REVELATION BIOSCIENCES INC

Notes to the 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”). 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 Splits

On January 17, 2025, the Company filed a Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation effecting a reverse stock split on January 28, 2025 with a ratio of 1-for-16 (the “2025 Reverse Split”). As a result of the 2025 Reverse Split, every 16 shares of the Company’s issued and outstanding common stock automatically converted intoone share of common stock, without any change in the par value per share. No fractional shares were outstanding following the 2025 Reverse Split. Any holder of common stock otherwise entitled to a fractional share as a result of the 2025 Reverse Stock Split because they hold a number of shares not evenly divisible by the 2025 Reverse Stock Split ratio will be rounded down to the nearest whole share. In addition, effective as of the same time as the 2025 Reverse Split, proportionate adjustments were made to all then-outstanding equity awards and warrants with respect to the number of shares of common stock subject to such award or warrant and the exercise price thereof. Furthermore, the number of shares of common stock available for issuance under the Company’s equity incentive plans were proportionately adjusted for the 2025 Reverse Split ratio, such that fewer shares are subject to such plans. All share numbers included herein have been retroactively adjusted to reflect the 1-for-16 Reverse Split (see Note 8).

On January 22, 2024, the Company filed a Certificate of Amendment of the Third Amended and Restated Certificate of Incorporation effecting a reverse stock split on January 25, 2024 with a ratio of 1-for-30 (the “2024 Reverse Split”). As a result of the 2024 Reverse Split, every 30 shares of the Company’s issued and outstanding common stock automatically converted intoone share of common stock, without any change in the par value per share. No fractional shares were outstanding following the 2024 Reverse Split. Any holder who would have received a fractional share of common stock automatically received an additional fraction of a share of common stock to round up to the next whole share. In addition, effective as of the same time as the 2024 Reverse Split, proportionate adjustments were made to all then-outstanding equity awards and warrants with respect to the number of shares of common stock subject to such award or warrant and the exercise price thereof. Furthermore, the number of shares of common stock available for issuance under the Company’s equity incentive plans were proportionately adjusted for the 2024 Reverse Split ratio, such that fewer shares are subject to such plans. All share numbers included herein have been retroactively adjusted to reflect the 1-for-30 Reverse Split (see Note 8).

Nasdaq Compliance

As previously reported on October 16, 2024, the Company received a letter from Nasdaq Stock Market (“Nasdaq”) notifying the Company of its noncompliance with Nasdaq Listing Rule 5550(a)(2) by failing to maintain a minimum bid price for its common stock of at least $1.00 per share for 30 consecutive business days. The Company had until February 14, 2025, to regain compliance by having a minimum closing bid price of at least $1.00 per share for at least 10 consecutive business days. On February 19, 2025 the Company received a formal notice from Nasdaq stating that the Company’s common stock will continue to be listed and traded on Nasdaq, due to the Company having regained compliance with the minimum bid price requirement, and all applicable listing standards.

Liquidity and Capital Resources

Going Concern

The Company has incurred recurring losses since its inception, including a net loss of$15.0 million for the year ended December 31, 2024. As of December 31, 2024, the Company had an accumulated deficit of$40.5 million, a stockholders’ equity of$4.7 million and available cash and cash equivalents of$6.5 million. The Company expects to continue to incur significant operating and net losses, as well as negative cash flows from operations, for the foreseeable future as it continues to complete all necessary product development or future commercialization efforts. The Company has never generated revenue and does not expect to generate revenue from product sales unless and until it successfully completes development and obtains regulatory approval for GEM-AKI, GEM-CKD, GEM-PSI or other product candidates, which the Company expects will not be for at least several years, if ever. The Company does not anticipate that its current cash and cash equivalents balance will be sufficient to sustain operations within one-year after the date that the Company’s audited financial statements for December 31, 2024 were issued, which raises substantial doubt about its ability to continue as a going concern.

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 audited consolidated financial statements for December 31, 2024, have been prepared on the basis that the Company will continue as a going concern, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the possible inability for the Company to continue as a going concern.

Basis of Presentation

The accompanying financial statements are prepared in accordance with U.S. generally accepted accounting principles (“GAAP”). The 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.

2. Summary of Significant Accounting Policies

Use of Estimates

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 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 consolidated financial statements.

Cash and Cash Equivalents

The Company considers all highly liquid investments purchased with original maturities of three months or less from the purchase date to be cash equivalents. The Company maintains its cash in checking and savings accounts. Income generated from cash held in savings accounts is recorded as interest income. The carrying value of the Company’s savings accounts is included in cash and approximates the fair value.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to a concentration of credit risk consist primarily of cash and cash equivalents. Bank deposits are held by accredited financial institutions and these deposits may at times be in excess of federally insured limits. The Company limits its credit risk associated with cash and cash equivalents by placing them with financial institutions that it believes are of high quality. The Company has not experienced any losses on its deposits of cash or cash equivalents.

Deferred Offering Costs

The Company capitalizes certain legal, professional accounting and other third-party fees that are directly associated with in-process equity financings as deferred offering costs until such financings are consummated. After consummation of the equity financing, these costs are recorded as a reduction of the proceeds generated as a result of the offering. Should the planned equity financing be abandoned, the deferred offering costs will be expensed immediately as a charge to operating expenses in the consolidated statements of operations.

Property and Equipment, Net

Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets, which isfive years. Maintenance and repairs are charged to operating expense as incurred. When assets are sold, or otherwise disposed of, the cost and related accumulated depreciation are removed from the accounts, and any gain or loss is included in other income (expense).

Leases

The Company determines if an arrangement is a lease at inception. Lease right-of-use assets represent the right to use an underlying asset for the lease term and lease liabilities represent the obligation to make lease payments arising from the lease. For operating leases with an initial term greater than 12 months, the Company recognizes operating lease right-of-use assets and operating lease liabilities based on the present value of lease payments over the lease term at the commencement date. Operating lease right-of-use assets are comprised of the lease liability plus any lease payments made and excludes lease incentives. Lease terms include options to renew or terminate the lease when the Company is reasonably certain that the renewal option will be exercised or when it is reasonably certain that the termination option will not be exercised. For an operating lease, if the interest rate used to determine the present value of future lease payments is not readily determinable, the Company estimates the incremental borrowing rate as the discount rate for the lease. The Company’s incremental borrowing rate is estimated to approximate the interest rate on a collateralized basis with similar terms and payments, and in similar economic environments. Lease expense for lease payments is recognized on a straight-line basis over the lease term.

All research and development costs are expensed as incurred. Research and development costs consist primarily of salaries, employee benefits, costs associated with preclinical studies and clinical trials (including amounts paid to clinical research organizations and other professional services). Payments made prior to the receipt of goods or services to be used for research and development expense are capitalized until the goods or services are received.

The Company records accruals for estimated research and development costs, comprising payments for work performed by third party contractors, laboratories, participating clinical trial sites, and others. Some of these contractors bill monthly based on actual services performed. Other contractors bill periodically based upon achieving certain contractual milestones. For the contractors that bill periodically, the Company accrues the expenses as goods or services are used or rendered. Clinical trial site costs related to patient enrollment are accrued as patients enter and progress through the trial. Upfront costs, such as costs associated with setting up clinical trial sites for participation in the trials, are expensed immediately once incurred as research and development expenses.

Patent Costs

Legal costs in connection with approved patents and patent applications are expensed as incurred, as recoverability of such expenditures is uncertain. These costs are recorded in general and administrative expenses in the consolidated statements of operations.

Stock-based Compensation

The Company recognizes stock-based compensation expense related to stock options, third-party warrants, and Restricted Stock Unit (“RSU”) awards granted, based on the estimated fair value of the stock-based awards on the date of grant. The fair value of employee stock options and third-party warrants are generally determined using the Black-Scholes option-pricing model using various inputs, including estimates of historic volatility, term, risk-free rate, and future dividends. The grant date fair value of the stock-based awards, which have graded vesting, is recognized using the straight-line method over the requi site service period of each stock-based award, which is generally the vesting period of the respective stock-based awards. The Company recognizes forfeitures as they occur.

Income Taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates applied to taxable income in the years in which those temporary differences are expected to be realized. The effect on deferred tax assets and liabilities of a change in tax rates is recognized as income or loss in the period that includes the enactment date. A valuation allowance is established when necessary to reduce deferred tax assets to the amount expected to be realized. Interest and penalties related to unrecognized tax benefits are included within the provision of income tax. To date, there have beenno unrecognized tax benefits balances.

Fair Value

Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company’s valuation techniques used to measure fair value maximize the use of observable inputs and minimize the use of unobservable inputs. The Company follows a fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value. These levels of inputs are the following:

• Level 1—Quoted prices in active markets for identical assets or liabilities.

• Level 2—Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3—Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities.

The Company has determined that the measurement of the fair value of the Class C Common Stock Warrants (as defined in Note 5) is a Level 3 fair value measurement and uses the Monte-Carlo simulation model for valuation (see Note 10).

Warrant Liability

The Company reviews the terms of debt instruments, equity instruments, and other financing arrangements to determine whether there are embedded derivative features, including embedded conversion options that are required to be bifurcated and accounted for separately as a derivative financial instrument. Additionally, in connection with the issuance of financing instruments, the Company may issue freestanding options and warrants.

The Company accounts for its common stock warrants in accordance with ASC 480, Distinguishing Liabilities from Equity (“ASC 480”) and ASC 815, Derivatives and Hedging (“ASC 815”). Based upon the provisions of ASC 480 and ASC 815, the Company accounts for common stock warrants as current liabilities if the warrant fails the equity classification criteria. Common stock warrants classified as liabilities are initially recorded at fair value on the grant date and revalued at each balance sheet date with the offsetting adjustments recorded in change in fair value of warrant liabilities within the consolidated statements of operations.

The Company values its Class C Common Stock Warrants classified as liabilities using the Monte-Carlo simulation model.

Basic and Diluted Net Loss per Share

The Company follows the guidance in FASB ASC 260, Earnings per Share (“ASC 260”), which establishes standards regarding the computation of earnings 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 December 31, 2024 and 2023, there were 960,469 and 2,422 potential shares of common stock excluded from the calculation of diluted net loss per share as their effect is anti-dilutive, respectively (see Note 8). The basic and diluted weighted-average shares used to compute net loss per share in the audited consolidated statements of operations includes the shares issued from the reverse stock split fractional share round down.

Comprehensive Loss

The Company has no components of comprehensive loss other than net loss. Thus, comprehensive loss is the same as net loss for the periods presented.

Segment Reporting

Operating segments are defined as components of an entity about which separate discrete information is available for evaluation by the chief operating decision maker, or decision-making group, in deciding how to allocate resources in assessing performance.

The Company hasone operating segment. The Company’s chief operating decision maker, which is the Chief Executive Officer, manages the Company’s operations for the purposes of allocating resources and evaluating financial performance (see Note 12 for further information).

Recent Accounting Pronouncements

In November 2023, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”), which improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. The guidance is effective for the Company beginning in the annual reporting period ended December 31, 2024 and interim periods beginning in fiscal year 2025. The Company adopted this standard as of December 31, 2024, which adoption only impacted the Company's segment reporting disclosures (see Note 13 for further information).

3. Balance Sheet Details

Prepaid Expenses and Other Current Assets

Prepaid expenses and other current assets consisted of the following:

Property and Equipment, Net

Property and equipment, net consisted of the following:

Depreciation expense was$27,923 for year ended December 31, 2024 and$25,049 for the year ended December 31, 2023.

Accrued Expenses

Accrued expenses consisted of the following:

4. Commitments and Contingencies

Lease Commitments

The Company leases 2,140 square feet of laboratory space located at 11011 Torreyana Road, Suite 102, San Diego, California (the “Lease”). In December 2024, the Company signed an amendment extending the Lease until February 28, 2025, with a base monthly rent equal to$5,350. The Company is required to maintain a security deposit of$5,564. The Lease contains customary default provisions, representations, warranties and covenants. In addition to rent, the Lease requires the Company to pay certain taxes, insurance and operating costs relating to the leased premises. The Company has applied the short-term lease exception as the amendment is less than twelve months. The Lease is classified as an operating lease.

Rent expense was$64,200 for the year ended December 31, 2024 and$111,661 for the year ended December 31, 2023.

Future minimum lease payments under the operating lease as of December 31, 2024 is$10,700.

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.

5. 2023 Public Offering

On February 13, 2023, the Company closed a public offering of 6,017 shares of its common stock,699 pre-funded warrants to purchase shares of common stock with an exercise price of $0.048 which did not have an expiration date (the “Class C Pre-Funded Warrants”) and 6,450,000 warrants to purchase up to 13,438 shares of common stock with an exercise price of $2,572.80 which expire on February 14, 2028 (the “Class C Common Stock Warrants”) at a combined offering price of $2,318.40 per share of common stock and two Class C Common Stock Warrants, or $2,318.352 per Class C Pre-Funded Warrant and two Class C Common Stock Warrants (the “February 2023 Public Offering”). Net cash proceeds to the Company from the offering were $14.0 million and issuance costs were $1.5 million.

Roth Capital Partners, LLC (“Roth”) was engaged by the Company to act as its exclusive placement agent for the February 2023 Public Offering. The Company paid Roth a cash fee equal to 8.0% of the gross proceeds received by the Company in the public offering, totaling $1.2 million of issuance costs.

The shares of common stock underlying the Class C Pre-Funded Warrants and the shares of common stock underlying the Class C Common Stock Warrants were registered with the SEC on Form S-1 (File No. 333-268576) and was declared effective by the SEC on February 9, 2023.

Between February 14, 2023 and April 6, 2023, the Company received notices of cash exercise for the Class C Pre-Funded Warrants issued in connection with the February 2023 Public Offering for 699 shares of common stock at a total purchase price of $33.64. As of December 31, 2024, there wereno Class C Pre-Funded Warrants outstanding.

Using a Monte-Carlo simulation model, the Class C Common Stock Warrants were valued in the aggregate at $14.0 million and included in the issuance costs of the February 2023 Public Offering and treated as a liability (see Note 10).

From March 13, 2023 to December 31, 2024, the Company received notices of alternative cashless exercises for 6,217,640 Class C Common Stock Warrants issued in connection with the February 2023 Public Offering for 5,160 shares of common stock. As of December 31, 2024, there were 232,360 of Class C Common Stock Warrants outstanding to purchase up to 485 shares of common stock.

As part of the Class D Warrant Inducement (defined below) on August 22, 2024, the exercise price of the Class C Common Stock Warrants was reset from $38.24 to $16.00.

6. 2024 Public Offering

On February 5, 2024, the Company closed a public offering of 8,029 shares of its common stock,77,282 pre-funded warrants to purchase shares of common stock with an exercise price of $0.0016 which did not have an expiration date (the “Class D Pre-Funded Warrants”) and 2,730,000 warrants to purchase up to 170,628 shares of common stock with an exercise price of $72.48 which expire on February 5, 2029 (the “Class D Common Stock Warrants”) at a combined offering price of $72.48 per share of common stock and two Class D Common Stock Warrants, or $72.4784 per Class C Pre-Funded Warrant and two Class D Common Stock Warrants (the “February 2024 Public Offering”). Net cash proceeds to the Company from the offering were $5.4 million and issuance costs were $0.8 million.

Roth was engaged by the Company to act as its exclusive placement agent for the February 2024 Public Offering. The Company paid Roth a cash fee equal to 8.0% of the gross proceeds received by the Company in the public offering, totaling $0.5 million of issuance costs.

The shares of common stock underlying the Class D Pre-Funded Warrants and the shares of common stock underlying the Class D Common Stock Warrants were registered with the SEC on Form S-1 (File No. 333-276232) and was declared effective by the SEC on January 31, 2024.

Between February 5, 2024 and February 13, 2024, the Company has received notices of cash exercise for the Class D Pre-Funded Warrants issued in connection with the February 2024 Public Offering for 77,282 shares of common stock at a total purchase price of $123.65. As of December 31, 2024, there wereno Class D Pre-Funded Warrants outstanding.

On August 22, 2024, the Company issued 6,312 shares of common stock in connection with a notice of cash exercise for the Class D Common Stock Warrants issued in connection with the February 2024 Public Offering with a total purchase price of $241,390.

Using the Black-Scholes option pricing model, the Class D Common Stock Warrants were valued in the aggregate at $6.3 million and was included in the issuance costs of the February 2024 Public Offering and treated as equity (see Note 10).

As part of the Class D Warrant Inducement (defined below) the Company issued common stock to a third party consultant on June 11, 2024, as a result the exercise price of the Class D Common Stock Warrants were reset from $72.48 to $38.24. Additionally, on August 22, 2024, the exercise price of the Class D Common Stock Warrants was reset from $38.24 to $16.00.

As part of the 2025 Reverse Stock Split on January 28, 2025, the exercise price of the Class D Common Stock Warrants was reset from $16.00 to $3.849.

Class D Warrant Inducement

On June 11, 2024, the Company issued 653 shares of common stock to a third party consultant in order to induce the holders of the Class D Common Stock Warrants, as a result the exercise price of the Class D Common Stock Warrants were reduced from $72.48 to $38.24. Further, on August 21, 2024, the Company entered into warrant exercise inducement offer letters with certain holders (the “Class D Holders”) of 2,548,060 existing Class D Common Stock Warrants exercisable for an aggregate of 159,249 shares of its common stock (collectively, the “Class D Common Stock Existing Warrants”), to exercise their warrants at a reduced exercise price of $20.00 per share, in exchange for the Company’s agreement to issue new warrants for $2.00 (the “Class E Common Stock Warrants) as described below. The aggregate net proceeds from the exercise of the Class D Common Stock Existing Warrants and the payment of the Class E Common Stock Warrants, as described below, was $3.5 million. The reduction of the exercise price of the Class D Common Stock Existing Warrants and the issuance of the Class E Common Stock Warrants (the “Class D Warrant Inducement”) was structured as an at-market transaction under Nasdaq rules.

In consideration for the immediate exercise of the Class D Common Stock Existing Warrants for cash and the payment of $2.00 per Class E Common Stock Warrants, the exercising holders receivedtwo Class E Common Stock Warrants for each Class D Common Stock Existing Warrant in a private placement pursuant to Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”). The Class E Common Stock Warrants are exercisable for a period offive years into an aggregate of up to 318,509 shares of common stock at an exercise price of $16.00 per share.

In connection with the Class D Warrant Inducement, the Company entered into a financial advisory services agreement, dated August 21, 2024, with Roth, pursuant to which the Company agreed to pay Roth a cash fee of $267,546 for its services, in addition to reimbursement for certain expenses.

The shares of common stock issued from the exercise of the Class D Common Stock Existing Warrants were registered pursuant to a registration statement on Form S-1, as amended (File No. 333-276232), which was declared effective by the SEC on January 31, 2024.

The Class E Common Stock Warrants offered in the private placement were not registered under the Securities Act or applicable state securities laws as of the issuance date, however, as part of the transaction, the Company filed a resale registration statement on Form S-3 with the SEC on September 03, 2024, which was declared effective on September 12, 2024.

The Class D Holders collectively exercised an aggregate of 2,548,060 Class D Common Stock Existing Warrants for 159,249 shares of its common stock. The Class D Warrant Inducement closed on August 22, 2024 with the Company receiving net cash proceeds of approximately $3.5 million consisting of gross cash proceeds of $3.8 million, less cash equity issuance costs of approximately $0.3 million. Note that while all Class D Common Stock Existing Warrants were exercised upon the closing of the Class D Warrant Inducement, certain shares were held in abeyance until September 20, 2024, due to the Class D holders’ exercise limitations. As of December 31, 2024, all underlying shares were issued and there were no shares held in abeyance as of the end of the reporting period that need to be considered.

The lowering of the exercise price of the Class D Common Stock Existing Warrants is considered a warrant modification under the guidance of ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Equity (“ASC 815-40”). In addition, the warrant modification is consistent with the equity issuance classification under that guidance as the reason for the warrant modification was to induce the Class D Holders of the Class D Common Stock Existing Warrants to a cash exercise. As pursuant to the guidance of ASC 480 and ASC 815 the Class D Common Stock Existing Warrants were classified as equity instruments before and after the warrant modification. The Company recognized the effect of the warrant modification of approximately $0.9 million as a non-cash equity issuance cost netted against the additional paid-in capital recognized from the associated warrant exercises. The amount of the non-cash equity issuance cost recognized for the warrant modification used the Black-Scholes option pricing model to determine the incremental fair value of the modified Class D Common Stock Existing Warrants immediately before and after the warrant modification (see Note 10).

Additionally, using the Black-Scholes option pricing model, the Class E Common Stock Warrants issued in connection with the Class D Warrant Inducement are treated as equity and the Company recognized approximately $4.9 million as a non-cash equity issuance cost netted against the additional paid-in capital (see Note 10).

Total cash and non-cash equity issuance costs recognized in the Class D Common Stock Existing Warrants modification and the issuance of the Class E Common Stock Warrants of $5.5 million include cash equity issuance costs of $0.3 million and non-cash equity issuance costs of approximately $5.2 million.

As of December 31, 2024, there are 80,940 Class D Common Stock Warrants outstanding to purchase 5,060 shares of common stock that were not included in the Class D Warrant Inducement.

Class E Warrant Inducement

On December 3, 2024, the Company entered into warrant exercise inducement offer letters (the “December 2024 Inducement Letters”) with the holders of the Class E Common Stock Warrants (the “Class E Holders”) for 4,064,040 existing Class E Common Stock Warrants exercisable for an aggregate of 254,002 shares of common stock (the “Class E Common Stock Existing Warrants”), to exercise their warrants at an exercise price of $16.00 per share, in exchange for the Company’s agreement to issue 4,064,040 Class F Common Stock Warrants for 254,002 shares of its common stock (the “Class F Common Stock Warrants”) and 6,096,060 Class G Common Stock Warrants for 381,004 shares of its common stock (the “Class G Common Stock Warrants”). The aggregate net proceeds from the exercise of the Class E Common Stock Existing Warrants, was $3.7 million.

In consideration for the immediate exercise of the Class E Common Stock Existing Warrants for cash, the exercising holders received one Class F Common Stock Warrants for each Class E Common Stock Existing Warrant and one and a half Class G Common Stock Warrants for each Class E Common Stock Existing Warrant in a private placement pursuant to Section 4(a)(2) of the Securities Act. The Class F Common Stock Warrants are exercisable for a period oftwo years as of the date that shareholder approval is obtained into an aggregate of up to 254,002 shares of common stock at an exercise price of $16.00 per share. The Class F Warrants have an alternative cashless exercise provision that allows the holder thereof to receivetwo shares of common stock without payment of the exercise price. The Class G Common Stock Warrants are exercisable for a period offive years as of the date that Shareholder approval is obtained into an aggregate of up to 381,004 shares of common stock at an exercise price of $16.00 per share.

In connection with the Class E Warrant Inducement, the Company entered into a financial advisory services agreement, dated November 30, 2024, with Roth, pursuant to which the Company agreed to pay Roth a cash fee of $325,000 for its services, in addition to reimbursement for certain expenses.

The shares of common stock issued from the exercise of the Class E Common Stock Existing Warrants were registered pursuant to a registration statement on Form S-3, as amended (File No. 333-281909), which was declared effective by the SEC on September 12, 2024.

The Class F Common Stock Warrants and Class G Common Stock Warrants offered in the private placement were not registered under the Securities Act or applicable state securities laws as of the issuance date, however, as part of the transaction, the Company filed a resale registration statement on Form S-3, as amended (File No. 333-283764) with the SEC on December 19, 2024, which was declared effective on December 20, 2024.

The Class E Holders collectively exercised an aggregate of 4,064,040 Class E Common Stock Existing Warrants to for 254,002 shares of its common stock. The Class F Common Stock Warrants and the Class G Common Stock Warrants closed on December 3, 2024 with the Company receiving net cash proceeds of approximately $3.7 million consisting of gross cash proceeds of $4.1 million, less cash equity issuance costs of approximately $0.4 million.

Using the closing price of our shares of common stock as reported on the date of issuance of the Class F Common Stock Warrants based on the alternative cashless exercise provision issued in connection with the Class E Warrant Inducement are treated as equity and the Company recognized approximately $4.1 million as a non-cash equity issuance cost netted against the additional paid-in capital.

Additionally, using the Black-Scholes option pricing model, the Class G Common Stock Warrants issued in connection with the Class E Warrant Inducement are treated as equity and the Company recognized approximately $2.1 million as a non-cash equity issuance cost netted against the additional paid-in capital (see Note 10).

Total cash and non-cash equity issuance costs recognized in the Class F Common Stock Warrants and the Class G Common Stock Warrants of $6.5 million include cash equity issuance costs of $0.4 million and non-cash equity issuance costs of approximately $6.2 million.

As of December 31, 2024, there are 1,032,080 Class E Common Stock Warrants outstanding to purchase 64,506 shares of common stock that were not included in the Class E Warrant Inducement.

As part of the 2025 Reverse Stock Split on January 28, 2025, the number of shares of common stock the Class G Common Stock Warrants are exercisable into was reset from 381,004 to 1,621,463 and the exercise price of the Class G Common Stock Warrants was reset from $16.00 to $3.7596.

7. Preferred Stock

Revelation Authorized Preferred Stock

The Company is authorized under its articles of incorporation, as amended, up to 5,000,000 shares of preferred stock, which may be issued as designated by the Board of Directors without stockholder approval. As of December 31, 2024 and as of the date of this Report, there wereno shares of preferred stock issued and outstanding.

Series A Preferred Stock

On December 19, 2022, the Company closed the sale of one share of the Company’s Series A Preferred Stock, par value $0.001 per share, to its Chief Executive Officer for $5,000.00. The outstanding share of Series A Preferred Stock was automatically redeemed for $5,000.00 on January 30, 2023 upon the effectiveness of the Certificate of Amendment implementing the reverse stock split and the increase in authorized shares of common stock of the Company.

8. Common Stock

The Company is authorized under its articles of incorporation, as amended, to issue up to 500,000,000 shares of common stock, par value $0.001 per share.

Common Stock Issuance during the year ended December 31, 2023

On February 13, 2023, the Company issued 6,017 shares of its common stock in connection with the February 2023 Public Offering. The Company received net cash proceeds of $14.0 million.

From February 14, 2023 to April 6, 2023, the Company issued 699 shares of common stock in connection with notices of cash exercise for Class C Pre-Funded Warrants issued in connection with the February 2023 Public Offering with a total purchase price of $33.64.

From March 13, 2023 to June 30, 2023, the Company issued 4,948 shares of common stock in connection with notices of alternative cashless exercise for the Class C Common Stock Warrants issued in connection with the February 2023 Public Offering.

On April 18, 2023, the Company issued 8 shares of common stock in connection with vested Rollover RSU awards.

Common Stock Issuance during the year ended December 31, 2024

On January 29, 2024, the Company issued 212 shares of common stock in connection with notices of alternative cashless exercise for the Class C Common Stock Warrants issued in connection with the February 2023 Public Offering.

On February 5, 2024, the Company issued 8,029 shares of its common stock in connection with the February 2024 Public Offering. The Company received net cash proceeds of $5.4 million.

Between February 5, 2024 and February 13, 2024, the Company issued 77,282 shares of common stock in connection with notices of cash exercise for Class D Pre-Funded Warrants issued in connection with the February 2024 Public Offering with a total purchase price of $123.65.

On June 11, 2024, as part of the Class D Warrant Inducement the Company issued 653 shares of its common stock to a third party consultant for services provided totaling $25,000.

On August 22, 2024, the Company issued 6,312 shares of common stock in connection with a notice of cash exercise for the Class D Common Stock Warrants issued in connection with the February 2024 Public Offering with a total purchase price of $241,390.

Between August 22, 2024 and September 20, 2024, the Company issued 159,249 shares of common stock in connection with notices of cash exercise for the Class D Common Stock Existing Warrants issued in connection with the Class D Warrant Inducement with a total purchase price of $3.8 million.

Between December 3, 2024 and December 6, 2024, the Company issued 254,002 shares of common stock in connection with notices of cash exercise for the Class E Common Stock Existing Warrants issued in connection with the Class E Warrant Inducement with a total purchase price of $4.1 million.

As of December 31, 2024 and December 31, 2023,522,223 and 16,484 shares of common stock were issued and outstanding, respectively. As of December 31, 2024, no cash dividends have been declared or paid.

The total shares of common stock reserved for issuance are summarized as follows:

9. 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 overone tofour years. In addition, the number of shares of stock available for issuance under the 2021 Plan will be automatically increased each January 1, and began on January 1, 2022, by 10% of the aggregate number of outstanding shares of our common stock from the first day of the preceding calendar year to the first day of the current calendar year or such lesser number as determined by our board of directors.

On May 15, 2024 at the Company’s 2024 Annual Meeting of Stockholders, an amendment to the 2021 Equity Incentive Plan to increase the number of shares reserved under the Plan to 10,206 was approved.

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 100% of the estimated fair market value of the common stock on the grant date. Incentive stock options granted to any stockholders holding 10% or more of the Company's equity cannot be granted with an exercise price of less than 110% of the estimated fair market value of the common stock on the grant date and such options are not exercisable after five years from the grant date.

As of December 31, 2024, there were 10,142 shares available for future grants under the 2021 Plan.

Restricted Stock Units

As of December 31, 2024 and December 31, 2023, the Company has a total of 3 Rollover RSU awards for shares of common stock outstanding, respectively. As of December 31, 2024,3 Rollover RSU awards have fully vested but are unissued and no Rollover RSU awards have been forfeited. Each Rollover RSU award converts to one share of common stock.

Stock Options

The Company has granted stock options which (i) vest fully on the date of grant; (ii) vest 25% on the one-year anniversary of the grant date or the employees hiring date, with the remainder vesting quarterly thereafter; or (iii) vest quarterly over one-year, for grants to Board of Directors, officers and employees. Stock options have a maximum term of 3 or 10 years.

The activity related to stock options during theyear ended December 31, 2024 is summarized as follows:

For the year ended December 31, 2023, the weighted-average Black-Scholes value per stock option issued during 2023 was$516.21. The fair value of the stock options was estimated using the Black-Scholes option pricing model with the following weighted-average assumptions:

Expected volatility is based on the historical volatility of shares of the Company’s common stock. In determining the expected term of stock options, the Company uses the “simplified” method. Under this method, the expected term is presumed to be the midpoint between the average vesting date and the end of the contractual term. The risk-free interest rate is based on the U.S. Treasury yield for a period consistent with the expected term of the stock options in effect at the time of the grants. The dividend yield assumption is based on the expectation of no future dividend payments by the Company. In addition to assumptions used in the Black-Scholes model, the Company reduces stock-based compensation expense based on actual forfeitures in the period that each forfeiture occurs.

Stock-Based Compensation Expense

For theyears ended December 31, 2024 and 2023, the Company recorded stock-based compensation expense for the period indicated as follows:

10. Warrants

Public Warrants

In connection with our initial public offering, we issued and have outstanding as of December 31, 2024 10,511,597 Public Warrants to purchase an aggregate of 626 shares of common stock with an exercise price of $193,200.00 per share which expire on January 10, 2027 (the “Public Warrants”). The Public Warrants trade on the Nasdaq Capital Market under the ticker symbol REVBW.

The Company may redeem the Public Warrants at a price of $0.01 per Public Warrant upon not less than 30 days’ prior written notice of redemption if, and only if, the reported last sale price of the Company’s common stock equals or exceeds $302,400 per share for any 20 trading days within a 30-trading day period ending on the third business day prior to the notice of redemption to the Public Warrant holders; and if, and only if, there is a current registration statement in effect with respect to the shares of common stock underlying the Public Warrants. If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

Rollover Warrants

In connection with a private placement on January 31, 2021, Revelation issued warrants to a placement agent to purchase up to 17 shares of common stock with an exercise price of $45,070.73 per share which expire on January 31, 2027, valued on the issuance date in the aggregate at $326,675 (the “Rollover Warrants”).

As of December 31, 2024, there were 7 Rollover Warrants remaining to be exercised or exchanged.

The fair value of the Rollover Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

Class A Common Stock Warrants

In connection with the closing of a private placement on January 25, 2022 (“PIPE Investment”), the Company issued warrants to an institutional investor to purchase up to 154 shares of common stock at an exercise price of $55,272.00 per share(the “Class A Common Stock Warrants”), valued on the PIPE Investment purchase date in the aggregate at $3.6 million and included in the issuance costs of the PIPE Investmentand treated as equity. The warrants were exercisable immediately upon issuance, provide for a cash or cashless exercise right and expire on July 25, 2027.

The fair value of the Class A Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

Class A Placement Agent Common Stock Warrants

In connection with the PIPE Investment, the Company issued warrants to Roth to purchase an aggregate of 22 shares of common stock at an exercise price of $55,272.00 per share(the “Class A Placement Agent Common Stock Warrants”), valued on the PIPE Investment purchase date in the aggregate at $0.5 million and included in the issuance costs of the PIPE Investmentand treated as equity. The warrants were exercisable immediately upon issuance, provide for a cash or cashless exercise right and expire on July 25, 2027.

The fair value of the Class A Placement Agent Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

Class B Common Stock Warrants

In connection with closing of a public offering on July 28, 2022 (“the July 2022 Public Offering”), the Company issued and has outstanding 8,333,334 warrants to purchase an aggregate of 497 shares of common stock at an exercise price of $10,080.00 per share(the “Class B Common Stock Warrants”), valued on the public offering purchase date in the aggregate at $4.5 million and included in the issuance costs of the public offeringand treated as equity. The warrants were exercisable immediately upon issuance, provide for a cash or cashless exercise right and expire on July 28, 2027.

The fair value of the Class B Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

Class B Placement Agent Common Stock Warrants

In connection with the July 2022 Public Offering, the Company issued warrants to the Placement Agent to purchase up to 35 shares of common stock at an exercise price of $12,600.00 per share (the “Class B Placement Agent Common Stock Warrants”), valued on the public offering purchase date in the aggregate at $0.3 million and included in the issuance costs of the public offeringand treated as equity. The warrants were exercisable immediately upon issuance, provide for a cash or cashless exercise right and expire on July 25, 2027.

The fair value of the Class B Placement Agent Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

Class C Pre-Funded Warrants

In connection with the February 2023 Public Offering, the Company issued pre-funded warrants to purchase up to 699 shares of common stock at an exercise price of $0.048 per share. Between February 14, 2023 and April 6, 2023, the Company received notices of cash exercise for the Class C Pre-Funded Warrants issued in connection with the February 2023 Public Offering for 699 shares of common stock at a total purchase price of $33.64. As of December 31, 2024, there wereno Class C Pre-Funded Warrants outstanding.

Class C Common Stock Warrants

In connection with the February 2023 Public Offering, the Company issued 6,450,000 Class C Common Stock Warrants to purchase up to 13,438 shares of common stock at an exercise price of $2,572.80 per share, valued on the public offering purchase date in the aggregate at $13,996,500 and included in the issuance costs of the public offering and treated as a liability. The warrants were exercisable immediately upon issuance, provide for a cash, cashless exercise right or an alternative cashless exercise right for 0.4 shares of common stock per Class C Common Stock Warrant and expire on February 14, 2028.

The Company evaluated the Class C Common Stock Warrants under ASC 815-40 and concluded that they do not meet the criteria to be classified in stockholders’ equity and accounted for the Class C Common Stock Warrants as current liabilities.

The Company concluded that the multiplier of 0.4 sharesof common stock per Class C Common Stock Warrant used in the alternative cashless exercise precludes the Class C Common Stock Warrants from being considered indexed to the Company’s stock. The Company recorded the Class C Common Stock Warrants as current liabilities on the balance sheet at fair value, with subsequent changesin their respective fair values recognized in the consolidated statements of operations at each reporting date. Estimating fair values of liability-classified financial instruments requires the development of estimates that may, and are likely to, change over the duration of the instrument with related changes in internal and external market factors. In addition, option-based techniques are highly volatile and sensitive to changes in the trading market price of the Company’s common stock. Because liability-classified financial instruments are initially and subsequently carried at fair value, the Company’s financial results will reflect the volatility in these estimate and assumption changes. Changes in fair value are recognized as a component of other (expense) income in the consolidated statements of operations.

At the date of issuance, the Company valued the Class C Common Stock Warrants using a Monte-Carlo simulation model with a fair value of $14.0 million.

As of December 31, 2024, the Company has received notices of alternative cashless exercises for 6,217,640 Class C Common Stock Warrants issued in connection with the February 2023 Public Offering for 5,160 shares of common stock.

As of December 31, 2024, the Company re-valued 232,360 outstanding Class C Common Stock Warrants to purchase up to 485 shares of common stock using a Monte-Carlo simulation model with a fair value of$2,246. For year ended December 31, 2024, the gain of$0.1 million, resulting from the change in the fair value of the liability for the unexercised warrants was recorded as a change in fair value of the warrant liability in the accompanying consolidated statements of operations.

As part of the Class D Warrant Inducement on August 22, 2024, the exercise price of the Class C Common Stock Warrants was reset from $38.24 to $16.00.

Class D Pre-Funded Warrants

In connection with the February 2024 Public Offering, the Company issued pre-funded warrants to purchase up to 77,282 shares of common stock at an exercise price of $0.0016 per share. Between February 5, 2024 and February 13, 2024, the Company received notices of cash exercise for the Class D Pre-Funded Warrants issued in connection with the February 2024 Public Offering for 77,282 shares of common stock at a total purchase price of $123.65. As of December 31, 2024, there wereno Class D Pre-Funded Warrants outstanding.

Class D Common Stock Warrants

In connection with the February 2024 Public Offering, the Company issued and has outstanding 2,730,000 warrants shares of common stock to purchase up to 170,628 shares of common stock at an exercise price of $72.48 per share, valued on the public offering purchase date in the aggregate at $6.3 million and included in the issuance costs of the public offeringand treated as equity. The warrants were exercisable immediately upon issuance, provide for a cash or cashless exercise right and expire on February 5, 2029.

As of December 31, 2024, the Company issued 6,312 shares of common stock in connection with a notice of cash exercise for the Class D Common Stock Warrants issued in connection with the February 2024 Public Offering with a total purchase price of $241,390.

As of December 31, 2024, the Company issued 159,249 shares of common stock in connection with notices of cash exercise for the Class D Common Stock Existing Warrants issued in connection with the Class D Warrant Inducement with a total purchase price of $3.8 million.

As part of the Class D Warrant Inducement the Class D Common Stock Warrants the Company issued common stock to a third party consultant on June 11, 2024, as a result the exercise price of the Class D Common Stock Warrants were reset from $72.48 to $38.24. Additionally, on August 22, 2024, the exercise price of the Class D Common Stock Warrants was reset from $38.24 to $16.00.

As part of the 2025 Reverse Stock Split on January 28, 2025, the exercise price of the Class D Common Stock Warrants was reset from $16.00 to $3.849.

As of December 31, 2024 there were 80,940 Class D Common Stock Warrants outstanding to purchase up to 5,060 shares of common stock that were not included in the Class D Warrant Inducement.

The fair value of the Class D Common Stock Warrants were originally estimated using the Black-Scholes option pricing model with the following assumptions:

Modification of the Class D Common Stock Warrants and Class E Common Stock Warrants

As part of the Class D Warrant Inducement, the 2,548,060 Class D Common Stock Existing Warrants to purchase up to 159,249 shares of common stock were modified. Due to the warrant modification the fair value of the Class D Common Stock Existing Warrants were revalued before and after the warrant modification, and as the warrant modification is directly attributable to an equity offering, the Company recognized the effect of the warrant modification of approximately $0.9 million using the Black-Scholes option pricing model.

In connection with the Class D Warrant Inducement, the Company issued 5,096,120 Class E Common Stock Warrants to purchase up to 318,509 shares of common stock at an exercise price of $16.00 per share, valued on the Class D Warrant Inducement date in the aggregate at $4.9 million and included in the issuance costs of the Class D Warrant Inducementand treated as equity. The Class E Common Stock Warrants were exercisable immediately upon issuance, provide for a cash or cashless exercise right and expire on August 22, 2029.

As of December 31, 2024, there are 1,032,080 Class E Common Stock Warrants outstanding to purchase 64,506 shares of common stock that were not included in the Class E Warrant Inducement.

The fair value of the Class D Common Stock Existing Warrant modification and the Class E Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

Class F Common Stock Warrants and Class G Common Stock Warrants

In connection with the Class E Warrant Inducement to exercise the Class E Common Stock Existing Warrants, the Company issued 4,064,040 Class F Common Stock Warrants to purchase up to 254,002 shares of common stock at an exercise price of $16.00 per share. The Class F Warrants have an alternative cashless exercise provision that allows the holder thereof to receivetwo shares of common stock without payment of the exercise price. The Company valued the Class F Common Stock Warrants based on the alternative cashless exercise provision issued and recognized approximately $4.1 million and included in the issuance costs of the Class E Warrant Inducementand treated as equity. The Class F Common Stock Warrants are exercisable for a period oftwo years from January 17, 2025.

In connection with the Class E Warrant Inducement to exercise the Class E Common Stock Existing Warrants, the Company issued 6,096,060 Class G Common Stock Warrants to purchase up to 381,004 shares of common stock at an exercise price of $16.00 per share, valued on the Class E Warrant Inducement date in the aggregate at $2.1 million and included in the issuance costs of the Class E Warrant Inducementand treated as equity. The Class G Common Stock Warrants are exercisable for a period offive years from January 17, 2025. As part of the 2025 Reverse Stock Split on January 28, 2025, the number of shares of common stock the Class G Common Stock Warrants are exercisable into was reset from 381,004 to 1,621,463 and the exercise price of the Class G Common Stock Warrants was reset from $16.00 to $3.7596.

The fair value of the Class G Common Stock Warrants were estimated using the Black-Scholes option pricing model with the following assumptions:

11. Income Taxes

The Company didnot record a provision for income taxes for the years ended December 31, 2024 and December 31, 2023 due to a full valuation allowance against its deferred tax assets.

The difference between the provision for income taxes and income taxes computed using the effective U.S. federal statutory rate is as follows:

Significant components of the Company’s deferred tax assets are as follows:

As of December 31, 2024 and 2023, a full valuation allowance of$14,919,356 and$10,503,924, respectively, was established against its deferred tax assets due to the uncertainty surrounding the realization of such assets. The valuation allowance increased by$4,415,432 and$2,003,941 in 2024 and 2023, respectively, due to the increase in the deferred tax assets by the same amount; primarily due to net operating loss carryforwards and the mandatory capitalization of qualified research and development expenses in 2023.

As of December 31, 2024, the Company had federal and state net operating loss carryforwards of$36,356,115 and$48,464,356, respectively. As of December 31, 2023, the Company had federal and state net operating loss carryforwards of$23,777,049 and$33,468,573, respectively. Federal net operating losses carryforward indefinitely. State net operating loss carryforwards will begin to expire in 2026.

The Company had estimated federal research and development credit carryforwards of$93,915 as of December 31, 2024 and 2023. The federal research tax credit carryforwards will begin to expire in 2040. The Company had estimated state research and development credit carryforwards of$445,880 and$349,658 as of December 31, 2024 and 2023, respectively. The California state credits carryforward indefinitely.

Pursuant to Section 382 and 383 of the Internal Revenue Code (“IRC”), utilization of the Company’s federal net operating loss carryforwards and research and development credit carryforwards may be subject to annual limitations in the event of any significant future changes in its ownership structure. These annual limitations may result in the expiration of net operating loss and research and development credit carryforwards prior to utilization. The Company has not completed an IRC Section 382 and 383 analyses regarding the limitation of net operating loss and research and development credit carryforwards.

No liability is recorded on the financial statements related to uncertain tax positions. There areno unrecognized tax benefits as of December 31, 2024 and 2023. The Company does not expect that uncertain tax benefits will materially change in the next 12 months.

The Company’s policy is to record estimated interest and penalties related to uncertain tax benefits as income tax expense. As of December 31, 2024 and 2023, the Company hadno accrued interest or penalties recorded related to uncertain tax positions.

The Company is subject to taxation in the U.S. and various state jurisdictions. The Company’s tax returns since inception are subject to examination by the U.S. and various state tax authorities. The Company is not currently undergoing a tax audit in any federal or state jurisdiction.

12. 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 ofone reportable segment, which is focused on the prevention and treatment of disease by developing and commercializing therapeutics that modulate the innate immune system (see Note 1 for a brief description of the Company’s business).

The CODM of the Company is the Chief Executive Officer. The CODM assesses the performance of the Company and decides how to allocate resources based upon consolidated net loss that is also reported within the Consolidated Statements of Operations. The measure of segment assets that is reviewed by the CODM is reported within the Consolidated Balance Sheets as consolidated Total assets. The CODM uses consolidated net loss to monitor period-over-period results and decides where to allocate and invest additional resources within the business to continue growth. The following is a summary of the significant expense categories and consolidated net loss details provided to the CODM:

(1)

Other program expenses include pre-clinical costs and clinical preparation costs primarily for programs GEM-AKI, GEM-CKD and GEM-PSI.

(2)

Other research and development expenses primarily consist of facilities charges, third party consultant costs, costs related to other product candidates, and other unallocated costs.

(3)

LifeSci Capital LLC judgment expense, reimbursement of costs, clinical trial related settlement expenses with A-IR Clinical Research Ltd., expense in connection with the deferred underwriting commissions, foreign currency transaction gains and losses and interest income from our cash balances in savings accounts.

13. Subsequent Event

2021 Equity Plan Stock Increase

On January 1, 2025, the number of shares of common stock available under the 2021 Plan increased to 156,512 as per the Evergreen Feature in the 2021 Plan.

Restricted Stock Awards Granted

On February 11, 2025,58,568 Restricted Stock Awards, were granted to employees and the Board of Directors which resulted in a fair value of $0.2 million of stock-based compensation expense based on the Company’s stock price on the date of grant. The grants were granted from shares of the 2021 Plan and either vest 100% on the date of grant or vest 50% on the date of grant, with 50% vesting on the vestone year thereafter.

Regaining Nasdaq Compliance

As previously reported on October 16, 2024, the Company received a letter from Nasdaq notifying the Company of its noncompliance with Nasdaq Listing Rule 5550(a)(2) by failing to maintain a minimum bid price for its common stock of at least $1.00 per share for 30 consecutive business days. The Company had until February 14, 2025, to regain compliance by having a minimum closing bid price of at least $1.00 per share for at least 10 consecutive business days. On February 19, 2025 the Company received a formal notice from Nasdaq stating that the Company’s common stock will continue to be listed and traded on Nasdaq, due to the Company having regained compliance with the minimum bid price requirement, and all applicable listing standards.

Class F Common Stock Warrant Exercises

As of March 3, 2025, the Company received alternative cashless exercise notices for 3,064,040 Class F Common Stock Warrants to purchase 383,006 shares of common stock issued in connection with the Class E Warrant Inducement.