f
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, 2026
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: 001-40672
RANI THERAPEUTICS HOLDINGS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware
86-3114789
(State or other jurisdiction of
incorporation or organization)
(I.R.S. EmployerIdentification No.)
2051 Ringwood Avenue
San Jose, California
95131
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (408) 457-3700
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
Trading
Symbol(s)
Name of each exchange on which registered
Class A common stock, par value $0.0001 per share
RANI
The Nasdaq Stock Market LLC
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
Accelerated filer
Non-accelerated filer
Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
As of April 30, 2026, the registrant had 99,912,515 shares of Class A common stock, $0.0001 par value per share, outstanding, 23,970,359 shares of Class B common stock, $0.0001 par value per share, outstanding and no shares of Class C common stock, $0.0001 par value per share, outstanding. Certain holders of units of the registrant’s consolidated subsidiary, Rani Therapeutics, LLC, who do not hold shares of the registrant’s Class B common stock, can exchange their units of Rani Therapeutics, LLC for 1,124,194 shares of the registrant’s Class A common stock.
Table of Contents
Page
Special Note Regarding Forward-Looking Statements
3
PART I.
FINANCIAL INFORMATION
Item 1.
Financial Statements (Unaudited)
5
Condensed Consolidated Balance Sheets
Condensed Consolidated Statements of Operations
6
Condensed Consolidated Statements of Comprehensive Loss
7
Condensed Consolidated Statements of Changes in Stockholders’ Equity
8
Condensed Consolidated Statements of Cash Flows
9
Notes to Unaudited Condensed Consolidated Financial Statements
10
Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
25
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
32
Item 4.
Controls and Procedures
PART II.
OTHER INFORMATION
34
Legal Proceedings
Item 1A.
Risk Factors
Unregistered Sales of Equity Securities and Use of Proceeds
35
Defaults Upon Senior Securities
Mine Safety Disclosures
Item 5.
Other Information
Item 6.
Exhibits
36
Signatures
37
2
Unless otherwise stated or the context otherwise requires, the terms “we,” “us,” and “our,” and similar references refer to Rani Therapeutics Holdings, Inc. (“Rani Holdings”) and its consolidated subsidiary, Rani Therapeutics, LLC (“Rani LLC”).
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
This Quarterly Report on Form 10-Q, including the section titled "Management's Discussion and Analysis of Financial Condition and Results of Operations," contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q, including statements regarding our future results of operations and consolidated financial position, business strategy, product candidates, planned preclinical studies and clinical trials, results of clinical trials, research and development costs, manufacturing costs, regulatory approvals, development and advancement of our oral delivery technology, timing and likelihood of success, potential partnering activities as well as plans and objectives of management for future operations, are forward-looking statements. These statements involve known and unknown risks, uncertainties, and other important factors that are in some cases beyond our control and may cause our actual results, performance, or achievements to be materially different from any future results, performance, or achievements expressed or implied by the forward-looking statements.
In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “would,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “believe,” “estimate,” “predict,” “potential,” “seek,” “aim,” or “continue” or the negative of these terms or other similar expressions. Forward-looking statements contained in this Quarterly Report on Form 10-Q include, but are not limited to, statements about:
These forward-looking statements are subject to a number of risks, uncertainties, and assumptions described in the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K filed with the Securities and Exchange Commission on March 26, 2026. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, or otherwise.
In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this Quarterly Report on Form 10-Q, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and you are cautioned not to unduly rely upon these statements.
4
PART I. FINANCIAL INFORMATIONItem 1. Financial Statements
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except par value)
March 31,
December 31,
2026
2025
(Unaudited)
Assets
Current assets:
Cash and cash equivalents
$
9,644
18,618
Accounts receivable
2,042
Marketable securities
33,759
31,091
Prepaid expenses and other current assets
1,646
1,570
Total current assets
47,091
53,321
Property and equipment, net
601
736
Operating lease right-of-use asset
3,941
4,318
Other assets
246
Total assets
51,879
58,621
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable
858
309
Accrued expenses and other current liabilities
4,706
3,943
Current portion of deferred revenue
6,831
Current portion of operating lease liability
1,460
1,586
Total current liabilities
13,855
12,669
Long-term deferred revenue
—
1,708
Operating lease liability, less current portion
2,481
2,732
Total liabilities
16,336
17,109
Commitments and contingencies (Note 12)
Stockholders' equity:
Preferred stock, $0.0001 par value - 20,000 shares authorized; none issued and outstanding as of March 31, 2026 and December 31, 2025
Class A common stock, $0.0001 par value - 800,000 shares authorized; 99,813 and 97,622 issued and outstanding as of March 31, 2026 and December 31, 2025, respectively
Class B common stock, $0.0001 par value - 40,000 shares authorized; 23,970 and 23,970 issued and outstanding as of March 31, 2026 and December 31, 2025
Class C common stock, $0.0001 par value - 20,000 shares authorized; none issued and outstanding as of March 31, 2026 and December 31, 2025
Additional paid-in capital
168,015
165,578
Accumulated other comprehensive (loss)/gain
(8
)
1
Accumulated deficit
(139,613
(132,580
Total stockholders' equity attributable to Rani Therapeutics Holdings, Inc.
28,405
33,010
Non-controlling interest
7,138
8,502
Total stockholders' equity
35,543
41,512
Total liabilities and stockholders' equity
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
CONDENSED Consolidated Statements of Operations
(in thousands, except per share amounts)
Three Months Ended March 31,
Contract revenue
172
Operating expenses
Research and development
5,161
6,570
General and administrative
4,886
5,615
Total operating expenses
10,047
12,185
Loss from operations
(8,339
(12,013
Other income (expense), net
Interest income and other, net
412
218
Interest expense and other, net
(88
(943
Net loss
(8,015
(12,738
Net loss attributable to non-controlling interest
(982
(5,474
Net loss attributable to Rani Therapeutics Holdings, Inc.
(7,033
(7,264
Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc., basic and diluted
(0.04
(0.22
Weighted-average Class A common shares outstanding—basic and diluted
179,996
33,440
CONDENSED Consolidated Statements of Comprehensive Loss
(in thousands)
Other comprehensive loss
Net unrealized loss on marketable securities
(11
(6
Comprehensive loss
(8,026
(12,744
Comprehensive loss attributable to non-controlling interest
(984
(5,477
Comprehensive loss attributable to Rani Therapeutics Holdings, Inc.
(7,042
(7,267
CONDENSED Consolidated Statements of Changes in STOCKHOLDERS’ (DEFICIT)/Equity
Class A Common Stock
Class B Common Stock
Shares
Amount
AdditionalPaid InCapital
AccumulatedOtherComprehensiveGain
AccumulatedDeficit
Non-ControllingInterest
TotalStockholders'Equity
Balance at December 31, 2025
97,622
23,970
Issuance of common stock under employee equity plans, net of shares withheld for tax settlement
91
(32
Exercise of Pre-funded Warrants in connection with the Private Placement, net of issuance cost of ($5)
2,100
Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC
799
(799
Stock-based compensation
1,665
419
2,084
(9
(2
Balance at March 31, 2026
99,813
AccumulatedOtherComprehensiveLoss
TotalStockholders'(Deficit)/Equity
Balance at December 31, 2024
33,430
23,972
104,889
(102,907
1,501
3,493
140
(23
(1
2,241
1,684
3,925
(3
Balance at March 31, 2025
33,570
107,108
(110,171
(2,293
(5,349
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Cash flows from operating activities
Adjustments to reconcile net loss to net cash used in operating activities:
Stock-based compensation expense
Depreciation and amortization
161
251
Non-cash operating lease expense
477
Amortization of debt discount and issuance costs
58
Net accretion and amortization of investments in marketable securities
(244
(150
Changes in operating assets and liabilities:
(600
Contract asset
428
(87
347
549
763
170
Deferred revenue
(1,708
Operating lease liabilities
(477
(478
Net cash used in operating activities
(6,497
(8,149
Cash flows from investing activities
Proceeds from maturities of marketable securities
21,000
Purchases of marketable securities
(23,435
(2,720
Purchases of property and equipment
(15
(51
Net cash (used in)/provided by investing activities
(2,450
18,229
Cash flows from financing activities
Proceeds from employee stock purchase plan
42
Tax withholdings paid on behalf of employees for net share settlement
Repayment of debt
(3,750
Exercise of Pre-funded Warrants in connection with the Private Placement, net of issuance costs of ($5)
Net cash used in financing activities
(27
(3,731
Net (decrease)/increase in cash, cash equivalents and restricted cash equivalents
(8,974
6,349
Cash, cash equivalents and restricted cash equivalents, beginning of period
18,818
4,262
Cash, cash equivalents and restricted cash equivalents, end of period
9,844
10,611
Supplemental disclosures of non-cash investing and financing activities
Interest income receivable included in prepaid expenses and other current assets
71
17
Unrealized loss on short-term investments
Notes to THE UNAUDITED CONDENSED Consolidated Financial Statements
1. Nature of Business, Organization and Liquidity
Description of Business
Rani Therapeutics Holdings, Inc. (“Rani Holdings”, and together with its consolidated subsidiary, the “Company”) is a clinical-stage biotherapeutics company focusing on advancing technologies to enable the administration of biologics and drugs orally, to provide patients, physicians, and healthcare systems with a convenient alternative to painful injections. The Company’s technology comprises a drug-agnostic oral delivery platform, the RaniPill capsule, which is designed to deliver a wide variety of drug substances, including antibodies, proteins, peptides, and oligonucleotides. The Company is advancing a portfolio of oral therapeutics using the RaniPill capsule, and the Company is actively pursuing partnering the technology with third party biopharmaceutical companies for the oral delivery of their biologics and drugs. The Company is headquartered in San Jose, California and operates in one segment.
Organizational Transactions
Rani Holdings was formed as a Delaware corporation in April 2021 for the purpose of facilitating an initial public offering (“IPO”) of its Class A common stock. In connection with the IPO, the Company effected a series of organizational transactions (the “Organizational Transactions”), which, together with the IPO, were completed in August 2021, that resulted in the Company becoming the ultimate parent company of Rani Therapeutics, LLC (“Rani LLC”). The Company operates its business through Rani LLC.
As part of the Organizational Transactions, the Company entered into a Registration Rights Agreement with certain individuals and entities that continued to hold economic nonvoting Class A units of Rani LLC (“Class A Units”), collectively referred to herein as the “Continuing LLC Owners”. The Continuing LLC Owners are entitled to exchange, subject to the terms of the Sixth Amended and Restated Limited Liability Company Agreement of Rani LLC (the “Amended Rani LLC Agreement”), the Class A Units they hold in Rani LLC, together with the shares they hold of the Company Class B common stock (together referred to as a "Paired Interest"), in return for shares of the Company’s Class A common stock on a one-for-one basis provided that, at the Company’s election, the Company has the ability to effect a direct exchange of such Class A common stock or make a cash payment equal to a volume weighted average market price of one share of Class A common stock for each Paired Interest redeemed. Any shares of Class B common stock will be canceled on a one-for-one basis if, at the election of the Continuing LLC Owners, the Company redeems or exchanges such Paired Interest pursuant to the terms of the Amended Rani LLC Agreement. As of March 31, 2026, certain individuals who continue to own interests in Rani LLC but do not hold shares of the Company’s Class B common stock (“non-corresponding Class A Units”) have the ability to exchange their non-corresponding Class A Units of Rani LLC for 1,124,194 shares of the Company’s Class A common stock.
Liquidity
The Company has incurred recurring losses and negative cash flows from operations since its inception, including net loss of $8.0 million for the three months ended March 31, 2026. As of March 31, 2026, the Company had an accumulated deficit of $139.6 million and for the three months ended March 31, 2026, had negative cash flows from operations of $6.5 million. The Company expects that its cash, cash equivalents and marketable securities of $43.4 million as of March 31, 2026, will be sufficient to fund its operations through at least twelve months from the date that its condensed consolidated financial statements for the three months ended March 31, 2026 are issued.
The Company expects to continue to generate operating losses and negative operating cash flows for the foreseeable future as it continues to develop the RaniPill capsule. The Company expects to finance its future operations with its existing cash and through strategic financing opportunities that could include, but are not limited to, future offerings of its equity, collaboration or licensing agreements, or the incurrence of debt. However, there is no guarantee that any of these strategic or financing opportunities will be executed or realized on favorable terms, if at all. The Company will not generate any revenue from product sales unless, and until, it successfully completes clinical development and obtains regulatory approval of its product candidates. While the Company may generate collaboration or license revenue prior to product approval, the timing and amount of such revenue are inherently uncertain. If the Company obtains regulatory approval for the RaniPill capsule, it expects to incur significant expenses related to developing its internal commercialization capability to support manufacturing, product sales, marketing, and distribution.
The Company’s ability to raise additional capital through either the issuance of equity or debt is dependent on a number of factors including, but not limited to, the market interest of the Company, which itself is subject to a number of development and
business risks and uncertainties, as well as the uncertainty that the Company would be able to raise such additional capital at a price or on terms that are favorable to the Company.
2. Summary of Significant Accounting Policies
Basis of Presentation
These condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”).
The Company operates and controls all of the business and affairs of Rani LLC and, through Rani LLC, conducts its business. Because the Company manages and operates the business and controls the strategic decisions and day-to-day operations of Rani LLC and also has a substantial financial interest in Rani LLC, the Company consolidates the financial results of Rani LLC, and a portion of its net loss is allocated to the non-controlling interests in Rani LLC held by the Continuing LLC Owners. All intercompany accounts and transactions have been eliminated in consolidation.
Unaudited Interim Condensed Consolidated Financial Statements
The accompanying condensed consolidated financial statements have been prepared in accordance with U.S. GAAP for interim financial information and pursuant to Form 10-Q of Regulation S-X of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. These unaudited condensed consolidated financial statements include all adjustments necessary to fairly state the financial position and the results of the Company's operations and cash flows for interim periods in accordance with U.S. GAAP. All such adjustments are of a normal, recurring nature. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for the year ending December 31, 2026 or for any future period.
The consolidated balance sheet as of December 31, 2025 included herein was derived from the audited consolidated financial statements as of that date. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Therefore, these interim condensed consolidated financial statements should be read in conjunction with the 2025 consolidated financial statements and notes included in the Company’s Annual Report on Form 10-K filed with the SEC on March 26, 2026.
Use of Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue and expenses and the disclosure of contingent assets and liabilities in the Company’s condensed consolidated financial statements and accompanying notes. The Company evaluates its estimates on an ongoing basis. The Company bases its estimates on its historical experience and also on assumptions that the Company believes are reasonable; however, actual results may differ materially and adversely from these estimates.
Significant Accounting Policies
A description of the Company’s significant accounting policies is included in the audited consolidated financial statements within its Annual Report on Form 10-K for the year ended December 31, 2025. Except as noted below, there have been no material changes in the Company’s significant accounting policies during the three months ended March 31, 2026.
Cash, Cash Equivalents and Restricted Cash Equivalents
The following table provides a reconciliation of cash, cash equivalents and restricted cash equivalents reported as a component of prepaid expenses and other current assets on the condensed consolidated balance sheet which, in aggregate, represents the amount reported in the condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025:
11
10,111
Restricted cash equivalents
200
500
Total cash, cash equivalents and restricted cash equivalents
Accounts Receivable and Allowance for Credit Losses
Accounts receivable primarily consist of amounts due from customers under revenue arrangements. Receivables are recorded when revenue is recognized and are recorded net of any allowance for current expected credit losses measured based on historical experience, current conditions, and reasonable and supportable forecasts. The Company evaluates its accounts receivable for expected credit losses in accordance with ASC 326 “Financial Instruments - Credit Losses” (“ASC 326”). Receivables are primarily due from collaboration partners and government agencies with strong credit profiles. The Company has no history of credit losses with these counterparties and collection has historically occurred within contractual terms. As of March 31, 2026 and December 31, 2025, the Company has determined that no allowance for credit losses was required, and no write-offs or recoveries were recognized during both periods.
Contract Balances
A contract asset is created when the Company satisfies a performance obligation by transferring a promised good or service to the customer. Contract assets represent conditional rights to consideration when the Company must first satisfy another performance obligation in the contract before it is entitled to payment from the customer. Contract assets are transferred to accounts receivable once the right to consideration becomes unconditional and presented separately from contract assets. A right is unconditional if nothing other than the passage of time is required before payment of that consideration is due. During the three months ended March 31, 2026, net change on contract asset balance due to timing of billing, payment and recognition was $0.
Contract liabilities are recorded as deferred revenue on the condensed consolidated balance sheets and include payments received in advance of performance obligations or where the Company has unsatisfied performance obligations.
Significant changes in contract liabilities (deferred revenue) in the three months ended March 31, 2026 were as follows (in thousands):
Contract liabilities, beginning of period
8,539
Revenue recognized
Contract liabilities, end of period
Recently Adopted Accounting Pronouncements
In July 2025, the Financial Accounting Standards Board (the "FASB") issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets ("ASU 2025‑05"), which amends the guidance for estimating expected credit losses for financial assets within the scope of ASC 326. The amendments allow all entities to elect a practical expedient to assume that the current conditions as of the balance sheet date will remain unchanged for the remaining life of the asset when developing a reasonable and supportable forecast as part of estimating expected credit losses on these assets. Entities are required to disclose their practical expedient and accounting policy elections. The guidance is effective for fiscal years beginning after December 15, 2025, and interim periods within those fiscal years. The Company adopted ASU 2025-05 effective January 1, 2026. The Company elected the practical expedient and adoption did not have a material impact on its condensed consolidated financial statements.
Recently Issued Accounting Pronouncements Not Yet Adopted
In December 2025, the FASB issued Accounting Standards Update ("ASU") 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements ("ASU 2025‑11"). The amendments clarify the scope of interim reporting guidance in U.S. GAAP, consolidate interim disclosure requirements from other codification topics, and introduce a disclosure principle requiring entities to describe events occurring after the end of the most recent annual period that have a material effect on the entity. The ASU is effective for annual periods beginning after December 15, 2027 and for interim periods within fiscal years beginning after December 15, 2028. Early adoption is permitted. The Company is currently evaluating the effect of this update; however, because the amendments primarily clarify existing interim reporting requirements and do not significantly expand disclosure obligations, the Company does not expect the ASU to have a material impact on its condensed consolidated financial statements.
12
In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40) ("ASU 2024-03"). ASU 2024-03 provides disaggregated information about certain income statement costs and expenses. This guidance is effective for the Company’s annual periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, with early adoption permitted. The Company is evaluating the impact of this guidance on its condensed consolidated financial statements and related disclosures.
3. Cash Equivalents, Restricted Cash Equivalents and Marketable Securities
The following tables summarize the amortized cost and fair value of the Company's cash equivalents, restricted cash equivalents and marketable securities by major investment category (in thousands):
As of March 31, 2026
Amortized Cost
Unrealized Gains
Unrealized Losses
Estimated Fair Value
Cash equivalents:
Money market funds
9,222
Restricted cash equivalents:
Total cash equivalents and restricted cash equivalents
9,422
Marketable securities:
U.S. Treasuries and agencies
30,531
(10
30,521
Corporate debt securities
2,249
2,248
Commercial paper
991
990
Total marketable securities
33,771
(12
Total cash equivalents, restricted cash equivalents and marketable securities
43,193
43,181
As of December 31, 2025
6,757
6,891
2,099
1,491
Total cash equivalents
17,238
17,438
25,868
25,867
3,233
1,991
31,092
48,530
48,529
All marketable securities are classified as short-term. The Company regularly reviews its available-for-sale marketable securities in an unrealized loss position and evaluates the current expected credit loss by considering factors such as historical experience, market data, issuer-specific factors, and current economic conditions. As of March 31, 2026, the aggregate difference between the amortized cost and fair value of each security in an unrealized loss position was de minimis. Since any provision for expected credit losses for a security held is limited to the amount the fair value is less than its amortized cost, no allowance for expected credit loss was deemed necessary at March 31, 2026. As of March 31, 2026 and December 31, 2025, interest income receivable recorded as a component of prepaid expenses and other current assets on the condensed consolidated balance sheet was de minimis for both periods.
13
4. Fair Value Measurements
The following tables detail information about the Company’s financial assets and liabilities measured at fair value on a recurring basis and indicate the level of inputs used in such measurements (in thousands):
Level 1
Level 2
Level 3
Total
Assets:
39,943
3,238
39,715
8,814
Level 1 financial instruments are comprised of investments in money market funds and U.S. treasuries and agencies. Level 2 financial instruments are comprised of corporate debt securities and commercial paper.
There were no transfers between Level 1, Level 2 and Level 3 of the fair value hierarchy for any of the periods presented.
14
5. Balance Sheet Components
Property and equipment, net consist of the following (in thousands):
Laboratory equipment
4,281
4,259
Leasehold improvements
1,656
1,655
Office equipment
227
Software
104
6,268
6,245
Less accumulated depreciation and amortization
(5,701
(5,540
567
705
Construction-in-progress
31
Total property and equipment, net
Depreciation and amortization expense totaled $0.2 million and $0.3 million for the three months ended March 31, 2026 and 2025, respectively.
Accrued expenses and other current liabilities consist of the following (in thousands):
Payroll and related costs
3,430
2,646
Accrued professional fees
851
718
Accrued rent
328
335
Accrued preclinical and clinical trial costs
198
Other
97
46
Total accrued expenses and other current liabilities
6. Evaluation, Collaboration and License, and Collaborative Arrangements
Chugai Collaboration and License Agreement
In October 2025, the Company entered into a Collaboration and License Agreement (the “Chugai Collaboration and License Agreement”) with Chugai Pharmaceutical Co., Ltd. (“Chugai”). Under the Chugai Collaboration and License Agreement, the Company and Chugai will collaborate to develop, manufacture, seek regulatory approvals for and, if approved, commercialize a product (the “Chugai Product” or “RT-117”) combining Chugai’s antibody (the “Compound”), which is in development for hemophilia, and the RaniPill HC oral delivery device (the “Device”) for use in humans. Under the Chugai Collaboration and License Agreement, the Company received a $10.0 million upfront payment and is eligible to receive up to $18.0 million in technology transfer milestones (of which $10.0 million is subject to the customer's option), up to $57.0 million in regulatory and development milestones, up to $100.0 million in a series of sales-based milestones, contingent upon approval and the commercial success of the Chugai Product, and single digit royalties on net sales upon approval and successful commercialization of the Chugai Product.
Under the Chugai Collaboration and License Agreement, the Company granted Chugai an exclusive, worldwide right and license to certain intellectual property owned by the Company to research, develop, register, manufacture, use, sell, offer to sell, import, export, commercialize, and market the Chugai Product. Chugai granted the Company a non-exclusive, worldwide right and license to certain intellectual property owned by Chugai to manufacture and supply the Device and Chugai Product to Chugai and to perform activities under the Chugai Collaboration and License Agreement. Both parties have the right to sublicense subject to certain conditions.
In addition, Chugai has a one-time limited option to replace the Compound with a different compound subject to certain terms and conditions, a time-limited right of first refusal with respect to a select group of additional targets, and a time-limited option
15
to extend its rights to up to five of the additional drug targets, each exercisable upon payment of a $5.0 million additional target fee, under similar deal terms as the Chugai Collaboration and License Agreement.
The parties have the right to terminate the Chugai Collaboration and License Agreement at any time through mutual written consent. Chugai has the unilateral right to terminate the Chugai Collaboration and License Agreement at will, without cause, by providing the Company with 60 days’ prior written notice. Upon termination, Chugai must wind down development, regulatory, and commercial activities and continue paying royalties on any remaining net sales made during the wind-down period. Further, both the Company and Chugai retain their ownership of intellectual property, program inventions, and the license automatically becomes exclusive, irrevocable, perpetual, and fully paid‑up in favor of Chugai, unless Chugai terminated the Agreement without cause.
The Company determined that the Chugai Collaboration and License Agreement falls within the scope of Accounting Standards Codification ("ASC") Topic 808: Collaborative Arrangements ("ASC 808"), with certain elements accounted for under ASC Topic 606, Revenue from Contracts with Customer ("ASC 606"). Specifically, the exclusive license granted to Chugai, technology transfer of a sterile manufacturing process, sales-based milestones, and royalties are accounted for under ASC 606, while the development related activities are accounted for as collaborative arrangements under ASC 808.
Under ASC 606, the Company concluded there is one combined performance obligation, primarily consisting of the exclusive license, the information transfer of the Company's intellectual property, and the sterile manufacturing process research and know-how transfer. The combined performance obligation conveys a right to use the Company's functional intellectual property, which has significant standalone value as Chugai has exclusive rights to use the Compound within the RaniPill. The performance obligation is a stand ready obligation that is satisfied over time by providing Chugai with ongoing access to the Company's leadership throughout the period of delivery of regulatory feedback on the sterile manufacturing process, in order to answer regulatory questions when and if they are asked.
The Company uses the time based (straight line) measure of progress to recognize revenue for the arrangement over time as the performance obligation is satisfied, which is the period from license issuance through the period over which sterile manufacturing process research activities and the corresponding know-how transfer occur. Accordingly, the Company expects to recognize the initial $10.0 million transaction price between the execution of the arrangement through the expected completion date of the sterile manufacturing process transfer.
As of December 31, 2025, the transaction price primarily consisted of the $10.0 million upfront payment. Additional variable considerations including development milestones have been excluded from the initial transaction price because achievement is not considered probable and is fully constrained due to uncertainties outside the Company's control.
Based on its assessment as of March 31, 2026, the Company concluded that there were no changes in facts or circumstances that would result in any milestone‑related variable consideration becoming probable of achievement. As such, no variable consideration was included in the transaction price as of March 31, 2026. The Company will reassess milestone-related variable consideration each reporting period and will update the transaction price once it becomes probable and the associated constraint is lifted. Any milestone consideration included in the transaction price will be recognized when the milestone is achieved or consistent with the pattern of recognition of the associated performance obligation, including through cumulative catch-up adjustments, as applicable.
For the three months ended March 31, 2026, the Company recognized $1.7 million of revenue on the condensed consolidated statement of operations and $6.8 million as deferred revenue on the condensed consolidated balance sheet. Of the $10.0 million upfront payment, $8.0 million was received in cash and $2.0 million remains in accounts receivable relating to tax withheld by the Japanese tax authorities, which is expected to be refunded to the Company upon submission and acceptance of the required residency certificate. The Company expects to collect the full amount and does not view the withholding as impacting the collectability assessment under ASC 606.
16
Evaluation Arrangement
In August 2024, the Company entered into a contract with Chugai to conduct evaluation services of certain Chugai compounds for oral delivery using the RaniPill HC, (the "Chugai Research Agreement"), which was concluded to be a single performance obligation with an enforceable right to payment. The Company received an up-front payment of $0.6 million upon execution of the contract. Upon completion of the evaluation services, in April 2025, the Company was paid a final $0.6 million for an aggregate total of $1.2 million due under the contract. In addition, if agreed upon, the agreement allows for joint filing of certain intellectual property protection in which all associated expenses will be shared equally. Chugai has the ability to terminate the agreement at any time by providing 10 days’ written notice after the effective date of the contract. The contract can be terminated for cause by either party based on uncured material breach by the other party. Upon early termination, all ongoing activities under the agreement and all mutual collaboration, development and commercialization licenses and sublicenses will terminate. For the periods ended March 31, 2026 and 2025, $0 and $0.2 million, respectively, in contract revenue was recognized for evaluation services performed. As of March 31, 2026, no contract asset or contract liability was outstanding under the Chugai Research Agreement, as all consideration received had been recognized as revenue in proportion to the services performed.
ProGen Co., Ltd.
In June 2024, the Company and ProGen Co., Ltd. (“ProGen”) entered into a Collaboration Agreement (the “Collaboration Agreement”). Under the Collaboration Agreement, the Company and ProGen will collaborate to manufacture, develop, seek regulatory approvals for and, if approved, commercialize a product (the “Product” or “RT-114”) combining ProGen’s GLP-1/GLP-2 dual agonist compound, PG-102, and the RaniPill HC oral delivery device in the field of weight management (including without limitation obesity, weight reduction and weight maintenance) in humans (the “Collaboration”).
Under the Collaboration Agreement, development costs, as well as operating profits and losses from the commercialization of the Product, will be equally shared by the Company and ProGen. The Company and ProGen each granted to the other party an exclusive right and license (except with respect to the other party’s affiliates and sublicensees) to certain intellectual property to develop the Product for weight management and an exclusive right and license to seek regulatory approval for, and to use, sell, offer to sell, import and commercialize the Product in their assigned territories. The parties share responsibility for the development of RT-114 worldwide, with the Company leading such development for preclinical activities through Phase 1 clinical trials. After initiation of the first Phase 2 clinical trial, the Company will lead development and commercialization of the Product in the United States, Canada, Europe (including the United Kingdom) and Australia, and ProGen will lead development and commercialization in all other countries.
Each party has the right to opt-out of the Collaboration (“Opt-Out”) at any time upon prior written notice to the other party. Following an Opt-Out, the continuing party shall have sole right to develop, conduct regulatory activities for and commercialize the Product on a worldwide basis. The Opt-Out party shall share all development costs and operating profit (or loss) through the effective date of the Opt-Out, and all costs to complete the conduct of any clinical trials of Product that have been initiated prior to delivery of the Opt-Out notice, even if the costs are incurred or the trials are completed after the effective date of the Opt-Out. The continuing party shall pay to the Opt-Out party low single to mid-single digit royalties on net sales of the Product made after the Opt-Out date depending on when the Opt-Out occurs.
The Company determined that the Collaboration Agreement is not a contract with a customer and is therefore accounted for under ASC 808. The Company evaluates the presentation of amounts due from ProGen based on the nature of each separate activity. Reimbursements from ProGen are recognized as contra-research and development expense on the Consolidated Statement of Operations once earned and collectability is assured. As of March 31, 2026 and December 31, 2025, reimbursement due from ProGen recorded as contra-research and development expense was $0.4 million and $0.1 million, respectively.
7. Related Party Transactions
The founder and Chairman of the Company is the father of the Company’s Chief Executive Officer and the brother of the Company’s Chief Scientific Officer. Thus, the Company's Chief Scientific Officer is also the uncle of the Company’s Chief Executive Officer.
InCube Labs, LLC (“ICL”) is wholly-owned by the Company’s founder and Chairman and his family.
Service Agreements
In April 2022, Rani LLC entered into a service agreement for a facility in San Jose, California. In March 2024, the Company entered into an amendment to increase the size of the rental space from 23,000 square feet to 24,000 square feet (such agreement, as amended, the “RMS-ICL Service Agreement”). The RMS-ICL Service Agreement has a twelve-month term and will automatically renew for successive twelve-month periods unless terminated (Note 8). Rani LLC or ICL may terminate services under the RMS-ICL Service Agreement upon 60 days' notice to the other party, except for occupancy which requires six months’ notice. The RMS-ICL Service Agreement specifies the scope of services to be provided as well as the methods for determining the costs of services. ICL administrative fees and research and development expenses are billed or charged on a monthly basis by ICL or Rani LLC, respectively, as well as allocations of expenses based upon Rani LLC’s utilization of ICL’s facilities and equipment.
The table below details the amounts charged by ICL for services and rent, net of the amount that the Company charged ICL, which is included in the condensed consolidated statements of operations (in thousands):
180
186
(14
169
As of March 31, 2026, one of the Company's facilities was owned by an entity affiliated with the Company’s Chairman (Note 8). The Company pays for the use of this facility through the RMS-ICL Service Agreement.
Exclusive License Agreement
In June 2021, ICL and the Company, through Rani LLC, entered into an Amended and Restated Exclusive License Agreement which replaced the 2012 Exclusive License Agreement between ICL and Rani LLC, as amended in 2013, and terminated the 2012 Intellectual Property Agreement between ICL and Rani LLC, as amended in June 2013. Under the Amended and Restated Exclusive License Agreement, the Company has a fully paid, exclusive license under certain scheduled patents related to optional features of the device and certain other scheduled patents to exploit products covered by those patents in the field of oral delivery of sensors, small molecule drugs or biologic drugs including, any peptide, antibody, protein, cell therapy, gene therapy or vaccine. The Company covers patent-related expenses and, after a certain period, the Company will have the right to acquire four specified United States patent families from ICL by making a one-time payment of $0.3 million to ICL for each United States patent family that the Company desires to acquire, up to $1.0 million in the aggregate. This payment will not become an obligation until the fifth anniversary of the Amended and Restated Exclusive License Agreement. The Amended and Restated Exclusive License Agreement will terminate when there are no remaining valid claims of the patents licensed under the Amended and Restated Exclusive License Agreement. Additionally, the Company may terminate the Amended and Restated Exclusive License Agreement in its entirety or as to any particular licensed patent upon notification to ICL of such intent to terminate.
In November 2025, as part of a strategic focusing of the Company's resources, the Company notified ICL that it is terminating the Amended and Restated Exclusive License Agreement in its entirety. The termination became effective on January 18, 2026, and the Company no longer has any obligations to ICL under the Amended and Restated Exclusive License Agreement.
Non-Exclusive License Agreement between Rani and ICL (“Non-Exclusive License Agreement”)
In June 2021, the Company, through Rani LLC, entered into the Non-Exclusive License Agreement with ICL a related party, pursuant to which the Company granted ICL a non-exclusive, fully-paid license under specified patents that were assigned from ICL to the Company. Additionally, the Company agreed not to license these patents to a third party in a specific field outside the field of oral delivery of sensors, small molecule drugs or biologic drugs including, any peptide, antibody, protein, cell therapy, gene therapy or vaccine, if ICL can prove that it or its sublicensee has been in active development of a product covered by such patents in that specific field. ICL may grant sublicenses under this license to third parties only with the Company’s prior approval. The Non-Exclusive License Agreement will continue in perpetuity unless earlier terminated.
18
Rani LLC Agreement
The Company operates its business through Rani LLC. In connection with the IPO, the Company and the Continuing LLC Owners, including ICL and its affiliates, entered an LLC agreement (the “Rani LLC Agreement”). As part of the Private Placement, the Rani LLC Agreement was amended effective as of December 31, 2025 (the “Amended Rani LLC Agreement”). The governance of Rani LLC, and the rights and obligations of the holders of LLC Interests, are set forth in the Amended Rani LLC Agreement. As Continuing LLC Owners, ICL and its affiliates are entitled to exchange, subject to the terms of the Amended Rani LLC Agreement, Paired Interests for Class A common stock of the Company; provided that, at the Company’s election, the Company may effect a direct exchange of such Class A common stock or make a cash payment equal to a volume weighted average market price of one share of Class A common stock for each Paired Interest redeemed.
During each of the three months ended March 31, 2026 and 2025, no related parties that are parties to the Amended Rani LLC Agreement exchanged any Paired Interests, for an equal number of shares of the Company's Class A common stock.
8. Leases
In November 2023, Rani LLC and BKM South Bay 240, LLC (“Landlord”) entered into the Standard Industrial/Commercial Multi-Tenant Lease - Net (the “Lease”). Pursuant to the terms of the Lease, Rani LLC is leasing approximately 33,000 square feet of space in Fremont, California, which is part of a two-building project (the “Project”). The initial term of the Lease commenced in February 2024, and the duration of the initial term is 63 months. Subject to certain conditions, Rani LLC has an option to renew the Lease for one additional 5-year term at the then-prevailing market rate. The monthly base rent for the initial term of the Lease is approximately $95,000 per month, subject to a 4% increase each year. Rani LLC is also responsible for the payment of additional rent to cover its share of common area operating expenses, including taxes, insurance, utilities, and repair and maintenance of the premises and common areas of the Project.
In addition, the Company pays for the use of its office, laboratory and manufacturing facility in San Jose, California as part of the RMS-ICL Service Agreement. In March 2024, the Company entered into an amendment to increase the size of the rental space from 23,000 square feet to 24,000 square feet. The RMS-ICL Service Agreement has a twelve-month term and will automatically renew for successive twelve-month periods unless Rani LLC or ICL terminate occupancy under the RMS-ICL Service Agreement upon six months’ notice. In October 2025, the Company determined it to be reasonably certain that it would exercise its renewal option for a successive twelve-month period through 2026. The Company accounted for the renewal option as a lease modification that did not result in a separate contract and recognized the additional right-of-use asset and corresponding lease liabilities associated with the Rani LLC-ICL Service Agreement in its condensed consolidated balance sheet.
The Company's leases are accounted for as operating leases and require certain fixed payments of real estate taxes and insurance in addition to future minimum lease payments, and certain variable payments of common area maintenance costs and building utilities. Variable lease payments are expensed in the period in which the obligation for those payments is incurred. These variable lease costs are payments that vary in amount beyond the commencement date, for reasons other than passage of time. Variable lease payments are excluded from the total operating lease expense and immaterial for the periods presented.
Supplemental information on the Company’s condensed consolidated balance sheet and statements of cash flows as of March 31, 2026 and 2025 and for the three months ended March 31, 2026 and 2025, respectively, related to the Company's leases was as follows (in thousands):
Weighted-average remaining lease term (in years)
2.8
3.7
Weighted-average discount rate
10.6
%
10.4
Cash flows
Cash paid for amounts included in lease liabilities:
Operating cash flows used for operating leases
473
19
As of March 31, 2026, minimum annual rental payments under the Company’s operating lease agreements are as follows (in thousands), excluding short-term leases:
Year ending December 31,
2026 (remaining nine months)
1,465
2027
1,278
2028
1,330
2029
458
Total undiscounted future minimum lease payments
4,531
Less: Imputed interest
(590
Total operating lease liability
Less: Current portion of operating lease liability
9. Warrants
Private Placement
In October 2025, the Company entered into a securities purchase agreement (the "Private Placement") with (i) certain institutional and accredited investors (the “Institutional Investors”) and (ii) Mir Imran, chairman of the Company’s Board of Directors (the “Affiliated Investor” and, together with the Institutional Investors, each, a “Purchaser” and, together, the “Purchasers”), pursuant to which the Company issued and sold (i) 42,633,337 shares (the “Shares”) of its Class A common stock, par value $0.0001 per share (the “Class A Common Stock”), (ii) warrants to purchase up to an aggregate of 125,000,004 shares of Class A Common Stock or pre-funded warrants (the “Common Warrants”) and (iii) pre-funded warrants to purchase up to an aggregate of 82,366,667 shares of Class A Common Stock (the “Pre-Funded Warrants”). The Common Warrants and Pre-Funded Warrants are classified as equity on the Company’s condensed consolidated balance sheet. The warrants include certain rights upon “fundamental transactions,” as described in the warrant agreement, including the right of the holders thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Class A common stock in such fundamental transaction in the amount of the Black Scholes value of the unexercised portion of the applicable warrants on the date of the consummation of the fundamental transactions. The purchase price of the Shares to the Institutional Investors is $0.48 per share, and the purchase price of the Shares to the Affiliated Investor is $0.605 per share. The purchase price of the Pre-Funded Warrants to the Purchasers is $0.4799 per Pre-Funded Warrant. The aggregate gross proceeds to the Company from the closing of the Private Placement were approximately $60.3 million (including conversion of $6.0 million of the previously outstanding loan's principal balance), before deducting placement agent fees and other expenses payable by the Company of approximately $4.5 million, and excluding the proceeds, if any, from the exercise of the Common Warrants.
The Common Warrants became exercisable following the effective date of stockholder approval in December 2025 and have a term of five years following the initial exercise date. The Common Warrants purchased by the Purchasers have an exercise price of $0.48 per share. The Pre-Funded Warrants are exercisable immediately following the closing, have an unlimited term and an exercise price of $0.0001 per share. In January 2026, a Purchaser exercised 2,099,844 shares of Pre-Funded Warrants on a cashless basis, resulting in 80,266,823 shares of Pre-Funded Warrants outstanding as of March 31, 2026.
Service Warrants
In May 2025, in conjunction with a service agreement, the Company issued warrants to purchase 300,000 shares of the Company's Class A common stock, $0.0001 par value per share ("Service Warrants") to a third party vendor. The value of the Service Warrants was expensed immediately as a general and administrative cost. The Service Warrants are exercisable for a period of five years from the issuance date, at an exercise price per share equal to $0.70. The Service Warrants are classified as equity on the Company's condensed consolidated balance sheet. The Service Warrants include certain rights upon “fundamental transactions,” as described in the warrant agreement, including the right of the holders thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Class A common stock in such fundamental transaction in the amount of the Black Scholes value of the unexercised portion of the applicable warrants on the date of the consummation of the fundamental transactions. In February 2026, the service agreement was terminated, however the issued Service Warrants remain outstanding with terms unchanged. As of March 31, 2026, all of the Service Warrants were outstanding.
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Letter Agreement
In May 2025, the Company entered into a letter agreement (the “Letter Agreement”) with an existing institutional investor (the “Equity Investor”) pursuant to which the Equity Investor exercised for cash all outstanding Series B and Series C warrants, which had been previously issued in July 2024 and October 2024, respectively, at a reduced exercise price of $0.65 per share, for net proceeds of $3.9 million in consideration for the Company’s issuance of a new Series D common stock warrant (the “Series D Warrants”) to purchase an aggregate of 13,160,172 shares of Class A common stock, $0.0001 par value per share (the “Class A Common Stock”). Modification accounting was only performed on the warrants that were actually exercised pursuant to the Letter Agreement as it represented a short-term inducement. On the modification date, the Company remeasured the warrants at the reduced exercise price and recognized a $1.3 million inducement charge in the condensed consolidated statements of changes in stockholders' equity.
The Series D Warrants were exercisable immediately following stockholder approval, and will expire five years from the date of stockholder approval and have an exercise price of $0.65 per share. The Series D Warrants include certain rights upon “fundamental transactions,” as described in the Series D Warrant agreement, including the right of the holders thereof to receive from the Company or a successor entity the same type or form of consideration (and in the same proportion) that is being offered and paid to the holders of Class A common stock in such fundamental transaction in the amount of the Black Scholes value of the unexercised portion of the applicable Series D Warrants on the date of the consummation of the fundamental transactions. The Series D Warrant is classified as equity on the Company's condensed consolidated balance sheet. In October 2025, pursuant to the Letter Agreement, the equity investor exercised the Series D Warrants to purchase 6,967,150 shares of Class A Common Stock for cash proceeds of $4.5 million. As of March 31, 2026, there were 6,193,022 Series D Warrants outstanding.
Pursuant to the terms of the Letter Agreement, in the event that the exercise of the Series B and Series C warrants would have otherwise caused a holder to exceed the beneficial ownership limitations set forth in the existing warrant, the Company issued the number of shares that would not cause a holder to exceed such beneficial ownership limitation and agreed to hold such balance of shares of Class A Common Stock in abeyance. Accordingly, an aggregate of 1,161,000 shares of Class A Common Stock from the exercise of the Series B and Series C warrants were held in abeyance (the “Abeyance Shares”) with such Abeyance Shares evidenced through the holder’s existing warrants and which are deemed to be prepaid. The Abeyance Shares were to be held until notice is received by the holder that the balance of the shares of Class A Common Stock may be issued in compliance with such beneficial ownership limitations and may be exercised pursuant to a notice of exercise from the holder. The Abeyance Shares were subsequently released and considered shares of Class A Common Stock in July 2025.
Loan and Security Agreement Warrants
In August 2022, in conjunction with a loan and security agreement, the Company issued warrants to purchase 76,336 shares of the Company's Class A common stock. The warrants are exercisable for a period of five years from the grant date, as may be adjusted for certain anti-dilution adjustments, dividends, stock splits, and reverse stock splits, at an exercise price per share equal to $11.79, which may be net share settled at the option of the holder. The warrants are classified as equity on the Company’s condensed consolidated balance sheet. In September 2025, the Company modified the exercise price of the warrants to $0.50 in consideration for a deferral of a principal repayment due in October 2025. There were no other changes to the terms of the warrant agreement. On the modification date, the Company remeasured the warrants at the reduced exercise price and recognized an additional $15 thousand as interest expense in the condensed consolidated statements of operations. As of March 31, 2026, there were 76,336 warrants outstanding.
Warrant activity
A summary of warrant activity during the periods indicated is as follows:
Number of Warrants
Weighted Average Exercise Price
WeightedAverageRemaining Contractual Term (in years)
Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2025
131,569,362
0.49
4.78
113,345
Granted
Exercised
Outstanding at March 31, 2026
4.55
32,430
21
10. Stockholders’ Equity
As of March 31, 2026, Rani Holdings held approximately 80% of the Class A Units of Rani LLC, and approximately 20% of the outstanding Class A Units of Rani LLC are held by the Continuing LLC Owners. From the date of the Organizational Transactions to March 31, 2026, 5,378,539 Paired Interests and 362,821 non-corresponding Class A Units of Rani LLC were exchanged for an equal number of shares of the Company's Class A common stock. For each of the three months ended March 31, 2026 and 2025, none of the Continuing LLC Owners executed an exchange of any Paired Interests and none of non-corresponding Class A Units of Rani LLC, for either period. In accordance with the Amended Rani LLC Agreement, Rani LLC also issues a corresponding Class A Unit to Rani Holdings for each share of common stock issued by Rani Holdings. This increases Rani Holdings’ ownership in Rani LLC.
11. Stock-Based Compensation
Stock Options
A summary of stock option activity during the periods indicated is as follows:
Number of Stock Option Awards
12,867,236
4.03
8.19
5,067
55,601
1.37
Forfeited
(192,512
4.33
12,730,325
4.01
7.93
2,427
Exercisable at March 31, 2026
7,773,044
5.39
7.49
566
Nonvested at March 31, 2026
4,957,281
1.83
8.61
1,861
As of March 31, 2026, there was $7.5 million of unrecognized stock-based compensation expense related to stock options which is expected to be recognized over a weighted-average period of approximately 2.4 years.
The Company uses the Black-Scholes option pricing model to estimate the fair value of each stock option award on the date of grant. The assumptions and estimates are as follows:
The following table sets forth the weighted average assumptions used in estimating the fair value of stock option awards on the grant date:
Expected volatility
112.6
Risk-free interest rate
3.62
Expected term (in years)
6.1
Expected dividend yield
22
Restricted Stock Units
A summary of restricted stock unit (“RSU”) activity during the periods indicated is as follows:
Number of Restricted Stock Units
Weighted Average Grant-Date Fair Value per Share
348,702
6.94
Vested
(123,389
9.69
225,313
5.44
As of March 31, 2026, there was $1.2 million of unrecognized stock-based compensation expense related to RSUs which is expected to be recognized over a weighted-average period of approximately 1.0 years. The total fair value of RSUs vested was $0.1 million for the three months ended March 31, 2026.
Stock-Based Compensation Expense
The following table summarizes the components of stock-based compensation expense resulting from the grant of stock options, RSUs, RSAs, and the ESPP, recorded in the Company’s condensed consolidated statement of operations and comprehensive loss (in thousands):
733
1,137
1,351
2,788
Total stock-based compensation
12. Commitments and Contingencies
Leases
The Company enters into lease arrangements for office and laboratory facilities under operating leases accounted for in accordance with ASC 842 "Leases" ("ASC 842"). The Company’s future minimum lease payments under operating leases are presented within the lease footnote (Note 8).
The Company’s lease liabilities represent a contractual commitment to make future payments over the lease term. As of March 31, 2026, the Company had no additional significant lease commitments outside of those recognized as operating lease liabilities on the condensed consolidated balance sheets.
In the ordinary course of business, the Company may be subject to legal proceedings, claims and litigation as the Company operates in an industry susceptible to patent legal claims. The Company accounts for estimated losses with respect to legal proceedings and claims when such losses are probable and estimable. Legal costs associated with these matters are expensed when incurred.
13. Income Taxes
The Company’s effective income tax rate was zero for each of the three months ended March 31, 2026 and 2025. As a result of the Company’s history of operating losses, the Company believes that recognition of the deferred tax assets arising from such future income tax benefits is currently not likely to be realized and, accordingly, has recognized a full valuation allowance on its deferred tax assets. There were no material changes to uncertain tax positions for the three months ended March 31, 2026 and 2025, and the Company does not anticipate material changes within the next twelve months.
23
14. Net Loss Per Share
The following table sets forth the computation of basic and diluted net loss per Class A common share attributable to Rani Holdings (in thousands, except per share data):
Numerator:
Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc.
Denominator:
Weighted average Class A common shares outstanding—basic and diluted*
Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc.—basic and diluted
* The pre-funded warrants (Note 9) are considered outstanding shares in the basic earnings per share calculation given their nominal exercise price (as of the beginning of the period or the date of the grant, whichever is earlier).
The following table shows the total outstanding securities considered anti-dilutive and therefore excluded from the computation of diluted net loss per Class A common share attributable to Rani Holdings (in thousands):
As of March 31,
Paired Interests
Stock options
12,730
11,382
Warrants
131,569
6,656
Non-corresponding Class A Units
1,124
1,230
Restricted stock units
225
653
Shares issuable pursuant to the ESPP
53
62
169,671
43,955
Shares of Class B Common Stock do not share in the Company’s earnings and are not participating securities. Accordingly, separate presentation of loss per share of Class B common stock under the two-class method has not been provided. The outstanding shares of Class B Common Stock were determined to be anti-dilutive for the three months ended March 31, 2026. Therefore, they are not included in the computation of net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc.
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
MANAGEMENT’S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
You should read the following management's discussion and analysis of our financial condition and results of operations together with our unaudited condensed consolidated financial statements and the related notes and other information included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2025, as filed with the Securities and Exchange Commission ("SEC"). Some of the information contained in this discussion and analysis or set forth elsewhere in this document, includes forward looking statements that involve risks, uncertainties, and assumptions. Our actual results could differ materially from those discussed in or implied by these forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors” in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2025. Please also see the section titled “Forward Looking Statements.”
The following discussion contains references to the three months ended March 31, 2026 and 2025, respectively, which represents the condensed consolidated financial results of Rani Therapeutics Holdings, Inc. (the "Company") and its subsidiary, Rani Therapeutics, LLC (“Rani LLC”) for the three months ended March 31, 2026 and 2025, respectively. Unless we state otherwise or the context otherwise requires, the terms “we,” “us,” “our,” and “Rani” and similar references refer to the Company and its consolidated subsidiary.
Overview
We are a clinical-stage biotherapeutics company focusing on advancing technologies to enable the administration of biologics and drugs orally, to provide patients, physicians, and healthcare systems with a convenient alternative to painful injections. Our technology comprises a drug-agnostic oral delivery platform, the RaniPill capsule, which is designed to deliver a wide variety of drug substances, including antibodies, proteins, peptides, and oligonucleotides. We are advancing a portfolio of oral therapeutics using the RaniPill capsule and we are actively pursuing partnering the technology with third party biopharmaceutical companies for the oral delivery of their biologics and drugs.
Our technology comprises a drug-agnostic oral delivery platform, the RaniPill capsule, which is designed to deliver a wide variety of drug substances, including antibodies, proteins, peptides, and oligonucleotides. We have two configurations of the platform – the RaniPill GO and the RaniPill HC. The RaniPill GO is designed to deliver up to a 3 mg dose of drug in microtablet form with high bioavailability. We have completed three Phase 1 clinical trials using the RaniPill GO. We are also developing a high-capacity version of the RaniPill capsule known as the RaniPill HC, which is intended to enable delivery of drug payloads up to 200µL in liquid form with high bioavailability. We have tested preclinically the RaniPill HC with multiple therapeutics, including multiple different antibodies and peptides. In December 2025, we initiated a Phase 1 clinical trial with the RT-114, a RaniPill HC capsule, containing a bispecific GLP-1/GLP-2 receptor agonist (PG-102) in collaboration with ProGen.
We believe the RaniPill capsule technology could enable us to deliver most biologics currently on the market with convenient, oral dosing.
We do not have any products approved for sale, and we have not yet generated any revenue from sales of a commercial product. Our ability to generate product revenue sufficient to achieve profitability, if ever, will depend on the successful development of the RaniPill capsule, which we expect will take a number of years. Given our stage of development, we have not yet established a commercial organization or distribution capabilities, and we have no experience as a company in marketing drugs or a drug-delivery platform. When, and if, any of our product candidates are approved for commercialization, we plan to develop a commercialization infrastructure or engage commercial sales organizations or distributors for those products in the United States, Europe, Asia, and potentially in certain other key markets. We may also rely on partnerships to provide commercialization infrastructure, including sales, marketing, and commercial distribution.
As is common with biotechnology companies, we rely on third-party suppliers for the supply of raw materials and active pharmaceutical ingredients ("APIs") and drug substances required for the production of our product candidates. In addition, we work with third parties to manufacture and develop biologics and drugs for inclusion in the RaniPill capsule. Design work, prototyping and pilot manufacturing are performed in house, and we have utilized third-party engineering firms to assist with the design of manufacturing lines that support our supply of the RaniPill capsule. Certain of our suppliers of components and materials are single source suppliers. We believe our vertically integrated manufacturing strategy will offer significant advantages, including rapid product iteration, control over our product quality and the ability to rapidly scale our manufacturing capacity. This capability also allows us to develop future generations of products while maintaining the confidentiality of our intellectual property. Our vertically integrated manufacturing strategy will result in material future capital outlays and fixed costs related to constructing and operating a manufacturing facility. We have invested and plan to continue to invest in automated manufacturing production lines for the RaniPill capsule. Those assets deemed to have an alternative future use have been capitalized as property and equipment while those projects related to our assets determined to not have an alternative future use have been expensed as research and development costs.
Clinical Update
In December 2025, we initiated a Phase 1 clinical trial with RT-114, a RaniPill HC capsule containing a bispecific GLP-1/GLP-2 receptor agonist (PG-102) in collaboration with ProGen. The Phase 1 trial will evaluate the safety, tolerability, bioavailability, and pharmacokinetics / pharmacodynamics of single and multiple doses of RT-114 for the treatment of obesity.
The single-center Phase 1 study of RT-114 is being conducted in Australia. The single dose portion of the study is underway and will evaluate the safety, tolerability and bioavailability of RT-114 administered in up to 30 healthy human participants. This part of the trial consists of two cohorts, with one cohort evaluating RT-114 containing 12 mg of PG-102, administered orally as a RaniPill capsule. The second cohort, as the control group, will receive 12 mg of PG-102 via subcutaneous injection.
The Phase 1 trial of RT-114 is ongoing as of the date of this filing, and we expect to provide an update following completion of the study in 2027.
Relationship with InCube Labs, LLC
See Note 7 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Results of Operations
The results of operations presented below should be reviewed in conjunction with the condensed consolidated financial statements and notes included elsewhere in this Quarterly Report on Form 10-Q. For information with respect to recent accounting pronouncements that are of significance or potential significance to us, see “Note 2. Summary of Significant Accounting Policies” in the “Notes to the Unaudited Condensed Consolidated Financial Statements” contained in Part I, Item 1 of this Quarterly Report on Form 10-Q.
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Comparison of the three months ended March 31, 2026 and 2025
The following table summarizes our results of operations (in thousands):
Change
893.0
(21.4
(13.0
(17.5
(30.6
89.0
(90.7
(37.1
(82.1
(3.2
*Not meaningful
Contract Revenue
Contract revenue of $1.7 million for the three months ended March 31, 2026, was attributable to Chugai Collaboration and License Agreement entered into in October 2025. There was $0.2 million of contract revenue from evaluation services performed for Chugai for the same period in 2025.
Research and Development Expenses
The following table reflects our research and development costs by nature of expense (in thousands):
Payroll, stock-based compensation and related benefits
3,576
4,663
Facilities, materials and supplies
1,212
1,415
Third-party services
367
476
The decrease of $1.4 million in research and development expenses in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributed to lower compensation costs of $1.1 million, $0.2 million reduction in facilities, materials and supplies and $0.1 million decrease in third-party services.
General and Administrative Expenses
The decrease of $0.7 million in general and administrative expenses in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributed to lower compensation costs of $1.2 million and $0.1 million reduction in facilities, materials and supplies, offset by an increase in third-party services of $0.6 million.
Other Income (Expense), Net
The increase of $1.1 million in other income (expense), net, in the three months ended March 31, 2026, as compared to the same period in 2025, was primarily attributed to an increase in interest income of $0.2 million from our investment in marketable securities and a decrease in interest expense of $0.9 million.
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Liquidity and Capital Resources
We have incurred recurring losses and negative cash flows from operations since inception, including net loss of $8.0 million for the three months ended March 31, 2026. As of March 31, 2026, we had an accumulated deficit of $139.6 million and for three months ended March 31, 2026, had negative cash flows from operations of $6.5 million. As of March 31, 2026, our cash, cash equivalents and marketable securities totaled $43.4 million. We expect to continue to incur losses for the foreseeable future, and our net losses may fluctuate significantly from period to period, depending on the timing of and expenditures on our planned research and development activities.
Based on our current operating plans and assumptions, we believe that our cash, cash equivalents, and marketable securities will be sufficient to fund our operations through at least twelve months from the date that our condensed consolidated financial statements for the three months ended March 31, 2026 are issued.
Future Funding Requirements
We will need to raise substantial additional funds in the future in order to complete the development of the RaniPill platform, to complete the clinical development of our product candidates and seek regulatory approval thereof, to expand our manufacturing capabilities, to further develop the RaniPill technology and to commercialize any of our product candidates.
To date, we have not generated any commercial product revenue. We do not expect to generate any commercial product revenue unless and until we obtain regulatory approval and commercialize any of our commercial product candidates, and we do not know when, or if at all, that will occur. We will continue to require additional capital to develop our product candidates and fund operations for the foreseeable future. Our primary uses of cash are to fund our operations, which consist primarily of research and development expenses related to our programs, manufacturing automation and scaleup, and general and administrative expenses. We expect our expenses to continue to increase in connection with our ongoing activities as we continue to advance the RaniPill technology and our product candidates.
We may seek to raise capital through equity offerings or debt financings, which may include collaboration agreements, or other arrangements with other companies, or through other sources of financing. Adequate additional funding may not be available to us on acceptable terms or at all. Our failure to raise capital as and when needed could have a negative impact on our consolidated financial condition and our ability to pursue our business strategies. We anticipate that we will need to raise substantial additional capital, the requirements of which will depend on many factors, including:
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If we raise additional capital through debt financing, we may be subject to covenants that restrict our operations including limitations on our ability to incur liens or additional debt, pay dividends, make certain investments, and engage in certain merger, consolidation, or asset sale transactions. Any debt financing or additional equity that we raise may contain terms that are not favorable to us. If we raise funds through collaborations, we may have to relinquish valuable rights to our technologies, future revenue streams, research programs, product candidates or grant licenses on terms that may not be favorable to us. If we are unable to raise additional funds when needed, we may be required to delay, reduce, or terminate some or all of our development programs and clinical trials or delay investments in our manufacturing scale-up and automation. In addition, our ability to raise additional capital may be adversely impacted by potential worsening global economic conditions and the recent disruptions to and volatility in the credit and financial markets in the U.S. and worldwide resulting from the effects of ongoing military conflicts, inflationary pressures, potential future bank failures, or otherwise. In this regard, the ongoing Russia-Ukraine military conflict and the ongoing military conflict involving the U.S., Israel and Iran have created extreme volatility in the global credit and financial markets and have had and may continue to have further global economic consequences, including continued disruptions of the global supply chain and energy markets, which could continue to drive inflationary pressures and increase global recession risk.
The following table summarizes our cash, cash equivalents and marketable securities:
Total cash, cash equivalents and marketable securities
43,403
49,709
Cash Flows
The following table summarizes our cash flows for the periods presented (in thousands):
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Operating Activities
Net cash used in operating activities for the three months ended March 31, 2026 was $6.5 million, which was primarily attributable to a net loss of $8.0 million and net accretion and amortization of investments in marketable securities of $0.2 million, partially offset by stock-based compensation expense of $2.1 million, depreciation and amortization expense of $0.2 million and, non-cash lease expense of $0.5 million. Additionally, there was an increase in accounts payable of $0.5 million, an increase in accrued expenses and other current liabilities of $0.7 million, a decrease in deferred revenue of $1.7 million, an increase in prepaid expenses and other current assets of $0.1 million, and a decrease in operating lease liabilities of $0.5 million for the three months ended March 31, 2026.
Net cash used in operating activities for the three months ended March 31, 2025 was $8.1 million, which was primarily attributable to a net loss of $12.7 million and net accretion and amortization of investments in marketable securities of $0.2 million, partially offset by the stock-based compensation expense of $3.9 million and depreciation and amortization expense of $0.3 million. Additionally, there was an increase in accounts receivable of $0.6 million, accounts payable of $0.2 million, accrued expenses and other current liabilities of $0.2 million, and a decrease in contract assets of $0.4 million and prepaid expenses and other current assets of $0.3 million for the three months ended March 31, 2025.
Investing Activities
For the three months ended March 31, 2026, net cash used in investing activities was $2.5 million, which primarily consisted of $21.0 million in proceeds from maturities of marketable securities, partially offset by $23.5 million in purchases of marketable securities.
For the three months ended March 31, 2025, net cash provided by investing activities was $18.2 million, which primarily consisted of $21.0 million in proceeds from maturities of marketable securities, partially offset by $2.7 million in purchases of marketable securities and $0.1 million in purchases of property and equipment.
Financing Activities
For the three months ended March 31, 2026, net cash used in financing activities was de minimis.
For the three months ended March 31, 2025, net cash used in financing activities was $3.7 million, which primarily consisted of repayment of debt of $3.8 million.
Contractual Obligations and Other Commitments
As of March 31, 2026, there have been no material changes to our contractual obligations and other commitments compared to those disclosed in our Annual Report on Form 10-K.
The following table summarizes our contractual obligations and commitments as of March 31, 2026 (in thousands):
Short-term
Long-term
Operating leases (1)
(1) Represents operating lease payments. See Note 8 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
Critical Accounting Estimates
We prepare our condensed consolidated financial statements in accordance with U.S. generally accepted accounting principles, which require our management to make estimates that affect the reported amounts of assets, liabilities and disclosures of contingent assets and liabilities at the balance sheet dates, as well as the reported amounts of revenues and expenses during the reporting periods. We base our estimates on our own historical experience and other assumptions that we believe are reasonable after taking account of our circumstances and expectations for the future based on available information. To the extent that there are material differences between these estimates and actual results, our financial condition or results of operations would be affected.
We consider an accounting estimate to be critical if: (i) the accounting estimate requires us to make assumptions about matters that were highly uncertain at the time the accounting estimate was made, and (ii) changes in the estimate that are reasonably
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likely to occur from period to period or use of different estimates that we reasonably could have used in the current period, would have a material impact on our financial condition or results of operations. There are items within our condensed consolidated financial statements that require estimation but are not deemed critical, as defined above.
Recently Adopted Accounting Standards
See Note 2 to the condensed consolidated financial statements contained in Part I, Item 1 of this Quarterly Report on Form 10-Q for additional information.
JOBS Act Accounting Election
We are an “emerging growth company” within the meaning of the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”). The JOBS Act permits an emerging growth company like us to take advantage of an extended transition period to comply with new or revised accounting standards applicable to public companies. We are electing to use this extended transition period and we will therefore comply with new or revised accounting standards on the earlier of (i) when they apply to private companies; or (ii) when we lose our emerging growth company status. As a result, our financial statements may not be comparable with companies that comply with public company effective dates for accounting standards. We also rely on other exemptions provided by the JOBS Act, including not being required to comply with the auditor attestation requirements of Section 404(b) of the Sarbanes-Oxley Act unless we cease to be an emerging growth company.
We will remain an emerging growth company until the earliest of (1) December 31, 2026 (the last day of the fiscal year following the fifth anniversary of the closing of our IPO), (2) the last day of the fiscal year in which we have total annual gross revenue of at least $1.235 billion, (3) the last day of the fiscal year in which we are deemed to be a “large accelerated filer” as defined in Rule 12b-2 under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which would occur if the market value of our Class A common stock held by non-affiliates exceeded $700.0 million as of the last business day of the second fiscal quarter of such year or (4) the date on which we have issued more than $1.0 billion in non-convertible debt securities during the prior three-year period.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information required under this item.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, we evaluated the effectiveness of our disclosure controls and procedures pursuant to Rule 13a-15(e) and 15(d)-15(e) under the Exchange Act as of the end of the period covered by this Quarterly Report on Form 10-Q. Our disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including the Chief Executive Officer and the Chief Financial Officer, to allow timely decisions regarding required disclosures. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objective and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based upon their evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, solely as a result of the material weakness previously identified by management and described in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, our disclosure controls and procedures were not effective as of March 31, 2026.
Previously Identified Material Weakness
As described in Part II, Item 9A, Controls and Procedures, of our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, we previously identified a material weakness related to the design and implementation effectiveness of the control related to the accounting for certain significant and complex or unusual transactions. While the material weakness did not result in a misstatement of our previously filed annual or interim consolidated financial statements, this material weakness, until remediated, could result in a material misstatement to one or more accounts or disclosures that would not be prevented or detected on a timely basis.
Remediation
During the three months ended March 31, 2026, we continued to implement remediation measures designed to strengthen our internal control over financial reporting and remediate previously identified material weakness. These measures include revising policies and procedures and implementing additional training to enhance our risk assessment and review processes related to significant and complex transactions, particularly in evolving and growing areas of our business.
These remediation efforts are subject to ongoing senior management review, as well as oversight by the Audit Committee of our Board of Directors. The material weakness will not be considered remediated until the relevant control has been designed and implemented effectively for a sufficient period of time and management has concluded, through testing, that the control is effective. We will continue to monitor the effectiveness of our remediation efforts and make additional improvements as management deems necessary.
Changes in Internal Control over Financial Reporting
Except as noted above, there were no changes in our internal control over financial reporting, as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act, during the three months ended March 31, 2026 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.
Inherent Limitations on Effectiveness of Controls
Our management, including our Chief Executive Officer and Chief Financial Officer, believes that our disclosure controls and procedures over financial reporting are designed to provide reasonable assurance of achieving their objectives and are effective at the reasonable assurance level. However, our management does not expect that our disclosure controls and procedures will prevent or detect all errors and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls also is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost–effective control system, misstatements due to error or fraud may occur and not be detected.
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PART II—OTHER INFORMATION
Item 1. Legal Proceedings
From time to time, we may become involved in litigation or other legal proceedings. We are not currently a party to any litigation or legal proceedings that, in the opinion of our management, are likely to have a material adverse effect on our business. Regardless of outcome, litigation can have an adverse impact on us because of defense and settlement costs, diversion of management resources, and other factors.
Item 1A. Risk Factors
Other than described below, management believes that there have been no significant changes to the risk factors associated with our business as compared to those disclosed in Part 1, Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2025.
We currently do not meet, and may not regain compliance with, the listing standards of the Nasdaq Stock Market LLC, or Nasdaq, and as a result our Class A common stock may be delisted. Delisting could adversely affect the liquidity of our Class A common stock and the market price of our Class A common stock could decrease, and our ability to obtain sufficient additional capital to fund our operations and to continue to operate as a going concern would be substantially impaired.
Our Class A common stock is currently listed on the Nasdaq Global Market, which has minimum requirements that a company must meet in order to remain listed. These requirements include maintaining a minimum closing bid price of $1.00 per share, which closing bid price cannot fall below $1.00 per share for a period of more than 30 consecutive trading days, or the Bid Price Requirement. On May 11, 2026, we received a deficiency notice, or the Notice, from the Listing Qualifications Staff, or the Staff, of Nasdaq notifying us that, for the last 30 consecutive business days, the bid price of our Class A common stock had closed below $1.00 per share, thereby failing to satisfy the Bid Price Requirement set forth in the continued listing requirements of Nasdaq Listing Rule 5450(a)(1). The Notice has no immediate effect on the listing of our Class A common stock on the Nasdaq Global Market. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), we have 180 calendar days, or until November 9, 2026, to regain compliance with the Bid Price Requirement by having shares of our Class A common stock maintain a minimum closing bid price of at least $1.00 per share for a minimum of 10 consecutive trading days. In the event we do not regain compliance with the Bid Price Requirement prior to the expiration of the compliance period, our Class A common stock may be subject to a delisting action by Nasdaq.
Alternatively, we may be eligible for an additional 180-calendar day compliance period if we elect to transfer to the Nasdaq Capital Market to take advantage of the additional compliance period offered on that market. To qualify, we will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards, with the exception of the Bid Price Requirement, and will need to provide written notice of our intention to cure the deficiency during the second compliance period by effecting a reverse stock split if necessary. If we do not regain compliance within the compliance period(s), including any extensions that may be granted by Nasdaq, then the Class A common stock will be subject to delisting. We intend to monitor the closing bid price of our Class A common stock and consider our available options to resolve the noncompliance with the Bid Price Requirement. There can be no assurance that we will be able to regain compliance with the Nasdaq Global Market’s continued listing requirements or that Nasdaq will grant us a further extension of time to regain compliance, if applicable.
A reverse stock split may allow us to meet the Bid Price Requirement, but we cannot assure you that a reverse stock split will be approved by our stockholders or that any reverse stock split, if implemented, will be sufficient to enable us to maintain our Nasdaq listing. Additionally, if a reverse stock split is implemented, there can be no assurance that the market price per post-split share of our Class A common stock following the reverse stock split will remain unchanged or will increase in proportion to the reduction in the number of pre-split shares of our Class A common stock outstanding before the reverse stock split. The liquidity of the shares of our Class A common stock may be affected adversely by any reverse stock split given the reduced number of shares of our Class A common stock that will be outstanding following such reverse stock split. Furthermore, following any reverse stock split, the resulting market price of our Class A common stock may not attract new investors and may not satisfy the investing requirements of those investors.
In the event that our Class A common stock is delisted from Nasdaq as a result of our failure to regain compliance with the Bid Price Requirement, as a result of Nasdaq not granting us an extension or the panel not granting us a favorable decision or due to our failure to continue to comply with any other requirement for continued listing on Nasdaq, trading of our Class A common stock could be conducted in the over-the-counter market or on an electronic bulletin board established for unlisted securities such as the Pink Sheets or the OTC Bulletin Board, but there can be no assurance that our Class A common stock will be eligible for trading on such alternative exchange or market.
Additionally, if our Class A common stock is delisted from Nasdaq, the liquidity of our Class A common stock would be adversely affected, the market price of our Class A common stock could decrease, our ability to obtain sufficient additional capital to fund our operations and to continue to operate as a going concern would be substantially impaired and transactions in our Class A common stock could lose federal preemption of state securities laws. Furthermore, there could also be a further reduction in our coverage by securities analysts and the news media and broker-dealers may be deterred from making a market in or otherwise seeking or generating interest in our Class A common stock, which could cause the price of our Class A common stock to decline further. Moreover, delisting may also negatively affect our collaborators’, vendors’, suppliers’ and employees’ confidence in us and employee morale.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
In January 2026, we issued 2,099,844 shares of our Class A common stock to funds affiliated with Avenue Venture Opportunities Fund, L.P (the “Lender”) upon exercise by the Lender of the Pre-Funded Warrants issued in the Private Placement in October 2025. The Pre-Funded Warrants were exercised on a cashless basis in accordance with their terms, resulting in no cash proceeds to us. The issuance was exempt from registration under Section 3(a)(9) of the Securities Act of 1933.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
During the three months ended March 31, 2026, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as those terms are defined in Item 408 of Regulation S-K.
Item 6. Exhibits
The following is a list of all exhibits filed or furnished as part of this report:
Exhibit
Number
Description
3.1
Amended and Restated Certificate of Incorporation of the Registrant as currently in effect (incorporated by reference to Exhibit 3.1 to the Registrant’s Current Report on Form 8-K dated December 31, 2025, filed with the SEC on January 2, 2026).
3.2
Amended and Restated Bylaws of the Registrant as currently in effect (incorporated by reference to Exhibit 3.2 to the Registrant’s Current Report on Form 8-K dated December 31, 2025, filed with the SEC on January 2, 2026).
10.1*
Rani Therapeutics Holdings, Inc. Non-Employee Director Compensation Policy.
10.2*
First Amendment to ProGen Collaboration Agreement dated January 13, 2026.
31.1*
Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2*
Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1*†
Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
101.INS
Inline XBRL Instance Document – the instance document does not appear in the Interactive Data File because XBRL tags are embedded within the Inline XBRL document.
101.SCH
Inline XBRL Taxonomy Extension Schema With Embedded Linkbase Documents
Cover Page Interactive Data File (embedded within the Inline XBRL document)
*
Filed herewith.
†
The certifications attached as Exhibit 32.1 which accompanies this Quarterly Report on Form 10-Q, are not deemed filed with the Securities and Exchange Commission and are not to be incorporated by reference into any filing of the Registrant under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of this Quarterly Report on Form 10-Q), irrespective of any general incorporation language contained in such filing.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
Rani Therapeutics Holdings, Inc.
Date: May 15, 2026
By:
/s/ Talat Imran
Talat Imran
Chief Executive Officer
(Principal Executive Officer)
/s/ Svai Sanford
Svai Sanford
Chief Financial Officer
(Principal Financial and Accounting Officer)