Rapport Therapeutics, Inc. Common Stock (RAPP) Cash Flow Statement

The OCF/NI ratio has ranged from 0.65 to 0.94, with the latest quarter at 0.73, suggesting that reported net losses overstate the actual cash drain by roughly 25-35% due to non-cash items. However, the absolute cash burn is accelerating, with operating cash outflows reaching $41.5M in 2026Q2, up from $17.6M in 2024Q1, reflecting the ramp in pivotal trial spending. Investors should monitor whether the gap narrows as trial costs become more cash-intensive.

The FCF trajectory is clearly negative and accelerating, with the quarterly burn more than doubling over the ten-quarter period. This aligns with the initiation of pivotal FOCUS trials, which typically require significant upfront investment in patient recruitment and site activation. Given the pre-revenue status, the company's ability to sustain this burn without additional funding is a key concern, as the current cash position may only cover a few quarters.

CapEx has remained consistently low, ranging from $22K to $1.1M per quarter, which is typical for a clinical-stage biotech that outsources manufacturing and relies on CROs. This suggests that the company's cash burn is driven almost entirely by operating expenses, particularly R&D, rather than fixed asset investments. The low capital intensity provides flexibility but also underscores the reliance on external partners for trial execution.

The working capital adjustments are inconsistent, with positive changes in some quarters (e.g., 2026Q2, 2025Q4) and negative in others (e.g., 2025Q2, 2024Q1). This volatility is typical for clinical-stage companies where trial-related payables and prepayments can cause lumpy cash flows. The positive $8.5M in 2026Q2 may indicate delayed payments to vendors, which could reverse in subsequent quarters, adding to cash flow uncertainty.

Capital deployment is entirely focused on funding R&D and clinical development, with zero dividends and minimal share repurchases. The negligible buybacks (under $5K) are likely rounding errors or token amounts, indicating no intention to return capital to shareholders. This is consistent with a pre-revenue company in a growth phase, where preserving cash for trial milestones is paramount.

The cumulative gap between net income and operating cash flow is significant, with non-cash items like stock-based compensation (totaling $43.1M) and depreciation/amortization ($2.2M) explaining most of the difference. This suggests that while the company is burning cash at a rapid pace, the reported losses overstate the immediate cash drain. However, the gap is narrowing as SBC becomes a smaller proportion of total expenses, implying that future cash burn may more closely track net losses.