ITEM 7. MANAGEMENT’S
DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
References to the “Company,”
“we,” “us,” “our,” or “Revelation” refer to Revelation Biosciences, Inc. (f/k/a Petra
Acquisition, Inc.). The following discussion and analysis of the Company’s financial condition and results of operations should
be read in conjunction with our audited financial statements and the notes related thereto which are included in “Item 8. Financial
Statements and Supplementary Data” of this Annual Report on Form 10-K. Certain information contained in the discussion and analysis
set forth below includes forward-looking statements. Our actual results may differ materially from those anticipated in these forward-looking
statements as a result of many factors, including those set forth under “Special Note Regarding Forward-Looking Statements,”
“Item 1A. Risk Factors” and elsewhere in this Annual Report on Form 10-K.
Special Note Regarding Forward-Looking Statements
All statements other than
statements of historical fact included in this Form 10-K including, without limitation, statements under “Management’s Discussion
and Analysis of Financial Condition and Results of Operations” regarding the Company’s financial position, business strategy
and the plans and objectives of management for future operations, are forward-looking statements. When used in this Form 10-K, words
such as “anticipate,” “believe,” “estimate,” “expect,” “intend” and similar
expressions, as they relate to us or the Company’s management, identify forward-looking statements. Such forward-looking statements
are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’s management.
Actual results could differ materially from those contemplated by the forward-looking statements as a result of certain factors detailed
in our filings with the SEC.
The following discussion
and analysis of our financial condition and results of operations should be read in conjunction with the financial statements and the
notes thereto contained elsewhere in this Annual Report. Certain information contained in the discussion and analysis set forth below
includes forward-looking statements that involve risks and uncertainties.
73
Overview
We are a former blank check
company formed under the laws of the State of Delaware on November 20, 2019 for the purpose of effecting a merger, capital stock exchange,
asset acquisition, stock purchase, reorganization or other similar business combination with one or more businesses. We completed our
IPO on October 13, 2020 and our Business Combination on January 10, 2022.
All activity through December
31, 2021 relates to our formation, IPO, and search for a prospective initial business combination target.
Recent Developments
On the Closing Date, Petra
consummated the previously announced Business Combination, pursuant to the terms of the Business Combination Agreement, by and among
Petra, Merger Sub, and Old Revelation. Pursuant to the Business Combination Agreement, on the Closing Date, (i) Merger Sub merged with
and into Old Revelation, with Old Revelation as the surviving company in the Merger, and, after giving effect to such Merger, Old Revelation
was renamed Revelation Biosciences Sub, Inc. and became a wholly-owned subsidiary of Petra and (ii) Petra changed its name to Revelation
Biosciences, Inc.
Results of Operations
We have neither engaged in
any operations nor generated any revenues to date. Our only activities for the period from November 20, 2019 (inception) through December
31, 2021 were organizational activities, those necessary to consummate the IPO, described below, searching for a target company for a
business combination, and the proposed acquisition of Old Revelation. At the consummation of the IPO, cash amounting to $10.10 per share
issued in the IPO was deposited into a trust account for the shares of common stock subject to redemption (the “Trust Account”).
We generate non-operating income from interest earned on cash held in the Trust Account, interest earned on cash and cash equivalents
held in our operating account and gains or losses from marketable securities held in our operating account. We incur expenses as a result
of being a public company (for legal, financial reporting, accounting and auditing compliance), as well as for due diligence expenses.
For the year ended December
31, 2021, we had a net loss of $2,130,625 which consisted of interest income of $222, interest expense of $41,750, realized loss on marketable
securities of $17,356, as well as interest income from cash held in the Trust Account of $6,896, a change in the fair value of the warrant
liability of $1,009,620, and operating costs of $3,088,248, which were primarily professional fees and insurance expense.
For the year ended December
31, 2020, we had a net loss of $1,630,500 which consisted of interest income of $9,325 and unrealized loss on marketable securities of
$1,831, as well as interest income from cash held in the Trust Account of $1,590, a change in fair value of warrant liability of $1,494,092,
and operating costs of $145,492 which were primarily professional fees and insurance expense.
We classify the Private Warrants
issued in our private placement in connection with the IPO as liabilities at their fair value and adjust the warrant instruments to fair
value at each reporting period. These liabilities are subject to re-measurement at each balance sheet date until exercised, and any change
in fair value is recognized in our statements of operations.
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Liquidity
and Capital Resources
For the year ended December
31, 2020, cash used in operating activities was $216,664. The net loss of $1,630,500 was affected by interest earned on cash held in
the Trust Account of $1,590, an unrealized loss on marketable securities of $1,831 and a change in the fair value of the warrant liability
of $1,494,092. Changes in operating assets and liabilities was $80,497 from operating activities.
For the year ended December
31, 2021, cash used in operating activities was $725,618. The net loss of $2,130,625 was affected by interest earned on cash held in
the Trust Account of $6,896 and a change in the fair value of the warrant liability of $1,009,620. Changes in operating assets and liabilities
was $2,421,523 from operating activities.
In October 2020, we consummated
our IPO and sold a total of 7,281,151 units. Each unit consists of one share of common stock of the Company, par value $0.001 per share,
and one redeemable warrant of the Company, with each warrant entitling the holder thereof to purchase one share of common stock for $11.50
per share (the “Units”). The Units were sold at a price of $10.00 per Unit, generating gross proceeds to the Company of $72,781,510.
Simultaneously with the IPO, the Company consummated the sale of 3,233,446 Private Warrants at a price of $1.00 per Private Warrant,
generating total proceeds of $3,233,446. Each Private Warrant entitles the holder thereof to purchase one share of common stock for $11.50
per share.
Following the IPO and sale
of Private Warrants, an aggregate amount of $73,509,325 was placed in the Company’s Trust Account established in connection with
the IPO. Transaction costs amounted to $4,366,890, consisting of $3,450,000 of underwriting fees and $315,846 of other offering
costs.
On October 13, 2021, we entered
into three promissory notes payable for a total of up to an aggregate principal amount of $750,000 with a minimum draw of $50,000 (Promissory
Notes Payable) with three Lenders (the Lenders). Such Promissory Notes Payable are being made for the purpose of funding a contribution
of cash for each share of common stock issued in Petra’s IPO that was not redeemed in connection with the stockholder vote to approve
the extension of the deadline for us to complete an initial business combination, as contemplated in the definitive proxy statement on
Scheduled 14A filed by us with the SEC on September 24, 2021. The Promissory Notes Payable will bear interest at the rate of 2% per month
on the outstanding balance of the Promissory Notes Payable. The Promissory Notes Payable will be forgiven if we are unable to consummate
an initial business combination except to the extent of any funds held outside of the Trust Account.
On October 27, 2021 the Company
paid an aggregate of $25,698,161 in cash to various Unit holders that elected to redeem 2,544,127 shares of the common stock subject
to redemption.
Between October 2021 and
December 2021, three contributions in the amount of $160,957 were deposited into the Trust Account for each share of common stock issued
in the Petra IPO that was not redeemed in connection with the stockholder vote at the October 2021 Special Meeting. As of December 31,
2021, a total of $482,871 has been deposited into the Trust Account.
As of December 31, 2021,
we had cash equivalents held in the Trust Account of $48,302,521. Interest income on the balance in the Trust Account may be used by
us to pay taxes. As of December 31, 2021, we have not withdrawn any amount of interest earned on the Trust Account to pay our taxes.
Petra Acquisition, Inc. intended
to use substantially all of the funds held in the Trust Account, to acquire a target business and to pay our expenses relating thereto,
including a fee payable to LifeSci Capital LLC, Ladenburg Thalmann, and Ingalls & Snyder LLC, and Northland Securities, Inc., upon
consummation of our initial business combination for assisting us in connection with our initial business combination. To the extent
that our capital stock is used in whole or in part as consideration to effect a business combination, the remaining funds held in the
Trust Account will be used as working capital to finance the operations of the target business. Such working capital funds could be used
in a variety of ways including continuing or expanding the target business’ operations, for strategic acquisitions and for marketing,
research and development of existing or new products. Such funds could also be used to repay any operating expenses or finders’
fees which we had incurred prior to the completion of our business combination if the funds available to us outside of the Trust Account
were insufficient to cover such expenses.
As of December 31, 2021,
we had cash and cash equivalents of $78,532. During the year ended December 31, 2021, the Company received proceeds from the sale of
marketable securities of $525,287. Historically we have and intend to use any and all funds held outside the Trust Account for identifying
and evaluating prospective acquisition candidates, performing business due diligence on prospective target businesses, traveling to and
from the offices, plants or similar locations of prospective target businesses, reviewing corporate documents and material agreements
of prospective target businesses, selecting the target business to acquire and structuring, negotiating and consummating the business
combination.
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Related Party Transactions
This
information appears following “Item 13. Certain Relationships and Related Person Transactions, and Director Independence”
of this Annual Report and is included herein by reference.
Off-balance sheet financing arrangements
We did not have any off-balance
sheet arrangements as of December 31, 2021.
Contractual obligations
We do not have any long-term
debt, capital lease obligations, operating lease obligations or long-term liabilities.
We have engaged to LifeSci
Capital LLC, Ladenburg Thalmann, and Ingalls & Snyder LLC, and Northland Securities, Inc. (collectively, the “Advisors”)
as advisors in connection with a Business Combination to assist us in holding meetings with our shareholders to discuss the potential
Business Combination and the target business’ attributes, introduce us to potential investors that are interested in purchasing
our securities in connection with a Business Combination, assist us in obtaining shareholder approval for the Business Combination and
assist us with our press releases and public filings in connection with the Business Combination. We will pay the Advisors a cash fee
of $2.9 million for such services upon the consummation of a Business Combination which is equal to 4% of the gross proceeds received
by the Company in the IPO (“Fee”) (exclusive of any applicable finders’ fees which might become payable). The
Company will allocate 52.5% of the Fee to LifeSci, 10% of the Fee to Ingalls, 22.5% of the Fee to Ladenburg and 15% of the Fee to Northland.
On October 13, 2021, we entered
into three promissory notes payable for a total of up to an aggregate principal amount of $750,000 with a minimum draw of $50,000 (Promissory
Notes Payable) with three Lenders (the Lenders). Such Promissory Notes Payable are being made for the purpose of funding a contribution
of cash for each share of common stock issued in Petra’s IPO that was not redeemed in connection with the stockholder vote to approve
the extension of the deadline for us to complete an initial business combination, as contemplated in the definitive proxy statement on
Scheduled 14A filed by us with the SEC on September 24, 2021. The Promissory Notes Payable will bear interest at the rate of 2% per month
on the outstanding balance of the Promissory Notes Payable. The Promissory Notes Payable will be forgiven if we are unable to consummate
an initial business combination except to the extent of any funds held outside of the Trust Account.
Critical Accounting Policies
The preparation of financial
statements and related disclosures in conformity with accounting principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets
and liabilities at the date of the financial statements, and income and expenses during the periods reported. Actual results could materially
differ from those estimates. We have identified the following critical accounting policies:
76
Common stock subject to possible redemption
We account for common stock
subject to possible redemption in accordance with the guidance in Accounting Standards Codification (“ASC”) Topic 480 “Distinguishing
Liabilities from Equity.” Common stock subject to mandatory redemption is classified as a liability instrument and is measured
at fair value. Conditionally redeemable common stock (including common stock that feature redemption rights that is either within the
control of the holder or subject to redemption upon the occurrence of uncertain events not solely within our control) is classified as
temporary equity. At all other times, common stock is classified as stockholders’ equity. Our common stock features certain redemption
rights that are considered to be outside of our control and subject to occurrence of uncertain future events. Accordingly, common stock
subject to possible redemption is presented at redemption value as temporary equity, outside of the stockholders’ equity section
of our balance sheet.
Net loss per common share
We apply the two-class method
in calculating earnings per share. Common stock subject to possible redemption which is not currently redeemable and is not redeemable
at fair value, have been excluded from the calculation of basic net loss per common share since such shares, if redeemed, only participate
in their pro rata share of the Trust Account earnings. Our net income is adjusted for the portion of income that is attributable to common
stock subject to possible redemption, as these shares only participate in the earnings of the Trust Account and not our income or losses.
Derivative Warrant Liabilities
The Company accounts for
the Warrants in accordance with the guidance contained in ASC 815 under which the Private Warrants do not meet the criteria for equity
treatment and must be recorded as derivative liabilities. Accordingly, the Company classifies the Private Warrants as liabilities at
their fair value and adjusts the Private Warrants to fair value at each reporting period. This liability is subject to re-measurement
at each balance sheet date until the Private Warrants are exercised or expire, and any change in fair value is recognized in the Company’s
statement of operations. The fair value of the Private Warrants was initially and subsequently measured at the end of each reporting
period, using a Monte Carlo simulation.
Recent accounting standards
Management does not believe
that any other recently issued, but not yet effective, accounting pronouncements, if currently adopted, would have a material effect
on our financial statements.
ITEM 7A. QUANTITATIVE
AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
We
are a smaller reporting company as defined by Rule 12b-2 of the Exchange Act and are not required to provide the information
otherwise required under this item.
ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY
DATA
This
information appears following Item 15 of this Annual Report and is included herein by reference.
ITEM 9. CHANGES IN AND
DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE
None.
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ITEM 9A. CONTROL AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Disclosure controls are procedures
that are designed with the objective of ensuring that information required to be disclosed in our reports filed under the Exchange Act,
such as this Annual Report, is recorded, processed, summarized, and reported within the time period specified in the SEC’s rules
and forms. Disclosure controls are also designed with the objective of ensuring that such information is accumulated and communicated
to our management, including the chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding
required disclosure. Our management evaluated, with the participation of our principal executive officer and principal financial and
accounting officer (our “Certifying Officers”), the effectiveness of our disclosure controls and procedures as of December
31, 2021, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act. Based upon that evaluation, our Certifying Officers
concluded that, as of December 31, 2021, our disclosure controls and procedures were not effective as of December 31, 2021, due solely
to the material weakness in our internal control over financial reporting described below. In light of this material weakness, we performed
additional analysis as deemed necessary to ensure that our financial statements were prepared in accordance with U.S. generally accepted
accounting principles. Accordingly, management believes that the financial statements included in this Annual Report on Form 10-K present
fairly in all material respects our financial position, results of operations and cash flows for the period presented.
We do not expect that our
disclosure controls and procedures will prevent all errors and all instances of fraud. Disclosure controls and procedures, no matter
how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the disclosure controls
and procedures are met. Further, the design of disclosure controls and procedures must reflect the fact that there are resource constraints,
and the benefits must be considered relative to their costs. Because of the inherent limitations in all disclosure controls and procedures,
no evaluation of disclosure controls and procedures can provide absolute assurance that we have detected all our control deficiencies
and instances of fraud, if any. The design of disclosure controls and procedures also is based partly on certain assumptions about the
likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential
future conditions.
Management’s Report on Internal Controls Over Financial Reporting
Our management is responsible
for establishing and maintaining adequate internal control over our financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under
the Exchange Act. Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability
of financial reporting and the presentation of financial statements for external purposes in accordance with U.S. generally accepted
accounting principles. Internal control over financial reporting includes those policies and procedures that:
Because of its inherent limitations,
internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that our degree of
compliance with the policies or procedures may deteriorate.
In connection with the preparation
of this Annual Report, our management assessed the effectiveness of our internal control over financial reporting as of December 31,
2021. In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission
in Internal Control—Integrated Framework (2013 framework). Based on such assessment, our management concluded that, as of December
31, 2021, our internal control over financial reporting was effective based on those criteria.
This Annual Report does not
include an attestation report of our independent registered public accounting firm due to a transition period established by the rules
of the SEC for newly public companies.
Changes in Internal Control over Financial Reporting
During the most recently
completed fiscal quarter, there has been no change in our internal control over financial reporting that has materially affected, or
is reasonably likely to materially affect, our internal control over financial reporting.
ITEM 9B. OTHER
INFORMATION
None.
78
PART III
ITEM 10. DIRECTORS, EXECUTIVE OFFICERS, AND
CORPORATE GOVERNANCE
Executive Officers and Directors
The following table sets forth
information regarding our executive officers and directors, including their ages as of April 13, 2022:
Name Age Position
BOARD OF DIRECTORS
George Tidmarsh, M.D., Ph.D. 62 Chairman and Director
James Rolke 53 Director and Chief Executive Officer
Jennifer Carver, BSN, MBA 68 Director
Jess Roper 57 Director
Curt LaBelle, MD 51 Director
EXECUTIVE OFFICERS
James Rolke 53 Director and Chief Executive Officer
Chester S. Zygmont, III 41 Chief Financial Officer
Our Director and Executive Officers
George Tidmarsh, M.D.,
Ph.D.—Chairman. Dr. Tidmarsh has been Chairman of the Company since its inception in May 2020. Dr. Tidmarsh received
his M.D. and Ph.D. from Stanford University, where he also completed his fellowship training in Pediatric Oncology and Neonatology and
is currently Adjunct Faculty of Pediatrics and Neonatology since 2018. He served as clinical faculty at Stanford for a number of years
after his fellowship prior to devoting his full time to clinical research and development in order to bring new treatments through the
FDA approval process. Since 2018 Dr. Tidmarsh has served as a director and chairman of audit committee of Lucile Packard Foundation
for Children’s Health. Since the Company’s inception in 2020 he has also served as chairman at Revelation Biosciences Inc.
Prior to joining Revelation, Dr. Tidmarsh was President, Chief Executive Officer, Secretary and a Director of La Jolla Pharmaceutical
Company (“La Jolla”) from January 2012 until November 2019. While at La Jolla, Dr. Tidmarsh helped discover
the use of angiotensin II for the treatment of shock and led all aspects of development including approval by the FDA and the European
Medicines Agency (“EMA”) for the treatment of patients suffering from distributive shock. He also led the development of
artesunate for the treatment of severe malaria, which was approved by the FDA. Dr. Tidmarsh has over 30 years of experience
in biotechnology, including the successful clinical development of seven FDA-approved drugs. He previously served as the Chief Executive
Officer of Horizon Pharma, Inc., a company he founded in 2005, where he continued as CEO until 2008 and Director until 2010. While at
Horizon, he invented and led all aspects of development of Duexis, which was approved by the FDA for the treatment of rheumatoid arthritis.
He also founded Threshold Pharmaceuticals, Inc. and held senior positions at Coulter Pharmaceutical, Inc. (acquired by GlaxoSmithKline)
and SEQUUS Pharmaceuticals, Inc. (acquired by Johnson & Johnson). While at Coulter and SEQUUS, Dr. Tidmarsh led the clinical
development of BEXXAR and Doxil, respectively, two FDA-approved anti-cancer agents. We believe that Dr. Tidmarsh is qualified to
serve as a director based on his extensive management experience in the biotechnology industry.
James Rolke — Director
and Chief Executive Officer. Mr. Rolke cofounded and has been the Chief Executive Officer and a director of Revelation since
its inception in May 2020. Mr. Rolke has 29 years of experience in the biotechnology industry, spanning all areas and
phases of drug development. Prior to joining the Company, beginning in 2012, Mr. Rolke was employed at La Jolla in various leadership
roles overseeing Research and Development and serving as Chief Scientific Officer from 2017 to 2020. While at La Jolla, Mr. Rolke
oversaw the development of multiple technologies including six INDs and two marketing approvals: Giapreza for the treatment of distributive
shock (US FDA and EMEA) and artesunate for the treatment of severe malaria. Prior to La Jolla, from July 2009 to January 2012
Mr. Rolke was Chief Technology Officer at Pluromed, Inc. (acquired by Sanofi) and played a key role in the approvals of two medical
devices via the 510(k) and PMA approval pathways. Prior to Pluromed, Mr. Rolke held several key positions at biotechnology
companies, including Director of Operations at Prospect Therapeutics, Inc., Associate Director of Pharmaceutical Development at Mersana
Therapeutics, Inc., Manager of Process Development at GlycoGenesys, Inc., Principal Scientist at Surgical Sealants, Inc., Scientist at
GelTex, Inc., and Associate Scientist at Alpha-Beta Technology, Inc. Mr. Rolke received his B.S. in chemistry from Keene State College.
We believe that Mr. Rolke is qualified to serve as a director based on his role as our Chief Executive Officer and his extensive
management experience in the biotechnology industry.
79
Jennifer Carver, BSN,
MBA — Director. Ms. Carver has been a director of the Company since May 2020. Ms. Carver brings over 20 years
of industry experience with a focus on small biotech companies and their evolution from early development through commercialization.
From 2020 to 2021, Ms. Carver has served as Chief Operating Officer at Kartos Therapeutics (Kartos). Prior to Kartos from 2014, Ms. Carver
was employed at La Jolla Pharmaceutical Company in various leadership roles providing leadership through the clinical development, approval
and launch of Giapreza and serving as Chief Operating Officer from 2017 to 2019. Prior to La Jolla, Ms. Carver held positions at Spectrum
Pharmaceuticals and Allos Therapeutics, leading teams through the development and approval of Belionostat and Folotyn respectively. Her
experience in the healthcare industry spans multiple therapeutic areas including oncology, inflammatory disease, shock, iron overload,
and anti-infectives. Ms. Carver has played a critical role in negotiating key alliances, evaluation of financing opportunities, and overseeing
rapid organizational growth. Ms. Carver earned her B.S.N. and M.B.A. from University of Colorado. We believe that Ms. Carver’s
extensive experience working in the biotechnology industry makes her well-qualified to serve as a director.
Jess Roper — Director. Mr. Roper
has been a director since October 2020. Mr. Roper has considerable financial and audit experience in the sectors of medical
device, life sciences, technology, manufacturing, and financial institutions. He currently serves as a Board Member and Audit Chair for
Biolase, a publicly traded company that is the global leader in the manufacturing of dental laser systems. Mr. Roper previously
served as Senior Vice President and Chief Financial Officer of Dexcom, retiring in 2017 following a fulfilling and rewarding career.
During his 12-year tenure, Dexcom transitioned from a pre-revenue privately held medical device company to a multi-national publicly
traded entity. Mr. Roper previously held financial management positions with two other publicly traded companies and one venture
funded company. He has played key roles in two initial public offerings, acquisitions/divestitures, and numerous equity and debt financings.
Earlier in his career, Mr. Roper was an auditor with PricewaterhouseCoopers, and a bank and information systems examiner with the
Office of the Comptroller of the Currency. He earned a Master of Science in Corporate Accountancy and a Bachelor of Science in Finance.
Mr. Roper is a certified public accountant in the state of California. We believe that Mr. Roper is qualified to serve as a
director based on his extensive financial and audit experience.
Curt LaBelle, MD — Director.
Dr. LaBelle has been a director since January 2021. Dr. LaBelle has been investing in and working with life science
companies for over 20 years. Since 2015, he has been President of the Global Health Investment Fund (“GHIF”). GHIF is
a pioneering impact fund with a proven record of generating attractive financial returns and tangible impact. The fund works to facilitate
access to therapeutics and diagnostics among low-income populations. Dr. LaBelle also works with the AXA Prime Impact Fund and serves
as a Board member for Alydia Health, Atomo Diagnostics, Atticus Medical, Eyenovia, and Z Optics. He holds MD and MBA degrees from Columbia
University. Dr. LaBelle is the designee of the AXA Prime Impact Fund, the holder of the outstanding shares of our Series A
Preferred Stock. We believe that Dr. LaBelle’s significant experience as an investor in life science companies makes him well-qualified
to serve as a director.
Chester S. Zygmont, III — Chief
Financial Officer. Mr. Zygmont has been the Company’s Chief Financial Officer since inception. Mr. Zygmont
brings over 17 years of experience in finance to the company with a wide range of industry applications. In 2016, Mr. Zygmont
Co-Founded Jivanas, a social enterprise that owns and operates a factory in Nepal, that is focused on creating jobs for people at risk
for human trafficking. Jivanas has operations in Nepal, Hong Kong, and the USA. During 2013, Mr. Zygmont Co-Founded oOxesis
Biotechnology, LLC, a biologics lab that worked on developing therapies for unmet needs. From June 2012 to January 2016, Mr. Zygmont
was the Senior Director of Finance, at La Jolla Pharmaceutical Company. During Mr. Zygmont’s tenure at La Jolla, he brought
the company to its Nasdaq listing. Prior to La Jolla, Mr. Zygmont served as Managing Director at Z3 Capital, LLC from March 2009
to June 2012. Z3 Capital, LLC, a privately held investment firm, focused on investment acquisition and venture funding for multiple
startup companies in real estate, medical device and biotechnology. Mr. Zygmont also served as Vice President at Symmetry Advisors,
Inc. a private equity leveraged buyout firm. While at Symmetry, he managed all finance and accounting for its SPAC, was a key player
on a $600 million buyout of a portfolio company, and subsequently led the restructuring of its manufacturing division. Mr. Zygmont
earned his M.S. in Finance from Baruch College, Zicklin School of Business and his B.A. from Eastern University.
80
Number and Terms of Office of Officers and
Directors
Our Board is divided into
three classes, designated Class A, Class B and Class C, with only one class of directors being elected in each year and
each class serving a three-year term.
Our officers are appointed
by the Board and serve until such person’s successor is appointed or until such person’s earlier resignation, death or removal.
Our Board is authorized to appoint persons to the offices set forth in our bylaws as it deems appropriate. Our bylaws provide that our
officers may consist of a Chief Executive Officer, President, Secretary, Treasurer, Chief Financial Officer, Vice Presidents and such
other offices as may be determined by the Board.
Family Relationships
There are no family relationships
among our directors or executive officers.
Involvement in Certain Legal Proceedings
None of our directors, executive
officers, promoters or control persons has been involved in any events requiring disclosure under Item 401(f) of Regulation S-K.
Board Composition
81
Classified Board of Directors
In accordance with our amended
and restated certificate of incorporation, our board of directors is divided into three classes with staggered three-year terms. At each
annual general meeting of stockholders, the successors to the directors whose terms then expire will be elected to serve from the time
of election and qualification until the third annual meeting following their election. Our directors are divided among the three classes
as follows:
We expect that any additional
directorships resulting from an increase in the number of directors will be distributed among the three classes so that, as nearly as
possible, each class will consist of one-third of the directors. The division of our board of directors into three classes with staggered
three-year terms may delay or prevent a change of our management or a change in control.
Leadership Structure of the Board
Our bylaws and corporate
governance guidelines provide our board of directors with flexibility to combine or separate the positions of Chairman of the board of
directors and Chief Executive Officer.
Our board of directors has
concluded that our current leadership structure is appropriate at this time. However, our board of directors will continue to periodically
review our leadership structure and may make such changes in the future as it deems appropriate.
Role of Board in Risk Oversight Process
Risk assessment and oversight
are an integral part of our governance and management processes. Our board of directors encourages management to promote a culture that
incorporates risk management into our corporate strategy and day-to-day business operations. Management discusses strategic and
operational risks at regular management meetings, and conducts specific strategic planning and review sessions during the year that include
a focused discussion and analysis of the risks facing us. Throughout the year, senior management reviews these risks with the board of
directors at regular board meetings as part of management presentations that focus on particular business functions, operations or strategies,
and presents the steps taken by management to mitigate or eliminate such risks.
Our board of directors does
not have a standing risk management committee, but rather administers this oversight function directly through our board of directors
as a whole, as well as through various standing committees of our board of directors that address risks inherent in their respective
areas of oversight. While our board of directors is responsible for monitoring and assessing strategic risk exposure, our audit committee
is responsible for overseeing our major financial risk exposures and the steps our management has taken to monitor and control these
exposures. The audit committee also approves or disapproves any related person transactions. Our nominating and corporate governance
committee monitors the effectiveness of our corporate governance guidelines. Our compensation committee assesses and monitors whether
any of our compensation policies and programs has the potential to encourage excessive risk-taking.
82
Attendance of Directors at Board Meetings
and Annual Meeting of Stockholders
During 2021, the Board of
Directors met 11 times. During 2021, the Audit Committee met one time, the Nominating and Corporate Governance Committee met one time
and the Compensation Committee met one time. Each director who was on the Board during this timeframe attended at least 91% of the aggregate
number of meetings held during his or her term of service. The Company has not yet held an Annual Meeting of Stockholders. The Company
does not have a policy requiring its directors to attend the Annual Meeting of Stockholders.
Board Committees
Our board of directors has
established an audit committee, a compensation committee and a nominating and corporate governance committee. Our board of directors
may establish other committees to facilitate the management of our business. The composition and functions of each committee are described
below. Members serve on these committees until their resignation or until otherwise determined by our board of directors. Each committee
has adopted a written charter that satisfies the applicable rules and regulations of the SEC rules and regulations and the Nasdaq Listing
Rules, which are posted on our website. The reference to our website address does not constitute incorporation by reference of the information
contained at or available through our website.
Audit Committee
Revelation has a separately-designated standing
Audit Committee established in accordance with Section 3(a)(58)(A) of the Exchange Act and Nasdaq Listing Rules. In addition, the
board of directors adopted a written charter for the Audit Committee. The Audit Committee’s duties, will include, but are not limited
to:
● appoints our independent registered public accounting firm;
● reviews and approves all related party transactions on an ongoing basis;
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The composition of the Audit
Committee consist of Mr. Roper, Dr. Tidmarsh and Ms. Carver, with Mr. Roper as Chair. Mr. Roper qualifies as an audit
committee financial expert, as defined by the SEC rules. In addition, Revelation certified to Nasdaq that the Audit Committee has, and
will continue to have, at least one member who has past employment experience in finance or accounting, requisite professional certification
in accounting, or other comparable experience or background that results in the individual’s financial sophistication, including
being or having been a chief executive officer, chief financial officer or other senior officer with financial oversight responsibilities.
It has been determined that each of each of Mr. Roper, Dr. Tidmarsh and Ms. Carver satisfy such requirements.
Nominating and Governance Committee
Revelation’s Nominating
and Governance Committee is comprised of Ms. Carver and Drs. Tidmarsh and LaBelle, each of whom has been determined to be independent
under the Nasdaq Listing Rules. The Nominating and Governance Committee adopted a written charter.
Specific responsibilities
of the Nominating and GovernanceCommittee include:
● evaluating the performance of board of directors and of individual directors;
● reviewing developments in corporate governance practices;
● evaluating the adequacy of corporate governance practices and reporting;
● reviewing management succession plans; and
Compensation Committee
Revelation has a Compensation
Committee established in accordance with the Nasdaq Listing Rules. The Compensation Committee is comprised of Drs. Tidmarsh and LaBelle
and Mr. Roper, each of whom has been determined to be independent under the Nasdaq Listing Rules and is a “non-employee director”
as defined in Rule 16b-3 promulgated under the Exchange Act. The chair of Revelation’s compensation committee is Dr. LaBelle.
The Compensation Committee
oversees Revelation’s policies relating to compensation and benefits of its officers and employees. The Compensation Committee
reviews and approves or recommends corporate goals and objectives relevant to compensation of its executive officers (other than the
Chief Executive Officer), evaluates the performance of these officers in light of those goals and objectives and approves the compensation
of these officers based on such evaluations. The Compensation Committee also reviews and approves or makes recommendations to the board
of directors regarding the issuance of stock options and other awards under Revelation’s stock plans to its executive officers
(other than the Chief Executive Officer). The Compensation Committee reviews the performance of the Chief Executive Officer and makes
recommendations to the board of directors with respect to his compensation, and the board of directors retains the authority to make
compensation decisions relative to the Chief Executive Officer. The Compensation Committee reviews and evaluates, on an annual basis,
the compensation committee charter and the compensation committee’s performance.
Compensation Committee Interlocks and Insider
Participation
No member of the Compensation
Committee has ever been an officer or employee of Revelation. None of Revelation’s executive officers serve, or have served during
the last fiscal year, as a member of the compensation committee or other board committee performing equivalent functions of any other
entity that has one or more executive officers serving as one of Revelation’s directors or on the Compensation Committee.
Code of Conduct and Ethics
The Revelation Board adopted
a Code of Ethics that applies to all its employees including its principal executive and financial officers.
ITEM 11. EXECUTIVE OFFICER AND DIRECTOR COMPENSATION
Executive Compensation Overview
Each of the Company’s
executive officers receives a base salary to compensate them for services rendered to the Company. The base salary is intended to provide
a fixed component of compensation reflecting the executive’s skill set, experience, position and responsibilities.
Effective as of July 27,
2021, the Company entered into separate Executive Employment Agreements with Messrs. Rolke and Zygmont for their service as Chief Executive
Officer and Chief Financial Officer, respectively (collectively, the “Executive Employment Agreements”). The Executive Employment
Agreements provide for a term of three years, unless terminated earlier in accordance with their terms.
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The Executive Employment
Agreements provide for an annual base salary of $400,000 for Mr. Rolke and $320,000 for Mr. Zygmont. Messrs. Rolke and Zygmont
are also eligible to receive an annual performance bonus targeted at 40% for Mr. Rolke and 35% for Mr. Zygmont of their respective
base salaries or as otherwise determined in the sole discretion of the board (each, an “Annual Bonus”), as well as equity
incentive grants as determined by the Board in its sole discretion.
Pursuant to the Executive
Employment Agreements, if his employment is terminated as a result of a “Covered Termination Event” that is not in connection
with a change in control of the Company, then each of Messrs. Rolke and Zygmont will be entitled to receive a lump sum payment equal
to twelve months of severance payments at his then current base salary, plus a pro-rata portion of his Annual Bonus for the fiscal
year in which his termination occurs based on actual achievement of the applicable bonus objectives and/or conditions for such year,
plus continuation of medical benefits. If Mr. Rolke’s or Mr. Zygmont’s employment is terminated as a result of
a “Covered Termination Event” in connection with a change in control of the Company, then each of Messrs. Rolke and Zygmont
will be entitled to receive a lump sum payment equal to one times the sum of his then current base salary, plus his target bonus in effect
for the year in which his termination of employment occurs, plus a pro-rata portion of his Annual Bonus for the fiscal year in which
his termination occurs based on actual achievement of the applicable bonus objectives and/or conditions for such year, continuation of
medical benefits and acceleration of vesting of all outstanding and unvested equity-based awards. “Covered Termination Event”
means (i) a dismissal or discharge other than for Cause and other than by reason of death or disability, or (ii) a voluntary
termination for Good Reason.
Historically, our executive
compensation program has reflected our growth and development-oriented corporate culture. To date, the compensation of our Chief
Executive Officer and President and our other executive officers identified in the 2021 and 2020 Summary Compensation Table below, who
we refer to as the named executive officers, has consisted of a combination of base salary, bonuses and long-term incentive compensation
in the form of restricted common stock awards and incentive stock options. Our named executive officers who are full-time employees,
like all other full-time employees, are eligible to participate in our retirement and health and welfare benefit plans. As we transition
from a private company to a publicly traded company, we will evaluate our compensation values and philosophy and compensation plans and
arrangements as circumstances merit. At a minimum, we expect to review executive compensation annually with input from a compensation
consultant. As part of this review process, we expect the board of directors and the compensation committee to apply our values and philosophy,
while considering the compensation levels needed to ensure our executive compensation program remains competitive with our peers. In connection
with our executive compensation program, we will also review whether we are meeting our retention objectives and the potential cost of
replacing a key employee.
Summary Compensation Table
The following table shows
the total compensation awarded to, earned by, or paid to during the years ended December 31, 2021 and 2020 to our executive
officers who earned more than $100,000 during each of the fiscal years ended December 31, 2021 and 202 and were serving as
named executive officers as of such date.
Our named executive officers
for 2021 and 2020 who appear in the Summary Compensation Table are:
● James Rolke, our President and Chief Executive Officer; and
● Chester S. Zygmont, III, our Chief Financial Officer.
The following table sets
forth, for the years ended December 31, 2021 and 2020, all compensation paid, distributed or earned for services, including
salary and bonus amounts, rendered in all capacities by the Company’s named executive officers. The information contained below
represents compensation earned by the Company’s officers for their work related to the Company:
Non-equity incentive plan compensation ($)
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Outstanding Equity Awards at Fiscal Year End
The following table provides
information regarding the 2020 Equity Incentive Plan awards for each named executive officer outstanding as of December 31, 2021:
Option-based Awards Stock-based Awards
Director Compensation
The general policy of the
Board is that compensation for independent directors should be a fair mix between cash and equity-based compensation. Additionally, the
Company reimburses directors for reasonable expenses incurred during the course of their performance. There are no long-term incentive
or medical reimbursement plans. The Company does not pay directors who are part of management for Board service in addition to their
regular employee compensation. The Board determines the amount of director compensation. The Board may delegate such authority to the
compensation committee. The following table provides a summary of compensation paid to directors during the fiscal year ended December 31,
2021.
The following table sets
forth the total cash and equity compensation paid to our non-employee directors for service on our board of directors during 2021:
Name Fees earned or paid in cash ($) Stock-based awards ($)(1) Total ($)
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ITEM 12. SECURITY OWNERSHIP
OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED SHAREHOLDER MATTERS
The following table also sets
forth information known to us regarding the beneficial ownership of our Common Stock as of April 13, 2022:
● each of our current officers and directors; and
● all current executive officers and directors of the Company, as a group.
Beneficial ownership is determined
according to the rules of the SEC, which generally provide that a person has beneficial ownership of a security if he, she or it possesses
sole or shared voting or investment power over that security, including options and warrants that are currently exercisable or exercisable
within 60 days. Shares of Common Stock issuable pursuant to options or warrants are deemed to be outstanding for purposes of computing
the beneficial ownership percentage of the person or group holding such options or warrants but are not deemed to be outstanding for
purposes of computing the beneficial ownership percentage of any other person.
The beneficial ownership of
our Common Stock is based on 15,082,771 shares of Common Stock issued and outstanding as of April 13, 2022.
Unless otherwise indicated,
we believe that all persons named in the table have sole voting and investment power with respect to all shares of Common Stock owned
by them.
Name Shares %
Five Percent Holders:
Armistice Capital Master Fund Ltd.(3) 1,293,541 8.6 %
LifeSci Venture Partners II, LP & Affiliates(4) 1,043,749 6.9 %
Directors and Officers of Revelation(6):
All Directors and Officers as a Group (Six Individuals) 3,671,004 24.3 %
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ITEM 13. CERTAIN RELATIONSHIPS AND RELATED
PERSON TRANSACTIONS, AND DIRECTOR INDEPENDENCE
Petra
On January 21, 2020,
Petra issued an aggregate of 3,593,750 shares of its common stock (“Founder Shares”) for an aggregate purchase
price of $25,000, or approximately $0.007 per share, to Petra Investment Holdings, LLC (the “Sponsor”). On August 24,
2020, pursuant to an amendment to the terms of Petra’s offering, the Sponsor agreed to cancel 1,437,500 Founder Shares, resulting
in an aggregate amount of 2,156,250 Founder Shares outstanding.
Between May 2020 and
September 2020, our sponsor agreed to transfer 10,000 Founder Shares to each of our then director nominees, Messrs. Dobkin, Hayes,
Nicholson, Dennis and Angelides. Mr. William Carson subsequently replaced Mr. Angelides as a director, although Mr. Carson
has not yet been transferred any Founder Shares.
Between May 2020 and
September 2020, our Sponsor transferred 10,000 Founder Shares to each of our then director nominees, Messrs. Dobkin, Hayes, Nicholson,
Dennis and Angelides. Mr. William Carson subsequently replaced Mr. Angelides as a director, although Mr. Carson has not
yet been transferred any Founder Shares.
On October 7, 2020,
the Sponsor agreed to cancel an additional 143,750 Founder Shares, resulting in an aggregate amount of 1,962,500 Founder Shares outstanding
and held by the Sponsor and 50,000 shares outstanding and held by our directors and Mr. Angelides.
Simultaneously with the consummation
of the IPO, Petra completed the private sale of an aggregate of 3,150,000 private warrants (the “Private Warrants”)
to the Sponsor at a purchase price of $1.00 per Private Warrant, generating gross proceeds to Petra of $3,150,000.
At inception, our Sponsor,
Petra Investment Holdings LLC, loaned us an aggregate of $140,000 on a non-interest bearing basis for payment of expenses related to
the IPO pursuant to a promissory note issued to Sponsor by us, which allows us to borrow up to an aggregate principal amount of $150,000.
The note was repaid on October 16, 2020, including prior advances of $10,000 converted into the note, less $25,000 applied to the purchase
of Founder Shares.
On October 16, 2020,
Petra consummated the sale of an additional 278,151 Units (the “Over-Allotment Option Units”) at $10.00
per Unit, generating gross proceeds of $2,781,510. Simultaneously with the closing of the sale of additional units, Petra consummated
the sale of an additional 83,446 Private Warrants at a price of $1.00 per Private Warrant, generating total proceeds of $83,446.
Following the closing of the over-allotment option and sale of additional Private Warrants, an aggregate amount of $73,509,325 was placed
in Petra’s Trust Account established in connection with the IPO.
In addition, the Founder
Shares held by the Sponsor (prior to the exercise of the over-allotment) included an aggregate of up to 262,500 Founder Shares subject
to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment option was not exercised in full. Since the underwriters
exercised the over-allotment option in part, 192,962 Founder Shares were subject to forfeiture and were cancelled by the Sponsor on December 30,
2020, resulting in 1,769,538 Founder Shares held by the Sponsor.
The Petra IPO prospectus
and original charter provided that Petra initially had until October 13, 2021 to complete its initial business combination. At a
special meeting of Petra’s stockholders held on October 9, 2021 (the “October 2021 Special Meeting”),
Petra’s stockholders approved a proposal to amend Petra’s second amended and restated certificate of incorporation, to extend
the date by which Petra has to consummate a business combination from October 13, 2021 to November 13, 2021, plus an option
for Petra to further extend such date to December 13, 2021 (which option was exercised), plus an option for Petra to further extend
such date to January 13, 2022 (which option was exercised) (all three such extensions, the “Extensions”).
Petra’s stockholders
elected to redeem an aggregate of 2,544,127 shares in connection with the October 2021 Special Meeting. As of October 12, 2021,
following such redemptions and the deposit of the initial Contribution described below, the amount of funds remaining in the Trust Account