Quarterly Report for Quarter Ending September 30, 2026 (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-Q. 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, 2025, the other quarterly reports filed by the Company since January 1, 2026, 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 developing innovative solutions to treat acute and chronic disease. 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 programs consist of: GEM-AKI, which is being developed as a potential therapy for the treatment of acute kidney injury; and GEM-CKD, which is being developed as a potential therapy for the treatment of chronic kidney disease (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. Although since inception we have focused on the development of our Product Candidates, we may from time-to-time choose to pursue the development of other pharmaceutical compounds or product candidates to the extent that our management believes that they offer unique or proprietary features for the treatment of disease or other human medical conditions.

We have funded our operations since our inception to September 30, 2026 through the issuance and sale of our common stock, preferred stock, and warrants from which we have raised net proceeds of $75.9 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, 2026 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 $9.6 million for the nine months ended September 30, 2026 and $6.4 million for the nine months ended September 30, 2025. As of September 30, 2026 we had an accumulated deficit of $59.1 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

Stockholder Rights Plan

On July 10, 2026, the Company entered into a Rights Agreement (the "Rights Agreement") with Continental Stock Transfer & Trust Co. Pursuant to the Rights Agreement, the Company declared a dividend of one preferred purchase right (a "Right") for each outstanding share of the Company's common stock, payable to stockholders of record at the close of business on July 21, 2026. The Rights will become exercisable only if a person or a group of affiliated or associated persons acquires or obtains the right to acquire beneficial ownership of 10% or more of the Company's outstanding common stock (15% in the case of a person who reports their beneficial ownership on Schedule 13G) without the prior approval of the Board of Directors. When exercisable, each holder of a Right will be entitled to purchase 1/1,000th of a share of the Company's Series B Preferred at a price of $140, subject to adjustment. The Rights expire on July 9, 2027 unless the Company's stockholders ratify the Rights Agreement before that date, in which case the Rights expire on the third anniversary of the date of such approval, in each case subject to earlier redemption or exchange. The Company designed and adopted the stockholder rights plan to protect stockholder value and deter coercive or unfair takeover tactics. As of September 30, 2026, the rights have not become exercisable.

Reverse Stock Splits

On October 20, 2026, the Company effected a 1-for-7 reverse stock split of our shares of common stock, which had been approved at the 2026 annual meeting of the stockholders on June 24, 2026.

On January 28, 2026, the Company effected a 1-for-4 reverse stock split of our outstanding shares of common stock, which had been approved at the 2025 annual meeting of stockholders on June 23, 2025.

All share and per share numbers included herein have been adjusted to reflect these reverse splits.

Class I Warrant Inducement

On January 23, 2026, the Company entered into warrant inducement offer letters with two holders of 305,180 Class I Common Stock Warrants, exercisable for 305,180 shares of common stock with an exercise price of $61.60 per share of common stock. Pursuant to the warrant inducement offer letters, the holders agreed to the immediate cash exercise of their 305,180 Class I Common Stock Warrants to purchase an aggregate of 305,180 shares of the Company's common stock at an exercise price of $24.08 per share, and the Company's agreement to issue 610,358 Class J Common Stock Warrants exercisable for a total of up to 610,358 shares of common stock, at an exercise price of $24.08. The Company received net proceeds of approximately $6.7 million from the warrant exercises.

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 and foreign currency transaction gains and losses, in addition to other gains or losses resulting from transactions that do not relate to our continuing operations, if any.

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 $0.6 million, from $0.9 million for the three months ended September 30, 2025 to $1.5 million for the three months ended September 30, 2026. The increase was primarily due to increases of $0.5 million in program expenses related to GEM-AKI, $0.1 million in manufacturing expenses related to GEM-AKI, $0.1 million of other expenses related to the new facility, and $0.2 million in personnel expenses, offset by a $0.3 million decrease in program expenses related to GEM-CKD.

Research and development expenses increased by $1.7 million, from $3.1 million for the nine months ended September 30, 2025 to $4.8 million for the nine months ended September 30, 2026. The increase was primarily due to increases of $1.2 million in program expenses related to GEM-AKI, $0.6 million in manufacturing expenses related to GEM-AKI, $0.4 million of other expenses primarily related to the new facility, and $0.4 million in personnel expenses, offset by a $0.9 million decrease in program expenses related to GEM-CKD.

General and Administrative Expenses

General and administrative expenses increased by $0.9 million, from $1.0 million for the three months ended September 30, 2025 to $1.9 million for the three months ended September 30, 2026. The increase was primarily due to increases of $0.7 million in personnel expenses, including stock-based compensation, and $0.2 million in professional fees.

General and administrative expenses increased by $1.9 million, from $3.4 million for the nine months ended September 30, 2025 to $5.3 million for the nine months ended September 30, 2026. The increase was primarily due to increases of $1.5 million in personnel expenses, including stock-based compensation, and $0.5 million in professional fees.

Other Income (Expense), Net

Other income (expense), net, increased by $32,000, from $36,000 for the three months ended September 30, 2025 to $68,000 for the three months ended September 30, 2026. The increase was primarily due to interest income from our cash balances in savings accounts.

Other income (expense), net, increased by $0.4 million, from $0.1 million for the nine months ended September 30, 2025 to $0.5 million for the nine months ended September 30, 2026. The increase was primarily due to a refund received from the Delaware Secretary of State for overpaid franchise fees totaling $0.3 million and an increase of $0.1 million in interest income from our cash balances in savings accounts.

Liquidity and Capital Resources

Since our inception to September 30, 2026, 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 $75.9 million. As of September 30, 2026, we had available cash and cash equivalents of $9.1 million and an accumulated deficit of $59.1 million.

Our use of cash is to fund operating expenses, which consist primarily of research and development expenditures related to our Product Candidates or other 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 of our current or 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 $9.6 million for the nine months ended September 30, 2026. As of September 30, 2026 we had an accumulated deficit of $59.1 million, a stockholders' equity of $7.2 million and available cash and cash equivalents of $9.1 million. We expect to continue to incur significant operating and net losses, as well as negative cash flows from operations, for the foreseeable future as we continue to complete all necessary product development or future commercialization efforts. We have never generated revenue and do not expect to generate revenue from product sales unless and until we successfully complete development and obtain regulatory approval for 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 unaudited financial statements for September 30, 2026 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, 2026, 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, 2026, net cash used in operating activities was $8.1 million, which consisted of a net loss of $9.6 million, adjusted for non-cash items of $1.5 million, including stock-based compensation expense, non-cash lease expense and depreciation expense.

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, adjusted for non-cash items of $0.3 million, including stock-based compensation expense and depreciation expense, and a net change of $0.2 million in our net operating assets and liabilities.

Net Cash Used in Investing Activities

During the nine months ended September 30, 2026, net cash used in investing activities of $0.1 million consisted of the purchase of property and equipment.

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

Net Cash Provided by Financing Activities

During the nine months ended September 30, 2026, net cash provided by financing activities was $6.7 million and was due to net proceeds received from the Class I Warrant Inducement in January 2026.

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

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, 2026, we did not have any off-balance sheet arrangements.

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. As of September 30, 2026, there have been no material changes to our existing critical accounting policies and estimates discussed in Part II, Item 7 of our Annual Report on Form 10-K for the year ended December 31, 2025.

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 or results of operations.