[FORM 10-Q Filing Information](index=1&type=section&id=FORM%2010-Q%20Filing%20Information) This section details the basic filing information for Rain Therapeutics Inc.'s Form 10-Q for Q1 2022, including company and security specifics [Filing Details](index=1&type=section&id=Filing%20Details) This section outlines the essential filing information for Rain Therapeutics Inc.'s Q1 2022 Form 10-Q, covering company, securities, and compliance status - The report is a Quarterly Report (Form 10-Q) for the period ended March 31, 2022[2](index=2&type=chunk) - Rain Therapeutics Inc. is incorporated in Delaware[2](index=2&type=chunk) - Common Stock (RAIN) is registered on The Nasdaq Global Select Market[3](index=3&type=chunk) - The registrant is classified as a Non-accelerated filer, Smaller reporting company, and Emerging growth company[4](index=4&type=chunk) - As of April 28, 2022, **26,529,878 shares of common stock** were outstanding, including **18,802,408 voting** and **7,727,470 non-voting shares**[5](index=5&type=chunk) [PART I. FINANCIAL INFORMATION](index=3&type=section&id=PART%20I.%20FINANCIAL%20INFORMATION) This part presents the unaudited condensed financial statements and management's discussion and analysis for the quarter ended March 31, 2022 [Item 1. Condensed Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Condensed%20Financial%20Statements%20(Unaudited)) This section provides Rain Therapeutics Inc.'s unaudited condensed financial statements for Q1 2022, encompassing balance sheets, income statements, equity, cash flows, and notes [Condensed Balance Sheets as of March 31, 2022 and December 31, 2021](index=3&type=section&id=Condensed%20Balance%20Sheets) This section presents the condensed balance sheets, highlighting key asset, liability, and equity changes between December 31, 2021, and March 31, 2022 | Metric | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | Change (vs. Dec 31, 2021) (in thousands) | | :-------------------------------- | :--------------- | :---------------- | :------------------------ | | Cash and cash equivalents | $21,505 | $24,780 | $(3,275) | | Short-term investments | $101,668 | $115,438 | $(13,770) | | Total current assets | $126,831 | $146,146 | $(19,315) | | Total assets | $127,778 | $147,140 | $(19,362) | | Total current liabilities | $13,044 | $16,315 | $(3,271) | | Total liabilities | $13,327 | $16,636 | $(3,309) | | Total stockholders' equity | $114,451 | $130,504 | $(16,053) | | Accumulated deficit | $(107,358) | $(89,964) | $(17,394) | [Condensed Statements of Operations and Comprehensive Loss for the three months ended March 31, 2022 and 2021](index=4&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) This section presents the condensed statements of operations and comprehensive loss, detailing financial performance for Q1 2022 and Q1 2021 | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (YoY) (in thousands) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | :------------------- | | Research and development | $13,555 | $5,328 | $8,227 | | General and administrative | $3,895 | $1,480 | $2,415 | | Total operating expenses | $17,450 | $6,808 | $10,642 | | Loss from operations | $(17,450) | $(6,808) | $(10,642) | | Net loss | $(17,394) | $(6,800) | $(10,594) | | Net loss per share, basic and diluted | $(0.66) | $(1.93) | $1.27 | | Comprehensive loss | $(17,694) | $(6,800) | $(10,894) | - The weighted-average shares for net loss per share significantly increased from **3,530,975 in Q1 2021** to **26,511,743 in Q1 2022**, mainly due to the April 2021 IPO[14](index=14&type=chunk) [Condensed Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) for the three months ended March 31, 2022 and 2021](index=5&type=section&id=Condensed%20Statements%20of%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity%20(Deficit)) This section details changes in convertible preferred stock and stockholders' equity (deficit) for the three months ended March 31, 2022 and 2021 | Item | Balance as of Dec 31, 2021 (in thousands) | Q1 2022 Activity (in thousands) | Balance as of Mar 31, 2022 (in thousands) | | :-------------------------------- | :------------------------- | :----------------- | :------------------------- | | Common Stock Amount | $27 | $0 | $27 | | Additional Paid-in Capital | $220,530 | $1,639 | $222,171 | | Accumulated Other Comprehensive Loss | $(89) | $(300) | $(389) | | Accumulated Deficit | $(89,964) | $(17,394) | $(107,358) | | Total Stockholders' Equity | $130,504 | $(16,053) | $114,451 | - Key Q1 2022 activities included **$1.242 million in stock-based compensation**, **$106 thousand from stock option exercises**, **$293 thousand from ESPP issuances**, and a **net loss of $17.394 million**[16](index=16&type=chunk) - As of March 31, 2022, no convertible preferred stock was outstanding, following conversion to common stock during the April 2021 IPO[16](index=16&type=chunk)[25](index=25&type=chunk)[67](index=67&type=chunk) [Condensed Statements of Cash Flows for the three months ended March 31, 2022 and 2021](index=6&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) This section presents the condensed statements of cash flows, outlining cash movements from operating, investing, and financing activities for Q1 2022 and Q1 2021 | Activity Type | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (YoY) (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------------------- | | Net cash used in operating activities | $(17,110) | $(4,866) | $(12,244) | | Net cash provided by (used in) investing activities | $13,436 | $(29) | $13,465 | | Net cash provided by (used in) financing activities | $399 | $(858) | $1,257 | | Net decrease in cash and cash equivalents | $(3,275) | $(5,753) | $2,478 | | Cash and cash equivalents at end of period | $21,505 | $53,110 | $(31,605) | - The increase in cash from investing activities in Q1 2022 was primarily due to **$22.95 million in short-term investment maturities**, partially offset by **$9.514 million in new purchases**[19](index=19&type=chunk) [Notes to Condensed Financial Statements (Unaudited)](index=7&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20(Unaudited)) This section provides detailed notes accompanying the unaudited condensed financial statements, offering further context on accounting policies, fair value, and commitments [Note 1 – Organization and Nature of Operations](index=7&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Nature%20of%20Operations) Rain Therapeutics Inc. is a late-stage precision oncology company developing milademetan and RAD52 inhibitors, facing significant losses and relying on capital raises - Rain Therapeutics Inc. is a late-stage precision oncology company developing therapies targeting oncogenic drivers via a tumor-agnostic strategy[22](index=22&type=chunk) - The lead product candidate, **milademetan**, is a small molecule, oral inhibitor of mouse double minute 2 (MDM2)[22](index=22&type=chunk) - The company is also developing a preclinical program focused on inhibiting RAD52[22](index=22&type=chunk) - From inception through March 31, 2022, the company incurred net losses and negative cash flows, with an accumulated deficit of **$107.4 million**[28](index=28&type=chunk)[108](index=108&type=chunk) - Operations have been funded primarily through **net proceeds from its April 2021 IPO**, and the issuance of convertible promissory notes and preferred stock[28](index=28&type=chunk) - Management believes current cash, cash equivalents, and short-term investments will provide sufficient funds for at least **twelve months** from the filing date[29](index=29&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=8&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines significant accounting policies for the condensed financial statements, covering estimates, cash, investments, R&D, stock compensation, and net loss per share - The most significant estimate in the condensed financial statements relates to **clinical trial expense accruals**[30](index=30&type=chunk) - Cash equivalents include highly liquid investments with an original maturity of **three months or less**[31](index=31&type=chunk) - Available-for-sale (AFS) securities are carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive loss[33](index=33&type=chunk) - Research and development costs are expensed as incurred[36](index=36&type=chunk) - Stock-based compensation expense is recognized over the requisite service period using the Black-Scholes option pricing model[38](index=38&type=chunk) - Basic and diluted net loss per share are the same because the company's net loss position renders potential dilutive securities anti-dilutive[44](index=44&type=chunk) - To date, **COVID-19 has not materially impacted expenditures**, but future effects remain uncertain[45](index=45&type=chunk)[46](index=46&type=chunk) - The adoption of **ASU 2019-12 did not impact financial statements**, and **ASU 2016-13 (effective January 1, 2023)** is not anticipated to have a significant impact[47](index=47&type=chunk)[48](index=48&type=chunk) [Note 3 – Fair Value Measurements](index=10&type=section&id=Note%203%20%E2%80%93%20Fair%20Value%20Measurements) This note details fair value measurements, classifying financial assets into a three-tier hierarchy, with most cash equivalents and short-term investments using Level 1 or 2 inputs - Fair value hierarchy categorizes inputs as **Level 1 (quoted prices in active markets)**, **Level 2 (observable inputs)**, and **Level 3 (unobservable inputs)**[50](index=50&type=chunk) | Asset Type | Level 1 (in thousands) | Level 2 (in thousands) | Level 3 (in thousands) | Total (in thousands) | | :-------------------------- | :------ | :------ | :------ | :------ | | Money market funds | $10,252 | — | — | $10,252 | | Commercial paper | — | $73,558 | — | $73,558 | | U.S. government securities | $27,640 | — | — | $27,640 | | U.S. agency bonds | — | $8,465 | — | $8,465 | | Corporate debt securities | — | $2,001 | — | $2,001 | | **Total** | **$37,892** | **$84,024** | **$—** | **$121,916** | - Money market funds and U.S. government securities are **Level 1**, while commercial paper, corporate debt securities, and U.S. agency bonds are **Level 2**[53](index=53&type=chunk)[54](index=54&type=chunk) [Note 4 – Investments](index=11&type=section&id=Note%204%20%E2%80%93%20Investments) This note details available-for-sale investments, including fair value classification, amortized cost, unrealized gains/losses, and maturities, with losses deemed not other-than-temporary | Investment Type | Amortized Cost (in thousands) | Unrealized Gains (in thousands) | Unrealized Losses (in thousands) | Estimated Fair Value (in thousands) | | :-------------------------- | :------------- | :--------------- | :---------------- | :------------------- | | Money market funds | $10,252 | $— | $— | $10,252 | | Commercial paper | $73,667 | $— | $(108) | $73,559 | | U.S. government securities | $27,838 | $— | $(199) | $27,639 | | U.S. agency bonds | $8,530 | $— | $(65) | $8,465 | | Corporate debt securities | $2,018 | $— | $(17) | $2,001 | | **Cash equivalents and investments** | **$122,305** | **$—** | **$(389)** | **$121,916** | | Maturity | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------- | :--------------- | :---------------- | | Due within one year | $99,446 | $105,173 | | Due within one to two years | $2,222 | $10,265 | | **Total** | **$101,668** | **$115,438** | - As of March 31, 2022, **$111.7 million of marketable securities** were in gross unrealized loss positions, none exceeding 12 months, and deemed not other-than-temporary[55](index=55&type=chunk)[56](index=56&type=chunk) [Note 5 – Condensed Balance Sheet Details](index=12&type=section&id=Note%205%20%E2%80%93%20Condensed%20Balance%20Sheet%20Details) This note details specific balance sheet line items, including prepaid and other current assets, and net property and equipment | Item | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------- | :--------------- | :---------------- | | Prepaid research | $2,971 | $4,329 | | FICA tax credit receivable | $367 | $452 | | Other current assets | $157 | $205 | | Prepaid other | $141 | $96 | | Deposits | $19 | $19 | | Prepaid insurance | $3 | $827 | | **Prepaid and Other Current Assets** | **$3,658** | **$5,928** | | Item | March 31, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------- | :--------------- | :---------------- | | Furniture and equipment | $204 | $204 | | Leasehold improvements | $67 | $67 | | Computer equipment | $50 | $50 | | Less: accumulated depreciation and amortization expense | $(179) | $(156) | | **Property and Equipment, net** | **$142** | **$165** | - Depreciation expense for Q1 2022 was **$22 thousand**, compared to **$15 thousand** for Q1 2021[58](index=58&type=chunk) [Note 6 – Convertible Preferred Stock and Stockholders' Equity](index=13&type=section&id=Note%206%20%E2%80%93%20Convertible%20Preferred%20Stock%20and%20Stockholders%27%20Equity) This note details the capital structure, including common stock, preferred stock conversion during IPO, equity incentive plans, and stock-based compensation expense - The company's capital stock includes **250 million authorized common shares** ($0.001 par value), with **200 million voting** and **50 million non-voting shares**[60](index=60&type=chunk) - All Series A and B convertible preferred stock converted to common or non-voting common stock during the April 2021 IPO, leaving **no preferred stock outstanding** as of March 31, 2022[25](index=25&type=chunk)[67](index=67&type=chunk) - The **2021 Equity Incentive Plan** initially reserved **3,246,120 shares**, with a **4.0% annual increase**, adding **1,059,032 shares** on January 1, 2022[70](index=70&type=chunk) - The **Employee Stock Purchase Plan (ESPP)** initially reserved **259,689 shares**, with a **1.0% annual increase**, adding **264,758 shares** on January 1, 2022[72](index=72&type=chunk) | Item | Total Options | Weighted Average Exercise Price Per Share | | :-------------------------------- | :------------ | :-------------------------------------- | | Outstanding as of Dec 31, 2021 | 1,734,696 | $8.50 | | Granted | 699,652 | $10.36 | | Exercised | (24,262) | $4.35 | | Forfeited or cancelled | (109,414) | $9.19 | | **Outstanding as of Mar 31, 2022** | **2,300,672** | **$9.09** | | Item | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Research and development | $889 | $134 | | General and administrative | $353 | $31 | | **Total stock-based compensation expense** | **$1,242** | **$165** | - As of March 31, 2022, unrecognized compensation cost for outstanding options was **$13.9 million** (over 3.3 years) and for ESPP was **$0.3 million** (over 1.3 years)[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 7 – License Agreements](index=18&type=section&id=Note%207%20%E2%80%93%20License%20Agreements) This note details key license agreements for milademetan (Daiichi Sankyo) and RAD52 inhibitors (Drexel), outlining payments, milestones, royalties, and termination clauses - Under the Daiichi Sankyo License Agreement for milademetan, the company paid an initial upfront payment of **$5.0 million** in September 2020[83](index=83&type=chunk) - Future milestone payments under the Daiichi Sankyo License Agreement could aggregate up to **$224.5 million**, contingent on development, regulatory, and sales milestones, including a **$2.0 million increase**[85](index=85&type=chunk) - The company is reimbursing Daiichi Sankyo **$2.0 million** for U105 study expenses in four installments, with the first **$500 thousand** paid in April 2022[84](index=84&type=chunk) - The Drexel License Agreement for RAD52 inhibitors includes a **$20 thousand initiation fee**, potential milestone payments up to **$6.25 million**, and low single-digit royalties on net sales[91](index=91&type=chunk) - Payments under the Drexel License Agreement were **$5 thousand for Q1 2022**, compared to **$19 thousand for Q1 2021**[93](index=93&type=chunk) - A clinical supply agreement with Roche was entered in December 2021 for atezolizumab supply in planned combination trials with milademetan, with **no financial commitments**[96](index=96&type=chunk) [Note 8 – Commitments and Contingencies](index=20&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingencies) This note outlines the company's lease obligations for its corporate headquarters and general contingencies - The company has a noncancelable operating lease for its Newark, California corporate headquarters, with a term ending **September 2024**[97](index=97&type=chunk)[98](index=98&type=chunk) | Year | Amount (in thousands) | | :-------------------------- | :-------------------- | | 2022 - remainder | $125 | | 2023 | $171 | | 2024 | $129 | | **Total minimum lease payments** | **$425** | | Less: amount representing interest | $(45) | | **Present value of operating lease liabilities** | **$380** | - Total operating lease expense was **$40 thousand for Q1 2022**, compared to **$34 thousand for Q1 2021**[100](index=100&type=chunk) [Note 9 – Employee Benefits](index=21&type=section&id=Note%209%20%E2%80%93%20Employee%20Benefits) The company offers a defined contribution 401(k) plan to eligible employees and made matching contributions - The company made matching contributions of **$75 thousand to its 401(k) plan for Q1 2022**, compared to **$78 thousand for Q1 2021**[102](index=102&type=chunk) [Note 10 – Net Loss Per Share](index=21&type=section&id=Note%2010%20%E2%80%93%20Net%20Loss%20Per%20Share) This note details the computation of basic and diluted net loss per share, highlighting that potentially dilutive securities are excluded due to the company's net loss position | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :------------------------------------ | :-------------------------------- | :-------------------------------- | | Net loss | $(17,394) | $(6,800) | | Weighted-average shares outstanding | 26,511,743 | 3,530,975 | | **Net loss per share, basic and diluted** | **$(0.66)** | **$(1.93)** | - Potentially dilutive securities (stock options, ESPP shares, convertible preferred stock) are excluded from diluted EPS calculation as their inclusion would be anti-dilutive due to net loss[44](index=44&type=chunk)[103](index=103&type=chunk) [Note 11 – Subsequent Events](index=21&type=section&id=Note%2011%20%E2%80%93%20Subsequent%20Events) The company evaluated subsequent events after March 31, 2022, and determined that no additional material events arose that require disclosure - No material events requiring disclosure were identified after March 31, 2022[104](index=104&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=22&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides management's discussion and analysis of financial condition and results of operations, covering business, pipeline, performance, liquidity, and accounting policies [Overview](index=22&type=section&id=Overview) This overview introduces Rain Therapeutics Inc. as a late-stage precision oncology company, detailing its lead product candidate, clinical trials, and financial position - Rain Therapeutics Inc. is a late-stage precision oncology company developing therapies targeting oncogenic drivers via a tumor-agnostic strategy[106](index=106&type=chunk) - The lead product candidate, **milademetan (RAIN-32)**, is an oral MDM2 inhibitor, showing antitumor activity in MDM2-amplified liposarcoma (LPS) and other solid tumors[107](index=107&type=chunk) - Clinical trials include the pivotal **Phase 3 MANTRA trial in LPS (July 2021)**, **Phase 2 MANTRA-2 basket trial (November 2021)**, and anticipated **Phase 2 MANTRA-3** and **Phase 1/2 MANTRA-4 combination trials in Q4 2022**[107](index=107&type=chunk) - The company had an accumulated deficit of **$107.4 million** as of March 31, 2022, with net losses of **$17.4 million (Q1 2022)** and **$6.8 million (Q1 2021)**[108](index=108&type=chunk) - Net proceeds from the April/May 2021 IPO were **$121.5 million**, contributing to **$123.2 million in cash, cash equivalents, and short-term investments** as of March 31, 2022[108](index=108&type=chunk) - The company expects continued significant expenses and operating losses, necessitating additional capital for future R&D and potential commercialization[108](index=108&type=chunk)[110](index=110&type=chunk) [COVID-19](index=23&type=section&id=COVID-19) This section discusses the COVID-19 pandemic's impact on the company's operations, clinical development, and potential regulatory delays - The **COVID-19 pandemic has not materially impacted expenditures** to date, but its ultimate effects on operations, clinical development, and capital raising remain uncertain[112](index=112&type=chunk) - Most employees are working remotely, with **no negative impact on productivity** or the integrity of subject data and clinical trial endpoints[112](index=112&type=chunk) - There is a potential risk of regulatory delays if the FDA or other authorities are prevented from conducting routine inspections or reviews[112](index=112&type=chunk) [Recent Developments](index=23&type=section&id=Recent%20Developments) This section highlights recent corporate developments, including a clinical supply agreement with Roche for combination trials - In January 2022, the company announced a clinical supply agreement with Roche for **atezolizumab supply** to evaluate its combination with milademetan in planned clinical trials (MANTRA-4)[113](index=113&type=chunk)[122](index=122&type=chunk) - Rain Therapeutics Inc. will be the sponsor of these anticipated clinical trials, with Roche supplying atezolizumab[113](index=113&type=chunk)[122](index=122&type=chunk) [Our Development Pipeline](index=23&type=section&id=Our%20Development%20Pipeline) This section outlines the company's development pipeline, focusing on its strategy to target oncogenic drivers with differentiated therapies - The company's development pipeline targets oncogenic drivers through differentiated therapies, genetically selecting patients most likely to benefit[114](index=114&type=chunk) - The company currently retains global development and commercialization rights to all its product candidates[114](index=114&type=chunk) [Milademetan Overview](index=24&type=section&id=Milademetan%20Overview) Milademetan, an MDM2 inhibitor, is in pivotal Phase 3 (LPS) and Phase 2 (tumor-agnostic) trials, with further trials planned for Merkel cell carcinoma and combination therapy - **Milademetan** is a small molecule, oral MDM2 inhibitor, developed with an optimized dosing schedule to reduce toxicities while preserving activity[115](index=115&type=chunk) - Phase 1 data showed meaningful antitumor activity in MDM2-amplified liposarcoma (LPS), with a **median progression-free survival (mPFS) of approximately seven to eight months** in WD/DD LPS patients[107](index=107&type=chunk)[116](index=116&type=chunk) - The pivotal **Phase 3 MANTRA trial for de-differentiated LPS** commenced in **July 2021**, with top-line data anticipated in the **first half of 2023**[116](index=116&type=chunk)[117](index=117&type=chunk) - A **Phase 2 tumor-agnostic basket trial (MANTRA-2)** for MDM2-amplified advanced solid tumors commenced in **November 2021**, with an interim analysis anticipated in **Q4 2022**[120](index=120&type=chunk) - A **Phase 2 clinical trial in Merkel cell carcinoma (MANTRA-3)** is on track to commence in **Q4 2022**, and a **Phase 1/2 clinical trial (MANTRA-4)** evaluating milademetan with atezolizumab is also anticipated to start in **Q4 2022**[107](index=107&type=chunk)[121](index=121&type=chunk)[122](index=122&type=chunk) - Long-term Phase 1 data showed three WD/DD LPS patients received milademetan monotherapy for over **51 months**, with two showing **no disease progression for 51 and 57 months**, suggesting favorable long-term tolerability[118](index=118&type=chunk)[119](index=119&type=chunk) [RAD52 and p53 Overview](index=25&type=section&id=RAD52%20and%20p53%20Overview) The company is developing a preclinical RAD52 program for HRD+ and PARP inhibitor-relapsed tumors, while milademetan reactivates p53 by inhibiting MDM2 in cancers with wild-type p53 - The preclinical program focuses on targeting **RAD52** in the DNA damage repair pathway to induce synthetic lethality in cancer cells[107](index=107&type=chunk)[123](index=123&type=chunk) - The **RAD52 program** aims to treat **HRD+ patients (e.g., BRCA1/2 mutations)** and those relapsed to PARP inhibitor therapy, representing a novel strategy with no currently approved therapies[123](index=123&type=chunk)[124](index=124&type=chunk) - **Milademetan reactivates p53** by inhibiting MDM2, preventing MDM2-p53 complex formation and triggering cancer cell cycle arrest or apoptosis[126](index=126&type=chunk)[128](index=128&type=chunk) - **MDM2 dependence** has been identified in several solid tumors where MDM2 overexpression functionally suppresses wild-type p53[127](index=127&type=chunk) [Collaboration and License Agreements](index=26&type=section&id=Collaboration%20and%20License%20Agreements) This section refers to Note 7 for details on the company's various in-license agreements for product candidates and development programs - The company is party to several license agreements for in-licensing product candidates and development programs, with details in Note 7 to the Condensed Financial Statements[129](index=129&type=chunk) [Components of Our Results of Operations](index=26&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section outlines the components of the company's results of operations, including revenue, operating expenses, and interest income - The company has not generated any revenue from product sales, licenses, or collaborations to date and does not expect to in the foreseeable future[130](index=130&type=chunk) - Operating expenses since inception have consisted solely of **research and development costs** (including in-process R&D acquisition) and **general and administrative costs**[131](index=131&type=chunk) [Revenue](index=26&type=section&id=Revenue) The company has not generated revenue from product sales, licenses, or collaborations to date, with future revenue contingent on successful product development and regulatory approval - **No revenue** has been generated from product sales, licenses, or collaborations to date[130](index=130&type=chunk) - Future revenue is uncertain and dependent on successful development, regulatory approval, and potential commercialization or licensing agreements[130](index=130&type=chunk) [Operating Expenses](index=26&type=section&id=Operating%20Expenses) Operating expenses are categorized into research and development (R&D) and general and administrative (G&A) costs, which are recognized as incurred - Operating expenses consist of **research and development costs** and **general and administrative costs**[131](index=131&type=chunk) - Expenses are recognized as incurred[132](index=132&type=chunk) [Research and Development Expenses](index=26&type=section&id=Research%20and%20Development%20Expenses) R&D expenses, recognized as incurred, cover drug discovery, preclinical/clinical development, and are expected to increase significantly as product candidates advance - R&D expenses include salaries, benefits, stock-based compensation for R&D personnel, preclinical/clinical study costs (CROs, consultants), drug manufacturing, regulatory compliance, and license/milestone payments[134](index=134&type=chunk) - External development costs are tracked by product candidate, while internal personnel and other costs remain unallocated[133](index=133&type=chunk) | Item | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :-------------------------------- | | Milademetan | $8,551 | $2,404 | | Other research and clinical candidates | $250 | $1,078 | | Unallocated internal R&D costs | $4,754 | $1,846 | | **Total research and development expenses** | **$13,555** | **$5,328** | - R&D expenses are expected to increase substantially as product candidates continue to develop[135](index=135&type=chunk) [General and Administrative Expenses](index=27&type=section&id=General%20and%20Administrative%20Expenses) G&A expenses include salaries, stock-based compensation, legal, accounting, consulting, and facility costs, expected to increase with R&D support, pre-commercial, and public company operations - G&A expenses consist of salaries, employee-related costs (including stock-based compensation) for administrative functions, legal, professional, and facility-related fees[137](index=137&type=chunk) - G&A expenses are expected to increase to support continued R&D, pre-commercial preparation, and public company operations (audit, legal, regulatory, D&O insurance, investor relations)[137](index=137&type=chunk) [Interest Income](index=27&type=section&id=Interest%20Income) Interest income for the three months ended March 31, 2022, was derived from money market accounts and short-term investments - Interest income is generated from money market accounts and short-term investments[138](index=138&type=chunk) [Results of Operations](index=28&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three months ended March 31, 2022, versus 2021 [Comparison of Three Months Ended March 31, 2022](index=28&type=section&id=Comparison%20of%20Three%20Months%20Ended%20March%2031%2C%202022) Total operating expenses increased by **$10.6 million**, resulting in a **$17.4 million net loss for Q1 2022**, compared to **$6.8 million in Q1 2021** | Metric | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | Change (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | :------- | | Research and development | $13,555 | $5,328 | $8,227 | | General and administrative | $3,895 | $1,480 | $2,415 | | Total operating expenses | $17,450 | $6,808 | $10,642 | | Loss from operations | $(17,450) | $(6,808) | $(10,642) | | Interest income | $56 | $8 | $48 | | **Net loss** | **$(17,394)** | **$(6,800)** | **$(10,594)** | [Research and Development Expenses](index=28&type=section&id=Research%20and%20Development%20Expenses_2) R&D expenses increased by **$8.2 million to $13.6 million in Q1 2022**, driven by milademetan and other research, including higher non-cash stock compensation, and are expected to continue rising - R&D expenses increased by **$8.2 million**, from **$5.3 million in Q1 2021** to **$13.6 million in Q1 2022**[140](index=140&type=chunk) - The increase was primarily related to **milademetan** and other research costs[140](index=140&type=chunk) - Non-cash stock-based compensation expenses within R&D increased from **$0.1 million in Q1 2021** to **$0.9 million in Q1 2022**[140](index=140&type=chunk) - R&D costs are expected to continue increasing in 2022 with ongoing **Phase 3 and Phase 2 trials for milademetan**[140](index=140&type=chunk) [General and Administrative Expenses](index=28&type=section&id=General%20and%20Administrative%20Expenses_2) G&A expenses increased by **$2.4 million to $3.9 million in Q1 2022**, driven by higher D&O insurance, payroll, third-party G&A costs, and increased stock-based compensation - G&A expenses increased by **$2.4 million**, from **$1.5 million in Q1 2021** to **$3.9 million in Q1 2022**[141](index=141&type=chunk) - The increase was primarily due to **director and officer insurance ($0.8 million)**, **payroll-related costs ($1.1 million)**, and various **third-party G&A costs ($2.0 million)**[141](index=141&type=chunk) - Non-cash stock-based compensation in G&A increased from **$31 thousand in Q1 2021** to approximately **$0.4 million in Q1 2022**[141](index=141&type=chunk) - G&A expenses are expected to continue increasing in 2022 due to public company operations and personnel expansion[141](index=141&type=chunk) [Other (Income) Expense](index=28&type=section&id=Other%20(Income)%20Expense) Other income for both periods primarily consisted of interest income from money market and short-term investments - Other income for both Q1 2022 and Q1 2021 primarily represents interest income from money market or short-term investments[142](index=142&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the company's liquidity, capital resources, future funding requirements, and cash flow activities - The company has incurred significant operating losses since inception and expects continued substantial expenses and losses for the foreseeable future[143](index=143&type=chunk) - Operations have been financed through convertible promissory notes, preferred stock, and **$121.5 million net proceeds from the April 2021 IPO**[144](index=144&type=chunk)[145](index=145&type=chunk) - As of March 31, 2022, cash, cash equivalents, and short-term investments totaled **$123.2 million**, believed sufficient for at least the next **twelve months**[145](index=145&type=chunk) - Additional capital will be required for future R&D activities and public company operations, potentially through equity/debt financings or collaborations[143](index=143&type=chunk)[149](index=149&type=chunk) [Future Funding Requirements](index=29&type=section&id=Future%20Funding%20Requirements) The company anticipates substantial expense increases for milademetan clinical trials, RAD52 preclinical research, and public company operations, with uncertain timing due to drug development unpredictability - Expenses are expected to increase substantially due to ongoing and new clinical trials for **milademetan**, preclinical research for **RAD52**, and other product candidates[146](index=146&type=chunk) - Additional costs are anticipated from operating as a public company[146](index=146&type=chunk) - The timing and amounts of increased capital outlays and operating expenses are uncertain due to the unpredictable nature of clinical and preclinical development[146](index=146&type=chunk) - Future capital requirements depend on factors such as clinical trial scope and costs, regulatory review, commercialization, intellectual property, acquisitions, and headcount growth[147](index=147&type=chunk) - Raising additional capital through equity or convertible debt may dilute the ownership interest of existing stockholders[149](index=149&type=chunk) [Cash Flows](index=30&type=section&id=Cash%20Flows) The company experienced a net decrease in cash and cash equivalents of **$3.3 million in Q1 2022**, driven by operating losses, partially offset by investing activities | Activity Type | Three Months Ended March 31, 2022 (in thousands) | Three Months Ended March 31, 2021 (in thousands) | | :-------------------------- | :-------------------------------- | :-------------------------------- | | Net cash used in operating activities | $(17,110) | $(4,866) | | Net cash provided by (used in) investing activities | $13,436 | $(29) | | Net cash provided by (used in) financing activities | $399 | $(858) | | **Net decrease in cash and cash equivalents** | **$(3,275)** | **$(5,753)** | [Operating Activities](index=31&type=section&id=Operating%20Activities) Net cash used in operating activities significantly increased to **$17.1 million in Q1 2022**, driven by a **$17.4 million net loss** and decreased operating assets/liabilities, partially offset by non-cash stock compensation - Net cash used in operating activities was **$17.1 million in Q1 2022**, primarily due to a **$17.4 million net loss** and a **$1.0 million decrease in operating assets and liabilities**[151](index=151&type=chunk) - This was partially offset by a non-cash stock compensation adjustment of **$1.2 million**[151](index=151&type=chunk) - In Q1 2021, net cash used in operating activities was **$4.9 million**, driven by a **$6.8 million net loss**, partially offset by changes in operating assets/liabilities (**$1.8 million**) and non-cash adjustments (**$0.2 million**)[152](index=152&type=chunk) [Investing Activities](index=31&type=section&id=Investing%20Activities) Net cash provided by investing activities was **$13.4 million in Q1 2022**, mainly from short-term investment maturities offsetting purchases; Q1 2021 saw cash used for property and equipment - Net cash provided by investing activities was **$13.4 million in Q1 2022**, primarily from **$23.0 million in short-term investment maturities**, partially offset by **$9.5 million in purchases**[153](index=153&type=chunk) - Net cash used in investing activities for Q1 2021 was **$29 thousand** for property and equipment purchases[153](index=153&type=chunk) [Financing Activities](index=31&type=section&id=Financing%20Activities) Net cash provided by financing activities was **$0.4 million in Q1 2022**, mainly from stock option exercises and ESPP purchases; Q1 2021 saw cash used for IPO offering costs - Net cash provided by financing activities was **$0.4 million in Q1 2022**, primarily from proceeds from option exercises and ESPP purchases[154](index=154&type=chunk) - Net cash used in financing activities for Q1 2021 was **$0.9 million**, primarily related to payments for deferred IPO offering costs[154](index=154&type=chunk) [Obligations and other Commitments](index=31&type=section&id=Obligations%20and%20other%20Commitments) The company has cancelable license agreements with unestimable future milestone/royalty payments, and cancelable CRO/vendor contracts, with accrued R&D obligations of **$5.4 million** as of March 31, 2022 - License agreements may require future milestone and royalty payments, which are not estimable and are cancelable by the company[155](index=155&type=chunk) - Contracts with CROs and other vendors are generally cancelable and do not contain minimum purchase commitments[156](index=156&type=chunk) - Accrued research and development obligations were **$5.4 million as of March 31, 2022**, compared to **$4.3 million as of December 31, 2021**[156](index=156&type=chunk) - No material changes to contractual obligations occurred during Q1 2022 outside the ordinary course of business[157](index=157&type=chunk) [Critical Accounting Policies and Use of Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) This section reviews the company's critical accounting policies and the use of estimates, including accrued liabilities and stock-based compensation - No significant changes to critical accounting policies and estimates from the 2021 Form 10-K, except as described in Note 2[158](index=158&type=chunk) [Accrued Liabilities](index=31&type=section&id=Accrued%20Liabilities) The company estimates and accrues expenses for vendor, consultant, CRO, and clinical site contracts based on service progress, with accrued R&D at **$5.4 million** as of March 31, 2022 - The company estimates expenses for obligations under contracts with vendors, consultants, CROs, and clinical sites, matching expenses with the period services are provided[159](index=159&type=chunk)[161](index=161&type=chunk) - Accrued research and development balances were **$5.4 million as of March 31, 2022**, compared to **$4.3 million as of December 31, 2021**[161](index=161&type=chunk) - Other accrued liabilities balances were **$4.5 million as of March 31, 2022**, compared to **$5.7 million as of December 31, 2021**[161](index=161&type=chunk) - To date, no material differences have been experienced between accrued costs and actual costs incurred[161](index=161&type=chunk) [Stock-Based Compensation](index=32&type=section&id=Stock-Based%20Compensation_2) Stock-based compensation expense is measured using the Black-Scholes model, requiring volatility and expected term estimates; total expense was **$1.2 million in Q1 2022**, with **$14.2 million in unrecognized costs** - Stock-based compensation expense is measured and recognized over the requisite service period using the Black-Scholes option pricing model[162](index=162&type=chunk)[163](index=163&type=chunk)[164](index=164&type=chunk) - The model requires estimates for assumptions such as expected stock price volatility and the estimated expected term of each award[163](index=163&type=chunk) - Stock-based compensation expense was **$1.2 million for Q1 2022**, compared to **$0.2 million for Q1 2021**[164](index=164&type=chunk) | Item | As of March 31, 2022 | As of December 31, 2021 | | :-------------------------------- | :------------------- | :---------------------- | | Unvested equity compensation costs not yet recognized (in millions) | $14.2 | $9.8 | | Weighted average period over which the unvested awards are expected to be recognized (in years) | 3.2 | 3.1 | [Recent Accounting Pronouncements](index=32&type=section&id=Recent%20Accounting%20Pronouncements_2) Refers to Note 2 for disclosures on recent accounting pronouncements and their potential impact - A description of recent accounting pronouncements potentially impacting the company's financial position, results of operations, or cash flows is disclosed in Note 2[166](index=166&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Rain Therapeutics Inc. is not required to provide quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[167](index=167&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls and procedures were effective as of March 31, 2022, with no material changes in internal control over financial reporting identified - Management concluded that the company's disclosure controls and procedures were effective at the reasonable assurance level as of March 31, 2022[169](index=169&type=chunk) - Management recognizes that controls and procedures provide only reasonable assurance and involve judgment in evaluating cost-benefit relationships[168](index=168&type=chunk)[170](index=170&type=chunk) - No changes in internal control over financial reporting were identified during Q1 2022 that materially affected or are reasonably likely to materially affect internal control[170](index=170&type=chunk) [PART II. OTHER INFORMATION](index=34&type=section&id=PART%20II.%20OTHER%20INFORMATION) This part contains other required information, including legal proceedings, risk factors, equity sales, defaults, and exhibits [Item 1. Legal Proceedings](index=34&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - There are no legal proceedings to report[173](index=173&type=chunk) [Item 1A. Risk Factors](index=34&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Annual Report on Form 10-K for the year ended December 31, 2021 - No material changes from the risk factors disclosed in Part I, Item 1A of the Annual Report on Form 10-K for the year ended December 31, 2021[174](index=174&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=34&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company reported no unregistered sales of equity securities or use of proceeds - There were no unregistered sales of equity securities and no use of proceeds to report[175](index=175&type=chunk) [Item 3. Defaults Upon Senior Securities](index=34&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - There were no defaults upon senior securities to report[176](index=176&type=chunk) [Item 4. Mine Safety Disclosures](index=34&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - There were no mine safety disclosures to report[177](index=177&type=chunk) [Item 5. Other Information](index=34&type=section&id=Item%205.%20Other%20Information) The company reported no other information - There is no other information to report[178](index=178&type=chunk) [Item 6. Exhibits](index=35&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including corporate documents, certifications, and XBRL data files - Exhibits include the Amended and Restated Certificate of Incorporation, Bylaws, Common Stock Certificate Form, Amended and Restated Investors' Rights Agreement, various certifications (**31.1, 31.2, 32.1**), and Inline XBRL documents[180](index=180&type=chunk) [Signatures](index=36&type=section&id=Signatures) The report is duly signed on behalf of Rain Therapeutics Inc. by its Chairman and Chief Executive Officer and its Senior Vice President of Finance and Administration - The report is signed by **Avanish Vellanki (Chairman and Chief Executive Officer)** and **Nelson Cabatuan (Senior Vice President of Finance and Administration)**[183](index=183&type=chunk)

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 OR ☐ 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 001-40356 Rain Therapeutics Inc. (Exact name of Registrant as specified in its Charter) Delaware 82-1130967 (State or other jurisdiction ...

```markdown PART I. FINANCIAL INFORMATION [Item 1. Financial Statements (Unaudited)](index=3&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) This section presents the unaudited condensed financial statements for Rain Therapeutics Inc., including the balance sheets, statements of operations and comprehensive loss, statements of changes in convertible preferred stock and stockholders' equity (deficit), and statements of cash flows, along with their accompanying notes [Condensed Balance Sheets as of September 30, 2021 (Unaudited) and December 31, 2020](index=3&type=section&id=Condensed%20Balance%20Sheets%20as%20of%20September%2030%2C%202021%20(Unaudited)%20and%20December%2031%2C%202020) The balance sheet shows a significant increase in total assets and stockholders' equity as of September 30, 2021, primarily driven by the IPO proceeds and short-term investments, while convertible preferred stock was eliminated Balance Sheet Data (in thousands) | Metric (in thousands) | Sep 30, 2021 | Dec 31, 2020 | Change | | :-------------------- | :----------- | :----------- | :----- | | Cash and cash equivalents | $13,258 | $58,863 | $(45,605) | | Short-term investments | $136,823 | $— | $136,823 | | Total current assets | $157,406 | $59,525 | $97,881 | | Total assets | $158,531 | $61,080 | $97,451 | | Total current liabilities | $10,904 | $3,419 | $7,485 | | Total liabilities | $11,256 | $3,800 | $7,456 | | Total convertible preferred stock | $— | $94,697 | $(94,697) | | Total stockholders' equity (deficit) | $147,275 | $(37,417) | $184,692 | [Condensed Statements of Operations and Comprehensive Loss (Unaudited) for the three and nine months ended September 30, 2021 and 2020](index=4&type=section&id=Condensed%20Statements%20of%20Operations%20and%20Comprehensive%20Loss%20(Unaudited)%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202021%20and%202020) The company experienced increased operating expenses, particularly in R&D and G&A, leading to a higher net loss for both the three and nine months ended September 30, 2021, compared to the prior year Statements of Operations Data (in thousands) | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $15,284 | $7,893 | $26,101 | $11,195 | | General and administrative | $3,154 | $591 | $7,334 | $2,311 | | Total operating expenses | $18,438 | $8,484 | $33,435 | $13,506 | | Net loss | $(18,426) | $(10,446) | $(33,409) | $(15,640) | | Net loss per share, basic and diluted | $(0.70) | $(3.05) | $(1.96) | $(4.73) | [Condensed Statements of Changes in Convertible Preferred Stock and Stockholders' Equity (Deficit) (Unaudited) for the three and nine months ended September 30, 2021 and 2020](index=5&type=section&id=Condensed%20Statements%20of%20Changes%20in%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)%20(Unaudited)%20for%20the%20three%20and%20nine%20months%20ended%20September%2030%2C%202021%20and%202020) The statements reflect significant changes in equity structure, primarily due to the conversion of all convertible preferred stock into common stock and non-voting common stock, and the issuance of common stock from the IPO, leading to a substantial increase in additional paid-in capital and total stockholders' equity Equity Changes Data (in thousands) | Metric (in thousands) | Dec 31, 2020 | Sep 30, 2021 | | :-------------------- | :----------- | :----------- | | Total convertible preferred stock | $94,697 | $— | | Common Stock (Amount) | $4 | $27 | | Additional paid-in capital | $1,149 | $219,222 | | Accumulated deficit | $(38,570) | $(71,979) | | Total stockholders' equity (deficit) | $(37,417) | $147,275 | - Conversion of convertible preferred stock to common stock resulted in a **$94.7 million** increase in additional paid-in capital[12](index=12&type=chunk) - Issuance of common stock upon IPO, net of issuance cost, contributed **$121.5 million** to additional paid-in capital[12](index=12&type=chunk) [Condensed Statements of Cash Flows (Unaudited) for the nine months ended September 30, 2021 and 2020](index=7&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20(Unaudited)%20for%20the%20nine%20months%20ended%20September%2030%2C%202021%20and%202020) Cash flow from operating activities remained negative, while investing activities saw a significant increase in cash used due to short-term investments. Financing activities provided substantial cash, primarily from the IPO, offsetting the cash used in operating and investing activities Cash Flow Data (in thousands) | Metric (in thousands) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :-------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(27,704) | $(6,775) | | Net cash used in investing activities | $(139,480) | $(5,156) | | Net cash provided by financing activities | $121,579 | $69,518 | | Net (decrease) increase in cash and cash equivalents | $(45,605) | $57,587 | | Cash and cash equivalents at end of period | $13,258 | $63,381 | - Proceeds from initial public offering, net of issuance costs, provided **$121.494 million** in financing activities for the nine months ended September 30, 2021[15](index=15&type=chunk) - Purchases of short-term investments accounted for **$136.852 million** in cash used in investing activities for the nine months ended September 30, 2021[15](index=15&type=chunk) [Notes to Unaudited Condensed Financial Statements (Unaudited)](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements%20(Unaudited)) These notes provide detailed information on the company's organization, significant accounting policies, fair value measurements, related party transactions, convertible promissory notes, changes in equity, license agreements, commitments, net loss per share calculations, and subsequent events [Note 1 – Organization and Nature of Operations](index=8&type=section&id=Note%201%20%E2%80%93%20Organization%20and%20Nature%20of%20Operations) Rain Therapeutics Inc. is a late-stage precision oncology company focused on developing therapies targeting oncogenic drivers, with its lead product candidate, milademetan, and a preclinical RAD52 program. The company completed its IPO in April 2021, raising $121.5 million net proceeds, and converted all preferred stock to common stock - Rain Therapeutics Inc. is a late-stage precision oncology company developing therapies for oncogenic drivers, using a tumor-agnostic strategy[17](index=17&type=chunk) - Lead product candidate, milademetan, is an oral inhibitor of MDM2[17](index=17&type=chunk) - Completed IPO on April 27, 2021, issuing 7,352,941 shares of common stock at $17.00/share, with net proceeds of **$121.5 million**[19](index=19&type=chunk) - All convertible preferred stock was converted into common stock or non-voting common stock immediately prior to and upon the closing of the IPO[20](index=20&type=chunk) [Note 2 – Summary of Significant Accounting Policies](index=9&type=section&id=Note%202%20%E2%80%93%20Summary%20of%20Significant%20Accounting%20Policies) This note outlines the company's key accounting policies, including the use of estimates, classification of cash and cash equivalents, available-for-sale investments, deferred offering costs, research and development costs, preclinical and clinical trial accruals, stock-based compensation, comprehensive loss, and net loss per share. It also discusses recent accounting pronouncements - Research and development costs are expensed as incurred[32](index=32&type=chunk) - Stock-based compensation expense is recognized over the vesting period using the Black-Scholes option pricing model[34](index=34&type=chunk) - The company elected early adoption of ASU 2020-06 (Debt and Equity Instruments) on January 1, 2020, with no material impact[40](index=40&type=chunk) [Note 3 – Fair Value Measurements](index=11&type=section&id=Note%203%20%E2%80%93%20Fair%20Value%20Measurements) The company classifies its financial assets measured at fair value into a three-tier hierarchy (Level 1, 2, 3) based on the observability of inputs. As of September 30, 2021, most investments were classified as Level 2, with money market funds as Level 1, and no Level 3 liabilities Fair Value of Financial Assets (in thousands) | Financial Assets (in thousands) | Level 1 (Sep 30, 2021) | Level 2 (Sep 30, 2021) | Total (Sep 30, 2021) | | :------------------------------ | :--------------------- | :--------------------- | :------------------- | | Money market funds | $6,340 | $— | $6,340 | | Commercial paper | $— | $102,290 | $102,290 | | U.S. government securities | $— | $24,365 | $24,365 | | U.S. agency bonds | $— | $8,047 | $8,047 | | Corporate debt securities | $— | $7,280 | $7,280 | | Total investments | $6,340 | $141,982 | $148,322 | - Cash and cash equivalents are classified using Level 1 inputs[45](index=45&type=chunk) - Commercial paper, corporate debt securities, U.S. government securities, and U.S. agency bonds are valued using Level 2 inputs[50](index=50&type=chunk) - Contractual maturities of AFS securities as of September 30, 2021: **$113.9 million** due within one year, **$22.9 million** due within one to two years[52](index=52&type=chunk) [Note 4 – Related Party Transactions](index=13&type=section&id=Note%204%20%E2%80%93%20Related%20Party%20Transactions) This note details the issuance and subsequent conversion of convertible promissory notes to certain preferred stock holders in 2019 and 2020, which were treated as related party transactions - The company issued 2019 Notes (**$2.5 million**) and 2020 Notes (**$6.4 million**) to certain holders of convertible preferred stock[55](index=55&type=chunk) - In September 2020, all outstanding convertible promissory notes (fair value **$11.2 million** plus **$167,000** accrued interest) were converted to 1,905,688 shares of Series B convertible preferred stock[55](index=55&type=chunk) - Change in fair value of convertible promissory notes for the three and nine months ended September 30, 2020, was **$1.9 million** and **$2.0 million**, respectively[55](index=55&type=chunk) [Note 5 – Convertible Promissory Notes](index=13&type=section&id=Note%205%20%E2%80%93%20Convertible%20Promissory%20Notes) This note provides detailed terms and conversion features of the 2019 and 2020 convertible promissory notes, which bore 5% interest and were convertible into preferred stock upon a qualifying financing or common stock under other conditions. All notes were converted to Series B preferred stock in September 2020 - 2019 Notes (**$2.5 million**) and 2020 Notes (**$6.4 million**) bore an interest rate of **5%** per annum[56](index=56&type=chunk)[58](index=58&type=chunk) - Notes were designed to automatically convert to convertible preferred stock upon a 'Future Qualifying Financing' or 'Qualifying Financing' (net proceeds of at least $10.0 million)[56](index=56&type=chunk)[58](index=58&type=chunk) - In September 2020, all outstanding convertible promissory notes (fair value **$11.2 million** and accrued interest **$167,000**) were converted to 1,905,688 shares of Series B convertible preferred stock[59](index=59&type=chunk) [Note 6 – Convertible Preferred Stock and Stockholders' Equity (Deficit)](index=14&type=section&id=Note%206%20%E2%80%93%20Convertible%20Preferred%20Stock%20and%20Stockholders'%20Equity%20(Deficit)) This note details the company's capital structure changes, including the authorization of common and preferred stock, the reverse stock split, the issuance of Series A and B convertible preferred stock, and their subsequent conversion into common and non-voting common stock prior to the IPO. It also covers the equity incentive plans (2018 Plan, 2021 Plan, ESPP) and stock-based compensation - Prior to IPO, 8,344,905 shares of convertible preferred stock were exchanged for 7,727,470 shares of non-voting common stock, and 7,928,501 shares of convertible preferred stock converted into 7,341,860 shares of common stock[65](index=65&type=chunk) - No convertible preferred stock was outstanding as of September 30, 2021[65](index=65&type=chunk) - The 2021 Equity Incentive Plan (effective April 15, 2021) initially reserved **3,246,120 shares** of common stock, with automatic annual increases[68](index=68&type=chunk) - The 2021 Employee Share Purchase Plan (ESPP) initially reserved **259,689 shares**, with automatic annual increases, allowing employees to purchase stock at **85%** of the lower fair market value[70](index=70&type=chunk) Stock-Based Compensation Expense (in thousands) | Expense Category (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :--------------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Research and development | $683 | $133 | $1,452 | $379 | | General and administrative | $179 | $68 | $368 | $217 | | Total | $862 | $201 | $1,820 | $596 | - Unrecognized compensation cost related to outstanding options was **$8.8 million** as of September 30, 2021, to be recognized over approximately **3.3 years**[73](index=73&type=chunk) [Note 7 – License Agreements](index=17&type=section&id=Note%207%20%E2%80%93%20License%20Agreements) This note details the company's license agreements, including the Drexel License Agreement for RAD52 inhibitors and the Daiichi Sankyo License Agreement for milademetan. It outlines milestone payments, royalties, and development obligations under these agreements - Drexel License Agreement (July 30, 2020) grants exclusive worldwide license for RAD52 inhibitors for cancer treatment[81](index=81&type=chunk) - Daiichi Sankyo License Agreement (September 2, 2020) grants exclusive worldwide rights to milademetan[87](index=87&type=chunk) - Aggregate future milestone payments of up to **$222.5 million** (excluding a **$2.5 million** milestone) and high single-digit royalties on net sales are required under the Daiichi Sankyo agreement[89](index=89&type=chunk) - A **$5.5 million** milestone fee was recorded as R&D expense in Q3 2021 due to the first patient randomization in the Phase 3 MANTRA trial for milademetan, with **$2.5 million** paid and **$3.0 million** accrued[92](index=92&type=chunk) [Note 8 – Commitments and Contingencies](index=19&type=section&id=Note%208%20%E2%80%93%20Commitments%20and%20Contingencies) This note describes the company's noncancelable operating lease for its corporate headquarters, including an amendment in March 2020 for rent relief and lease extension. It also outlines the future minimum lease payments - The company has a noncancelable operating lease for office space in Newark, CA, ending September 2024[93](index=93&type=chunk)[94](index=94&type=chunk) Future Minimum Lease Payments (in thousands) | Year | Amount (in thousands) | | :--- | :----- | | 2021 - remainder | $40 | | 2022 | $167 | | 2023 | $171 | | 2024 | $129 | | Total minimum lease payments | $507 | [Note 9 – Net Loss Per Share](index=20&type=section&id=Note%209%20%E2%80%93%20Net%20Loss%20Per%20Share) This note provides the computation of basic and diluted net loss per share, highlighting that for the periods presented, there is no difference between basic and diluted shares due to the company's net loss position, making all potentially dilutive securities anti-dilutive Net Loss Per Share Calculation | Metric | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :----- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Net loss (in thousands) | $(18,426) | $(10,446) | $(33,409) | $(15,640) | | Weighted-average shares outstanding | 26,466,746 | 3,422,458 | 17,025,032 | 3,307,932 | | Net loss per share | $(0.70) | $(3.05) | $(1.96) | $(4.73) | - Potentially dilutive securities (stock options, convertible preferred stock, unvested common stock) were excluded from diluted EPS calculation as they were anti-dilutive due to net loss[97](index=97&type=chunk) [Note 10 – Subsequent Events](index=20&type=section&id=Note%2010%20%E2%80%93%20Subsequent%20Events) The company evaluated subsequent events after September 30, 2021, and determined that no additional material events arose that require disclosure - No material subsequent events were identified after September 30, 2021[98](index=98&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=21&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This section provides an overview of Rain Therapeutics Inc.'s business, recent developments, and detailed analysis of its financial condition and results of operations for the three and nine months ended September 30, 2021. It highlights the company's focus on precision oncology, its lead product candidate milademetan, and its preclinical RAD52 program, along with significant increases in operating expenses and ongoing liquidity needs [Overview](index=21&type=section&id=Overview) Rain Therapeutics is a precision oncology company focused on MDM2 inhibitor milademetan and a preclinical RAD52 program. The company has incurred significant operating losses and an accumulated deficit of $72.0 million, primarily funding operations through its April 2021 IPO ($121.5 million net proceeds) and prior convertible notes/preferred stock. It expects to require additional capital for future R&D and commercialization - Rain is a late-stage precision oncology company developing therapies targeting oncogenic drivers, with a lead candidate milademetan (MDM2 inhibitor) and a preclinical RAD52 program[100](index=100&type=chunk) - Accumulated deficit was **$72.0 million** as of September 30, 2021[101](index=101&type=chunk) - Net losses were approximately **$18.4 million** for the three months and **$33.4 million** for the nine months ended September 30, 2021[101](index=101&type=chunk) - IPO in April 2021 generated **$121.5 million** in net proceeds[101](index=101&type=chunk) - Cash, cash equivalents, and short-term investments totaled **$150.1 million** as of September 30, 2021, believed to be sufficient for at least the next twelve months[101](index=101&type=chunk) [COVID-19](index=22&type=section&id=COVID-19) The company continues to monitor the evolving COVID-19 pandemic, acknowledging its uncertain impact on business, operations, clinical development timelines, and financial needs, while most employees work remotely - The extent of COVID-19's impact on business, operations, and clinical development timelines remains uncertain[105](index=105&type=chunk) - Most employees are working remotely, and the company is conducting business with necessary modifications[105](index=105&type=chunk) [Recent Developments](index=22&type=section&id=Recent%20Developments) Recent developments include plans to commence a Phase 2 clinical trial (MANTRA-3) for milademetan in Merkel cell carcinoma (MCC) in mid-2022, replacing a previously planned trial in intimal sarcoma. The company also announced patient referral partnerships with Caris Life Sciences and Tempus for its planned Phase 2 tumor-agnostic basket trial (MANTRA-2) - Plan to commence Phase 2 clinical trial (MANTRA-3) for milademetan in Merkel cell carcinoma (MCC) in mid-2022, replacing the intimal sarcoma trial[106](index=106&type=chunk)[109](index=109&type=chunk) - Announced patient referral partnership with Caris Life Sciences for the planned Phase 2 MDM2-amplified tumor-agnostic basket trial (MANTRA-2)[110](index=110&type=chunk) - Announced genomic analysis platform agreement with Tempus for centralized tumor testing and patient matching services for the MANTRA-2 trial[111](index=111&type=chunk) - First patient randomized in the multicenter, open-label, Phase 3 registrational trial (MANTRA) evaluating milademetan for de-differentiated liposarcoma (DD LPS) in July 2021[110](index=110&type=chunk) [Our Development Pipeline](index=23&type=section&id=Our%20Development%20Pipeline) The company's pipeline focuses on genetically selecting patients for targeted therapies. Milademetan, an MDM2 inhibitor, is in Phase 3 for DD LPS and has planned Phase 2 trials for tumor-agnostic solid tumors (MANTRA-2) and MCC (MANTRA-3). The preclinical RAD52 program targets DNA damage repair in HRD+ tumors - Development pipeline targets oncogenic drivers with differentiated therapies, using genetic selection for patients[112](index=112&type=chunk) - Retains global development and commercialization rights to all product candidates[112](index=112&type=chunk) [Overview of Milademetan](index=23&type=section&id=Overview%20of%20Milademetan) Milademetan, an oral MDM2 inhibitor, is being developed for MDM2-dependent cancers, leveraging a rationally designed dosing schedule to mitigate hematologic toxicities. It is in a pivotal Phase 3 trial (MANTRA) for DD LPS, with top-line data anticipated in 2023, and Phase 2 trials (MANTRA-2, MANTRA-3) planned for MDM2-amplified solid tumors and MCC, respectively - Milademetan is a small molecule, oral inhibitor of MDM2, developed for MDM2-dependent cancers[113](index=113&type=chunk) - A rationally designed dosing schedule aims to reduce toxicities while preserving activity due to milademetan's rapid plasma clearance and lack of drug accumulation[113](index=113&type=chunk) - Pivotal Phase 3 registrational trial (MANTRA) for de-differentiated liposarcoma (DD LPS) commenced in July 2021, with top-line data anticipated in 2023[115](index=115&type=chunk)[116](index=116&type=chunk) - Phase 2 tumor-agnostic basket trial (MANTRA-2) for MDM2-amplified advanced solid tumors is anticipated to commence in Q4 2021, with interim analysis in H2 2022[119](index=119&type=chunk) - Phase 2 clinical trial (MANTRA-3) for Merkel cell carcinoma (MCC) refractory to immune checkpoint inhibition is planned for mid-2022[118](index=118&type=chunk) [Overview of RAD52](index=24&type=section&id=Overview%20of%20RAD52) The preclinical RAD52 program targets the DNA damage repair pathway, aiming to induce synthetic lethality in HRD+ cancer cells (e.g., BRCA1/2 mutations) or those relapsing on PARP inhibitors. Lead candidate selection is expected in 2022 - Preclinical program focused on targeting RAD52 in the DNA damage repair pathway[120](index=120&type=chunk) - Aims to treat patients with molecularly diagnosed HRD+ (e.g., BRCA1/2 mutations) or those relapsed on PARP inhibitor therapy[120](index=120&type=chunk) - Lead candidate selection for RAD52 inhibitors is expected in 2022[123](index=123&type=chunk) [Collaboration and License Agreements](index=25&type=section&id=Collaboration%20and%20License%20Agreements) The company is party to several license agreements for its product candidates and development programs, as detailed in Note 7 to the Condensed Financial Statements - The company has license agreements for in-licensed product candidates and development programs[124](index=124&type=chunk) - Details of these agreements are provided in Note 7 to the Condensed Financial Statements[124](index=124&type=chunk) [Components of Our Results of Operations](index=25&type=section&id=Components%20of%20Our%20Results%20of%20Operations) This section outlines the components of the company's financial results, primarily focusing on operating expenses (R&D and G&A) as it has not generated product revenue. It details the types of costs included in R&D and G&A - No revenue from product sales, licenses, or collaborations to date, and none expected in the foreseeable future[125](index=125&type=chunk) - Operating expenses consist solely of research and development costs (including in-process R&D acquisition) and general and administrative costs[126](index=126&type=chunk) [Revenue](index=25&type=section&id=Revenue) The company has not generated any revenue from product sales, licenses, or collaborations since its inception and does not anticipate doing so in the foreseeable future, as it is still in the development phase for its product candidates - No revenue generated from product sales, licenses, or collaborations to date[125](index=125&type=chunk) - Does not expect to generate revenue from product sales in the foreseeable future[125](index=125&type=chunk) [Operating Expenses](index=25&type=section&id=Operating%20Expenses) Operating expenses are categorized into research and development (R&D) and general and administrative (G&A) costs, which are expensed as incurred - Operating expenses since inception have consisted solely of research and development costs and general and administrative costs[126](index=126&type=chunk) [Research and Development Expenses](index=25&type=section&id=Research%20and%20Development%20Expenses) R&D expenses, recognized as incurred, include personnel costs, preclinical study expenses, clinical trial costs (CROs, consultants), drug manufacturing, regulatory compliance, and license fees/milestone payments. The company expects these expenses to increase significantly as it expands its product candidate development - R&D expenses are recognized as incurred and include salaries, preclinical/clinical study costs, manufacturing, regulatory costs, and license/milestone payments[127](index=127&type=chunk)[128](index=128&type=chunk) - External development costs are tracked by product candidate, but internal costs are not allocated to specific programs[128](index=128&type=chunk) Research and Development Expenses by Category (in thousands) | Category (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | | :------- | :-------------------------- | :-------------------------- | :-------------------------- | :-------------------------- | | Milademetan | $10,366 | $5,493 | $16,603 | $5,493 | | Other clinical candidate | $209 | $2,129 | $1,546 | $5,364 | | Unallocated internal R&D costs | $4,709 | $271 | $7,952 | $338 | | Total R&D expenses | $15,284 | $7,893 | $26,101 | $11,195 | - R&D expenses are expected to increase substantially as development of product candidates expands[129](index=129&type=chunk) [General and Administrative Expenses](index=26&type=section&id=General%20and%20Administrative%20Expenses) G&A expenses include personnel costs, legal fees, professional fees (accounting, consulting), and facility costs. These expenses are expected to increase due to continued R&D, pre-commercial activities, and public company compliance requirements - G&A expenses include salaries, stock-based compensation, legal fees, professional fees, and facility costs[131](index=131&type=chunk) - G&A expenses are expected to increase due to continued R&D, pre-commercial preparation, and public company operating costs[131](index=131&type=chunk) [Interest Income](index=26&type=section&id=Interest%20Income) Interest income is generated from the company's available-for-sale securities - Interest income consists of interest on available-for-sale securities[132](index=132&type=chunk) [Interest Expense](index=26&type=section&id=Interest%20Expense) The company had no interest expense for the nine months ended September 30, 2021. Interest expense for the prior year period was related to outstanding convertible promissory notes - No interest expense for the nine months ended September 30, 2021[133](index=133&type=chunk) - Interest expense in 2020 was from outstanding convertible promissory notes[133](index=133&type=chunk) [Results of Operations](index=27&type=section&id=Results%20of%20Operations) This section provides a detailed comparison of the company's financial performance for the three and nine months ended September 30, 2021, versus 2020, highlighting significant increases in R&D and G&A expenses, leading to higher net losses [Comparison of Three and Nine Months Ended September 30, 2021 and 2020](index=27&type=section&id=Comparison%20of%20Three%20and%20Nine%20Months%20Ended%20September%2030%2C%202021%20and%202020) The company's net loss increased significantly for both the three and nine months ended September 30, 2021, primarily driven by higher research and development and general and administrative expenses Operating Results Comparison (in thousands) | Metric (in thousands) | 3 Months Ended Sep 30, 2021 | 3 Months Ended Sep 30, 2020 | Change (3 Months) | 9 Months Ended Sep 30, 2021 | 9 Months Ended Sep 30, 2020 | Change (9 Months) | | :----- | :-------------------------- | :-------------------------- | :---------------- | :-------------------------- | :-------------------------- | :---------------- | | Research and development | $15,284 | $7,893 | $7,391 | $26,101 | $11,195 | $14,906 | | General and administrative | $3,154 | $591 | $2,563 | $7,334 | $2,311 | $5,023 | | Total operating expenses | $18,438 | $8,484 | $9,954 | $33,435 | $13,506 | $19,929 | | Net loss | $(18,426) | $(10,446) | $(7,980) | $(33,409) | $(15,640) | $(17,769) | [Research and Development Expenses](index=27&type=section&id=Research%20and%20Development%20Expenses) R&D expenses increased significantly for both the three and nine months ended September 30, 2021, primarily due to a $5.5 million milestone payment to Daiichi Sankyo, increased costs for the milademetan Phase 3 study, and higher personnel costs, including stock-based compensation - R&D expenses increased by **$7.4 million** (3 months) and **$14.9 million** (9 months) YoY[136](index=136&type=chunk)[137](index=137&type=chunk) - Increase primarily due to **$5.5 million** milestone fees to Daiichi Sankyo and increased costs for the milademetan Phase 3 pivotal study[136](index=136&type=chunk)[137](index=137&type=chunk) - Non-cash stock-based compensation in R&D was **$0.7 million** (3 months) and **$1.4 million** (9 months) in 2021, up from **$0.2 million** and **$0.4 million** in 2020, respectively[136](index=136&type=chunk)[137](index=137&type=chunk) [General and Administrative Expenses](index=27&type=section&id=General%20and%20Administrative%20Expenses) G&A expenses rose substantially for both periods in 2021, driven by increased third-party costs (legal, consulting, accounting, audit) associated with public company compliance and growth in headcount and related personnel costs - G&A expenses increased by **$2.6 million** (3 months) and **$5.0 million** (9 months) YoY[138](index=138&type=chunk)[139](index=139&type=chunk) - Increase primarily due to higher third-party G&A costs (legal, consulting, accounting, audit) related to public company compliance and increased headcount[138](index=138&type=chunk)[139](index=139&type=chunk) - Non-cash stock-based compensation in G&A was approximately **$0.1 million** (3 months) and **$0.4 million** (9 months) in 2021, up from **$0.1 million** and **$0.2 million** in 2020, respectively[138](index=138&type=chunk)[139](index=139&type=chunk) [Other (Income) Expense](index=28&type=section&id=Other%20(Income)%20Expense) Other income (expense), net, for both periods in 2021 and 2020, primarily reflects interest income, interest expense on convertible promissory notes, and changes in their fair value, with nominal amounts in 2021 - Other income (expense), net, includes interest income, interest expense on convertible promissory notes, and changes in their fair value[141](index=141&type=chunk) - Nominal amounts for other income (expense) in 2021 compared to 2020, which included significant changes in fair value of convertible promissory notes[141](index=141&type=chunk) [Liquidity and Capital Resources](index=28&type=section&id=Liquidity%20and%20Capital%20Resources) The company has incurred significant operating losses and expects this to continue, requiring additional capital for R&D and public company operations. It raised $121.5 million net from its April 2021 IPO, bringing cash, cash equivalents, and short-term investments to $150.1 million as of September 30, 2021, which is estimated to fund operations for at least the next twelve months - Incurred significant operating losses since inception and expects to continue incurring losses[142](index=142&type=chunk) - Raised **$121.5 million** net proceeds from IPO in April 2021[143](index=143&type=chunk) - Cash, cash equivalents, and short-term investments totaled **$150.1 million** as of September 30, 2021[143](index=143&type=chunk) - Existing capital is estimated to be sufficient for at least the next twelve months, but additional capital will be required for future R&D[143](index=143&type=chunk) [Future Funding Requirements](index=28&type=section&id=Future%20Funding%20Requirements) The company anticipates substantial increases in expenses for ongoing and new clinical trials for milademetan, preclinical research for RAD52, and general public company operating costs. Future capital needs are highly dependent on development progress, regulatory outcomes, and potential collaborations, with no assurance of profitability or positive cash flow - Expenses are expected to increase substantially due to ongoing and new clinical trials for milademetan, preclinical research for RAD52, and public company operating costs[144](index=144&type=chunk) - Future capital requirements depend on the scope, progress, and costs of clinical trials, regulatory review, intellectual property, and potential acquisitions/collaborations[146](index=146&type=chunk) - Development is lengthy, expensive, and uncertain; no assurance of marketing approval or commercial success[147](index=147&type=chunk) - Will need substantial additional funds, potentially through equity/debt financings or collaborations, which may dilute stockholders or involve relinquishing rights[149](index=149&type=chunk) [Cash Flows](index=30&type=section&id=Cash%20Flows) Net cash used in operating activities increased significantly to $27.7 million for the nine months ended September 30, 2021, primarily due to higher net loss and R&D expenses. Investing activities used $139.5 million, mainly for short-term investments. Financing activities provided $121.6 million, predominantly from the IPO Cash Flow Summary (in thousands) | Activity | 9 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2020 (in thousands) | | :------- | :-------------------------- | :-------------------------- | | Operating activities | $(27,704) | $(6,775) | | Investing activities | $(139,480) | $(5,156) | | Financing activities | $121,579 | $69,518 | | Net (decrease) increase in cash and cash equivalents | $(45,605) | $57,587 | [Operating Activities](index=30&type=section&id=Operating%20Activities) Net cash used in operating activities for the nine months ended September 30, 2021, was $27.7 million, primarily driven by a net loss of $33.4 million from R&D and G&A expenses, partially offset by non-cash adjustments and changes in operating assets/liabilities - Net cash used in operating activities was **$27.7 million** for the nine months ended September 30, 2021, primarily due to a **$33.4 million** net loss[151](index=151&type=chunk) - Net cash used in operating activities was **$6.8 million** for the nine months ended September 30, 2020, due to a **$15.6 million** net loss[152](index=152&type=chunk) [Investing Activities](index=30&type=section&id=Investing%20Activities) Net cash used in investing activities for the nine months ended September 30, 2021, was $139.5 million, mainly due to $136.9 million in purchases of available-for-sale securities and a $2.5 million payment for in-process R&D - Net cash used in investing activities was **$139.5 million** for the nine months ended September 30, 2021[153](index=153&type=chunk) - This includes **$136.9 million** for purchases of short-term investments and **$2.5 million** for in-process R&D expense[153](index=153&type=chunk) [Financing Activities](index=31&type=section&id=Financing%20Activities) Net cash provided by financing activities for the nine months ended September 30, 2021, was $121.5 million, primarily from the net proceeds of the IPO. In the prior year, financing was mainly from convertible promissory notes and preferred stock issuance - Net cash provided by financing activities was **$121.5 million** for the nine months ended September 30, 2021, primarily from IPO net proceeds[154](index=154&type=chunk) - Net cash provided by financing activities was **$69.5 million** for the nine months ended September 30, 2020, from convertible promissory notes (**$6.4 million**) and preferred stock issuance (**$63.2 million**)[155](index=155&type=chunk) [Contractual Obligations and other Commitments](index=31&type=section&id=Contractual%20Obligations%20and%20other%20Commitments) There were no material changes to the company's principal contractual obligations and commitments during the period ended September 30, 2021, compared to those reported in its IPO prospectus - No material changes to contractual obligations and commitments during the period ended September 30, 2021[156](index=156&type=chunk) [Critical Accounting Policies and Use of Estimates](index=31&type=section&id=Critical%20Accounting%20Policies%20and%20Use%20of%20Estimates) There have been no significant changes to the company's critical accounting policies from those disclosed in its IPO prospectus, except as noted in Note 2 of the condensed financial statements - No significant changes to critical accounting policies, except as described in Note 2[157](index=157&type=chunk) [Emerging Growth Company Status](index=31&type=section&id=Emerging%20Growth%20Company%20Status) The company is an "emerging growth company" under the JOBS Act, allowing it to take advantage of reduced reporting requirements, including an extended transition period for new accounting standards and exemption from auditor attestation of internal control over financial reporting. This status will continue until December 31, 2026, or earlier if certain revenue or market capitalization thresholds are met - The company is an "emerging growth company" (EGC) under the JOBS Act[158](index=158&type=chunk) - Elected to use the extended transition period for complying with new or revised accounting standards[158](index=158&type=chunk) - Exempt from auditor attestation of internal control over financial reporting under Sarbanes-Oxley Act Section 404(b)[158](index=158&type=chunk) - EGC status will continue until the earliest of December 31, 2026, or meeting certain revenue/market value thresholds[159](index=159&type=chunk) [Recent Accounting Pronouncements](index=31&type=section&id=Recent%20Accounting%20Pronouncements) A description of recent accounting pronouncements that may impact the company's financial position, results of operations, or cash flows is provided in Note 2 to the unaudited condensed financial statements - Recent accounting pronouncements are discussed in Note 2 of the unaudited condensed financial statements[160](index=160&type=chunk) [Off-Balance Sheet Arrangements](index=31&type=section&id=Off-Balance%20Sheet%20Arrangements) The company did not have any off-balance sheet arrangements during the periods presented or currently - No off-balance sheet arrangements existed during the periods presented or currently[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Rain Therapeutics Inc. is not required to provide quantitative and qualitative disclosures about market risk - As a smaller reporting company, the registrant is not required to provide quantitative and qualitative disclosures about market risk[162](index=162&type=chunk) [Item 4. Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20Procedures) Management, including the CEO and Chief Accounting Officer, concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of September 30, 2021. No material changes in internal control over financial reporting were identified during the quarter [Limitations on Effectiveness of Controls and Procedures](index=32&type=section&id=Limitations%20on%20Effectiveness%20of%20Controls%20and%20Procedures) Management acknowledges that controls and procedures, regardless of design, can only provide reasonable assurance of achieving objectives due to inherent limitations and resource constraints requiring judgment in cost-benefit evaluation - Controls and procedures provide only reasonable assurance due to inherent limitations and resource constraints[163](index=163&type=chunk) [Evaluation of Disclosure Controls and Procedures](index=32&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and Chief Accounting Officer evaluated the effectiveness of disclosure controls and procedures as of September 30, 2021, and concluded they were effective at the reasonable assurance level - Disclosure controls and procedures were evaluated and deemed effective at the reasonable assurance level as of September 30, 2021[164](index=164&type=chunk) [Changes in Internal Control over Financial Reporting](index=32&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No changes in internal control over financial reporting were identified during the quarter ended September 30, 2021, that materially affected or are reasonably likely to materially affect the company's internal control over financial reporting - No material changes in internal control over financial reporting occurred during the quarter ended September 30, 2021[165](index=165&type=chunk) PART II. OTHER INFORMATION [Item 1. Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20Proceedings) The company reported no legal proceedings - No legal proceedings were reported[167](index=167&type=chunk) [Item 1A. Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) There have been no material changes to the risk factors previously disclosed in the company's Quarterly Report on Form 10-Q for the quarter ended March 31, 2021 - No material changes to risk factors from the prior Quarterly Report on Form 10-Q for Q1 2021[168](index=168&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company completed its IPO on April 27, 2021, issuing 7,352,941 shares of common stock at $17.00 per share, plus an additional 492,070 shares from the underwriters' option, generating net proceeds of $121.5 million. These proceeds are being used to fund clinical trials for milademetan (Phase 3 in LPS, Phase 2 tumor-agnostic, and Phase 2 in MCC, replacing intimal sarcoma), manufacturing, and general corporate purposes - IPO completed on April 27, 2021, with 7,352,941 shares sold at $17.00/share, plus 492,070 shares from underwriters' option[169](index=169&type=chunk) - Net proceeds from IPO totaled approximately **$121.5 million**[171](index=171&type=chunk) - Proceeds are used to fund a pivotal Phase 3 trial in LPS, a Phase 2 tumor-agnostic basket trial, and a Phase 2 trial in Merkel cell carcinoma (replacing intimal sarcoma) for milademetan, as well as manufacturing and general corporate purposes[172](index=172&type=chunk) [Item 3. Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reported no defaults upon senior securities - No defaults upon senior securities were reported[173](index=173&type=chunk) [Item 4. Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) The company reported no mine safety disclosures - No mine safety disclosures were reported[174](index=174&type=chunk) [Item 5. Other Information](index=33&type=section&id=Item%205.%20Other%20Information) The company reported no other information - No other information was reported[174](index=174&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including organizational documents, investor agreements, certifications, and XBRL documents - Lists exhibits filed or furnished, including Amended and Restated Certificate of Incorporation, Bylaws, Form of Common Stock Certificate, Investors' Rights Agreement, Executive Severance Plan, and various certifications and XBRL documents[177](index=177&type=chunk) [Signatures](index=35&type=section&id=Signatures) The report is duly signed on behalf of Rain Therapeutics Inc. by its Chairman and Chief Executive Officer, Avanish Vellanki, and its Senior Vice President of Finance and Administration, Nelson Cabatuan, on November 10, 2021 - Report signed by Avanish Vellanki (Chairman and CEO) and Nelson Cabatuan (SVP of Finance and Administration) on November 10, 2021[181](index=181&type=chunk) ```

Table of Contents 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 June 30, 2021 OR ☐ 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: 001-40356 Rain Therapeutics Inc. (Exact Name of Registrant as Specified in its Charter) ( State or other jurisdictio ...

Table of Contents 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 March 31, 2021 OR ☐ 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: 333-254998 Rain Therapeutics Inc. (Exact Name of Registrant as Specified in its Charter) Indicate by check mark whe ...