Rani Therapeutics Holdings, Inc. Announces Pricing of $10.0 Million Registered Direct Offering and Cancellation of Certain Existing Warrants

Rhea-AI Summary

Rani Therapeutics Holdings (Nasdaq: RANI) has announced a $10.0 million registered direct offering of its Class A common stock and warrants. The company will sell 3,000,000 shares of common stock and pre-funded warrants for 333,333 shares, along with Series C common warrants for up to 3,333,333 shares. Each share or pre-funded warrant is priced at $3.00, bundled with a Series C warrant. The Series C warrants have a $3.00 exercise price and a 5-year expiration. Rani will also cancel all outstanding Series A warrants issued on July 22, 2024. Maxim Group is the sole placement agent, with the offering expected to close around October 16, 2024. The proceeds will be used to support Rani's clinical-stage biotherapeutics work on oral delivery of biologics and drugs.

Positive

• Secured $10.0 million in gross proceeds through a registered direct offering
• Cancellation of previously issued Series A warrants, potentially reducing dilution
• 5-year expiration on new Series C warrants provides long-term funding flexibility

Negative

• Potential dilution for existing shareholders due to new share issuance
• Offering price of $3.00 per share may be below current market value
• Additional warrants could lead to further dilution if exercised

Insights

Financial Analyst

Rani Therapeutics' $10 million registered direct offering is a significant move for a company with a market cap of around $79 million. This capital raise, priced at $3.00 per share, represents a substantial dilution of about 12.5% based on the current outstanding shares. The inclusion of warrants adds potential for further dilution.

The cancellation of previously issued Series A warrants is a positive aspect, potentially reducing future dilution. However, the new Series C warrants, if exercised, could still lead to significant dilution. The $3.00 exercise price of these warrants suggests the company sees this as a fair valuation point.

For a clinical-stage biotherapeutics company, raising capital is important for funding ongoing research and development. This offering should provide Rani with a cash runway extension, but investors should monitor the burn rate and future financing needs. The market's reaction to this offering will be telling, as it may be seen as either a necessary step for growth or a sign of financial pressure.

Biotech Industry Expert

Rani Therapeutics' focus on oral delivery of biologics and drugs positions it in a high-potential but challenging niche within the biotech industry. The company's ability to secure this financing in the current market environment suggests some investor confidence in its technology platform.

However, the need for additional funding at this stage indicates that Rani is still some distance from commercialization. For clinical-stage biotech companies, each financing round is critical for advancing their pipeline. Investors should closely monitor upcoming clinical milestones and regulatory interactions to assess the company's progress.

The pricing of the offering at $3.00 per share, which is likely below recent trading prices, may reflect current market conditions and investor risk perception. This could impact short-term stock performance but may be necessary for long-term value creation if the funds are effectively utilized to advance key programs.

SAN JOSE, Calif., Oct. 15, 2024 (GLOBE NEWSWIRE) -- Rani Therapeutics Holdings, Inc. (“Rani Therapeutics” or “Rani”) (Nasdaq: RANI), a clinical-stage biotherapeutics company focused on the oral delivery of biologics and drugs, today announced that it has entered into a securities purchase agreement with a single institutional investor for the purchase and sale of 3,000,000 shares of Rani Therapeutics’ Class A common stock (the “Common Stock”) and pre-funded warrants to purchase 333,333 shares of Common Stock, together with Series C common warrants to purchase up to an aggregate of 3,333,333 shares of Common Stock, in a registered direct offering. Each share of Common Stock (or pre-funded warrant) is being sold together with one Series C common warrant at a combined purchase price of $3.00. The Series C common warrants will have an exercise price of $3.00 per share and will expire 5 years from the date of issuance.

The Company has also entered into an agreement with the investor to cancel all outstanding Series A common warrants to purchase an aggregate of 3,246,753 shares of the Company's common stock, previously issued on July 22, 2024. Pursuant to the agreement, the Series A warrants will be canceled and no-longer exercisable.

Maxim Group LLC is acting as the sole placement agent for the offering.

The offering is expected to close on or about October 16, 2024, subject to satisfaction of customary closing conditions. The gross proceeds to Rani Therapeutics from this offering are expected to be approximately $10.0 million, before deducting placement agent fees and other offering expenses, excluding the proceeds, if any, from the exercise of the pre-funded warrants and the Series C common warrants.

The securities in the registered direct offering are being offered and sold by Rani pursuant to a "shelf" registration statement on Form S-3 (File No. 333-266444) which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”) on August 10, 2022. The offering of the securities is being made only by means of a prospectus, including a prospectus supplement, forming a part of the effective registration statement. A final prospectus supplement and the accompanying prospectus relating to the registered direct offering will be filed with the SEC. Electronic copies of the final prospectus supplement and the accompanying prospectus may be obtained, when available, on the SEC's website at http://www.sec.gov or by contacting Maxim Group LLC, 300 Park Avenue, New York, NY 10022, Attention: Syndicate Department, or via email at syndicate@maximgrp.com or telephone at (212) 895-3745.

This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or jurisdiction in which such an offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or jurisdiction.

About Rani Therapeutics

Rani Therapeutics is a clinical-stage biotherapeutics company focused on advancing technologies to enable the development of orally administered biologics and drugs. Rani has developed the RaniPill^® capsule, which is a novel, proprietary and patented platform technology, intended to replace subcutaneous injection or intravenous infusion of biologics and drugs with oral dosing. Rani has successfully conducted several preclinical and clinical studies to evaluate safety, tolerability and bioavailability using RaniPill^® capsule technology.

Investor Contact:
investors@ranitherapeutics.com

Media Contact:
media@ranitherapeutics.com

FAQ

What is the size and type of Rani Therapeutics' (RANI) new offering announced on October 15, 2024?

Rani Therapeutics announced a $10.0 million registered direct offering of 3,000,000 shares of Class A common stock, pre-funded warrants for 333,333 shares, and Series C common warrants for up to 3,333,333 shares.

What is the pricing structure for Rani Therapeutics' (RANI) October 2024 offering?

Each share of common stock or pre-funded warrant is being sold together with one Series C common warrant at a combined purchase price of $3.00. The Series C common warrants have an exercise price of $3.00 per share.

When is Rani Therapeutics' (RANI) new offering expected to close?

The offering is expected to close on or about October 16, 2024, subject to satisfaction of customary closing conditions.

What will happen to Rani Therapeutics' (RANI) previously issued Series A warrants?

Rani Therapeutics has entered an agreement to cancel all outstanding Series A common warrants to purchase 3,246,753 shares, previously issued on July 22, 2024. These warrants will no longer be exercisable.