Rani Therapeutics Holdings, Inc 10-Q for FY2021 Q2

Rani Therapeutics Holdings, Inc. (RANI)

10-Q 2021-09-13 For: 2021-06-30

Added on April 06, 2026

About this 10-Q

Rani Therapeutics Holdings, Inc filed this 10-Q on September 13, 2021, covering the quarter ended June 30, 2021 (FY2021 Q2).

Headline figures

Quarter ended June 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.96M; up 3168.3% from $60K a year earlier
Net loss: $5.49M; compared with a net loss of $2.71M a year earlier

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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)


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


		Page

	Special Note Regarding Forward-Looking Statements	3
PART I.	FINANCIAL INFORMATION	6

Item 1.	RANI THERAPEUTICS HOLDINGS, INC.
	Financial Statement (Unaudited)	5
	Condensed Balance Sheets	5
	Note to Unaudited Condensed Financial Statements	6

	RANI THERAPEUTICS, LLC
	Financial Statements (Unaudited)	9
	Condensed Consolidated Balance Sheets	9
	Condensed Consolidated Statements of Operations and Comprehensive Loss	10
	Condensed Consolidated Statements of Changes In Convertible Preferred Units and Members' Deficit	11
	Condensed Consolidated Statements of Cash Flows	12
	Notes to Unaudited Condensed Consolidated Financial Statements	13
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	42
Item 4.	Controls and Procedures	42

PART II.	OTHER INFORMATION	44

Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	99
Item 3.	Defaults Upon Senior Securities	100
Item 4.	Mine Safety Disclosures	100
Item 5.	Other Information	100
Item 6.	Exhibits	101
Signatures		103


	June 30,		April 19,
	2021		2021
	(Unaudited)
Assets:
Cash	$	10	$	10
Total assets	$	10	$	10
Commitments and contingencies
Stockholder’s Equity:
Common stock, $0.0001 par value per share, 1,000 shares authorized, issued and outstanding at June 30, 2021 and April 19, 2021	$	—	$	—
Additional paid-in-capital		10		10
Total stockholder’s equity	$	10	$	10


	June 30,			December 31,
	2021			2020
	(Unaudited)
Assets
Current assets:
Cash and cash equivalents	$	69,314		$	73,058
Related party note receivable		—			1,720
Prepaid expenses		165			167
Total current assets		69,479			74,945
Deferred financing costs		3,412			—
Property and equipment, net		4,430			4,470
Total assets	$	77,321		$	79,415
Liabilities, Convertible Preferred Units and Members’ Deficit
Current liabilities:
Accounts payable	$	1,667		$	537
Related party payable		883			145
Accrued expenses		2,921			550
Deferred revenue		—			2,717
Current portion of long-term debt		3,884			1,359
Total current liabilities		9,355			5,308
Preferred unit warrant liability		606			320
Long-term debt, less current portion		—			2,412
Total liabilities		9,961			8,040
Commitments and contingencies (Note 10)
Convertible preferred units, 32,620,000 units authorized, and 27,629,804 and 26,745,528 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively		191,034			184,714
Members’ deficit:
Common units, 101,000,000 units authorized, and 46,896,280 and 46,890,280 units issued and outstanding at June 30, 2021 and December 31, 2020, respectively		1,412			664
Accumulated deficit		(125,086	)		(114,003	)
Total members’ deficit		(123,674	)		(113,339	)
Total liabilities, convertible preferred units and members’ deficit	$	77,321		$	79,415


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


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


	•		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 redesign and conduct additional preclinical and clinical studies of any future design of the RaniPill capsule to accommodate target payloads that are larger than the current capacity of the RaniPill capsule;


	•		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 selectively enter into strategic partnership and the expected potential benefits thereof;


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


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


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


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


	•		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;


	•		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 expectations regarding the impact of the COVID-19 pandemic on our business;


	•		developments relating to our competitors and our industry, including competing product candidates and therapies; 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").


	Three Months Ended June 30,						Six Months Ended June 30,
	2021			2020			2021			2020
Contract revenue	$	1,961		$	60		$	2,717		$	143
Operating expenses
Research and development		3,759			2,558			7,106			6,618
General and administrative		3,460			892			6,067			2,299
Total operating expenses	$	7,219		$	3,450		$	13,173		$	8,917
Loss from operations		(5,258	)		(3,390	)		(10,456	)		(8,774	)
Other income (expense), net
Interest income		13			12			60			74
Interest expense and other, net		(169	)		(2	)		(357	)		(2	)
Change in estimated fair value of preferred unit warrant		(70	)		672			(286	)		655
Loss before income taxes		(5,484	)		(2,708	)		(11,039	)		(8,047	)
Income tax expense		(1	)		(6	)		(44	)		(17	)
Net loss and comprehensive loss	$	(5,485	)	$	(2,714	)	$	(11,083	)	$	(8,064	)
Net loss per unit, basic and diluted	$	(0.12	)	$	(0.06	)	$	(0.24	)	$	(0.17	)
Weighted-average common units outstanding—basic and diluted		46,896,280			46,890,280			46,896,081			46,890,280


	Convertible Preferred				Common
For the Six Months Ended June 30, 2020 (unaudited)	Units		Amount		Units		Amount		Accumulated Deficit			Total Members’ Deficit
Balance at December 31, 2019		17,084,696	$	115,505		46,890,280	$	664	$	(97,300	)	$	(96,636	)
Net loss		—		—		—		—		(5,350	)		(5,350	)
Balance at March 31, 2020		17,084,696	$	115,505		46,890,280	$	664	$	(102,650	)	$	(101,986	)
Net loss		—		—		—		—		(2,714	)		(2,714	)
Balance at June 30, 2020		17,084,696	$	115,505		46,890,280	$	664	$	(105,364	)	$	(104,700	)


	Convertible Preferred				Common
For the Six Months Ended June 30, 2021 (unaudited)	Units		Amount		Units		Amount		Accumulated Deficit			Total Members’ Deficit
Balance at December 31, 2020		26,745,528	$	184,714		46,890,280	$	664	$	(114,003	)	$	(113,339	)
Issuance of Series E preferred units		884,276		6,320		—		—		—			—
Exercise of warrant for common units		—		—		6,000		13		—			13
Equity-based compensation from secondary sales transactions		—		—		—		453		—			453
Net loss		—		—		—		—		(5,598	)		(5,598	)
Balance at March 31, 2021		27,629,804	$	191,034		46,896,280	$	1,130	$	(119,601	)	$	(118,471	)
Equity-based compensation		—		—		—		282		—			282
Net loss		—		—		—		—		(5,485	)		(5,485	)
Balance at June 30, 2021		27,629,804	$	191,034		46,896,280	$	1,412	$	(125,086	)	$	(123,674	)


	As of June 30, 2021
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	67,002	$	—	$	—
Total assets	$	67,002	$	—	$	—
Liabilities:
Preferred unit warrant liability	$	—	$	—	$	606
Total liabilities	$	—	$	—	$	606

	As of December 31, 2020
	Level 1		Level 2		Level 3
Assets:
Money market funds	$	71,666	$	—	$	—
Total assets	$	71,666	$	—	$	—
Liabilities:
Preferred unit warrant liability	$	—	$	—	$	320
Total liabilities	$	—	$	—	$	320


Fair Value (in thousands)	Valuation Technique	Unobservable Input	Range	Weighted Average
	Hybrid between the	Time to exit	0.1 - 2.3 years	0.3 years
	probability weighted	Probability of exit events	10% - 90%	80%
$606	expected return and	Discount for lack of marketability	10% - 31%	12%
	option pricing methods	Volatility	72%	72%


	Three Months Ended June 30,					Six Months Ended June 30,
	2021		2020			2021		2020
Balance at beginning of period	$	536	$	672		$	320	$	655
Change in estimated fair value of Series B warrants		—		(1	)		—		16
Change in estimated fair value of Series E warrants		70		—			286		—
Expiration of Series B warrants		—		(671	)		—		(671	)
Balance at end of period	$	606	$	—		$	606	$	—


	Units				Carrying		Liquidation		Units issuable
June 30, 2021	Authorized		Outstanding		Value		Preference		upon conversion
Series A convertible preferred units		4,000,000		4,000,000		3,974		8,000		4,000,000
Series B convertible preferred units		2,600,000		2,510,246		10,080		19,332		2,510,246
Series C convertible preferred units		5,000,000		4,972,115		32,348		32,488		4,972,115
Series C-1 convertible preferred units		2,520,000		2,504,099		17,607		18,270		2,511,608
Series D convertible preferred units		7,500,000		3,149,577		52,214		49,174		3,400,875
Series E convertible preferred units		11,000,000		10,493,767		74,811		75,000		10,493,767
		32,620,000		27,629,804	$	191,034	$	202,264		27,888,611


	•		First, to the Preferred Unit holders, on a pari passu and pro rata basis, until the cumulative amount of distributions made with respect to each unit equals their aggregate capital contributions; and


	•		Second, to common unit holders pro rata in proportion to the number of common units held.


	•		First, to Preferred and common unit holders, on a pari passu basis and pro rata in proportion to the number of units, until the cumulative amount of distributions made with respect to each unit equals their aggregate capital contributions;