Rani Therapeutics Holdings, Inc. 10-K

Item 8. Financial Statements and Supplementary Data Index to Consolidated Financial Statements Report of CBIZ CPAs P.C., Independent Registered Public Accounting Firm (PCAOB ID: 199 ) 110 Report of Marcum LLP, Independent Registered Public Accounting Firm (PCAOB ID: 688 ) 111 Consolidated Balance Sheets 112 Consolidated Statements of Operations 113 Consolidated Statements of Comprehensive Loss 114 Consolidated Statements of Changes in Stockholders’ Equity 115 Consolidated Statements of Cash Flows 117 Notes to the Consolidated Financial Statements 118 109 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors of Rani Therapeutics Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Rani Therapeutics Holdings, Inc. (the “Company”) as of December 31, 2025, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the year ended December 31, 2025, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and the results of its operations and its cash flows for the year ended December 31, 2025, in conformity with accounting principles generally accepted in the United States of America. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ CBIZ CPAS P.C. CBIZ CPAs P.C. We have served as the Company’s auditor since 2024 (such date takes into account the acquisition of the attest business of Marcum LLP by CBIZ CPAs P.C. effective November 1, 2024). San Francisco, California March 26, 2026 110 Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors of Rani Therapeutics Holdings, Inc. Opinion on the Financial Statements We have audited the accompanying consolidated balance sheet of Rani Therapeutics Holdings, Inc. (the “Company”) as of December 31, 2024, the related consolidated statements of operations, comprehensive loss, changes in stockholders’ equity and cash flows for the year ended December 31, 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2024, and the results of its operations and its cash flows for the year ended December 31, 2024, in conformity with accounting principles generally accepted in the United States of America. Explanatory Paragraph – Going Concern The accompanying financial statements have been prepared assuming that the Company will continue as a going concern. As more fully described in Note 1, the Company has incurred recurring losses from operations, negative cash flows from operating activities, and needs to raise additional funds to meet its obligations and sustain its operations. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for Opinion These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audit provides a reasonable basis for our opinion. /s/ Marcum LLP Marcum LLP We have served as the Company’s auditor from 2024 through 2025 . San Francisco, California March 31, 2025 111 RANI THERAPEUTICS HOLDINGS, INC. CONSOLIDATED BALANCE SHEETS (in thousands, except par value) December 31, 2025 2024 Assets Current assets: Cash and cash equivalents $ 18,618 $ 3,762 Accounts receivable 2,042 — Contract asset — 428 Marketable securities 31,091 23,877 Prepaid expenses and other current assets 1,570 1,677 Total current assets 53,321 29,744 Property and equipment, net 736 1,548 Operating lease right-of-use asset 4,318 5,096 Other assets 246 246 Total assets $ 58,621 $ 36,634 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 309 $ 1,359 Accrued expenses and other current liabilities 3,943 2,073 Current portion of deferred revenue 6,831 — Current portion of long-term debt — 15,000 Current portion of operating lease liability 1,586 1,459 Total current liabilities 12,669 19,891 Long-term deferred revenue 1,708 — Long-term debt, less current portion — 9,613 Operating lease liability, less current portion 2,732 3,637 Total liabilities 17,109 33,141 Commitments and contingencies (Note 12) Stockholders' equity: Preferred stock, $ 0.0001 par value - 20,000 shares authorized; none issued and outstanding as of December 31, 2025 and December 31, 2024 — — Class A common stock, $ 0.0001 par value - 800,000 shares authorized; 97,622 and 33,430 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 9 3 Class B common stock, $ 0.0001 par value - 40,000 shares authorized; 23,970 and 23,972 issued and outstanding as of December 31, 2025 and December 31, 2024, respectively 2 2 Class C common stock, $ 0.0001 par value - 20,000 shares authorized; none issued and outstanding as of December 31, 2025 and December 31, 2024 — — Additional paid-in capital 165,578 104,889 Accumulated other comprehensive gain 1 5 Accumulated deficit ( 132,580 ) ( 102,907 ) Total stockholders' equity attributable to Rani Therapeutics Holdings, Inc. 33,010 1,992 Non-controlling interest 8,502 1,501 Total stockholders' equity 41,512 3,493 Total liabilities and stockholders' equity $ 58,621 $ 36,634 The accompanying notes are an integral part of these consolidated financial statements. 112 RANI THERAPEUTICS HOLDINGS, INC. Consolidated Statements of Operations (in thousands, except per share amounts) Year Ended December 31, 2025 2024 Contract revenue $ 1,633 $ 1,028 Operating expenses Research and development 20,205 26,682 General and administrative 19,738 23,946 Impairment loss — 3,714 Total operating expenses $ 39,943 $ 54,342 Loss from operations ( 38,310 ) ( 53,314 ) Other income (expense), net Interest income and other, net 827 1,763 Interest expense and other, net ( 2,891 ) ( 5,033 ) Loss on extinguishment of debt ( 576 ) — Net loss $ ( 40,950 ) $ ( 56,584 ) Net loss attributable to non-controlling interest ( 11,277 ) ( 26,566 ) Net loss attributable to Rani Therapeutics Holdings, Inc. $ ( 29,673 ) $ ( 30,018 ) Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc., basic and diluted $ ( 0.45 ) $ ( 1.05 ) Weighted-average Class A common shares outstanding—basic and diluted 66,138 28,476 The accompanying notes are an integral part of these consolidated financial statements. 113 RANI THERAPEUTICS HOLDINGS, INC. Consolidated Statements of Comprehensive Loss (in thousands) Year Ended December 31, 2025 2024 Net loss $ ( 40,950 ) $ ( 56,584 ) Other comprehensive loss Net unrealized (loss) gain on marketable securities ( 6 ) 33 Comprehensive loss $ ( 40,956 ) $ ( 56,551 ) Comprehensive loss attributable to non-controlling interest ( 11,279 ) ( 26,550 ) Comprehensive loss attributable to Rani Therapeutics Holdings, Inc. $ ( 29,677 ) $ ( 30,001 ) The accompanying notes are an integral part of these consolidated financial statements. 114 RANI THERAPEUTICS HOLDINGS, INC. Consolidated Statements of Changes in STOCKHOLDERS’ Equity (in thousands) Class A Common Stock Class B Common Stock Shares Amount Shares Amount Additional Paid In Capital Accumulated Other Comprehensive Loss Accumulated Deficit Non-Controlling Interest Total Stockholders' Equity Balance at December 31, 2023 26,036 $ 3 24,116 $ 2 $ 85,762 $ ( 12 ) $ ( 72,889 ) $ 12,577 $ 25,443 Issuance of common stock in connection with the October Securities Purchase Agreement, net of issuance costs of $ 621 3,000 — — — 9,379 — — — 9,379 Exercise of pre-funded warrants issued in connection with the October Securities Purchase Agreement 333 — — — — — — — — Issuance of common stock in connection with the July Securities Purchase Agreement, net of issuance costs of $ 1,117 2,800 — — — 8,883 — — — 8,883 Exercise of pre-funded warrants issued in connection with the July Securities Purchase Agreement 447 — — — — — — — — Issuance of common stock under employee equity plans, net of shares withheld for tax settlement 395 — — — 4 — — — 4 Issuance of common stock under employee stock purchase plan 159 — — — 304 — — — 304 Effect of exchanges of Paired Interests and non-corresponding Class A Units of Rani LLC 260 — ( 144 ) — — — — — — Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC — — — — ( 7,980 ) — — 7,980 — Stock-based compensation — — — — 8,537 — — 7,494 16,031 Net loss — — — — — — ( 30,018 ) ( 26,566 ) ( 56,584 ) Other comprehensive gain — — — — — 17 — 16 33 Balance at December 31, 2024 33,430 $ 3 23,972 $ 2 $ 104,889 $ 5 $ ( 102,907 ) $ 1,501 $ 3,493 Exercise of warrants issued in connection with the July 2024 and October 2024 Securities Purchase Agreement, net of issuance costs of $ 408 5,419 — — — 3,869 — — — 3,869 Issuance of common stock and pre-funded warrants in connection with the July 2025 Securities Purchase Agreement, net of issuance costs of $ 189 7,500 1 — — 2,810 — — — 2,811 Issuance of common stock, warrants, and pre-funded warrants in connection with the Private Placement, net of issuance costs of $ 4,467 42,633 4 — — 55,784 — — — 55,788 Effect of exchanges of Paired Interests and non-corresponding Class A Units of Rani LLC 107 — ( 2 ) — — — — — — Warrant issued for services provided — — — — 152 — — — 152 Warrant modification expense — — — — 15 — — — 15 Exercise of pre-funded warrants in connection with the Letter Agreement (the Abeyance Shares) 1,161 — — — — — — — — Exercise of Series D warrants in connection with the Letter Agreement 6,967 1 — — 4,529 — — — 4,530 Issuance of common stock under employee equity plans, net of shares withheld for tax settlement 267 — — — ( 59 ) — — — ( 59 ) Issuance of common stock from exercise of stock options 10 — — — 10 — — — 10 Issuance of common stock under employee stock purchase plan 128 — — — 61 — — — 61 Non-controlling interest adjustment for changes in proportionate ownership in Rani LLC — — — — ( 14,050 ) — — 14,050 — Stock-based compensation — — — — 7,568 — — 4,230 11,798 Net loss — — — — — — ( 29,673 ) ( 11,277 ) ( 40,950 ) Other comprehensive loss — — — — — ( 4 ) — ( 2 ) ( 6 ) Balance at December 31, 2025 97,622 $ 9 23,970 $ 2 $ 165,578 $ 1 $ ( 132,580 ) $ 8,502 $ 41,512 115 The accompanying notes are an integral part of these consolidated financial statements. 116 RANI THERAPEUTICS HOLDINGS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (in thousands) Year Ended December 31, 2025 2024 Cash flows from operating activities Net loss $ ( 40,950 ) $ ( 56,584 ) Adjustments to reconcile net loss to net cash used in operating activities: Stock-based compensation expense 11,798 16,031 Depreciation and amortization 900 1,028 Net accretion and amortization of investments in marketable securities ( 278 ) ( 1,247 ) Loss on disposal of property and equipment — 65 Impairment loss — 3,714 Non-cash operating lease expense 1,908 1,809 Amortization of debt discount and issuance costs 207 232 Loss on extinguishment of debt 576 — Warrant issued for services provided 152 — Modification expense related to warrants 15 — Changes in operating assets and liabilities: Accounts receivable ( 2,042 ) — Contract asset 428 ( 428 ) Prepaid expenses and other current assets ( 192 ) 631 Accounts payable ( 1,050 ) 711 Accrued expenses and other current liabilities 3,184 350 Deferred revenue 8,539 - Operating lease liabilities ( 1,909 ) ( 1,808 ) Net cash used in operating activities ( 18,714 ) ( 35,496 ) Cash flows from investing activities Proceeds from maturities of marketable securities 26,750 77,550 Purchases of marketable securities ( 33,692 ) ( 57,473 ) Purchases of property and equipment ( 88 ) ( 268 ) Net cash (used in) provided by investing activities ( 7,030 ) 19,809 Cash flows from financing activities Proceeds from Exercise of warrants issued in connection with the July 2024 and October 2024 Securities Purchase Agreement, net of issuance costs of $ 408 3,869 — Proceeds from issuance of common stock and pre-funded warrants in connection with the October 2024 Securities Purchase Agreement, net of issuance costs of $ 621 — 9,379 Proceeds from issuance of common stock and pre-funded warrants in connection with the July 2025 Securities Purchase Agreement, net of issuance costs of $ 189 2,811 — Proceeds from issuance of common stock and pre-funded warrants in connection with the July 2024 Securities Purchase Agreement, net of issuance costs of $ 1,117 — 8,883 Issuance of common stock under employee stock purchase plan 61 304 Proceeds from employee stock purchase plan 12 15 Proceeds from issuance of common stock in connection with the Private Placement, net of issuance costs of $ 4,467 49,788 — Proceeds from exercise of Series D Warrants 4,530 — Proceeds from exercise of stock options 10 51 Tax withholdings paid on behalf of employees for net share settlement ( 59 ) ( 47 ) Repayment of debt ( 20,722 ) ( 5,000 ) Net cash provided by financing activities 40,300 13,585 Net increase (decrease) in cash, cash equivalents and restricted cash equivalents 14,556 ( 2,102 ) Cash, cash equivalents and restricted cash equivalents, beginning of period 4,262 6,364 Cash, cash equivalents and restricted cash equivalents, end of period 18,818 4,262 Supplemental disclosures of cash flow information Cash paid for interest $ 2,121 $ 4,112 Cash paid for corporate taxes, net $ — $ — Supplemental disclosures of non-cash investing and financing activities Right-of-use assets obtained in exchange for new operating lease liabilities $ — $ 4,731 Exchanges of Paired Interests and non-corresponding Class A Units of Rani LLC $ 298 $ 721 Remeasurement of operating lease right-of-use assets $ 666 $ 589 Interest income receivable included in prepaid expenses and other current assets $ 121 $ 9 Unrealized loss on short-term investments $ ( 6 ) $ — Conversion of debt principal into common stock (Note 13) $ ( 6,000 ) $ — The accompanying notes are an integral part of these consolidated financial statements. 117 RANI THERAPEUTICS HOLDINGS, INC. Notes to THE 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. 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 December 31, 2025, 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 1,164,515 shares of the Company’s Class A common stock. Liquidity The Company has incurred recurring losses since its inception, including net losses of $ 41.0 million for the year ended December 31, 2025. As of December 31, 2025, the Company had an accumulated deficit of $ 132.6 million and for the year ended December 31, 2025 had negative cash flows from operations of $ 18.7 million. The Company expects that its cash, cash equivalents, and marketable securities of $ 49.7 million as of December 31, 2025, will be sufficient to fund its operations through at least twelve months from the date of these consolidated financial statements 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 new 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 inclu ding, 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. 118 2. Summary of Significant Accounting Policies Basis of Presentation These 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. Variable Interest Entities The Company consolidates all entities that it controls through a majority voting interest or as the primary beneficiary of a variable interest entity (“VIE”). In determining whether the Company is the primary beneficiary of an entity, the Company applies a qualitative approach that determines whether it has both (1) the power to direct the economically significant activities of the entity and (2) the obligation to absorb losses of, or the right to receive benefits from, the entity that could potentially be significant to that entity. The Company’s determination about whether it should consolidate such VIEs is made continuously as changes to existing relationships or future transactions may result in a consolidation event. Use of Estimates The preparation of the 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 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 we believe are reasonable; however, actual results may differ materially and adversely from these estimates. Revenue Recognition The Company may generate revenue from evaluation arrangements ( Note 6 ), under which the Company performs evaluation services of the partner's drug molecules using the Rani Pill platform technology. The Company may also generate revenue from customer-vendor components within certain collaboration and license arrangements ( Note 6 ) with certain pharmaceutical partners, which may include the grant of licenses to the Company's intellectual property and initial information transfer. Considerations for such arrangements may include non-refundable upfront license fees; payments based on the achievement of development, regulatory, or commercialization milestones; and future royalties on net sales of licensed products. The Company disaggregates revenue by major revenue stream, including collaboration and license arrangements and evaluation arrangements, which management believes best depicts the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Revenue is recognized when control of promised goods or services is transferred to a customer in an amount that reflects the consideration to which the entity expects to be entitled in exchange for those goods or services. The Company determines revenue recognition for arrangements within the scope of Accounting Standards Codification ("ASC") Topic 606, Revenue from Contracts with Customer ("ASC 606") by performing the following five steps: (i) identify the contract(s) with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when (or as) the entity satisfies a performance obligation. The majority of the Company’s contracts include only one performance obligation. A performance obligation is a promise in a contract to transfer a distinct good or service to the customer and is defined as the unit of account for revenue recognition. In determining whether performance obligations meet the criteria for being distinct, the Company considers a number of factors, such as the degree of interrelation and interdependence between obligations, and whether or not the good or service significantly modifies or transforms another good or service in the contract. Revenue for an individual contract is recognized at the related transaction price, which is the amount the Company expects to be entitled to in exchange for transferring the products and/or services. Revenue is recognized only to the extent that it is probable that a significant reversal of the cumulative amount recognized will not occur in future periods. As a practical expedient, we do not adjust the transaction price for the effects of a significant financing component if, at contract inception, the period between customer payment and the transfer of goods or services is expected to be one year or less. 119 In certain arrangements, the nature of the Company’s promise may include a stand‑ready obligation, under which the Company provides ongoing availability of specialized personnel, technical expertise, or regulatory support over a defined period. In such cases, the customer receives and consumes benefits as the Company stands ready to perform throughout the period, and revenue is recognized over time on a straight-line basis, which faithfully depicts the transfer of those benefits. For arrangements that include multiple performance obligations, the Company allocates the transaction price to the identified performance obligations based on the standalone selling price (“SSP”) of each distinct performance obligation. In instances where SSP is not directly observable, the Company develops assumptions that require judgment to determine the SSP for each performance obligation identified in the contract. The Company has no arrangements with multiple performance obligations for the years ended December 31, 2025 and 2024. Certain contracts within the scope of ASC 606 may include variable consideration, such as milestone or other contingent payments. The Company must make judgments to determine the estimates for certain variable considerations. Variable consideration is estimated using the most likely amount method for event-based milestones and other contingent payments. Variable consideration is included in the transaction price only to the extent it is probable that a significant revenue reversal will not occur when the uncertainty is resolved. The Company continues to re-evaluate the transaction price in each reporting period as contingencies are resolved and other changes in circumstances occur. Evaluation Arrangements The Company recognizes contract revenue from its evaluation arrangements using a cost-based input method, which most faithfully depicts the transfer of the performance obligation to the customer. Accordingly, the Company will recognize contract revenue based on actual costs incurred as a percentage of total estimated costs the Company expects to incur to deliver its performance obligation. These actual costs consist of the internal labor efforts, in vivo testing services and material costs related to the agreement, as the costs incurred over time will reflect the transfer of its performance obligations to the customer. The cumulative effect of revisions to estimated costs to complete the Company’s performance obligation will be recorded in the period in which changes are identified and amounts are reasonably estimable. License Fees As part of the collaboration and license agreement, the Company may grant licenses to its intellectual property ("IP"). Considerations for such arrangements may include non-refundable upfront license fees. When the Company grants a license to its intellectual property, it determines whether the nature of the intellectual property is functional or symbolic. Functional intellectual property has significant standalone functionality and provides the customer with a right to use the intellectual property as it exists at the point in time the license is granted. Revenue from functional IP is recognized at the point in time when control of the distinct license is transferred to the customer. Symbolic intellectual property does not have significant standalone functionality. A license to symbolic IP provides the customer with a right to access the Company's intellectual property over time. If a license to the Company’s intellectual property is determined to be distinct from the other promises or performance obligations identified in the arrangement, the Company recognizes the transaction price allocated to the license as licensing revenue, at the point in time, upon transfer of control of the license. In assessing whether a promise or performance obligation is distinct from the other promises, the Company considers whether a customer can benefit from the license on its own, or with other readily available resources, or if it needs to be combined with other promises in order to generate economic benefits. In certain collaboration arrangements, a license to functional intellectual property may not be distinct from other promised goods or services, such as initial technology or information transfer, development‑related support, or regulatory‑related obligations. When these activities significantly enhance the utility of the license, or are highly interdependent with it, the Company combines the license with those activities into a single performance obligation. If a license is determined to not be distinct and is combined with other promises into a single performance obligation, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether it is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue. Milestones and Other Contingent Payments 120 At contract inception, the Company evaluates whether each milestone or other contingent payments are considered probable of being achieved and estimates the amount to include in the initial transaction price using the most likely amount method. Variable consideration is included in the initial transaction price only to the extent that it is probable that a significant revenue reversal will not occur when the uncertainty is resolved. The Company evaluates factors such as the scientific, clinical, regulatory, manufacturing, commercial, and other risks that must be overcome to achieve the particular contingency in making this assessment. There is considerable judgment involved in determining whether it is probable that a significant revenue reversal would not occur. Milestones that are outside the Company's control, such as regulatory approvals, are not considered probable of being achieved until those approvals are received and therefore, the variable consideration is constrained. At each reporting period, the Company updates its assessment of the probability of achieving each milestone and other contingencies subject to constraint and adjusts its estimate of the transaction price as necessary. Adjustments are recorded on a cumulative catch-up basis. For arrangements that include sales-based milestone payments and royalties on net sales of licensed products, which are the result of a customer-vendor relationship and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied or partially satisfied. Customer options, such as options granted to allow a customer to acquire later stage evaluation services, are evaluated at contract inception in order to determine whether those options provide a material right (i.e., an optional good or service offered for free or at a discount) to the customer. If the customer options represent a material right, the material right is treated as a separate performance obligation at the outset of the arrangement. The Company allocates the transaction price to material rights based on the standalone selling price, and revenue is recognized when or as the future goods or services are transferred or when the option expires. Customer options that are not material rights do not give rise to a separate performance obligation, and as such, the additional consideration that would result from a customer exercising an option in the future is not included in the transaction price for the current contract. Instead, the option is deemed a marketing offer, and additional option fee payments are recognized as revenue when the licensee exercises the option. The exercise of an option that does not represent a material right is treated as a separate contract for accounting purposes. Incremental costs of obtaining contracts are expensed when incurred, when the amortization period of the assets that otherwise would have been recognized is one year or less. To date, none of these costs have been material. The costs to fulfill the contracts are determined to be immaterial and are recognized as an expense when incurred. Collaborative Arrangements The Company enters into collaboration agreements ( Note 6 ) that may involve joint research, development, manufacturing, or commercialization activities with third parties. The Company evaluates whether each arrangement is subject to ASC Topic 808: Collaborative Arrangements ("ASC 808") based on whether they involve joint operating activities and whether both parties have active participation in the arrangement and are exposed to significant risks and rewards that depend on the ultimate commercial success of the arrangement. To the extent that the arrangement falls within the scope of ASC 808 and the Company concludes that its collaboration partner is not a customer, the Company presents amounts due from its collaboration partner as a reduction of research and development expense based on the nature of such payments. To the extent an arrangement includes both customer‑vendor components and collaborative research or development activities, the Company applies ASC 606 to the customer‑vendor components and records reimbursements related to collaborative activities as a reduction of research and development expense under ASC 808. Research and Development Costs Research and development expenses consist primarily of payroll and related benefits, stock-based compensation, third-party services, facilities, materials and supplies. Research and development costs are expensed as incurred. Payments made prior to the receipt of goods or services to be used in research and development activities are recorded as prepaid expenses and other current assets on the consolidated balance sheets until the related goods or services are rendered . 121 Preclinical and Clinical Trial Accruals The Company's preclinical and clinical trials are being supported by Contract Research Organizations (“CROs”) and other vendors. Preclinical and clinical trial costs are a component of research and development expense. As part of the process of preparing the consolidated financial statements, the Company is required to estimate expenses resulting from obligations under contracts with CROs and other vendors. The financial terms of these contracts vary and may result in payment flows that do not match the periods over which materials or services are provided under such contracts. The Company accrues expenses for preclinical and clinical trial activities performed by CROs and other vendors based upon the amount of work completed on each trial. The Company maintains regular communications with the CROs and other vendors to assess the reasonableness of the accrual. To date, differences between actual preclinical and clinical trial expenses and accrued preclinical and clinical trial expenses recorded have not been material and are adjusted for in the period in which they become known. Payments made under these arrangements in advance of the receipt of the related services are recorded as prepaid expenses and other current assets on the consolidated balance sheets until the services are rendered. General and Administrative General and administrative expenses consist primarily of salaries and employee-related costs, including benefits and stock-based compensation, for personnel in the Company’s executive and administrative functions. Additional general and administrative costs include professional fees for legal, accounting, auditing, tax, and consulting services, as well as facility and office expenses. General and administrative costs are expensed as incurred. Stock-Based Compensation In July 2021, the Company adopted and its stockholders approved, the Rani Therapeutics Holdings, Inc. 2021 Equity Incentive Plan (the “2021 Plan”). The Company has subsequently granted stock options to purchase shares of its Class A common stock as well as restricted stock units (“RSUs”) and restricted stock awards ("RSAs") from the 2021 Plan to both employees and non-employees. The Company measures stock-based compensation at fair value on the grant date of the award. The fair value of employee and nonemployee RSUs is determined based on the number of shares granted and the closing market price of the Company’s Class A common stock on the date of grant. The fair value of RSAs is determined based on the estimated fair value of the Company’s Class A common stock on the grant date and is subject to the Company's reacquisition right which is accounted for as a forfeiture provision ( Note 11 ). For awards that vest subject to the satisfaction of service requirements, compensation expense is measured based on the fair value of the award on the date of grant and expense is recognized on a straight-line basis over the requisite service period. The Company accounts for forfeitures as they occur. Stock-based compensation is classified in the accompanying consolidated statements of operations and comprehensive loss based on the function to which the related services are provided. The Company determines the grant-date fair value of options to purchase common shares using the Black-Scholes option-pricing model which requires inputs based on certain subjective assumptions, including the expected stock price volatility derived from historical stock volatilities of the Company’s own stock price and public peer companies, the expected term of the option, the risk-free interest rate for a period that approximates the expected term of the option, and the Company’s expected dividend yield. Such assumptions represent management’s best estimates and involve inherent uncertainties and the application of management’s judgment. If actual results are not consistent with the Company’s assumptions and judgments used in making these estimates, the Company may be required to increase or decrease compensation expense, which could be material to the Company’s consolidated results of operations. Income Taxes Rani LLC is a pass-through entity for United States federal and most applicable state and local income tax purposes following the IPO and Organizational Transactions. As an entity classified as a partnership for tax purposes, Rani LLC is not subject to United States federal and certain state and local income taxes. Any taxable income or loss generated by Rani LLC is passed through to, and included in the taxable income or loss of, its members, including the Company. The Company is taxed as a corporation and pays corporate federal, state and local taxes with respect to income allocated to it, based on its economic interest in Rani LLC. 122 The Company accounts for income taxes under the asset and liability method of accounting. Current income tax expense or benefit represents the amount of income taxes expected to be payable or refundable for the current year. The Company recognizes deferred tax assets and liabilities for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for operating loss and tax credit carryforwards. The Company measures deferred tax assets and liabilities using enacted tax rates expected to apply to taxable income in the years in which the Company expects to recover or settle those temporary differences. The Company recognizes the effect of a change in tax rates on deferred tax assets and liabilities in the results of operations in the period that includes the enactment date. The Company reduces the measurement of a deferred tax asset, if necessary, by a valuation allowance if it is more likely than not that the Company will not realize some or all of the deferred tax asset. The Company’s tax positions are subject to income tax audits. The Company uses a recognition threshold and measurement attribute for the consolidated financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. A tax position is recognized when it is more likely than not that the tax position will be sustained upon examination, including the resolution of any related appeals or litigation. A tax position that meets the more-likely-than-not recognition threshold is measured at the largest amount of benefit that is greater than a 50 % likelihood of being realized upon ultimate settlement with a taxing authority. Interest and penalties related to unrecognized tax benefits are recognized in income tax expense in the accompanying consolidated statements of operations and comprehensive loss. No such interest and penalties were recognized for any period presented. Tax Receivable Agreement In August 2021, in connection with the IPO and Organizational Transactions, the Company entered into a tax receivable agreement ("TRA") with certain of the Continuing LLC Owners. The TRA provides that the Company pay to such Continuing LLC Owners, 85 % of the amount of tax benefits, if any, it is deemed to realize (calculated using certain assumptions) as a result of (i) increases in the tax basis of assets of Rani LLC resulting from (a) any future redemptions or exchanges of Paired Interests or non-corresponding Class A Units of Rani LLC and (b) payments under the TRA and (ii) certain other benefits arising from payments under the TRA (collectively the “Tax Attributes”). A liability for the payable to parties subject to the TRA, and a reduction to stockholders’ equity, is accrued when (i) an exchange of a Paired Interest or non-corresponding Class A Units of Rani LLC has occurred and (ii) when it is deemed probable that the Tax Attributes associated with the exchange will be used to reduce the Company’s taxable income based on the contractual percentage of the benefit of Tax Attributes that the Company expects to receive over a period of time ( Note 12 ). Pursuant to the terms of the Private Placement, the Company entered into a Tax Receivable Agreement Termination and Release Agreement (the “TRA Termination Agreement”) in December 2025 to terminate the TRA, entered into in connection with the IPO and Organizational Transactions, and disclaim any rights or interests thereunder. As a result of the termination, the Company has no further obligations under the TRA, and no tax benefit payments or early termination payments were required in connection with such termination. The TRA Termination Agreement provides for the mutual release of the parties from all obligations under the TRA, effective as of December 31, 2025. Non-Controlling Interest Non-controlling interest ("NCI") represents the portion of income or loss, net assets and comprehensive loss of the Company's consolidated subsidiary that is not allocable to Rani Holdings based on the Company's percentage of ownership of Rani LLC. In August 2021, based on the Organizational Transactions, Rani Holdings became the sole managing member of Rani LLC. As of December 31, 2025, 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. Therefore, the Company reports NCI based on the Class A Units of Rani LLC held by the Continuing LLC Owners on its consolidated balance sheet as of December 31, 2025. Income or loss attributed to the NCI in Rani LLC is based on the Class A Units outstanding during the period for which the income or loss is generated and is presented on the consolidated statements of operations and comprehensive loss. Future exchanges of Paired Interests and non-corresponding Class A Units of Rani LLC will result in a change in ownership and reduce or increase the amount recorded as NCI and increase or decrease additional paid-in-capital when Rani LLC has positive or negative net assets, respectively. From the date of the Organizational Transactions to December 31, 2025, there were 5,378,539 exchanges of Paired Interests and 362,821 ex changes of non-corresponding Class A Units of Rani LLC for an equal number of shares of the Company's Class A common stock. 123 Comprehensive Loss Comprehensive loss is defined as a change in equity of a business enterprise during a period, resulting from transactions and other events and/or circumstances from non-owner sources. Other comprehensive loss represents changes in fair value of the Company's available-for-sale marketable securities. Concentrations of Credit Risk and Other Risks and Uncertainties Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents. The Company maintains accounts in federally insured financial institutions in excess of federally insured limits. The Company also holds money market funds that are not federally insured. Cash, Cash Equivalents and Restricted Cash Equivalents The Company considers all cash held on deposit and highly liquid investments purchased with original or remaining maturities of less than three months at the date of purchase to be cash equivalents. Cash equivalents are carried at cost, which approximates fair value. The Company’s cash and cash equivalents consist of balances held in demand depositary accounts and money market funds. Restricted cash equivalents consist of cash collateral required by a bank in connection with the Company's commercial credit cards program. The Company limits its credit risk associated with cash, cash equivalents and restricted cash equivalents by maintaining its bank accounts at major financial institutions. 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 consolidated balance sheet which, in aggregate, represents the amount reported in the consolidated statements of cash flows for the years ended December 31, 2025 and 2024 (in thousands): Year Ended December 31, 2025 2024 Cash and cash equivalents $ 18,618 $ 3,762 Restricted cash equivalents 200 500 Total cash, cash equivalents and restricted cash equivalents $ 18,818 $ 4,262 Accounts Receivable 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. Based on this evaluation, the Company determined that expected credit losses are not material, and therefore no allowance was recorded as of December 31, 2025. As of December 31, 2025 and 2024, there were $ 2.0 million and $ 0 , respectively, of accounts receivable recorded in the Company's consolidated balance sheets. As of January 1, 2024, there were no accounts receivable recorded. 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 may represent conditional or unconditional rights to consideration. The right is conditional and recorded as a contract asset if 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 becomes unconditional. If the Company has the unconditional right to receive consideration from the customer, the contract asset is accounted for as accounts receivable 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 years ended December 31, 2024 and 2025 , net change on contract asset balance due to timing of billing, payment and recognition was $ 0 and $ 0.4 million, respectively. As of January 1, 2024, the contract asset recorded was $ 0 . Contract liabilities are recorded as deferred revenue when cash payments are received or due in advance of performance or where the Company has unsatisfied performance obligations. As of December 31, 2025 and December 31, 2024 , there were $ 8.5 million and $ 0 , respectively, of deferred revenue r ecognized for unsatisfied evaluation services. 124 Marketable Securities The Company invests its excess cash in marketable securities with high credit ratings including money market funds, securities issued by U.S. and international governments and their agencies, corporate debt securities and commercial paper. The Company has assessed U.S. government treasuries and agencies and money market funds as Level 1 and corporate debt securities and commercial paper as Level 2 within the fair value hierarchy. All the Company's marketable securities have been accounted for as available-for-sale and carried at fair value. The Company classifies all its available-for-sale marketable securities, including those with maturity dates beyond one year, as current assets on the consolidated balance sheets as the Company may sell these securities at any time for use in current operations even if they have not yet reached maturity. The amortized cost of debt securities is adjusted for amortization of premiums and accretion of discounts to maturity, which is included in interest income and other, net on the consolidated statements of operations and comprehensive loss. Realized gains and losses on marketable securities are included in other income (expense) on the consolidated statements of operations. Gains and losses on sales are recorded based on the trade date and determined using the specific identification method. The Company regularly reviews its investments for declines in fair value below their amortized cost basis to determine whether the impairment is due to credit-related factors or noncredit-related factors. The Company's review includes the creditworthiness of the security issuers, the severity of the unrealized losses, whether the Company has the intent to sell the securities and whether it is more likely than not that the Company will be required to sell the securities before the recovery of its amortized cost bases. When the Company determines that a portion of the unrealized loss is due to an expected credit loss, the Company recognizes the loss amount in Other income (expense), net, with a corresponding allowance against the carrying value of the security the Company holds. The portion of the unrealized loss related to factors other than credit losses is recognized in Accumulated other comprehensive loss. The Company has made an accounting policy election to not measure an allowance for credit loss for accrued interest receivables and will recognize a credit loss for accrued interest receivables when the loss becomes probable and estimable. Fair Value of Financial Instruments Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. Financial assets and liabilities carried at fair value are to be classified and disclosed in one of the following three levels of the fair value hierarchy, of which the first two are considered observable and the last is considered unobservable: Level 1—Quoted prices in active markets for identical assets or liabilities. Level 2—Observable inputs (other than Level 1 quoted prices), such as quoted prices in active markets for similar assets or liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities, or other inputs that are observable or can be corroborated by observable market data. Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discounted cash flow methodologies and similar techniques. As of December 31, 2025 and 2024, the carrying values of current assets, current liabilities, short-term debt, and some of the marketable securities balances classified as level 2 approximate fair value due to their short-term nature, respectively. To the extent that the valuation is based on models or inputs that are less observable or unobservable in the market, the determination of fair value requires more judgment. Accordingly, the degree of judgement exercised by the Company in determining fair value is greatest for instruments categorized in Level 3. A financial instrument’s level within the fair value hierarchy is based on the lowest level of any input that is significant to the fair value of the instrument. The Company estimates the fair value of its Level 2 financial instruments by taking into consideration valuations obtained from third-party pricing services. The third-party pricing services utilize industry standard valuation models, for which all significant inputs are observable, either directly or indirectly, to estimate fair value. These inputs include reported trades of and broker/dealer quotes on the same or similar securities; issuer credit spreads; benchmark securities; and other observable inputs. Property and Equipment, Net Property and equipment, net are stated at cost, less accumulated depreciation and amortization calculated using the straight-line method over the estimated useful lives of the assets, generally between three and five years. Leasehold improvements are amortized over the shorter of the related lease term or useful life. The Company’s property and equipment as of December 31, 2025 consists of laboratory equipment, office equipment, software, and leasehold improvements. Maintenance and repairs are charged to 125 operations when incurred, while betterments or renewals are capitalized. When property and equipment are sold or otherwise disposed of, the asset account and related accumulated depreciation and amortization accounts are relieved, and any gain or loss is included in the results of operations. Construction-in-progress consists of production equipment that will be used to scale-up the manufacturing of the RaniPill capsule for clinical trials and that has been determined to have an alternative future use. Construction-in-progress is stated at cost and does not begin to depreciate until it is put into production. Impairment of Long-Lived Assets The Company reviews the carrying amounts of its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset (or asset group) may not be recoverable. If indicators of impairment exist, an impairment loss would be recognized when the estimated undiscounted future cash flows expected to result from the use of the asset and its eventual disposition are less than its carrying amount. The impairment charge is determined based upon the excess of the carrying value of the asset over its estimated fair value, with estimated fair value determined based upon an estimate of discounted future cash flows or other appropriate measures of estimated fair value. As of December 31, 2025, the Company assessed the recoverability of the long-lived assets and determined there were no indicators of impairment . Leases The Company determines whether the arrangement is or contains a lease based on the unique facts and circumstances present at the inception of the arrangement and if such a lease is classified as a financing lease or operating lease. The Company has elected not to recognize on the balance sheet leases with terms of one year or less. Operating leases are included in operating lease right-of-use ("ROU") assets and operating lease liabilities in the Company’s consolidated balance sheet as of December 31, 2025. ROU assets represent the Company’s right to use an underlying asset for the lease term and lease liabilities represent the Company’s obligation to make lease payments arising from the lease contract. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the expected lease term. In determining the net present value of lease payments, the interest rate implicit in lease contracts is typically not readily determinable. As such, the Company utilizes the appropriate incremental borrowing rate (“IBR”), which is the rate incurred to borrow on a collateralized basis over a similar term, an amount equal to the lease payments in a similar economic environment. Certain adjustments to the ROU asset may be required for items such as initial direct costs paid or incentives received and impairment charges if the Company determines the ROU asset is impaired. The Company considers a lease term to be the noncancelable period during which it has the right to use the underlying asset, including any periods where it is reasonably certain the Company will exercise the option to extend the contract. Periods covered by an option to extend are included in the lease term if the lessor controls the exercise of that option. The operating lease ROU assets also include any lease payments made and exclude lease incentives. The Company has elected to not separate lease and non-lease components for its leased assets and accounts for all lease and non-lease components of its agreements as a single lease component. The lease components resulting in a ROU asset have been recorded on the consolidated balance sheet and amortized as lease expense on a straight-line basis over the lease term. Warrants The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and in accordance with the Financial Accounting Standards Board (“FASB”) ASC 480, “Distinguishing Liabilities from Equity” ("ASC 480"), and ASC 815 “Derivatives and Hedging” ("ASC 815"). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, meet the definition of a liability pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own shares, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance For issued or modified warrants that meet all of the criteria for equity classification, the warrants are recorded as a component of additional paid-in capital at the time of issuance. For issued or modified warrants that do not meet all the criteria for equity classification, the warrants are recorded at their initial fair value of the date of issuance, and each balance sheet date thereafter. Changes in the estimated fair value of liability classified warrants are recognized as a non-cash gain or loss on the consolidated statements of operations. Costs associated with issuing the warrants classified as derivative liabilities are charged to operations when the warrants are issued. 126 Net Loss Per Class A Common Share Attributable to Rani Holdings Basic net loss per Class A common share attributable to Rani Holdings is computed by dividing net loss attributable to the Company by the weighted average number of Class A common shares outstanding during the period, without consideration of potential dilutive securities. Diluted net loss per Class A common share is computed giving effect to all potentially dilutive shares. Diluted net loss per Class A common share for all periods presented is the same as basic loss per share as the inclusion of potentially issuable shares would be antidilutive. Emerging Growth Company Status The Company is an emerging growth company, as defined in the Jumpstart Our Business Startups Act of 2012 (“JOBS Act”). Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act, until such time as those standards apply to private companies. The Company has elected to use this extended transition period for complying with new or revised accounting standards that have different effective dates for public and private companies until the earlier of the date that it (i) is no longer an emerging growth company or (ii) affirmatively and irrevocably opts out of the extended transition period provided in the JOBS Act. As a result, these consolidated financial statements may not be comparable to companies that comply with the new or revised accounting pronouncements as of public company effective dates . Recently Adopted Accounting Pronouncements In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 requires enhanced annual disclosures regarding the rate reconciliation and income taxes paid information. ASU 2023-09 is effective for annual periods beginning after December 15, 2025 for entities that qualify as emerging growth companies and may be adopted on a prospective or retrospective basis. Early adoption is permitted. The Company early adopted this accounting standard in the fourth quarter of 2025 and applied the guidance on a prospective basis. Adoption did not have a material impact on the Company’s consolidated financial statements. Recently Issued Accounting Pronouncements In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. 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 consolidated financial statements. In July 2025, the FASB issued ASU 2025‑05, Financial Instruments - Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets, 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 is currently evaluating the guidance and does not expect the adoption to have a material impact on its consolidated financial statements. In November 2024, the FASB issued ASU 2024-03, Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40), to provide disaggregated information about certain income statement costs and expenses. The 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 consolidated financial statements and related disclosures. 127 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 December 31, 2025 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash equivalents: Money market funds $ 6,757 $ — $ — $ 6,757 U.S. Treasuries and agencies 6,891 — — 6,891 Commercial paper 2,099 — — 2,099 Corporate debt securities 1,491 — — 1,491 Total cash equivalents 17,238 — — 17,238 Restricted cash equivalents: Money market funds 200 — — 200 Total cash equivalents and restricted cash equivalents 17,438 — — 17,438 Marketable securities: U.S. Treasuries and agencies 25,868 2 ( 3 ) 25,867 Corporate debt securities 3,233 — — 3,233 Commercial paper 1,991 — — 1,991 Total marketable securities 31,092 2 ( 3 ) 31,091 Total cash equivalents, restricted cash equivalents and marketable securities $ 48,530 $ 2 $ ( 3 ) $ 48,529 As of December 31, 2024 Amortized Cost Unrealized Gains Unrealized Losses Estimated Fair Value Current assets: Cash equivalents: Money market funds $ 404 $ — $ — $ 404 Total cash and cash equivalents 404 — — 404 Restricted cash equivalents: Money market funds 500 — — 500 Total cash equivalents and restricted cash equivalents 904 — — 904 Marketable securities: U.S. Treasuries and agencies 24,871 5 — 24,876 Total marketable securities 24,871 5 — 24,876 Total cash equivalents, restricted cash equivalents and marketable securities $ 25,775 $ 5 $ — $ 25,780 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 December 31, 2025, 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 December 31, 2025. As of December 31, 2025 and 2024 , interest income receivable recorded as a component of prepaid expenses and other current assets on the consolidated balance sheet was de minimis for both years. 128 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): As of December 31, 2025 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 6,757 $ — $ — $ 6,757 U.S. Treasuries and agencies 6,891 — — 6,891 Commercial paper — 2,099 — 2,099 Corporate debt securities — 1,491 — 1,491 Restricted cash equivalents: Money market funds 200 — — 200 Marketable securities U.S. Treasuries and agencies 25,867 — — 25,867 Corporate debt securities — 3,233 — 3,233 Commercial paper — 1,991 — 1,991 Total assets $ 39,715 $ 8,814 $ — $ 48,529 As of December 31, 2024 Level 1 Level 2 Level 3 Total Assets: Cash equivalents: Money market funds $ 404 $ — $ — $ 404 Restricted cash equivalents: Money market funds 500 — — 500 Marketable securities U.S. Treasuries and agencies 24,876 — — 24,876 Total assets $ 25,780 $ — $ — $ 25,780 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. 5. Balance Sheet Components Property and equipment, net Property and equipment, net consist of the following (in thousands): December 31, 2025 2024 Laboratory equipment $ 4,259 $ 4,233 Leasehold improvements 1,655 1,655 Office equipment 227 165 Software 104 104 Total 6,245 6,157 Less accumulated depreciation and amortization ( 5,540 ) ( 4,640 ) Total 705 1,517 Construction-in-progress 31 31 Total property and equipment, net $ 736 $ 1,548 The Company recognized an impairment loss of $ 3.7 million as of December 31, 2024 . Depreciation and amortization expense totaled $ 0.9 million and $ 1.0 million for the years ended December 31, 2025 and 2024, respectively. Accrued expenses and other current liabilities 129 Accrued expenses and other current liabilities consist of the following (in thousands): December 31, 2025 2024 Payroll and related costs $ 2,646 $ 353 Accrued professional fees 718 107 Accrued rent 335 329 Accrued preclinical and clinical trial costs 198 70 Accrued interest — 931 Other 46 283 Total accrued expenses and other current liabilities $ 3,943 $ 2,073 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”) (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 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 ASC 808, with certain elements accounted for under 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. 130 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 December 31, 2025, the Company concluded that no milestone‑related variable consideration were probable of achievement and therefore none were included in the transaction price. 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 year ended December 31, 2025 , the Company recognized $ 1.5 million as revenue and $ 8.5 million as deferred revenue on the consolidated statement of operations and consolidated balance sheet, respectively. Of the $ 10.0 million upfront payment, $ 8.0 million was received in cash and $ 2.0 million remains in accounts receivable relates 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. 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 years ended December 31, 2025 and 2024, $ 0.1 million and $ 1.0 million, respectively, in contract revenue were recognized for evaluation services performed. As of December 31, 2025, 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. As of December 31, 2024, the contract asset balance was $ 0.4 million and the contract liability balance was zero . 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. 131 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. For each of the years ended December 31, 2025 and 2024, reimbursement received from ProGen recorded as contra-research and development expense were $ 0.1 million an d de minimis , 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. Participation in Private Placement In October 2025, the founder and Chairman of the Board of Directors of the Company, Mir Imran, participated in the Private Placement as an affiliated investor and purchased 2,083,334 Shares and 2,083,334 Common Warrants at a purchase price of $ 0.605 per share, which reflected the consolidated closing bid price of the Company's Class A Common Stock on October 16, 2025, as reported on the Nasdaq Stock Market, plus $ 0.125 per Common Warrant, for the aggregate purchase price of $ 1.3 million. Refer to Note 9 for additional details on the Private Placement. Service Agreements In June 2021, Rani LLC entered into a service agreement with ICL effective retrospectively to January 1, 2021, and subsequently amended such agreement in March 2022 (as amended, the "Rani LLC-ICL Service Agreement"), pursuant to which Rani LLC and ICL agreed to provide personnel services to the other upon requests. Under the amendment in March 2022, Rani LLC had a right to occupy certain facilities leased by ICL in Milpitas, California and San Antonio, Texas (“Occupancy Services”) for general office, research and development, and light manufacturing. The Rani LLC-ICL Service Agreement has a twelve-month term and will automatically renew for successive twelve-month periods unless terminated. Except for the Occupancy Services, Rani LLC or ICL may terminate services under the Rani LLC-ICL Service Agreement upon 60 days' notice to the other party. The Rani LLC-ICL Service Agreement specifies the scope of services to be provided as well as the methods for determining the costs of services. Costs are billed or charged on a monthly basis by ICL or Rani LLC, respectively. The Occupancy Services for the facility in San Antonio, Texas terminated in June 2024. The Occupancy Services for the facility in Milpitas, California expired in August 2024. 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 Occupancy Services 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. 132 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 consolidated statements of operations (in thousands): Year Ended December 31, 2025 2024 Research and development $ 726 $ 954 General and administrative ( 49 ) 173 Total $ 677 $ 1,127 As of December 31, 2025, 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. Tax Receivable Agreement Certain parties to the TRA, entered into in August 2021 pursuant to the IPO and Organizational Transactions are related parties of the Company. The TRA provides that the Company pay to ICL and the other Continuing LLC Owners 85% of the amount of tax benefits, if any, it is deemed to realize from exchanges of Paired Interests. For each of the years ended December 31, 2025 and 2024 , these parties to the TRA exchanged zero Paired Interests that resulted in tax benefits subject to the TRA ( Note 12 ). Pursuant to the terms of the Private Placement, the Company entered into the TRA Termination Agreement in December 2025 to terminate the TRA and disclaim any rights or interests thereunder. As a result of the termination, the Company has no further obligations under the TRA, and no tax benefit payments or early termination payments were required in connection with such termination. The TRA Termination Agreement provides for the mutual release of the parties from all obligations under the TRA, effective as of December 31, 2025. 133 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 into the Rani LLC Agreement. As part of the Private Placement, the Rani LLC Agreement was amended in connection with the Restated Charter and was adopted as the Sixth Amended and Restated Limited Liability Company Agreement (the “Amended Rani LLC Agreement”) effective as of December 31, 2025. 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. For the years ended December 31, 2025 and 2024 , certain related parties that are parties to the Amended Rani LLC Agreement exchanged zero 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 Occupancy Services 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 consolidated balance sheet. Under the Rani LLC-ICL Service Agreement amended in March 2022, Rani LLC had a right to occupy certain facilities leased by ICL in Milpitas, California and San Antonio, Texas for general office, research and development, and light manufacturing. The Rani LLC-ICL Service Agreement has a twelve-month term and will automatically renew for a successive twelve-month periods unless terminated. The Company accounted for its Occupancy Services in San Antonio, Texas as a short-term lease. In December 2023, the Company provided to ICL notice of termination of the Occupancy Services in San Antonio, which took effect in June 2024. In March 2024, the Company extended the Occupancy Services for the facility in Milpitas, California for an additional six-month term through August 2024 and increased the payment for such Occupancy Services during the extension period. The Company accounted for the March 2024 extension for its Occupancy Services in Milpitas, California as a short-term lease. The Occupancy Services for the facility in Milpitas, California expired in August 2024. 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. 134 Supplemental information on the Company’s consolidated balance sheet and statements of cash flows as of December 31, 2025 and 2024, respectively, related to the Company's leases was as follows (in thousands): December 31, 2025 2024 Weighted-average remaining lease term (in years) 3.0 3.9 Weighted-average discount rate 10.7 % 10.4 % Year Ended December 31, 2025 2024 Cash paid for amounts included in lease liabilities: Operating cash flows used for operating leases $ 1,902 $ 1,480 As of December 31, 2025, 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 $ 1,949 2027 1,278 2028 1,330 2029 458 Thereafter — Total undiscounted future minimum lease payments $ 5,015 Less: Imputed interest ( 697 ) Total operating lease liability $ 4,318 Less: Current portion of operating lease liability 1,586 Operating lease liability, net current portion $ 2,732 9. Warrants Private Placement In October 2025, the Company entered into a 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 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 are approximately $ 60.3 million (including conversion of $ 6.0 million of the Loan's principal balance, see Note 13 ), before deducting placement agent fees of approximately $ 4.5 million and other expenses payable by the Company, 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, resulting in 80,266,823 shares of Pre-Funded Warrants outstanding. The Company received de minimis proceeds from the exercise. Registration Rights Agreement 135 In October 2025, the Company entered into a registration rights agreement with the Purchasers (the “Registration Rights Agreement”), pursuant to which the Company agreed to file registration statements under the Securities Act of 1933, as amended (the “Securities Act”), with the Securities and Exchange Commission (the "SEC"), covering the resale of the Shares to be issued in the Private Placement and the shares of Class A Common Stock underlying the Common Warrants and Pre-Funded Warrants. In November 2025, the Company filed a Registration Statement on Form S-3 (the “Resale Registration Statement”) covering the resale of the Shares to be issued in the Private Placement and the shares of Class A Common Stock underlying the Common Warrants and Pre-Funded Warrants. In December 2025, the Resale Registration Statement was declared effective by the SEC. July 2025 Securities Purchase Agreement In July 2025, the Company entered into a securities purchase agreement (the "July 2025 Securities Purchase Agreement"), with an institutional investor, relating to the issuance and sale of 4,354,000 shares of Class A common stock, par value $ 0.0001 per share, and pre-funded warrants to purchase 3,146,000 shares of Class A common stock. The pre-funded warrants are exercisable immediately following the closing date of the offering, have an unlimited term, an exer cise price of $ 0.0001 per share. The warrants are equity classified on the Company's consolidated balance sheet. The offering price was $ 0.40 per share of Class A common stock, and $ 0.3999 per pre-funded warrant for total gross proceeds of $ 3.0 million. The Company incurred issuance costs of approximately $ 0.2 million. In July 2025, the institutional investor fully exercised all pre-funded warrants. 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 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. As of December 31, 2025, all of the Service Warrants were outstanding. In February 2026, the service agreement was terminated, however the issued Service Warrants remain outstanding with terms unchanged. 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 (refer to October 2024 Securities Purchase Agreement and July 2024 Securities Purchase Agreement sections below) 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. The Company remeasured the warrants at the reduced exercise price and recognized a $ 1.3 million inducement charge in the consolidated statements of changes in stockholders' equity for the year ended December 31, 2025. 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 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 a result of the exercise, 6,193,022 Series D Warrants remained outstanding as of December 31, 2025. 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 common stock in abeyance. Accordingly, an aggregate of 1,161,000 shares of common stock from the exercise of the Series B and Series C warrants were held in abe yance (the “Abeyance Shares”) with such Abey ance Shares evidenced through the holder’s 136 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 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 common stock in July 2025. October 2024 Securities Purchase Agreement In October 2024, the Company entered into a securities purchase agreement (the “October 2024 Securities Purchase Agreement”) with the Equity Investor relating to the issuance and sale of: (i) 3,000,000 shares of its Class A common stock, par value $ 0.0001 per share, (ii) pre-funded warrants to purchase 333,333 shares of Class A common stock, and (iii) Series C common warrants, which accompany the Class A common stock and pre-funded warrants, to purchase an aggregate of 3,333,333 shares of Class A common stock (the “October Offering”). Pursuant to the October 2024 Securities Purchase Agreement, Series A common warrants to purchase an aggregate of 3,246,753 shares of Class A common stock issued in connection with the July 2024 Securities Purchase Agreement were cancelled. The pre-funded warrants were exercisable immediately and had an unlimited term and an exercise price of $ 0.0001 per share. The Series C common warrants were exercisable immediately following the closing date and were to expire five years from the date of issuance and originally had an exercise price of $ 3.00 per share. The Series C warrants included certain rights upon “fundamental transactions,” as described in the Series C warrants, 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 C warrants on the date of the consummation of the fundamental transactions. Both the pre-funded warrants and Series C common warrants are classified as equity on the Company’s consolidated balance sheet. In October 2024, the pre-funded warrants were fully exercised for de minimis proceeds. All of the Series C common warrants were exercised as part of the Letter Agreement transaction above, and no Series C common warrants remain outstanding a s of December 31, 2025 and 2024. July 2024 Securities Purchase Agreement In July 2024, the Company entered into a securities purchase agreement (the "July 2024 Securities Purchase Agreement"), where the Company issued (i) pre-funded warrants to purchase 446,753 shares of Class A common stock, (ii) Series A common warrants to purchase an aggregate of 3,246,753 shares of Class A common stock and (iii) Series B common warrants to purchase an aggregate of 3,246,753 shares of Class A common stock. The pre-funded warrants are exercisable immediately and have an unlimited term and an exercise price of $ 0.0001 per share. Pursuant to the October Offering, Series A common warrants to purchase an aggregate of 3,246,753 shares of Class A common stock issued in the July 2024 Securities Purchase Agreement were cancelled. The Series B warrants will be exercisable following the six-month anniversary of the closing date of the July 2024 Securities Purchase Agreement, will expire five and a half years from the date of issuance and will have an exercise price of $ 3.08 per share. The Series B warrants include certain rights upon “fundamental transactions,” as described in the Series B warrants, 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 B warrants on the date of the consummation of the fundamental transactions. The pre-funded warrants, Series A common warrants, and Series B common warrants are all classified as equity on the Company's consolidated balance sheet. In August 2024, the pre-funded warrants were fully exercised for de minimis proceeds. A ll of the Series B warrants were exercised as part of the Letter Agreement disclosed above, and none remain outstanding as of December 31, 2025 and 2024. Loan and Security Agreement Warrants In August 2022, in conjunction with a loan and security agreement ( Note 13 ), 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 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 consolidated statements of operations for the year ended December 31, 2025. As of December 31, 2025, there were 76,336 w arrants to purchase the Company's Class A common stock outstanding. Warrant activity A summary of warrant activity during the periods indicated is as follows: 137 Number of Warrants Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Outstanding at December 31, 2024 † 6,656,422 $ 3.10 4.66 $ — Granted 138,460,176 0.50 4.78 — Exercised* ( 13,547,236 ) 1.79 — — Outstanding at December 31, 2025 131,569,362 $ 0.49 4.78 $ 113,345 † Included in the December 31, 2024 balance are 76,336 warrants with an exercise price of $ 11.79 per share, which were modified during the year ended December 31, 2025 to subsequently have an exercise price of $ 0.50 per share. * Note that 6,580,086 shares of warrants had an initial exercise price of $ 3.00 per share and were modified in May 2025 to a new exercise price of $ 0.65 per share. 10. Stockholders’ Equity As of December 31, 2025, 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 December 31, 2025, 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 the years ended December 31, 2025 and 2024, certain of the Continuing LLC Owners executed an exchange of 60,000 and 144,592 Paired Interests and 46,929 and 115,437 non-corresponding Class A Units of Rani LLC, respectively, in return for an equal number of shares of the Company’s Class A common stock. The corresponding shares of the Company’s Class B common stock included in the exchange of Paired Interests were subsequently canceled and retired pursuant to the terms of the Amended Rani LLC Agreement. 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. In October 2025, the Company entered into a Private Placement pursuant to which the Company issued and sold (i) 42,633,337 shares (the “Shares”) of Class A Common Stock, par value $ 0.0001 per share, (ii) Common Warrants to purchase up to an aggregate of 125,000,004 shares of Class A Common Stock or pre-funded warrants and (iii) Pre-Funded Warrants to purchase up to an aggregate of 82,366,667 shares of Class A Common Stock. The aggregate gross proceeds to the Company from the closing of the Private Placement are approximately $ 60.3 million (including conversion of $ 6.0 million of the Loan's principal balance, see Note 13 ), before deducting placement agent fees of approximately $ 4.5 million and other expenses payable by the Company, and excluding the proceeds, if any, from the exercise of the Common Warrants. Refer to Note 9 for more detail. In July 2025, the Company closed the July 2025 Securities Purchase Agreement, pursuant to which the Company issued and sold 4,354,000 shares of Class A common stock, par value $ 0.0001 per share, and pre-funded warrants to purchase 3,146,000 shares of Class A common stock. The pre-funded warrants are exercisable immediately following the closing date of the offering, have an unlimited term, an exer cise price of $ 0.0001 per share. The aggregate gross proceeds to the Company from the closing of the July 2025 Securities Purchase Agreement are approximately $ 3.0 million before deducting issuance costs of approximately $ 0.2 million. In July 2025, the institutional investor fully exercised all pre-funded warrants. Refer to Note 9 for more detail. In October 2024, the Company closed the October 2024 Securities Purchase Agreement, pursuant to which it issued and sold: (i) 3,000,000 shares of its Class A common stock, par value $ 0.0001 per share, (ii) pre-funded warrants to purchase 333,333 shares of Class A common stock, and (iii) Series C common warrants, which will accompany the Class A common stock and pre-funded warrants, to purchase an aggregate of 3,333,333 shares of Class A common stock. Pursuant to the October 2024 Securities Purchase Agreement, Series A common warrants to purchase an aggregate of 3,246,753 shares of Class A common stock issued in the July 2024 Securities Purchase Agreement were cancelled. The aggregate net proceeds from the October Offering totaled $ 9.4 million, after deducting placement agent fees and other offering expenses, and excluding potential proceeds, if any, from the exercise of the Series C common warrants issued in the October Offering. In October 2024, the pre-funded warrants were fully exercised for de minimis proceeds. In July 2024, the Company closed the July 2024 Securities Purchase Agreement, pursuant to which it issued and sold: (i) 2,800,000 shares of Class A common stock, (ii) pre-funded warrants to purchase 446,753 shares of Class A common stock, (iii) Series A common warrants, which accompany the Class A common stock and pre-funded warrants, to purchase an aggregate of 3,246,753 shares of Class A common stock and (iv) Series B common warrants, which accompany the Class A common stock and pre-funded warrants, to purchase an aggregate of 3,246,753 shares of Class A common stock. The aggregate net proceeds from the July 2024 138 Securities Purchase Agreement totaled $ 8.9 million, after deducting placement agent fees and other offering expenses, and excluding potential proceeds, if any, from the exercise of the Series A common warrants and Series B common warrants issued in the July 2024 Securities Purchase Agreement. In August 2024, the pre-funded warrants were fully exercised for de minimis proceeds. As of December 31, 2025, the Company reserved 0.5 million shares of Class A Common Stock for issuance under the Rani Therapeutics Holdings, Inc. 2021 Employee Stock Purchase Plan (the “ESPP”) and 2.4 million shares of Class A common stock for future issuance under the 2021 Plan. 11. Stock-Based Compensation Stock Options A summary of stock option activity during the periods indicated is as follows: Number of Stock Option Awards Weighted Average Exercise Price Weighted Average Remaining Contractual Term (in years) Aggregate Intrinsic Value (in thousands) Balance at December 31, 2024 10,225,433 $ 5.52 8.18 $ — Granted 4,473,930 $ 0.88 5,412 Exercised ( 9,760 ) $ 0.97 Forfeited ( 1,822,367 ) $ 4.68 Balance at December 31, 2025 12,867,236 $ 4.03 8.19 5,067 Exercisable at December 31, 2025 7,177,285 $ 5.70 7.64 1,144 Nonvested at December 31, 2025 5,689,951 $ 1.86 8.88 $ 3,923 In October 2025, the Company modified stock options held by two board members who resigned. The modification included (i) the accelerated vesting for 100,000 unvested stock options, which was accounted for as a Type III (improbable-to-probable) modification, and (ii) an extension of the post‑termination exercise periods for vested options, which was accounted for as a Type I (probable-to-probable) modification. As a result, the Company recorded an aggregate incremental fair value of approximately $ 0.2 million, which was recorded as stock-based compensation expense and additional paid-in-capital on the Company’s consolidated statement of operations and balance sheet, respectively, as of December 31, 2025. 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: • Expected term - The expected term represents the period of time that stock option awards are expected to remain outstanding. The Company estimates the expected term as the midpoint between actual or expected vesting date and the contractual term. • Expected volatility - The expected volatility was derived from the historical stock volatilities of peer public companies within the Company's industry that are considered to be comparable businesses over a period equivalent to the expected term of the stock option awards, since there has been limited trading history of the Company's stock. • Risk-free interest rate - The risk-free interest rate is based on the U.S. Treasury yield curve in effect at the date of grant for zero-coupon U.S. Treasury notes with maturities approximately equal to the stock option awards’ expected term. • Expected dividend yield - The expected dividend yield is zero as the Company has no plans to make dividend payments. The following table sets forth the weighted average assumptions used in estimating the fair value of stock option awards on the grant date: 139 Year Ended December 31, 2025 2024 Expected volatility 92.3 % 87.6 % Risk-free interest rate 4.13 % 4.30 % Expected term (in years) 5.9 6.0 Expected dividend yield — % — % As of December 31, 2025, there wa s $ 8.9 million of unrecognized stock-based compensation expense related to stock options which is expected to be recognized over a weighted-average period of approximately 2.5 years. Restricted Stock Units A summary of RSU activity during the periods indicated is as follows: Number of Restricted Stock Units Weighted Average Grant-Date Fair Value per Share Balance at December 31, 2024 811,893 $ 7.08 Vested ( 327,991 ) 7.47 Forfeited ( 135,200 ) 6.49 Balance at December 31, 2025 348,702 $ 6.94 As of December 31, 2025, the re was $ 1.6 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 $0.4 million for the year ended December 31, 2025. Restricted Stock Awards A summary of RSA activity during the periods indicated is as follows: Number of Restricted Stock Awards Weighted Average Grant-Date Fair Value per Share Balance at December 31, 2024 3,257 $ 6.17 Vested ( 3,257 ) 6.17 Balance at December 31, 2025 — $ — ESPP As of December 31, 2025, 0.1 million shares of Class A common stock have been issued under the ESPP. During the years ended December 31, 2025 and 2024, the Company recognized $ 0.1 million and $ 0.2 million, respectively, of stock-based compensation expense related to the ESPP. As of December 31, 2025 , unrecognized stock-based compensation expense related to the ESPP was de minimis which is expected to be recognized over a weighted-average period of approximately 0.4 years. As of December 31, 2025, contributions withheld from employees were de minimis and are recorded as a component of accrued expenses and other current liabilities in the consolidated balance sheet. 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 consolidated statement of operations and comprehensive loss (in thousands): Year Ended December 31, 2025 2024 Research and development $ 3,719 $ 4,700 General and administrative 8,079 11,331 Total stock-based compensation $ 11,798 $ 16,031 140 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 December 31, 2025, the Company had no additional significant lease commitments outside of those recognized as operating lease liabilities on the consolidated balance sheets. Legal Proceedings 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. Tax Receivable Agreement The Company was party to a TRA with certain of the Continuing LLC Owners ( Note 2 ). As of December 31, 2025, the Company has not recorded a liability under the TRA related to the income tax benefits originating from the exchanges of Paired Interest or non-corresponding Class A Units of Rani LLC as it is not probable that the Company will realize such tax benefits. In December 2025, as contemplated by the Private Placement, the Company entered into the TRA Termination Agreement by and between the Company and ICL, pursuant to which the parties agreed to terminate the TRA and disclaim any rights or interests thereunder. As a result of the termination, the Company has no further obligations under the TRA, and no tax benefit payments or early termination payments were required in connection with such termination. The TRA Termination Agreement provides for the mutual release of the parties from all obligations under the TRA, effective as of December 31, 2025. 13. Long-Term Debt In August 2022, the Company entered into a loan and security agreement and related supplement (the “Loan Agreement”) with Avenue Venture Opportunities Fund, L.P (the “Lender”). The Loan Agreement provides for term loans (the “Loans”) in an aggregate principal amount up to $ 45.0 million. A Loan of $ 30.0 million was committed at closing, with $ 15.0 million funded immediately and $ 15.0 million funded in December 2022. The remaining $ 15.0 million of Loans was uncommitted and subject to certain conditions and is no longer available under the Loan Agreement. The purpose of the Loans is for general corporate purposes. In exchange for access to this facility, the Company agreed to issue warrants ( Note 9 ). Pursuant to the Loan Agreement, the maturity date for the Loans is August 1, 2026 (the “Maturity Date”). The Loan principal is repayable in equal monthly installments beginning September 2024. The Loans bear interest at a variable rate per annum equal to the greater of (A) the prime rate, as published by the Wall Street Journal from time to time plus 5.60 % or (B) 10.35 %. The Loan Agreement is collateralized by substantially all of the Company’s assets, in which the Lender is granted continuing security interests. The Loans include customary events of default, including instances of a material adverse change in the Company’s operations, which may require prepayment of the outstanding Loans. As of December 31, 2025 and 2024, the Company paid $ 19.0 million and $ 5.0 million of principal, respectively. In October 2025, the Company and the Lender executed an amendment to Loan Agreement (the “LSA Amendment”), pursuant to which the Lender agreed, among other things, to settle $ 6.0 million of outstanding principal of the Loans by receiving 12,500,000 shares of Class A Common Stock in connection with the Private Placement ( Note 9 ). In addition, the Lender received warrants to purchase up to 12,500,000 shares of Class A Common Stock (or Pre-Funded Warrants in lieu thereof), on the same terms as the other purchasers in the Private Placement. The conversion option was exercised in October 2025 upon the closing of the Private Placement, and the $ 6.0 million of outstanding principal balance was fully settled through the issuance of shares. 141 In December 2025 , the Company repaid $ 7.9 million in cash to settle all obligations under the Loan Agreement, including the remaining principal balance of $ 6.2 million, a final payment of $ 1.7 million, and a prepayment fee of $ 0.1 million, offset by an interest refund of $ 0.1 million. The Company recognized a loss on the extinguishment of the debt of $ 0.6 million. Upon repayment of these amounts, all obligations under the Loan Agreement were fully satisfied. The Company no longer has any outstanding debt obligations as of December 31, 2025. 14. Income Taxes The tables below provides the updated requirements of ASU 2023-09 for 2025 (in thousands). See Note 2 Summary of Significant Accounting Policies - Recent accounting pronouncements for additional details on the adoption of ASU 2023-09. Year Ended December 31, 2025 Amount % Income taxes (benefit) at statutory federal rate ( 8,600 ) 21.0 % State and local taxes, net of federal income tax effect (1) ( 30 ) 0.1 Foreign tax effects — — Changes in valuation allowance 5,431 ( 13.3 ) Tax credits Federal research and development credit ( 465 ) 1.1 Non-taxable or nondeductible items Non-controlling interests 3,030 ( 7.4 ) Changes in unrecognized tax benefits Uncertain tax positions 99 ( 0.2 ) Other Federal return to provision 534 ( 1.3 ) Provision / (benefit) for income taxes — — % (1) California contributed to the majority (greater than 50%) of the tax effect in this category. Year Ended December 31, 2025 Federal statutory rate 21.0 % State tax, net of federal tax benefit 0.1 Non-controlling interest ( 7.4 ) Research and development credits 1.1 Uncertain tax position ( 0.2 ) Other ( 1.3 ) Change in valuation allowance ( 13.3 ) Effective tax rate — % As disclosed for the year ended December 31, 2024, prior to the adoption of ASU 2023-09, the difference between the Company’s provision for income taxes and the amounts computed by applying the statutory federal income tax rate to income before taxes is as follows: Year Ended December 31, 2024 Federal statutory rate 21.0 % State tax, net of federal tax benefit 3.7 Non-controlling interest ( 9.8 ) Research and development credits 1.7 Uncertain tax position ( 0.3 ) Other 0.2 Change in valuation allowance ( 16.5 ) Effective tax rate — % 142 Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. The components that comprise the Company’s net deferred taxes consist of the following (in thousands): Year Ended December 31, 2025 2024 Deferred tax assets Investment in partnership $ 46,125 $ 46,258 Net operating loss carryforward 28,733 19,384 Research and development credits 4,199 3,430 Total deferred tax assets 79,057 69,072 Valuation allowance ( 79,057 ) ( 69,072 ) Total deferred tax assets, net of valuation allowance $ — $ — The Company determines its valuation allowance on deferred tax assets by considering both positive and negative evidence in order to ascertain whether it is more likely than not that deferred tax assets will be realized. Realization of deferred tax assets is dependent upon the generation of future taxable income, if any, the timing and amount of which are uncertain. Because of the Company’s recent history of operating losses, the Company believes that recognition of the deferred tax assets arising from the above-mentioned future tax benefits is currently not likely to be realized and, accordingly, has recognized a full valuation allowance on its deferred tax assets. The valuation allowance increased by $ 10.0 m illion and $ 8.1 million for the years ended December 31, 2025 and 2024, respectively, primarily due to the increase in the Company’s net operating losses (“NOL”) during the period. As of December 31, 2025, the Company had the following tax attribute carryforwards that will expire on various dates as follows (in thousands): Amount Expiration Years Net operating losses, federal (post December 31, 2017) $ 97,659 Indefinite Net operating loss, state (definite) 117,251 2041 - 2045 Research and development tax credits, federal 3,073 2041 - 2045 Research and development tax credits, state $ 2,364 Indefinite Pursuant to Internal Revenue Code (“IRC”) Sections 382 and 383, annual use of the Company’s research and development credit carryforwards may be limited in the event a cumulative change in ownership of more than 50% occurs within a three-year period. As of December 31, 2025, the Company has not performed an IRC Section 382 or 383 analysis. If a change in ownership were to have occurred, additional tax credit carryforwards could be eliminated or restricted. If eliminated, the related asset would be removed from the deferred tax asset schedule with a corresponding reduction in the valuation allowance. The Company is subject to United States federal and California income taxes and is not currently under examination by any federal or state taxing authorities. Due to the Company's net operating loss carryforwards, its federal and California returns are open to examination by the Internal Revenue Service and the California Franchise Tax Board for years beginning in 2021. The following table summarizes the changes in the amount of the unrecognized tax benefits (in thousands): Year Ended December 31, 2025 2024 Balance at the beginning of the year $ 661 $ 489 Increase related to current year positions 143 162 Increase related to prior year positions 10 — Decrease related to prior year positions — 10 Balance at the end of the year $ 814 $ 661 Included in the balance of unrecognized tax benefits at December 31, 2025 is $ 0.7 million that if recognized would impact the Company’s income tax benefit and effective tax rate. The Company does not expect any significant increases or decreases in its unrecognized tax benefits within the next twelve months. 143 Recent Legislation On July 4, 2025, the One Big Beautiful Bill Act (the “OBBBA”) was signed into law, which enacts significant changes to U.S. tax and related laws. Some of the provisions of the OBBBA affecting corporations include but are not limited to restoring the current deductibility of domestic research and experimental expenses, increasing the limit of the deduction of interest expense deduction limitation under Section 163(j) of the Internal Revenue Code of 1986, as amended, to thirty percent of EBITDA, and allowing one hundred percent bonus depreciation on eligible property acquired after January 19, 2025. The OBBBA has varying effective dates, with certain provisions effective in 2025 and others with multiple effective dates through 2027. The Company has evaluated the potential impact of the OBBBA and expects it to result primarily in a timing difference, with no material impact on its effective tax rate. 15. 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): Year Ended December 31, 2025 2024 Numerator: Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc. $ ( 29,673 ) $ ( 30,018 ) Denominator: Weighted average Class A common share outstanding—basic and diluted* 66,138 28,476 Net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc.—basic and diluted $ ( 0.45 ) $ ( 1.05 ) * 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 December 31, 2025 2024 Paired Interests 23,970 23,972 Stock options 12,867 10,225 Warrants 131,569 6,656 Non-corresponding Class A Units 1,165 1,230 Restricted stock units 349 812 Shares issuable pursuant to the ESPP 60 62 Restricted stock awards — 3 169,980 42,960 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 year ended December 31, 2025 . Therefore, they are not included in the computation of net loss per Class A common share attributable to Rani Therapeutics Holdings, Inc. 144 16. Segment Information The Company operates as one operating segment. The Company's chief operating decision maker (“CODM”) is its Chief Executive Officer, who reviews financial information presented on a consolidated basis. The CODM assesses operating performance and makes resource allocation decisions primarily based on net loss, cash on-hand and cash flows utilizing the Company’s long-range plan, which includes product development roadmaps and long-range financial models. Significant expenses include research and development and general and administrative expenses, which are each separately presented on the Company’s Consolidated Statements of Operations. Other segment items within net loss include interest income and other, net and interest expense and other, net. See the consolidated financial statements for other financial information regarding the Company’s operating segment. The Company’s long-lived assets recognized on the Consolidated Balance Sheets primarily consisted of property and equipment, net and operating lease right-of-use assets, which are located within the US. 17. Subsequent Events The Company has evaluated all subsequent events through the date the consolidated financial statements were issued and determined that there have been no events or transactions that have occurred that would require recognition in the consolidated financial statements or additional disclosure herein, except as described elsewhere in the notes to the consolidated financial statements. 145 Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure None.