REVELATION BIOSCIENCES INC

Previous wording

Revelation is a clinical-stage biopharmaceutical company founded in May 2020. We are focused on harnessing the power of trained immunity for the prevention and treatment of disease by developing and commercializing therapeutics that modulate the innate immune system. Our current product candidates were developed by us and licensed to potentially prevent, treat and detect disease. Our therapeutic product candidates are based on our therapeutic platform and consist of GEM-AKI, which is being developed as a potential therapy for the prevention and treatment of acute kidney injury as a result of cardiac surgery; GEM-CKD, which is being developed as a potential therapy for the prevention and treatment of chronic kidney disease; and GEM-SSI, which is being developed for the prevention and treatment of surgical sit infection.

Current wording

Revelation is a clinical-stage biopharmaceutical company focused on harnessing the power of trained immunity for the prevention and treatment of disease by developing and commercializing therapeutics that modulate the innate immune system. 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 as a result of cardiac surgery; GEM-CKD, which is being developed as a potential therapy for the prevention and treatment of chronic kidney disease; and GEM-PSI, which is being developed for the prevention and treatment of post surgical infection.

Previous wording

Since our inception in May 2020, we have devoted substantially all of our resources to organizing and staffing our Company, business planning, raising capital, and research and development of GEM-AKI, GEM-CKD and GEM-SSI, our product candidates.

Current wording

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 GEM-AKI, GEM-CKD and GEM-PSI, our product candidates.

Previous wording

We have funded our operations since our inception in May 2020 to March 31, 2024 through the issuance and sale of our capital stock, from which we have raised net proceeds of $49.3 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 unaudited financial statements for March 31, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

Current wording

We have funded our operations since our inception to June 30, 2024 through the issuance and sale of our capital stock, from which we have raised net proceeds of $49.3 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 unaudited financial statements for June 30, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

Previous wording

We have incurred recurring losses since our inception, including a net loss of $2.7 million for the three months ended March 31, 2024 and $6.2 million for the three months ended March 31, 2023, respectively. As of March 31, 2024 we had an accumulated deficit of $28.1 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future if and as we:

Current wording

We have incurred recurring losses since our inception, including a net loss of $11.1 million for the six months ended June 30, 2024 and $4.7 million for the six months ended June 30, 2023, respectively. As of June 30, 2024 we had an accumulated deficit of $36.5 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future if and as we:

Previous wording

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 GEM-AKI, GEM-CKD, GEM-SSI 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 GEM-AKI, GEM-CKD, GEM-SSI 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.

Current wording

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 GEM-AKI, GEM-CKD, GEM-PSI 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 GEM-AKI, GEM-CKD, GEM-PSI 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.

Previous wording

Research and development expenses consist primarily of costs incurred for the development of our product candidates GEM-AKI, GEM-CKD and GEM-SSI. 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.

Current wording

Research and development expenses consist primarily of costs incurred for the development of our product candidates GEM-AKI, GEM-CKD and GEM-PSI. 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.

Previous wording

We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of GEM-AKI, GEM-CKD and GEM-SSI 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 GEM-AKI, GEM-CKD and GEM-SSI 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.

Current wording

We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of GEM-AKI, GEM-CKD and GEM-PSI 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 GEM-AKI, GEM-CKD and GEM-PSI 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.

Previous wording

The actual probability of success for GEM-AKI, GEM-CKD and GEM-SSI 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 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 GEM-AKI, GEM-CKD and GEM-SSI or any future product candidate.

Current wording

The actual probability of success for GEM-AKI, GEM-CKD and GEM-PSI 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 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 GEM-AKI, GEM-CKD and GEM-PSI or any future product candidate.

Previous wording

Research and development expenses increased by $0.2 million, from $0.5 million for the three months ended March 31, 2023 to $0.7 million for the three months ended March 31, 2024. The increase was primarily due to increases of $0.3 million in clinical study expenses related to GEM-AKI and GEM-SSI and $0.2 million in personnel expenses, offset by a decrease of $0.3 million in manufacturing expenses.

Current wording

Research and development expenses increased by $0.5 million, from $0.9 million for the three months ended June 30, 2023 to $1.4 million for the three months ended June 30, 2024. The increase was primarily due to increases of $0.9 million in clinical study expenses related to GEM-AKI and GEM-PSI and $0.2 million in personnel expenses, offset by decreases of $0.4 in other program expenses and $0.2 million in manufacturing expenses. Other program expenses include pre-clinical costs and clinical preparation costs primarily for programs GEM-AKI and GEM-PSI.

Previous wording

General and administrative expenses increased by $0.1 million, from $1.1 million for the three months ended March 31, 2023 to $1.2 million for the three months ended March 31, 2024. The increase was primarily due to increases of $0.3 million in personnel expenses, offset by a decrease of $0.2 million in legal and professional fees.

Current wording

General and administrative expenses increased by $0.2 million, from $2.1 million for the six months ended June 30, 2023 to $2.3 million for the six months ended June 30, 2024. The increase was primarily due to increases of $0.4 million in personnel expenses, offset by a decrease of $0.2 million in legal and professional fees.

Previous wording

Other (expense) income, net was $7,779,042 for the three months ended March 31, 2023, 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. Other (expense) income, net was $779,295 for the three months ended March 31, 2024, related to the change in fair value of the warrant liability, clinical trial related settlement expenses with A-IR, foreign currency transaction gains and losses, and interest income from our cash balances in savings accounts.

Current wording

Other (expense) income, net was $8,263,902 for the six months ended June 30, 2023, 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. Other (expense) income, net was ($6,646,717) for the six months ended June 30, 2024, primarily related to the LifeSci judgment expense, reimbursement of costs and clinical trial related settlement expenses with A-IR (defined below), offset by interest income from our cash balances in savings accounts.

Previous wording

Since our inception to March 31, 2024, 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 $49.3 million, of which $5.4 million was received during the three months ended March 31, 2024. As of March 31, 2024, we had available cash and cash equivalents of $14.6 million and an accumulated deficit of $28.1 million.

Current wording

Since our inception to June 30, 2024, 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 $49.3 million, of which $5.4 million was received during the six months ended June 30, 2024. As of June 30, 2024, we had available cash and cash equivalents of $12.1 million and an accumulated deficit of $36.5 million.

Previous wording

Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to our therapeutic product candidates, GEM-AKI, GEM-CKD and GEM-SSI. 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.

Current wording

Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to our therapeutic product candidates, GEM-AKI, GEM-CKD and GEM-PSI. 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.

Previous wording

We have incurred recurring losses since our inception, including a net loss of $2.7 million for the three months ended March 31, 2024. As of March 31, 2024 we had an accumulated deficit of $28.1 million, a stockholders’ equity of $9.5 million and available cash and cash equivalents of $14.6 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 GEM-AKI, GEM-CKD, GEM-SSI 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 unaudited financial statements for March 31, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

Current wording

We have incurred recurring losses since our inception, including a net loss of $11.1 million for the six months ended June 30, 2024. As of June 30, 2024 we had an accumulated deficit of $36.5 million, a stockholders’ equity of $1.1 million and available cash and cash equivalents of $12.1 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 GEM-AKI, GEM-CKD, GEM-PSI 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 unaudited financial statements for June 30, 2024 were issued, which raises substantial doubt about our ability to continue as a going concern.

Previous wording

The unaudited consolidated financial statements for March 31, 2024, 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.

Current wording

The unaudited condensed consolidated financial statements for June 30, 2024, 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.

Previous wording

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 $0.1 million in our net operating assets and liabilities.

Current wording

During the six months ended June 30, 2024, net cash used in operating activities was $5.3 million, which consisted of a net loss of $11.1 million and a net change of $5.7 million in our net operating assets and liabilities.

Previous wording

During the three months ended March 31, 2023, net cash used in operating activities was $1.6 million, which consisted of a net income of $6.2 million, offset by a net change of $7.7 million comprised of the change in fair value of the warrant liability, stock-based compensation expense and depreciation expense.

Current wording

During the six months ended June 30, 2023, net cash used in operating activities was $3.6 million, which consisted of a net income of $4.7 million, offset by a net change of $8.1 million comprised of the change in fair value of the warrant liability, stock-based compensation expense and depreciation expense.

Previous wording

During the three months ended March 31, 2024, net cash used in investing activities consisted of a purchase of lab equipment.

Current wording

During the six months ended June 30, 2024, net cash used in investing activities consisted of a purchase of lab equipment.

Previous wording

During the three months ended March 31, 2023, there was no cash used in investing activities.

Current wording

During the six months ended June 30, 2023, there was no cash used in investing activities.

Previous wording

During the three months ended March 31, 2024, net cash provided by financing activities was $5.4 million, from cash proceeds of $5.4 million received from the February 2024 Public Offering.

Current wording

During the six months ended June 30, 2024, net cash provided by financing activities was $5.4 million, from the February 2024 Public Offering.

Previous wording

During the three months ended March 31, 2023, net cash provided by financing activities was $14.0 million, from net cash proceeds of $14.0 million received from the February 2023 Public Offering.

Current wording

During the six months ended June 30, 2023, net cash provided by financing activities was $14.0 million, from the February 2023 Public Offering.

Previous wording

Critical Accounting Policies and Significant Judgements and Estimates

Current wording

Critical Accounting Policies and Significant Judgments and Estimates

Previous wording

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 U.S. generally accepted accounting principles (“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.

Current wording

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 U.S. generally accepted accounting principles (“GAAP”). 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 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 condensed consolidated financial statements. While our significant accounting policies are more fully described in the notes to our condensed consolidated financial statements, we believe that the accounting policies discussed below are most critical to understanding and evaluating our historical and future performance.

Previous wording

As of March 31, 2024, there were 94 Rollover RSU awards unvested and unissued and 1,157 stock options outstanding.

Current wording

As of June 30, 2024, there were 94 Rollover RSU awards unvested and unissued and 946 stock options outstanding.

Previous wording

See Note 2 to our unaudited 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.

Current wording

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.