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 RANI THERAPEUTICS HOLDINGS, INC. (Exact Name of Registrant as Specified in its Charter) Delaware 86-3114789 (State or other jurisdiction of incorporation or organization) 2051 Ringwood Avenue San Jose, California 95131 (Address of principal executive offices) (Zip Code) (I.R.S. Employer Identification No.) Registrant's telephone ...

PART I [Business](index=7&type=section&id=Item%201.%20Business) Rani Therapeutics is a clinical-stage biotherapeutics company developing the RaniPill capsule, an oral delivery platform for biologics, with a pipeline of product candidates and a vertically integrated manufacturing strategy [Overview](index=7&type=section&id=Overview) Rani Therapeutics is a clinical-stage company developing oral administration technologies for biologics to replace injections - Rani Therapeutics is a clinical-stage company focused on developing oral administration technologies for biologics to replace injections[22](index=22&type=chunk) - The company has developed the RaniPill capsule, a drug-agnostic oral delivery platform. The current version delivers up to **3 mg**, while a high-capacity version (RaniPill HC) in preclinical development aims for up to **20 mg**[23](index=23&type=chunk) - A Phase 1 trial for RT-102 (parathyroid hormone) was initiated in Australia in March 2022. A previous Phase 1 study for RT-101 (octreotide) successfully demonstrated safety and achieved oral bioavailability greater than **70%**[25](index=25&type=chunk) [Our Platform Technology](index=9&type=section&id=Our%20Platform%20Technology) The RaniPill capsule is designed for oral delivery of biologics, offering high bioavailability and patient preference over injections - The RaniPill capsule is designed to withstand stomach acid and deploy in the small intestine. A self-inflating balloon orientates a dissolvable microneedle to inject the biologic drug into the intestinal wall for absorption into the bloodstream[41](index=41&type=chunk)[44](index=44&type=chunk)[45](index=45&type=chunk) - Key advantages of the RaniPill include **high bioavailability comparable to subcutaneous injection**, protection of the drug from the GI environment, and reliable delivery in both fed and fasted states[47](index=47&type=chunk)[49](index=49&type=chunk)[50](index=50&type=chunk) - A third-party survey indicated a **strong preference among patients and physicians for oral pills over injections**, even for infrequent dosing regimens (up to every six months)[52](index=52&type=chunk)[53](index=53&type=chunk)[55](index=55&type=chunk) [Our Pipeline](index=12&type=section&id=Our%20Pipeline) The company's pipeline includes multiple product candidates leveraging the RaniPill platform, targeting established markets with well-characterized molecules Product Candidate Pipeline Summary | Product Candidate | Molecule | Indication(s) | Development Stage | Key Milestone/Data | | :--- | :--- | :--- | :--- | :--- | | **RT-101** | Octreotide | NETs & Acromegaly | Phase 1 Completed | Bioavailability >70% achieved | | **RT-102** | Parathyroid Hormone (PTH) | Osteoporosis | Phase 1 Initiated (Mar 2022) | Evaluating pharmacokinetics, safety, and tolerability | | **RT-105** | Anti-TNF-alpha antibody | Psoriatic Arthritis | Preclinical | Plan to initiate Phase 1 in 2023 | | **RT-109** | Human Growth Hormone (hGH) | Growth Hormone Deficiency | Preclinical | Plan to initiate Phase 1 in H2 2022 | | **RT-110** | Parathyroid Hormone (PTH) | Hypoparathyroidism | Preclinical | Plan to initiate Phase 1 in 2023 | | **RT-104** | GLP-1 mimetic | Type 2 Diabetes | Partnering | Proof-of-concept study showed bioavailability similar to subcutaneous injection | | **RT-106** | Basal insulin | Type 2 Diabetes | Partnering | Preclinical study showed comparable efficacy to subcutaneous injection | - The pipeline focuses on well-characterized molecules with established markets to potentially accelerate approval and market acceptance[59](index=59&type=chunk) [Our Regulatory Pathways](index=18&type=section&id=Our%20Regulatory%20Pathways) Rani's product candidates are expected to be classified as combination products by the FDA, following BLA/NDA pathways and leveraging prior findings - Rani's product candidates are expected to be classified by the FDA as combination products (device + biologic), with the Center for Drug Evaluation and Research (CDER) likely being the lead review center[114](index=114&type=chunk)[115](index=115&type=chunk) - The company plans to conduct an Investigational Device Exemption (IDE) study for the RaniPill platform alone to evaluate its safety and tolerability. Data from this study will be used to create a Master File with the FDA's Center for Devices and Radiological Health (CDRH) to support subsequent product applications[117](index=117&type=chunk)[118](index=118&type=chunk)[119](index=119&type=chunk) - Marketing applications for product candidates are expected to follow the Biologics License Application (BLA) or New Drug Application (NDA) pathway. The company may be able to leverage the FDA's prior findings on the safety and efficacy of the already-approved biologics used in its products[122](index=122&type=chunk)[123](index=123&type=chunk) [Manufacturing and Commercialization](index=21&type=section&id=Manufacturing%20and%20Commercialization) Rani pursues a vertically integrated manufacturing strategy and plans to commercialize products through in-house efforts or strategic partnerships - Rani pursues a **vertically integrated manufacturing strategy**, with current facilities in San Jose and Milpitas, California, to control product quality, enable rapid iteration, and protect intellectual property[131](index=131&type=chunk) - The current semi-automated manufacturing process is sufficient for planned clinical trials, with plans to **fully automate the process for commercialization**[134](index=134&type=chunk) - The company intends to either build its own commercialization infrastructure or partner with pharmaceutical companies for sales and distribution in key markets like the United States, Europe, and Asia[135](index=135&type=chunk)[137](index=137&type=chunk) - Commercial success will depend on securing coverage and adequate reimbursement from third-party payors, which is a complex and challenging process[138](index=138&type=chunk) [Intellectual Property](index=22&type=section&id=Intellectual%20Property) The company's intellectual property strategy relies on patents, trademarks, and trade secrets to protect its core technology and product pipeline - The company's IP strategy relies on a combination of patents, trademarks, and trade secrets to protect its technology and products[148](index=148&type=chunk) - The core patent family, with a priority date in 2009, includes over **230 patents and applications globally**, with terms expected to extend into at least 2030. This family covers device aspects and the delivery of various biologics[150](index=150&type=chunk) - A separate patent family covers the microtablets delivered by the RaniPill capsule, with a priority date in 2014 and expected patent terms extending into at least 2035[151](index=151&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20Factors) The company faces substantial risks due to its limited operating history, history of net losses, and need for significant additional capital. Development and regulatory risks are high, as its novel drug-device combination products are in early clinical stages with an uncertain and lengthy approval pathway. Commercialization success is not guaranteed and depends on market acceptance, competition, and reimbursement. The company also relies on third parties for key materials and clinical trial execution. Additional risks include potential challenges to its intellectual property, complexities of its holding company structure, and the volatility of its stock price - The company has a limited operating history, has incurred significant losses since inception (**$53.1 million net loss in 2021**), and expects to continue incurring losses for the foreseeable future. It may never achieve or sustain profitability[222](index=222&type=chunk)[224](index=224&type=chunk) - Clinical development is lengthy, expensive, and uncertain. The company's novel technology has not been approved by the FDA, and regulatory authorities have limited experience evaluating it, making the time and cost of development difficult to predict[248](index=248&type=chunk)[289](index=289&type=chunk) - The company faces significant competition from major pharmaceutical companies with injectable biologics and other companies developing oral delivery technologies. Its success depends on demonstrating advantages in efficacy, convenience, and safety[313](index=313&type=chunk)[317](index=317&type=chunk) - The multi-class stock structure concentrates **over 80% of voting power** with certain pre-IPO owners (Continuing LLC Owners), limiting the influence of public stockholders on important corporate decisions[510](index=510&type=chunk)[513](index=513&type=chunk) - The company is involved in ongoing patent opposition proceedings in Europe initiated by Novo Nordisk A/S, which could result in the revocation or amendment of key European patents, potentially impacting its ability to commercialize in Europe[469](index=469&type=chunk)[473](index=473&type=chunk) [Unresolved Staff Comments](index=90&type=section&id=Item%201B.%20Unresolved%20Staff%20Comments) The company reports that it has no unresolved staff comments from the Securities and Exchange Commission - There are no unresolved staff comments[556](index=556&type=chunk) [Properties](index=90&type=section&id=Item%202.%20Properties) The company leases approximately 55,000 square feet of office, R&D, and manufacturing space across California and Texas - The company's corporate headquarters are in San Jose, California[557](index=557&type=chunk) - It leases approximately **55,000 square feet** of space across facilities in San Jose, Milpitas (California), and San Antonio (Texas) under service agreements with the related party InCube Labs, LLC (ICL)[557](index=557&type=chunk) [Legal Proceedings](index=91&type=section&id=Item%203.%20Legal%20Proceedings) The company is not currently a party to any legal proceedings expected to have a material adverse effect on its business - The company is not currently party to any litigation or legal proceedings that management believes are likely to have a material adverse effect on the business[559](index=559&type=chunk) [Mine Safety Disclosures](index=91&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's business - Not applicable[560](index=560&type=chunk) PART II [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](index=92&type=section&id=Item%205.%20Market%20for%20Registrant%27s%20Common%20Equity%2C%20Related%20Stockholder%20Matters%20and%20Issuer%20Purchases%20of%20Equity%20Securities) The company's Class A common stock trades on Nasdaq, has never paid dividends, and adjusted its IPO proceeds allocation - The company's Class A common stock is traded on the Nasdaq Stock Market LLC under the symbol "**RANI**"[562](index=562&type=chunk) - The company has never declared or paid dividends and does not intend to in the foreseeable future[562](index=562&type=chunk) - The planned use of IPO proceeds was revised, with allocations for the internal pipeline and manufacturing scale-up being reduced from their original ranges[566](index=566&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=93&type=section&id=Item%207.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) The company reported a significant net loss in 2021 driven by increased expenses and equity-based compensation, but maintains sufficient cash from its IPO for the next twelve months Results of Operations (2021 vs. 2020) | Metric | 2021 (in thousands) | 2020 (in thousands) | Change Driver | | :--- | :--- | :--- | :--- | | Contract Revenue | $2,717 | $462 | Termination of Takeda agreement led to full recognition of deferred revenue | | Research & Development Expense | $26,482 | $12,044 | Increased headcount and $8.2M in equity-based compensation | | General & Administrative Expense | $27,834 | $4,962 | Increased headcount, public company costs, and $14.4M in equity-based compensation | | **Loss from Operations** | **($51,599)** | **($16,544)** | Higher operating expenses | | **Net Loss** | **($53,088)** | **($16,703)** | Higher operating loss and other expenses | Cash Flow Summary (2021 vs. 2020) | Metric | 2021 (in thousands) | 2020 (in thousands) | | :--- | :--- | :--- | | Net cash used in operating activities | ($32,245) | ($14,960) | | Net cash used in investing activities | ($506) | ($1,200) | | Net cash provided by financing activities | $77,146 | $72,682 | - As of December 31, 2021, the company had cash and cash equivalents of **$117.5 million**, which is expected to fund operations for at least the next twelve months[621](index=621&type=chunk)[630](index=630&type=chunk) - The company's IPO in August 2021 raised net proceeds of **$73.6 million**[621](index=621&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=107&type=section&id=Item%207A.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) The company is a smaller reporting company and is therefore not required to provide market risk disclosures - As a smaller reporting company, Rani Therapeutics is not required to provide quantitative and qualitative disclosures about market risk[660](index=660&type=chunk) [Financial Statements and Supplementary Data](index=108&type=section&id=Item%208.%20Financial%20Statements%20and%20Supplementary%20Data) This section presents the company's audited consolidated financial statements for 2021 and 2020, including balance sheets, income statements, and cash flows Key Financial Data (Year Ended Dec 31, 2021) | Metric | Amount (in thousands) | | :--- | :--- | | **Income Statement:** | | | Contract Revenue | $2,717 | | Total Operating Expenses | $54,316 | | Net Loss | ($53,088) | | **Balance Sheet (End of Period):** | | | Cash and Cash Equivalents | $117,453 | | Total Assets | $124,207 | | Total Liabilities | $2,640 | | Total Stockholders' Equity | $121,567 | - The financial statements reflect the company's transition to a public entity following its IPO in August 2021, including the establishment of a non-controlling interest and a new equity structure[679](index=679&type=chunk)[685](index=685&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=137&type=section&id=Item%209.%20Changes%20in%20and%20Disagreements%20with%20Accountants%20on%20Accounting%20and%20Financial%20Disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None[820](index=820&type=chunk) [Controls and Procedures](index=137&type=section&id=Item%209A.%20Controls%20and%20Procedures) Management concluded the company's disclosure controls were effective as of December 31, 2021, with a new stock plan system implemented - Management concluded that the company's disclosure controls and procedures were effective at a reasonable assurance level as of December 31, 2021[821](index=821&type=chunk) - As a newly public company, a management assessment of internal control over financial reporting is not yet required[822](index=822&type=chunk) - A new stock plan administration system was implemented in 2021, leading to changes in internal controls over financial reporting[823](index=823&type=chunk) [Other Information](index=137&type=section&id=Item%209B.%20Other%20Information) The company reports no other information for this item - None[826](index=826&type=chunk) PART III [Directors, Executive Officers and Corporate Governance](index=138&type=section&id=Item%2010.%20Directors%2C%20Executive%20Officers%20and%20Corporate%20Governance) Information for this item is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the company's 2022 Proxy Statement[829](index=829&type=chunk) [Executive Compensation](index=138&type=section&id=Item%2011.%20Executive%20Compensation) Information for this item regarding executive compensation is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the company's 2022 Proxy Statement[831](index=831&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=138&type=section&id=Item%2012.%20Security%20Ownership%20of%20Certain%20Beneficial%20Owners%20and%20Management%20and%20Related%20Stockholder%20Matters) Information for this item concerning security ownership is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the company's 2022 Proxy Statement[832](index=832&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=138&type=section&id=Item%2013.%20Certain%20Relationships%20and%20Related%20Transactions%2C%20and%20Director%20Independence) Information for this item detailing related party transactions and director independence is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the company's 2022 Proxy Statement[833](index=833&type=chunk) [Principal Accountant Fees and Services](index=138&type=section&id=Item%2014.%20Principal%20Accountant%20Fees%20and%20Services) Information for this item regarding principal accountant fees and services is incorporated by reference from the company's 2022 Proxy Statement - Information is incorporated by reference from the company's 2022 Proxy Statement[834](index=834&type=chunk) PART IV [Exhibits and Financial Statement Schedules](index=139&type=section&id=Item%2015.%20Exhibits%20and%20Financial%20Statement%20Schedules) This section lists the documents filed as part of the Annual Report on Form 10-K, including financial statements and exhibits - This item contains the list of financial statements and exhibits filed as part of the Form 10-K[835](index=835&type=chunk)[837](index=837&type=chunk) [Form 10-K Summary](index=140&type=section&id=Item%2016.%20Form%2010-K%20Summary) The company reports no information for this item - None[839](index=839&type=chunk)

Financial Data and Key Metrics Changes - Operating expenses for Q4 2021 were $13.4 million, compared to $5.1 million in Q4 2020, while full-year operating expenses were $54.3 million versus $17 million in 2020 [33] - Non-GAAP operating expenses for Q4 2021 were $10.1 million and $31.2 million for the full year [33] - Cash, cash equivalents, and short-term investments stood at $117.5 million as of December 31, 2021, sufficient to fund operations until at least the end of 2023 [34] Business Line Data and Key Metrics Changes - The company made significant progress in drug development, particularly with the RaniPill platform, which can deliver doses of up to three milligrams per pill [11] - The RaniPill HC, a new high-capacity oral biologic delivery device, can administer over 500% higher payloads than the original RaniPill capsule, potentially delivering up to 20 milligrams [14][15] Market Data and Key Metrics Changes - A survey indicated a strong preference among patients for oral medications over injections, with 76% of patients preferring a daily pill over a six-month injection regimen [19] - The survey involved 611 patients and 201 physicians, showing consistent preference across various demographics [20] Company Strategy and Development Direction - The company aims to expand its pipeline with the RaniPill HC, targeting a range of biologics and potentially pursuing daily dosing options for over 50 additional biologics [14][21] - The current RaniPill platform is focused on lower-dose drugs, while the RaniPill HC is expected to cater to higher-dose biologics, particularly in immunology and oncology [42][76] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the company's progress and plans to maintain momentum in 2022, including the initiation of additional clinical programs [35] - The company is exploring opportunities involving the RaniPill HC and aims to validate its clinical applications as soon as possible [67] Other Important Information - The company completed a successful IPO in August 2021, raising approximately $84 million [8] - The RaniPill HC has shown promising results in preclinical studies, successfully delivering an 80-milligram dose in canine models [17][29] Q&A Session Summary Question: Are there any additional modifications to the high-capacity pill? - The RaniPill HC shares commonalities with the current RaniPill platform, but modifications were made to increase the dose by 500% [40] Question: Is the HC strategically preferred going forward? - The HC opens new opportunities, particularly for higher-dose products, while the current RaniPill is suited for lower-dose drugs [42] Question: Are there any current programs better suited for the high-capacity pill? - Pediatric applications may benefit from a smaller pill size, but further development is needed [49] Question: Will there be a new master file for the high-capacity pill? - There will be one master file with chapters covering different embodiments, sharing many components with the current RaniPill [53] Question: What is the timeline for the master file and clinical studies? - The company is gearing up for a significant GLP study, which will take time, but updates will be shared as they progress [85]

PART I. FINANCIAL INFORMATION [Financial Statements (Unaudited)](index=5&type=section&id=Item%201.%20Financial%20Statements%20(Unaudited)) The unaudited financial statements reflect a significant increase in cash and total assets following the company's August 2021 IPO [Condensed Consolidated Balance Sheets](index=5&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) The company's financial position strengthened significantly post-IPO, with increased cash, decreased liabilities, and a shift to stockholders' equity Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | Sep 30, 2021 (Unaudited) | Dec 31, 2020 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $129,743 | $73,058 | | Total current assets | $132,365 | $74,945 | | Total assets | $136,958 | $79,415 | | **Liabilities & Equity** | | | | Total liabilities | $5,250 | $8,040 | | Convertible preferred units | $0 | $184,714 | | Total stockholders' equity / (members' deficit) | $131,708 | $(113,339) | | Non-controlling interest | $80,342 | $0 | [Condensed Consolidated Statements of Operations and Comprehensive Loss](index=6&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations%20and%20Comprehensive%20Loss) Operating expenses and net losses rose substantially for the period, driven by significant IPO-related equity-based compensation charges Statement of Operations Summary (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Contract revenue | $0 | $108 | $2,717 | $252 | | Research and development | $11,959 | $2,090 | $19,065 | $8,708 | | General and administrative | $15,822 | $845 | $21,889 | $3,144 | | Loss from operations | $(27,781) | $(2,827) | $(38,237) | $(11,600) | | Net loss | $(28,700) | $(2,883) | $(39,783) | $(10,947) | | Net loss attributable to Rani Therapeutics Holdings, Inc | $(3,142) | $0 | $(3,142) | $0 | - Net loss per Class A common share was **$(0.16)** for both the three and nine months ended September 30, 2021[15](index=15&type=chunk) [Condensed Consolidated Statements of Cash Flows](index=8&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash from financing activities, primarily from the IPO, offset increased cash used in operations, resulting in a significant net increase in cash Cash Flow Summary (in thousands) | Metric | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | $(20,796) | $(8,260) | | Net cash used in investing activities | $(235) | $(944) | | Net cash provided by financing activities | $77,716 | $4,035 | | Net increase (decrease) in cash | $56,685 | $(5,169) | | Cash and cash equivalents, end of period | $129,743 | $11,367 | - Key financing activities in 2021 included receiving **$74.2 million in net proceeds from the IPO** and repaying a **$1.3 million PPP loan** and a **$3.3 million convertible note**[19](index=19&type=chunk) [Notes to Unaudited Condensed Consolidated Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) The notes detail the IPO's impact, including proceeds, corporate reorganization, termination of the Takeda agreement, and significant equity-based compensation - In August 2021, the company closed its IPO, receiving approximately **$73.6 million in net proceeds** after deductions[23](index=23&type=chunk) - The company expects its cash and cash equivalents of **$129.7 million** as of September 30, 2021, to be sufficient to fund operations for at least one year[26](index=26&type=chunk) - In May 2021, Takeda terminated its evaluation agreement, leading to the recognition of the remaining **$2.0 million in deferred revenue**[79](index=79&type=chunk) - Total equity-based compensation expense for the nine months ended September 30, 2021 was **$19.0 million**, with a significant portion recognized in Q3[129](index=129&type=chunk)[131](index=131&type=chunk) - In 2021, the company repaid its **$3.0 million convertible loan**, resulting in a $0.7 million loss, and also repaid its **$1.3 million PPP Loan** in full[140](index=140&type=chunk)[142](index=142&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=27&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses its clinical-stage status, ongoing operating losses, and the significant impact of IPO-related expenses on recent financial results - The company is a clinical-stage biotherapeutics company developing the **RaniPill capsule**, an oral alternative to injectable biologics[151](index=151&type=chunk) - Cash and cash equivalents of **$129.7 million** are expected to be sufficient to fund operations for at least the next twelve months[152](index=152&type=chunk) - Net losses were **$28.7 million for Q3 2021** and **$39.8 million for the first nine months of 2021**, a significant increase from the prior year[154](index=154&type=chunk) [Results of Operations](index=33&type=section&id=Results%20of%20Operations) Net loss increased substantially in Q3 and the first nine months of 2021 due to higher R&D and G&A expenses driven by IPO-related equity compensation Comparison of Operating Results (in thousands) | Metric | Three Months Ended Sep 30, 2021 | Three Months Ended Sep 30, 2020 | Nine Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2020 | | :--- | :--- | :--- | :--- | :--- | | Contract Revenue | $0 | $108 | $2,717 | $252 | | R&D Expense | $11,959 | $2,090 | $19,065 | $8,708 | | G&A Expense | $15,822 | $845 | $21,889 | $3,144 | | Net Loss | $(28,700) | $(2,883) | $(39,783) | $(10,947) | - The increase in R&D expenses in Q3 2021 was driven by a **$1.9 million increase in salaries** and a **$6.6 million increase in equity-based compensation**[191](index=191&type=chunk) - The increase in G&A expenses in Q3 2021 was primarily due to a **$12.1 million increase in equity-based compensation** from the IPO[192](index=192&type=chunk)[193](index=193&type=chunk) [Liquidity and Capital Resources](index=35&type=section&id=Liquidity%20and%20Capital%20Resources) The company's liquidity was significantly bolstered by IPO proceeds, providing sufficient capital to fund operations for at least the next twelve months - As of September 30, 2021, the company had cash and cash equivalents of **$129.7 million**[203](index=203&type=chunk) - The company raised net proceeds of **$73.6 million** from its IPO in August 2021[203](index=203&type=chunk) - During 2021, the company repaid its **$1.3 million PPP Loan** and a **$3.0 million convertible note**[204](index=204&type=chunk)[205](index=205&type=chunk) - The company entered into a Tax Receivable Agreement (TRA), requiring payment of **85% of the tax benefits** realized from future exchanges of LLC interests[210](index=210&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=39&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, the company is not required to provide information for this item - As a smaller reporting company, Rani Therapeutics is **exempt from providing quantitative and qualitative disclosures** about market risk[233](index=233&type=chunk) [Controls and Procedures](index=39&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were effective as of September 30, 2021, with no material changes to internal controls - The CEO and CFO concluded that the company's disclosure controls and procedures were **effective** as of September 30, 2021[234](index=234&type=chunk) - **No material changes** in internal control over financial reporting occurred during the third quarter of 2021[235](index=235&type=chunk) PART II. OTHER INFORMATION [Legal Proceedings](index=40&type=section&id=Item%201.%20Legal%20Proceedings) The company faces several patent opposition proceedings in Europe but does not expect any current legal matters to have a material adverse effect - The company is currently involved in several opposition proceedings at the European Patent Office, asserted by **Novo Nordisk AS**[135](index=135&type=chunk) - Management does not believe any current litigation is likely to have a **material adverse effect** on the business[238](index=238&type=chunk) [Risk Factors](index=40&type=section&id=Item%201A.%20Risk%20Factors) The company faces significant risks related to its limited operating history, dependence on capital, novel technology, and complex organizational structure - The company has a **limited operating history**, has incurred significant losses since inception, and expects to continue incurring losses[240](index=240&type=chunk)[242](index=242&type=chunk) - The business is highly dependent on advancing its **early-stage product candidates** through a lengthy, expensive, and uncertain regulatory approval process[240](index=240&type=chunk)[257](index=257&type=chunk) - The company's novel **RaniPill technology** has not yet been approved by the FDA, creating uncertainty in the development timeline and cost[240](index=240&type=chunk)[306](index=306&type=chunk) - The **multi-class stock structure concentrates voting control** with existing owners, limiting the influence of new Class A stockholders[241](index=241&type=chunk)[506](index=506&type=chunk) - As a holding company, it is obligated to make potentially substantial payments under a **Tax Receivable Agreement**[241](index=241&type=chunk)[482](index=482&type=chunk)[490](index=490&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=95&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) This section details a warrant exercise and the use of approximately $73.6 million in net proceeds from the company's recent IPO - The company's IPO generated aggregate gross proceeds of approximately **$84.3 million**, resulting in net proceeds of approximately **$73.6 million**[556](index=556&type=chunk) - The IPO proceeds were used to purchase newly issued Class A units of Rani LLC, which then repaid the **$1.3 million PPP loan** in full[558](index=558&type=chunk) [Defaults Upon Senior Securities](index=96&type=section&id=Item%203.%20Defaults%20Upon%20Senior%20Securities) The company reports no defaults upon senior securities - None[559](index=559&type=chunk) [Mine Safety Disclosures](index=96&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company - Not applicable[560](index=560&type=chunk) [Other Information](index=96&type=section&id=Item%205.%20Other%20Information) The company reports no other information for this item - None[561](index=561&type=chunk) [Exhibits](index=97&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including governance documents, material agreements, and officer certifications - The report includes exhibits such as the **Tax Receivable Agreement**, **2021 Equity Incentive Plan**, and officer certifications[564](index=564&type=chunk)

OR 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 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ________________ to ________________ Commission File Number: 001-40672 RANI THERAPEUTICS HOLDINGS, INC. (Exact Name of Registrant as Specified in its Charter) | ...