10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

xQUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2015

or

oTRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from            to            

Commission file number: 000-54192

REVA MEDICAL, INC.

(Exact name of registrant as specified in its charter)

Delaware	33-0810505
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

5751 Copley Drive San Diego, CA 92111	(858) 966-3000
(Address of principal executive offices,	(Registrant’s telephone number
including zip code)	including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes  x  No  o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes  x  No  o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer  o	Accelerated filer  o
Non-accelerated filer  o	Smaller reporting company  x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes  o  No  x

As of May 1, 2015, a total of 33,579,778 shares of the registrant’s Common Stock, $0.0001 par value per share, were outstanding.

REVA MEDICAL, INC.

FORM 10-Q — QUARTERLY REPORT

For the Quarter Ended March 31, 2015

Table of Contents

	Page
PART I. FINANCIAL INFORMATION	1
Item 1. Unaudited Consolidated Financial Statements	1
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	12
Item 3. Quantitative and Qualitative Disclosures about Market Risk	19
Item 4. Controls and Procedures	20
PART II. OTHER INFORMATION	21
Item 1. Legal Proceedings	21
Item 1A. Risk Factors	21
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3. Defaults upon Senior Securities	21
Item 4. Mine Safety Disclosures	21
Item 5. Other Information	22
Item 6. Exhibits	22
SIGNATURES	23

REFERENCES

Corporate Information

We incorporated in Delaware in October 2010. Our principal executive offices are located at 5751 Copley Drive, San Diego, CA 92111, U.S.A., and our telephone number is (858) 966-3000. Our website address is www.revamedical.com. The information on, or accessible through, our website is not part of this report. Unless the context implies otherwise, references in this report and the information incorporated herein by reference to “REVA Medical,” “REVA,” the “Company,” “we,” “us,” and “our” refer to REVA Medical, Inc.

Currency

Unless indicated otherwise in this report, all references to “$” or “dollars” refer to United States dollars, the lawful currency of the United States of America. References to “A$” refer to Australian dollars, the lawful currency of the Commonwealth of Australia.

Trademarks

The names ReZolve® and FantomTM are trademarked by us. All other trademarks, trade names, and service marks appearing in this report are the property of their respective owners. Use or display by us of other parties’ trademarks, trade dress, or products is not intended to and does not imply a relationship with, or endorsement or sponsorship of, us by the trademark or trade dress owner.

i

PART I.  FINANCIAL INFORMATION

Item 1. Unaudited Consolidated Financial Statements

REVA Medical, Inc.

Consolidated Balance Sheets

(Unaudited)

(in thousands, except share and per share amounts)

	December 31,			March 31,
	2014			2015
Assets
Current Assets:
Cash and cash equivalents	$	25,814		$	20,583
Short-term investments	995			995
Prepaid expenses and other current assets	406			361
Total current assets	27,215			21,939
Property and Equipment, net	2,920			2,931
Other Non-Current Assets	60			60
Total Assets	$	30,195		$	24,930
Liabilities and Stockholders’ Equity (Deficit)
Current Liabilities:
Accounts payable	$	651		$	632
Accrued expenses and other current liabilities	2,213			1,182
Total current liabilities	2,864			1,814
Long-Term Liabilities:
Convertible notes payable	37,780			49,990
Common stock warrant liability	15,389			21,280
Other long-term liabilities	611			1,037
Total long-term liabilities	53,780			72,307
Total Liabilities	56,644			74,121
Commitments and Contingencies (Note 7)
Stockholders’ Equity (Deficit):
Common stock — $0.0001 par value; 100,000,000 shares authorized; 33,529,778 and 33,579,778 shares issued and outstanding at December 31, 2014 and March 31, 2015 respectively	3			3
Class B common stock — $0.0001 par value; 25,000,000 shares authorized; no shares issued or outstanding	—			—
Undesignated preferred stock — $0.0001 par value; 5,000,000 shares authorized; no shares issued or outstanding	—			—
Additional paid-in capital	226,094			226,709
Accumulated deficit	(252,546		)	(275,903		)
Total Stockholders’ Equity (Deficit)	(26,449		)	(49,191		)
Total Liabilities and Stockholders’ Equity (Deficit)	$	30,195		$	24,930

The accompanying notes are an integral part of these financial statements.

1

REVA Medical, Inc.

Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)

(in thousands, except share and per share amounts)

	Three Months Ended
	March 31,
	2014			2015
Operating Expense:
Research and development	$	4,879		$	3,264
General and administrative	2,393			1,589
Loss from operations	(7,272		)	(4,853		)
Other Income (Expense):
Interest income	3			3
Interest expense	—			(465		)
Loss on change in fair value of convertible notes payable and warrant liability	—			(18,101		)
Other income (expense)	(7		)	59
Other income (expense)	(4		)	(18,504		)
Net Loss and Comprehensive Loss	$	(7,276	)	$	(23,357	)
Net Loss Per Common Share:
Net loss per share, basic and diluted	$	(0.22	)	$	(0.70	)
Shares used to compute net loss per share, basic and diluted	33,339,779			33,468,431

The accompanying notes are an integral part of these financial statements.

2

REVA Medical, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Three Months Ended
	March 31,
	2014			2015
Cash Flows from Operating Activities:
Net loss	$	(7,276	)	$	(23,357	)
Non-cash adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	264			260
Stock-based compensation	1,142			555
Interest on convertible notes payable	—			465
Loss on change in fair value of convertible notes payable and warrant liability	—			18,101
Other non-cash expenses	5			3
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	62			45
Accounts payable	(401		)	(9		)
Accrued expenses and other current liabilities	(411		)	(986		)
Long-term liabilities	(34		)	(39		)
Net cash used for operating activities	(6,649		)	(4,962		)
Cash Flows from Investing Activities:
Purchases of property and equipment	(216		)	(281		)
Maturities of investments	498			—
Net cash provided by (used for) investing activities	282			(281		)
Cash Flows from Financing Activities:
Proceeds from issuances of common stock	170			62
Costs of issuing convertible notes payable and warrants	—			(50		)
Net cash provided by financing activities	170			12
Net decrease in cash and cash equivalents	(6,197		)	(5,231		)
Cash and cash equivalents at beginning of period	19,229			25,814
Cash and Cash Equivalents at End of Period	$	13,032		$	20,583
Supplemental Non-Cash Information:
Property and equipment in accounts payable	$	76		$	2

The accompanying notes are an integral part of these financial statements

3

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1.  Background and Basis of Presentation

Background:  REVA Medical, Inc. (“REVA” or the “Company”) was incorporated in California in 1998 under the name MD3, Inc. In March 2002, we changed our name to REVA Medical, Inc. In October 2010, we reincorporated in Delaware. We established a non-operating wholly owned subsidiary, REVA Germany GmbH, in 2007. In these notes the terms “us,” “we,” or “our” refer to REVA and our consolidated subsidiary unless context dictates otherwise.

We do not yet have a product available for sale; our product(s) will become available following completion of required clinical studies with acceptable data and when, and if, we receive regulatory approval. We are currently developing and testing a bioresorbable stent to treat vascular disease in humans. This stent, which we have named Fantom, was first implanted in humans during December 2014. We are currently enrolling up to 110 patients in a clinical trial with Fantom from which we will obtain follow-up data at a six-month time point; we expect to complete enrollment in this trial prior to December 31, 2015. If this data has acceptable safety and efficacy results, we intend to apply for a European CE Marking, the regulatory approval that would allow us to commercialize Fantom in Europe.

In December 2010 we completed an initial public offering (the “IPO”) of our common stock in Australia and registered with the U.S. Securities and Exchange Commission (“SEC”) and, consequently, became an SEC filer. Our stock is traded in the form of CHESS Depository Interests (“CDIs”) on the Australian Securities Exchange (“ASX”); each share of our common stock is equivalent to ten CDIs. Our trading symbol is “RVA.AX.”

Basis of Presentation:  We have prepared the accompanying consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the SEC for reporting of interim financial information and, therefore, certain information and footnote disclosures normally included in annual financial statements have been omitted. Accordingly, these interim financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and with the audited financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Our consolidated financial statements include the accounts of REVA and our wholly owned subsidiary. All intercompany transactions and balances, if any, have been eliminated in consolidation. These interim consolidated financial statements are unaudited; the consolidated balance sheet as of December 31, 2014 was derived from the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. The interim financial statements have been prepared on the same basis as our annual financial statements and, in our opinion, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results of these interim periods have been included. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period.

Capital Resources:  We had cash and investments totaling $21,578,000 as of March 31, 2015, which we believe will be sufficient to fund our operating and capital needs for at least the next year. We have experienced recurring losses and negative cash flows from operating activities since our inception and, as of March 31, 2015, we had an accumulated deficit of $275,903,000. Until we generate revenue, and at a level to support our cost structure, we expect to continue to incur substantial operating losses and net cash outflows. Even if we do attain revenue, we may never become profitable and even if we do attain profitable operations, we may not be able to sustain that profitability or positive cash flows on a recurring basis. We may need to raise further capital in the future to fund our operations until such time as we can sustain positive cash flows. If we are unable to raise sufficient additional capital when needed, we may be compelled to reduce the scope of our operations and planned capital expenditures or sell certain assets, including our intellectual property assets.

Use of Estimates:  In order to prepare our financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Our most significant estimates relate to the fair value of our convertible notes payable, the fair value of our warrant liability, our operating expense accruals, including clinical study expenses, and stock-based compensation. Actual results could differ from our estimates.

4

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

2.  Fair Value Measurements

We measure the fair value of our financial and non-financial assets and liabilities at each reporting date in accordance with the fair value hierarchy according to GAAP, which requires that fair value measurements be classified and disclosed in one of the following three categories:

Level 1	—	Quoted market prices for identical assets or liabilities in active markets at the measurement date;
Level 2	—	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active or non-active markets, or other inputs that can be corroborated by observable market data for substantially the full term of an asset or liability; and,
Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of an asset or liability, including management’s best estimate of the factors that market participants would use in pricing an asset or liability at the measurement date.

We carry our convertible notes payable and common stock warrant liability at fair value. We carry our other financial instruments at amortized cost; these items include cash, investments, accounts payable, and accrued expenses. The carrying amounts of our cash and cash equivalents, accounts payable, and accrued expenses are considered to be reasonable estimates of their respective fair values due to their short-term nature and, therefore, fair value information is not provided in the following table. Utilizing the lowest level inputs available under the measurement hierarchy, the fair values of our measured financial instruments comprise the following (we had no Level 1 financial instruments):

	Level 2		Level 3
	(in thousands)
Fair Value at December 31, 2014:
Assets:
Certificates of deposit due in one year or less	$	991	$	—
Liabilities:
Convertible notes payable	$	—	$	37,780
Common stock warrant liability	—		15,389
	$	—	$	53,169
Fair Value at March 31, 2015:
Assets:
Certificates of deposit due in one year or less	$	993	$	—
Liabilities:
Convertible notes payable	$	—	$	49,990
Common stock warrant liability	—		21,280
	$	—	$	71,270

Our Level 2 financial assets consist of certificates of deposit (“CDs”) that are held to maturity and carried at cost; their fair value is determined each reporting period through quoted market prices of similar instruments in active markets. Unrealized losses on these CDs as of December 31, 2014 and March 31, 2015 were $4,000 and $2,000, respectively.

5

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

2.  Fair Value Measurements (continued)

Our Level 3 financial liabilities, which are recurring, consist of convertible notes payable (the “Notes”) and warrants for the purchase of common stock, all of which were issued on November 14, 2014. The fair values of these liabilities are determined utilizing a binomial valuation model, which requires use of unobservable inputs that are determined by management, with the assistance of independent experts. These inputs represent our best estimates, but involve certain inherent uncertainties. We used the market value of the underlying stock, a life equal to the contractual life of the financial instrument, incremental borrowing rates and bond yields that correspond to instruments of similar credit worthiness and the instrument’s remaining life, an estimate of volatility based on the historical prices of our trading securities, and we made assumptions as to our abilities to test and commercialize our product(s), to obtain future financings when and if needed, and to comply with the terms and conditions of our Notes. A summary of the assumptions used to value the Notes and warrants is as follows:

	December 31,			March 31,
	2014			2015
Market price per share of common stock	$	3.35		$	4.34
Risk-free interest rate	2.30		%	1.81		%
Expected volatility of common stock	87.2		%	86.4		%
Expected life — years	4.87			4.63
Bond yield of equivalent securities	28.4		%	28.8		%

A significant change in the market price per share, expected volatility, or bond yield of equivalent securities, in isolation, would result in significantly higher or lower fair value measurements. In combination, changes in these inputs could result in a significantly higher or lower fair value measurement if the input changes were to be aligned, or could result in a minimally higher or lower fair value measurement if the input changes were of a compensating nature.

A total of $18,101 in unrealized losses arising from the change in fair value on our Level 3 financial liabilities was recorded during the three months ended March 31, 2015. Our Level 3 fair value activity during the current reporting period is as follows:

	Level 3
	(in thousands)
Balance at December 31, 2014	$	53,169
Losses from Change in Fair Value:
Convertible notes payable	12,210
Warrants to purchase common stock	5,891
Balance at March 31, 2015	$	71,270

3.  Convertible Notes Payable and Warrants to Purchase Common Stock

In November 2014, we issued 250 convertible notes payable, each with a face value of $100,000, for total cash proceeds of $25,000,000. The Notes are convertible into 11,506,155 shares of common stock, which is a conversion rate of $2.17275 per share. The Notes are convertible at any time at the holders’ election, except the Notes will automatically convert in the case where we have received a CE Mark approval for our Fantom product and have sustained a market trading price of A$0.60 per CDI for 20 consecutive trading days. The Notes mature on November 14, 2019, if not converted or redeemed earlier. Interest accrues on the Notes at the rate of 7.54 percent per annum, compounded annually, and is payable upon redemption or maturity; accrued interest is not payable or convertible upon conversion of the Notes. The Notes provide the holders a one-time option for cash redemption in January 2017, if not previously converted or redeemed, for the face value plus accrued interest.

6

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

3.  Convertible Notes Payable and Warrants to Purchase Common Stock (continued)

Following an analysis of the embedded and derivative features of the Notes upon their issuance in 2014, and a projection of the volatility of their effective interest rates under the cost method, we elected to utilize fair value accounting for the Notes. Management believes the fair value method of accounting provides a more appropriate presentation of these liabilities than would be provided under the cost method. The fair value of the Notes as of March 31, 2015 was calculated to be $49,990,000, which was $24,990,000 more than the unpaid principal balance of the Notes. The change in fair value of the Notes between December 31, 2014 and March 31, 2015 of $12,210,000 was recorded as a loss in the consolidated statement of operations.

In connection with issuing the Notes in November 2014, we issued warrants to the noteholders to purchase up to 8,750,000 shares of common stock at $2.17275 per share. The warrants are exercisable immediately and expire in November 2019. The exercise price of the warrants will increase to $2.6073 per share if, and when, we achieve full enrollment in our clinical trial of Fantom with the required number of patients that would provide data for a CE Mark application. None of the warrants had been exercised as of March 31, 2015.

The fair value of the warrants as of March 31, 2015 was calculated to be $21,280,000. The change in fair value of the warrant liability between December 31, 2014 and March 31, 2015 of $5,891,000 was recorded as a loss in the consolidated statement of operations.

4.  Balance Sheet Details

Property and Equipment and Accrued Expenses:  Components of our property and equipment and accrued expenses and other current liabilities are as follows:

	December 31,			March 31,
	2014			2015
	(in thousands)
Property and equipment:
Furniture, office equipment, and software	$	648		$	649
Laboratory equipment	5,187			5,447
Leasehold improvements	2,361			2,371
	8,196			8,467
Accumulated depreciation and amortization	(5,276		)	(5,536		)
	$	2,920		$	2,931
Accrued expenses and other current liabilities:
Accrued salaries and other employee costs	$	1,315		$	497
Accrued operating expenses	769			556
Accrued use taxes and other	129			129
	$	2,213		$	1,182

5.  Income Taxes

We have reported net losses for all periods through March 31, 2015; therefore, no provision for income taxes has been recorded since our inception. The net operating loss carryforwards arising from our net losses may be available to offset future taxable income for income tax purposes; however, under Internal Revenue Code (“IRC”) Sections 382 and 383, use of the net operating loss carryforwards, as well as our research tax credit carryforwards, may be limited based on cumulative changes in ownership. We have established a valuation allowance against our net deferred tax assets due to the uncertainty surrounding the realization of those assets and we, therefore, have no deferred asset or liability balance for any reporting period. We periodically evaluate the recoverability of the deferred tax assets and, when it is determined that it is more-likely-than-not that the deferred tax assets are realizable, the valuation allowance will be reduced. Due to our valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate.

7

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

6.  Stock-Based Compensation

The Plan: Our 2010 Equity Incentive Plan, as amended (the “Plan”), provides for grants of incentive and non-qualified stock options for purchase of our common stock at a price per share equal to the closing market price on the date of grant and for awards of restricted stock units and restricted stock for no consideration payable by the recipient. The number of shares reserved for issuance under the Plan may be increased annually by up to three percent of the outstanding stock of the Company and on January 1, 2015, an additional 1,002,893 shares were reserved for issuance under the Plan. An aggregate of 8,209,153 shares are reserved for issuance under the Plan as of March 31, 2015. All stock issuances under the Plan are made with new shares from our authorized but unissued common stock. The term of grants and awards under the Plan may not exceed ten years.

Employees, non-employee directors, and consultants are eligible to participate in the Plan. For purposes of determining stock-based compensation expense, we include non-employee directors with employees; we account for consultant compensation expense separately.

No tax benefits arising from stock-based compensation have been recognized in the consolidated statements of operations and comprehensive loss through March 31, 2015.

Option activity under the Plan is as follows:

			Weighted
			Average
	Options		Exercise
	Outstanding		Price
Balance at December 31, 2013	4,046,650		$	7.15
Granted	637,000		$	3.53
Cancelled	(180,500	)	$	6.61
Exercised	(259,725	)	$	0.95
Balance at December 31, 2014	4,243,425		$	7.01
Granted	352,500		$	4.00
Cancelled	(107,342	)	$	4.71
Exercised	(50,000	)	$	1.25
Balance at March 31, 2015	4,438,583		$	6.89

The majority of options granted prior to 2015 vest over four years, with 25 percent vesting on the one-year anniversary of the vesting commencement date and 75 percent in equal monthly installments thereafter and those options are exercisable at any time but, if exercised, are subject to a lapsing right of repurchase by us at the exercise price until fully vested. During March 2015, we granted a total of 316,000 options that vest based on certain performance achievements of the Company. We estimated the vesting term, which ranges from approximately nine months to two years with a weighted average vesting term of 15 months, on the date of grant based on our internal timelines and operating projections.

During July 2012, January 2013, and May 2013 we awarded 33,000 shares, 40,000 shares, and 47,500 shares, respectively, of restricted stock; 25 percent of each award vests on each annual anniversary date of the award. Through March 31, 2015, none of the restricted stock has been cancelled.

During March 2015, we awarded 824,200 restricted stock units (“RSUs”) to employees. Each RSU entitles the employee to one share of our common stock upon vesting. The RSUs vest based on certain performance achievements of the Company. We estimated the vesting term, which ranges from approximately 14 months to two years with a weighted average vesting term of 17 months, on the date of award based on our internal timelines and operating projections. Through March 31, 2015, none of the RSUs have vested and none have been cancelled.

8

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

6.  Stock-Based Compensation (continued)

Grants and Awards to Employees:  We account for option grants, restricted stock awards, and RSU awards to employees based on their estimated fair values on the date of grant or award, with the resulting stock-based compensation recorded over the vesting period on a straight-line basis. For the options and RSUs that vest upon performance achievements, we additionally estimate the probability that the performance targets will be met and record only the compensation expense based on these probabilities during the vesting period; during the three months ended March 31, 2015, the probabilities assigned to such options and RSUs ranged from 50 percent to 80 percent. Stock-based compensation arising from employee options and awards under the Plan is as follows:

	Three Months Ended March 31,
	2014		2015
	(in thousands)
Research and development	$	288	$	295
General and administrative	778		232
Total stock-based compensation	$	1,066	$	527

The fair value of restricted stock and RSUs awarded is equal to the closing market price of our common stock on the date of award. The fair value of options granted was estimated using the following weighted-average assumptions:

	Three Months Ended March 31,
	2014		2015
Risk-free interest rate	2.27	%	1.69	%
Expected volatility of common stock	59.3	%	56.4	%
Expected life in years	6.25		5.71
Dividend yield	0	%	0	%

The assumed risk-free interest rate was based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected life of the option. The assumed volatility was calculated from the historical market prices of a selected group of publicly traded companies considered to be our peers; we use peer group data due to the fact that we have limited historical trading data. For options that vest based on passage of time, the expected option life was calculated using the simplified method under the accounting standard for stock compensation and a ten-year option expiration; we use the simplified method because we do not yet have adequate history as a public company to establish a reasonable expected life. For options that vest based on performance achievements, the expected life was calculated based on the vesting periods estimated by management and a ten-year option expiration. The expected dividend yield of zero reflects that we have not paid cash dividends since inception and do not intend to pay cash dividends in the foreseeable future. The options granted to employees during the three months ended March 31, 2015 had a weighted average grant date fair value of $2.07.

The aggregate intrinsic value of options exercised during the three months ended March 31, 2014 and 2015 was $557,000 and $135,000, respectively.

9

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

6.  Stock-Based Compensation (continued)

Stock Options to Consultants:  We account for stock options granted to consultants at their fair value. Under this method, the fair value is estimated at each reporting date during the vesting period using the Black-Scholes option-pricing model. The resulting stock-based compensation expense, or income if the fair value declines in a reporting period, is recorded over the consultant’s service period. Options to purchase 110,000 shares of common stock were granted to consultants during the three months ended March 31, 2014; no options were granted to consultants during the three months ended March 31, 2015. Stock-based compensation expense or (income) arising from consultant options granted under the Plan is as follows:

	Three Months Ended March 31,
	2014			2015
	(in thousands)
Research and development	$	79		$	1
General and administrative	(3		)	27
Total stock-based compensation	$	76		$	28

The weighted-average fair value of unvested consultant options at March 31, 2014 and 2015 was estimated to be $0.73 and $2.60 per share, respectively, based on the following weighted-average assumptions:

	March 31,
	2014		2015
Risk-free interest rate	2.68	%	1.94	%
Expected volatility of common stock	59.3	%	57.2	%
Expected life in years	9.45		8.83
Dividend yield	0	%	0	%

The assumed risk-free interest rate was based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected life of the option. The assumed volatility was calculated from the historical market prices of a selected group of publicly traded companies considered to be our peers; we use peer group data due to the fact that we have limited historical trading data. The expected option life is the remaining term of the option. The expected dividend yield of zero reflects that we have not paid cash dividends since inception and do not intend to pay cash dividends in the foreseeable future.

7.  Commitments and Contingencies

We have licensed certain patents and other intellectual property rights related to the composition and coating of our bioresorbable stent and our other biomaterial products. Terms of these licenses include provisions for royalty payments on any future sales of products, if any, utilizing this technology, with provisions for minimum royalties once product sales begin. The amount of royalties varies depending upon type of product, use of product, stage of product, location of sale, and ultimate sales volume, and ranges from a minimum of approximately $25 per unit to a maximum of approximately $100 per unit sold, with license provisions for escalating minimum royalties that could be as high as $2.2 million per year. Additionally, in the event we sublicense the technology and receive certain milestone payments, the licenses require that up to 40 percent of the milestone amount be paid to the licensors. Additional terms of the technology licenses include annual licensing payments of $175,000 until the underlying technology has been commercialized. Terms of the licenses also include other payments to occur during commercialization that could total $950,000, payment of $350,000 upon a change in control of ownership, payments of up to $300,000 annually to extend filing periods related to certain technology, and payment of patent filing, maintenance, and defense fees. The license terms remain in effect until the last patent expires.

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REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

8.  Net Loss Per Common Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method, as applicable. For purpose of this calculation, common stock options and restricted stock subject to forfeiture are considered to be common stock equivalents and are included in the calculation of diluted net loss per share only when their effect is dilutive. For the three month reporting periods, the following weighted average shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive.

	Three Months Ended March 31,
	2014	2015
Options to purchase common stock	4,293,388	4,320,093
Unvested restricted stock	103,694	73,569
Restricted stock units	—	210,629
Warrants to purchase common stock	—	8,750,000
Common share equivalents from convertible notes	—	11,506,156
Total weighted average shares excluded	4,397,082	24,860,447

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

You should read the following discussion and analysis of our financial condition and results of operations in conjunction with our unaudited consolidated financial statements and related notes thereto included in this Quarterly Report on Form 10-Q and with our consolidated financial statements and the related notes thereto that are contained in our Annual Report on Form 10-K for the year ended December 31, 2014. In addition to historical information, the following discussion and analysis includes forward-looking statements that involve risks, uncertainties, and assumptions. Forward-looking statements are all statements other than statements of historical facts, such as those statements regarding the projected timing and plans to complete clinical and regulatory evaluations, projected timing of our receipt of regulatory approvals and commencement of commercial sales, projected timing and plans to develop pipeline products, anticipated future net losses from operations, projected timing and objectives for future financing transactions, and anticipated cash and capital requirements.

We caution readers that forward-looking statements are not guarantees of future performance and actual results and the timing of events could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under “Risk Factors” in our Form 10-K for the year ended December 31, 2014. Investors are cautioned that many of the assumptions on which our forward-looking statements are based are likely to change after our forward-looking statements are made. Further, we may make changes to our business plans that could or will affect our results. We caution investors that we do not intend to update our forward-looking statements more frequently than quarterly notwithstanding any changes in our assumptions, changes in our business plans, our actual experience, or other changes, and we undertake no obligation to update any forward-looking statements.

Overview

We are a development stage medical device company working toward commercialization of our proprietary technologies to provide minimally invasive medical devices for the treatment of conditions in the human body. We are in the later stages of developing and clinically testing bioresorbable drug-eluting coronary stents. We refer to bioresorbable stents as “scaffolds” because they are not permanent devices like metal stents that are commonly used today. In clinical use, a scaffold is guided by x-ray by an interventional cardiologist during a minimally invasive surgery to a coronary artery location with a delivery catheter system, whereupon it is deployed to restore blood flow to the artery and medicate the artery to prevent further blocking, or restenosis. Our scaffolds combine our proprietary bioresorbable polymer with various designs, including deformable designs and our proprietary “slide and lock” non-deformable designs. Our scaffolds are designed to offer full x-ray visibility, clinically relevant sizing, and a controlled and safe resorption rate.

Our stent products have not yet been approved for sale and will require successful clinical trial results and regulatory approval before they can generate sales. We have invested significant time and funds in development, having performed scientific research, engineering development, and testing in laboratory and preclinical studies. We have developed, tested, and selected the polymer formulation, tested and selected the anti-restenotic drug and coating process, created and iterated the device design, and identified and implemented methods and processes to produce and test the scaffold. We designed and performed extensive preclinical tests that ranged from bench and engineering studies to in vitro and in vivo laboratory studies. In 2007, we enrolled patients in a small human clinical study that proved the viability of the technology while confirming the areas needing further development. We have been developing and advancing our scaffolds in both design and polymer composition since that study and have undertaken significant testing that has shown the viability of the technology across various models.

We are currently enrolling patients in a clinical trial of our Fantom scaffold. We intend to enroll up to 110 patients in this trial during 2015, obtain follow-up data at a six-month time point, and if this data has acceptable safety and efficacy results, apply for regulatory approval in mid-2016. We also intend to enroll up to 110 supplemental patients with Fantom to obtain data to support a potential commercial distribution arrangement. Prior to developing Fantom, we had enrolled a total of 165 patients in three clinical trials between June 2007 and January 2014 with predecessor scaffolds that were developed utilizing our proprietary x-ray visible polymer in combination with our “slide and lock” stent design. While these predecessor scaffolds demonstrated viability of the technology, we believe the enhanced characteristics of Fantom better position it for commercial success. Fantom’s enhanced features include a unibody design, lower strut thickness, smaller crossing profile, optimized polymer properties, and streamlined manufacturing processes, while still maintaining all the beneficial features of our prior scaffolds. In March 2014 we announced Fantom as our sole focus for development and testing and concurrently reduced headcount by approximately 45 percent and reduced other overhead costs to a lesser extent.

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Our current plan is to apply for European CE Marking, the regulatory approval that would allow us to sell our scaffolds in Europe and other countries that recognize the CE Mark. When, and if, we receive CE Mark approval, we will evaluate how best to implement our sales, marketing, and distribution strategies for commercialization. While our Fantom scaffold could be approved for sale in late 2016 or early 2017, our efforts to generate substantial revenue and achieve positive cash flows from our operations may take several years, even if our clinical results are favorable.

In order to produce quantities of our scaffold large enough to accommodate commercial needs, when that time arrives, we will need to scale up our manufacturing processes and expand our capabilities to allow for such things as additional scaffold sizes. We have developed plans and have begun implementation of the methods and processes for such manufacturing scale-up, including work on additional product sizes. We will continue implementation of manufacturing preparedness through 2015 and as we approach commercialization.

During the course of our product development and testing, we have invented, co-invented, and licensed a portfolio of proprietary technologies. Our design-related technologies have been invented by our employees and consultants and our materials-related technologies have been either invented by our employees or licensed from, or co-invented with, Rutgers, The State University of New Jersey. We consider our patent portfolio to be significant and have invested considerable time and funds to develop and maintain it. Our goal is to continue to perform feasibility tests on additional technologies in our patent portfolio as our resources allow and, if feasibility is proven, determine a course of development for additional products.

We perform all of our research and development activities from one location in San Diego, California. As of March 31, 2015, we had 51 employees, a majority of which are degreed professionals and six of whom are PhDs. We leverage our internal expertise with contract research and preclinical laboratories, outside catheter manufacturing, and other outside services as needed. We have three clean rooms and multiple engineering and chemistry labs at our facility, in addition to our corporate and administrative office. We are ISO certified to the medical device standard 13485:2012 and intend to maintain the certification to support our commercialization plans.

In November 2014, we completed a financing to provide ongoing capital for our operations, including the Fantom clinical trial and application for CE Mark. This financing comprised the issuance of 250 senior unsecured convertible notes, each with a face value of $100,000, and warrants to purchase 8,750,000 shares of our common stock. We received cash proceeds of $25.0 million from the notes and have the potential to receive up to an additional $22.8 million cash proceeds when, and if, the warrants are exercised. Both the notes and the warrants have a five-year maturity or expiration, respectively.

We have not yet developed a product to a saleable stage and we have not, therefore, generated any product or other revenues. Our development efforts have been funded with a variety of capital received from angel investors, venture capitalists, strategic partners, hedge funds, the proceeds from our IPO in 2010, and the issuance of convertible notes in November 2014. Since our inception, we have received approximately $153.9 million in equity proceeds and $53.5 million from issuances of notes payable ($28.5 million of the notes payable were converted to common stock upon our IPO in 2010). As of March 31, 2015, we had approximately $21.6 million in cash and investments available for operations, which we believe will be sufficient to fund our operating and capital needs for at least the next year. We have incurred substantial losses since our inception; as of March 31, 2015, we had accumulated a deficit of approximately $275.9 million.

We expect our losses to continue for the next several years as we continue our development work, clinical studies, and preparations for commercialization and, if these efforts are successful and we are able to obtain approval to sell our products, we expect to commence product sales thereafter. In order to successfully transition to profitable operations, we will need to achieve a level of revenues and product margins to support the Company’s cost structure. Until such time as we generate positive cash flow, we plan to continue to fund our operating and capital needs by utilizing our current cash and investments and by raising additional capital through equity or debt financings or strategic or other transactions, if the warrants issued in November 2014 are not exercised, or not exercised on a timeframe that coincides with our cash needs.

Our company was founded in California in June 1998 and named MD3, Inc. We changed our name to REVA Medical, Inc. in March 2002. We reincorporated from the State of California to the State of Delaware in October 2010; as a result, the rights of our stockholders are governed by the Delaware General Corporation Law. We formed a wholly owned subsidiary in Germany in 2007 to facilitate our clinical trials and our planned commercialization of products; we have not used this subsidiary yet for any operating activities.

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Key Components of our Results of Operations

Since we are still in a pre-revenue stage and our activities are focused on further developing and testing our bioresorbable coronary scaffold with the goal of commercially selling it, as well as performing minimal research and tests to determine the feasibility of other product possibilities, our operating results primarily consist of research and development expenses, including costs to perform clinical trials, general and administrative expenses, and other expenses that are primarily the costs of the convertible notes and warrants that we issued in November 2014 to provide the funds to continue our developments efforts.

Research and Development Expenses:  Our research and development expenses arise from a combination of internal and external costs. Our internal costs primarily consist of employee salaries and benefits, facility and other overhead expenses, and engineering and other supplies that we use in our labs for prototyping, testing, and producing our scaffolds and other product possibilities. Our external costs primarily consist of contract research, engineering consulting, polymer consulting and certain production costs, polymer lasing costs, catheter system and anti-restenotic drug purchases, preclinical and clinical study expenses, and license fees paid for the technology underlying our polymer materials. All research and development costs are expensed when incurred.

Historically, our research and development expenses have represented between 70 and 75 percent of our total operating expenses. Upon our change in development programs to Fantom in early 2014, we saw a decrease in research and development expenses, primarily due to a concurrent reduction in headcount by approximately 46 percent upon the change and a reduction of other development and clinical trial expenses due to the earlier stage of development for Fantom compared to the predecessor program. Research and development expenses as a percentage of our total operating expenses were 65 percent for the year ended December 31, 2014 and 67 percent for the three months ended March 31, 2015. We expect our research and development expense to continue to increase during the remainder of 2015 as we continue the clinical enrollment and testing of Fantom. We are currently enrolling up to 110 patients in the clinical trial with Fantom. We plan to obtain follow-up data at a six-month time point, and if this data has acceptable safety and efficacy results, apply for regulatory approval of Fantom in mid-2016. We also plan to enroll up to 110 supplemental patients with Fantom to obtain data for other business purposes. We expect to incur increasing expenses in the future for development of final manufacturing processes and equipment as we prepare for commercialization and as we research the feasibility of developing additional products from technology in our intellectual property portfolio.

General and Administrative Expenses:  Our general and administrative expenses consist primarily of salaries and benefits for our executive officers and administrative staff, corporate office and other overhead expenses, legal expenses including patent filing and maintenance costs, audit and tax fees, investor relations and other public company costs, and travel expenses. Although our patent portfolio is one of our most valuable assets, we record legal costs related to patent development, filing, and maintenance as expense when the costs are incurred since the underlying technology associated with these assets is purchased or incurred in connection with our research and development efforts and the future realizable value cannot be determined.

Historically, our general and administrative expenses have represented between 25 and 30 percent of our total operating expenses; they represented 35 percent of total operating expenses for the year ended December 31, 2014 and 33 percent for the three months ended March 31, 2015. We anticipate that we will continue to invest in patents at similar levels as we have in the past. Additionally, we anticipate that we will expand our corporate infrastructure in late 2015 and 2016 to continue to support the needs of being a public company and to prepare for commercial sales of our products, which will increase our general and administrative expenses accordingly. We also expect to begin to incur sales and marketing expenses beginning in 2016 as we prepare for product sales in the event we receive CE Marking.

Other Income and Expense:  Since our IPO in 2010 and through October 2014, our other income and expense was relatively immaterial and primarily comprised interest income on investments and gains and losses from foreign currency fluctuations. Following our issuance of convertible notes and warrants in November 2014, the components of other income and expense also include interest expense on the notes and losses related to the changes in fair values of both the notes and warrants. We recorded the notes and warrants at fair value upon issuance and we remeasure their fair values at each reporting date. If those fair values change, we record a corresponding gain (upon a decrease in fair value) or loss (upon an increase in fair value) in the consolidated statement of operations. Accordingly, we expect our other income and expense to fluctuate, and possibly fluctuate by a significant amount, in future periods by the gains or losses on changes in fair value until such time as the notes are either converted into common stock or repaid and the warrants are either exercised or expire. Also, we will continue to accrue and record interest expense on the notes at the rate of 7.54 percent per annum until they are either converted or repaid. We do not expect any material changes in interest income or foreign currency gains or losses during the remainder of 2015.

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Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States. In preparing our financial statements and related disclosures, we are required to use estimates, assumptions, and judgments that affect the reported amounts of assets, liabilities, stockholders’ equity, expenses, and the presentation and disclosures related to those items. We base our estimates and assumptions on historical experience and other factors that we believe are reasonable under the circumstances. We evaluate our estimates and assumptions on an ongoing basis; changes in our estimates and assumptions are reasonably likely to occur from period to period. Additionally, actual results could differ significantly from the estimates we make. To the extent there are material changes in our estimates or material differences between our estimates and our actual results, our future financial statement presentation, financial condition, results of operations, and cash flows will be affected.

While we have other key accounting policies that are less subjective and, therefore, their application would not have a material impact on our reported results, we believe the following accounting policies involve a greater degree of judgment and complexity than our other accounting policies and, therefore, are the most critical to understanding and evaluating our consolidated financial condition and results of operations.

Research and Development Costs:  We expense research and development costs as incurred. Our preclinical and clinical study costs are incurred on a contract basis and generally span a period from a few months to longer than a year. We record costs incurred under these contracts as the work occurs and make payments according to contractual terms. Until a contract is completed, we estimate the amount of work performed and accrue for estimated costs that have been incurred but not paid. As actual costs become known, we adjust our accruals. We expect our clinical expense accruals to increase as we continue to initiate and enroll patients in clinical trials. We expect to make estimates of work performed throughout the term of these trials, each of which is expected to be five years or longer. As these costs increase, if our estimates are inaccurate, possible material changes to our accruals could be required, which could materially affect our results of operations within any fiscal period. To date, there have been no material changes in our research and development expense estimates, including our estimates for accrued clinical costs.

Stock-Based Compensation:  We recognize stock-based compensation expense in connection with stock option grants and restricted stock and restricted stock unit (“RSU”) awards to employees, directors, and consultants. We have granted options and restricted stock that vest based on the passage of time and we have granted options and RSUs that vest based on achievement of performance milestones.

For awards to employees and directors, we determine the amount of compensation expense by estimating the fair value of the option, stock, or RSU on the date award, with the resulting stock-based compensation recorded over the vesting period, which ranges from one to four years, on a straight-line basis. For stock options and RSUs that vest upon performance achievements, we additionally estimate the probability that the performance targets will be met and record only the portion of the compensation expense that represents these probabilities; during the three months ended March 31, 2015, the probabilities assigned to such options and RSUs ranged from 50 percent to 80 percent. All stock-based compensation expense is recorded as either research and development or general and administrative expense based on a recipient’s work classification. For stock options, we estimate the fair value by using the Black-Scholes option pricing model. For the model inputs, we use the fair value of the underlying common stock, a risk-free interest rate that corresponds to the expected life of the option, an expected option life of 6.25 years, and an estimate of volatility based on the market trading prices of comparative peer companies. The fair value of restricted stock and RSUs awarded is equal to the closing market price of our common stock on the date of award.  Additionally, we reduce the amount of recorded compensation expense to allow for potential forfeitures of the options; the forfeiture rate is based on our actual historical forfeitures and has ranged from approximately 2.3 percent to 3.4 percent.

For options granted to consultants, we estimate the fair value at the date of grant and at each subsequent accounting date and record compensation expense based on the fair value during the service period of the consultant, which is generally a four-year vesting period. We estimate the fair value by using the Black-Scholes option pricing model with the same approach to inputs and assumptions as we use to estimate the fair value of options granted to employees, except we use the remaining term as the expected life of the option.

As a result of our use of estimates for the fair value calculations and the performance-based achievement probabilities, if factors change and we use different assumptions, the amount of our stock-based compensation expense could fluctuate materially in the future. Also, we expect to increase the level of awards for options, restricted stock, and/or RSUs as we expand our workforce and prepare for commercialization, which could result in an increase of our stock-based compensation in the future.

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Notes Payable:  We analyze notes payable as of their issue date to determine their classification, issue discounts or premiums, and embedded or derivative features, if any. If embedded or derivative features exist, such as a right to convert notes into common stock, we evaluate the features in accordance with accounting guidance for derivative securities, determine whether such features would give rise to separate accounting, and, if they do, make an election to account for the notes at cost or at fair value.

We elected to account for the convertible notes we issued in November 2014 at fair value, which does not require separate accounting for derivative features. On the issue date, we record the difference, if any, between the issue price of the notes and their fair value as a gain or loss in the consolidated statement of operations. Until such time as the notes are converted into common stock or repaid, we accrue interest on the notes at the stated interest rate. We additionally remeasure the fair value of the notes at each reporting date and record a gain (upon decrease in fair value) or loss (upon an increase in fair value) for any change in fair value. Fair value is determined using a binomial valuation model, which requires the use of subjective assumptions, including unobservable inputs that are supported by little or no market activity. The assumptions represent our best estimates, but involve certain inherent uncertainties. Inputs to the model include the market value of the underlying stock, a life equal to the contractual life of the notes, incremental borrowing rates that correspond to debt with similar credit worthiness, estimated volatility based on the historical prices of our trading securities, and we make assumptions as to our abilities to test and commercialize our product(s), to obtain future financings when and if needed, and to comply with the terms and conditions of the notes. Since the determination of fair value is complex and involves the use of subjective assumptions, if our assumptions, estimates, or modeling approaches change and we use different assumptions or methods, our fair values could be materially different in the future.

Common Stock Warrants:  We record the fair value of the warrants we have issued for the purchase of common stock as a liability since they call for issuance of registered shares upon exercise, a condition that we may not be able to accommodate and which would then result in a net settlement of the warrants. Until the time the warrants are exercised or expire, the fair value is assessed at each reporting date utilizing a binomial valuation model with the same approach to inputs and assumptions as we use to estimate the fair value of our notes payable. Any change in fair value is recorded as a gain (upon a decrease in fair value) or loss (upon an increase in fair value) in the consolidated statement of operations. Since the determination of fair value of the warrants is complex and involves the use of subjective assumptions, if our assumptions, estimates, or modeling approaches change and we use different assumptions or methods, our fair values could be materially different in the future.

Results of Operations

During the first quarter of 2014, our operating activities focused on testing and commercial preparation of a predecessor version scaffold. In March 2014 we announced our Fantom scaffold as our sole focus for development and testing and concurrently reduced headcount by approximately 45 percent and reduced other overhead costs to a lesser extent. In addition to the development and testing of Fantom in 2014, we began the initial human clinical trial of Fantom in December of 2014. During the first quarter of 2015, our operating activities have consisted of further refinement of Fantom and clinical activities to support enrollment of patients with Fantom.

In November 2014, we issued 250 senior unsecured convertible notes, each with a face value of $100,000, and warrants to purchase 8,750,000 shares of our common stock. We received cash proceeds of $25.0 million from the notes. We account for the notes and warrant liability at their fair values and have recognized losses in the consolidated statement of operations for increase in fair value since the issuance date.

Comparison of the Three Months Ended March 31, 2014 and 2015

Our operating results for the three-month periods indicated are as follows (dollars in thousands):

	Three Months Ended
	March 31,					Change
	2014			2015		$			%
Research and development expense	$	4,879		$	3,264	$	(1,615	)	(33	)%
General and administrative expense	$	2,393		$	1,589	$	(804	)	(34	)%
Interest expense	$	—		$	465	$	465		100	%
Loss on change in fair values of convertible notes and warrant liability	$	—		$	18,101	$	18,101		100	%
Other income (expense)	$	(4	)	$	62	$	66		>100	%

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Research and development expense decreased $1,615,000, or 33 percent, for the three months ended March 31, 2015 compared to the three months ended March 31, 2014. This decrease was primarily a result of our change in product development and testing focus to Fantom in late March 2014, the related reduction in headcount on March 26, 2014, and the completion of patient enrollment in a predecessor scaffold clinical study in January 2014. Personnel costs, including benefits and stock-based compensation, decreased $587,000 primarily due to the approximate 46 percent decrease in headcount during March 2014; an additional $237,000 in severance benefits and payroll taxes recorded in 2014 was not repeated in 2015. Preclinical study costs decreased $368,000 between comparative periods due to the timing and type of testing performed. Direct materials, including purchased catheters and polymer lasing costs, decreased $270,000 because of the type and timing of Fantom development work in 2015 compared to the predecessor scaffold testing and scale-up work performed in 2014. The remainder of the change in research and development expenses between periods resulted from individually immaterial changes in clinical costs, lab supplies, quality control, engineering services, depreciation, and facilities expenses.

General and administrative expense decreased $804,000, or 34 percent, for the three months ended March 31, 2015 compared to the three months ended March 31, 2014. A combination of items contributed to this decrease. Personnel costs, including benefits and stock-based compensation expense, decreased $689,000 primarily due to a decrease of $514,000 in stock compensation upon final vesting of stock option grants made in 2010 for which there were no corresponding grants in 2015. Other personnel costs decreased $178,000 due to an approximate 44 percent decrease in headcount during March 2014. The remainder of the change in general and administrative expenses between periods was due to individually immaterial changes in travel and entertainment expenses, investor relations costs, office supplies, audit fees, depreciation, insurance, franchise taxes, and other overhead expenses.

Our other non-operating expenses during the first quarter of 2015 primarily arose from the issuance of convertible notes and warrants in November 2014. Interest expense of $465,000 on the convertible notes accrued during the three months ended March 31, 2015. We additionally recorded a $18,101,000 loss on the change in fair value of the notes and warrants during the three months ended March 31, 2015. Interest income was $3,000 and other income, which primarily arose from exchange rate gains, was $59,000 for the three months ended March 31, 2015.

Liquidity and Capital Resources

Sources of Liquidity

We are in the clinical testing phase of product development, but have not commercialized or generated revenue from the sale of any products and have incurred losses since our inception in June 1998. We do not anticipate having a product available for sale unless, and until, we successfully receive CE Marking or other regulatory approval, which we do not anticipate will occur until late 2016 at the earliest. We anticipate that we will continue to incur substantial net losses and cash outflows through at least 2016 as we continue our development work, conduct and complete preclinical and clinical trials, expand our corporate infrastructure, and prepare for the potential commercial launch of our products.

Our development efforts have been funded with a variety of capital received from angel investors, venture capitalists, strategic partners, hedge funds, the proceeds from our IPO in 2010, and the issuance of convertible notes in November 2014. Since our inception, we have received approximately $153.9 million in equity proceeds and $53.5 million from issuance of notes payable ($28.5 million of the notes payable were converted to common stock upon our IPO in 2010). As of March 31, 2015, we had approximately $21.6 million in cash and investments available for operations. We have incurred substantial losses since our inception; as of March 31, 2015, we had accumulated a deficit of approximately $275.9 million. The financing that we completed in November 2014 is intended to provide the ongoing capital for our operations, including the Fantom clinical trial and application for CE Mark. This financing was completed with the issuance of 250 senior unsecured convertible notes payable, each with a face value of $100,000, and warrants to purchase 8,750,000 shares of our common stock. We received gross cash proceeds of $25.0 million from the notes and have the potential to receive up to an additional $22.8 million cash proceeds when, and if, the warrants are exercised. Both the notes and the warrants have five-year lives.

We expect our losses to continue for the next several years as we continue our development work, clinical studies, and preparations for commercialization. In order to successfully transition to profitable operations, we will need to achieve a level of revenues and product margins to support the Company’s cost structure. Until such time as we generate positive cash flow, we plan to continue to fund our operating and capital needs by utilizing our current cash and investments and by raising additional capital through equity or debt financings, strategic or other transactions, or through the exercise of the warrants issued in November 2014. We currently have no set plans for raising additional capital.

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Cash Flows

Our cash flows for the periods indicated are as follows (dollars in thousands):

	Three Months Ended
	March 31,
	2014			2015
Net cash used for operating activities	$	(6,649	)	$	(4,962	)
Net cash provided by (used for) investing activities	282			(281		)
Net cash provided by financing activities	170			12
Net decrease in cash and cash equivalents	$	(6,197	)	$	(5,231	)

Net Cash Flow from Operating Activities

Net cash used for operating activities during the first three months of 2014 primarily reflects the net loss of $7,276,000 and the changes in operating assets and liabilities of $784,000. These items were offset by non-cash expenses of $1,142,000 for stock-based compensation, $264,000 of depreciation and amortization, and $5,000 of other non-cash expense.

Net cash used for operating activities during the first three months of 2015 primarily reflects the loss from operations of $4,853,000 and the changes in operating assets and liabilities of $989,000. These items were offset by non-cash expenses of $555,000 for stock-based compensation, $260,000 of depreciation and amortization, and $3,000 of other non-cash expense. The accrued interest on convertible notes and the loss on change in fair value of convertible notes and warrant liability were non-cash items that had no effect on cash flows.

Net Cash Flow from Investing Activities

Net cash provided by investing activities during the first three months of 2014 consisted of $498,000 in receipts upon the maturity of short-term investments, offset by $216,000 in purchases of lab and other equipment.

Net cash used for investing activities during the first three months of 2015 consisted of the purchase of lab and other equipment.

Net Cash Flow from Financing Activities

Cash provided by financing activities during the first three months of 2014 resulted solely from issuances of common stock upon the exercise of employee and consultant stock options.

Cash provided by financing activities during the first three months of 2015 resulted from $62,000 in proceeds from the issuance of common stock upon exercise of employee stock options, offset by payment of $50,000 in issuance costs from the financing completed in November 2014.

Operating Capital and Capital Expenditure Requirements

To date, we have not commercialized any products. We do not anticipate generating any revenue unless and until we successfully obtain CE Mark or other regulatory approval to sell, or license for sale, our scaffolds or one of our other product possibilities. We anticipate that we will continue to incur substantial net losses and cash outflows for the next several years as we continue our development work, conduct and complete preclinical and clinical trials, apply for regulatory approval to sell our products, expand our corporate infrastructure, prepare to commercially manufacture and sell our products, and collect cash from sales of our product(s).

We had cash and investments totaling $21.6 million as of March 31, 2015; we believe that these resources will be sufficient to meet our anticipated cash requirements during the next year. Additionally, the terms of the warrants that we issued in November 2014, which have a five-year life, call for the warrants to be exercised in cash, if they are exercised at all. We issued a total of 8,750,000 warrants; their exercise price is set at $2.17275 per share until such time as we complete enrollment of the CE Mark clinical trial of our Fantom scaffold; the exercise price increases to $2.6073 per share upon completion of enrollment, which we expect could occur during the third quarter of 2015. If the warrants are exercised, we have the potential to receive up to $22.8 million cash proceeds.

18

If the warrants are not exercised, or if they are not exercised in time to accommodate our cash flow needs, and if our available cash resources are insufficient to satisfy our liquidity requirements before we are able to maintain our operations from our cash inflows, or if we develop additional products or pursue new uses for our products, we may need to raise additional capital. Any such needed additional capital may not be available on reasonable terms, if at all. Additionally, we may be limited under the terms of the convertible notes as to the type, quantity, timing, or other aspects of a financing, unless the noteholders agree. Any financing, even one to which the noteholders agree, may result in additional dilution to our current securityholders, could have rights senior to those of our common stock, and/or could contain provisions that would restrict our operations. If we are unable to raise additional capital, if needed, we may be compelled to sell certain assets, including intellectual property assets. Even if we are able to commercialize our products and raise additional capital if and when needed, we may never become profitable, or if we do attain profitable operations, we may not be able to sustain profitability and cash flows on a recurring basis.

Because of the numerous risks and uncertainties associated with the development of medical devices, such as our bioresorbable scaffolds, we are unable to estimate the exact amounts of, or timing of, capital outlays and operating expenditures necessary to complete development, continue ongoing preclinical studies, conduct human clinical trials, successfully deliver a commercial product to market, and collect on our trade receivables. Our future funding requirements will depend on many factors, including, but not limited to:

·the time and effort it will take to successfully complete development and testing of our products;

·the scope, enrollment rate, and costs of our human clinical trials;

·the time and effort it will take to identify, develop, and scale-up manufacturing processes;

·the cost of establishing clinical and commercial supplies of our products;

·the scope of research and development for any of our other product opportunities;

·the cost of filing and prosecuting patentable technologies and defending and enforcing our patent and other intellectual property rights;

·the terms and timing of any collaborative, licensing, or other arrangements that we may establish;

·the requirements, cost, and timing of regulatory approvals;

·the cost and timing of establishing sales, marketing, and distribution capabilities; and,

·the effect of competing technological and market developments.

Future capital requirements will also depend on the extent to which we acquire or invest in businesses, products, and technologies; we currently have no commitments or agreements relating to any of these types of transactions.

Contractual Obligations, Commitments, and Contingencies

The following table summarizes our outstanding contractual obligations as of March 31, 2015 (dollars in thousands):

	Payments Due by Period
	< 1 Year		1-3 Years		Total
Operating lease obligations	$	649	$	1,290	$	1,939
Purchase obligations	68		15		83
Total contractual obligations	$	717	$	1,305	$	2,022

Off-Balance Sheet Arrangements

Not applicable.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

19

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, including our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of March 31, 2015, the end of the period covered by this Quarterly Report on Form 10-Q. Based on this evaluation, our Chief Executive Officer and our Chief Financial Officer concluded that our disclosure controls and procedures were effective as of March 31, 2015.

Changes in Internal Control Over Financial Reporting

There has been no change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended March 31, 2015 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

20

PART II.  OTHER INFORMATION

Item 1. Legal Proceedings

We may from time to time become subject to various claims and legal actions during the ordinary course of our business. We are not party to any legal proceedings at the date of filing of this Quarterly Report on Form 10-Q.

Item 1A. Risk Factors

Our business is subject to various risks, including those described in Item 1A “Risk Factors” of our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, which we strongly encourage you to review. There have been no material changes during the three months ended March 31, 2015, from the risk factors disclosed in Item 1A of our Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sales of Equity Securities

None.

Use of Proceeds from Registered Securities

In December 2010, we closed our initial public offering (“IPO”), in which we sold 77,272,730 CDIs, representing 7,727,273 shares of our common stock, at a price to the public of A$1.10 per CDI or A$11.00 per share. The aggregate offering price for CDIs sold in the offering was A$85.0 million (which equated to approximately US$84.3 million). The offer and sale of all of the CDIs in the initial public offering were registered under the Securities Act pursuant to a registration statement on Form S-1 (File No. 333-168852). We raised approximately $76.2 million in net proceeds after deducting placement agent fees and other offering expenses.

Through December 31, 2014, we had used approximately 96 percent of the IPO proceeds; during the three months ended March 31, 2015, we used the remainder. The proceeds were used in a manner generally consistent with our projections at the time of the IPO, as follows:

·$40.0 million was projected to be used for research and development activities, including advancement of our scaffolds and development of pipeline products, if any. Approximately $42.0 million was used for R&D.

·$10.0 million was projected to be used for clinical trials and approximately $6.0 million was used for that purpose.

·$4.0 million was projected to be used for commercial infrastructure, including manufacturing capacity expansion. Approximately $4.0 million was used for R&D equipment, laboratory improvements, and related infrastructure.

·The balance of the proceeds was expected to be used for working capital and other general corporate purposes and they were used for those purposes.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

21

Item 5. Other Information

Not applicable.

Item 6. Exhibits

The exhibits listed in the accompanying Index to Exhibits are filed or incorporated by reference as part of this Quarterly Report on Form 10-Q.

22

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this Quarterly Report on Form 10-Q to be signed on its behalf by the undersigned, thereunto duly authorized.

	REVA Medical, Inc.
Date: May 14, 2015	/s/ Robert B. Stockman
	Robert B. Stockman
	Chairman of the Board and Chief Executive Officer
	(Principal Executive Officer)
Date: May 14, 2015	/s/ Katrina L. Thompson
	Katrina L. Thompson
	Chief Financial Officer and Secretary
	(Principal Financial Officer and Principal Accounting Officer)

23

INDEX TO EXHIBITS

		Filed
		with this
Exhibit		Form	Incorporated by Reference
Number	Description of Exhibits	10-Q	Form	File No.	Date Filed
3.1	Amended and Restated Certificate of Incorporation		S-1/A	333-168852	10/22/2010
3.2	Amended and Restated Bylaws		S-1/A	333-168852	10/22/2010
3.3	Amendment No. 1 to the Amended and Restated Bylaws		8-K	000-54192	9/12/2014
4.1	Form of Stock Certificate		S-1/A	333-168852	11/12/2010
4.2	Form of Amended and Restated Investors’ Rights Agreement, by and among REVA Medical, Inc. and the holders of our common stock and convertible notes set forth therein		S-1/A	333-168852	11/12/2010
4.3	Convertible Note Deed dated September 25, 2014, by and between REVA Medical, Inc., Goldman Sachs International, and Senrigan Master Fund		8-K	000-54192	9/26/2014
31.1	Certification of Principal Executive Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended	X
31.2	Certification of Principal Financial Officer Required Under Rule 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended	X
32.1 *	Certification of Principal Executive Officer and Principal Financial Officer Required Under Rule 13a-14(b) of the Securities Exchange Act of 1934, as amended, and 18 U.S.C. §1350	X
99.1	Section 13 of the ASX Settlement Rules		S-1/A	333-168852	10/22/2010
101.INS	XBRL Instance Document	X
101.SCH	XBRL Taxonomy Extension Schema Document	X
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document	X
101.LAB	XBRL Taxonomy Extension Label Linkbase Document	X
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document	X

*These certifications are being furnished solely to accompany this quarterly report pursuant to 18 U.S.C. Section 1350, and are not being filed for purposes of Section 18 of the Securities Exchange Act of 1934 and are not to be incorporated by reference into any filing of REVA Medical, Inc., whether made before or after the date hereof, regardless of any general incorporation language in such filing.

24

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Robert B. Stockman, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of REVA Medical, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 14, 2015

/s/ Robert B. Stockman

Robert B. Stockman

Chairman and Chief Executive Officer

(principal executive officer)

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Katrina L. Thompson, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of REVA Medical, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:  May 14, 2015

/s/ Katrina L. Thompson

Katrina L. Thompson

Chief Financial Officer

(principal financial officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q of REVA Medical, Inc. (the “Company”) for the quarterly period ended March 31, 2015, as filed with the Securities and Exchange Commission (the “Report”), Robert B. Stockman, Chairman and Chief Executive Officer of the Company, and Katrina L. Thompson, Chief Financial Officer of the Company, do hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

·The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

·The information in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 14, 2015

/s/ Robert B. Stockman

Robert B. Stockman

Chairman and Chief Executive Officer

(principal executive officer)

/s/ Katrina L. Thompson

Katrina L. Thompson

Chief Financial Officer

(principal financial officer)

XML

Stock-Based Compensation (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended	33 Months Ended	0 Months Ended	12 Months Ended	1 Months Ended
	Mar. 31, 2015	Mar. 31, 2015	Jan. 02, 2015	Dec. 31, 2014	May 31, 2013	Jan. 31, 2013	Jul. 31, 2012
Equity awards to employees
Stock-Based Compensation
Term of options granted under the plan	10 years
Restricted stock
Stock-Based Compensation
Shares of restricted stock cancelled		0
2010 Equity Incentive Plan [Member]
Stock-Based Compensation
Number of shares added in reserve			1,002,893
Total number of shares in reserve with additional shares under the Plan	8,209,153	8,209,153
Tax benefits from stock based compensation	0
Vesting periods	4 years
Vesting percentage	25.00%
Percentage of remaining option grants vesting in equal monthly installments after the one-year anniversary of the vesting commencement date	75.00%
Options Outstanding
Balance at the beginning of period (in shares)	4,243,425		4,243,425	4,046,650
Granted (in shares)	352,500			637,000
Cancelled (in shares)	(107,342)			(180,500)
Exercised (in shares)	(50,000)			(259,725)
Balance at the end of period (in shares)	4,438,583	4,438,583		4,243,425
Weighted Average Exercise Price
Balance at the beginning of period (in dollars per share)	7.01		$ 7.01	$ 7.15
Granted (in dollars per share)	4.00			$ 3.53
Cancelled (in dollars per share)	4.71			$ 6.61
Exercised (in dollars per share)	1.25			$ 0.95
Balance at the end of period (in dollars per share)	6.89	6.89		$ 7.01
2010 Equity Incentive Plan [Member] | Minimum [Member]
Stock-Based Compensation
Performance achievement probability (percentage)	50.00%
2010 Equity Incentive Plan [Member] | Maximum [Member]
Stock-Based Compensation
Increment in the number of shares reserved under the Plan annually (as a percent)	3.00%
Term of options granted under the plan	10 years
Performance achievement probability (percentage)	80.00%
2010 Equity Incentive Plan [Member] | Equity awards to employees
Options Outstanding
Granted (in shares)	316,000
2010 Equity Incentive Plan [Member] | Equity awards to employees | Minimum [Member]
Stock-Based Compensation
Vesting period	P9M
2010 Equity Incentive Plan [Member] | Equity awards to employees | Maximum [Member]
Stock-Based Compensation
Vesting period	P2Y
2010 Equity Incentive Plan [Member] | Equity awards to employees | Weighted Average [Member]
Stock-Based Compensation
Vesting period	P15M
2010 Equity Incentive Plan [Member] | Restricted stock
Stock-Based Compensation
Annual vesting percent					25.00%	25.00%	25.00%
Shares of restricted stock awarded					47,500	40,000	33,000
2010 Equity Incentive Plan [Member] | Restricted stock units
Stock-Based Compensation
Number of shares awarded	824,200
Award vesting rights, description	1
Employee share of common stock upon vesting	1
Options vested	0
Options cancelled	0
2010 Equity Incentive Plan [Member] | Restricted stock units | Minimum [Member]
Stock-Based Compensation
Vesting period	P14M
2010 Equity Incentive Plan [Member] | Restricted stock units | Maximum [Member]
Stock-Based Compensation
Vesting period	P2Y
2010 Equity Incentive Plan [Member] | Restricted stock units | Weighted Average [Member]
Stock-Based Compensation
Vesting period	P17M

XML

Balance Sheet Details

3 Months Ended

Mar. 31, 2015

Balance Sheet Details.

Balance Sheet Details

4.  Balance Sheet Details

Property and Equipment and Accrued Expenses:  Components of our property and equipment and accrued expenses and other current liabilities are as follows:

	December 31,			March 31,
	2014			2015
	(in thousands)
Property and equipment:
Furniture, office equipment, and software	$	648		$	649
Laboratory equipment	5,187			5,447
Leasehold improvements	2,361			2,371
	8,196			8,467
Accumulated depreciation and amortization	(5,276		)	(5,536		)
	$	2,920		$	2,931
Accrued expenses and other current liabilities:
Accrued salaries and other employee costs	$	1,315		$	497
Accrued operating expenses	769			556
Accrued use taxes and other	129			129
	$	2,213		$	1,182

XML

Net Loss Per Common Share (Details)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Net Income Loss Per Common Share
Total weighted average shares excluded	24,860,447	4,397,082
Options to purchase common stock
Net Income Loss Per Common Share
Total weighted average shares excluded	4,320,093	4,293,388
Restricted stock
Net Income Loss Per Common Share
Total weighted average shares excluded	73,569	103,694
Restricted stock units
Net Income Loss Per Common Share
Total weighted average shares excluded	210,629
Warrants to purchase common stock
Net Income Loss Per Common Share
Total weighted average shares excluded	8,750,000
Common share equivalents from convertible notes
Net Income Loss Per Common Share
Total weighted average shares excluded	11,506,156

XML

Commitments and Contingencies (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Commitment and Contingencies
License provisions for escalating minimum royalties	$ 2,200,000
Annual licensing payment	175,000
Other payments of royalty agreement occur during commercialization	950,000
Contingent license fee payable only upon a change in ownership of licensee	350,000
Minimum [Member]
Commitment and Contingencies
Royalty payment per unit (in dollar per unit)	25
Maximum [Member]
Commitment and Contingencies
Royalty payment per unit (in dollar per unit)	100
Milestone amounts paid to the licensors (as a percent)	40.00%
Annual payments to extend filing periods related to certain technology	$ 300,000

XML

Convertible Notes Payable and Warrants to Purchase Common Stock

3 Months Ended

Mar. 31, 2015

Convertible Notes Payable and Warrants to Purchase Common Stock

Convertible Notes Payable and Warrants to Purchase Common Stock

3.  Convertible Notes Payable and Warrants to Purchase Common Stock

In November 2014, we issued 250 convertible notes payable, each with a face value of $100,000, for total cash proceeds of $25,000,000. The Notes are convertible into 11,506,155 shares of common stock, which is a conversion rate of $2.17275 per share. The Notes are convertible at any time at the holders’ election, except the Notes will automatically convert in the case where we have received a CE Mark approval for our Fantom product and have sustained a market trading price of A$0.60 per CDI for 20 consecutive trading days. The Notes mature on November 14, 2019, if not converted or redeemed earlier. Interest accrues on the Notes at the rate of 7.54 percent per annum, compounded annually, and is payable upon redemption or maturity; accrued interest is not payable or convertible upon conversion of the Notes. The Notes provide the holders a one-time option for cash redemption in January 2017, if not previously converted or redeemed, for the face value plus accrued interest.

Following an analysis of the embedded and derivative features of the Notes upon their issuance in 2014, and a projection of the volatility of their effective interest rates under the cost method, we elected to utilize fair value accounting for the Notes. Management believes the fair value method of accounting provides a more appropriate presentation of these liabilities than would be provided under the cost method. The fair value of the Notes as of March 31, 2015 was calculated to be $49,990,000, which was $24,990,000 more than the unpaid principal balance of the Notes. The change in fair value of the Notes between December 31, 2014 and March 31, 2015 of $12,210,000 was recorded as a loss in the consolidated statement of operations.

In connection with issuing the Notes in November 2014, we issued warrants to the noteholders to purchase up to 8,750,000 shares of common stock at $2.17275 per share. The warrants are exercisable immediately and expire in November 2019. The exercise price of the warrants will increase to $2.6073 per share if, and when, we achieve full enrollment in our clinical trial of Fantom with the required number of patients that would provide data for a CE Mark application. None of the warrants had been exercised as of March 31, 2015.

The fair value of the warrants as of March 31, 2015 was calculated to be $21,280,000. The change in fair value of the warrant liability between December 31, 2014 and March 31, 2015 of $5,891,000 was recorded as a loss in the consolidated statement of operations.

XML

Consolidated Balance Sheets (USD $)	Mar. 31, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 20,583,000	$ 25,814,000
Short-term investments	995,000	995,000
Prepaid expenses and other current assets	361,000	406,000
Total current assets	21,939,000	27,215,000
Property and equipment, net	2,931,000	2,920,000
Other non-current assets	60,000	60,000
Total Assets	24,930,000	30,195,000
Current Liabilities:
Accounts payable	632,000	651,000
Accrued expenses and other current liabilities	1,182,000	2,213,000
Total current liabilities	1,814,000	2,864,000
Long-Term Liabilities:
Convertible Notes Payable	49,990,000	37,780,000
Common stock warrant liability	21,280,000	15,389,000
Other long-term liabilities	1,037,000	611,000
Total Long-term liabilities	72,307,000	53,780,000
Total Liabilities	74,121,000	56,644,000
Commitments and contingencies (Note 7)
Stockholders' Equity (Deficit):
Undesignated preferred stock $ $0.0001 par value; 5,000,000 shares authorized; no shares issued or outstanding
Additional paid-in capital	226,709,000	226,094,000
Accumulated deficit	(275,903,000)	(252,546,000)
Total Stockholders' Equity (Deficit)	(49,191,000)	(26,449,000)
Total Liabilities and Stockholders' Equity (Deficit)	24,930,000	30,195,000
Common Stock
Stockholders' Equity (Deficit):
Common stock	3,000	3,000
Class B common stock
Stockholders' Equity (Deficit):
Common stock

XML

Background and Basis of Presentation

3 Months Ended

Mar. 31, 2015

Background and Basis of Presentation

Background and Basis of Presentation

1.  Background and Basis of Presentation

Background:  REVA Medical, Inc. (“REVA” or the “Company”) was incorporated in California in 1998 under the name MD3, Inc. In March 2002, we changed our name to REVA Medical, Inc. In October 2010, we reincorporated in Delaware. We established a non-operating wholly owned subsidiary, REVA Germany GmbH, in 2007. In these notes the terms “us,” “we,” or “our” refer to REVA and our consolidated subsidiary unless context dictates otherwise.

We do not yet have a product available for sale; our product(s) will become available following completion of required clinical studies with acceptable data and when, and if, we receive regulatory approval. We are currently developing and testing a bioresorbable stent to treat vascular disease in humans. This stent, which we have named Fantom, was first implanted in humans during December 2014. We are currently enrolling up to 110 patients in a clinical trial with Fantom from which we will obtain follow-up data at a six-month time point; we expect to complete enrollment in this trial prior to December 31, 2015. If this data has acceptable safety and efficacy results, we intend to apply for a European CE Marking, the regulatory approval that would allow us to commercialize Fantom in Europe.

In December 2010 we completed an initial public offering (the “IPO”) of our common stock in Australia and registered with the U.S. Securities and Exchange Commission (“SEC”) and, consequently, became an SEC filer. Our stock is traded in the form of CHESS Depository Interests (“CDIs”) on the Australian Securities Exchange (“ASX”); each share of our common stock is equivalent to ten CDIs. Our trading symbol is “RVA.AX.”

Basis of Presentation:  We have prepared the accompanying consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the SEC for reporting of interim financial information and, therefore, certain information and footnote disclosures normally included in annual financial statements have been omitted. Accordingly, these interim financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and with the audited financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Our consolidated financial statements include the accounts of REVA and our wholly owned subsidiary. All intercompany transactions and balances, if any, have been eliminated in consolidation. These interim consolidated financial statements are unaudited; the consolidated balance sheet as of December 31, 2014 was derived from the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. The interim financial statements have been prepared on the same basis as our annual financial statements and, in our opinion, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results of these interim periods have been included. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period.

Capital Resources:  We had cash and investments totaling $21,578,000 as of March 31, 2015, which we believe will be sufficient to fund our operating and capital needs for at least the next year. We have experienced recurring losses and negative cash flows from operating activities since our inception and, as of March 31, 2015, we had an accumulated deficit of $275,903,000. Until we generate revenue, and at a level to support our cost structure, we expect to continue to incur substantial operating losses and net cash outflows. Even if we do attain revenue, we may never become profitable and even if we do attain profitable operations, we may not be able to sustain that profitability or positive cash flows on a recurring basis. We may need to raise further capital in the future to fund our operations until such time as we can sustain positive cash flows. If we are unable to raise sufficient additional capital when needed, we may be compelled to reduce the scope of our operations and planned capital expenditures or sell certain assets, including our intellectual property assets.

Use of Estimates:  In order to prepare our financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Our most significant estimates relate to the fair value of our convertible notes payable, the fair value of our warrant liability, our operating expense accruals, including clinical study expenses, and stock-based compensation. Actual results could differ from our estimates.

XML

Balance Sheet Details (Details ) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Property and equipment:
Property and equipment, gross	$ 8,467	$ 8,196
Accumulated depreciation and amortization	(5,536)	(5,276)
Property and equipment, net	2,931	2,920
Office Equipment [Member]
Property and equipment:
Property and equipment, gross	649	648
Equipment [Member]
Property and equipment:
Property and equipment, gross	5,447	5,187
Leasehold Improvements [Member]
Property and equipment:
Property and equipment, gross	$ 2,371	$ 2,361

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Income Taxes (Details) (USD $)	3 Months Ended
	Mar. 31, 2015
Income Taxes
Provision for income taxes	$ 0
Deferred tax assets	0
Deferred tax liability	$ 0

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Fair Value Measurements

3 Months Ended

Mar. 31, 2015

Fair Value Measurements

Fair Value Disclosures [Text Block]

2.  Fair Value Measurements

We measure the fair value of our financial and non-financial assets and liabilities at each reporting date in accordance with the fair value hierarchy according to GAAP, which requires that fair value measurements be classified and disclosed in one of the following three categories:

Level 1	—	Quoted market prices for identical assets or liabilities in active markets at the measurement date;
Level 2	—	Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities in active or non-active markets, or other inputs that can be corroborated by observable market data for substantially the full term of an asset or liability; and,
Level 3	—	Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of an asset or liability, including management’s best estimate of the factors that market participants would use in pricing an asset or liability at the measurement date.

We carry our convertible notes payable and common stock warrant liability at fair value. We carry our other financial instruments at amortized cost; these items include cash, investments, accounts payable, and accrued expenses. The carrying amounts of our cash and cash equivalents, accounts payable, and accrued expenses are considered to be reasonable estimates of their respective fair values due to their short-term nature and, therefore, fair value information is not provided in the following table. Utilizing the lowest level inputs available under the measurement hierarchy, the fair values of our measured financial instruments comprise the following (we had no Level 1 financial instruments):

	Level 2		Level 3
	(in thousands)
Fair Value at December 31, 2014:
Assets:
Certificates of deposit due in one year or less	$	991	$	—
Liabilities:
Convertible notes payable	$	—	$	37,780
Common stock warrant liability	—		15,389
	$	—	$	53,169
Fair Value at March 31, 2015:
Assets:
Certificates of deposit due in one year or less	$	993	$	—
Liabilities:
Convertible notes payable	$	—	$	49,990
Common stock warrant liability	—		21,280
	$	—	$	71,270

Our Level 2 financial assets consist of certificates of deposit (“CDs”) that are held to maturity and carried at cost; their fair value is determined each reporting period through quoted market prices of similar instruments in active markets. Unrealized losses on these CDs as of December 31, 2014 and March 31, 2015 were $4,000 and $2,000, respectively.

Our Level 3 financial liabilities, which are recurring, consist of convertible notes payable (the “Notes”) and warrants for the purchase of common stock, all of which were issued on November 14, 2014. The fair values of these liabilities are determined utilizing a binomial valuation model, which requires use of unobservable inputs that are determined by management, with the assistance of independent experts. These inputs represent our best estimates, but involve certain inherent uncertainties. We used the market value of the underlying stock, a life equal to the contractual life of the financial instrument, incremental borrowing rates and bond yields that correspond to instruments of similar credit worthiness and the instrument’s remaining life, an estimate of volatility based on the historical prices of our trading securities, and we made assumptions as to our abilities to test and commercialize our product(s), to obtain future financings when and if needed, and to comply with the terms and conditions of our Notes. A summary of the assumptions used to value the Notes and warrants is as follows:

	December 31,			March 31,
	2014			2015
Market price per share of common stock	$	3.35		$	4.34
Risk-free interest rate	2.30		%	1.81		%
Expected volatility of common stock	87.2		%	86.4		%
Expected life — years	4.87			4.63
Bond yield of equivalent securities	28.4		%	28.8		%

A significant change in the market price per share, expected volatility, or bond yield of equivalent securities, in isolation, would result in significantly higher or lower fair value measurements. In combination, changes in these inputs could result in a significantly higher or lower fair value measurement if the input changes were to be aligned, or could result in a minimally higher or lower fair value measurement if the input changes were of a compensating nature.

A total of $18,101 in unrealized losses arising from the change in fair value on our Level 3 financial liabilities was recorded during the three months ended March 31, 2015. Our Level 3 fair value activity during the current reporting period is as follows:

	Level 3
	(in thousands)
Balance at December 31, 2014	$	53,169
Losses from Change in Fair Value:
Convertible notes payable	12,210
Warrants to purchase common stock	5,891
Balance at March 31, 2015	$	71,270

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Consolidated Balance Sheets (Parenthetical) (USD $)	Mar. 31, 2015	Dec. 31, 2014
Undesignated preferred stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Undesignated preferred stock, shares authorized	5,000,000	5,000,000
Undesignated preferred stock, shares issued	0	0
Undesignated preferred stock, shares outstanding	0	0
Common Stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	33,579,778	33,529,778
Common stock, shares outstanding	33,579,778	33,529,778
Class B common stock
Common stock, par value (in dollars per share)	$ 0.0001	$ 0.0001
Common stock, shares authorized	25,000,000	25,000,000
Common stock, shares issued	0	0
Common stock, shares outstanding	0	0

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Stock-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

Schedule of the option activity under the plan

			Weighted
			Average
	Options		Exercise
	Outstanding		Price
Balance at December 31, 2013	4,046,650		$	7.15
Granted	637,000		$	3.53
Cancelled	(180,500	)	$	6.61
Exercised	(259,725	)	$	0.95
Balance at December 31, 2014	4,243,425		$	7.01
Granted	352,500		$	4.00
Cancelled	(107,342	)	$	4.71
Exercised	(50,000	)	$	1.25
Balance at March 31, 2015	4,438,583		$	6.89

Equity awards to employees

Stock-Based Compensation

Schedule of the expense (income) recorded under the plan

	Three Months Ended March 31,
	2014		2015
	(in thousands)
Research and development	$	288	$	295
General and administrative	778		232
Total stock-based compensation	$	1,066	$	527

Schedule of the weighted-average assumptions used to estimate fair value of options granted

	Three Months Ended March 31,
	2014		2015
Risk-free interest rate	2.27	%	1.69	%
Expected volatility of common stock	59.3	%	56.4	%
Expected life in years	6.25		5.71
Dividend yield	0	%	0	%

Equity awards to consultants

Stock-Based Compensation

Schedule of the expense (income) recorded under the plan

	Three Months Ended March 31,
	2014			2015
	(in thousands)
Research and development	$	79		$	1
General and administrative	(3		)	27
Total stock-based compensation	$	76		$	28

Schedule of the weighted-average assumptions used to estimate fair value of options granted

	March 31,
	2014		2015
Risk-free interest rate	2.68	%	1.94	%
Expected volatility of common stock	59.3	%	57.2	%
Expected life in years	9.45		8.83
Dividend yield	0	%	0	%

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Document and Entity Information	3 Months Ended
	Mar. 31, 2015	May 01, 2015
Document and Entity Information
Entity Registrant Name	REVA Medical, Inc.
Entity Central Index Key	0001496268
Document Type	10-Q
Document Period End Date	Mar. 31, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		33,579,778
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q1

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Net Loss Per Common Share (Tables)

3 Months Ended

Mar. 31, 2015

Net Loss Per Common Share:

Schedule of weighted average shares excluded from the computation of diluted net loss per share

	Three Months Ended March 31,
	2014	2015
Options to purchase common stock	4,293,388	4,320,093
Unvested restricted stock	103,694	73,569
Restricted stock units	—	210,629
Warrants to purchase common stock	—	8,750,000
Common share equivalents from convertible notes	—	11,506,156
Total weighted average shares excluded	4,397,082	24,860,447

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Consolidated Statements of Operations and Comprehensive Loss (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Operating Expense:
Research and development	$ 3,264	$ 4,879
General and administrative	1,589	2,393
Loss from operations	(4,853)	(7,272)
Other Income (Expense):
Interest income	3	3
Interest expense	(465)
Loss on change in fair value of convertible notes payable and warrant liability	(18,101)
Other income (expense)	59	(7)
Other income (expense)	(18,504)	(4)
Net Loss and Comprehensive Loss	$ (23,357)	$ (7,276)
Net loss per share, basic and diluted (in dollars per share)	$ (0.70)	$ (0.22)
Shares used to compute net loss per share, basic and diluted (in shares)	33,468,431	33,339,779

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2015

Commitments and Contingencies.

Commitments and Contingencies

7.  Commitments and Contingencies

We have licensed certain patents and other intellectual property rights related to the composition and coating of our bioresorbable stent and our other biomaterial products. Terms of these licenses include provisions for royalty payments on any future sales of products, if any, utilizing this technology, with provisions for minimum royalties once product sales begin. The amount of royalties varies depending upon type of product, use of product, stage of product, location of sale, and ultimate sales volume, and ranges from a minimum of approximately $25 per unit to a maximum of approximately $100 per unit sold, with license provisions for escalating minimum royalties that could be as high as $2.2 million per year. Additionally, in the event we sublicense the technology and receive certain milestone payments, the licenses require that up to 40 percent of the milestone amount be paid to the licensors. Additional terms of the technology licenses include annual licensing payments of $175,000 until the underlying technology has been commercialized. Terms of the licenses also include other payments to occur during commercialization that could total $950,000, payment of $350,000 upon a change in control of ownership, payments of up to $300,000 annually to extend filing periods related to certain technology, and payment of patent filing, maintenance, and defense fees. The license terms remain in effect until the last patent expires.

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Stock-Based Compensation

3 Months Ended

Mar. 31, 2015

Stock-Based Compensation

Stock-Based Compensation

6.  Stock-Based Compensation

The Plan:  Our 2010 Equity Incentive Plan, as amended (the “Plan”), provides for grants of incentive and non-qualified stock options for purchase of our common stock at a price per share equal to the closing market price on the date of grant and for awards of restricted stock units and restricted stock for no consideration payable by the recipient. The number of shares reserved for issuance under the Plan may be increased annually by up to three percent of the outstanding stock of the Company and on January 1, 2015, an additional 1,002,893 shares were reserved for issuance under the Plan. An aggregate of 8,209,153 shares are reserved for issuance under the Plan as of March 31, 2015. All stock issuances under the Plan are made with new shares from our authorized but unissued common stock. The term of grants and awards under the Plan may not exceed ten years.

Employees, non-employee directors, and consultants are eligible to participate in the Plan. For purposes of determining stock-based compensation expense, we include non-employee directors with employees; we account for consultant compensation expense separately.

No tax benefits arising from stock-based compensation have been recognized in the consolidated statements of operations and comprehensive loss through March 31, 2015.

Option activity under the Plan is as follows:

			Weighted
			Average
	Options		Exercise
	Outstanding		Price
Balance at December 31, 2013	4,046,650		$	7.15
Granted	637,000		$	3.53
Cancelled	(180,500	)	$	6.61
Exercised	(259,725	)	$	0.95
Balance at December 31, 2014	4,243,425		$	7.01
Granted	352,500		$	4.00
Cancelled	(107,342	)	$	4.71
Exercised	(50,000	)	$	1.25
Balance at March 31, 2015	4,438,583		$	6.89

The majority of options granted prior to 2015 vest over four years, with 25 percent vesting on the one-year anniversary of the vesting commencement date and 75 percent in equal monthly installments thereafter and those options are exercisable at any time but, if exercised, are subject to a lapsing right of repurchase by us at the exercise price until fully vested. During March 2015, we granted a total of 316,000 options that vest based on certain performance achievements of the Company. We estimated the vesting term, which ranges from approximately nine months to two years with a weighted average vesting term of 15 months, on the date of grant based on our internal timelines and operating projections.

During July 2012, January 2013, and May 2013 we awarded 33,000 shares, 40,000 shares, and 47,500 shares, respectively, of restricted stock; 25 percent of each award vests on each annual anniversary date of the award. Through March 31, 2015, none of the restricted stock has been cancelled.

During March 2015, we awarded 824,200 restricted stock units (“RSUs”) to employees. Each RSU entitles the employee to one share of our common stock upon vesting. The RSUs vest based on certain performance achievements of the Company. We estimated the vesting term, which ranges from approximately 14 months to two years with a weighted average vesting term of 17 months, on the date of award based on our internal timelines and operating projections. Through March 31, 2015, none of the RSUs have vested and none have been cancelled.

Grants and Awards to Employees:  We account for option grants, restricted stock awards, and RSU awards to employees based on their estimated fair values on the date of grant or award, with the resulting stock-based compensation recorded over the vesting period on a straight-line basis. For the options and RSUs that vest upon performance achievements, we additionally estimate the probability that the performance targets will be met and record only the compensation expense based on these probabilities during the vesting period; during the three months ended March 31, 2015, the probabilities assigned to such options and RSUs ranged from 50 percent to 80 percent. Stock-based compensation arising from employee options and awards under the Plan is as follows:

	Three Months Ended March 31,
	2014		2015
	(in thousands)
Research and development	$	288	$	295
General and administrative	778		232
Total stock-based compensation	$	1,066	$	527

The fair value of restricted stock and RSUs awarded is equal to the closing market price of our common stock on the date of award. The fair value of options granted was estimated using the following weighted-average assumptions:

	Three Months Ended March 31,
	2014		2015
Risk-free interest rate	2.27	%	1.69	%
Expected volatility of common stock	59.3	%	56.4	%
Expected life in years	6.25		5.71
Dividend yield	0	%	0	%

The assumed risk-free interest rate was based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected life of the option. The assumed volatility was calculated from the historical market prices of a selected group of publicly traded companies considered to be our peers; we use peer group data due to the fact that we have limited historical trading data. For options that vest based on passage of time, the expected option life was calculated using the simplified method under the accounting standard for stock compensation and a ten-year option expiration; we use the simplified method because we do not yet have adequate history as a public company to establish a reasonable expected life. For options that vest based on performance achievements, the expected life was calculated based on the vesting periods estimated by management and a ten-year option expiration. The expected dividend yield of zero reflects that we have not paid cash dividends since inception and do not intend to pay cash dividends in the foreseeable future. The options granted to employees during the three months ended March 31, 2015 had a weighted average grant date fair value of $2.07.

The aggregate intrinsic value of options exercised during the three months ended March 31, 2014 and 2015 was $557,000 and $135,000, respectively.

Stock Options to Consultants:  We account for stock options granted to consultants at their fair value. Under this method, the fair value is estimated at each reporting date during the vesting period using the Black-Scholes option-pricing model. The resulting stock-based compensation expense, or income if the fair value declines in a reporting period, is recorded over the consultant’s service period. Options to purchase 110,000 shares of common stock were granted to consultants during the three months ended March 31, 2014; no options were granted to consultants during the three months ended March 31, 2015. Stock-based compensation expense or (income) arising from consultant options granted under the Plan is as follows:

	Three Months Ended March 31,
	2014			2015
	(in thousands)
Research and development	$	79		$	1
General and administrative	(3		)	27
Total stock-based compensation	$	76		$	28

The weighted-average fair value of unvested consultant options at March 31, 2014 and 2015 was estimated to be $0.73 and $2.60 per share, respectively, based on the following weighted-average assumptions:

	March 31,
	2014		2015
Risk-free interest rate	2.68	%	1.94	%
Expected volatility of common stock	59.3	%	57.2	%
Expected life in years	9.45		8.83
Dividend yield	0	%	0	%

The assumed risk-free interest rate was based on the implied yield on a U.S. Treasury zero-coupon issue with a remaining term equal to the expected life of the option. The assumed volatility was calculated from the historical market prices of a selected group of publicly traded companies considered to be our peers; we use peer group data due to the fact that we have limited historical trading data. The expected option life is the remaining term of the option. The expected dividend yield of zero reflects that we have not paid cash dividends since inception and do not intend to pay cash dividends in the foreseeable future.

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Balance Sheet Details (Details 2) (USD $) In Thousands, unless otherwise specified	Mar. 31, 2015	Dec. 31, 2014
Accrued expenses and other current liabilities:
Accrued salaries and other employee costs	$ 497	$ 1,315
Accrued operating expenses	556	769
Accrued use taxes and other	129	129
Accrued expenses and other current liabilities, total	$ 1,182	$ 2,213

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Background and Basis of Presentation (Details) (USD $)	3 Months Ended
	Mar. 31, 2015 item	Dec. 31, 2014	Dec. 31, 2010 item
Background and Basis of Presentation
Number of patients enrolled in a clinical trial of bioresorbable stent product	110
Common stock to CDIs conversion ratio			10
Capital Resources
Cash and investments	$ 21,578,000
Retained Earnings (Accumulated Deficit)	$ (275,903,000)	$ (252,546,000)

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Fair Value Measurements (Tables)

3 Months Ended

Mar. 31, 2015

Fair Value Measurements

Schedule of fair values of investments and liabilities, determined from level 2 and 3 inputs

	Level 2		Level 3
	(in thousands)
Fair Value at December 31, 2014:
Assets:
Certificates of deposit due in one year or less	$	991	$	—
Liabilities:
Convertible notes payable	$	—	$	37,780
Common stock warrant liability	—		15,389
	$	—	$	53,169
Fair Value at March 31, 2015:
Assets:
Certificates of deposit due in one year or less	$	993	$	—
Liabilities:
Convertible notes payable	$	—	$	49,990
Common stock warrant liability	—		21,280
	$	—	$	71,270

Summary of assumptions used to value the Notes and warrants

	December 31,			March 31,
	2014			2015
Market price per share of common stock	$	3.35		$	4.34
Risk-free interest rate	2.30		%	1.81		%
Expected volatility of common stock	87.2		%	86.4		%
Expected life — years	4.87			4.63
Bond yield of equivalent securities	28.4		%	28.8		%

Summary of fair value of financial liabilities determined from "Level 3" inputs

	Level 3
	(in thousands)
Balance at December 31, 2014	$	53,169
Losses from Change in Fair Value:
Convertible notes payable	12,210
Warrants to purchase common stock	5,891
Balance at March 31, 2015	$	71,270

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Net Loss Per Common Share

3 Months Ended

Mar. 31, 2015

Net Loss Per Common Share:

Net Loss Per Common Share

8.  Net Loss Per Common Share

Basic net loss per common share is calculated by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding for the period, without consideration for common stock equivalents. Diluted net loss per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common share equivalents outstanding for the period determined using the treasury-stock method and the if-converted method, as applicable. For purpose of this calculation, common stock options and restricted stock subject to forfeiture are considered to be common stock equivalents and are included in the calculation of diluted net loss per share only when their effect is dilutive. For the three month reporting periods, the following weighted average shares were excluded from the computation of diluted net loss per share because including them would have been antidilutive.

	Three Months Ended March 31,
	2014	2015
Options to purchase common stock	4,293,388	4,320,093
Unvested restricted stock	103,694	73,569
Restricted stock units	—	210,629
Warrants to purchase common stock	—	8,750,000
Common share equivalents from convertible notes	—	11,506,156
Total weighted average shares excluded	4,397,082	24,860,447

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Background and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2015

Background and Basis of Presentation

Basis of Presentation

Basis of Presentation:  We have prepared the accompanying consolidated financial statements in accordance with U.S. generally accepted accounting principles (“GAAP”) and the rules and regulations of the SEC for reporting of interim financial information and, therefore, certain information and footnote disclosures normally included in annual financial statements have been omitted. Accordingly, these interim financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and with the audited financial statements and accompanying footnotes included in our Annual Report on Form 10-K for the year ended December 31, 2014.

Our consolidated financial statements include the accounts of REVA and our wholly owned subsidiary. All intercompany transactions and balances, if any, have been eliminated in consolidation. These interim consolidated financial statements are unaudited; the consolidated balance sheet as of December 31, 2014 was derived from the Company’s audited financial statements included in our Annual Report on Form 10-K for the year ended December 31, 2014. The interim financial statements have been prepared on the same basis as our annual financial statements and, in our opinion, all adjustments, consisting only of normal recurring accruals, considered necessary for a fair statement of the results of these interim periods have been included. The results of operations for the three months ended March 31, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period.

Capital Resources

Capital Resources:  We had cash and investments totaling $21,578,000 as of March 31, 2015, which we believe will be sufficient to fund our operating and capital needs for at least the next year. We have experienced recurring losses and negative cash flows from operating activities since our inception and, as of March 31, 2015, we had an accumulated deficit of $275,903,000. Until we generate revenue, and at a level to support our cost structure, we expect to continue to incur substantial operating losses and net cash outflows. Even if we do attain revenue, we may never become profitable and even if we do attain profitable operations, we may not be able to sustain that profitability or positive cash flows on a recurring basis. We may need to raise further capital in the future to fund our operations until such time as we can sustain positive cash flows. If we are unable to raise sufficient additional capital when needed, we may be compelled to reduce the scope of our operations and planned capital expenditures or sell certain assets, including our intellectual property assets.

Use of Estimates

Use of Estimates:  In order to prepare our financial statements in conformity with GAAP, we are required to make estimates and assumptions that affect the reported amounts in the financial statements and accompanying notes. Our most significant estimates relate to the fair value of our convertible notes payable, the fair value of our warrant liability, our operating expense accruals, including clinical study expenses, and stock-based compensation. Actual results could differ from our estimates.

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Balance Sheet Details (Tables)

3 Months Ended

Mar. 31, 2015

Balance Sheet Details.

Schedule of components of property and equipment

	December 31,			March 31,
	2014			2015
	(in thousands)
Property and equipment:
Furniture, office equipment, and software	$	648		$	649
Laboratory equipment	5,187			5,447
Leasehold improvements	2,361			2,371
	8,196			8,467
Accumulated depreciation and amortization	(5,276		)	(5,536		)
	$	2,920		$	2,931

Schedule of components of accrued expenses and other current liabilities

Accrued expenses and other current liabilities:
Accrued salaries and other employee costs	$	1,315	$	497
Accrued operating expenses	769		556
Accrued use taxes and other	129		129
	$	2,213	$	1,182

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Notes Payable and Warrants to Purchase Common Stock (Details) (USD $)	1 Months Ended	3 Months Ended
	Nov. 30, 2014	Mar. 31, 2015	Dec. 31, 2014
Proceeds from notes payable and warrants	$ 25,000,000
Convertible Notes Payable		49,990,000	37,780,000
Change in fair value of Notes		12,210,000
Common Stock Warrant Liability		21,280,000	15,389,000
Change in fair value of Warrants		5,891,000
Warrants to purchase common stock
Convertible rate into common stock	$ 2.17275
Warrants issued to purchase common stock (in shares)	8,750,000
Increased exercise price of warrants		$ 2.6073
Warrants excercised		0
Convertible Notes Payable [Member]
Number of convertible notes payable	250
Face Amount	100,000
Number of converted shares of common stock	11,506,155
Convertible rate into common stock	$ 2.17275
Market trading price	$ 0.60
Consecutive trading days	20
Interest rate (as a percent)	7.54%
Convertible notes excluding unpaid principal balance		$ 24,990,000

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Stock-Based Compensation (Details 2) (Equity awards to employees, USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Stock Options and Restricted Stock to Employees
Total stock-based compensation	$ 527	$ 1,066
Research And Development Expense [Member]
Stock Options and Restricted Stock to Employees
Total stock-based compensation	295	288
General And Administrative Expense [Member]
Stock Options and Restricted Stock to Employees
Total stock-based compensation	$ 232	$ 778

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Consolidated Statements of Cash Flows (USD $) In Thousands, unless otherwise specified	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Cash Flows from Operating Activities:
Net loss	$ (23,357)	$ (7,276)
Non-cash adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	260	264
Stock-based compensation	555	1,142
Interest on convertible notes payable	465
Loss on change in fair value of convertible notes payable and warrant liability	18,101
Other non-cash expenses	3	5
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	45	62
Accounts payable	(9)	(401)
Accrued expenses and other current liabilities	(986)	(411)
Long-term liabilities	(39)	(34)
Net cash used for operating activities	(4,962)	(6,649)
Cash Flows from Investing Activities:
Purchases of property and equipment	(281)	(216)
Maturities of investments		498
Net cash provided by (used for) investing activities	(281)	282
Cash Flows from Financing Activities:
Proceeds from issuances of common stock	62	170
Costs of issuing convertible notes payable and warrants	(50)
Net cash provided by financing activities	12	170
Net decrease in cash and cash equivalents	(5,231)	(6,197)
Cash and cash equivalents at beginning of period	25,814	19,229
Cash and Cash Equivalents at End of Period	20,583	13,032
Supplemental Cash and Non-Cash information:
Property and equipment in accounts payable	$ 2	$ 76

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Income Taxes

3 Months Ended

Mar. 31, 2015

Income Taxes

Income Taxes

5.  Income Taxes

We have reported net losses for all periods through March 31, 2015; therefore, no provision for income taxes has been recorded since our inception. The net operating loss carryforwards arising from our net losses may be available to offset future taxable income for income tax purposes; however, under Internal Revenue Code (“IRC”) Sections 382 and 383, use of the net operating loss carryforwards, as well as our research tax credit carryforwards, may be limited based on cumulative changes in ownership. We have established a valuation allowance against our net deferred tax assets due to the uncertainty surrounding the realization of those assets and we, therefore, have no deferred asset or liability balance for any reporting period. We periodically evaluate the recoverability of the deferred tax assets and, when it is determined that it is more-likely-than-not that the deferred tax assets are realizable, the valuation allowance will be reduced. Due to our valuation allowance, future changes in our unrecognized tax benefits will not impact our effective tax rate.

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Stock-Based Compensation (Details 3) (USD $)	3 Months Ended
	Mar. 31, 2015	Mar. 31, 2014
Equity awards to employees
Additional information related to fair values of options granted
Risk-free interest rate (as a percent)	1.69%	2.27%
Expected volatility of common stock (as a percent)	56.40%	59.30%
Expected life	5 years 8 months 16 days	6 years 3 months
Dividend yield (as a percent)	0.00%	0.00%
Expiration term	10 years
Weighted average grant date fair value (in dollars per share)	$ 2.07
Intrinsic value of options exercised	$ 135,000	$ 557,000
Total stock-based compensation	527,000	1,066,000
Equity awards to employees | Research And Development Expense [Member]
Additional information related to fair values of options granted
Total stock-based compensation	295,000	288,000
Equity awards to employees | General And Administrative Expense [Member]
Additional information related to fair values of options granted
Total stock-based compensation	232,000	778,000
Equity awards to consultants
Additional information related to fair values of options granted
Risk-free interest rate (as a percent)	1.94%	2.68%
Expected volatility of common stock (as a percent)	57.20%	59.30%
Expected life	8 years 9 months 29 days	9 years 5 months 12 days
Dividend yield (as a percent)	0.00%	0.00%
Weighted average grant date fair value (in dollars per share)	$ 2.60	$ 0.73
Granted (in shares)	0	110,000
Total stock-based compensation	28,000	76,000
Equity awards to consultants | Research And Development Expense [Member]
Additional information related to fair values of options granted
Total stock-based compensation	1,000	79,000
Equity awards to consultants | General And Administrative Expense [Member]
Additional information related to fair values of options granted
Total stock-based compensation	$ 27,000	$ (3,000)

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Fair Value Measurements (Details) (USD $)	3 Months Ended	12 Months Ended
	Mar. 31, 2015	Dec. 31, 2014
Certificates of deposit due in one year or less	$ 995,000	$ 995,000
Convertible Notes Payable	49,990,000	37,780,000
Common Stock Warrant Liability	21,280,000	15,389,000
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Market price per share of common stock	$ 4.34	$ 3.35
Risk-free interest rate	1.81%	2.30%
Expected volatility of common stock	86.40%	87.20%
Expected life - years	4 years 7 months 17 days	4 years 10 months 13 days
Bond yield of equivalent securities	28.80%	28.40%
Losses from Change in Fair Value:
Convertible note payable	12,210,000
Warrants to purchase common stock	5,891,000
Level 3
Convertible Notes Payable	49,990,000	37,780,000
Common Stock Warrant Liability	21,280,000	15,389,000
Liabilities	71,270,000
Gross Unrealized loss	18,101,000
Financial Liabilities Fair Value Disclosure.
Beginning balance	53,169,000
Losses from Change in Fair Value:
Convertible note payable	12,210,000
Warrants to purchase common stock	5,891,000
Ending balance	71,270,000
Level 2
Gross Unrealized loss	2,000,000	4,000,000
Certificates of Deposit | Level 2
Certificates of deposit due in one year or less	$ 993,000	$ 991,000