Amendment: SEC Form 10-K/A filed by Revelation Biosciences Inc.
ageord
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Amendment No. 1)
(Mark One)
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from to
Commission File Number:
(Exact Name of Registrant as Specified in its Charter)
( State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer |
(Address of principal executive offices) |
(Zip Code) |
Registrant’s telephone number, including area code: (
Securities registered pursuant to Section 12(b) of the Act:
Title of each class |
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Trading Symbol(s) |
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Name of each exchange on which registered |
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The |
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Redeemable warrants, each exercisable for a 1/1,050th share of common stock at an exercise price of $12,075.00 per share |
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REVBW |
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The Nasdaq Stock Market LLC |
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. Yes ☐
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.
Indicate by check mark whether the registrant has fi led a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting fi rm that prepared or issued its audit report.
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements.
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
The aggregate market value of voting common equity held by non-affiliates of the registrant was
As of March 18, 2024, the registrant had
EXPLANATORY NOTE
Except as described above, this Amendment does not reflect events occurring after the date of the filing of the Original Form 10-K or modify or update any of the other disclosures contained therein in any way. Accordingly, this Amendment should be read in conjunction with the Original Form 10-K and the Company’s other filings with the SEC. This Amendment does not reflect events that may have occurred subsequent to the filing of the Original Form 10-K. The filing of this Amendment is not an admission that the Original Form 10-K, when filed, included any untrue statement of a material fact or omitted to state a material fact necessary to make a statement not misleading.
PART II
Item 8. Financial Statements and Supplementary Data.
The financial statements required by this item are set forth at the end of this Annual Report on Form 10-K/A beginning on page F-1 and are incorporated herein by reference.
Item 9A. Controls and Procedures.
Evaluation of Disclosure Controls and Procedures
Our management, with the participation of our principal executive officer and our principal financial officer, evaluated, as of the end of the period covered by this Annual Report on Form 10-K/A, the effectiveness of our disclosure controls and procedures. Based on that evaluation of our disclosure controls and procedures as of December 31, 2023, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures as of such date are effective at the reasonable assurance level. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the “Exchange Act”), means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act are recorded, processed, summarized and reported within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives, and our management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures.
Management’s Annual Report on Internal Control over Financial Reporting
Our management is responsible for establishing and maintaining adequate internal control over our financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the presentation of financial statements for external purposes in accordance with U.S. generally accepted accounting principles. Internal control over financial reporting includes those policies and procedures that:
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that our degree of compliance with the policies or procedures may deteriorate.
In connection with the preparation of this Annual Report on Form 10-K/A, our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2023. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013 framework). Based on such assessment, our management concluded that, as of December 31, 2023, our internal control over financial reporting was effective based on those criteria.
Changes in Internal Control over Financial Reporting
There was no change in our internal control over financial reporting that occurred during our most recent quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART IV
Item 15. Exhibits, Financial Statement Schedules.
The following documents are filed as part of this Annual Report on Form 10-K/A:
10.15(7) |
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10.16(11) |
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Form of Securities Purchase Agreement dated February 1, 2024 |
10.17(11) |
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14.1(13) |
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21.1(4) |
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23.1* |
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31.1* |
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31.2* |
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32.1* |
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32.2* |
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97(15) |
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99.1(13) |
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99.2(13) |
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99.3(13) |
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101.INS* |
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XBRL Instance Document – the instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document. |
101.SCH* |
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Inline XBRL Taxonomy Extension Scema Document |
101.CAL* |
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Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* |
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Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
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Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* |
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Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* |
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Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
The annexes, schedules, and certain exhibits to the Agreement and Plan of Merger have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Revelation hereby agrees to furnish supplementally a copy of any omitted annex, schedule or exhibit to the SEC upon request.
(1) |
Previously filed as an exhibit to Petra Acquisition Inc.’s Registration Statement on Form S-1, as amended (File No. 333-240175). |
(2) |
Previously filed as an exhibit to Petra Acquisition Inc.’s Current Report on Form 8-K filed on October 13, 2020. |
(3) |
Previously filed as an exhibit to Petra Acquisition Inc.’s Current Report on Form S-4 filed, as amended (File No. 333- 259638). |
(4) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on January 14, 2022. |
(5) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on January 27, 2022. |
(6) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Registration Statement on Form S-1, as amended (File No. 333-268076). |
(7) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on February 13, 2023. |
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(8) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on July 7, 2023. |
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(9) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on January 23, 2024. |
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(10) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Registration Statement on Form S-1, as amended (File No. 333-276232). |
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(11) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on February 8, 2024. |
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(12) |
Previously filed Appendix A to Revelation Biosciences, Inc.’s definitive proxy statement filed on May 5, 2023 |
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(13) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Annual Report on Form 10-K filed on March 30, 2023. |
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(14) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Current Report on Form 8-K filed on January 31, 2023. |
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(15) |
Previously filed as an exhibit to Revelation Biosciences, Inc.’s Annual Report on Form 10-K filed on March 22, 2024. |
* |
Filed herewith. |
† |
Indicates a management contract or compensatory plan. |
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Annual Report on Form 10-K/A to be signed on its behalf by the undersigned, thereunto duly authorized.
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REVELATION BIOSCIENCES, INC. |
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Date: September 23, 2024 |
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By: |
/s/ James Rolke |
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James Rolke |
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Chief Executive Officer |
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(principal executive officer) |
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
REVELATION BIOSCIENCES, INC.
Report of Independent Registered Public Accounting Firm (PCAOB ID |
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F-2 |
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F-3 |
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F-4 |
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Consolidated Statements of Changes in Stockholders’ Equity (Deficit) |
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F-5 |
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F-6 |
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F-7 – F-27 |
F-1
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Stockholders of Revelation Biosciences, Inc.
Opinion on the Consolidated Financial Statements
We have audited the accompanying consolidated balance sheets of Revelation Biosciences, Inc. (the Company) as of December 31, 2023, and 2022, the related consolidated statements of operations, changes in stockholders' equity (deficit), and cash flows for each of the two years in the period ended December 31, 2023, and the related notes (collectively, the consolidated financial statements). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023, and 2022, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.
Going Concern Uncertainty
The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the consolidated financial statements, the Company has incurred recurring operating losses and has no revenue sources. 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 consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
Basis for Opinion
These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company’s consolidated 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 U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits 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 consolidated 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 audits, 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 audits included performing procedures to assess the risks of material misstatement of the consolidated 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 consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion.
/s/
We have served as the Company’s auditor since 2021.
March 22, 2024
F-2
PART I—FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
REVELATION BIOSCIENCES, INC.
Consolidated Balance Sheets
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December 31, |
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December 31, |
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ASSETS |
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Current assets: |
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Cash and cash equivalents |
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$ |
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$ |
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Deferred offering costs |
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Prepaid expenses and other current assets |
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Total current assets |
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Property and equipment, net |
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Total assets |
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$ |
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$ |
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LIABILITIES AND STOCKHOLDERS’ EQUITY |
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Current liabilities: |
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Accounts payable |
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$ |
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$ |
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Accrued expenses |
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Deferred underwriting commissions |
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Warrant liability |
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— |
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Total current liabilities |
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Total liabilities |
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(Note 4) |
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Stockholders’ equity: |
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Series A Preferred Stock, $ |
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Common Stock, $ |
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Additional paid-in-capital |
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Accumulated deficit |
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( |
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Total stockholders’ equity |
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Total liabilities and stockholders’ equity |
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$ |
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$ |
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See accompanying notes to the consolidated financial statements.
F-3
REVELATION BIOSCIENCES, INC.
Consolidated Statements of Operations
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Year Ended |
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2023 |
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2022 |
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Operating expenses: |
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Research and development |
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$ |
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$ |
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General and administrative |
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Total operating expenses |
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Loss from operations |
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Other income (expense): |
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Change in fair value of warrant liability |
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— |
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Other income (expense) |
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Total other income (expense), net |
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Net loss |
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$ |
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Net loss per share, basic and diluted |
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$ |
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$ |
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Weighted-average shares used to compute net loss per share, basic and diluted |
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See accompanying notes to the consolidated financial statements.
F-4
REVELATION BIOSCIENCES, INC.
Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
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Series A |
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Common Stock |
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Additional |
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Accumulated |
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Total |
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Shares |
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Amount |
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Shares |
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Amount |
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Capital |
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Deficit |
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(Deficit) |
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Balance as of December 31, 2021 (as previously reported) |
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— |
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— |
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$ |
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$ |
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$ |
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$ |
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Retrospective application of reverse recapitalization |
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— |
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— |
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( |
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( |
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— |
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— |
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Reverse stock split fractional stock round up |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at December 31, 2021 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
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$ |
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Issuance of common stock in connection with the Business Combination, net |
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— |
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Issuance of common stock for fees in connection with the Business Combination |
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— |
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— |
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— |
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Proceeds from the PIPE Investment, net |
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— |
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— |
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— |
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Rollover Warrant exercise |
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— |
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— |
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— |
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— |
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Repurchase for the Forward Share Purchase Agreement exercise |
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— |
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— |
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— |
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Class A Pre-Funded Warrants exercise |
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— |
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— |
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— |
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Proceeds from the July 2022 Public Offering, net |
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— |
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— |
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— |
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RSU awards issued |
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— |
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— |
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— |
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Issuance of common stock for Accrued Expenses in connection with the Business Combination |
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— |
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— |
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— |
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— |
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— |
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Issuance of Series A Preferred Stock |
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— |
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— |
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— |
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— |
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— |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
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— |
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— |
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Net loss |
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— |
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— |
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— |
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— |
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— |
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Balance at December 31, 2022 |
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— |
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$ |
— |
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$ |
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$ |
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$ |
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$ |
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Balance as of December 31, 2022 (as previously reported) |
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$ |
— |
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$ |
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$ |
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$ |
( |
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$ |
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Retrospective application of reverse recapitalization |
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— |
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— |
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( |
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— |
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— |
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Reverse stock split fractional stock round up |
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— |
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— |
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— |
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— |
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— |
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— |
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Balance at December 31, 2022 |
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$ |
— |
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$ |
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$ |
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$ |
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$ |
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Redemption of Series A Preferred Stock |
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— |
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— |
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— |
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— |
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Issuance of common stock from the February 2023 Public Offering |
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— |
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— |
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— |
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Class C Pre-Funded Warrants exercise |
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— |
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— |
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— |
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Alternative cashless exercise of Class C Common Stock Warrants |
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— |
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— |
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RSU awards issued |
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— |
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Stock-based compensation expense |
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— |
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— |
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— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of December 31, 2023 |
|
|
— |
|
|
$ |
— |
|
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes to the consolidated financial statements.
F-5
REVELATION BIOSCIENCES, INC.
Consolidated Statements of Cash Flows
|
|
Year Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Stock-based compensation expense |
|
|
|
|
|
|
||
Depreciation expense |
|
|
|
|
|
|
||
Non-cash lease expense |
|
|
|
|
|
|
||
Change in fair value of warrant liability |
|
|
( |
) |
|
|
|
|
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Deferred offering costs |
|
|
|
|
|
( |
) |
|
Accounts payable |
|
|
|
|
|
( |
) |
|
Accrued expenses |
|
|
|
|
|
( |
) |
|
Operating lease liability |
|
|
|
|
|
( |
) |
|
Accrued interest on Promissory Notes Payable & Convertible Note |
|
|
|
|
|
|
||
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from the Convertible Note |
|
|
|
|
|
|
||
Repayment of the Convertible Note |
|
|
|
|
|
( |
) |
|
Proceeds from the Business Combination, net |
|
|
|
|
|
|
||
Proceeds from the PIPE Investment, net |
|
|
|
|
|
|
||
Proceeds from Rollover Warrant exercise |
|
|
|
|
|
|
||
Repurchase for the Forward Share Purchase Agreement exercise |
|
|
|
|
|
( |
) |
|
Repayments of Promissory Notes Payable, including interest |
|
|
|
|
|
( |
) |
|
Proceeds from the July 2022 Public Offering, net |
|
|
|
|
|
|
||
Redemption of Series A Preferred Stock |
|
|
( |
) |
|
|
|
|
Proceeds from the February 2023 Public Offering, net |
|
|
|
|
|
|
||
Proceeds from Pre-Funded Warrants exercise |
|
|
|
|
|
|
||
Net cash provided by financing activities |
|
|
|
|
|
|
||
Net increase in cash and cash equivalents |
|
|
|
|
|
|
||
Cash and cash equivalents at beginning of period |
|
|
|
|
|
|
||
Cash and cash equivalents at end of period |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
Supplemental disclosure of non-cash investing and financing activities: |
|
|
|
|
|
|
||
Deferred offering costs included in accounts payable and accrued expenses |
|
$ |
|
|
$ |
|
||
Fair Value of Class C Common Stock Warrants in connection with the February 2023 Public Offering |
|
$ |
|
|
$ |
|
||
Alternative cashless exercise of Class C Common Stock Warrants |
|
$ |
|
|
$ |
|
||
Current liabilities assumed in the Business Combination |
|
$ |
|
|
$ |
|
||
Deferred underwriting commissions assumed in the Business Combination |
|
$ |
|
|
$ |
|
||
Equity Issuance for fees in connection with the Business Combination |
|
$ |
|
|
$ |
|
||
Issuance of Class A Common Stock Warrants in connection with the PIPE Investment |
|
$ |
|
|
$ |
|
||
Issuance of Class A Placement Agent Common Stock Warrants in connection with the PIPE Investment |
|
$ |
|
|
$ |
|
||
Conversion of Accrued Expenses to Equity in connection with the Business Combination |
|
$ |
|
|
$ |
|
||
Issuance of Class B Common Stock Warrants in connection with the July 2022 Public Offering |
|
$ |
|
|
$ |
|
||
Issuance of Class B Placement Agent Common Stock Warrants in connection with the July 2022 Public Offering |
|
$ |
|
|
$ |
|
||
|
|
|
|
|
|
|
||
See accompanying notes to the consolidated financial statements.
F-6
REVELATION BIOSCIENCES, INC.
Notes to the Consolidated Financial Statements
1. Organization and Basis of Presentation
Revelation Biosciences, Inc. (collectively with its wholly-owned subsidiaries, the “Company” or “Revelation”), formerly known as Petra Acquisition, Inc. (“Petra”), was incorporated in Delaware on November 20, 2019. The Company was formed for the purpose of entering into a merger, share exchange, asset acquisition, stock purchase, recapitalization, reorganization or similar business combination with one or more businesses or entities. On August 29, 2021 Petra and Old Revelation signed an agreement and plan of merger (the “Business Combination Agreement”). On January 10, 2022 (the “Closing Date”) the Company consummated its business combination, with Revelation Biosciences Sub, Inc. (“Old Revelation” or “Revelation Sub”), the Company's wholly owned subsidiary (the “Business Combination”). Since the Business Combination, the Company is a clinical-stage biopharmaceutical company and has been focused on the development and commercialization of immunologic therapeutics and diagnostics.
Business Combination
The Business Combination was accounted for as a reverse recapitalization with Revelation Sub as the accounting acquirer and Petra as the acquired company for accounting purposes. Accordingly, all historical financial information presented in the consolidated financial statements represents the accounts of Revelation Sub as if Revelation Sub is the predecessor to the Company. The common stock and net loss per share, prior to the Merger, have been retroactively restated as common stock and net loss per share reflecting the exchange ratio established in the Business Combination (the “Common Stock Exchange Ratio”).
Petra’s Common Stock, Public Warrants and Units were historically listed on the Nasdaq Capital Market under the symbols “PAIC,” “PAICW” and “PAICU,” respectively. On January 10, 2022, the Company’s units, common stock and warrants were listed on the Nasdaq Capital Market under the symbols “REVBU”, “REVB” and “REVBW”, respectively.
Unit Separation
Reverse Stock Splits
On January 22, 2024, the Company filed a Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation effecting a reverse stock split on January 25, 2024 with a ratio of (the “2024 Reverse Split”). As a result of the 2024 Reverse Split, every
F-7
On January 30, 2023, the Company filed a Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation reflecting the change in authorized shares of common stock from
NASDAQ Compliance
As previously reported in 2022, the Nasdaq Stock Market (“Nasdaq”) issued delist letters based on the Company’s non-compliance with the bid price and stockholders’ equity requirements for continued listing on the Nasdaq Capital Market, as set forth in Nasdaq Listing Rules 5550(a)(2) and 5550(b)(1), respectively. The Company’s compliance plan was approved by a Nasdaq hearing panel giving the Company until April 18, 2023 to regain compliance. On February 16, 2023, the Company received formal notice from Nasdaq stating that the Company’s common stock will continue to be listed and traded on Nasdaq, due to the Company having regained compliance with the minimum bid price requirement and minimum stockholders’ equity requirement for continued listing on Nasdaq, and all applicable listing standards.
As previously reported on August 8, 2023, the Company received a letter from Nasdaq notifying the Company of its noncompliance with Nasdaq Listing Rule 5550(a)(2) by failing to maintain a minimum bid price for its common stock of at least $
Liquidity and Capital Resources
Going Concern
The Company has incurred recurring losses since its inception, including a net loss of $
F-8
To continue as a going concern, the Company will need, among other things, to raise additional capital resources. The Company plans to seek additional funding through public or private equity or debt financings. The Company may not be able to obtain financing on acceptable terms, or at all. The terms of any financing may adversely affect the holdings or the rights of the Company’s stockholders. If the Company is unable to obtain funding, it could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect the Company’s business operations.
The audited consolidated financial statements for December 31, 2023, have been prepared on the basis that the Company will continue as a going concern, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability for the Company to continue as a going concern.
Basis of Presentation
The accompanying financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). All inter-company transactions and balances have been eliminated in consolidation.
2. Summary of Significant Accounting Policies
Use of Estimates
The preparation of the consolidated financial statements in accordance with GAAP requires management to make estimates and assumptions about future events that affect the amounts of assets and liabilities reported, disclosures about contingent assets and liabilities, and reported amounts of expenses. These estimates and assumptions are based on the Company’s best estimates and judgment. The Company regularly evaluates its estimates and assumptions using historical and industry experience and other factors; however, actual results could differ materially from these estimates and could have an adverse effect on the Company’s consolidated financial statements.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. The Company maintains its cash in checking and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. The carrying value of the Company’s savings accounts is included in cash and approximates the fair value.
Concentrations of Credit Risk
Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. Bank deposits are held by accredited financial institutions and these deposits may at times be in excess of federally insured limits. The Company limits its credit risk associated with cash and cash equivalents by placing them with financial institutions that it believes are of high quality. The Company has not experienced any losses on its deposits of cash or cash equivalents.
Deferred Offering Costs
The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations.
F-9
Property and Equipment, Net
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which is
Leases
The Company determines if an arrangement is a lease at inception. Lease right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. For operating leases with an initial term greater than 12 months, the Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of lease payments over the lease term at the commencement date. Operating lease right-of-use assets are comprised of the lease liability plus any lease payments made and excludes lease incentives. Lease terms include options to renew or terminate the lease when the Company is reasonably certain that the renewal option will be exercised or when it is reasonably certain that the termination option will not be exercised. For an operating lease, if the interest rate used to determine the present value of future lease payments is not readily determinable, the Company estimates the incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.
Research and Development Expenses
Research and development expenses consist primarily of costs incurred for the development of the Company’s product candidates, GEM-SSI, GEM-AKI, GEM-CKD and other product candidates. Research and development costs are charged to expense as incurred. The Company records accrued expenses for estimated preclinical, clinical study and research expenses related to the services performed but not yet invoiced pursuant to contracts with research institutions, contract research organizations, and clinical manufacturing organizations that conduct and manage preclinical studies, clinical studies, research services, and development services on the Company’s behalf. Payments for these services are based on the terms of individual agreements and payment timing may differ significantly from the period in which the services were performed. Estimates are based on factors such as the work completed, including the level of patient enrollment. The Company monitors patient enrollment levels and related activity to the extent reasonably possible and makes judgments and estimates in determining the accrued balance in each reporting period. The Company’s estimates of accrued expenses are based on the facts and circumstances known at the time. If the Company underestimates or overestimates the level of services performed or the costs of these services, actual expenses could differ from estimates. As actual costs become known, the Company adjusts accrued expenses. To date, the Company has not experienced significant changes in estimates of clinical study and development services accruals.
Patent Costs
Legal costs in connection with approved patents and patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are recorded in general and administrative expenses in the consolidated statements of operations.
F-10
Stock-based Compensation
The Company recognizes stock-based compensation expense related to stock options, third-party warrants, and Restricted Stock Unit (“RSU”) awards granted, based on the estimated fair value of the stock-based awards on the date of grant. The fair value of employee stock options and third-party warrants are generally determined using the Black-Scholes option-pricing model using various inputs, including estimates of historic volatility, term, risk-free rate, and future dividends. The grant date fair value of the stock-based awards, which have graded vesting, is recognized using the straight-line method over the requisite service period of each stock-based award, which is generally the vesting period of the respective stock-based awards. The Company recognizes forfeitures as they occur.
Income Taxes
Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or loss in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Interest and penalties related to unrecognized tax benefits are included within the provision of income tax. To date, there have been
Fair Value
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. The Company’s valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company follows a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of inputs are the following:
• Level 1—Quoted prices in active markets for identical assets or liabilities.
• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.
• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.
The Company has determined that the measurement of the fair value of the Class C Common Stock Warrants (as defined in Note 7) is a Level 3 fair value measurement and uses the Monte-Carlo simulation model for valuation (see Note 12).
F-11
Warrant Liability
The Company reviews the terms of debt instruments, equity instruments, and other financing arrangements to determine whether there are embedded derivative features, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Additionally, in connection with the issuance of financing instruments, the Company may issue freestanding options and warrants.
The Company accounts for its common stock warrants in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). Based upon the provisions of ASC 480 and ASC 815, the Company accounts for common stock warrants as current liabilities if the warrant fails the equity classification criteria. Common stock warrants classified as liabilities are initially recorded at fair value on the grant date and remeasured at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the consolidated statements of operations.
The Company values its Class C Common Stock Warrants classified as liabilities using the Monte-Carlo simulation model.
Basic and Diluted Net Loss per Share
Basic net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding during the period, without consideration of potential shares of common stock. Diluted net loss per share is calculated by dividing net loss by the weighted-average number of shares of common stock outstanding plus potential shares of common stock. Convertible preferred stock on an as converted basis, RSU awards, warrants and stock options outstanding are considered potential shares of common stock and are included in the calculation of diluted net loss per share using the treasury stock method when their effect is dilutive. Potential shares of common stock are excluded from the calculation of diluted net loss per share when their effect is anti-dilutive.
As of December 31, 2023 and 2022, there were
The basic and diluted weighted-average shares used to compute net loss per share in the audited consolidated statements of operations includes the shares issued from the reverse stock split fractional share round up.
Comprehensive Loss
The Company has no components of comprehensive loss other than net loss. Thus, comprehensive loss is the same as net loss for the periods presented.
Segment Reporting
Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance.
The Company has
Recent Accounting Pronouncements
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (“FASB”) or other standard setting bodies that are adopted by the Company as of the specified effective date. The Company has evaluated recently issued accounting pronouncements and does not believe any will have a material impact on the Company’s consolidated financial statements or related financial statement disclosures.
F-12
3
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
|
|
December 31, |
|
|
December 31, |
|
||
Prepaid insurance costs |
|
$ |
|
|
$ |
— |
|
|
Other prepaid expenses & current assets |
|
|
|
|
|
|
||
Total prepaid expenses & current assets |
|
$ |
|
|
$ |
|
||
Property and Equipment, Net
Property and equipment, net consisted of the following:
|
|
December 31, |
|
|
December 31, |
|
||
Lab equipment |
|
$ |
|
|
$ |
|
||
Total property and equipment, gross |
|
|
|
|
|
|
||
Accumulated depreciation |
|
|
( |
) |
|
|
( |
) |
Total property and equipment, net |
|
$ |
|
|
$ |
|
||
Depreciation expense was $
Accrued Expenses
Accrued expenses consisted of the following:
|
|
December 31, |
|
|
December 31, |
|
||
Accrued payroll and related expenses |
|
$ |
|
|
$ |
|
||
Accrued clinical study expenses |
|
|
|
|
|
|
||
Accrued professional fees |
|
|
|
|
|
|
||
Accrued clinical development costs |
|
|
|
|
|
|
||
Accrued other expenses |
|
|
|
|
|
|
||
Total accrued expenses |
|
$ |
|
|
$ |
|
||
Included in accrued other expenses as of December 31, 2022, was the $
F-13
4. Commitments and Contingencies
Lease Commitments
In February 2021, Revelation Sub entered into an agreement to lease
Rent expense was $
There are
Effective on January 1, 2024, Revelation Sub signed the 2024 Amended Lease (see Note 14).
Convertible Note Financing
On January 4, 2022, Revelation Sub entered into a convertible note with AXA Prime Impact Master Fund I SCA SICAV-RAIF (“AXA”) for $
On January 6, 2022, Old Revelation purchased
Total interest incurred under the Convertible Note was $
Commitments
The Company enters into contracts in the normal course of business with third party service providers and vendors. These contracts generally provide for termination on notice and, therefore, are cancellable contracts and not considered contractual obligations and commitments.
F-14
Contingencies
From time to time, the Company may become subject to claims and litigation arising in the ordinary course of business. The Company is not a party to any material legal proceedings, nor is it aware of any material pending or threatened litigation other than described below.
Legal Proceedings
On February 18, 2022, LifeSci Capital LLC filed an action against the Company in the U.S. District Court for the Southern District of New York seeking damages in the amount of approximately $
On September 27, 2022, A-IR Clinical Research Ltd. (“A-IR”) filed a claim against the Company in the High Court of Justice, in the Business and Property Courts of England and Wales, seeking £
F-15
5. PIPE Investment
On January 25, 2022, the Company closed a private placement of
Roth Capital Partners, LLC (“Roth”) was engaged by the Company to act as its exclusive placement agent for the private placement. The Company paid Roth a cash fee equal to
In connection with the private placement, the Company entered into a registration rights agreement with the institutional investor, pursuant to which the Company agreed to file a registration statement to register for resale of the shares of common stock, shares of common stock underlying the Class A Pre-Funded Warrants and shares of common stock underlying the Class A Common Stock Warrants. The company filed the registration statement with the SEC on Form S-1 (File No. 333-262410) on January 28, 2022 and it became effective on February 7, 2022.
On February 22, 2022, the Company received a notice of cash exercise for the total outstanding Class A Pre-Funded Warrants issued in connection with the PIPE Investment for
Using the Black-Scholes option pricing model, the Class A Common Stock Warrants were valued in the aggregate at $
6. 2022 Public Offering
On July 28, 2022, the Company closed a public offering of
Roth was engaged by the Company to act as its exclusive placement agent for the July 2022 Public Offering. The Company paid Roth a cash fee equal to
The shares of common stock, the shares of common stock underlying the Class B Common Stock Warrants and the shares of common stock underlying the Class B Placement Agent Common Stock Warrants were registered with the SEC on Form S-1 (File No. 333-266108) and was declared effective by the SEC on July 25, 2022.
Using the Black-Scholes option pricing model, the Class B Common Stock Warrants were valued in the aggregate at $
F-16
7. 2023 Public Offering
On February 13, 2023, the Company closed a public offering of
Roth was engaged by the Company to act as its exclusive placement agent for the February 2023 Public Offering. The Company paid Roth a cash fee equal to
The shares of common stock, the shares of common stock underlying the Class C Pre-Funded Warrants and the shares of common stock underlying the Class C Common Stock Warrants were registered with the SEC on Form S-1 (File No. 333-268576) and was declared effective by the SEC on February 9, 2023.
Between February 14, 2023 and April 6, 2023, the Company received notices of cash exercise for the Class C Pre-Funded Warrants issued in connection with the February 2023 Public Offering for
Using a Monte-Carlo simulation model, the Class C Common Stock Warrants were valued in the aggregate at $
From March 13, 2023 to December 31, 2023, the Company issued
8. Preferred Stock
Revelation Authorized Preferred Stock
The Certificate of Amendment of the Company authorizes up to
Series A Preferred Stock
On December 19, 2022, the Company closed the sale of one share of the Company’s Series A Preferred Stock, par value $
The Series A Preferred Stock had
F-17
9. Units
In connection with Petra's IPO, in
As disclosed in Note 1, on January 13, 2023, the Company’s units were mandatorily separated, ceased to exist and stopped trading on the Nasdaq Capital Market. At the time of separation there were
10. Common Stock
The Company is authorized under its articles of incorporation, as amended, to issue
Common Stock Issuance due to the Business Combination
On the Closing Date, the Company issued an aggregate of
F-18
Common Stock Issuance during the year ended December 31, 2022
On January 23, 2022, the Company issued
On January 31, 2022, the Company issued
On February 2, 2022, the Company issued
On February 4, 2022, the Company cancelled
On February 22, 2022, the Company issued
On July 28, 2022, the Company issued
On July 29, 2022, the Company issued
Common Stock Issuance during the year ended December 31, 2023
On February 13, 2023, the Company issued
On February 14, 2023, the Company issued
On March 2, 2023, the Company issued
From March 13, 2023 to March 31, 2023, the Company issued
From April 1, 2023 to June 30, 2023, the Company issued
On April 6, 2023, the Company received a notice of cash exercise for the Class C Pre-Funded Warrants issued in connection with the February 2023 Public Offering for
On April 18, 2023, the Company issued
As of December 31, 2023 and December 31, 2022,
F-19
The total shares of common stock reserved for issuance are summarized as follows:
|
|
December 31, |
|
|
December 31, |
|
||
Public Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class A Common Stock Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class A Placement Agent Common Stock Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class B Common Stock Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class B Placement Agent Common Stock Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class C Common Stock Warrants (exercise price of $ |
|
|
|
|
|
— |
|
|
Rollover Warrants (exercise price of $ |
|
|
|
|
|
|
||
Rollover RSU awards outstanding |
|
|
|
|
|
|
||
Stock options outstanding |
|
|
|
|
|
|
||
Shares reserved for issuance |
|
|
|
|
|
|
||
Shares available for future stock grants under the 2021 Equity Incentive Plan |
|
|
|
|
|
|
||
Total common stock reserved for issuance |
|
|
|
|
|
|
||
11. Stock-Based Compensation
2021 Equity Incentive Plan
In January 2022, in connection with the Business Combination, the Board of Directors and the Company’s stockholders adopted the 2021 Equity Incentive Plan (the “2021 Plan”) and reserved
Under the 2021 Plan, stock options and stock appreciation rights are granted at exercise prices determined by the Board of Directors which cannot be less than
As of December 31, 2023, there were
F-20
Restricted Stock Units
At the Closing Date of the Business Combination, all Revelation Sub RSU award holders received a Rollover RSU award in exchange for each RSU award of Revelation Sub that vest in accordance with the original terms of the award. The Company determined this to be a Type I modification but did not record any incremental stock-based compensation expense since the fair value of the modified awards immediately after the modification was not greater than the fair value of the original awards immediately before the modification.
The Rollover RSU awards have time-based and milestone-based vesting conditions.
As of December 31, 2023 and December 31, 2022, the Company has a total of
Stock Options
The Company has granted stock options which
The activity related to stock options, during the year ended December 31, 2023 is summarized as follows:
|
|
Shares |
|
|
Weighted-average Exercise Price |
|
|
Weighted-average Remaining Contractual Term (Years) |
|
|||
Outstanding at December 31, 2022 |
|
|
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$ |
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Granted |
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Exercised |
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— |
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— |
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Expired and forfeited |
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Outstanding at December 31, 2023 |
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$ |
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Exercisable at December 31, 2023 |
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$ |
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For the year ended December 31, 2023, the weighted-average Black-Scholes value per stock option was $
Volatility |
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% |
|
Expected term (years) |
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|
Risk-free interest rate |
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% |
|
Expected dividend yield |
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% |
F-21
Expected volatility is based on the historical volatility of shares of the Company’s common stock. In determining the expected term of stock options, the Company uses the “simplified” method. Under this method, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the stock options in effect at the time of the grants. The dividend yield assumption is based on the expectation of no future dividend payments by the Company. In addition to assumptions used in the Black-Scholes model, the Company reduces stock-based compensation expense based on actual forfeitures in the period that each forfeiture occurs.
Stock-Based Compensation Expense
For the years ended December 31, 2023 and 2022, the Company recorded stock-based compensation expense for the period indicated as follows:
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Year Ended |
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2023 |
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2022 |
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General and administrative: |
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RSU awards |
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$ |
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$ |
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Stock Options |
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General and administrative stock-based compensation expense |
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Research and development: |
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RSU awards |
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Stock Options |
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Research and development stock-based compensation expense |
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Total stock-based compensation expense |
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$ |
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|
$ |
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||
As of December 31, 2023, there was $
12. Warrants
Public Warrants
In connection with Petra's IPO, Petra issued and has outstanding
The Company may redeem the Public Warrants at a price of $
F-22
Rollover Warrants
Prior to the Merger, Revelation Sub issued warrants to a placement agent to purchase up to
On February 2, 2022, the Company received a notice of cash exercise for the Company’s Rollover Warrants for
The fair value of the Rollover Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:
Volatility |
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% |
|
Expected term (years) |
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|
Risk-free interest rate |
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% |
|
Expected dividend yield |
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|
% |
Class A Pre-Funded Warrants
In connection with the PIPE Investment, the Company issued pre-funded warrants to an institutional investor to purchase up to
On February 22, 2022, the Company received a notice of cash exercise for the Class A Pre-Funded Warrants issued in connection with the PIPE Investment for
Class A Common Stock Warrants
In connection with the PIPE Investment, the Company issued warrants to an institutional investor to purchase up to
The fair value of the Class A Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:
Volatility |
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% |
|
Expected term (years) |
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|
Risk-free interest rate |
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|
% |
|
Expected dividend yield |
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|
% |
Class A Placement Agent Common Stock Warrants
In connection with the PIPE Investment, the Company issued warrants to Roth to purchase an aggregate of
The fair value of the Class A Placement Agent Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:
Volatility |
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|
% |
|
Expected term (years) |
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|
Risk-free interest rate |
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|
% |
|
Expected dividend yield |
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|
% |
F-23
Class B Common Stock Warrants
In connection with the July 2022 Public Offering, the Company issued and has outstanding
The fair value of the Class B Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:
Volatility |
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% |
|
Expected term (years) |
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|
Risk-free interest rate |
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|
% |
|
Expected dividend yield |
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|
% |
Class B Placement Agent Common Stock Warrants
In connection with the July 2022 Public Offering, the Company issued warrants to the Placement Agent to purchase up to
The fair value of the Class B Placement Agent Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:
Volatility |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
Class C Pre-Funded Warrants
In connection with the February 2023 Public Offering, the Company issued pre-funded warrants to purchase up to
Class C Common Stock Warrants
In connection with the February 2023 Public Offering, the Company issued
The Company accounted for the Class C Common Stock Warrants as current liabilities based upon the guidance of ASC 480 and ASC 815. The Company evaluated the Class C Common Stock Warrants under ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”) and concluded that they do not meet the criteria to be classified in stockholders’ equity.
F-24
The Company concluded that the multiplier of
At the date of issuance, the Company valued the Class C Common Stock Warrants using a Monte-Carlo simulation model with a fair value of $
As of December 31, 2023, the Company received notices of alternative cashless exercises for
As of December 31, 2023, the Company re-valued
13. Income Taxes
The Company did
The difference between the provision for income taxes and income taxes computed using the effective U.S. federal statutory rate is as follows:
|
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Year Ended |
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|||||
|
|
2023 |
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2022 |
|
||
|
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Federal tax statutory rate |
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|
% |
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|
% |
||
State tax, net of federal benefit |
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||
Non-taxable change in fair value of warrant liability |
|
|
|
|
— |
|
||
Research and development credits |
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|
|
|
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|
||
Change in valuation allowance |
|
|
( |
) |
|
|
( |
) |
Effective tax rate |
|
— % |
|
|
— % |
|
||
Significant components of the Company’s deferred tax assets are as follows:
|
|
Year Ended |
|
|||||
|
|
2023 |
|
|
2022 |
|
||
Net operating loss carryforwards |
|
$ |
|
|
$ |
|
||
Research and development credits |
|
|
|
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|
||
Capitalized research and development costs |
|
|
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|
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Capitalized start-up costs |
|
|
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|
||
Other, net |
|
|
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|
||
Total gross deferred tax assets |
|
|
|
|
|
|
||
Valuation allowance |
|
|
( |
) |
|
|
( |
) |
Net deferred tax assets |
|
$ |
— |
|
|
$ |
— |
|
F-25
As of December 31, 2023 and 2022, a full valuation allowance of $
As of December 31, 2023, the Company had federal and state net operating loss carryforwards of $
The Company had estimated federal research and development credit carryforwards of $
Pursuant to Section 382 and 383 of the Internal Revenue Code (“IRC”), utilization of the Company’s federal net operating loss carryforwards and research and development credit carryforwards may be subject to annual limitations in the event of any significant future changes in its ownership structure. These annual limitations may result in the expiration of net operating loss and research and development credit carryforwards prior to utilization. The Company has not completed an IRC Section 382 and 383 analyses regarding the limitation of net operating loss and research and development credit carryforwards.
No liability is recorded on the financial statements related to uncertain tax positions. There are
The Company’s policy is to record estimated interest and penalties related to uncertain tax benefits as income tax expense. As of December 31, 2023 and 2022, the Company had
The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax returns since inception are subject to examination by the U.S. and various state tax authorities. The Company is not currently undergoing a tax audit in any federal or state jurisdiction.
14. Subsequent Events
Third Amendment to Lease
In February 2024, Revelation Sub amended the 2023 Amended Lease (the “2024 Amended Lease”) to expire on
Class C Common Stock Warrant Exercise
As of March 20 2023, the Company received notices for
F-26
February 2024 Public Offering
On February 5, 2024, the Company closed a public offering of (i) an aggregate of
Roth Capital Partners, LLC (the “Placement Agent’) was engaged by the Company to act as its exclusive placement agent for the public offering. The Company agreed to pay the Placement Agent a cash fee equal to
As part of the February 2024 Public Offering, the exercise price of the Class C Common Stock Warrants issued in the February 2023 Public Offering was reset to $
Regaining NASDAQ Compliance
As previously reported on August 8, 2023, the Company received a letter from Nasdaq notifying the Company of its noncompliance with Nasdaq Listing Rule 5550(a)(2) by failing to maintain a minimum bid price for its common stock of at least $
Class D Pre-Funded Warrant Exercises
As of March 18, 2024, the Company received notices of cash exercises for the Class D Pre-Funded Warrants issued in connection with the February 2024 Public Offering for
F-27