SEC Filing - Rani Therapeutics, LLC

View:

Download DOC

Download PDF

Download XLS

Download XBRL

10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024


☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ________________ to ________________

Commission File Number: 001-40672

RANI THERAPEUTICS HOLDINGS, INC.

(Exact Name of Registrant as Specified in its Charter)


Delaware	86-3114789
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)
2051 Ringwood Avenue San Jose, California	95131
(Address of principal executive offices)	(Zip Code)

Registrant’s telephone number, including area code: (408) 457-3700

Securities registered pursuant to Section 12(b) of the Act:

     Title of each class

     Trading
Symbol(s)

     Name of each exchange on which registered

     Class A common stock, par value $0.0001 per share

     RANI

     The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☐	Accelerated filer	☐
Non-accelerated filer	☒	Smaller reporting company	☒
Emerging growth company	☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of November 11, 2024, the registrant had 33,311,543 shares of Class A common stock, $0.0001 par value per share, outstanding, 23,977,139 shares of Class B common stock, $0.0001 par value per share, outstanding and no shares of Class C common stock, $0.0001 par value per share, outstanding. Certain holders of units of the registrant’s consolidated subsidiary, Rani Therapeutics, LLC, who do not hold shares of the registrant’s Class B common stock can exchange their units of Rani Therapeutics, LLC for 1,229,630 shares of the registrant’s Class A common stock.

Table of Contents


		Page
Special Note Regarding Forward-Looking Statements		3

PART I.	FINANCIAL INFORMATION

	RANI THERAPEUTICS HOLDINGS, INC.
Item 1.	Financial Statements (Unaudited)	5
	Condensed Consolidated Balance Sheets	5
	Condensed Consolidated Statements of Operations	6
	Condensed Consolidated Statements of Comprehensive Loss	7
	Condensed Consolidated Statements of Changes in Stockholders’ Equity	8
	Condensed Consolidated Statements of Cash Flows	10
	Notes to Unaudited Condensed Consolidated Financial Statements	11
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 4.	Controls and Procedures	35

PART II.	OTHER INFORMATION	37

Item 1.	Legal Proceedings	37
Item 1A.	Risk Factors	37
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	37
Item 3.	Defaults Upon Senior Securities	37
Item 4.	Mine Safety Disclosures	37
Item 5.	Other Information	38
Item 6.	Exhibits	39
Signatures		40

Unless otherwise stated or the context otherwise requires, the terms “we,” “us,” and “our,” and similar references refer to Rani Therapeutics Holdings, Inc. (“Rani Holdings”) and its consolidated subsidiary, Rani Therapeutics, LLC (“Rani LLC”).

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and consolidated financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, manufacturing costs, regulatory approvals, development and advancement of our oral delivery technology, timing and likelihood of success, potential partnering activities as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.

In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential,” “seek,” “aim,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:

•

the progress and focus of our current and future clinical trials in the United States and abroad, and the reporting of data from those trials;

•

our ability to advance product candidates into and successfully complete clinical trials;

•

the beneficial characteristics, safety, efficacy, and therapeutic effects of our product candidates;

•

our potential and ability to successfully manufacture and supply our product candidates for clinical trials and for commercial use, if approved;

•

our ability to complete development of the RaniPill HC or any redesign and conduct additional preclinical and clinical studies of the RaniPill HC or any future design of the RaniPill capsule to accommodate target payloads that are larger than the payload capacity of the RaniPill GO capsule used to date for clinical studies of our product candidates;

•

our ability to further develop and expand our platform technology;

•

our ability to utilize our technology platform to generate and advance additional product candidates;

•

the accuracy of our estimates regarding expenses, future revenue, capital requirements, and needs for additional financing;

•

our financial performance;

•

our ability to continue as a going concern;

•

our plans relating to commercializing our product candidates, if approved;

•

our ability to selectively enter into strategic partnership and the expected potential benefits thereof;

•

the implementation of our strategic plans for our business and product candidates;

•

our ability to continue to scale and optimize our manufacturing processes by expanding our use of automation;

•

our estimates of the number of patients in the United States who suffer from the indications we target and the number of patients that will enroll in our clinical trials;

•

the size of the market opportunity for our product candidates in each of the indications we target;

•

our ability to continue to innovate and expand our intellectual property by developing novel formulations and new applications of the RaniPill capsule;

•

our plans and ability to obtain or protect intellectual property rights, including extensions of existing patent terms where available;

•

the scope of protection we are able to establish and maintain for intellectual property rights, including our technology platform and product candidates;

•

the sufficiency of our existing cash and cash equivalents to fund our future operating expenses and capital expenditure requirements;

•

our ability to realize savings from any restructuring plans or cost-containment measures we propose to implement;

•

developments relating to our competitors and our industry, including competing product candidates and therapies;

•

our realization of any benefit from our organizational structure, taking into account our obligations under the Tax Receivable Agreement (defined herein) and the impact of any payments required to be made thereunder on our liquidity and financial condition; and

•

our expectations regarding the period during which we will qualify as an emerging growth company under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”).

These forward-looking statements are subject to a number of risks, uncertainties, and assumptions described in the section titled “Risk Factors” and elsewhere in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 20, 2024. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, or otherwise.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.

RANI THERAPEUTICS HOLDINGS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except par value)


	September 30,			December 31,
	2024			2023
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	4,277		$	5,864
Marketable securities		26,127			42,675
Prepaid expenses and other current assets		1,967			2,308
Total current assets		32,371			50,847
Property and equipment, net		5,496			6,105
Operating lease right-of-use asset		5,427			718
Other assets		246			246
Total assets	$	43,540		$	57,916
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,566		$	648
Accrued expenses and other current liabilities		1,867			1,726
Deferred revenue		600			—
Current portion of long-term debt		14,768			4,897
Current portion of operating lease liability		1,410			718
Total current liabilities		20,211			7,989
Long-term debt, less current portion		13,537			24,484
Operating lease liability, less current portion		4,017			—
Total liabilities		37,765			32,473
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $0.0001 par value - 20,000 shares authorized; none issued and outstanding as of September 30, 2024 and December 31, 2023		—			—
Class A common stock, $0.0001 par value - 800,000 shares authorized; 29,807 and 26,036 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		3			3
Class B common stock, $0.0001 par value - 40,000 shares authorized; 24,116 issued and outstanding as of September 30, 2024 and December 31, 2023		2			2
Class C common stock, $0.0001 par value - 20,000 shares authorized; none issued and outstanding as of September 30, 2024 and December 31, 2023		—			—
Additional paid-in capital		97,067			85,762
Accumulated other comprehensive gain (loss)		8			(12	)
Accumulated deficit		(93,960	)		(72,889	)
Total stockholders' equity attributable to Rani Therapeutics Holdings, Inc.		3,120			12,866
Non-controlling interest		2,655			12,577
Total stockholders' equity		5,775			25,443
Total liabilities and stockholders' equity	$	43,540		$	57,916

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RANI THERAPEUTICS HOLDINGS, INC.

CONDENSED Consolidated Statements of Operations

(in thousands, except per share amounts)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Operating expenses
Research and development	$	6,172		$	11,220		$	19,872		$	32,018
General and administrative		5,627			6,635			18,484			20,647
Total operating expenses	$	11,799		$	17,855		$	38,356		$	52,665
Loss from operations		(11,799	)		(17,855	)		(38,356	)		(52,665	)
Other income (expense), net
Interest income and other, net		414			839			1,403			2,626
Interest expense and other, net		(1,337	)		(1,316	)		(3,909	)		(3,789	)
Net loss	$	(12,722	)	$	(18,332	)	$	(40,862	)	$	(53,828	)
Net loss attributable to non-controlling interest		(5,939	)		(9,135	)		(19,791	)		(26,956	)
Net loss attributable to Rani Therapeutics Holdings, Inc.	$	(6,783	)	$	(9,197	)	$	(21,071	)	$	(26,872	)
Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc., basic and diluted	$	(0.24	)	$	(0.36	)	$	(0.78	)	$	(1.06	)
Weighted-average Class A common shares outstanding—basic and diluted		28,836			25,552			27,071			25,380

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RANI THERAPEUTICS HOLDINGS, INC.

CONDENSED Consolidated Statements of Comprehensive Loss

(in thousands)

(Unaudited)


	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net loss	$	(12,722	)	$	(18,332	)	$	(40,862	)	$	(53,828	)
Other comprehensive loss
Net unrealized gain on marketable securities		24			45			37			64
Comprehensive loss	$	(12,698	)	$	(18,287	)	$	(40,825	)	$	(53,764	)
Comprehensive loss attributable to non-controlling interest		(5,928	)		(9,113	)		(19,774	)		(26,924	)
Comprehensive loss attributable to Rani Therapeutics Holdings, Inc.	$	(6,770	)	$	(9,174	)	$	(21,051	)	$	(26,840	)

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RANI THERAPEUTICS HOLDINGS, INC.

CONDENSED Consolidated Statements of Changes in STOCKHOLDERS’ Equity

(in thousands)

(Unaudited)


	Class A Common Stock				Class B Common Stock
	Shares		Amount		Shares		Amount		Additional Paid In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Non-Controlling Interest			Total Stockholders' Equity
Balance at December 31, 2023		26,036	$	3		24,116	$	2	$	85,762		$	(12	)	$	(72,889	)	$	12,577		$	25,443
Issuance of common stock under employee equity plans		175		—		—		—		—			—			—			—			—
Effect of exchanges of non-corresponding Class A Units of Rani LLC		83		—		—		—		—			—			—			—			—
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC		—		—		—		—		45			—			—			(45	)		—
Stock-based compensation		—		—		—		—		1,969			—			—			1,901			3,870
Net loss		—		—		—		—		—			—			(7,483	)		(7,296	)		(14,779	)
Other comprehensive gain		—		—		—		—		—			1			—			—			1
Balance at March 31, 2024		26,294	$	3		24,116	$	2	$	87,776		$	(11	)	$	(80,372	)	$	7,137		$	14,535
Issuance of common stock under employee stock purchase plan, net of shares withheld for tax settlement		110		—		—		—		221			—			—			—			221
Issuance of common stock under employee equity plans, net of shares withheld for tax settlement		85		—		—		—		14			—			—			—			14
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC		—		—		—		—		(108	)		—			—			108			—
Stock-based compensation		—		—		—		—		2,109			—			—			2,020			4,129
Net loss		—		—		—		—		—			—			(6,805	)		(6,556	)		(13,361	)
Other comprehensive gain		—		—		—		—		—			6			—			6			12
Balance at June 30, 2024		26,489	$	3		24,116	$	2	$	90,012		$	(5	)	$	(87,177	)	$	2,715		$	5,550
Issuance of common stock in connection with the July Securities Purchase Agreement, net of issuance costs of $1,117		2,800		—		—		—		8,883			—			—			—			8,883
Exercise of pre-funded warrants		447		—		—		—		—			—			—			—			—
Issuance of common stock under employee equity plans, net of shares withheld for tax settlement		71		—		—		—		(1	)		—			—			—			(1	)
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC		—		—		—		—		(4,010	)		—			—			4,010			—
Stock-based compensation		—		—		—		—		2,183			—			—			1,858			4,041
Net loss		—		—		—		—		—			—			(6,783	)		(5,939	)		(12,722	)
Other comprehensive gain		—		—		—		—		—			13			—			11			24
Balance at September 30, 2024		29,807	$	3		24,116	$	2	$	97,067		$	8		$	(93,960	)	$	2,655		$	5,775

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RANI THERAPEUTICS HOLDINGS, INC.

CONDENSED Consolidated Statements of Changes in STOCKHOLDERS’ Equity (continued)

(in thousands)

(Unaudited)


	Class A Common Stock					Class B Common Stock
	Shares			Amount		Shares		Amount		Additional Paid In Capital			Accumulated Other Comprehensive Loss			Accumulated Deficit			Non-Controlling Interest			Total Stockholders' Equity
Balance at December 31, 2022		25,295		$	3		24,116	$	2	$	75,842		$	(73	)	$	(38,919	)	$	37,149		$	74,004
Issuance of common stock under employee equity plans, net of shares withheld for tax settlement		81			—		—		—		(124	)		—			—			—			(124	)
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC		—			—		—		—		98			—			—			(98	)		—
Stock-based compensation		—			—		—		—		2,202			—			—			2,213			4,415
Net loss		—			—		—		—		—			—			(8,372	)		(8,460	)		(16,832	)
Other comprehensive loss		—			—		—		—		—			63			—			63			126
Balance at March 31, 2023		25,376		$	3		24,116	$	2	$	78,018		$	(10	)	$	(47,291	)	$	30,867		$	61,589
Issuance of common stock under employee stock purchase plan		63			—		—		—		219			—			—			—			219
Issuance of common stock under employee equity plans, net of shares withheld for tax settlement		78			—		—		—		(9	)		—			—			—			(9	)
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC		—			—		—		—		(54	)		—			—			54			—
Equity-based compensation		—			—		—		—		2,572			—			—			2,569			5,141
Net loss		—			—		—		—		—			—			(9,303	)		(9,361	)		(18,664	)
Other comprehensive loss		—			—		—		—		—			(53	)		—			(54	)		(107	)
Balance at June 30, 2023		25,517		$	3		24,116	$	2	$	80,746		$	(63	)	$	(56,594	)	$	24,075		$	48,169
Issuance of common stock under employee equity plans, net of shares withheld for tax settlement		319			—		—		—		(29	)		—			—			—			(29	)
Effect of exchanges of Paired Interests and non-corresponding Class A Units of Rani LLC		42			—		—		—		—			—			—			—			—
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC		—			—		—		—		159			—			—			(159	)		—
Forfeiture of restricted stock awards		(2	)		—		—		—		(6	)		—			—			(6	)		(12	)
Equity-based compensation		—			—		—		—		2,510			—			—			2,468			4,978
Net loss		—			—		—		—		—			—			(9,197	)		(9,135	)		(18,332	)
Other comprehensive gain		—			—		—		—		—			22			—			23			45
Balance at September 30, 2023		25,876		$	3		24,116	$	2	$	83,380		$	(41	)	$	(65,791	)	$	17,266		$	34,819

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

RANI THERAPEUTICS HOLDINGS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)


	Nine Months Ended September 30,
	2024			2023
Cash flows from operating activities
Net loss	$	(40,862	)	$	(53,828	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense		12,040			14,522
Depreciation and amortization		762			595
Non-cash operating lease expense		1,332			780
Amortization of debt discount and issuance costs		174			174
Net accretion and amortization of investments in marketable securities		(940	)		(1,851	)
Loss on disposal of property and equipment		65			—
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		341			(66	)
Accounts payable		918			68
Accrued expenses and other current liabilities		61			1,628
Deferred revenue		600			—
Operating lease liabilities		(1,332	)		(780	)
Net cash used in operating activities		(26,841	)		(38,758	)
Cash flows from investing activities
Proceeds from maturities of marketable securities		57,250			81,500
Purchases of marketable securities		(39,725	)		(63,852	)
Purchases of property and equipment		(237	)		(1,062	)
Net cash provided by investing activities		17,288			16,586
Cash flows from financing activities
Proceeds from issuance of common stock and pre-funded warrants in connection with the July Securities Purchase Agreement, net of issuance costs of $1,117		8,883			—
Issuance of common stock under employee stock purchase plan