Rani Therapeutics (RANI) - 2024 Q3 - Quarterly Report

Financial Performance - Net loss for the three months ended September 30, 2024, was $12,722 thousand, compared to a net loss of$18,332 thousand for the same period in 2023, reflecting a reduction of approximately 30%[7] - The company reported a net loss attributable to Rani Therapeutics Holdings, Inc. of $6,783 thousand for the three months ended September 30, 2024, compared to$9,197 thousand for the same period in 2023, a decrease of approximately 26%[7] - For the nine months ended September 30, 2024, the company reported a net loss of $40.9 million, compared to a net loss of$53.8 million for the same period in 2023, representing a 24.5% improvement[11] - The net loss for the quarter ending September 30, 2024, is $12,722,000, compared to a net loss of$14,779,000 for the previous quarter[9] - The net loss attributable to Rani Therapeutics Holdings, Inc. for the nine months ended September 30, 2024, was $21.1 million, resulting in a net loss per Class A common share of$(0.78)[45] - The company expects to continue incurring losses for the foreseeable future and will need to raise substantial capital to complete the development of the RaniPill platform[51] Revenue and Expenses - Total revenue for the three months ended September 30, 2024, was $6,172,000, a decrease of 45.0$11,220,000 for the same period in 2023[53] - Research and development expenses for the three months ended September 30, 2024, were $6,172 thousand, down from$11,220 thousand in the same period of 2023, a decrease of about 45%[7] - Total operating expenses for the nine months ended September 30, 2024, were $38,356 thousand, compared to$52,665 thousand for the same period in 2023, a reduction of approximately 27%[7] - Research and development expenses for the nine months ended September 30, 2024, totaled $19,872,000, down 37.9$32,018,000 in 2023[55] - General and administrative expenses decreased by $2.2 million to$18,484,000 for the nine months ended September 30, 2024, a reduction of 10.5% compared to $20,647,000 in 2023[55] - General and administrative expenses for the three months ended September 30, 2024, were$41,000, down from $87,000 for the same period in 2023, indicating a reduction of 52.9$50,847 thousand as of December 31, 2023, to $32,371 thousand as of September 30, 2024, representing a decline of approximately 36$32,473 thousand as of December 31, 2023, to $37,765 thousand as of September 30, 2024, an increase of about 16$12,866 thousand as of December 31, 2023, to $3,120 thousand as of September 30, 2024, a decline of about 76$5,775,000, a decrease from $14,535,000 as of March 31, 2024[9] - The accumulated deficit increased to$93,960,000 as of September 30, 2024, from $80,372,000 at March 31, 2024[9] Cash Flow - Cash and cash equivalents decreased from$5,864 thousand as of December 31, 2023, to $4,277 thousand as of September 30, 2024, a decline of about 27$26.8 million for the nine months ended September 30, 2024, an improvement from negative cash flows of $38.8 million in the prior year[12] - Net cash provided by investing activities for the nine months ended September 30, 2024 was$17.3 million, primarily from $57.3 million in proceeds from maturities of marketable securities[65] - Net cash provided by financing activities for the nine months ended September 30, 2024 was$8.0 million, mainly from net proceeds of $8.9 million from the July Offering[65] Funding and Capital Needs - The company expects to continue generating operating losses and negative cash flows as it develops the RaniPill capsule, indicating a need for substantial additional funding in the future[13] - The company anticipates needing to raise substantial additional capital to fund ongoing operations and development activities, with existing resources deemed insufficient for the next twelve months[61] - The company may seek additional capital through equity offerings or debt financings, but restrictions from recent agreements could limit these options[61] - The company entered into a Controlled Equity Sales Agreement allowing it to offer and sell up to$150 million of Class A common stock, but has not made any sales under this agreement as of September 30, 2024[13] Strategic Initiatives - The company aims to advance product candidates and expand its platform technology, focusing on the development of the RaniPill HC and other future designs[5] - The Company entered into a Collaboration Agreement with ProGen Co., Ltd. in June 2024 to develop a weight management product, sharing development costs and operating profits equally[28] - The Company will lead the development of the weight management product in the U.S., Canada, Europe, and Australia, while ProGen will handle development in other countries[28] - The company plans to initiate clinical testing of the RaniPill HC in 2025, which is intended to deliver drug payloads up to 200µL in liquid form[49] Accounting and Compliance - The company is evaluating the impact of recently issued accounting pronouncements, including ASU 2023-07 and ASU 2023-09, on its financial statements[23] - The company recognizes revenue based on actual costs incurred as a percentage of total estimated costs, reflecting a cost-based input method for contract revenue recognition[21] - The company had no contract assets recorded as of September 30, 2024, indicating no unconditional right to consideration[22] - The company had deferred revenue of $0.6 million related to unsatisfied evaluation services as of September 30, 2024, compared to no deferred revenue as of December 31, 2023[22] Legal and Governance - The company is not currently involved in any litigation that is likely to materially affect its business[71] - Management believes that disclosure controls provide reasonable assurance but cannot guarantee detection of all errors or fraud[70] - The effectiveness of control systems is limited by resource constraints and the cost-benefit analysis of controls[70] - Inherent limitations in control systems may lead to undetected misstatements due to error or fraud[70]