Amendment: SEC Form 10-Q/A filed by Revelation Biosciences Inc.
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(Amendment No. 1)
(Mark One)
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period 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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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 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 is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No
As of August 5, 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-Q 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-Q 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-Q. The filing of this Amendment is not an admission that the Original Form 10-Q, 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 I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Balance Sheets
(Unaudited)
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June 30, |
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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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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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Common Stock, $ |
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Additional paid-in-capital |
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Accumulated deficit |
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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 condensed consolidated financial statements.
1
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
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Three Months Ended |
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Six Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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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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$ |
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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 (expense) income: |
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Change in fair value of warrant liability |
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Other (expense) income, net |
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( |
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( |
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Total other (expense) income, net |
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( |
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Net (loss) earnings |
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$ |
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$ |
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$ |
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$ |
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Net (loss) earnings per share, basic |
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$ |
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$ |
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$ |
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$ |
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Weighted-average shares used to compute net (loss) earnings per share, basic |
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Net (loss) earnings per share, diluted |
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$ |
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$ |
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$ |
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$ |
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Weighted-average shares used to compute net (loss) earnings per share, diluted |
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See accompanying notes to the condensed consolidated financial statements.
2
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity (Deficit)
(Unaudited)
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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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Equity |
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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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— |
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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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— |
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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 income |
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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 March 31, 2023 |
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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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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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— |
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RSU awards issued |
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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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( |
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( |
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Balance as of June 30, 2023 |
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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, 2023 |
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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 from the February 2024 Public Offering |
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— |
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— |
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— |
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Class D Pre-Funded Warrants exercise |
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— |
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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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— |
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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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( |
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( |
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Balance as of March 31, 2024 |
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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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Common stock issued for services |
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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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( |
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( |
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Balance as of June 30, 2024 |
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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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See accompanying notes to the condensed consolidated financial statements.
3
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
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Six Months Ended |
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2024 |
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2023 |
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Cash flows from operating activities: |
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Net (loss) income |
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$ |
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Adjustments to reconcile net (loss) income to net cash used in operating activities: |
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Stock-based compensation expense |
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Issuance of common stock for services |
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Depreciation expense |
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Change in fair value of warrant liability |
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( |
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Changes in operating assets and liabilities: |
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Prepaid expenses and other current assets |
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( |
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Deferred offering costs |
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Accounts payable |
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Accrued expenses |
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( |
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Net cash used in operating activities |
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( |
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Cash flows from investing activities: |
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Purchase of property and equipment |
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Net cash used in investing activities |
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Cash flows from financing activities: |
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Proceeds from the February 2024 Public Offering, net |
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Proceeds from Class D Pre-Funded Warrants exercise |
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Redemption of Series A Preferred Stock |
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Proceeds from the February 2023 Public Offering, net |
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Proceeds from Class C Pre-Funded Warrants exercise |
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Net cash provided by financing activities |
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Net increase in cash and cash equivalents |
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Cash and cash equivalents at beginning of period |
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Cash and cash equivalents at end of period |
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$ |
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$ |
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Supplemental disclosure of non-cash investing and financing activities: |
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Issuance of Class D Common Stock Warrants in connection with the February 2024 Public Offering |
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$ |
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$ |
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Fair Value of Class C Common Stock Warrants in connection with the February 2023 Public Offering |
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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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See accompanying notes to the condensed consolidated financial statements.
4
REVELATION BIOSCIENCES, INC.
Notes to the Condensed Consolidated Financial Statements
1. Organization and Basis of Presentation
Revelation Biosciences, Inc. (collectively with its wholly-owned subsidiaries, referred to as “we,” us,” “our,” “Revelation,” or the “Company”) is a clinical-stage biopharmaceutical company focused on the development or commercialization on harnessing the power of trained immunity for the prevention and treatment of disease using its proprietary formulation Gemini. We have multiple ongoing programs to evaluate Gemini, including as a prevention for post-surgical infection, as a prevention for acute kidney injury, and for the treatment of chronic kidney disease. The Company was incorporated in the state of Delaware on November 20, 2019 (originally as Petra Acquisition, Inc.) and is based in San Diego, California.
The Company’s common stock and public warrants are listed on the Nasdaq Capital Market under the symbols “REVB” and “REVBW”, respectively.
Reverse Stock Split
On January 25, 2024, the Company effected the approved reverse stock split of our shares of common stock. Unless specifically provided otherwise herein, the share and per share information that follows in this Quarterly Report, reflects the effect of the reverse stock split.
Liquidity and Capital Resources
Going Concern
The Company has incurred recurring losses since its inception, including a net loss of $
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 unaudited condensed consolidated financial statements for June 30, 2024, 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.
5
2. Summary of Significant Accounting Policies
Unaudited Interim Condensed Consolidated Financial Statements
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements as of December 31, 2023 and for the year ended December 31, 2023 and, in the opinion of management, reflect all adjustments, which include only normal recurring adjustments, necessary to present fairly the Company’s financial position. The financial data and the other financial information contained in these notes to the condensed consolidated financial statements related to the three and six months ended June 30, 2024 are unaudited. The results of operations for the three and six months ended June 30, 2024 are not necessarily indicative of the results to be expected for the year ending December 31, 2024 or for any other future annual or interim period. The condensed consolidated financial statements and notes thereto should be read in conjunction with the Company’s audited financial statements and notes thereto for the year ended December 31, 2023 included on Form 10-K, as filed with the SEC on March 22, 2024. The accompanying condensed consolidated balance sheet as of December 31, 2023 has been derived from the audited balance sheet at December 31, 2023 contained in the above referenced Form 10-K.
Use of Estimates
The preparation of the condensed 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 condensed 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 condensed consolidated statements of operations.
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
6
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-AKI, GEM-CKD, GEM-PSI 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 condensed consolidated statements of operations.
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
7
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 5) is a Level 3 fair value measurement and uses the Monte-Carlo simulation model for valuation (see Note 10).
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 revalued at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the condensed 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) Earnings per Share
Basic net (loss) earnings per share is calculated by dividing net (loss) income 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) earnings per share is calculated by dividing net (loss) income 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) earnings 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) earnings per share when their effect is anti-dilutive. As of June 30, 2024, there were
Comprehensive (Loss) Income
The Company has no components of comprehensive (loss) income other than net (loss) income. Thus, comprehensive (loss) income is the same as net (loss) income for the periods presented.
8
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 condensed consolidated financial statements or related financial statement disclosures.
3. Balance Sheet Details
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
|
|
June 30, |
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|
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:
|
|
June 30, |
|
|
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:
|
|
June 30, |
|
|
December 31, |
|
||
Accrued LifeSci judgment and reimbursement of costs |
|
$ |
|
|
$ |
— |
|
|
Accrued payroll and related expenses |
|
|
|
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|
||
Accrued clinical study expenses |
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||
Accrued professional fees |
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|
||
Accrued clinical development costs |
|
|
|
|
|
|
||
Total accrued expenses |
|
$ |
|
|
$ |
|
9
4. Commitments and Contingencies
Lease Commitments
The Company leases
Rent expense was $
Future minimum lease payments under the operating lease as of June 30, 2024 is $
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.
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 (“LifeSci”) 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 $
10
5. 2023 Public Offering
On February 13, 2023, the Company closed a public offering of
Roth Capital Partners, LLC (“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 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 June 30, 2024, the Company received notices of alternative cashless exercises for
As part of the February 2024 Public Offering, the exercise price of the Class C Common Stock Warrants was reset from $
6. 2024 Public Offering
On February 5, 2024, the Company closed a public offering of
Roth was engaged by the Company to act as its exclusive placement agent for the February 2024 Public Offering. The Company paid Roth a cash fee equal to
The shares of common stock underlying the Class D Pre-Funded Warrants and the shares of common stock underlying the Class D Common Stock Warrants were registered with the SEC on Form S-1 (File No. 333-276232) and was declared effective by the SEC on January 31, 2024.
Between February 5, 2024 and February 13, 2024, the Company has received notices of cash exercise for the Class D Pre-Funded Warrants issued in connection with the February 2024 Public Offering for
Using the Black-Scholes option pricing model, the Class D Common Stock Warrants were valued in the aggregate at $
As part of a common stock issuance to a third party consultant on June 11, 2024 for services provided, the exercise price of the Class D Common Stock Warrants was reset from $
11
7
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 $
8. Common Stock
The Company is authorized under its articles of incorporation, as amended, to issue
Common Stock Issuance during the year ended December 31, 2023
On February 13, 2023, the Company issued
From February 14, 2023 to April 6, 2023, the Company issued
From March 13, 2023 to June 30, 2023, the Company issued
On April 18, 2023, the Company issued
Common Stock Issuance during the six months ended June 30, 2024
On January 29, 2024, the Company issued
On February 5, 2024, the Company issued
Between February 5, 2024 and February 13, 2024, the Company issued
On June 11, 2024, the Company issued
As of June 30, 2024 and December 31, 2023,
12
The total shares of common stock reserved for issuance are summarized as follows:
|
|
June 30, |
|
|
June 30, |
|
||
Public Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class A Common Stock Warrants (exercise price of $ |
|
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|
||
Class A Placement Agent Common Stock Warrants (exercise price of $ |
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Class B Common Stock Warrants (exercise price of $ |
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|
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|
||
Class B Placement Agent Common Stock Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class C Common Stock Warrants (exercise price of $ |
|
|
|
|
|
|
||
Class D Common Stock Warrants (exercise price of $ |
|
|
|
|
|
— |
|
|
Rollover Warrants (exercise price of $ |
|
|
|
|
|
|
||
Rollover RSU awards outstanding |
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|
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|
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|
||
Stock options outstanding (minimum exercise price $ |
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|
||
Shares reserved for issuance |
|
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|
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|
||
Shares available for future stock grants under the 2021 Equity Incentive Plan |
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|
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|
||
Total common stock reserved for issuance |
|
|
|
|
|
|
9
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”). The 2021 Plan is administered by the Board of Directors. Vesting periods and other restrictions for grants under the 2021 Plan are determined at the discretion of the Board of Directors. Grants to employees, officers, directors, advisors, and consultants of the Company typically vest over to
On July 14, 2023 at the Company’s 2023 Annual Meeting of Stockholders, an amendment to the 2021 Equity Incentive Plan to increase the number of shares reserved under the Plan to
On May 15, 2024 at the Company’s 2024 Annual Meeting of Stockholders, an amendment to the 2021 Equity Incentive Plan to increase the number of shares reserved under the Plan to
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 June 30, 2024, there were
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 June 30, 2024 and December 31, 2023, the Company has a total of
13
Stock Options
The Company has granted stock options which
The activity related to stock options during the six months ended June 30, 2024 is summarized as follows:
|
|
Shares |
|
|
Weighted-average Exercise Price |
|
|
Weighted-average Remaining Contractual Term (Years) |
|
|||
Outstanding at December 31, 2023 |
|
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|
|
$ |
|
|
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|
|||
Granted |
|
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|
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|
|||
Exercised |
|
|
— |
|
|
|
— |
|
|
|
|
|
Expired and forfeited |
|
|
( |
) |
|
|
|
|
|
|
||
Outstanding at June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
|||
Exercisable at June 30, 2024 |
|
|
|
|
$ |
|
|
|
|
For the six months ended June 30, 2023, the weighted-average Black-Scholes value per stock option was $
Volatility |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
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.
14
Stock-Based Compensation Expense
For the three and six months ended June 30, 2024 and 2023, the Company recorded stock-based compensation expense for the period indicated as follows:
|
|
Three Months Ended |
|
|
Six Months Ended |
|
||||||||||
|
|
2024 |
|
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2023 |
|
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2024 |
|
|
2023 |
|
||||
General and administrative: |
|
|
|
|
|
|
|
|
|
|
|
|
||||
RSU awards |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
||||
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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|
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|
||||
Stock Options |
|
|
|
|
|
|
|
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|
||||
Research and development stock-based compensation expense |
|
|
|
|
|
|
|
|
|
|
|
|
||||
Total stock-based compensation expense |
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
As of June 30, 2024, there was $
10. Warrants
Public Warrants
In connection with Petra's initial public offering (“IPO”), Petra issued and has outstanding as of June 30, 2024
The Company may redeem the Public Warrants at a price of $
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 |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
15
Class A Common Stock Warrants
In connection with the closing of a private placement on January 25, 2022 (“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 |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
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 |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
Class B Common Stock Warrants
In connection with closing of a public offering on July 28, 2022 (“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 |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
16
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 |
|
|
% |
17
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 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 and accounted for the Class C Common Stock Warrants as current liabilities.
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 June 30, 2024, the Company has received notices of alternative cashless exercises for
As of June 30, 2024, the Company re-valued
As part of the February 2024 Public Offering, the exercise price of the Class C Common Stock Warrants was reset from $
Class D Pre-Funded Warrants
In connection with the February 2024 Public Offering, the Company issued pre-funded warrants to purchase up to
18
Class D Common Stock Warrants
In connection with the February 2024 Public Offering, the Company issued and has outstanding
As part of a common stock issuance to a third party consultant on June 11, 2024 for services provided, the exercise price of the Class D Common Stock Warrants was reset from $
The fair value of the Class D 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 |
|
|
% |
11. Income Taxes
The quarterly provision for or benefit from income taxes is computed based upon the estimated annual effective tax rate and the year-to-date pre-tax (loss) income and other comprehensive (loss) income. The Company did
For the six months ended June 30, 2024 and 2023, the Company recorded non-taxable income of $
12. Subsequent Event
As previously reported, 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 $
Item 6. Exhibits, Financial Statement Schedules.
Furnish the exhibits required by Item 601 of Regulation S-K (§ 229.601 of this chapter).
EXHIBIT |
|
DESCRIPTION |
31.1* |
|
|
31.2* |
|
|
32.1* |
|
|
32.2* |
|
19
101.INS* |
|
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* |
|
Inline XBRL Taxonomy Extension Scema Document |
101.CAL* |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
101.DEF* |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
101.LAB* |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
101.PRE* |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
104* |
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) |
* |
Filed herewith. |
20
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q/A to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
REVELATION BIOSCIENCES, INC. |
|
|
|
|
|
Date: September 23, 2024 |
|
By: |
/s/ James Rolke |
|
|
|
James Rolke |
|
|
|
Chief Executive Officer |
|
|
|
(principal executive officer) |
|
|
|
|
Date: September 23, 2024 |
|
By: |
/s/ Chester S. Zygmont, III |
|
|
|
Chester S. Zygmont, III |
|
|
|
Chief Financial Officer |
|
|
|
(principal financial and accounting officer) |
21