SEC Form 10-Q filed by Revelation Biosciences Inc.
r
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM
(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 |
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 |
|
Trading Symbol(s) |
|
Name of each exchange on which registered |
|
|
The |
||
Redeemable warrants, each exercisable for a 1/16,800th share of common stock at an exercise price of $193,200.00 per share |
|
REVBW |
|
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 |
|
☐ |
|
Accelerated filer |
|
☐ |
|
☒ |
|
Smaller reporting company |
|
||
Emerging growth company |
|
|
|
|
|
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 May 5, 2025, the registrant had
PART I—FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements (Unaudited)
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Balance Sheets
|
|
March 31, |
|
|
December 31, |
|
||
ASSETS |
|
|
|
|
|
|
||
Current assets: |
|
|
|
|
|
|
||
Cash and cash equivalents |
|
$ |
|
|
$ |
|
||
Prepaid expenses and other current assets |
|
|
|
|
|
|
||
Total current assets |
|
|
|
|
|
|
||
Property and equipment, net |
|
|
|
|
|
|
||
Total assets |
|
$ |
|
|
$ |
|
||
LIABILITIES AND STOCKHOLDERS’ EQUITY |
|
|
|
|
|
|
||
Current liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
$ |
|
|
$ |
|
||
Accrued expenses |
|
|
|
|
|
|
||
Warrant liability |
|
|
|
|
|
|
||
Total current liabilities |
|
|
|
|
|
|
||
Total liabilities |
|
|
|
|
|
|
||
(Note 4) |
|
|
|
|
|
|
||
Stockholders’ equity: |
|
|
|
|
|
|
||
Common Stock, $ |
|
|
|
|
|
|
||
Additional paid-in-capital |
|
|
|
|
|
|
||
Accumulated deficit |
|
|
( |
) |
|
|
( |
) |
Total stockholders’ equity |
|
|
|
|
|
|
||
Total liabilities and stockholders’ equity |
|
$ |
|
|
$ |
|
||
See accompanying notes to the condensed consolidated financial statements.
1
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Statements of Operations
(Unaudited)
|
Three Months Ended |
|
|||||
|
2025 |
|
|
2024 |
|
||
Operating expenses: |
|
|
|
|
|
||
Research and development |
$ |
|
|
$ |
|
||
General and administrative |
|
|
|
|
|
||
Total operating expenses |
|
|
|
|
|
||
Loss from operations |
|
( |
) |
|
|
( |
) |
Other income (expense): |
|
|
|
|
|
||
Change in fair value of warrant liability |
|
|
|
|
|
||
Other income (expense), net |
|
|
|
|
( |
) |
|
Total other income (expense), net |
|
|
|
|
( |
) |
|
Net loss |
$ |
( |
) |
|
$ |
( |
) |
|
|
|
|
|
|
||
Net loss per share, basic and diluted |
$ |
( |
) |
|
$ |
( |
) |
Weighted-average shares used to compute net loss per share, basic and diluted |
|
|
|
|
|
||
|
|
|
|
|
|
||
See accompanying notes to the condensed consolidated financial statements.
2
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Statements of Changes in Stockholders’ Equity
(Unaudited)
|
|
Common Stock |
|
|
Additional |
|
|
Accumulated |
|
|
Total |
|
||||||||
|
|
Shares |
|
|
Amount |
|
|
Capital |
|
|
Deficit |
|
|
Equity |
|
|||||
Balance at December 31, 2023 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
Issuance of common stock from the February 2024 Public Offering |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Class D Pre-Funded Warrants exercise |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Alternative cashless exercise of Class C Common Stock Warrants |
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
|
|
||||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of March 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Balance at December 31, 2024 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
4,708,382 |
|
|||
Alternative cashless exercise of Class F Common Stock Warrants |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Issuance of RSA's |
|
|
|
|
|
|
|
|
( |
) |
|
|
— |
|
|
|
— |
|
||
Stock-based compensation expense |
|
|
— |
|
|
|
— |
|
|
|
|
|
|
— |
|
|
|
|
||
Net loss |
|
|
— |
|
|
|
— |
|
|
|
— |
|
|
|
( |
) |
|
|
( |
) |
Balance as of March 31, 2025 |
|
|
|
|
$ |
|
|
$ |
|
|
$ |
( |
) |
|
$ |
|
||||
See accompanying notes to the condensed consolidated financial statements.
3
REVELATION BIOSCIENCES, INC.
Condensed Consolidated Statements of Cash Flows
(Unaudited)
|
|
Three Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Cash flows from operating activities: |
|
|
|
|
|
|
||
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
Adjustments to reconcile net loss to net cash used in operating activities: |
|
|
|
|
|
|
||
Change in fair value of warrant liability |
|
|
( |
) |
|
|
( |
) |
Depreciation expense |
|
|
|
|
|
|
||
Disposal of lab supplies |
|
|
|
|
|
— |
|
|
Stock-based compensation expense |
|
|
|
|
|
|
||
Changes in operating assets and liabilities: |
|
|
|
|
|
|
||
Accounts payable |
|
|
( |
) |
|
|
|
|
Accrued expenses |
|
|
( |
) |
|
|
( |
) |
Deferred offering costs |
|
|
— |
|
|
|
|
|
Prepaid expenses and other current assets |
|
|
( |
) |
|
|
|
|
Net cash used in operating activities |
|
|
( |
) |
|
|
( |
) |
Cash flows from investing activities: |
|
|
|
|
|
|
||
Purchase of property and equipment |
|
|
— |
|
|
|
( |
) |
Net cash used in investing activities |
|
|
— |
|
|
|
( |
) |
Cash flows from financing activities: |
|
|
|
|
|
|
||
Proceeds from the February 2024 Public Offering, net |
|
|
— |
|
|
|
|
|
Proceeds from Class D Pre-Funded Warrants exercise |
|
|
— |
|
|
|
|
|
Net cash provided by financing activities |
|
|
— |
|
|
|
|
|
Net (decrease) 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: |
|
|
|
|
|
|
||
Issuance of Class D Common Stock Warrants in connection with the February 2024 Public Offering |
|
$ |
— |
|
|
$ |
|
|
Alternative cashless exercise of Class C Common Stock Warrants |
|
$ |
— |
|
|
$ |
|
|
Alternative cashless exercise of Class F Common Stock Warrants |
|
$ |
|
|
$ |
— |
|
|
See accompanying notes to the condensed consolidated financial statements.
4
REVELATION BIOSCIENCES, INC.
Notes to the Unaudited 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 life science company that is focused on rebalancing inflammation to optimize health using its proprietary formulation Gemini. We have multiple ongoing programs to evaluate Gemini, including GEM-AKI as a prevention for acute kidney injury (“AKI”), GEM-CKD as a treatment for chronic kidney disease (“CKD”), and GEM-PSI as a prevention for post surgical infection (“PSI”) (together the “Product Candidates”). 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 28, 2025, 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 March 31, 2025, 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.
5
Basis of Presentation
The accompanying financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The condensed consolidated financial statements include the accounts of Revelation Biosciences, Inc. and its wholly owned subsidiaries. All intercompany balances and transactions among the consolidated entity have been eliminated in consolidation.
The unaudited interim condensed consolidated financial statements have been prepared on the same basis as the audited financial statements as of December 31, 2024 and for the year ended December 31, 2024 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 months ended March 31, 2025 are unaudited. The results of operations for the three months ended March 31, 2025 are not necessarily indicative of the results to be expected for the year ending December 31, 2025 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, 2024 included on Form 10-K, as filed with the SEC on March 6, 2025. The accompanying condensed consolidated balance sheet as of December 31, 2024 has been derived from the audited balance sheet at December 31, 2024 contained in the above referenced Form 10-K.
2. Summary of Significant Accounting Policies
During the three months ended March 31, 2025, there were no changes to the Company’s significant accounting policies described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024. Selected significant accounting policies are discussed in further detail below:
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.
Basic and Diluted Net Loss per Share
Basic and diluted net loss per share of common stock is computed by dividing net loss attributable to common stockholders by the weighted-average number of common shares outstanding for the period. In net loss periods, basic net loss per share and diluted net loss per share are identical because the otherwise dilutive potential common shares become anti-dilutive and are therefore excluded. As of March 31, 2025 and 2024, there were
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.
6
3. Balance Sheet Details
Prepaid Expenses and Other Current Assets
Prepaid expenses and other current assets consisted of the following:
|
|
March 31, |
|
|
December 31, |
|
||
Prepaid insurance costs |
|
$ |
|
|
$ |
|
||
Other prepaid expenses & current assets |
|
|
|
|
|
|
||
Total prepaid expenses & current assets |
|
$ |
|
|
$ |
|
||
Accrued Expenses
Accrued expenses consisted of the following:
|
|
March 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 |
|
$ |
|
|
$ |
|
||
4. Commitments and Contingencies
Lease Commitments
The Company leases office space located at 4660 La Jolla Village Dr., Suite 100, San Diego, California, through a month-to-month rental agreement, with monthly rent of $
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.
7
5. 2024 Financings
February Public Offering
On February 5, 2024, the Company closed a public offering of
Class D Warrant Inducement
On August 21, 2024, the Company entered into warrant exercise inducement offer letters with certain holders of Class D Common Stock Warrants exercisable for an aggregate of
Class E Warrant Inducement
On December 3, 2024, the Company entered into warrant exercise inducement offer letters with certain holders of the Class E Common Stock Warrants exercisable for an aggregate of
6
The Company is authorized under its articles of incorporation, as amended, up to
8
7
The Company is authorized under its articles of incorporation, as amended, to issue up to
Common Stock Issuance during the year ended December 31, 2024
On January 29, 2024, the Company issued
On August 22, 2024, the Company issued
During 2024 the Company issued a total of
Common Stock Issuance during the three months ended March 31, 2025
Between January 17, 2025 and March 31, 2025 the Company issued
On February 11, 2025, the Company issued
As of March 31, 2025 and December 31, 2024,
The total shares of common stock reserved for issuance are summarized as follows:
|
|
March 31, |
|
|
March 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 $ |
|
|
|
|
|
|
||
Class D Common Stock Warrants (exercise price of $ |
|
|
|
|
|
— |
|
|
Class E Common Stock Warrants (exercise price of $ |
|
|
|
|
|
— |
|
|
Class F Common Stock Warrants (exercise price of $ |
|
|
|
|
|
— |
|
|
Class G Common Stock Warrants (exercise price of $ |
|
|
|
|
|
— |
|
|
Rollover Warrants (exercise price of $ |
|
|
|
|
|
|
||
Rollover RSU awards outstanding |
|
|
|
|
|
|
||
Stock options outstanding (minimum exercise price $ |
|
|
|
|
|
|
||
Shares reserved for issuance |
|
|
|
|
|
|
||
Shares available for future stock grants under the 2021 Equity Incentive Plan |
|
|
|
|
|
|
||
Total common stock reserved for issuance |
|
|
|
|
|
|
||
(1) |
9
8. Stock-Based Compensation
2021 Equity Incentive Plan
In January 2022, 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 immediately or within
On January 1, 2025, the number of shares of common stock available under the 2021 Plan increased 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 March 31, 2025, there were
Restricted Stock Units
As of March 31, 2025 and December 31, 2024, the Company has a total of
Restricted Stock Awards
On February 11, 2025,
Stock Options
The Company has granted stock options,
10
Stock-Based Compensation Expense
For the three months ended March 31, 2025 and 2024, the Company recorded stock-based compensation expense for the periods indicated as follows:
|
Three Months Ended |
|
|||||
|
2025 |
|
|
2024 |
|
||
General and administrative: |
|
|
|
|
|
||
RSA awards |
$ |
|
|
$ |
|
||
RSU awards |
|
|
|
|
|
||
Stock Options |
|
|
|
|
|
||
General and administrative stock-based compensation expense |
|
|
|
|
|
||
Research and development: |
|
|
|
|
|
||
RSA awards |
|
|
|
|
|
||
RSU awards |
|
|
|
|
|
||
Stock Options |
|
|
|
|
|
||
Research and development stock-based compensation expense |
|
|
|
|
|
||
Total stock-based compensation expense |
$ |
|
|
$ |
|
||
As of March 31, 2025, there was approximately $
11
9
Class C Common Stock Warrants
As of March 31, 2025, the Company has
As of March 31, 2025 and December 31, 2024, the fair value of the Class C Common Stock Warrants was $
Class D Common Stock Warrants
As of March 31, 2025, the Company had Class D Common Stock Warrants outstanding to purchase up to
The fair value of the Class D Common Stock Warrants were originally estimated using the Black-Scholes option pricing model with the following assumptions:
Volatility |
|
|
% |
|
Expected term (years) |
|
|
|
|
Risk-free interest rate |
|
|
% |
|
Expected dividend yield |
|
|
% |
Class E Common Stock Warrants
On August 22, 2024, in connection with the Class D Warrant Inducement (see Note 5), the Company issued Class E Common Stock Warrants to purchase up to
The fair value of the Class E 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 |
|
|
% |
12
Class F Common Stock Warrants
On December 3, 2024 in connection with the Class E Warrant Inducement, (see Note 5), the Company issued Class F Common Stock Warrants to purchase up to
Class G Common Stock Warrants
On December 3, 2024 in connection with the Class E Warrant Inducement (see Note 5), the Company issued Class G Common Stock Warrants to purchase up to
The fair value of the Class G 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 |
|
|
% |
10. 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 and other comprehensive loss. The Company did not record a provision or benefit for income taxes during the three months ended March 31, 2025 and 2024, respectively.
For the three months ended March 31, 2025 and 2024, the Company recorded non-taxable income of $
13
11. Segment Information
ASC 280, “Segment Reporting,” establishes standards for reporting information about operating segments. Operating segments are defined as components of an enterprise about which separate discrete financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. The Company and the Company’s CODM view the Company’s operations and manage its business on the basis of
The CODM of the Company is the .
|
|
Three Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Segment operating expenses: |
|
|
|
|
|
|
||
Research and development: |
|
|
|
|
|
|
||
GEM-AKI, GEM-CKD and GEM-PSI clinical study expenses |
|
$ |
|
|
$ |
|
||
Other expenses(1) |
|
|
|
|
|
|
||
Personnel expenses (including stock-based compensation) |
|
|
|
|
|
|
||
General and administrative |
|
|
|
|
|
|
||
Change in fair value of warrant liability |
|
|
( |
) |
|
|
( |
) |
Other income (expense), net(2) |
|
|
( |
) |
|
|
|
|
Net loss |
|
$ |
( |
) |
|
$ |
( |
) |
(1) |
Other research and development expenses primarily consist of facilities charges, third party consultant costs, costs related to other product candidates, and other unallocated costs. |
(2) |
Clinical trial related settlement expenses with A-IR Clinical Research Ltd., foreign currency transaction gains and losses and interest income from our cash balances in savings accounts. |
14
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
You should read the following discussion of our financial condition and results of operations in conjunction with our audited financial statements and the notes included elsewhere in this Form 10-K. The following discussion contains forward-looking statements that involve certain risks and uncertainties. Our actual results could differ materially from those discussed in these statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q, the Company’s Form 10-K for the fiscal year ended December 31, 2024 and in the Company’s registration statements filed under the Securities Act of 1933, as amended, particularly under the “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements and Risk Factors Summary” sections.
Overview
Revelation is a clinical-stage life science company that is focused on rebalancing inflammation to optimize health using its proprietary formulation Gemini. We are developing a pipeline of potential high-value products based on Gemini. Gemini is our proprietary formulation of PHAD an established TLR4 agonist that can stimulate the human body’s innate immune response to prevent and treat disease. Our current Gemini based programs consist of: GEM-AKI, which is being developed as a potential therapy for the prevention and treatment of acute kidney injury; GEM-CKD, which is being developed as a potential therapy for the prevention and treatment of chronic kidney disease; GEM-PSI, which is being developed for the prevention and treatment of post surgical infection; and GEM-PBI as a prevention of infection in severe burn patients requiring hospitalization (together the “Product Candidates”).
Since our inception, we have devoted substantially all of our resources to organizing and staffing our Company, business planning, raising capital, and research and development of the Product Candidates.
We have funded our operations since our inception to March 31, 2025 through the issuance and sale of our capital stock, from which we have raised net proceeds of $56.8 million. Our current cash and cash equivalents balance will not be sufficient to complete all necessary product development or future commercialization efforts. We anticipate that our current cash and cash equivalents balance will not be sufficient to sustain operations within one-year after the date that our audited financial statements for March 31, 2025 were issued, which raises substantial doubt about our ability to continue as a going concern.
We plan to seek additional funding through public or private equity or debt financings. We 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 our stockholders. If we are unable to obtain funding we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business operations.
We have incurred recurring losses since our inception, including a net loss of $2.1 million for the three months ended March 31, 2025 and $2.7 million for the three months ended March 31, 2024. As of March 31, 2025 we had an accumulated deficit of $42.6 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future if and as we:
Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical studies and our expenditures on other research and development activities.
15
We have never generated revenue and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for Product Candidates or other product candidates, which we expect will not be for at least several years, if ever. Accordingly, until such time as we can generate significant revenue from sales of Product Candidates or other product candidates, if ever, we expect to finance our cash needs through a combination of public or private equity offerings, debt financings or other capital sources, including potential collaborations, licenses and other similar arrangements. However, we may be unable to raise additional funds or enter into such other arrangements when needed on favorable terms or at all. Our failure to raise capital or enter into such other arrangements when needed would have a negative impact on our financial condition and could force us to delay, limit, reduce or terminate our product development or future commercialization efforts or grant rights to develop and market product candidates that we would otherwise prefer to develop and market ourselves.
Recent Developments
2025 Reverse Stock Split
On January 28, 2025, the Company effected a 1-for-16 reverse stock split of our outstanding shares of common stock, which had been approved at a special meeting of stockholders.
Research and Development
Research and development expenses consist primarily of costs incurred for the development of our product candidates Product Candidates. Our research and development expenses consist primarily of external costs related to clinical development, costs related to contract research organizations, costs related to consultants, costs related to acquiring and manufacturing clinical study materials, costs related to contract manufacturing organizations and other vendors, costs related to the preparation of regulatory submissions, costs related to laboratory supplies and services, and personnel costs. Personnel and related costs consist of salaries, employee benefits and stock-based compensation for personnel involved in research and development efforts.
We expense all research and development expenses in the periods in which they are incurred. We accrue for costs incurred as the services are being provided by monitoring the status of specific activities and the invoices received from our external service providers. We adjust our accrual as actual costs become known.
We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of Product Candidates and continue to invest in research and development activities. The process of conducting the necessary clinical research and product development to obtain regulatory approval is costly and time consuming, and the successful development of Product Candidates and any future product candidates is highly uncertain. To the extent that our product candidates continue to advance into larger and later stage clinical studies, our expenses will increase substantially and may become more variable.
The actual probability of success for Product Candidates or any future product candidate may be affected by a variety of factors, including the safety and efficacy of our product candidates, investment in our clinical programs, manufacturing capability, regulatory and staffing developments at the FDA and competition with other products. As a result, we are unable to determine the timing of initiation, duration and completion costs of our research and development efforts or when and to what extent we will generate revenue from the commercialization and sale of Product Candidates or any future product candidate.
General and Administrative
Our general and administrative expenses consist primarily of personnel costs, expenses for outside professional services, including financial advisory, legal, human resource, audit and accounting services and consulting costs. Personnel and related costs consist of salaries, employee benefits and stock-based compensation for personnel involved in executive, finance and other administrative functions. We expect our general and administrative expenses to increase for the foreseeable future as we increase the size of our administrative function to support the growth of our business and support our continued research and development activities. We also anticipate increased expenses as we continue to operate as a public company, including increased expenses related to financial advisory services, audit, legal, regulatory, investor relations costs, director and officer insurance premiums associated with maintaining compliance with exchange listing and SEC requirements.
Other (Expense) Income, Net
Other (expense) income, net primarily consists of the change in fair value of warrant liability, clinical trial related settlement expenses with A-IR Clinical Research Ltd., foreign currency transaction gains and losses, interest expense and interest income from our cash balances in savings accounts.
16
Results of Operations
The following table summarizes our results of operations for the periods presented:
|
|
Three Months Ended |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
Operating expenses: |
|
|
|
|
|
|
|
|
|
|||
Research and development |
|
$ |
858,830 |
|
|
$ |
717,582 |
|
|
$ |
141,248 |
|
General and administrative |
|
|
1,236,157 |
|
|
|
1,184,556 |
|
|
|
51,601 |
|
Total operating expenses |
|
|
2,094,987 |
|
|
|
1,902,138 |
|
|
|
192,849 |
|
Loss from operations |
|
|
(2,094,987 |
) |
|
|
(1,902,138 |
) |
|
|
(192,849 |
) |
Total other income (expense), net |
|
|
43,902 |
|
|
|
(779,295 |
) |
|
|
823,197 |
|
Net loss |
|
$ |
(2,051,085 |
) |
|
$ |
(2,681,433 |
) |
|
$ |
630,348 |
|
Research and Development Expenses
The following table summarizes our research and development expenses for the periods presented:
|
|
Three Months Ended |
|
|||||||||
|
|
2025 |
|
|
2024 |
|
|
Change |
|
|||
GEM-AKI, GEM-CKD and GEM-PSI clinical study expenses |
|
$ |
470,578 |
|
|
$ |
333,225 |
|
|
$ |
137,353 |
|
Other expenses |
|
|
23,613 |
|
|
|
89,015 |
|
|
|
(65,402 |
) |
Personnel expenses (including stock-based compensation) |
|
|
364,639 |
|
|
|
295,342 |
|
|
|
69,297 |
|
Total research and development expenses |
|
$ |
858,830 |
|
|
$ |
717,582 |
|
|
$ |
141,248 |
|
Research and development expenses increased by $0.1 million, from $0.7 million for the three months ended March 31, 2024 to $0.9 million for the three months ended March 31, 2025. The increase was primarily due to increases of $0.1 million of clinical study expense and $0.07 million of personnel expenses, offset by a decrease of $0.07 million of other research and development expenses. Other program expenses include pre-clinical costs and clinical preparation costs primarily for new programs.
General and Administrative Expenses
General and administrative expenses increased by $0.05 million, from $1.1 million for the three months ended March 31, 2024 to $1.2 million for the three months ended March 31, 2025. The increase was primarily due to a increase of $0.06 million in legal and professional fees, and an increase of $0.09 million in personnel expenses.
Other (Expense) Income, Net
Other (expense) income, net, was expense of $0.8 million for the three months ended March 31, 2024, primarily related to the change in fair value of the warrant liability, the clinical trial related settlement expenses with A-IR Clinical Research Ltd., foreign currency transaction gains and losses, and interest income from our cash balances in savings accounts. Other (expense) income, net, was income of $0.04 million for the three months ended March 31, 2025, primarily related to the change in fair value of the warrant liability, foreign currency transaction gains and losses, and interest income from our cash balances in savings accounts.
17
Liquidity and Capital Resources
Since our inception to March 31, 2025, we have funded our operations from the issuance and sale of our common stock, preferred stock and warrants, from which we have raised net proceeds of $56.8 million. As of March 31, 2025, we had available cash and cash equivalents of $3.7 million and an accumulated deficit of $42.6 million.
Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to our Product Candidates. We plan to increase our research and development expenses substantially for the foreseeable future as we continue the clinical development of our current and future product candidates. At this time, due to the inherently unpredictable nature of product development, we cannot reasonably estimate the costs we will incur and the timelines that will be required to complete development, obtain marketing approval, and commercialize our current product candidate or any future product candidates. For the same reasons, we are also unable to predict when, if ever, we will generate revenue from product sales or any future license agreements which we may enter into or whether, or when, if ever, we may achieve profitability. Clinical and preclinical development timelines, the probability of success, and development costs can differ materially from expectations. In addition, we cannot forecast the timing and amounts of milestone, royalty and other revenue from licensing activities, which future product candidates may be subject to future collaborations, when such arrangements will be secured, if at all, and to what degree such arrangements would affect our development plans and capital requirements.
We expect to continue to generate substantial operating losses for the foreseeable future as we expand our research and development activities. We will continue to fund our operations primarily through utilization of our current financial resources and through additional raises of capital.
To the extent that we raise additional capital through partnerships or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams or research programs or to grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our then-existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders’ rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our clinical studies or preclinical studies, research and development programs or commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.
Going Concern
We have incurred recurring losses since our inception, including a net loss of $2.1 million for the three months ended March 31, 2025. As of March 31, 2025 we had an accumulated deficit of $42.6 million, a stockholders’ equity of $2.9 million and available cash and cash equivalents of $3.7 million. We expect to continue to incur significant operating and net losses, as well as negative cash flows from operations, for the foreseeable future as we continue to complete all necessary product development or future commercialization efforts. We have never generated revenue and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for Product Candidates or other product candidates, which we expect will not be for at least several years, if ever. We do not anticipate that our current cash and cash equivalents balance will be sufficient to sustain operations within one-year after the date that our audited financial statements for March 31, 2025 were issued, which raises substantial doubt about our ability to continue as a going concern.
To continue as a going concern, we will need, among other things, to raise additional capital resources. We plan to seek additional funding through public or private equity or debt financings. We 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 our stockholders. If we are unable to obtain funding we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business operations.
The unaudited consolidated financial statements for March 31, 2025, have been prepared on the basis that we will continue as a going concern, and do 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 us to continue as a going concern.
18
Cash Flows
The following table summarizes our cash flows for the periods presented:
|
|
Three Months Ended |
|
|||||
|
|
2025 |
|
|
2024 |
|
||
Net cash used in operating activities |
|
$ |
(2,794,407 |
) |
|
$ |
(2,837,969 |
) |
Net cash used in investing activities |
|
|
- |
|
|
|
(19,172 |
) |
Net cash provided by financing activities |
|
|
— |
|
|
|
5,417,180 |
|
Net (decrease) increase in cash and cash equivalents |
|
$ |
(2,794,407 |
) |
|
$ |
2,560,039 |
|
Net Cash Used in Operating Activities
During the three months ended March 31, 2025, net cash used in operating activities was $2.8 million, which consisted of a net loss of $2.1 million and a net change of $0.2 million comprised of the change in fair value of the warrant liability, stock-based compensation expense and depreciation expense, offset by a net change of $1.0 million in our net operating assets and liabilities.
During the three months ended March 31, 2024, net cash used in operating activities was $2.8 million, which consisted of a net loss of $2.7 million and a net change of $0.03 million comprised of the change in fair value of the warrant liability, stock-based compensation expense and depreciation expense, offset by a net change of $0.1 million in our net operating assets and liabilities.
Net Cash Used in Investing Activities
During the three months ended March 31, 2025, there was no net cash provided by or used in investing activities consisted of the disposal of lab equipment.
During the three months ended March 31, 2024, net cash used in investing activities consisted of the purchase of lab equipment.
Net Cash Provided by Financing Activities
During the three months ended March 31, 2025, there was no net cash provided by financing activities.
During the three months ended March 31, 2024, net cash provided by financing activities was $5.4 million from the February Public Offering.
Contractual Obligations and Other Commitments
We enter 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. We believe that our non-cancelable obligations under these agreements are not material.
Off-Balance Sheet Arrangements
As of March 31, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.
Quantitative and Qualitative Disclosure about Market Risk
We are exposed to market risks in the ordinary course of our business.
Critical Accounting Policies and Significant Judgments and Estimates
Our management’s discussion and analysis of our financial condition and results of operations is based on our financial statements, which have been prepared in accordance with the generally accepted accounting principles in the United States (“GAAP”). 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 revenue and expenses. These estimates and assumptions are based on management’s best estimates and judgment. Management regularly evaluates its estimates and assumptions using industry experience and other factors; however, actual results could differ materially from these estimates and could have an adverse effect on our consolidated financial statements. While our significant accounting policies are more fully described in the notes to our consolidated financial statements, we believe that the accounting policies discussed below are most critical to understanding and evaluating our historical and future performance.
19
Recent Accounting Pronouncements
See Note 2 to our unaudited condensed consolidated financial statements for more information about recent accounting pronouncements, the timing of their adoption, and our assessment, to the extent we have made one yet, of their potential impact on our financial condition of results of operations.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
We are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information otherwise required under this item.
Item 4. 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 Quarterly Report on Form 10-Q, the effectiveness of our disclosure controls and procedures. Based on that evaluation of our disclosure controls and procedures as of March 31, 2025, 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 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 SEC’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.
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.
20
PART II—OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 1A. Risk Factors.
Our business is subject to various risks, including those described below and in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2024.
Significant reductions in FDA staffing and changes in federal regulatory policy may delay or adversely affect the approval and commercialization of our product candidates.
Recent actions by the current administration, including substantial reductions in the workforce of the U.S. Food and Drug Administration (“FDA”), have created increased uncertainty regarding the timing and outcome of regulatory reviews for new drugs and biologics. These staffing cuts, which have affected key divisions responsible for the review of innovative therapies, may result in longer review times, missed milestones, and inconsistent or delayed feedback from the agency. In addition, the loss of experienced FDA personnel and potential further restructuring could lead to a loss of institutional knowledge and a reduced ability to resolve complex regulatory questions efficiently.
As a result, we may experience delays in the initiation, conduct, or completion of our clinical trials and in the review and approval of our marketing applications. These delays could adversely impact our ability to bring our product candidates to market, disrupt our development timelines, and increase our costs. Furthermore, ongoing regulatory uncertainty may negatively affect investor confidence and our ability to raise additional capital on favorable terms, particularly as small and mid-cap biopharmaceutical companies are more vulnerable to such disruptions.
If the FDA’s operational capacity continues to be reduced or if further policy changes are implemented that affect the agency’s review processes, our business, financial condition, and results of operations could be materially and adversely affected.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
21
Item 6. Exhibits, Financial Statement Schedules.
The exhibits filed or furnished as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index, which Exhibit Index is incorporated herein by reference.
EXHIBIT |
|
DESCRIPTION |
|
||
|
||
|
||
|
||
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. |
|
|
22
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 to be signed on its behalf by the undersigned, thereunto duly authorized.
|
|
REVELATION BIOSCIENCES, INC. |
|
|
|
|
|
Date: May 8, 2025 |
|
By: |
/s/ James Rolke |
|
|
|
James Rolke |
|
|
|
Chief Executive Officer |
|
|
|
(principal executive officer) |
|
|
|
|
Date: May 8, 2025 |
|
By: |
/s/ Chester S. Zygmont, III |
|
|
|
Chester S. Zygmont, III |
|
|
|
Chief Financial Officer |
|
|
|
(principal financial and accounting officer) |
23