Rain Oncology (RAIN) - 2022 Q3 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents Rain Therapeutics Inc.'s unaudited condensed consolidated financial statements and comprehensive notes Condensed Consolidated Balance Sheets | Metric | September 30, 2022 (in thousands) | December 31, 2021 (in thousands) | | :-------------------------------- | :-------------------------------- | :--------------------------------- | | Total Assets | $94,635 | $147,140 | | Total Liabilities | $13,226 | $16,636 | | Total Stockholders' Equity | $81,409 | $130,504 | | Cash and cash equivalents | $39,834 | $24,780 | | Short-term investments | $50,874 | $115,438 | Condensed Consolidated Statements of Operations and Comprehensive Loss | Metric | 3 Months Ended Sep 30, 2022 (in thousands) | 3 Months Ended Sep 30, 2021 (in thousands) | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Research and development | $14,510 | $15,284 | $42,322 | $26,101 | | General and administrative | $3,901 | $3,154 | $11,257 | $7,334 | | Total operating expenses | $18,411 | $18,438 | $53,579 | $33,435 | | Net loss | $(18,041) | $(18,426) | $(53,046) | $(33,409) | | Net loss per share, basic and diluted | $(0.68) | $(0.70) | $(2.00) | $(1.96) | Condensed Consolidated Statements of Convertible Preferred Stock and Stockholders' Equity (Deficit) | Metric | As of September 30, 2022 (in thousands) | As of September 30, 2021 (in thousands) | | :-------------------------- | :------------------------------------ | :------------------------------------ | | Total Stockholders' Equity | $81,409 | $147,275 | | Additional Paid-in Capital | $224,694 | $219,222 | | Accumulated Deficit | $(143,010) | $(71,979) | Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | 9 Months Ended Sep 30, 2022 (in thousands) | 9 Months Ended Sep 30, 2021 (in thousands) | | :----------------------------------- | :----------------------------------- | :----------------------------------- | | Net cash used in operating activities | $(49,905) | $(27,704) | | Net cash provided by (used in) investing activities | $64,386 | $(139,480) | | Net cash provided by financing activities | $573 | $121,579 | | Net increase (decrease) in cash and cash equivalents | $15,054 | $(45,605) | | Cash and cash equivalents at end of period | $39,834 | $13,258 | Notes to Condensed Consolidated Financial Statements Note 1 – Organization and Nature of Operations - Rain Therapeutics Inc. is a late-stage precision oncology company developing therapies targeting oncogenic drivers, with milademetan as its lead product candidate[16] - The company completed its Initial Public Offering (IPO) on April 27, 2021, generating $121.5 million in net proceeds[18] - Rain has incurred net losses and negative cash flows since inception, with an accumulated deficit of $143.0 million as of September 30, 2022[21][109] - Management believes current cash, cash equivalents, and short-term investments will provide sufficient funds for at least twelve months from the filing date[23] Note 2 – Summary of Significant Accounting Policies - The condensed consolidated financial statements are prepared in accordance with GAAP, requiring management to make estimates, particularly for clinical trial expense accruals[20][24] - Cash equivalents are highly liquid investments with original maturities of three months or less; available-for-sale (AFS) securities are classified as current assets and carried at fair value[25][26] - Research and development costs are expensed as incurred, and stock-based compensation expense is recognized over the service period using the Black-Scholes model for options and closing stock price for RSUs[30][32] - The company adopted ASU 2019-12 (Simplifying the Accounting for Income Taxes) effective January 1, 2022, with no material impact, and anticipates no significant impact from ASU 2016-13 (Financial Instruments—Credit Losses) effective January 1, 2023[36][41] Note 3 – Fair Value Measurements - Fair value is defined as an exit price, measured using a three-tier hierarchy: Level 1 (unadjusted quoted prices in active markets), Level 2 (observable inputs other than Level 1), and Level 3 (unobservable inputs)[43] | Category | Level 1 (in thousands) | Level 2 (in thousands) | Total (in thousands) | | :----------------------------------- | :--------------------- | :--------------------- | :------------------- | | Money market funds | $7,874 | $— | $7,874 | | Commercial paper | $— | $44,774 | $44,774 | | U.S. government securities | $20,080 | $— | $20,080 | | U.S. agency bonds | $— | $16,167 | $16,167 | | Corporate debt securities | $— | $992 | $992 | | Total cash equivalents and short-term investments | $27,954 | $61,933 | $89,887 | Note 4 – Investments - The company holds investment grade securities classified as available-for-sale (AFS), including money market funds, commercial paper, corporate debt securities, U.S. government securities, and U.S. agency bonds[26][48] - All AFS securities are classified as current assets, reflecting management's intent to use proceeds for operations as needed[26][51] - As of September 30, 2022, $66.4 million of marketable securities were in gross unrealized loss positions, none for greater than 12 months, and these losses were determined not to be other-than-temporary[51][52](index=52&