Quarterly Report for Quarter Ending September 30, 2025 (Form 10-Q)

Management's Discussion and Analysis of Financial Condition and Results of Operations.

You should read the following discussion of our financial condition and results of operations in conjunction with our audited financial statements and the notes included elsewhere in this Form 10-K. The following discussion contains forward-looking statements that involve certain risks and uncertainties. Our actual results could differ materially from those discussed in these statements. Factors that could cause or contribute to these differences include those discussed below and elsewhere in this Form 10-Q, the Company's Form 10-K for the fiscal year ended December 31, 2024 and in the Company's registration statements filed under the Securities Act of 1933, as amended, particularly under the "Risk Factors" and "Cautionary Note Regarding Forward-Looking Statements and Risk Factors Summary" sections.

Overview

Revelation is a clinical-stage life science company that is focused on rebalancing inflammation to optimize health using its proprietary formulation Gemini. 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 treatment of acute kidney injury; GEM-CKD, which is being developed as a potential therapy for the treatment of chronic kidney disease; GEM-PSI, which is being developed for the prevention and treatment of post surgical infection; and GEM-PBI as a prevention of infection in severe burn patients requiring hospitalization (together the "Product Candidates").

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 the Product Candidates.

We have funded our operations since our inception to September 30, 2025 through the issuance and sale of our capital stock, from which we have raised net proceeds of $69.2 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 condensed consolidated financial statements for September 30, 2025 were issued, which raises substantial doubt about our ability to continue as a going concern.

We plan to seek additional funding through public or private equity or debt financings. We 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 our stockholders. If we are unable to obtain funding we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business operations.

We have incurred recurring losses since our inception, including a net loss of $6.4 million for the nine months ended September 30, 2025 and $13.3 million for the nine months ended September 30, 2024. As of September 30, 2025 we had an accumulated deficit of $46.9 million. We expect to continue to generate operating losses and negative operating cash flows for the foreseeable future if and as we:

Our net losses may fluctuate significantly from quarter-to-quarter and year-to-year, depending on the timing of our clinical studies and our expenditures on other research and development activities.

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 Product Candidates 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 Product Candidates 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.

Recent Developments

One Big Beautiful Bill Act

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was enacted in the U.S. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act, modifications to the international tax framework and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in 2025 and others implemented through 2027. The Company is currently assessing its impact on its consolidated financial statements, which are expected to be immaterial.

Reverse Stock Splits

On January 28, 2025, the Company effected a 1-for-16 reverse stock split of our outstanding shares of common stock, which had been approved at a special meeting of stockholders. Additionally, on July 7, 2025, the Company effected the approved 1-for-3 reverse stock split of our shares of common stock.

Research and Development

Research and development expenses consist primarily of costs incurred for the development of our product candidates. 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.

We expense all research and development expenses in the periods in which they are incurred. We accrue for costs incurred as the services are being provided by monitoring the status of specific activities and the invoices received from our external service providers. We adjust our accrual as actual costs become known.

We expect our research and development expenses to increase substantially for the foreseeable future as we continue the development of Product Candidates 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 Product Candidates 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.

The actual probability of success for Product Candidates 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, regulatory and staffing developments at the FDA 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 Product Candidates or any future product candidate.

General and Administrative

Our general and administrative expenses consist primarily of personnel costs, expenses for outside professional services, including financial advisory, legal, human resource, audit and accounting services and consulting costs. Personnel and related costs consist of salaries, employee benefits and stock-based compensation for personnel involved in executive, finance and other administrative functions. We expect our general and administrative expenses to increase for the foreseeable future as we increase the size of our administrative function to support the growth of our business and support our continued research and development activities. We also anticipate increased expenses as we continue to operate as a public company, including increased expenses related to financial advisory services, audit, legal, regulatory, investor relations costs, director and officer insurance premiums associated with maintaining compliance with exchange listing and SEC requirements.

Other Income (expense), Net

Other income (expense), net primarily consists of interest income from our cash balances in savings accounts, foreign currency transaction gains and losses, the change in fair value of warrant liability, and clinical trial related settlement expenses.

Results of Operations

The following table summarizes our results of operations for the periods presented:

Research and Development Expenses

The following table summarizes our research and development expenses for the periods presented:

Research and development expenses increased by $0.1 million, from $0.8 million for the three months ended September 30, 2024 to $0.9 million for the three months ended September 30, 2025. The increase was primarily due to an increase in clinical study expenses related to our Product Candidates.

Research and development expenses increased by $0.2 million, from $2.9 million for the nine months ended September 30, 2024 to $3.1 million for the nine months ended September 30, 2025. The increase was due to increases in personnel expenses of $0.1 million and $0.1 million of clinical study expenses related to our Product Candidates.

General and Administrative Expenses

General and administrative expenses for the three months ended September 30, 2025 and 2024 were $1.0 million for each period.

General and administrative expenses increased by $0.1 million, from $3.3 million for the nine months ended September 30, 2024 to $3.4 million for the nine months ended September 30, 2025. The increase was primarily due to an increase of $0.1 million in investor relations expense and $0.1 million in consulting fees, offset by a reduction in personnel expenses.

Other Income (Expense), Net

Other income (expense), net, was income of less than $0.1 million for the three months ended September 30, 2025 and related primarily to interest income from our cash balances in savings accounts. Other income (expense), net, was expense of $0.4 million for the three months ended September 30, 2024, primarily related to expense in connection with the deferred underwriting

commissions, partially offset by 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 income (expense), net, was income of $0.1 million for the nine months ended September 30, 2025, primarily related to interest income from our cash balances in savings accounts and foreign currency transaction gains and losses. Other income (expense), net, was expense of $7.1 million for the nine months ended September 30, 2024, primarily related to the LifeSci judgment expense, including reimbursement of costs, the clinical trial related settlement expenses with A-IR Clinical Research Ltd, and expense in connection with the deferred underwriting commissions, offset by interest income from our cash balances in savings accounts.

Liquidity and Capital Resources

Since our inception to September 30, 2025, 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 $69.2 million. As of September 30, 2025, we had available cash and cash equivalents of $12.7 million and an accumulated deficit of $46.9 million.

Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to our Product Candidates. 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.

We expect to continue to generate substantial operating losses for the foreseeable future as we expand our research and development activities. We will continue to fund our operations primarily through utilization of our current financial resources and through additional raises of capital.

To the extent that we raise additional capital through partnerships or licensing arrangements with third parties, we may have to relinquish valuable rights to our product candidates, future revenue streams or research programs or to grant licenses on terms that may not be favorable to us. If we raise additional capital through public or private equity offerings, the ownership interest of our then-existing stockholders will be diluted, and the terms of these securities may include liquidation or other preferences that adversely affect our stockholders' rights. If we raise additional capital through debt financing, we may be subject to covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures or declaring dividends. If we are unable to obtain adequate financing when needed, we may have to delay, reduce the scope of or suspend one or more of our clinical studies or preclinical studies, research and development programs or commercialization efforts or grant rights to develop and market our product candidates even if we would otherwise prefer to develop and market such product candidates ourselves.

Going Concern

We have incurred recurring losses since our inception, including a net loss of $6.4 million for the nine months ended September 30, 2025. As of September 30, 2025 we had an accumulated deficit of $46.9 million, a stockholders' equity of $11.0 million and available cash and cash equivalents of $12.7 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 the Product Candidates 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 audited financial statements for September 30, 2025 were issued, which raises substantial doubt about our ability to continue as a going concern.

To continue as a going concern, we will need, among other things, to raise additional capital resources. We plan to seek additional funding through public or private equity or debt financings. We 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 our stockholders. If we are unable to obtain funding we could be required to delay, reduce or eliminate research and development programs, product portfolio expansion or future commercialization efforts, which could adversely affect our business operations.

The unaudited condensed consolidated financial statements for September 30, 2025, 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.

Cash Flows

The following table summarizes our cash flows for the periods presented:

Net Cash Used in Operating Activities

During the nine months ended September 30, 2025, net cash used in operating activities was $6.3 million, which consisted of a net loss of $6.4 million and a net change of $0.3 million comprised primarily of stock-based compensation expense and depreciation expense, offset by a net change of $0.2 million in our net operating assets and liabilities.

During the nine months ended September 30, 2024, net cash used in operating activities was $14.6 million, which consisted of a net loss of $13.3 million and a net change of $1.3 million in our net operating assets and liabilities.

Net Cash Used in Investing Activities

During the nine months ended September 30, 2025, there was no net cash provided by or used in investing activities.

During the nine months ended September 30, 2024, net cash used in investing activities consisted of the purchase of lab equipment.

Net Cash Provided by Financing Activities

During the nine months ended September 30, 2025, net cash provided by financing activities was $12.5 million and was primarily due to the May 2025 Public Offering of $3.4 million and the Class H Warrant Inducement in September 2025 of $8.7 million.

During the nine months ended September 30, 2024, net cash provided by financing activities was $9.2 million from net proceeds of $5.4 million received in connection with the February 2024 Public Offering, $0.2 million received from exercises of the Class D Common Stock Warrants, and $3.5 million received in connection with the Warrant Inducement.

Contractual Obligations and Other Commitments

We enter 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. We believe that our non-cancelable obligations under these agreements are not material.

Off-Balance Sheet Arrangements

As of September 30, 2025, we did not have any off-balance sheet arrangements as defined in Item 303(a)(4)(ii) of Regulation S-K.

Quantitative and Qualitative Disclosure about Market Risk

We are exposed to market risks in the ordinary course of our business.

Critical Accounting Policies and Significant Judgments and Estimates

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 generally accepted accounting principles in the United States ("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.

Recent Accounting Pronouncements

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.