Rain Oncology (RAIN) - 2023 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION This section presents Rain Oncology Inc.'s unaudited condensed consolidated financial statements and management's analysis of financial performance Item 1. Condensed Consolidated Financial Statements (Unaudited) This section presents Rain Oncology Inc.'s unaudited condensed consolidated financial statements, including balance sheets, statements of operations, and cash flows, detailing financial position and performance for periods ended June 30, 2023 Condensed Consolidated Balance Sheets This section presents Rain Oncology Inc.'s financial position, detailing assets, liabilities, and equity as of June 30, 2023, and December 31, 2022 Condensed Consolidated Balance Sheet Highlights (in thousands) | Metric | June 30, 2023 | December 31, 2022 | | :-------------------------- | :------------ | :---------------- | | Total Assets | $91,723 | $135,180 | | Total Liabilities | $18,434 | $22,144 | | Total Stockholders' Equity | $73,289 | $113,036 | | Cash and cash equivalents | $40,076 | $61,955 | | Short-term investments | $46,214 | $68,499 | Condensed Consolidated Statements of Operations and Comprehensive Loss This section details Rain Oncology Inc.'s financial performance, including operating expenses, interest income, and net loss for the three and six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Operations and Comprehensive Loss Highlights (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------------------------ | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $14,980 | $14,257 | $31,657 | $27,812 | | General and administrative | $5,414 | $3,461 | $10,480 | $7,356 | | Restructuring charges | $2,837 | — | $2,837 | — | | Total operating expenses | $23,231 | $17,718 | $44,974 | $35,168 | | Net loss | $(22,064) | $(17,611) | $(42,548) | $(35,005) | | Net loss per share, basic and diluted | $(0.61) | $(0.66) | $(1.17) | $(1.32) | | Interest income | $1,167 | $107 | $2,426 | $163 | Condensed Consolidated Statements of Stockholders' Equity This section presents changes in Rain Oncology Inc.'s total stockholders' equity, reflecting net loss, stock-based compensation, and unrealized gains or losses on investments Condensed Consolidated Statements of Stockholders' Equity Highlights (in thousands) | Metric | As of Dec 31, 2022 | As of Mar 31, 2023 | As of Jun 30, 2023 | | :-------------------------------- | :----------------- | :----------------- | :----------------- | | Total Stockholders' Equity | $113,036 | $94,557 | $73,289 | | Net Loss (Q1 2023) | | $(20,484) | | | Net Loss (Q2 2023) | | | $(22,064) | | Stock-based compensation expense (H1 2023) | | $1,568 | $837 | | Unrealized gain (loss) on investments (H1 2023) | | $119 | $(53) | Condensed Consolidated Statements of Cash Flows This section summarizes Rain Oncology Inc.'s cash inflows and outflows from operating, investing, and financing activities for the six months ended June 30, 2023 and 2022 Condensed Consolidated Statements of Cash Flows Highlights (in thousands) | Metric | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :------------------------------------ | :--------------------------- | :--------------------------- | | Net cash used in operating activities | $(45,463) | $(34,542) | | Net cash provided by investing activities | $23,106 | $52,760 | | Net cash provided by financing activities | $478 | $411 | | Net (decrease) increase in cash and cash equivalents | $(21,879) | $18,629 | | Cash and cash equivalents at end of period | $40,076 | $43,409 | Notes to Condensed Consolidated Financial Statements (Unaudited) This section provides detailed explanations and additional information supporting the condensed consolidated financial statements, clarifying accounting policies and specific financial items Note 1 – Organization and Nature of Operations This note describes Rain Oncology Inc.'s business as a precision oncology company, its lead product candidate milademetan, and its financial condition including accumulated deficit and liquidity - Rain Oncology Inc. is a precision oncology company developing therapies targeting oncogenic drivers, with milademetan as its lead product candidate, an oral inhibitor of the MDM2-p53 complex[17] - The company has incurred significant net losses and negative cash flows since its inception, with an accumulated deficit of $208.2 million as of June 30, 2023[20][102] - Management believes current cash, cash equivalents, and short-term investments are sufficient to meet obligations for at least twelve months from the filing date[21] Note 2 – Summary of Significant Accounting Policies This note outlines the key accounting principles and methods used in preparing the financial statements, including significant estimates, available-for-sale securities, and research and development costs - The preparation of financial statements involves significant estimates, particularly for clinical trial expense accruals[22] - Available-for-sale (AFS) securities are classified as current assets and carried at fair value, with unrealized gains and losses reported in accumulated other comprehensive loss[24][25] - Research and development costs are expensed as incurred, and stock-based compensation is recognized over the requisite service period[28][30] - The company adopted ASU 2016-13 (Topic 326) on January 1, 2023, with no significant impact on its financial statements[39] Note 3 – Fair Value Measurements This note details the fair value hierarchy and measurements for financial assets, including cash equivalents and available-for-sale securities, classified into three levels - Financial assets measured at fair value on a recurring basis include cash equivalents and available-for-sale securities, classified using a three-tier hierarchy[44] - Money market funds and U.S. government securities are classified as Level 1, while commercial paper and U.S. agency bonds are classified as Level 2[45][46] Fair Value Measurements of Cash Equivalents and Short-term Investments (in thousands) | Category | June 30, 2023 (Total Fair Value) | December 31, 2022 (Total Fair Value) | | :------------------------------------ | :------------------------------- | :----------------------------------- | | Money market funds | $14,051 | $8,528 | | Commercial paper | $36,169 | $83,423 | | U.S. government securities | $16,337 | $10,837 | | U.S. agency bonds | $19,066 | $22,143 | | Corporate debt securities | — | $997 | | Total | $85,623 | $125,928 | Note 4 – Investments This note provides details on Rain Oncology Inc.'s available-for-sale securities, including fair value, unrealized gains and losses, and maturity profiles Available-for-Sale Securities (in thousands) | Metric | June 30, 2023 (Fair Value) | December 31, 2022 (Fair Value) | | :-------------------------- | :------------------------- | :--------------------------- | | Total AFS Securities | $85,623 | $125,928 | | Gross Unrealized Gains | $5 | $15 | | Gross Unrealized Losses | $(105) | $(181) | | Due within one year | $46,214 | $63,595 | | Due within one to two years | — | $4,904 | - Unrealized losses as of June 30, 2023, were primarily due to changes in interest rates, not increased credit risks, and the company does not intend to sell these investments before maturity[55] Note 5 - Condensed Consolidated Balance Sheet Details This note provides a detailed breakdown of specific balance sheet accounts, including prepaid and other current assets, property and equipment, and other accrued liabilities Prepaid and Other Current Assets (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------- | :------------ | :---------------- | | Prepaid insurance | $1,821 | $913 | | Prepaid research and development | $1,585 | $1,103 | | Total | $4,703 | $3,174 | Property and Equipment, Net (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------- | :------------ | :---------------- | | Total Property and equipment, net | $361 | $93 | | Construction in progress | $312 | $8 | | Accumulated depreciation and amortization expense | $(271) | $(236) | Other Accrued Liabilities (in thousands) | Category | June 30, 2023 | December 31, 2022 | | :-------------------------- | :------------ | :---------------- | | Accrued payroll and related | $1,713 | $229 | | Accrued bonus | $1,055 | $3,379 | | Total | $4,986 | $6,424 | Note 6 – Stockholders' Equity This note details Rain Oncology Inc.'s capital structure, stock option and restricted stock unit activity, and related stock-based compensation expense - The company's capital structure includes 250 million authorized common shares ($0.001 par value), comprising 200 million voting and 50 million non-voting shares, and 10 million undesignated preferred shares[61] - The 2021 Equity Incentive Plan reserved 3,246,120 shares initially, with an automatic increase of 1,451,611 shares on January 1, 2023[64] Stock Option and RSU Activity (as of June 30, 2023) | Metric | Stock Options | Restricted Stock Units | | :------------------------------------ | :------------ | :--------------------- | | Outstanding as of Dec 31, 2022 | 2,593,761 | 8,945 | | Granted (H1 2023) | 1,312,762 | 95,333 | | Forfeited or cancelled (H1 2023) | (1,009,324) | (41,906) | | Outstanding as of June 30, 2023 | 2,876,442 | 62,372 | | Weighted-average exercise price (options) | $8.27 | | | Weighted-average grant date fair value (RSUs) | | $9.27 | Stock-Based Compensation Expense (in thousands) | Category | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | | :-------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | :--------------------------- | | Research and development | $534 | $1,203 | $1,660 | $2,093 | | General and administrative | $266 | $214 | $708 | $566 | | Restructuring charges | $37 | — | $37 | — | | Total | $837 | $1,417 | $2,405 | $2,659 | - As of June 30, 2023, total unrecognized compensation cost was $11.2 million, expected to be recognized over approximately 2.8 years[69][178] Note 7 – License Agreements This note describes Rain Oncology Inc.'s exclusive license for milademetan, including potential milestone payments and royalties, and the termination of other development agreements - The company holds worldwide exclusive rights to milademetan from Daiichi Sankyo, with potential future milestone payments up to $223.5 million and high single-digit royalties on net sales[77][79][80][81] - A $2.0 million milestone fee related to the Phase 3 MANTRA trial remained accrued as of June 30, 2023[80] - The intellectual property license agreement with Drexel University for the RAD52 program was terminated in February 2023 to focus resources on milademetan[85] - The clinical supply agreement with Roche for atezolizumab was terminated in May 2023[86][124] Note 8 – Commitments and Contingencies This note outlines Rain Oncology Inc.'s noncancelable operating lease for its corporate headquarters, including recent amendments and future minimum lease payments - The company has a noncancelable operating lease for its corporate headquarters in Newark, California, expiring in September 2024[87][90] - Recent amendments expanded the leased premises, with a new expansion commencing July 2023 and a temporary space provided rent-free (excluding operating costs) until then[91][92] Future Minimum Lease Payments (in thousands, as of June 30, 2023) | Year | Amount | | :--- | :----- | | 2023 (remainder) | $86 | | 2024 | $130 | | Total minimum lease payments | $216 | Note 9 – Employee Benefits This note details Rain Oncology Inc.'s 401(k) matching contributions for the three and six months ended June 30, 2023 and 2022 401(k) Matching Contributions (in thousands) | Period | 2023 | 2022 | | :-------------------------- | :--- | :--- | | Three Months Ended June 30 | $143 | $156 | | Six Months Ended June 30 | $577 | $231 | Note 10 – Restructuring Charges This note explains the $2.8 million restructuring charges incurred due to a May 2023 workforce reduction, detailing cash severance and stock-based compensation components - In May 2023, the company announced a workforce reduction as part of a clinical strategy reprioritization, resulting in $2.8 million in restructuring charges for the three and six months ended June 30, 2023[96] - These charges comprised $2.8 million in cash severance, employee transition, and related benefits, plus $37,000 in stock-based compensation expense[96] - Approximately $1.7 million in unpaid cash severance and related benefits remained outstanding as of June 30, 2023, expected to be paid in Q3 2023[96] Note 11 – Net Loss Per Share This note presents Rain Oncology Inc.'s basic and diluted net loss per share and explains the exclusion of potentially dilutive securities due to the company's net loss position Net Loss Per Share (Basic and Diluted) | Period | 2023 | 2022 | | :-------------------------- | :----- | :----- | | Three Months Ended June 30 | $(0.61) | $(0.66) | | Six Months Ended June 30 | $(1.17) | $(1.32) | - Potentially dilutive securities, including 2,876,442 stock options and 62,372 restricted stock units, were excluded from diluted net loss per share calculations as their inclusion would be anti-dilutive due to the company's net loss position[97] Note 12 – Subsequent Event This note discloses a securities class action lawsuit filed on July 17, 2023, against Rain Oncology Inc. and certain officers, alleging misrepresentations regarding clinical trial design - On July 17, 2023, a securities class action lawsuit was filed against the company and certain officers, alleging violations of Sections 10(b) and 20(a) of the Exchange Act[98] - The lawsuit claims false and misleading information regarding the Phase 3 MANTRA trial design quality and risks related to clinical development strategy and regulatory approval[98] - The company believes it has meritorious defenses and intends to defend vigorously, but cannot estimate the possible costs at this early stage[99] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This section provides management's perspective on Rain Oncology Inc.'s financial condition and results of operations, highlighting operating losses, clinical trial setbacks, strategic reprioritization, and liquidity Overview This section introduces Rain Oncology as a precision oncology company focused on milademetan, detailing its significant operating losses and current liquidity position - Rain Oncology is a precision oncology company focused on developing milademetan, an MDM2-p53 complex inhibitor, for genetically selected patients[101] - The company has incurred significant operating losses since inception, with an accumulated deficit of $208.2 million and net losses of $22.1 million (Q2 2023) and $42.5 million (H1 2023)[102] - As of June 30, 2023, cash, cash equivalents, and short-term investments totaled $86.3 million, which management believes is sufficient for at least the next twelve months, but additional capital will be required for future R&D[102] Recent Developments This section details the Phase 3 MANTRA trial's failure to meet its primary endpoint, leading to strategic reprioritization, suspension of studies, and a significant workforce reduction - In May 2023, the Phase 3 MANTRA trial for milademetan in dedifferentiated (DD) LPS did not meet its primary endpoint of progression-free survival (PFS)[107] - The median PFS for milademetan was 3.6 months compared to 2.2 months for trabectedin (HR 0.89, p=0.53), leading to the decision not to pursue further development in DD LPS[108] - Strategic priorities were realigned, including suspending enrollment in the MANTRA-2 basket study, terminating plans for the MANTRA-4 trial, and reducing the full-time employee workforce by approximately 65%[109] Our Development Pipeline This section describes Rain Oncology Inc.'s lead product candidate, milademetan, and its clinical development plan, including recent trial outcomes and program terminations Our Lead Product Candidate, Milademetan This section introduces milademetan as a small molecule, oral inhibitor of the MDM2-p53 complex, designed to reactivate p53 in MDM2-dependent cancers - Milademetan is a small molecule, oral inhibitor of MDM2-p53 complex, designed to reactivate p53 in MDM2-dependent cancers[113][115] - The therapy aims to improve peak drug exposure and minimize hematologic toxicity through an optimized dosing schedule[113] Clinical Development Plan This section outlines the outcomes of the Phase 3 MANTRA trial, leading to the decision not to pursue further development in DDLPS and the suspension of other studies - The Phase 3 MANTRA trial for DDLPS patients did not meet its primary endpoint of PFS, leading to the decision not to pursue further development in this indication[107][108][119] - Enrollment for the Phase 2 MANTRA-2 MDM2-amplified tumor-agnostic basket study has been suspended[109][122] - Plans for the MANTRA-4 Phase 1/2 trial, evaluating milademetan in combination with atezolizumab for CDKN2A-loss, p53 WT advanced solid tumors, have been terminated[109][125] Collaboration and License Agreements This section refers to Note 7 for details on Rain Oncology Inc.'s license agreements for its product candidates and development programs - The company is party to license agreements for its product candidates and development programs, with details provided in Note 7 to the Condensed Consolidated Financial Statements[126] Components of Our Results of Operations This section defines the key components of Rain Oncology Inc.'s results of operations, including revenue, research and development expenses, general and administrative expenses, and interest income Revenue This section states that Rain Oncology Inc. has not generated any revenue from product sales, licenses, or collaborations since inception - The company has not generated any revenue from product sales, licenses, or collaborations since inception and does not expect to in the foreseeable future[128] Operating Expenses This section clarifies that Rain Oncology Inc.'s operating expenses consist solely of research and development costs and general and administrative costs - Operating expenses consist solely of research and development costs and general and administrative costs[129] Research and Development Expenses This section defines research and development expenses, including costs for drug discovery, clinical development, personnel, and external services, recognized as incurred - Research and development expenses are recognized as incurred and include costs for drug discovery, preclinical and clinical development, personnel, external CROs, manufacturing, regulatory compliance, and license fees[130][131] General and Administrative Expenses This section describes general and administrative expenses, including salaries, legal fees, professional services, and facility-related costs, with expected increases due to public company operations - General and administrative expenses include salaries, legal fees, professional services, and facility-related costs, with expectations for increased costs due to public company operations[134] Interest Income This section clarifies that Rain Oncology Inc.'s interest income is derived from its available-for-sale (AFS) securities - Interest income is derived from the company's available-for-sale (AFS) securities[135] Results of Operations This section provides a detailed comparison of Rain Oncology Inc.'s financial performance for the three and six months ended June 30, 2023 and 2022 Comparison of Three and Six Months Ended June 30, 2023 and 2022 This section presents a table summarizing Rain Oncology Inc.'s key financial metrics for the comparative periods, including operating expenses, net loss, and interest income Financial Performance Comparison (in thousands) | Metric | 3 Months Ended June 30, 2023 | 3 Months Ended June 30, 2022 | Change (3M) | 6 Months Ended June 30, 2023 | 6 Months Ended June 30, 2022 | Change (6M) | | :-------------------------- | :--------------------------- | :--------------------------- | :---------- | :--------------------------- | :--------------------------- | :---------- | | Research and development | $14,980 | $14,257 | $723 | $31,657 | $27,812 | $3,845 | | General and administrative | $5,414 | $3,461 | $1,953 | $10,480 | $7,356 | $3,124 | | Restructuring charges | $2,837 | — | $2,837 | $2,837 | — | $2,837 | | Total operating expenses | $23,231 | $17,718 | $5,513 | $44,974 | $35,168 | $9,806 | | Net loss | $(22,064) | $(17,611) | $(4,453) | $(42,548) | $(35,005) | $(7,543) | | Interest income | $1,167 | $107 | $1,060 | $2,426 | $163 | $2,263 | Research and Development Expenses This section analyzes changes in Rain Oncology Inc.'s R&D expenses, attributing increases to milademetan clinical trial costs and payroll, with expected future decreases due to strategic reprioritization - R&D expenses increased by $0.7 million to $15.0 million for Q2 2023 and by $3.8 million to $31.7 million for H1 2023, primarily due to milademetan clinical trial costs and higher payroll[138][139] - Non-cash stock-based compensation included in R&D was $0.5 million for Q2 2023 and $1.7 million for H1 2023[138][139] - R&D costs are expected to significantly decrease for the remainder of 2023 following the reprioritization of the clinical strategy[139] General and Administrative Expenses This section examines the increase in Rain Oncology Inc.'s G&A expenses, driven by higher professional services, legal, and payroll costs, with expected future decreases due to business strategy optimization - G&A expenses increased by $1.9 million to $5.4 million for Q2 2023 and by $3.1 million to $10.5 million for H1 2023, driven by higher professional services, legal, and payroll costs[140][141] - Non-cash stock-based compensation in G&A was approximately $0.3 million for Q2 2023 and $0.7 million for H1 2023[140][141] - G&A expenses are expected to significantly decrease for the remainder of 2023 due to the optimization of the company's business strategy[141] Restructuring Charges This section details the $2.8 million restructuring charges incurred in Q2 and H1 2023, primarily for cash severance and employee benefits related to a May 2023 workforce reduction - The company recorded $2.8 million in restructuring charges for Q2 and H1 2023, primarily for cash severance and employee benefits related to a workforce reduction in May 2023[142] - Approximately $1.6 million of these charges remained unpaid as of June 30, 2023, with expected payment in Q3 2023[144] Other Income This section clarifies that Rain Oncology Inc.'s other income primarily represents interest income from money market or short-term investments - Other income for the periods presented primarily represents interest income from money market or short-term investments[145] Liquidity and Capital Resources This section discusses Rain Oncology Inc.'s historical operating losses, current cash position, future funding requirements, and sources of capital - The company has incurred significant operating losses since inception and expects to continue incurring substantial expenses for R&D, requiring additional capital[146] - As of June 30, 2023, the company had $86.3 million in cash, cash equivalents, and short-term investments, which is estimated to be sufficient for at least the next twelve months[150] - Funding sources have included convertible promissory notes ($9.9 million gross), convertible preferred stock ($81.9 million gross), and common stock offerings, including $52.9 million net proceeds from the November 2022 offering and $0.3 million from the ATM facility in H1 2023[102][147][148][149] Future Funding Requirements This section outlines the expected increase in future expenses due to ongoing development activities and pipeline expansion, highlighting the uncertainty of capital outlays and the need for additional funding - Future expenses are expected to increase substantially due to ongoing development activities, new clinical trials, pipeline expansion, marketing approvals, manufacturing, intellectual property, and public company operations[151][154] - The timing and amounts of future capital outlays are uncertain due to the unpredictable nature of drug development[154] - Inability to raise additional funds through equity, debt, or collaborations could lead to delays, limitations, or termination of product development and commercialization efforts[159] Cash Flows This section provides a summary of Rain Oncology Inc.'s cash flows from operating, investing, and financing activities for the six months ended June 30 Summary of Cash Flows (in thousands, 6 Months Ended June 30) | Activity | 2023 | 2022 | | :-------------------------- | :----------- | :----------- | | Operating activities | $(45,463) | $(34,542) | | Investing activities | $23,106 | $52,760 | | Financing activities | $478 | $411 | | Net (decrease) increase | $(21,879) | $18,629 | Operating Activities This section explains the net cash used in Rain Oncology Inc.'s operating activities, primarily driven by net loss and changes in operating assets and liabilities - Net cash used in operating activities increased to $45.5 million for H1 2023, primarily due to a net loss of $42.5 million and changes in operating assets and liabilities[161] Investing Activities This section details the net cash provided by Rain Oncology Inc.'s investing activities, mainly from maturities of short-term investments partially offset by new purchases - Net cash provided by investing activities was $23.1 million for H1 2023, mainly from $50.2 million in maturities of short-term investments, partially offset by $26.7 million in purchases[165] Financing Activities This section describes the net cash provided by Rain Oncology Inc.'s financing activities, primarily from ATM facility proceeds and equity incentive plans - Net cash provided by financing activities was $0.5 million for H1 2023, primarily from $0.3 million in net proceeds from the ATM Facility and $0.2 million from equity incentive plans and ESPP purchases[167] Obligations and other Commitments This section outlines Rain Oncology Inc.'s potential future milestone and royalty payment obligations under license agreements and accrued research and development obligations - The company has potential future milestone and royalty payment obligations under license agreements, which are generally cancelable[169] - Incurred and accrued research and development obligations were $7.4 million as of June 30, 2023[170] Critical Accounting Policies and Use of Estimates This section discusses Rain Oncology Inc.'s critical accounting policies and estimates, including accrued research and development and stock-based compensation - There have been no significant changes to critical accounting policies and use of estimates, except as described in Note 2[172] Accrued Research and Development This section explains the estimation process for accrued research and development expenses and the balance of $7.4 million as of June 30, 2023 - The company estimates R&D expenses based on contract terms, service progress, and communications with vendors, with accrued R&D balances of $7.4 million as of June 30, 2023[173][174] Stock-Based Compensation This section details the recognition of stock-based compensation expense, fair value estimation methods, and total unrecognized compensation costs - Stock-based compensation expense is recognized over the vesting period, with fair value estimated using the Black-Scholes model for stock options and the closing stock price for RSUs[176][177] Stock-Based Compensation Expense (in millions) | Period | 2023 | 2022 | | :-------------------------- | :--- | :--- | | Six Months Ended June 30 | $2.4 | $2.7 | | Unvested equity compensation costs not yet recognized (as of June 30, 2023) | $11.2 | | | Weighted average period over which unvested awards are expected to be recognized (in years) | 2.8 | | Recent Accounting Pronouncements This section refers to Note 2 for a description of recent accounting pronouncements and their immaterial impact on Rain Oncology Inc.'s financial position or operating results - A description of recent accounting pronouncements is provided in Note 2, with no material impact on the company's financial position or operating results[179] Item 3. Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Rain Oncology Inc. is not required to provide detailed quantitative and qualitative disclosures about market risk - The company is a smaller reporting company and is not required to provide detailed market risk disclosures[180] Item 4. Controls and Procedures Management concluded that Rain Oncology Inc.'s disclosure controls and procedures were effective as of June 30, 2023, with no material changes in internal control over financial reporting during the quarter - The company's disclosure controls and procedures were deemed effective at the reasonable assurance level as of June 30, 2023[182] - No material changes in internal control over financial reporting were identified during the quarter ended June 30, 2023[183] PART II. OTHER INFORMATION This section provides additional information not covered in the financial statements, including legal proceedings, updated risk factors, and exhibits Item 1. Legal Proceedings This section refers to Note 12 for details on legal proceedings, specifically a recently filed securities class action lawsuit against Rain Oncology Inc. and certain officers - Legal proceedings are discussed in Note 12, which details a securities class action lawsuit filed on July 17, 2023[186] Item 1A. Risk Factors This section updates Rain Oncology Inc.'s risk factors, emphasizing new risks associated with resource reallocation and a significant workforce reduction following clinical strategy reprioritization - The company began reallocating resources in Q2 2023 to align with business priorities, which may adversely affect future revenue and operating results[188] - A workforce reduction of approximately 65% was approved in May 2023 as part of efforts to reprioritize the clinical strategy and optimize resources[189] - Managing these organizational changes and potential further reductions imposes significant responsibilities on management and could impact future financial performance[190] Item 2. Unregistered Sales of Equity Securities and Use of Proceeds There were no unregistered sales of equity securities or use of proceeds to report for the period - No unregistered sales of equity securities or use of proceeds to report[191] Item 3. Defaults Upon Senior Securities There were no defaults upon senior securities to report for the period - No defaults upon senior securities to report[192] Item 4. Mine Safety Disclosures There were no mine safety disclosures to report for the period - No mine safety disclosures to report[193] Item 5. Other Information There was no other information to report for the period - No other information to report[194] Item 6. Exhibits This section lists all exhibits filed or furnished as part of the Quarterly Report on Form 10-Q, including corporate governance documents, certifications, and XBRL interactive data files - The exhibits include corporate governance documents (e.g., Certificate of Incorporation, Bylaws), common stock certificates, investor rights agreements, certifications (31.1, 31.2, 32.1), and Inline XBRL documents[196] Signatures This section contains the required signatures for the Quarterly Report on Form 10-Q, certifying its submission - The report is signed by Avanish Vellanki, Chairman and Chief Executive Officer, and Josephine Bruce, Director of Accounting[200]