\nConducting preclinical testing and clinical trials\nis a time-consuming, expensive and uncertain process that takes years to complete, and we may never generate the necessary data\nor results required to obtain marketing approval and achieve product sales. In addition, even if we successfully develop product candidates\nand those are approved, we may not achieve commercial success. Our commercial revenues, if any, will be derived from sales of products\nthat we do not expect to be commercially available for several years, if at all. Accordingly, we will need to continue to rely\non additional financing to achieve our business objectives.\n\n \n\nWe currently have an effective universal shelf\nregistration statement on Form S-3, which we filed with the SEC on March 19, 2025, and which was declared effective on March 26, 2025\nand will expire on March 26, 2028 (the “Shelf Registration Statement”). Pursuant to the Shelf Registration Statement, we\nmay offer from time to time up to an aggregate of $300.0 million of securities, including any combination of common stock, preferred\nstock, debt securities, warrants, rights, units and depositary shares. On March 19, 2025, we entered into an Open Market Sale AgreementSM\nwith Jefferies LLC (the “Agent”), pursuant to which we may offer and sell through or to the Agent, as sales agent or principal,\nshares of common stock from time to time (the “ATM Offering”). On March 26, 2025, we filed with the SEC a prospectus under\nthe Shelf Registration Statement in connection with the ATM Offering (the “ATM Prospectus”), pursuant to which we may offer\nand sell shares of our common stock having an aggregate offering price of up to $100.0 million. As of March 31, 2026, we have issued\nand sold an aggregate of 1,231,447 shares of our common stock for net proceeds of approximately $6.5 million pursuant to the ATM Prospectus.\n\n \n\nOn September 22, 2025, we completed an underwritten\npublic offering of our common stock (the “September Offering”) pursuant to the Shelf Registration Statement. In the September\nOffering, we sold (i) an aggregate of 11,670,707 shares of common stock and accompanying warrants (the “Common Warrants”)\nto purchase up to an aggregate of 11,670,707 shares of common stock and (ii) pre-funded warrants to purchase up to an aggregate of 675,000\nshares of common stock (the “Pre-Funded Warrants”) and accompanying Common Warrants to purchase up to an aggregate of 675,000\nshares of common stock. Upon the closing of the September Offering, we received net proceeds of $27.5 million, after deducting underwriting\ndiscounts, commissions and other offering expenses.\n\n \n\nAs of March 31, 2026, $93.5 million remains allocated\nand available under the ATM Prospectus and approximately $170.0 million remains available and unallocated under the Shelf Registration\nStatement. However, as of March 31, 2026, the aggregate market value of our common stock held by non-affiliates (“public float”)\nis less than $75.0 million, so the amount we can raise through primary public offerings of securities, including through the ATM offering,\nin any twelve-month period using shelf registration statements is limited to an aggregate of one-third of our public float. Although\nwe still maintain the ability to raise funds through other means, such as through the filing of a registration statement on Form S-1\nor in private placements, the rules and regulations of the SEC or any other regulatory agencies may restrict our ability to conduct certain\ntypes of financing activities, or may affect the timing of and amounts we can raise by undertaking such activities.\n\n \n\n40\n\n \n\n \n\nIf we raise additional capital by issuing equity\nsecurities, the percentage ownership of our existing stockholders may be reduced, and accordingly these stockholders may experience substantial\ndilution. We may also issue equity securities that provide for rights, preferences and privileges senior to those of our common stock.\nGiven our need for cash and that equity issuances are the most common type of fundraising for similarly situated companies, the risk\nof dilution is particularly significant for our stockholders.\n\n \n\nAny additional fundraising efforts may divert\nour management from our day-to-day activities, which may adversely affect our ability to develop and commercialize product candidates.\nWe cannot be certain that additional funding will be available on acceptable terms, or at all. We have no committed source of additional\ncapital and, if we are unable to raise additional capital in sufficient amounts or on terms acceptable to us, we may have to significantly\ndelay, scale back or discontinue the development or commercialization of product candidates or other research and development initiatives.\nOur license agreements and any future collaboration agreements may also be terminated if we are unable to meet the payment or other obligations\nunder the agreements. We could be required to seek collaborators for product candidates at an earlier stage than otherwise would be desirable\nor on terms that are less favorable than might otherwise be available or relinquish or license on unfavorable terms our rights to product\ncandidates in markets where we otherwise would seek to pursue development or commercialization ourselves.\n\n \n\n*As a result of our history of losses\nand negative cash flows from operations, our management has performed an analysis and concluded that substantial doubt exists about our\nability to continue as a going concern, and we will need to raise additional financing to continue our products’ development.*\n\n \n\nOur history of operating losses and negative cash flows from operations combined with our anticipated use of cash to fund operations raises\nsubstantial doubt about our ability to continue as a going concern beyond one year from the date of filing of this Quarterly Report on\nForm 10-Q. Our financial statements as of March 31, 2026 do not include any adjustments that might result from the outcome of this uncertainty.\nBased on our current operating plan, we will need to raise additional financing to continue our products’ development for the foreseeable\nfuture, and until we become profitable. Our future viability as an ongoing business is dependent on our ability to generate cash from\nour operating activities or to raise additional capital to finance our operations. We expect to finance our future cash needs through\nequity or debt financings, collaborations or a combination of these approaches, and given the imminent need for additional funding to\ncontinue to fund operations in the near-term, we are actively seeking additional capital to extend the cash runway. The sale of equity\nor convertible debt securities may result in dilution to our stockholders, and, in the case of preferred equity securities or convertible\ndebt, those securities could provide for rights, preferences or privileges senior to those of our common stock. Debt financings may subject\nus to covenant limitations or restrictions on our ability to take specific actions, such as incurring additional debt or making capital\nexpenditures. Our ability to raise additional funds may be adversely impacted by negative global economic conditions and any disruptions\nto and volatility in the credit and financial markets in the United States and worldwide or other factors. There can be no assurance that\nwe will be successful in acquiring additional funding at levels sufficient to fund our operations or on terms favorable or acceptable\nto us. While we routinely evaluate cost reduction measures to proactively manage cash burn, if we are unable to obtain adequate financing\nwhen needed or on terms favorable or acceptable to us, we may be forced to take broader actions such as to delay, reduce the scope of\nor eliminate one or more of our research and development programs.\n\n \n\nThe perception that we\nmight be unable to continue as a going concern may also make it more difficult to obtain financing for the continuation of our operations\non terms that are favorable to us, or at all, and could result in the loss of confidence by investors and employees. Our consolidated\nfinancial statements do not include any adjustments that might result from the outcome of this uncertainty. If we are unable to continue\nas a going concern, we may have to liquidate our assets and may receive less than the value at which those assets are carried on our\nconsolidated financial statements, and it is likely that our investors will lose all or a part of their investment.\n\n \n\n41\n\n \n\n \n\nRisks Related to Ownership of Our Common Stock and Warrants\n\n* *\n\n*If our operations and performance do not meet the expectations\nof investors or securities analysts or for other reasons, the market price of our securities may decline, and the market price of our\ncommon stock may continue to be volatile.*\n\n \n\nAny of the factors listed below could have a negative\nimpact on your investment in our securities, and our securities may trade at prices significantly below the price you paid for them.\nIn such circumstances, the trading price of our securities may not recover and may experience a further decline.\n\n \n\nFactors affecting the trading price of our securities\nmay include:\n\n \n\n \n●\nadverse regulatory decisions;\n\n \n\n \n●\nany delay in our regulatory filings for our product\ncandidates and any adverse development or perceived adverse development with respect to the applicable regulatory authority’s\nreview of such filings, including without limitation the FDA’s issuance of a “refusal to file” letter or a request\nfor additional information;\n\n  \n\n \n●\nthe war in Iran and other conflicts and instability\nin the Middle East, the ongoing conflict between Ukraine and Russia, instability in Venezuela and other geopolitical conflicts\nand the global impact of restrictions and sanctions imposed on Russia and the impact thereof on the markets generally, including\nany adverse effects on macroeconomic conditions such as inflation;\n\n \n\n \n●\nthe commencement, enrollment or results of any future\nclinical trials we may conduct, or changes in the development status of our product candidates;\n\n \n\n \n●\nadverse results from, delays in or termination of clinical\ntrials;\n\n \n\n \n●\nunanticipated serious safety concerns related to the\nuse of our product candidates;\n\n \n\n \n●\nlower than expected market acceptance of our product\ncandidates following approval for commercialization;\n\n \n\n \n●\nchanges in financial estimates by us or by any securities\nanalysts who might cover our stock;\n\n \n\n \n●\nchanges in the market valuations of similar companies;\n\n \n\n \n●\nstock market price and volume fluctuations of comparable\ncompanies and, in particular, those that operate in the biopharmaceutical industry;\n\n \n\n \n●\npublication of research reports about us or our industry\nor positive or negative recommendations or withdrawal of research coverage by securities analysts;\n\n \n\n \n●\nannouncements by us or our competitors of significant\nacquisitions, strategic partnerships or divestitures;\n\n  \n\n \n●\nannouncements of investigations or regulatory scrutiny\nof our operations or lawsuits filed against us;\n\n \n\n \n●\ninvestors’ general perception of our business\nor management;\n\n \n\n \n●\nrecruitment or departure of key personnel;\n\n \n\n \n●\noverall performance of the equity markets;\n\n \n\n \n●\ndisputes or other developments relating to intellectual\nproperty rights, including patents, litigation matters and our ability to obtain, maintain, defend, protect and enforce patent and\nother intellectual property rights for our technologies;\n\n \n\n \n●\nsignificant lawsuits, including patent or stockholder\nlitigation;\n\n \n\n \n●\nproposed changes to healthcare laws in the U.S. or\nforeign jurisdictions, or speculation regarding such changes;\n\n \n\n \n●\ngeneral political and economic conditions; and\n\n \n\n \n●\nother events or factors, many of which are beyond our\ncontrol.\n\n \n\n42\n\n \n\n \n\nIn addition, the stock market in general, Nasdaq\nand pharmaceutical companies in particular have experienced extreme price and volume fluctuations that have often been unrelated or disproportionate\nto the operating performance of these companies. The trading price of our common stock is, and is likely to continue to be, volatile.\nFor example, from January 2, 2025 to December 31, 2025, our closing stock price ranged from $1.58 to $21.09 per share. From January 2,\n2026 to May 11, 2026, our closing stock price ranged from $0.67 to $2.05 per share. Broad market and industry factors may negatively\naffect the market price of our securities, regardless of our actual operating performance. As a result of this volatility, our stockholders\nmay not be able to sell their common stock at or above the prices at which they purchased their shares. Moreover, in the past, stockholders\nhave initiated class action lawsuits against pharmaceutical and biotechnology companies following periods of volatility in the market\nprices of these companies’ stock. Such litigation, if instituted against us, could cause us to incur substantial costs and divert\nmanagement’s attention and resources from our business.\n\n* *\n\n*Insiders have substantial control over us, which could limit\nyour ability to affect the outcome of key transactions, including a change of control.*\n\n \n\nAs of March 31, 2026, our directors and executive\nofficers and their affiliates beneficially owned approximately 15.6% of the outstanding shares of our common stock. As a result, these\nstockholders, if they act together, will be able to influence our management and affairs and all matters requiring stockholder approval,\nincluding the election of directors and approval of significant corporate transactions, such as a merger or other sale of our company\nor our assets. This concentration of ownership may have the effect of delaying or preventing a change in control of our company or discouraging\na potential acquirer from making a tender offer or otherwise attempting to obtain control, even if that change in control would benefit\nour other stockholders. This significant concentration of ownership may also adversely affect the trading price for our common stock\nbecause investors often perceive disadvantages in owning stock in companies with controlling stockholders.\n\n*   *\n\n*Future sales, or the perception of future sales, by us or our\nstockholders in the public market, the issuance of rights to purchase our common stock, including pursuant to the 2024 Plan and the 2024\nESPP, and future exercises of registration rights could result in the additional dilution of the percentage ownership of our stockholders\nand cause the market price for our common stock to decline.*\n\n \n\nThe sale of shares of our common stock, convertible\nsecurities or other equity securities in the public market, or the perception that such sales could occur, could harm the prevailing\nmarket price of shares of our common stock. These sales, or the possibility that these sales may occur, also might make it more difficult\nfor us to sell equity securities in the future at a time and at a price that we deem appropriate. In addition, if we sell shares of our\ncommon stock, convertible securities or other equity securities, investors may be materially diluted by subsequent sales. Such sales\nmay also result in material dilution to our existing stockholders, and new investors could gain rights, preferences, and privileges senior\nto the holders of our common stock.\n\n \n\nPursuant to the Jasper Therapeutics, Inc. 2024\nEquity Incentive Plan (the “2024 Plan”), which became effective on June 6, 2024, we are authorized to grant equity awards\nto our employees, directors and consultants. In addition, pursuant to the Jasper Therapeutics, Inc. 2024 Employee Stock Purchase Plan\n(the “2024 ESPP”), which became effective on June 6, 2024, we are authorized to sell shares to our employees. As of March\n31, 2026, 418,817 shares and 920,827 shares of our common stock are reserved for future issuance under the 2024 Plan and the 2024 ESPP,\nrespectively.\n\n \n\n43\n\n \n\n \n\nOn March 14, 2022, the Compensation Committee\nof our Board of Directors (the “Compensation Committee”) adopted the 2022 Inducement Equity Incentive Plan (the “2022\nInducement Plan”). On June 2, 2023, the Compensation Committee approved an amendment and restatement of our 2022 Inducement Plan\nto increase the maximum number of shares of our voting common stock available for grant by 250,000 shares of common stock to an aggregate\nof 550,000 shares of common stock. As of March 31, 2026, 180,960 shares of our common stock are available for future issuance under the\n2022 Inducement Plan. The 2022 Inducement Plan has not been and will not be approved by our stockholders. Under the 2022 Inducement Plan,\nwe can grant nonstatutory stock options, restricted stock awards, stock appreciation rights, restricted stock units, performance awards\nand other awards, but only to an individual, as a material inducement to such individual to enter into employment with us or an affiliate\nof ours, who (i) has not previously been an employee or director of ours or (ii) is rehired following a bona fide period of non-employment\nwith us.\n\n \n\nAs of March 31, 2026, options to purchase an aggregate\nof 2,671,358 shares of our common stock were outstanding.\n\n \n\nAdditionally, as of March 31, 2026, we had outstanding\nPre-Funded Warrants to purchase up to an aggregate of 675,000 shares of common stock and Common Warrants to purchase up to an aggregate\nof 12,345,707 shares of common stock, which, if exercised, would further increase the number of shares of our common stock outstanding\nand the number of shares eligible for resale in the public market.\n\n \n\nIn the future, we may also issue our securities\nin connection with investments or acquisitions. The amount of shares of our common stock issued in connection with an investment or acquisition\ncould constitute a material portion of our then-outstanding shares of our common stock. Any issuance of additional securities in connection\nwith investments or acquisitions may result in additional dilution to our stockholders."}