Quarterly Report for Quarter Ending March 31, 2026 (Form 10-Q)

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.

Comparison of the three months ended March 31, 2026 and 2025

The following table summarizes our results of operations (in thousands):

*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):

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.

Liquidity and Capital Resources

Overview

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:

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:

Cash Flows

The following table summarizes our cash flows for the periods presented (in thousands):

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):

(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

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.

Other 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.