Revelation Biosciences(REVB) - 2025 Q2 - Quarterly Report

PART I—FINANCIAL INFORMATION Item 1. Condensed Consolidated Financial Statements (Unaudited) Unaudited condensed consolidated financial statements detail the company's financial position, performance, and cash flows Condensed Consolidated Balance Sheets | Metric | June 30, 2025 | December 31, 2024 | Change (%) | | :-------------------------------- | :------------ | :---------------- | :--------- | | Cash and cash equivalents | $5,173,871 | $6,499,018 | -20.4% | | Total current assets | $5,359,920 | $6,565,717 | -18.4% | | Total assets | $5,395,090 | $6,622,049 | -18.5% | | Total current liabilities | $1,569,306 | $1,913,667 | -18.0% | | Accumulated deficit | $(45,001,105) | $(40,505,638) | +11.1% | | Total stockholders' equity | $3,825,784 | $4,708,382 | -18.7% | - Common Stock shares outstanding increased significantly from 174,104 at December 31, 2024, to 1,534,637 at June 30, 2025[8] Condensed Consolidated Statements of Operations | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $1,317,980 | $1,394,929 | $(76,949) | -5.5% | | General and administrative | $1,143,249 | $1,127,468 | $15,781 | +1.4% | | Total operating expenses | $2,461,229 | $2,522,397 | $(61,168) | -2.4% | | Net loss | $(2,444,382) | $(8,389,819) | $5,945,437 | -70.9% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $2,176,810 | $2,112,511 | $64,299 | +3.0% | | General and administrative | $2,379,406 | $2,312,024 | $67,382 | +2.9% | | Total operating expenses | $4,556,216 | $4,424,535 | $131,681 | +3.0% | | Net loss | $(4,495,467) | $(11,071,252) | $6,575,785 | -59.4% | - Net loss per share, basic and diluted, for the six months ended June 30, 2025, was $(13.60), a significant improvement from $(390.02) in the prior year[11] Condensed Consolidated Statements of Changes in Stockholders' Equity | Item | Balance as of Dec 31, 2024 | Balance as of June 30, 2025 | | :------------------------------------------ | :------------------------- | :-------------------------- | | Common Stock (shares) | 174,104 | 1,534,637 | | Common Stock (amount) | $174 | $1,535 | | Additional Paid-in Capital | $45,213,846 | $48,825,354 | | Accumulated Deficit | $(40,505,638) | $(45,001,105) | | Total Stockholders' Equity | $4,708,382 | $3,825,784 | - The May 2025 Public Offering resulted in the issuance of 225,000 shares of common stock and generated $3,388,244 in proceeds[13] - Class H Pre-funded Warrant exercises led to the issuance of 988,334 shares of common stock for a total purchase price of $297[13] Condensed Consolidated Statements of Cash Flows | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,713,688) | $(5,316,651) | | Net cash used in investing activities | $0 | $(19,172) | | Net cash provided by financing activities | $3,388,541 | $5,417,180 | | Net (decrease) increase in cash and cash equivalents | $(1,325,147) | $81,357 | | Cash and cash equivalents at end of period | $5,173,871 | $12,073,058 | - Non-cash financing activities included $3,094,680 from alternative cashless exercise of Class F Common Stock Warrants and $11,546,080 for issuance of Class H Common Stock Warrants[16] Notes to the Unaudited Condensed Consolidated Financial Statements 1. Organization and Basis of Presentation Revelation Biosciences is a clinical-stage life science company facing going concern doubt due to a $45.0 million accumulated deficit - Revelation Biosciences is a clinical-stage life science company focused on rebalancing inflammation using its proprietary formulation Gemini, with product candidates including GEM-AKI, GEM-CKD, and GEM-PSI[19] - The company effected a 1-for-16 reverse stock split on January 28, 2025, and a 1-for-3 reverse stock split on July 7, 2025[21] - The company incurred a net loss of $4.5 million for the six months ended June 30, 2025, and had an accumulated deficit of $45.0 million, raising substantial doubt about its ability to continue as a going concern[22] 2. Summary of Significant Accounting Policies Significant accounting policies are consistent with the 2024 Annual Report, with no material impact from recent pronouncements - No changes to the Company's significant accounting policies described in the Annual Report on Form 10-K for the year ended December 31, 2024[27] - Basic and diluted net loss per share are identical in net loss periods because potential common shares are anti-dilutive[28] - Recently issued accounting pronouncements are not expected to have a material impact on the Company's condensed consolidated financial statements[29] 3. Balance Sheet Details Prepaid expenses increased to $186,049 while accrued expenses decreased to $739,626 due to changes in payroll and insurance | Account | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Prepaid expenses and other current assets | $186,049 | $66,699 | | Accrued expenses | $739,626 | $1,127,800 | | Accrued payroll and related expenses | $404,090 | $835,724 | 4. Commitments and Contingencies The company has month-to-month lease commitments, no material contractual obligations, and no material legal proceedings - The Company leases office space for $151 per month and laboratory space for $5,350 per month, both on a month-to-month basis[32] - Contracts with third-party service providers are generally cancellable and not considered material contractual obligations[33] - The Company is not a party to any material legal proceedings[34] 5. Financings Recent public offerings generated $5.4 million and $3.4 million net cash, triggering warrant down-round provisions and a $3.2 million deemed dividend - The February 2024 Public Offering generated net cash proceeds of $5.4 million[35] - The May 2025 Public Offering generated net cash proceeds of $3.4 million[38] - The May 2025 Public Offering triggered down-round features for Class C, D, and G Common Stock Warrants, resetting their exercise prices to $3.30[43] - A deemed dividend of approximately $3.2 million was recorded due to the price reset of the Class G Common Stock Warrants[43] 6. Preferred Stock The company is authorized to issue up to 5,000,000 preferred shares, with none issued or outstanding as of June 30, 2025 - The Company is authorized to issue up to 5,000,000 shares of preferred stock[44] - As of June 30, 2025, there were no shares of preferred stock issued and outstanding[44] 7. Common Stock Authorized for 500,000,000 common shares, 1,534,637 were outstanding as of June 30, 2025, with 6,798,719 reserved - The Company is authorized to issue up to 500,000,000 shares of common stock[45] | Metric | June 30, 2025 | December 31, 2024 | | :-------------------------------- | :------------ | :---------------- | | Common stock issued and outstanding | 1,534,637 | 174,104 | | Total common stock reserved for issuance | 6,798,719 | 60,887 | - During the six months ended June 30, 2025, significant issuances included 127,669 shares from Class F warrant exercises, 19,529 shares for RSA grants, 225,000 shares from the May 2025 Public Offering, and 988,334 shares from pre-funded warrant exercises[48][49] 8. Stock-Based Compensation The 2021 Equity Incentive Plan governs stock-based compensation, with 32,627 shares available and expense increasing to $224,328 - The 2021 Equity Incentive Plan includes an evergreen provision, increasing available shares to 52,173 on January 1, 2025[51][52] - As of June 30, 2025, 32,627 shares were available for future grants under the 2021 Plan[54] | Expense Category | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | General and administrative stock-based compensation expense | $189,930 | $59,197 | | Research and development stock-based compensation expense | $34,398 | $4,992 | | Total stock-based compensation expense | $224,328 | $64,189 | 9. Warrants Various common stock warrants are detailed, with the May 2025 offering triggering down-round provisions, resetting exercise prices to $3.30 - Class C Common Stock Warrants are treated as a liability due to an alternative cashless exercise provision, with a fair value of $786 as of June 30, 2025[60][61] - The exercise price of Class D Common Stock Warrants was reset from $48.00 to $11.28 due to a reverse stock split, and further to $3.30 due to a down-round provision triggered by the May 2025 Public Offering[62] - The May 2025 Public Offering triggered a down-round provision for Class G Common Stock Warrants, resetting the exercise price to $3.30 and increasing underlying shares from 540,488 to 1,847,273, resulting in a $3.2 million deemed dividend[68] - Class H Common Stock Warrants, issued in the May 2025 Public Offering, were valued at $11.5 million and allow purchase of up to 4,853,334 shares at an exercise price of $3.30[70] 10. Income Taxes No income tax provision or benefit was recorded due to recurring taxable losses and a full valuation allowance - No provision or benefit for income taxes was recorded for the three and six months ended June 30, 2025 and 2024[72] - A full valuation allowance was recorded against deferred tax assets due to recurring taxable losses[73] 11. Segment Information Revelation Biosciences operates as a single reportable segment, with the CEO allocating resources based on consolidated net loss and total assets - The Company operates as one reportable segment, focused on developing therapeutics that modulate the innate immune system[76] - The Chief Executive Officer (CODM) assesses performance and allocates resources based on consolidated net loss and total assets[77] 12. Subsequent Events Subsequent events include an increase in 2021 Equity Plan shares, a 1-for-3 reverse stock split, and 495,000 Class H Warrants cash-exercised - On July 1, 2025, the number of shares available under the 2021 Equity Plan increased to 830,073[79] - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, with an expected immaterial impact on financial statements[80] - A 1-for-3 reverse stock split was effected on July 7, 2025, adjusting exercise prices of Class C, D, G, and H Warrants to $2.20 and increasing Class G Warrants' underlying shares to 2,770,938[81][82] - During July 2025, 495,000 Class H Common Stock Warrants were cash-exercised, leading to the issuance of 165,000 shares for $363,000[83] ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. Management's discussion covers financial condition, operations, R&D focus, liquidity, capital resources, and going concern Overview - Revelation is a clinical-stage life science company developing Gemini-based therapies for GEM-AKI, GEM-CKD, GEM-PSI, and GEM-PBI[85] - The company has raised $60.2 million in net proceeds from capital stock sales since inception to June 30, 2025[87] - A net loss of $4.5 million for the six months ended June 30, 2025, and an accumulated deficit of $45.0 million as of June 30, 2025, raise substantial doubt about the company's ability to continue as a going concern[89] - The company expects to continue incurring operating losses and negative cash flows, requiring additional funding through equity or debt financings[89][91] Recent Developments - The One Big Beautiful Bill Act (OBBBA) was enacted on July 4, 2025, with its impact on consolidated financial statements expected to be immaterial[92] - The company effected a 1-for-16 reverse stock split on January 28, 2025, and a 1-for-3 reverse stock split on July 7, 2025[93] Research and Development - Research and development expenses primarily consist of external costs for clinical development, contract research organizations, manufacturing, regulatory submissions, laboratory supplies, and personnel costs[94] - All research and development expenses are expensed as incurred, with accruals adjusted as actual costs become known[95] - Research and development expenses are expected to increase substantially as product candidates advance into larger and later-stage clinical studies, with timing and costs being highly uncertain[96][97] General and Administrative - General and administrative expenses primarily include personnel costs, professional services (financial advisory, legal, audit, accounting), and consulting costs[98] - These expenses are expected to increase as the company expands its administrative function and incurs costs associated with operating as a public company[98] Other (Expense) Income, Net - Other (expense) income, net, includes changes in fair value of warrant liability, clinical trial settlement expenses, foreign currency gains/losses, and interest income[99] | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Total other income (expense), net | $16,847 | $(5,867,422) | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--------------------------------- | :------------------------------- | :------------------------------- | | Total other income (expense), net | $60,749 | $(6,646,717) | Results of Operations | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $1,317,980 | $1,394,929 | $(76,949) | -5.5% | | General and administrative | $1,143,249 | $1,127,468 | $15,781 | +1.4% | | Net loss | $(2,444,382) | $(8,389,819) | $5,945,437 | -70.9% | | Metric | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | Change ($) | Change (%) | | :--------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Research and development | $2,176,810 | $2,112,511 | $64,299 | +3.0% | | General and administrative | $2,379,406 | $2,312,024 | $67,382 | +2.9% | | Total operating expenses | $4,556,216 | $4,424,535 | $131,681 | +3.0% | | Net loss | $(4,495,467) | $(11,071,252) | $6,575,785 | -59.4% | Liquidity and Capital Resources - Since inception to June 30, 2025, the company has raised $60.2 million in net proceeds from capital stock sales[107] - As of June 30, 2025, the company had $5.2 million in cash and cash equivalents and an accumulated deficit of $45.0 million[107] - The current cash balance is not anticipated to be sufficient to sustain operations for one year, raising substantial doubt about the company's ability to continue as a going concern[111] - The company plans to seek additional funding through public or private equity or debt financings, acknowledging potential dilution or restrictive covenants[110][112] Cash Flows | Cash Flow Activity | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :----------------------------------- | :------------------------------- | :------------------------------- | | Net cash used in operating activities | $(4,713,688) | $(5,316,651) | | Net cash used in investing activities | $0 | $(19,172) | | Net cash provided by financing activities | $3,388,541 | $5,417,180 | | Net (decrease) increase in cash and cash equivalents | $(1,325,147) | $81,357 | - Net cash used in operating activities decreased in H1 2025 primarily due to a lower net loss compared to H1 2024[115][116] - Net cash provided by financing activities in H1 2025 was primarily from the May 2025 Public Offering[118] Contractual Obligations and Other Commitments - The company's contracts with third-party service providers and vendors are generally cancellable upon notice and are not considered material contractual obligations[119] Off-Balance Sheet Arrangements - As of June 30, 2025, the company did not have any off-balance sheet arrangements[120] Quantitative and Qualitative Disclosure about Market Risk - The company is exposed to market risks in the ordinary course of its business[121] - As a smaller reporting company, the company is not required to provide detailed disclosures under this item[124] Critical Accounting Policies and Significant Judgments and Estimates - The preparation of financial statements in accordance with GAAP requires management to make estimates and assumptions that could materially differ from actual results[122] - Management regularly evaluates its estimates and assumptions using historical and industry experience[122] Recent Accounting Pronouncements - Refer to Note 2 of the unaudited condensed consolidated financial statements for information on recent accounting pronouncements[123] ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. As a smaller reporting company, Revelation Biosciences is exempt from detailed quantitative and qualitative market risk disclosures - The company is a smaller reporting company and is not required to provide detailed market risk disclosures[124] ITEM 4. CONTROLS AND PROCEDURES. Disclosure controls were effective as of June 30, 2025, with no material changes in internal control over financial reporting Evaluation of Disclosure Controls and Procedures - Management concluded that disclosure controls and procedures were effective at the reasonable assurance level as of June 30, 2025[125] - Disclosure controls are designed to ensure timely and accurate reporting of information required by the Exchange Act[125] Changes in Internal Control over Financial Reporting - There was no change in internal control over financial reporting during the most recent quarter that materially affected, or is reasonably likely to materially affect, internal control over financial reporting[126] PART II—OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The company is not currently involved in any material legal proceedings or aware of any pending or threatened litigation - The Company is not a party to any material legal proceedings[128] ITEM 1A. RISK FACTORS. Key risks include potential delays in product approval due to FDA staffing and regulatory changes, and risks from increasing AI reliance Significant reductions in FDA staffing and changes in federal regulatory policy may delay or adversely affect the approval and commercialization of our product candidates. - Significant reductions in FDA workforce may lead to longer review times, missed milestones, and inconsistent feedback for new drugs and biologics[130] - These delays could adversely impact the company's ability to bring product candidates to market, disrupt development timelines, and increase costs[131] - Ongoing regulatory uncertainty may negatively affect investor confidence and the ability to raise additional capital, particularly for small and mid-cap biopharmaceutical companies[131] Artificial intelligence is playing an increasingly important role in biotechnology which may have an effect on us. - Artificial intelligence (AI) is increasingly used in biotechnology for target identification, drug discovery, preclinical modeling, and data analysis[133] - Risks associated with AI include potential failures to function as intended, produce accurate results, or comply with future regulatory guidelines[134][135] - Reliance on third-party AI platforms and cloud infrastructure introduces risks of errors, outages, or security breaches[136] ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS. This item is not applicable to Revelation Biosciences for the reporting period - This item is not applicable[138] ITEM 3. DEFAULTS UPON SENIOR SECURITIES. This item is not applicable to Revelation Biosciences for the reporting period - This item is not applicable[138] ITEM 4. MINE SAFETY DISCLOSURES. This item is not applicable to Revelation Biosciences for the reporting period - This item is not applicable[139] ITEM 5. OTHER INFORMATION. No other information is reported under this item for the reporting period - No other information is reported under this item[140] ITEM 6. EXHIBITS, FINANCIAL STATEMENT SCHEDULES. This section lists all exhibits filed as part of this Quarterly Report, including corporate amendments, officer certifications, and XBRL - Exhibits include an Amendment to the Third Amended and Restated Certificate of Incorporation effective July 7, 2025[143] - Certifications of the Principal Executive Officer and Principal Financial Officer are filed pursuant to the Securities Exchange Act Rules[143] - XBRL Instance Document and Taxonomy Extension Documents are included for interactive data filing[143]