Item 1A. Risk Factors
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, 2025.
A newly adopted Nasdaq rule could result in the delisting of the Company’s securities.
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. In general, 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, minimum market value of publicly-held shares, for failure to hold an annual stockholders meeting, or any other listing standards, we and our stockholders could face significant material adverse consequences including:
• limited availability of market quotations for our securities;
• reduced liquidity for Revelation’s securities;
• a determination that the Revelation common stock is a “penny stock” which will require brokers trading in the Revelation common stock to adhere to more stringent rules and possibly result in a reduced level of trading activity in the secondary trading market for Revelation’s securities;
• a limited amount of news and analyst coverage; and
• a decreased ability to issue additional securities or obtain additional financing in the future.
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On or about July 23, 2026, the SEC allowed a new Nasdaq continued listing rule to come into effect (the “MVLS Rule”) that requires automatic delisting if the market value of a company's listed securities remains below $5 million for 30 consecutive business days. The new MVLS Rule eliminates any cure period, precludes any automatic stay of suspension pending an appeal, and results in an immediate trading suspension upon Nasdaq's determination of non-compliance. Given that the current market value of the Company’s listed securities is below $5 million, the MVLS Rule would result in the delisting of the Company’s securities from Nasdaq should the market value of its listed securities remain below $5 million for 30 consecutive business days. Prior to its implementation, however, the MVLS Rule was automatically stayed pending further action by the SEC. Accordingly, it is currently uncertain when the stay will be lifted, or the MVLS Rule delayed, modified, or set aside. The Company is in active discussions with its financial and legal advisors to address the manner in which it could achieve compliance with the MVLS Rule, if at all, should it be implemented in generally the same form as it had been originally adopted. There can be no assurances, however, that if the stay is lifted and the MVLS Rule goes into effect as originally adopted, the Company’s efforts to avoid delisting will be successful.
We have recently adopted a Rights Agreement that includes terms and conditions that could discourage a takeover or other transaction that stockholders may otherwise consider favorable.
In recognition of the risk that an opportunist acquiror may attempt to take over the Company at a price that does not reflect the full value of the Company’s development pipeline, on July 10, 2026, the Board adopted a stockholder rights plan (the “Rights Plan”) pursuant to which stockholders of record as of the close of business on July 21, 2026 are to receive one preferred share purchase right (each, a “Right”) for each outstanding share of Common Stock they beneficially own. Each Right entitles the registered holder to purchase from the Company one one-thousandth of a share of Series B Junior Participating Preferred Stock (the “Preferred Stock”), of the Company at an exercise price of $20.00, subject to adjustment. Under the Rights Agreement, the Rights will become exercisable if a person or group acquires beneficial ownership of 10% or more of the Company’s outstanding Common Stock (15% for qualifying passive investors that file on Schedule 13G) without the prior approval of the Board, or if a person or group with beneficial ownership of 10% or more at the time the adoption of the Rights Agreement is announced acquires any additional shares of Common Stock, without the prior approval of the Board. In the event that the Rights become exercisable due to such thresholds being triggered or certain other triggers, each Right will entitle its holder to purchase, at the Right’s exercise price, a number of shares of common stock or equivalent securities (including the Common Stock or equivalent securities of an acquiring entity after a change of control upon certain triggers) having a market value at that time equal to twice each Right’s exercise price.
The Board adopted the Rights Agreement to protect the interests of Company stockholders. In general terms, subject to certain enumerated exceptions, it works by imposing significant dilution upon any person or group that acquires beneficial ownership of 10% or more of the shares of Common Stock, or if a person or group with beneficial ownership of 10% or more at the time the adoption of the Rights Agreement is announced acquires any additional shares of Common Stock, without the prior approval of the Board. In general, any person will be deemed to beneficially own any securities (a) as to which such person has any agreement, arrangement or understanding with another person for the purpose of acquiring, holding, voting or disposing of any shares of Common Stock or (b) that are the subject of a derivative transaction or constitute a derivative security. As a result, the overall effect of the Rights Agreement and the issuance of the Rights may be to render more difficult or discourage a merger, tender or exchange offer or other business combination involving the Company that is not approved by the Board. However, neither the Rights Agreement nor the Rights should interfere with any merger, tender or exchange offer or other business combination approved by the Board.
The Rights Agreement is similar to agreements adopted by other public companies in comparable circumstances. It is intended to enable all Company stockholders to realize the full value of their investment and to reduce the likelihood that any person or group gains control of the Company through open-market accumulation or other coercive or unfair tactics without paying an appropriate control premium to all stockholders. It is designed to protect stockholders’ interests, by, among others, providing the Board sufficient time to make informed judgments and take actions that are in the best interests of all of the Company’s stockholders and other stakeholders. Nevertheless, the Rights Agreement may be considered to have certain anti-takeover effects, including potentially discouraging a third party from attempting to obtain a substantial position in the Common Stock or seeking to obtain control of the Company and discouraging a takeover attempt that stockholders may consider favorable or that could result in a premium over the market price of the Common Stock. Even in the absence of a takeover attempt, the Rights Agreement may adversely affect the prevailing market price of the Common Stock if it is viewed as discouraging takeover attempts in the future. The Company cannot predict, and no assurances can be given as to, the outcome or timing of any matters relating to the foregoing actions by activist stockholders and its responses thereto or the ultimate effects on its business, liquidity, financial condition, or results of operations.
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We will require substantial additional financing to continue our operations, which may not be available on acceptable terms or at all, and any future financing may cause substantial dilution to our stockholders.
Drug development is a lengthy, expensive, and uncertain process. We have incurred significant operating losses since our inception, and we expect to continue to incur substantial net losses for the foreseeable future as we advance our product candidates through preclinical and clinical development, seek regulatory approvals, and build our commercial infrastructure. We do not currently have any products approved for sale, and we do not generate any revenue from product sales. As a result, we are entirely dependent on external financing to fund our operations.
We will require substantial additional capital to continue to operate in accordance with our business plan, including to fund ongoing and planned research and development activities, conduct clinical trials, support regulatory submissions, maintain and expand our intellectual property portfolio, and for working capital and general corporate purposes. The amount and timing of our future funding requirements will depend on many factors, some of which are beyond our control, including the progress, costs, and results of our clinical and preclinical programs; the outcome of regulatory review of our product candidates; the cost and timing of establishing sales and marketing capabilities; and market conditions generally.
We cannot assure you that additional financing will be available when needed or, if available, that it will be available on terms that are acceptable to us. If we are unable to raise capital when needed or on acceptable terms, we could be forced to delay, reduce, or eliminate our research and development programs or other operations, which could have a material adverse effect on our business, financial condition, and results of operations.
To the extent we raise additional capital through the issuance of equity or equity-linked securities—including common stock, preferred stock, warrants, or convertible instruments—our existing stockholders will experience dilution. Such dilution may be substantial. In addition, certain of our outstanding securities contain anti-dilution provisions that are triggered by future issuances of equity at prices below the existing conversion or exercise prices. To the extent such provisions are triggered, holders of those securities may have their conversion or exercise prices adjusted to the new offering price, resulting in further dilution to our other stockholders beyond what would otherwise occur. The terms of any future financing may also include covenants or other restrictions that limit our operational flexibility. There can be no assurance that we will be able to obtain the financing necessary to continue our operations on terms acceptable to us, if at all, and our failure to do so could have a material adverse effect on our business and the value of our securities.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
a) None.
b) None.
c) None.
Item 3. Defaults Upon Senior Securities.
Not applicable.
Item 4. Mine Safety Disclosures.
Not applicable.
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