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Item 1A. Risk Factors

2025-03-06 compared with 2024-03-22 · 37 added, 39 removed, 848 unchanged (8% of the section changed)

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The following discussion should be read in conjunction with our audited financial statements and notes to the financial statements included herein.

Unless the context otherwise requires, references herein to “Program Products” refers to Revelation’s GEM-SSI, GEM-AKI and GEM-CKD programs.

Unless the context otherwise requires, references herein to “Program Products” refers to Revelation’s GEM-AKI, GEM-CKD, and GEM-PSI programs.

Risks Related to Our Business

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Our prior losses and expected future losses have, had and will continue to have a material adverse effect on our stockholders’ equity and working capital.

Additionally, taking into consideration the net proceeds of approximately $5.4 million received in connection with the public offering completed in February of 2024, 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 December 31, 2023 were issued, which raises substantial doubt about our ability to continue as a going concern.

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 December 31, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

In our own required quarterly assessments, we may continue to conclude that there is substantial doubt about our ability to continue as a going concern, and future reports from our independent registered public accounting firm may also contain statements expressing substantial doubt about our ability to continue as a going concern.

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The net losses we incur may fluctuate significantly from quarter-to-quarter such that a period-to-period comparison of our results of operations may not be a good indication of our future performance.

We have no products approved for marketing in any jurisdiction, our Program Products are in early stages of development.

We have no products approved for marketing in any jurisdiction, and our Program Products are in early stages of development.

We have never generated any revenue from product sales.

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Our clinical studies may fail to adequately demonstrate the safety and efficacy of our Program Products or any future product candidates.

We are focused on the development of GEM-SSI, GEM-AKI and GEM-CKD, which are in pre-clinical development working towards early clinical trials.

We are focused on the development of GEM-AKI, GEM-CKD, and GEM-PSI which are in pre-clinical development working towards early clinical trials.

There is a high failure rate for product candidates proceeding through clinical studies.

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If these third parties do not successfully carry out their contractual duties, meet expected deadlines or comply with regulatory requirements, we may not be able to obtain regulatory approval for or commercialize our Program Products.

In addition, Congress recently amended the FDCA to require sponsors of a Phase 3 clinical trial, or other “pivotal study” of a new drug to support marketing authorization, to design and submit a diversity action plan for such clinical trial.

The action plan must describe appropriate diversity goals for enrollment, as well as a rationale for the goals and a description of how the sponsor will meet them.

Although none of our product candidates has reached Phase 3 of clinical development, we must submit a diversity action plan to the FDA by the time we submit a Phase 3 trial, or pivotal study, protocol to the agency for review, unless we are able to obtain a waiver for some or all of the requirements for a diversity action plan.

It is unknown at this time how the diversity action plan may affect the planning and timing of any future Phase 3 trial for our product candidates or what specific information FDA will expect in such plans.

However, initiation of such trials may be delayed if the FDA objects to our proposed diversity action plans for any future Phase 3 trial for our product candidates, and we may experience difficulties recruiting a diverse population of patients in attempting to fulfill the requirements of any approved diversity action plan.

We may find it difficult to enroll patients in our clinical studies, which could delay or prevent us from proceeding with clinical studies.

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Our business depends on the success of our Program Products, including obtaining regulatory approval to market our product candidates in the United States and/or other major foreign markets such as the EU.

We are focusing our time and financial resources in the clinical development of GEM-SSI, GEM-AKI and GEM-CKD.

We are focusing our time and financial resources in the clinical development of GEM-AKI, GEM-CKD, and GEM-PSI.

If we cannot successfully develop, obtain regulatory approval for, and commercialize our Program Products, we may not be able to continue our operations.

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• the CROs, that we retain to conduct our clinical studies may take actions outside of our control that materially adversely impact our clinical studies;

• the regulatory agencies may not approve the formulation, labeling or specifications of GEM-SSI, GEM-AKI, GEM-CKD or other future product candidates;

• the regulatory agencies may not approve the formulation, labeling or specifications of GEM-AKI, GEM-CKD, GEM-PSI, or other future product candidates;

• the regulatory agencies may change their approval policies or adopt new regulations;

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Many of our competitors have substantially greater financial, technical, human and other resources than we do and may be better equipped to develop, manufacture and market technologically superior products.

In addition, many of these competitors have significantly longer operating histories and greater experience than we have in undertaking nonclinical studies and human clinical studies of new pharmaceutical products and in obtaining regulatory approvals of human therapeutic products.

In addition, many of these competitors have significantly longer operating histories and greater experience than we have in undertaking preclinical studies and human clinical studies of new pharmaceutical products and in obtaining regulatory approvals of human therapeutic products.

Many of our competitors have established distribution channels for the commercialization of their products, whereas we have no such channel or capabilities.

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Until such time, if ever, as we establish a manufacturing facility that has been properly validated to comply with FDA or other comparable regulatory agencies cGMP requirements, we will not be able to independently manufacture Program Products for our planned preclinical and clinical programs.

We currently rely on a third-party manufacturer for the production of our clinical study materials., GEM-SSI, GEM-AKI and GEM-CKD have been and for the near-term will be manufactured by a single third-party manufacturer.

This manufacturer may not be able to scale production to the larger quantities required for large clinical studies and to commercialize GEM-SSI, GEM-AKI and GEM-CKD, if approved.

We currently rely on a third-party manufacturer for the production of our clinical study materials., GEM-AKI, GEM-CKD, and GEM-PSI have been and for the near-term will be manufactured by a single third-party manufacturer.

This manufacturer may not be able to scale production to the larger quantities required for large clinical studies and to commercialize GEM-AKI, GEM-CKD, and GEM-PSI, if approved.

Also, the third-party manufacturers may not be able to produce Program Products that meet the quality requirements.

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• reliance on the third party for regulatory compliance, quality assurance and safety and pharmacovigilance reporting.

Certain raw materials necessary for the manufacture of our Program Products, such as our API, are available only from a single supplier.

Certain raw materials necessary for the manufacture of our Program Products, such as our active pharmaceutical ingredient, are available only from a single supplier.

Any significant delay in the acquisition or decrease in the availability of these raw materials from our supplier could considerably delay their manufacture, which could adversely impact the timing of any planned studies or the regulatory approvals.

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We may decide to collaborate with other pharmaceutical and biotechnology companies for the development and potential commercialization of our product candidates.

For example, we have recently licensed a patent from Vanderbilt University which is the basis of GEM-SSI.

For example, we have recently licensed a patent from Vanderbilt University which is the basis of GEM-PSI.

We face significant competition in seeking appropriate collaborators.

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Data collection is governed by restrictive regulations governing the collection, use, processing and cross-border transfer of personal information.

We have completed a Phase 2 clinical study in Europe and we will continue to collect, process, use or transfer personal information from individuals located in the EEA in connection with our business, including in connection with conducting clinical studies in the EEA.

We have completed a Phase 2 clinical study in Europe and we will continue to collect, process, use or transfer personal information from individuals located in the European Economic Area (“EEA”) in connection with our business, including in connection with conducting clinical studies in the EEA.

Additionally, if any of our product candidates are approved, we may seek to commercialize those products in the EEA.

The collection and use of personal health data in the EEA is governed by the provisions of the GDPR, along with other European Union and country-specific laws and regulations.

The collection and use of personal health data in the EEA is governed by the provisions of the General Data Protection Regulation ((EU) 2016/679) (“GDPR”), along with other European Union and country-specific laws and regulations.

The United Kingdom and Switzerland have also adopted data protection laws and regulations.

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If we incur indebtedness in the future to fund our future growth, our ability to pay dividends may be further restricted by the terms of such indebtedness.

If we fail to maintain proper and effective internal control over financial reporting in the future, our ability to produce accurate and timely financial statements could be impaired, which could harm our operating results, investors’ views of us and, as a result, the value of our common stock.

When and if we are a “large accelerated filer” or an “accelerated filer” and are no longer an “emerging growth company” or “smaller reporting company,” each as defined in the Exchange Act, our independent registered public accounting firm will be required to attest to the effectiveness of our internal control over financial reporting.

However, for so long as we remain an emerging growth company or smaller reporting company, we intend to take advantage of an exemption available to emerging growth companies and smaller reporting companies from these auditor attestation requirements.

The rules governing the standards that must be met for management to assess our internal control over financial reporting are complex and require significant documentation, testing, and possible remediation.

To comply with the requirements of being a reporting company under the Exchange Act, we will need to upgrade our systems including information technology;

implement additional financial and management controls, reporting systems, and procedures;

and hire additional accounting and finance staff.

If we or, if required, our auditors are unable to conclude that our internal control over financial reporting is effective, investors may lose confidence in our financial reporting, and the trading price of our common stock may decline.

We are an emerging growth company, and the reduced reporting requirements applicable to emerging growth companies may make our common stock less attractive to investors.

We are an emerging growth company and are eligible to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, but not limited to, only two years of audited financial statements in addition to any required unaudited interim financial statements with correspondingly reduced “Management’s Discussion and Analysis of Financial Condition and Results of Operations” disclosure, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act of 2002 reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, exemptions from the requirements of holding non-binding advisory votes on executive compensation and seeking stockholder approval of any golden parachute payments not previously approved and not being required to adopt certain accounting standards until those standards would otherwise apply to private companies.

We could be an emerging growth company until the last day of the fiscal year following the fifth anniversary of Petra’s IPO, although circumstances could cause us to lose that status earlier, including if we become a large accelerated filer (in which case we will cease to be an emerging company as of the date we become a large accelerated filer, which, generally, would occur if, at the end of a fiscal year, among other things, the market value of our common stock that is held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter), if we have total annual gross revenue of $1.07 billion or more during any fiscal year (in which cases we would no longer be an emerging growth company as of March 31 of such fiscal year), or if we issue more than $1.0 billion in non-convertible debt during any three year period before that time (in which case we would cease to be an emerging growth company immediately).

Even after we no longer qualify as an emerging growth company, we may still qualify as a “smaller reporting company,” which would allow us to take advantage of many of the same exemptions from disclosure requirements including not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act and reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements.

We cannot predict if investors will find our common stock less attractive because we may rely on these exemptions.

If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and our stock price may be more volatile.

Loss of Emerging Grown Company Status

We are no longer an emerging growth company (“EGC”) as defined in the Jumpstart Our Business Startup Act of 2012, as amended.

As a result, we are now subject to additional regulatory and compliance obligations, which may increase our costs, divert management’s attention, and adversely affect our financial condition.

These obligations include:

• Enhanced disclosures:

We must provide expanded executive compensation disclosures and comply with new or revised accounting standards on the same timeline as non-EGC public companies.

• Reduced flexibility:

We can no longer use EGC exemptions for test-the-waters communications or scaled executive compensation disclosures.

Our transition from EGC status became effective on December 31, 2024, as we exceeded the five-year anniversary of our initial public offering.

However, we continue to qualify as a smaller reporting company under SEC rules and as defined in the Securities Exchange Act of 1934, as amended (the “Exchange Act”), which permits certain scaled disclosures but does not alleviate all obligations triggered by the loss of EGC status.

Compliance with these requirements may strain our financial and operational resources and could make us less attractive to investors accustomed to EGC reporting standards.

Our common stock price may be volatile and as a result you could lose all or part of your investment.

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See the section titled “Registration Rights.” Such future sales of our shares of common stock by our existing stockholders, pursuant to and in accordance with the provisions of any registration statement, may have a depressive effect on the market price of our shares of common stock.

Further, in general, under Rule 144 under the Securities Act, a person who has satisfied a minimum holding period of between six months and one-year and any other applicable requirements of Rule 144, may thereafter sell such shares publicly.

Further, in general, under Rule 144 under the Securities Act of 1933, as amended (the “Securities Act”), a person who has satisfied a minimum holding period of between six months and one-year and any other applicable requirements of Rule 144, may thereafter sell such shares publicly.

A significant number of our currently issued and outstanding shares of common stock held by existing stockholders, including officers and directors and other principal stockholders are currently eligible for resale pursuant to and in accordance with the provisions of Rule 144.

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FINRA has adopted sales practice requirements, which may also limit a stockholder’s ability to buy and sell our common stock.

FINRA has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.

The Financial Industry Regulatory Authority (“FINRA”) has adopted rules that require that in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer.

Prior to recommending speculative low-priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information.

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Our Charter provides that the Court of Chancery of the State of Delaware and the federal district courts of the United States of America will be the exclusive forums for substantially all disputes between us and our stockholders, which could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers, or employees.

Our Charter provides that, subject to limited exceptions, any (i) derivative action or proceeding brought on our behalf of under Delaware law, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of Revelation to its stockholders, (iii) any action asserting a claim against Revelation or any of its directors, officers or other employees arising pursuant to any provision of the DGCL, the Charter or the Bylaws of Revelation (in each case, as may be amended from time to time), (iv) any action asserting a claim against Revelation or any of its directors, officers or other employees governed by the internal affairs doctrine of the State of Delaware or (v) any other action asserting an “internal corporate claim,” as defined in Section 115 of the DGCL, in all cases subject to the court’s having personal jurisdiction over all indispensable parties named as defendants shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware.

The Charter also provides that unless a majority of the Board of Revelation, acting on

behalf of Revelation, consents in writing to the selection of an alternative forum (which consent may be given at any time, including during the pendency of litigation), the federal district courts of the United States of America, to the fullest extent permitted by law, will be the sole and exclusive forum for the resolution of any action asserting a cause of action arising under the Securities Act.

Our Charter provides that, subject to limited exceptions, any (i) derivative action or proceeding brought on our behalf of under Delaware law, (ii) any action asserting a claim of breach of a fiduciary duty owed by any current or former director, officer or other employee of Revelation to its stockholders, (iii) any action asserting a claim against Revelation or any of its directors, officers or other employees arising pursuant to any provision of the Delaware General Corporation Law (“DGCL”), the Charter or the Bylaws of Revelation (in each case, as may be amended from time to time), (iv) any action asserting a claim against Revelation or any of its directors, officers or other employees governed by the internal affairs doctrine of the State of Delaware or (v) any other action asserting an “internal corporate claim,” as defined in Section 115 of the DGCL, in all cases subject to the court’s having personal jurisdiction over all indispensable parties named as defendants shall, to the fullest extent permitted by law, be exclusively brought in the Court of Chancery of the State of Delaware or, if such court does not have subject matter jurisdiction thereof, another state or federal court located within the State of Delaware.

The Charter also provides that unless a majority of the Board of Revelation, acting on behalf of Revelation, consents in writing to the selection of an alternative forum (which consent may be given at any time, including during the pendency of litigation), the federal district courts of the United States of America, to the fullest extent permitted by law, will be the sole and exclusive forum for the resolution of any action asserting a cause of action arising under the Securities Act.

Any person or entity purchasing or otherwise acquiring any interest in shares of Revelation’s capital stock shall be deemed to have notice of and to have consented to the provisions of Revelation’s certificate of incorporation described above.

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If Revelation is not able to comply with the applicable continued listing requirements or standards of Nasdaq, Nasdaq could delist our common stock.

Revelation’s common stock and Public Warrants are listed on the Nasdaq Capital Market under the symbols “REVB” and “REVBW,” respectively.

Revelation’s common stock and Public Warrants are listed on the Nasdaq Capital Market listing tier (“Nasdaq Capital Market”) under the symbols “REVB” and “REVBW,” respectively.

If Nasdaq delists the Revelation common stock and Public Warrants from trading on its exchange for failure to meet the listing standards such as the minimum public stockholders equity requirement, minimum bid price, for failure to hold an annual stockholders meeting, or any other listing standards, we and our stockholders could face significant material adverse consequences including:

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Our common stock warrants may be accounted for as warrant liabilities and the changes in value of our warrants could have a material effect on our financial results.

Historically, warrants were reflected on a company’s balance as a component of equity as opposed to liabilities on the balance sheet and the statements of operations did not include subsequent non-cash changes in estimated fair value of the warrants, based on the prevailing application of Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”).

Historically, warrants were reflected on a company’s balance as a component of equity as opposed to liabilities on the balance sheet and the statements of operations did not include subsequent non-cash changes in estimated fair value of the warrants, based on the prevailing application of the Financial Accounting Standards Boar (“FASB”) Accounting Standards Codification (“ASC”) including 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 certain types of 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 (based up option pricing models since in most cases there is no public market for the warrants) and remeasured at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the consolidated statements of operations.

Common stock warrants classified as liabilities are initially recorded at fair value on the grant date (based upon option pricing models since in most cases there is no public market for the warrants) and remeasured at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the consolidated statements of operations.

One result of this accounting treatment is that as the market price of the Company’s common stock increases, the value of the warrant liability increases, resulting in a non-cash charge to earnings in the quarter in which the revaluation took place.

Conversely, if the common stock price declines, the warrant liability is reduced and the Company recognizes income in the quarter in the amount of the reduction in the liability.

Due to specific provisions within the warrant agreement for the Class C Common Stock Warrants and the Company’s application of ASC 480 and ASC 815 to the warrant agreement, we assessed our accounting for the Class C Common Stock Warrants as a warrant liability.

Due to specific provisions within the warrant agreement for the Class C Common Stock Warrants (defined below) and the Company’s application of ASC 480 and ASC 815 to the warrant agreement, we assessed our accounting for the Class C Common Stock Warrants (defined below) as a warrant liability.

Future issuances of warrants may be accounted for on the same basis.

Our financial condition will be adversely affected if we are unsuccessful in our defense in our litigation with LifeSci Capital LLC

The investment banking firm for the SPAC into which we merged has brought suit against us for unpaid investment banking fees relating to the merger and deferred underwriting commissions, which claims damages of $5.3 million.

See “Legal Proceedings.” While we have defenses which we believe are meritorious, if we were to be unsuccessful in the proceeding it would have a material adverse effect on our financial condition and reduce the available funds to advance our product development.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors