10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

For the quarterly period ended September 30, 2015

or

o TRANSITION 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
	(Registrant’s telephone number
(Address of principal executive offices,	including area code)
including zip 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  þ     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  þ     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   ¨ Accelerated filer   þ Non-accelerated filer   ¨ Smaller reporting company   ¨

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

As of November 1, 2015, a total of 38,082,778 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 September 30, 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	20
	Item 4. Controls and Procedures	21
PART II.  OTHER INFORMATION		22
	Item 1. Legal Proceedings	22
	Item 1A. Risk Factors	22
	Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	22
	Item 3. Defaults upon Senior Securities	22
	Item 4. Mine Safety Disclosures	22
	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 iswww.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 Fantom^® and ReZolve^® 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,			September 30,
Assets	2014			2015
Current Assets:
Cash and cash equivalents	$	25,814		$	11,845
Short-term investments		995			497
Prepaid expenses and other current assets		406			287
Total current assets		27,215			12,629
Non-Current Assets:
Property and equipment, net		2,920			2,887
Other non-current assets		60			60
Total non-current assets		2,980			2,947
Total Assets	$	30,195		$	15,576
Liabilities and Stockholders' Equity (Deficit)
Current Liabilities:
Accounts payable	$	651		$	711
Accrued expenses and other current liabilities		2,213			1,714
Total current liabilities		2,864			2,425
Long-Term Liabilities:
Convertible notes payable		37,780			57,540
Common stock warrant liability		15,389			29,940
Other long-term liabilities		611			1,902
Total long-term liabilities		53,780			89,382
Total Liabilities		56,644			91,807
Commitments and contingencies (Note 7)
Stockholders' Equity (Deficit):
Common stock ― $0.0001 par value; 100,000,000 shares authorized;        33,529,778 and 33,707,778 shares issued and outstanding at        December 31, 2014 and September 30, 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			228,683
Accumulated deficit		(252,546	)		(304,917	)
Total Stockholders' Equity (Deficit)		(26,449	)		(76,231	)
Total Liabilities and Stockholders' Equity (Deficit)	$	30,195		$	15,576

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						Nine Months Ended
	September 30,						September 30,
	2014			2015			2014			2015
Operating Expense:
Research and development	$	2,930		$	4,404		$	10,782		$	11,735
General and administrative		1,516			1,818			5,768			4,973
Loss from operations		(4,446	)		(6,222	)		(16,550	)		(16,708	)
Other Income (Expense):
Interest income		1			1			6			7
Interest expense		—			(475	)		—			(1,410	)
Loss on change in fair value of convertible       notes payable and warrant liability		—			(28,180	)		—			(34,311	)
Other income		48			8			38			51
Other income (expense)		49			(28,646	)		44			(35,663	)
Net Loss and Comprehensive Loss	$	(4,397	)	$	(34,868	)	$	(16,506	)	$	(52,371	)
Net Loss Per Common Share:
Net loss per share, basic and diluted	$	(0.13	)	$	(1.04	)	$	(0.49	)	$	(1.56	)
Shares used to compute net loss per share,       basic and diluted		33,383,894			33,647,104			33,361,805			33,543,151

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

- 2  -

REVA Medical, Inc.

Consolidated Statements of Cash Flows

(Unaudited)

(in thousands)

	Nine Months Ended
	September 30,
	2014			2015
Cash Flows from Operating Activities:
Net loss	$	(16,506	)	$	(52,371	)
Non-cash adjustments to reconcile net loss to net cash used for
operating activities:
Depreciation and amortization		780			811
Stock-based compensation		2,940			2,368
Interest on convertible notes payable		—			1,410
Loss on change in fair value of convertible notes payable       and warrant liability		—			34,311
Other non-cash expenses		14			41
Changes in operating assets and liabilities:
Prepaid expenses and other current assets		235			119
Accounts payable		(647	)		36
Accrued expenses and other current liabilities		(858	)		(490	)
Other long-term liabilities		(78	)		(119	)
Net cash used for operating activities		(14,120	)		(13,884	)
Cash Flows from Investing Activities:
Purchases of property and equipment		(383	)		(754	)
Maturities of investments		1,492			498
Net cash provided by (used for) investing activities		1,109			(256	)
Cash Flows from Financing Activities:
Proceeds from issuances of common stock		222			221
Costs of issuing convertible notes payable and warrants		(143	)		(50	)
Net cash provided by financing activities		79			171
Net Decrease in Cash and Cash Equivalents		(12,932	)		(13,969	)
Cash and Cash Equivalents at Beginning of Period		19,229			25,814
Cash and Cash Equivalents at End of Period	$	6,297		$	11,845
Supplemental Non-Cash Information:
Property and equipment in accounts payable at end of period	$	2		$	36

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 enrolled 110 patients in a clinical trial with Fantom between March 2015 and September 2015, from which we will obtain follow-up data at a six-month time point. 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 and other countries that recognize the European CE Mark.

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 (the “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 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 nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period.

Liquidity:  In November 2014, we completed a financing to provide ongoing capital for our operations. The financing comprised the issuance of $25,000,000 in convertible notes and 8,750,000 warrants for the purchase of common stock. The convertible notes and the warrants remained outstanding, and we had $12,342,000 in cash and investments available for operations, as of September 30, 2015. Subsequent to our third quarter end, on October 1, 2015, we received cash proceeds of $9,506,000 from the issuance of common stock upon the exercise of 4,375,000 warrants, which provided us cash and investments available for operations of $21,848,000 as of October 1, 2015. We believe this October 1, 2015 balance will be sufficient to fund our operating and capital needs into, and possibly through, the third fiscal quarter of 2016. The remaining 4,375,000 warrants are exercisable at a price of $2.6073 per share; when and if they are exercised, we have the potential to receive $11,407,000 additional cash proceeds.

We have experienced recurring losses and negative cash flows from operating activities since our inception and, as of September 30, 2015, we had an accumulated deficit of $304,917,000. 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. These conditions, combined with the uncertainty of the timing of receipt of proceeds, if any, from the exercise of warrants to purchase common stock, raise substantial doubt about our ability to continue as a going concern.

- 4  -

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

1. Background and Basis of Presentation (continued)

Liquidity (continued): If the remaining warrants are not exercised, or are not exercised to coincide with the timing of our liquidity needs, or even if the warrants are exercised, 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. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

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.

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, which we consider 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; these other financial instruments include cash, investments, accounts payable, and accrued expenses. Utilizing the lowest level inputs available under the measurement hierarchy, the fair values of our measured financial instruments are as follows:

	Level 2		Level 3
Fair Value at December 31, 2014:	(in thousands)
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 September 30, 2015:
Assets:
Certificates of deposit due in one year or less	$	496	$	—
Liabilities:
Convertible notes payable		—		57,540
Common stock warrant liability		—		29,940
	$	—	$	87,480

-  5  -

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

2. Fair Value Measurements (continued)

We had no Level 1 financial instruments through September 30, 2015.

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 September 30, 2015 were $4,000 and $1,000, 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 in November 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,	September 30,
	2014	2015
Market price per share of common stock	$3.35	$5.62
Risk-free interest rate	2.30%	1.95%
Expected volatility of common stock	87.2%	88.5%
Expected life – years	4.87	4.12
Bond yield of equivalent securities	28.4%	29.0%

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 $28,180,000 and $34,311,000 in unrealized losses arising from the change in fair value on our Level 3 financial liabilities were recorded during the three- and nine-month periods ended September 30, 2015, respectively. Our Level 3 fair value activity through September 30, 2015 is as follows:

	Level 3
	(in thousands)
Balance at December 31, 2014	$	53,169
Losses from Change in Fair Value:
Convertible notes payable		5,270
Common stock warrant liability		861
Balance at June 30, 2015		59,300
Losses from Change in Fair Value:
Convertible notes payable		14,490
Common stock warrant liability		13,690
Balance at September 30, 2015	$	87,480

-  6  -

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

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 at least 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 September 30, 2015 was calculated to be $57,540,000, which was $32,540,000 more than the unpaid principal balance of the Notes. The increases of $14,490,000 and $19,760,000 in the fair value of the Notes during the three and nine months ended September 30, 2015, respectively, were recorded as losses in the consolidated statement of operations.

In connection with the issuance of the Notes in November 2014, we issued warrants to the noteholders to purchase up to 8,750,000 shares of common stock. On October 1, 2015, a total of 4,375,000 warrants were exercised for $9,506,000 cash proceeds. The remaining 4,375,000 warrants are exercisable immediately at $2.6073 per share and expire in November 2019 if not exercised. None of the warrants had been exercised as of September 30, 2015.

The fair value of the warrants as of September 30, 2015 was calculated to be $29,940,000. The increases of $13,690,000 and $14,551,000 in fair value of the warrant liability during the three and nine months ended September 30, 2015, respectively, were recorded as losses 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,			September 30,
	2014			2015
	(in thousands)
Property and Equipment:
Furniture, office equipment, and software	$	648		$	651
Laboratory equipment		5,187			5,839
Leasehold improvements		2,361			2,385
		8,196			8,875
Accumulated depreciation and amortization		(5,276	)		(5,988	)
	$	2,920		$	2,887
Accrued Expenses and Other Current Liabilities:
Accrued salaries and other employee costs	$	1,315		$	736
Accrued operating expenses		769			800
Accrued use taxes and other		129			178
	$	2,213		$	1,714

-  7  -

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

5. Income Taxes

We have reported tax net operating losses since our inception through September 30, 2015; therefore, no provision for income taxes has been recorded since our inception. The net operating tax 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 tax 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.

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 7,956,153 shares are reserved for issuance under the Plan as of September 30, 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. 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		2,152,500		$4.50
Cancelled		(232,342	)	$2.85
Exercised		(178,000	)	$1.25
Balance at September 30, 2015		5,985,583		$6.44

The majority of options granted by the Company vest over four years, with 25 percent vesting on the one-year anniversary of the vesting commencement date and 75 percent vesting in equal monthly installments thereafter. 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.

No tax benefits arising from stock-based compensation have been recognized in the consolidated statements of operations and comprehensive loss through September 30, 2015.

-  8  -

REVA Medical, Inc.

Notes to Consolidated Financial Statements

(Unaudited)

6. Stock-Based Compensation (continued)

The Plan (continued):  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 September 30, 2015, none of the restricted stock had been cancelled.

During March 2015, we awarded 824,200 restricted stock units (“RSUs”) to employees. These 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. During May 2015, we awarded 160,000 RSUs to employee and non-employee directors; such RSUs vest on the earlier of May 26, 2016 or one day prior to our 2016 annual stockholder meeting. Each RSU entitles the recipient to one share of our common stock upon vesting. Through September 30, 2015, none of the RSUs had vested and none had 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 requisite service period on a straight-line basis. For the options and RSUs that vest upon performance achievements, we record only the compensation expense for the performance targets that are probable of being achieved and we record such expense on a straight-line basis over the vesting period. During the nine months ended September 30, 2015, we determined that two of the three performance targets for our performance-based awards were probable of being achieved and, therefore, recorded expense for those awards only. Stock-based compensation arising from employee options and awards under the Plan is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
Employee Stock-Based Compensation:	(in thousands)
Research and development expense	$	282	$	448	$	855	$	1,162
General and administrative expense		465		535		2,026		1,179
	$	747	$	983	$	2,881	$	2,341

The fair value of restricted stock and RSU awards is equal to the closing market price of our common stock on the date of award. The fair value of options granted was estimated on the date of grant using the following weighted-

average assumptions:

	Nine Months Ended
	September 30,
	2014		2015
Risk-free interest rate		2.33%		1.82%
Expected volatility of common stock		59.3%		55.6%
Expected life in years		6.14		6.16
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 requisite service 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 nine months ended September 30, 2015 had a weighted average grant date fair value of $2.40.

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2014 and 2015 was $561,000 and $417,000, 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 nine months ended September 30, 2014; no options were granted to consultants during the nine months ended September 30, 2015. All stock options granted to consultants had either vested or been cancelled as of March 31, 2015; therefore, no compensation expense was recorded during the three months ended September 30, 2015. Stock-based compensation expense or (income) arising from consultant options granted under the Plan is as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2015		2014			2015
Consultant Stock-Based Compensation:	(in thousands)
Research and development expense	$	(6	)	$	—	$	67		$	—
General and administrative expense		16			—		(8	)		27
	$	10		$	—	$	59		$	27

The weighted-average fair value of unvested consultant options at September 30, 2014 was estimated to be $1.15 per share based on weighted-average assumptions of a risk-free interest rate of 2.47 percent, volatility of 58.7 percent, an option life of 9.19 years, and a dividend yield of zero percent. 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; common share equivalents are included in the calculation of diluted net loss per share only when their effect is dilutive.

The following weighted average shares were excluded from the computations of diluted net loss per share because including them would have been antidilutive.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
Weighted Average Shares Excluded from EPS:
Options to purchase common stock		4,408,842		4,466,191		4,384,484		4,425,491
Unvested restricted stock		83,559		53,435		94,992		64,869
Restricted stock units		—		984,200		—		696,356
Warrants to purchase common stock		—		8,750,000		—		8,750,000
Common share equivalents of convertible notes		—		11,506,156		—		11,506,156
		4,492,401		25,759,982		4,479,476		25,442,872

9.  Subsequent Events

On October 1, 2015, the Company received cash proceeds of $9,506,000 and issued 4,375,000 shares of common stock from the exercise of warrants. Following the exercise, a total of 38,082,778 shares of common stock were outstanding and 4,375,000 warrants remained outstanding.

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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 financialcondition 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 notesthereto that are contained in our Annual Report on Form 10-K for the year ended December 31, 2014. In addition to historicalinformation, the following discussion and analysis includes forward-lookingstatements that involve risks, uncertainties, and assumptions. Forward-looking statements are all statements other than statements of historical facts, such as those statements regarding the projections and timing surrounding our plans to complete clinical and regulatory evaluations, receive regulatory approvals and commence commercial sales, develop pipeline products, incur losses from operations, and assess and obtain future financings for operating and capital requirements.

We caution readers that forward-looking statements are not guarantees of future performance and actual results andthe timing of events could differ materially from those anticipated by these forward-looking statements as a result of many factors, including those discussed under “RiskFactors” 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 pre-revenue 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 conventional designs and internally developed designs. Our scaffolds are designed to offer full x-ray visibility, clinically relevant sizing, and a controlled and safe resorption rate.

Our scaffold 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 enrolled 110 patients in this trial between March 2015 and September 2015, from which we will obtain follow-up data at a six-month time point. If this data has acceptable safety and efficacy results, we plan to apply for European regulatory approval in approximately the third quarter of 2016. In October 2015, we began enrolling up to 110 supplemental patients in the trial to obtain additional clinical data to facilitate commercialization needs. 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, including its conventional design, 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 and will continue such work during the remainder of 2015 and throughout 2016 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 September 30, 2015, we had 53 employees, a majority of whom 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 in November 2014 and cash proceeds of $9.5 million from the issuance of common stock upon the exercise of 4,375,000 of the warrants on October 1, 2015. We have the potential to receive an additional $11.4 million cash proceeds when, and if, the remainder of 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 through September 30, 2015, we 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 September 30, 2015, we had approximately $12.3 million in cash and investments available for operations; we received $9.5 million cash proceeds from the exercise of warrants on October 1, 2015. We believe the combined balance of $21.8 million as of October 1, 2015 will be sufficient to fund our operating and capital needs into, and possibly through, the third fiscal quarter of 2016.

We have incurred substantial losses since our inception; as of September 30, 2015, we had accumulated a deficit of approximately $304.9 million. We expect our losses to continue as we complete our development work, clinical studies, and preparations for commercialization during the remainder of this year and in 2016; if these efforts are successful and we are able to obtain regulatory approval, 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. If the remainder of the warrants issued in November 2014 are not exercised, or not exercised on a timeframe that coincides with our cash needs, we may need to raise additional capital through equity or debt financings or strategic or other transactions.

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

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. We additionally perform minimal research and tests to determine the feasibility of other product possibilities. Consequently, 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 largely 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 70 percent for the nine months ended September 30, 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 enrolled 110 patients in the clinical trial between March 2015 and September 2015. We plan to obtain follow-up data at a six-month time point on these patients, and if this data has acceptable safety and efficacy results, apply for regulatory approval of Fantom in approximately the third quarter of 2016. We are also enrolling 110 supplemental patients with Fantom to obtain additional data for commercialization 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 30 percent for the nine months ended September 30, 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 gains or 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, possibly 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.

We believe the following accounting policies involve a greater degree of judgment and complexity than any other of our accounting policies and, therefore, are the most critical to understanding and evaluating our consolidated financial condition and results of operations. Our other key accounting policies are less subjective and, therefore, are not included here.

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 longer than a month. 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 currently 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, beginning in March 2015, 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 of 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 record only the compensation expense for the performance targets that are probable of being achieved and we record such expense on a straight-line basis over the vesting period. During the nine months ended September 30, 2015, we determined that two of the three performance targets for our performance-based awards were probable of being achieved and, therefore, recorded expense for those awards only. 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 ranging between 5.65 and 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.

We have not granted any consultant options since January 2014; as of March 31, 2015, no consultant options remained subject to vesting. When we do have unvested consultant options, we estimate the fair value at 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. 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 of convertible notes, 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 that our Fantom scaffold would be our sole focus for development and testing and we 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 2015, our operating activities have consisted of further refinement of Fantom and clinical trial activities to support increasing enrollments 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 at that time. We account for the notes and warrant liability at their fair values and have recognized non-cash losses in the consolidated statement of operations for the increases in fair values since the issuance date. Subsequent to our third quarter end, a total of 4,375,000 warrants were exercised on October 1, 2015, for cash proceeds of $9,506,000.

Comparison of the Three Months Ended September 30, 2014 and 2015

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

	Three Months Ended
	September 30,				Change
	2014		2015		$			%
Research and development expense	$	2,930	$	4,404	$	1,474			50%
General and administrative expense	$	1,516	$	1,818	$	302			20%
Interest expense	$	—	$	475	$	475			100%
Loss on change in fair values of convertible notes       and warrant liability	$	—	$	28,180	$	28,180			100%
Other income	$	49	$	9	$	(40	)	(82%)

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Research and development expense increased $1,474,000, or 50 percent, for the three months ended September 30, 2015 compared to the three months ended September 30, 2014. This increase was primarily a result of our Fantom development focus during 2014 compared to our testing and clinical enrollment focus in 2015. Clinical costs increased $443,000 as a result of the difference in timing and number of Fantom patient enrollments during the third quarter of 2015 compared to the predecessor product patient follow-ups during the third quarter of 2014. Direct materials, including purchased catheters and polymer lasing costs, increased $294,000 due to the increased product needs for preclinical and clinical purposes and our continuation of process improvement efforts during the third quarter of 2015 as compared to the same period in 2014. Personnel costs, including benefits and stock-based compensation, increased $337,000 primarily due to an approximate ten percent increase in headcount between years and an additional $171,000 in stock compensation during the third quarter of 2015 that arose from the performance-based equity grants made in March 2015. During the third quarter of 2015, we made a non-recurring payment of $200,000 for non-stent intellectual property. Preclinical study costs increased $104,000 between comparative periods due to the timing and type of testing performed.The remainder of the change in research and development expenses between periods resulted from individually immaterial changes in lab supplies, quality control, engineering services, depreciation, and facilities expenses.

General and administrative expense increased $302,000, or 20 percent, for the three months ended September 30, 2015 compared to the three months ended September 30, 2014. This increase was primarily a result of recording an expected $210,000 in severance costs as of September 30, 2015 related to the transition to our new Chief Executive Officer. The remainder of the change in general and administrative expenses between periods was due to individually immaterial changes in salaries and other personnel costs, travel and entertainment expenses, investor relations costs, marketing and tradeshow costs, office supplies, facilities costs, audit and legal fees, depreciation, insurance, franchise taxes, and other overhead expenses.

Our other non-operating expenses during the third quarter of 2015 primarily arose from the issuance of convertible notes and warrants in November 2014. Interest expense of $475,000 on the convertible notes accrued during the three months ended September 30, 2015. We additionally recorded a $28,180,000 loss on the change in fair value of the notes and warrants during the three months ended September 30, 2015. Interest income was $1,000 and other income, which primarily arose from exchange rate gains, was $8,000 for the three months ended September 30, 2015.

Comparison of the Nine Months Ended September 30, 2014 and 2015

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

	Nine Months Ended
	September 30,				Change
	2014		2015		$			%
Research and development expense	$	10,782	$	11,735	$	953			9%
General and administrative expense	$	5,768	$	4,973	$	(795	)	(14%)
Interest expense	$	—	$	1,410	$	1,410			100%
Loss on change in fair values of convertible notes       and warrant liability	$	—	$	34,311	$	34,311			100%
Other income	$	44	$	58	$	14			32%

Research and development expense increased $953,000, or nine percent, for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014, primarily as a result of our change in product development to the Fantom scaffold in late March 2014, the related reduction in headcount on March 26, 2014, and the initiation of Fantom clinical trials in December 2014. Clinical costs increased $519,000 during the first nine months of 2015 as a result of the difference in timing and number of Fantom patient enrollments in 2015 compared to the predecessor product patient follow-ups in 2014. Direct materials, including purchased catheters and polymer lasing costs, increased $393,000 because of increased product needs for preclinical and clinical purposes and our initiation of process improvement efforts during 2015 as compared to 2014. During the third quarter of 2015, we made a non-recurring payment of $200,000 for non-stent intellectual property. Offsetting these increases, our personnel costs, including benefits and stock-based compensation, decreased $206,000 in 2015, primarily due to the approximate 46 percent decrease in headcount during March 2014; the $237,000 in severance benefits and payroll taxes recorded in 2014 was not repeated in 2015. The remainder of the change in research and development expenses between periods resulted from individually immaterial changes in lab supplies, quality control, preclinical expenses, engineering services, depreciation, and facilities expenses.

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General and administrative expense decreased a total of $795,000, or 14 percent, for the nine months ended September 30, 2015 compared to the nine months ended September 30, 2014. A combination of items contributed to this decrease. Personnel costs, including benefits and stock-based compensation expense, decreased $937,000 primarily due to a decrease of $811,000 in stock compensation upon final vesting of stock option grants made in 2010 and 2011 for which comparative grants were not made in 2015. An additional $178,000 in severance benefits and payroll taxes recorded in 2014 was not repeated in 2015; the remainder of the decrease in personnel costs was due to an approximate 44 percent decrease in headcount during March 2014. Offsetting the personnel decreases, travel and entertainment increased $112,000 between the comparative periods as a result of travel required for clinical studies and we incurred $210,000 in severance costs in September 2015 related to the transition to our new Chief Executive Officer. The remainder of the change in general and administrative expenses between periods was due to individually immaterial changes in investor relations costs, office supplies, marketing and tradeshow costs, audit and tax fees, facilities costs, depreciation, insurance, franchise taxes, and other overhead expenses.

Our other non-operating expenses during the nine months ended September 30, 2015 primarily arose from the issuance of convertible notes and warrants in November 2014. Interest expense of $1,410,000 on the convertible notes accrued during the nine months ended September 30, 2015. We additionally recorded a $34,311,000 loss on the change in fair value of the notes and warrants during the nine months ended September 30, 2015. Interest income was $7,000 and other income, which primarily arose from exchange rate gains, was $51,000 for the nine months ended September 30, 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 have incurred substantial losses since our inception; as of September 30, 2015, we had accumulated a deficit of approximately $304.9 million. 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 through September 30, 2015, 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). We completed a financing in November 2014 that was 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. Both the notes and the warrants have five-year lives. We received gross cash proceeds of $25.0 million from the notes upon the closing in November 2014.

As of September 30, 2015, we had approximately $12.3 million in cash and investments available for operations. Subsequent to our third quarter end, on October 1, 2015, we received cash proceeds of $9.5 million from the issuance of common stock upon the exercise of 4,375,000 warrants, which provided us cash and investments available for operations totaling $21.8 million as of October 1, 2015. We believe this balance as of October 1, 2015 will be sufficient to fund our operating and capital needs into, and possibly through, the third fiscal quarter of 2016. When, and if, the remaining 4,375,000 outstanding warrants are exercised, we would receive $11.4 million cash proceeds.

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 remaining warrants issued in November 2014. We currently have no set plans for raising additional capital.

-  18  -

Cash Flows

Our cash flows for the periods indicated are as follows: 

	Nine Months Ended
	September 30,
	2014			2015
	(in thousands)
Net cash used for operating activities	$	(14,120	)	$	(13,884	)
Net cash provided by (used for) investing activities	$	1,109		$	(256	)
Net cash provided by financing activities	$	79		$	171
Net decrease in cash and cash equivalents	$	(12,932	)	$	(13,969	)

Net Cash Flow from Operating Activities

Net cash used for operating activities during the first nine months of 2014 primarily reflects the net loss of $16,506,000. A total of $1,348,000 was due to the net changes in operating assets and liabilities. Non-cash expenses included $780,000 of depreciation and amortization and $2,940,000 of stock-based compensation.

Net cash used for operating activities during the first nine months of 2015 primarily reflects the loss from operations of $16,708,000 and the changes in operating assets and liabilities of $454,000. These items were offset by non-cash expenses of $2,368,000 for stock-based compensation, $811,000 of depreciation and amortization, and $41,000 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 used in investing activities during the first nine months of 2014 consisted of $1,492,000 in receipts upon the maturity of short-term investments, offset by $383,000 in purchases of lab and other equipment and leasehold improvements.

Net cash used for investing activities during the first nine months of 2015 consisted of $754,000 for the purchase of lab and other equipment, offset by $498,000 received upon the maturity of certificates of deposit.

Net Cash Flow from Financing Activities

Cash provided by financing activities during the first nine months of 2014 resulted from $222,000 in proceeds from the issuance of common stock upon the exercise of employee and consultant stock options, offset by $143,000 in payment of progress costs associated with the financing transaction completed in November 2014.

Cash provided by financing activities during the first nine months of 2015 resulted from $221,000 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).

Until such time as we commercialize a product and reach a sales volume to generate positive cash flow, we plan to continue to fund our operating and capital needs by utilizing our current cash and investments. We had cash and investments totaling $12.3 million as of September 30, 2015; we received $9.5 million cash proceeds from the exercise of 4,375,000 warrants on October 1, 2015. We believe the combined balance of $21.8 million as of October 1, 2015 will be sufficient to fund our operating and capital needs into, and possibly through, the third fiscal quarter of 2016.  Additionally, the 4,375,000 warrants that remain outstanding, which have a five-year life, are exercisable at a price of $2.6073 per share. If the remaining warrants are exercised, we have the potential to receive up to $11.4 million cash proceeds. Management intends to pursue exercise of the remaining warrants.

-  19  -

If the warrants are not exercised or if they are not exercised in time to accommodate our cash flow needs, 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 bioresorbablescaffolds, 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 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 September 30, 2015:

	Payments Due by Period
	< 1 Year		1 to 3 Years		Total
	(in thousands)
Contractual Obligations:
Operating lease obligations	$	685	$	947	$	1,632
Purchase obligations		79		6		85
	$	764	$	953	$	1,717

Off-Balance Sheet Arrangements

Not applicable.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

-  20  -

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 September 30, 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 September 30, 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 September 30, 2015 that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

-  21  -

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 nine months ended September 30, 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

Not applicable.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not applicable.

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:  November 9, 2015	/s/ Regina E. Groves
	Regina E. Groves
	Chief Executive Officer (Principal Executive Officer)
Date:  November 9, 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	Incorporated by Reference
Exhibit Number	Description of Exhibits	Form 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
10.1	Executive Employment Agreement, dated September 21, 2015, by and between REVA Medical, Inc. and Regina Groves		8-K	000-54192	8/21/2015
10.2	Exclusive License Agreement Number 2 between Rutgers, The State University of New Jersey and REVA Medical, Inc. dated July 1, 2010 *	X
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

* Registrant has requested continuation of confidential treatment with respect to certain portions of this exhibit.

** 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.

EX-10.2

Exhibit 10.2

EXCLUSIVE LICENSE AGREEMENT NUMBER

Between

REVA Medical, Inc.

and

RUTGERS, THE STATE UNIVERSITY OF NEW JERSEY

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EXCLUSIVE LICENSE AGREEMENT NUMBER 2

THIS Exclusive License Agreement Number 2 (the "Agreement") is made and is effective as of the 1^st day of July 2010, (the “Effective Date”) by and between Rutgers, The State University Of New Jersey, having its statewide Office of Technology Commercialization at ASB Annex III, 3 Rutgers Plaza, New Brunswick, New Jersey 08901-8559, (hereinafter referred to as "Rutgers"), and REVA Medical, Inc., a California corporation having a principal place of business at 5751 Copley Drive, Suite B, San Diego, CA 92111 (hereinafter referred to as "Licensee").

RECITALS

WHEREAS, Certain inventions were madein the course of research at Rutgers under the direction of Dr. Joachim Kohn and in the course of research at Licensee; and

WHEREAS, The development of the inventions was sponsored in part by the National Institutes of Health under Grant GM39455, and in consequence this Agreement is subject to overriding obligations to the federal government as set forth in 35 U.S.C. sections 200-212 and applicable governmental regulations; and

WHEREAS, Licensee entered into that certain Exclusive License Agreement dated January 21, 2004, as amended, (the “2004 License Agreement”) (License Number L04-062); and

WHEREAS, the 2004 License Agreement is superseded and replaced in its entirety by this Agreement; and

WHEREAS, Licensee has maintained a sponsored research agreement (as later defined) with Rutgers (Dr. Joachim Kohn and other Rutgers employees working under his direction) and intends to continue this agreement, which contributes to the Rutgers’ Patent Rights; and

WHEREAS, Licensee intends to continue its contributions to the technology advancements with its collaboration efforts through the sponsored research agreement and its other research efforts; such contributions and collaborations by Licensee have previously, and may in the future, give rise to Joint Improvements (as later defined) and Joint Inventions (as later defined); and

WHEREAS, as of the Effective Date Licensee is a "Small Business Firm" as defined (for grants) in 15 U.S.C. 632; and

WHEREAS, Licensee wishes to obtain certain rights from Rutgers for the commercial development, manufacture, use, and sale of the Inventions (defined below), and Rutgers is willing to grant such rights on the terms and conditions set forth in this

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Agreement; and

WHEREAS, Rutgers is desirous that the Inventions be developed and utilized to the fullest extent so that the benefits can be enjoyed by the general public.

NOW THEREFORE, the parties agree as follows:

1. DEFINITIONS

All definitions below or elsewhere in this Agreement apply to both their singular and plural forms, as the context may require.  "Herein," "hereunder," and "hereof" and other similar expressions refer to this Agreement.  "Section" and "Article" refer to sections in this Agreement.  The term "including" means "including without limitation" and "Days" means "calendar days," unless otherwise stated.

1.1. "Affiliate(s)" means any corporation or other legal entity that directly or indirectly controls, is controlled by, or is under common control with Licensee to the extent of at least fifty percent (50%) of the outstanding stock or other voting rights entitled to elect directors.

1.2. “Change of Control” means the acquisition by a third party or an Affiliate of more than fifty percent (50%) of Licensee’s securities which are outstanding after the acquisition, or all or substantially all of Licensee’s assets.

1.3. "Confidential Information" with respect to property owned or controlled by either party means all data, information, and/or tangible material owned or controlled by either party and provided to each other, its Affiliates or its sublicensee (“Sublicensee) directly or indirectly from or through either party, its units, its employees, the Inventors, or its consultants relating to the Inventions, Licensed Products, or this Agreement, including but not limited to, all patent prosecution documents and all information received from Inventors.

1.4. “Coronary stent products” means Licensed Products in the Licensed Field that are polymer stents used in coronary blood vessels.

1.5. “Improvement(s)” means any change, modification or enhancement of a technology and/or invention that cannot be practiced without infringing a claim cited in an Invention described in Exhibit A and/or that cannot be practiced without a license to the Inventions described in Exhibit A.

1.6. “Invention(s)” collectively means, with respect to Licensed Polymers, any patent application, disclosure and/or discovery that is patentable or non-patentable, which is included in Exhibit A, and as subsequently amended, which was madein the course of research at Rutgers under the direction of Dr. Joachim Kohn  

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(hereinafter “Rutgers Inventions”) or in the course of research by Licensee, including work for hire, and is included on Exhibit A, and as subsequently amended (hereinafter “Licensee Inventions"), or was made by Rutgers and Licensee and is included on Exhibit A and as subsequently amended (hereinafter “Joint Inventions”).  The parties represent that Exhibit A correctly lists all applicable intellectual property of theirs as of the Effective Date of this Agreement that is intended to be included in the scope of this Agreement. 

1.7. "Inventor(s)" collectively means any person at Rutgers working under the direction of Dr. Joachim Kohn (“Rutgers Inventor”) and/or at Licensee, including work for hire (“Licensee Inventor”) who contributes to the claims of a patentable invention or non-patentable technology. If both a Rutgers Inventor(s) and a Licensee Inventor(s) contribute to said invention or non-patentable technology, they shall be termed “Joint Inventors,” as applicable.

1.8. “Licensed Fields” collectively means:

(i) For all licensed intellectual property that is owned by Rutgers, the Licensed Field shall be defined as any product applications that work in or with the vasculature (i.e., that which comprises all cardiovascular and peripheral vessels (arteries and veins, capillaries to large vessels, and blood vessels to the heart and those vessels on the surface of the heart such as coronary vessels)) which includes vessel lumens and/or vessel exteriors and vessel replacements. Products applications in the Licensed Field may include a therapeutic that is pharmaceutically and/or biologically active and/or a passive agent as long as said therapeutic is acting and is intended to be used in a site specific fashion only.  Excluded from the Licensed Field are

(a) any systemic drug delivery devices and implants that are placed into the blood stream predominantly for the purpose of the delivery of a therapeutic to the patient’s entire system, and

(b) arterial and venous closure devices defined as any device whose primary purpose and function is to close a catheter access puncture of a blood vessel, and

(c) any device that resides within the chambers (atria or ventricles) of the heart or within the muscle wall of the heart chambers.

(ii) For all Joint Inventions that were jointly invented by Rutgers and Licensee and filed in 2007 or thereafter, and for all Licensee Inventions, subject to the terms of this License Agreement, the Licensed Field shall be defined as product applications that work in or with the vasculature (i.e., that which comprises all cardiovascular and peripheral vessels (arteries and veins, capillaries to large vessels, and blood vessels to the heart and those vessels on the surface of the heart such as coronary vessels) which includes vessel lumens and/or vessel exteriors and vessel replacements. Products

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applications in the Licensed Field may include a therapeutic that is pharmaceutically and/or biologically active and/or a passive agent as long as said therapeutic is acting and is intended to be usedin a site specific fashion only.Excluded from the Licensed Field are 

(a) any systemic drug delivery devices and implants that are placed into the blood stream predominantly for the purpose of the delivery of a therapeutic to the patient’s entire system.

1.9. "Licensed Method(s)" means any process, method, or use that is covered by Rutgers’ Patent Rights or use or practice of which would constitute, but for the license granted to Licensee pursuant to this Agreement, an infringement of any issued or pending claim within Rutgers’ Patent Rights.

1.10. "Licensed Polymer(s)" means (should be numbered (i) through (iv))

(i) any polymer that the manufacture, use or sale of which is covered by at least one Valid Claim; and

(ii) Including starting materials to the extent used by Licensee or a Sublicensee to make polymers under this Agreement in the Licensed Field, which materials are covered by the intellectual property listed on Exhibit A, as amended, and Improvements thereto (for example monomers).  Notwithstanding anything to the contrary in this Agreement, Licensed Polymers shall not include starting materials sold or traded as product itself (i.e., a monomer) if the starting material is not covered by a Valid Claim, but

(iii) excluding the following intellectual property licensed by Rutgers to a third party for certain fields of use:  Polyarylates polymerized from diphenol monomers disclosed in US Patents Nos. ^***
and US Application Publication ***.

iv) excluding materials, methods and intellectual property claimed in Exhibit A not already excluded by subsection 1.10 (iii) above, and that have been previously licensed by Rutgers exclusively to a third party for use outside the “Licensed Fields” as defined in Section 1.8 above.

1.11. "Licensed Product(s)" means those products containing a Licensed Polymer including, without limitation, those Licensed Polymers that

^***Portions of this page have been omitted pursuant to a request for Confidential Treatment filed separately with the Commission.

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(i) are covered by Rutgers’ Patent Rights in that their manufacture, use, distribution or sale would constitute, but for the license granted to Licensee pursuant to this Agreement, an infringement of any valid claim within Rutgers’ Patent Rights and/or

(ii) are discovered, developed, made, or practiced using a Licensed Method.

1.12. "Major Market Countries" means Canada, France, Germany, Italy, Japan, the United States of America and the United Kingdom.

1.13. "Net Sales" means the total of the gross consideration received for Licensed Products made, used, leased, transferred, distributed, sold or otherwise disposed of by Licensee, its Affiliates, and its Sublicensees, less the sum of the following actual and customary deductions, returns, credits, rebates or allowances actually paid or given, including without limitation, cash, trade, or quantity discounts; sales, production, value added or use taxes imposed upon particular sales; chargeback payments and rebates granted to managed healthcare organizations or to governments;  and import/export duties; and transportation and insurance charges. In the event Licensee or any of its Affiliates or Sublicensees makes a transfer of a Licensed Product to a third party for other than monetary consideration or for less than fair market value, such transfer shall be considered a sale hereunder to be calculated at a fair market value for accounting and royalty purposes.  Furthermore if Licensee, its Affiliates or Sublicensees commercially use Licensed Product with no expectation of subsequent royalty bearing transfer of such Licensed Product to an unaffiliated third party, such commercial use shall be considered a sale hereunder to be calculated at a fair market value for royalty and accounting purposes.  Only one royalty shall be payable to Rutgers with respect to each Licensed Product.  Notwithstanding the foregoing, free sampling of Licensed Product in reasonable and customary quantities, including development trials, evaluation and reasonable marketing, as well as providing Licensed Product for compassionate use, shall not be subject to payment of royalties to Rutgers.

A Licensed Product shall be deemed made, used, leased, transferred, sold, or otherwise disposed of at the time Licensee bills, invoices, ships, or receives payment for such Licensed Product or commercially uses such Licensed Product, whichever occurs first.

1.14. “Non-Coronary Stent Product” means a Licensed Product in the Licensed Field that is inserted into any blood vessel that is not part of the coronary blood supply.  For the avoidance of doubt, any stent used in peripheral blood vessels or any stent used within the vasculature of the brain is a “Non-Coronary Stent Product.”

1.15. “Non-Stent Product” means a Licensed Product in the Licensed Field that is not

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inserted into the blood vessel with the intent to maintain the lumen of a blood vessel open.  For the avoidance of doubt, a product injected into the vasculature with the intent of blocking the flow of blood in a target blood vessel will be a “Non-Stent Product.”   

1.16. "Rutgers’ Patent Rights" means the following patent applications, provisional patent applications, and issued patents owned or controlled by Rutgers and/or Rutgers’ ownership interest in jointly owned provisional patent applications and issued patents to the extent they apply to Licensed Polymers:

(i) U.S. Patents and Patent Applications listed on Exhibit A, and as subsequently amended; any divisionals, renewals, substitutions, continuations or continuations-in-part to any such Patent Applications; U.S. Patent(s) that claim priority to, or common priority with, any of the foregoing Patent Applications; and any reissues, extensions (including governmental equivalents thereto) and reexaminations to any of the foregoing Patents that are owned or controlled by Rutgers, and

(ii) any other pending, issued or hereafter filed, foreign counterpart of any application from clause (i) above, all of the foregoing owned or controlled by Rutgers, in Exhibit A, and

(iii) any disclosures, U.S. provisional patent applications, patent registrations, utility models, registered or unregistered designs, in Exhibit A, and

(iv) Improvements with respect to subsections (i), (ii) and (iii) above to which Licensee acquires or has otherwise licensed rights in accordance with this Agreement except as set forth in Section 2.8, and  

(v) for avoidance of doubt, with respect to such Improvements with respect to subsections (i), (ii) and (iii) which constitute the Licensee Inventions or Joint Inventions of Licensee under U.S. patent law, Licensee elects to have such Licensee's rights in such Improvements included in the Rutgers’ Patent Rights for purposes of this Agreement. Further, other intellectual property which is added to Exhibit A, pursuant to the terms of this Agreement, will be included in the definition of Rutgers' Patent Rights for purposes of this Agreement

1.17. "Rutgers’ Technology" means, to the extent they apply to Licensed Polymers, all information, know-how, data rights, trade secrets, mask works, and physical objects to the extent reasonably necessary or useful to practice the Inventions in the Licensed Field and any non-patent intellectual property thereunder owned or controlled by Rutgers, which Rutgers has the right to disclose and license to Licensee, except as set forth herein, without incurring obligations, and which was created and discovered by, or under the direction of, one or more of the Rutgers Inventors prior to the Effective Date of this Agreement.

1.18. “Sponsored Research Agreement” means the agreement dated July 18, 2002 between Licensee and Rutgers for the work performed by Professor Joachim

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Kohn and other Rutgers employees, and as previously amended by Modification No.1 dated July 7, 2003, Modification No. 2 dated October 12, 2004, Modification No.3 dated February 28, 2005 and Modification No.4 dated July 25, 2005 and Modification No. 5 dated July 12, 2006 and Modification No. 6 dated May 29, 2007 and Modification No. 7 dated March 4, 2008 and Modification No. 8 dated December 23, 2008 and Modification No. 9 dated July 21, 2009. 

1.19. "Territory" means worldwide.

1.20. “Valid Claim” means either (a) a claim of an issued and unexpired patent included within the Rutgers Patent Rights, which has not been held permanently revoked, unenforceable or invalid by a decision of a court or other governmental agency of competent jurisdiction, unappealable or unappealed within the time allowed for appeal, and which has not been admitted to be invalid or unenforceable through reissue or disclaimer or otherwise or (b) a claim of a pending patent application included within the Rutgers Patent Rights, which claim was filed in good faith, and has not been abandoned or finally disallowed without the possibility of appeal or refiling of such application.

2. GRANTS

2.1. Subject to the limitations set forth in this Agreement, Rutgers hereby grants to Licensee an exclusive license solely with respect to Licensed Polymers in the Licensed Field in the Territory under Rutgers’ Patent Rights and a non-exclusive right to use the Rutgers’ Technology, in each case to make, have made, use, import, put into use, modify, distribute, sell, offer for sale and have sold Licensed Products and to practice Licensed Method in the Territory during the term of this Agreement.  During the term of this Agreement, Licensee shall also have the right to make Improvements as long as the Improvements are made with the intent to incorporate into this Agreement.

2.2. As the Inventions were funded in part by the U.S. Government, the licenses granted hereunder shall be subject to the overriding obligations to the U.S. Government set forth in 35 U.S.C. 200-212 and any future amendments thereto, and applicable governmental regulations, as well as any other applicable governmental restrictions, if any, including, without limitation

(i) to the obligation to manufacture in the United States Licensed Product intended for consumption in the United States unless a waiver is obtained, and

(ii) to the royalty free non-exclusive license thereunder to which the U.S. Government is entitled.

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2.3. Rutgers’ reserved rights: 

(i) Rutgers expressly reserves the right to have the Inventions and associated Rutgers Patent Rights licensed hereunder used for educational, non-commercial research and other non-business purposes and to publish (excluding Licensee Confidential Information) the results thereof.

(ii) Except as provided by Section 2.8, Licensee hereby grants to Rutgers an exclusive, worldwide, license, with right of sublicense, to make, use and sell products containing or covered by the claims of Inventions listed on Exhibit A, as amended and Improvements thereto, discovered and/or developed by or on behalf of Licensee, its Affiliates or its Sublicensees during the term of this Agreement for all fields of use outside the Licensed Field.   With respect to Rutgers Patent Rights, in the event that Rutgers sublicenses these Rutgers Patent Rights to a third party outside the Licensed Field after the Effective Date, the patent-related costs of the Rutgers Patent Rights will be shared pro-rata with either Rutgers or the applicable Sublicensee.

(iii) If, pursuant to the rights granted in Section 2.3(ii), Rutgers licenses only Inventions and/or Improvements constituting a Licensee Invention or otherwise solely owned by Licensee, Rutgers shall pay Licensee fifty percent (50%) of all income and consideration Rutgers receives from such licenses. Rutgers shall make all such payments, and provide reports and audit rights, consistent with Sections 5, 7 and 8, parri passu.  Notwithstanding the foregoing, Rutgers shall deduct all non-reimbursed patent costs and other reasonable out of pocket costs it has incurred in regards to such license prior to allocating income percentages.  This provision shall survive termination of the license.

(iv) As long as Licensee retains its exclusive grant of license rights from Rutgers pursuant to the terms of this Agreement, neither Rutgers nor its (sub)licensees shall have the right to practice the license rights to the Improvements granted pursuant to this Section within the Licensed Field for commercial purposes.

2.4. To the extent Rutgers, principally through the Inventors, has provided Rutgers’ Technology to Licensee, it is understood that at the time of disclosure to the Licensee some of the Rutgers’ Technology may have been made available to the public without restrictions.

2.5. Continuing Research by Rutgers and Licensee.

(i) Each Party will advise the other of Improvements to the Inventions made by the Inventors during the term of this Agreement and will disclose them to the Rutgers Office of Technology Commercialization.  Each party shall further disclose to each other any patent filings directly related to the Inventions that such party intends to make.

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(a) Rutgers Inventions which are Improvements, to the extent such Improvements were funded by Licensee pursuant to a Sponsored Research Agreement between Licensee and Rutgers, will be included within the definition of "Inventions" set forth in this Agreement.   

(b) For avoidance of doubt, Licensee Inventions and all Joint Inventions which are Improvements will be included within the definition of "Inventions" set forth in this Agreement.

(c) A new Invention, which is not an Improvement, and which is within the definition of the Licensed Polymer and is developed as part of the Sponsored Research Agreement, and which is a Rutgers Invention or a Joint Invention, will be included within the definition of "Inventions" set forth in this Agreement.

(ii) Each Party will advise the other, at their sole discretion, if they elect to include in this Agreement a novel invention that consists of a new biodegradable polymer that:

(a) is not an Improvement to an existing Invention on Exhibit A, and

(b) that was developed separately from the Sponsored Research Agreement, and

(c) that is a sole Invention by Rutgers Inventors or by Licensee Inventors.

Upon one Party providing written notice to the other party pursuant to this clause (ii), the applicable invention shall be an “Invention” under this Agreement.

(iii) Exhibit A will be periodically amended to include Improvements, new Inventions.  

(iv) The provisions of this Agreement supersede the terms of intellectual property as stated in the Sponsored Research Agreement.

2.6. Subject to Sections 2.3 and 2.8, Licensee shall hold all rights and interests in and to any Improvements that Licensee, its Affiliates or its Sublicensees develop during the term of this Agreement for the Licensed Field.  The parties shall execute any and all documentation and take any such actions at Licensee’s expense to achieve the intent of this Section 2.6 and Sections 2.1, 2.3 and 2.8.  For avoidance of doubt, with respect to such Improvements, Licensee Inventions will be included in the Rutgers’ Patent Rights for purposes of this Agreement.

2.7. Subject to Sections 2.2 and 2.3 Rutgers represents that as of the Effective Date of this Agreement it has not entered into any agreements or other arrangements to license the Rutgers’ Patent Rights to any third party in the Licensed Field, and warrants that to the extent Licensee is not in default of its obligations under this Agreement and retains an exclusive license in the Licensed Field to such provisional patent or U.S. or foreign patent applications corresponding thereto or patents issuing thereon, Rutgers shall not grant to a third party a license of such

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applications or patents in the Licensed Field or for any other polymer within the Licensed Field (for avoidance of doubt, as used solely in this instance “Licensed Field” shall exclude the “solely with respect to Licensed Polymers” language therein). 

2.8. Notwithstanding anything in this Agreement to the contrary, after the effective date of a Change of Control, all rights (including Rutgers Patent Rights and Rutgers Technology), title and interests in any Improvements made by Licensee with no contribution by Rutgers after such Change of Control, shall be owned exclusively by Licensee without any obligation to pay any royalties or fees of any kind on such Improvements (or the use of the Improvements in any products).  For avoidance of doubt,

(i) after a Change of Control, such Improvements shall not constitute “Rutgers’ Patent Rights” or “Inventions” as such terms are defined in this Agreement, and

(ii) notwithstanding Sections 2.1, 2.3, 2.6 and 11, Licensee shall not be obligated to license or assign such Improvements which are Licensee Inventions, or any rights underlying such Improvements, or any information related to such Improvements, to Rutgers or any third party and all rights granted to Rutgers hereunder with respect to such Improvements shall terminate.

3. SUBLICENSES

3.1. Rutgers grants to Licensee the right to grant sublicenses to third parties under any or all of the licenses granted in Article 2, provided Licensee has current exclusive rights thereto under this Agreement at the time it exercises a right of sublicense. To the extent applicable, any such sublicense shall include all of the rights of and obligations due to Rutgers (and to the U.S. Government) that are contained in this Agreement.  Upon any termination of this Agreement, any sublicense agreements that have been properly entered into prior to the date of such termination and that are in good standing shall be automatically assigned to Rutgers after the date of such termination, such that the applicable Sublicensee shall continue to receive a license under the Rutgers’ Patent Rights.

3.2. Within thirty (30) days after execution thereof, Licensee shall provide Rutgers with a copy of each sublicense issued hereunder, and shall thereafter collect and guarantee payment of all royalties and other obligations due Rutgers relating to the sublicenses and summarize and deliver all reports due Rutgers relating to the sublicenses.  Notwithstanding the foregoing, if a Sublicensee breaches its obligation to pay royalties to Licensee pursuant to the terms of the sublicense agreement, and Licensee timely terminates the applicable sublicense agreement, then Licensee shall not be in breach of its obligation to pay royalties to Rutgers from such Sublicensee’s Net Sales of Licensed Product.

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4. LICENSE FEES AND MILESTONE AND OTHER PAYMENTS

4.1. Licensee shall pay to Rutgers $175,000 on January 1, 2010 and on each following annual anniversary thereafter, until a Licensed Product has commenced commercial sales in a Major Market Country.

4.2. Licensee shall pay to Rutgers  milestone payment fees on milestones achieved by REVA itself (not Sublicensees) of:

(i) $  *** for the European Marketing Approval of each Coronary Stent Product, $ ***   for the European Marketing Approval of each Non-Coronary Stent Product, and $  ***   for the European Marketing Approval of any other product that is a Non-Stent Product, up to a total aggregate over the lifetime of this Agreement of $  ***     for European Marketing Approvals, and,

(ii) $  *** for the Marketing Approval of each Coronary Stent Product in any country other than the USA and Europe, $  ***   for the Marketing Approval of each Non-Coronary Stent Product in any country other than the USA and Europe, and $  *** for the Marketing Approval of any other product that is a Non-Stent Product in any country other than the USA and Europe, up to a total aggregate over the lifetime of this Agreement of $   ***   for all Marketing Approvals in countries that are outside of Europe and the USA.

(iii) $***   for the Pre-Marketing Approval by USFDA of each Coronary Stent Product, $  *** for the Pre-Marketing Approval by USFDA of each Non-Coronary Stent Product by USFDA, and $  ***   for each Non-Stent Product by USFDA, up to a total aggregate over the lifetime of this Agreement of
$  ***   for all Pre-Market Approvals (or equivalent regulatory approval) by USFDA.

(iv) These milestone payment fees under Sections (i) through (iii) shall be paid to Rutgers within thirty (30) days after the occurrence of the event set forth on the schedule above and shall not be refundable or creditable against royalties.

4.3. Licensee shall pay to Rutgers ***   percent (***%) of milestone fees and ***% up to the first $*** received (***% of all amounts received over $***) of license fees received in consideration for the grant of a sublicense to Rutgers’ Patent Rights, Rutgers’ Technology or Licensed Products licensed hereunder (“Rights”) received by Licensee or its Affiliates in connection with all such sublicenses or transfer of rights agreements. The applicable fee will be made at the first to occur of the following:

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(i) The first milestone payment received by Licensee under a sublicense or transfer of rights agreement or  

(ii) The first commercial sale of Licensed Product by a Sublicensee under a sublicense or transfer of rights agreement or

(iii) 30 days after receipt by Licensee if received after the occurrence of (i) or (ii) above.

4.4. Neither milestone or license fees shall be paid on the following:

(i)   royalties received pursuant to Section 5.1 herein, and

(ii)   bona fide equity investments in Licensee, and

(iii) payments received and used for the direct cost of future Licensee research expenses and reasonable operating expenses of Licensee related to the development of the Licensed Products for which the payments are received (including without limitation reimbursement for patent expenses), and

(i)  payments received as installments in the sale of Licensee to a third party or a part of a Change of Control (regardless of structure, and for avoidance of doubt, whether structured as a sale of substantially all of the assets of Licensee or a sale of substantially all of the stock of Licensee).

4.5. In sublicense or "transfer of rights" transaction agreements set forth above, where Licensee equity is part of the transaction and the Sublicensee is purchasing Licensee’s equity at above its fair market value, then Licensee will pay Rutgers    ***    percent (***%) of the difference between the consideration received by License and the fair market value (as determined by a mutually agreeable third party under confidentiality obligations at least as protective of the parties as those set forth in this Agreement) of the equity acquired if such difference is less than $^***. If the difference between the consideration received by Licensee for such equity and the fair market value (as determined by a mutually agreeable third party under confidentiality obligations at least as protective of the parties as those set forth in this Agreement) of the equity acquired exceeds $***, then Licensee shall pay Rutgers forty percent (40%) of such difference.

4.6. Licensee shall pay Rutgers a one time fee of $350,000 at closing of the first Change of Control of Licensee.

5. ROYALTIES

5.1. Except as otherwise required by law, Licensee shall pay to Rutgers a royalty of   

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***    percent (^***%) of Licensee’s Net Sales of each category of Licensed Products and   ***     percent (***%) of Net Sales of Licensee’s Sublicensees. This obligation to pay royalties shall survive termination (but not expiration) of this License. 

Sales or other transfers among Licensee, its Affiliates and Sublicensees which would otherwise be royalty bearing under this Agreement shall be disregarded for purposes of computing royalties, to the extent that Licensed Products subject to such sale or transfer are subsequently sold or transferred to a third party where a payment of royalty by such third party pursuant to the terms of this Agreement with respect to such sale or transfer will be required.  Regardless of the number of Licensed Patents that cover a Licensed Product, Licensee shall only pay one applicable royalty set forth in this Article 5.1, and shall not pay multiple royalties for such overlapping coverage.

5.2. Royalties payable to Rutgers shall be paid quarterly on or before the following dates of each calendar year with respect to the immediately preceding calendar quarter:

(i) February 28^th, and

(ii) May 31^st, and

(iii) August 31^st, and

(iv) November 30^th.  

Each such payment will be for unpaid royalties that accrued within Licensee's most recently completed calendar quarter plus any other undisputed unpaid royalties due, but not previously paid for any reason.

5.3. For the term of this Agreement, with regard to Coronary Stent Products only Licensee shall pay to Rutgers a minimum annual royalty beginning on the first anniversary of the first commercial sale of a Coronary Stent Product according to the following payment schedule:

Year one:    $***

Year two:     $***

Year three:  $***

Year four:    $***

Year five:     $***

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Year six:       $***

In year seven and every year thereafter, Licensee shall pay an annual fee of
$^***

For the term of this Agreement with regard to Non-Coronary Stent Products and Non-Stent Products which for the purposes of this Section 5.3 only are combined into one category of Licensed Products other than Coronary Stent Products, Licensee shall pay to Rutgers a minimum annual royalty beginning on the first anniversary of the first commercial sale of a Licensed Product, other than a Coronary Stent Product, according to the following payment schedule.

Year one:     $***

Year two:      $***

Year three:   $***

Year four:     $***

Year five:      $***

Year six:        $***

In year seven and every year thereafter, Licensee shall pay an annual minimum royalty payment of $***.

5.4. This minimum annual royalty shall be paid to Rutgers by February 28 of each year and shall be credited against the earned royalty due and owing for the calendar year in which the minimum annual royalty is paid.  The first minimum annual royalty due shall be prorated by the fractional number of full months remaining in that calendar year and shall be paid within forty-five days (45) of the date of first commercial sale of a Licensed Product.

5.5. All amounts due Rutgers shall be payable in United States Dollars in New Brunswick, New Jersey.  When Licensed Products are sold for monies other than United States Dollars, the earned royalties will first be determined in the foreign currency of the country in which such Licensed Products were sold and then converted into equivalent United States Dollars.  The exchange rate will be the average of the United States Dollar buying rate quoted in the Wall Street Journal on the last business day of each month during the reporting period.

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5.6. Licensee shall be responsible for any and all taxes, fees, or other charges imposed by the U.S. Government or any country outside the United States on the income for sales occurring in any such country, excluding income taxes owing on Rutgers’ income.

5.7. If at any time legal restrictions prevent the acquisition or prompt remittance of United States Dollars by Licensee with respect to any country where a Licensed Product is sold, Licensee shall pay royalties due to Rutgers from Licensee’s other sources of United States Dollars.

5.8. In the event that any patent or any claim thereof included within the Rutgers’ Patent Rights shall be held invalid in a final decision by a court of competent jurisdiction and last resort in any country and from which no appeal has or can be taken, all obligation to pay royalties based on such patent or claim or any claim patently indistinct there from shall cease as of the date of such final decision with respect to such country.  Licensee shall not, however, be relieved from paying any royalties that accrued before such decision or that are based on another patent or claim not involved in such decision, or that are based on the Rutgers’ Technology.

5.9. If a license to the Inventions has been granted to the U.S. Government, no running royalties shall be payable hereunder on Licensed Products sold to the U.S. Government.  Licensee, its Affiliates and its Sublicensees shall reduce the amount charged for Licensed Products sold to the U.S. Government by an amount equal to the royalty for such Licensed Products otherwise due Rutgers as provided herein.

5.10. If Licensee’s practice of a claim of an issued patent included in the Rutgers’ Patent Rights infringes a third party’s patent rights (as documented by a written opinion of an outside patent counsel selected by the parties, a copy of which is provided to Rutgers), and as a result Licensee is obligated to pay running royalties to such third party as a result of such infringement, then to the extent the sum of the running royalties Licensee is obligated to pay Rutgers and said third party for such infringement exceed ^***% of Net Sales of Licensed Product, the running royalties due Rutgers shall be reduced by ***   percent (***%) of such excess, provided however, the running royalty rate due Rutgers will not be reduced by more than one-half the rates otherwise due to Rutgers, as stated above.  

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6. DILIGENCE 

6.1. Licensee, upon and after execution of this Agreement, shall use all reasonable efforts to develop, test, obtain any required governmental approvals, manufacture, market and sell Licensed Products in all countries of the Major Market Countries and any such other countries mutually agreed to by the parties.  Licensee shall use all commercially reasonable efforts to obtain such Major Market Country approval within a reasonable time after execution of this Agreement and supply (or have supplied) Licensed Product to such Major Market Countries in quantities sufficient to meet the market demands.

6.2. Licensee shall be entitled to exercise prudent and reasonable business judgment in meeting its diligence obligations in Section 6.1, but at a minimum will exert at least the efforts that it exerts for its own highly valuable potential products under development and existing products being marketed and sold.

6.3. Licensee shall meet the following key commercialization milestones within the time frames indicated. If a substantial change in laws or regulations that directly affects the approval process for a Licensed Product prevents Licensee from meeting the milestone dates in this Section 6.3 Rutgers and Licensee agree to negotiate in good faith for a reasonable change in the dates effected.

(i) In regard to a Coronary Stent Product,

(a) Licensee or its Sublicensees will initiate at least one clinical trial for a Coronary Stent Product within eighteen (18) months of the Effective Date of this Agreement in Major Market Country.

(b) Licensee or its Sublicensees will submit a complete application to either an appropriate regulatory body in the European Community or to the USFDA for CE Market/PreMarket Approval for at least one Coronary Stent Product within forty-eight (48) months of the Effective Date of this Agreement.  Should applicable regulatory requirements change subsequent to the Effective Date or should there arise a technical complication requiring that Licensee (or Sublicensees) must perform additional research and development work to satisfy the new requirements, Licensee may request an extension at no cost to Licensee of up to eighteen (18) months to complete this milestone.  Permission for such an extension shall not be unreasonably withheld by Rutgers as long as Licensee provides documentation showing that the extension is  necessary, as well as a reasonable revised timeline to the submission required to satisfy this milestone.  .

(c) Licensee or its Sublicensees will commence commercial sales of at least one Coronary Stent Product in at least one Major Market Country within six (6) months of obtaining regulatory approval for such product.  

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(ii) With regard to any Non-Stent Product,

(a) Licensee shall pay to Rutgers $***   upon execution of this
Agreement.

(b) Licensee or its Sublicensees shall file with the USFDA or with a comparable agency in another Major Market Country, product specific applications to initiate human trials that are intended to lead to market approval of a Licensed Product.  Such filing shall occur no later than three (3) years from the date of execution of this Agreement.  If such filing does not occur within three years, Licensee may elect to extend the filing period by an additional year by payment of a $***
extension fee.  If extended, and if such filing does not occur by the fourth anniversary, Licensee may elect a further extension of the filing period to a fifth year by payment of a $***     extension fee.  If additional extensions are required, Licensee may obtain them by paying $^*** annually there after if the necessary filing has not occurred prior to the date the extension fee is due.

Should applicable regulatory requirements change subsequent to the Effective Date or should there arise a technical complication requiring that Licensee (or Sublicensees) must perform additional research and development work to satisfy the new requirements, Licensee may request a one-time extension at no cost to Licensee of up to eighteen (18) months to complete this milestone.  Permission for such an extension shall not be unreasonably withheld by Rutgers as long as Licensee provides documentation showing that the extension is reasonably necessary, as well as a reasonable revised timeline to the submission required to satisfy this milestone.

For the avoidance of doubt, it is made explicit that the extension fees outlined above are distinct from milestone, license or any other fees discussed in this Agreement.

7. PROGRESS AND PAYMENT REPORTS

7.1. Beginning six (6) months after the Effective Date, and semi-annually thereafter, Licensee shall submit to Rutgers a progress report covering Licensee's activities related to the research, development and testing of Licensed Products and the

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obtaining of governmental approvals necessary for marketing.  These progress reports are Licensee’s Confidential Information and shall be made for each Licensed Product in each country of the Territory. 

7.2. The progress reports submitted under Section 7.1 shall include sufficient information to enable Rutgers to determine Licensee's progress in fulfilling its obligations under Article 6, including, but not limited to, the following topics:

(i) summary of work completed, including key scientific results and market analysis;

(ii) summary of work in progress, including product development and testing and progress in obtaining government approvals;

(iii) current schedule of anticipated events or milestones;

(iv) market plans for introduction of Licensed Products in the Territory;

(v) summary of resources (dollar value) spent in the reporting period for research, development, and marketing of Licensed Products;

(vi) activities in obtaining Sublicensees and activities of Sublicensees;

(vii) certified financial statements as of the end of the previous calendar quarter; and,

(viii) A statement showing how amounts due were calculated.

7.3. Licensee shall have a continuing responsibility to keep Rutgers informed of the large/small entity status (as defined by the United States Patent and Trademark Office) of itself and its Sublicensees.

7.4. Licensee shall report to Rutgers in its immediately subsequent progress and payment report the date of first commercial sale of each Licensed Product in each country.

7.5. After the first commercial sale of a Licensed Product anywhere in the world, Licensee will make quarterly royalty reports to Rutgers on or before each February 28, May 31, August 31 and November 30 of each year.  Each such royalty report will cover Licensee's most recently completed calendar quarter and will show

(i) the units and gross consideration received and Net Sales of each type of Licensed Product sold by Licensee, its Affiliates and sublicenses on which royalties have not been paid, including a clear indication of how Net Sales were calculated;

(ii) the royalties and fees, in U.S. dollars, payable hereunder and which patents apply;

(iii) the method used to calculate the royalty;

(iv) the exchange rates used, if any; and

(v) any other information relating to the foregoing reasonably requested by Rutgers.  

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7.6. If no sales of Licensed Products have been made during any reporting period, a statement to this effect shall be made by Licensee.

7.7. Licensee shall include a written statement with any additional payment or other consideration made to Rutgers pursuant to the terms of this Agreement setting forth in reasonable detail the basis for the payment and the manner in which the payment was calculated.

8. BOOKS AND RECORDS

8.1. Licensee shall keep and cause its Affiliates and require its Sublicensees to keep books and records in accordance with generally accepted accounting principles accurately showing all financial transactions and information relating to this Agreement.  Such books and records shall be preserved for at least five (5) years from the date of the entry to which they pertain and shall be open to inspection by a nationally recognized accounting firm designated by Rutgers no more than once a calendar year at reasonable times upon reasonable notice.

8.2. The fees and expenses of Rutgers' representatives performing such an examination shall be borne by Rutgers.  However, if an error in any payment of more than five percent (5%) of such payment due is discovered, then the fees and expenses of these representatives shall be borne by Licensee, and Licensee shall promptly reimburse Rutgers for reasonably documented audit expenses as well as all overdue payments and late interest payments.  Any information gathered during such accounting shall be deemed Licensee's Confidential Information, and the independent accounting firm shall be bound to confidentiality terms substantially equivalent to those contained in this Agreement.

9. TERM OF THE AGREEMENT

9.1. Unless otherwise terminated by operation of law or by acts of the parties in accordance with the provisions of this Agreement, this Agreement shall be in force from the Effective Date and shall remain in effect in each country of the Territory until the expiration of the last-to-expire patent licensed under this Agreement in such country.

9.2. Any termination or expiration of this Agreement shall not affect the rights and obligations set forth in the following Sections and/or Articles:

Article 1, Section 2.2, Section 2.3, Section 2.6, Section 2.8, Section 3.1, Section 5.5, Section 5.6, Section 5.7, Section 5.8, Section 5.9, Section 5.10, Article 8, this Article 9, Section 10.1, Section 11.1, Article 12, Article

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13, Article 17, Article 18, Article 19, Article 20, Article 21, Article 22, Article 24, Article 25, Article 26, Article 27.

9.3. Any termination or expiration under this Agreement shall not relieve a party of any obligation or liability accrued hereunder prior to such termination or expiration or rescind anything done by a party or any payments made to the other party hereunder prior to the time such termination or expiration becomes effective, and such termination or expiration shall not affect in any manner any rights of a party arising under this Agreement prior to such termination or expiration. Solely upon expiration of this Agreement in any country, Rutgers shall grant to Licensee the rights set forth in Section 2.1, solely with regard to the Rutgers’ Technology on a perpetual, non-exclusive and fully-paid basis in such country.

9.4. Except as expressly set forth in this Agreement, Licensee shall only have the right to terminate this Agreement in its entirety , or to terminate with regard to its obligations under the Agreement that relate to Coronary Stent Products, if specific circumstances obtain as described below. In the event of such termination, Licensee shall give Rutgers one hundred and twenty (120) days notice of intent to terminate.  Licensee may not terminate Agreement prior to initial commercial sales of a Coronary Stent Product.  The circumstances that would permit Licensee to terminate the Agreement are specified below:

a. If market conditions outside Licensee’s control related to commercial potential for Coronary Stent Products deteriorate to the extent that continued marketing of such Products is no longer commercially viable for Licensee.  In these circumstances, Licensee shall provide Rutgers with documentation of the market conditions adversely affecting sales of Coronary Stent Products and how such conditions make it no longer commercially reasonable for Licensee to continue to market said products. Market conditions sufficient to justify termination would include, for example (but would not be restricted to), the commercial development of a non-stent technology that substantially reduces the demand for and/or the selling price of the Coronary Stent Products to the extent that it is no longer commercially viable for Licensee to continue to market such Products.

b. The imposition of new regulations (outside Licensee’s control) that render further marketing of Coronary Stent Products not commercially viable for Licensee. Regulatory factors justifying termination of the License might include, but would not be restricted to, regulations that so affect the manufacture of Coronary Stent Products (including the polymer, the stent or any process related thereto) that it is no longer commercially viable for

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Licensee to produce such Products (e.g. if a component of the manufacturing process is banned from the market or otherwise becomes unavailable and there is no suitable replacement).   Another example of a regulation that would justify termination of the Agreement is one that would result in the Product being prohibited from use in human beings. . In these circumstances, Licensee shall provide Rutgers with documentation regarding the applicable regulatory change and the effect of such change on Licensee.  

Unless Licensee terminates the Agreement under the provisions of this Section 9.4, following receipt of regulatory approval to market a Coronary Stent Product, Licensee will be bound by the minimum royalty payments set forth in Section 5.3.

If Licensee terminates the Agreement in whole under the provisions of this Section 9.4, Licensee will forfeit all rights to manufacture, sell, or distribute any Licensed Products and Licensee will assign its interest in any and all joint patent rights included in Rutgers Patent Rights to Rutgers.  If Licensee only terminates the Agreement with respect to Coronary Stent Products, then it shall only forfeit the rights to manufacture, sell or distribute Coronary Stent Products and will assign to Rutgers its interest in any and all applicable patent rights included in Rutgers Patent Rights.

10. TERMINATION FOR CAUSE BY EITHER PARTY

10.1. If one party should materially breach or materially fail to perform any provision of this Agreement, then the other party may give written notice of such default (Notice of Default) to the breaching party.  The parties agree that failure to make any payment when due under the terms of this Agreement or breach of any of the required obligations in Sections 6.1 through 6.3 of the Agreement shall be deemed, without limitation, a material breach or a material failure under this Section. If the breaching party should fail to cure such default within sixty (60) days of notice thereof, the non-breaching party shall have the right to terminate this Agreement and the licenses herein by a second written notice (Notice of Termination) to the breaching party.  If a Notice of Termination is sent to the breaching party, this Agreement shall automatically terminate on the effective date of such notice.  Termination shall not relieve the breaching party of its obligation to pay all amounts due to the non-breaching party as of the effective date of termination and shall not impair any accrued rights of the non-breaching party.

11. DISPOSITION OF LICENSED PRODUCTS ANDINFORMATION ON HAND UPON TERMINATION

11.1. Upon termination of this Agreement by either party:

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(i) Licensee shall have the privilege of disposing of all previously made or partially made Licensed Products (Licensee may complete partially made Licensed Products), but no more, within a period of one hundred and eighty (180) days after the initial notice of termination given pursuant to Sections 9.4, 10.1  or 11.1 hereunder, provided, however, that the disposition of such Licensed Products shall be subject to the terms of this Agreement including, but not limited to, the payment of royalties at the rate and at the time provided herein and the rendering of reports thereon; and,  

(ii) each party shall promptly return, and shall cause its Affiliates and require its Sublicensees to return, all property belonging to the other party, including without limitation in the case of Rutgers, Rutgers’ Technology and Rutgers’ Confidential Information, if any, that has been provided to Licensee or its Affiliates or Sublicensees hereunder; and including without limitation in the case of Licensee, Licensee Confidential Information.  All copies and facsimiles thereof and derivatives therefrom shall be returned (except that one copy of written material for record purposes only, provided such material is not used for any other purpose and is not disclosed to others).

12. USE OF NAMES, TRADEMARKS, AND CONFIDENTIAL INFORMATION

12.1. Nothing contained in this Agreement shall be construed as granting any right to a party, its Affiliates or Sublicensees to use in advertising, publicity, or other promotional activities or otherwise any name, trade name, trademark, or other designation of the other party or any of its units (including contraction, abbreviation or simulation of any of the foregoing).  Unless required by law or consented to in advance in writing by an authorized representative of Rutgers, the use by Licensee of the name, "Rutgers, The State University" or any campus or unit of Rutgers is expressly prohibited.

13. LIMITED WARRANTY

13.1. Rutgers represents to Licensee that as of the Effective Date it owns  the Rutgers’ Patent Rights and that Rutgers has the lawful right to grant the licenses in this Agreement to Licensee. Licensee represents that it owns the Licensee Inventions, that it has the lawful right to grant the licenses in this Agreement to Rutgers, and that it has consented to include the Licensee Inventions as part of Exhibit A in this Agreement.

13.2. Rutgers represents that, as of the Effective Date, its Director of the Office of Technology Commercialization: (a) has no actual knowledge of any third party intellectual property rights which are infringed by the use  of the Rutgers’ Patent Rights or Rutgers’ Technology; and (b) has no actual knowledge of any action or

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suit that threatens the validity of the Rutgers’ Patent Rights or of any intellectual property rights owned by Rutgers as of the Effective Date which would prevent Licensee from practicing the rights licensed to Licensee under this Agreement.  Rutgers shall not exercise any intellectual property rights owned by Rutgers as of the Effective Date, or grant a license to any third party, which would prevent Licensee from practicing, or conflict with, the rights licensed to Licensee under this Agreement. 

13.3. EXCEPT AS SET FORTH IN SECTION 13.1 AND 13.2, THIS LICENSE IS WITHOUT WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE OR ANY OTHER WARRANTY, EXPRESS OR IMPLIED AND RUTGERS MAKES NO REPRESENTATION OR WARRANTY THAT THE LICENSED PRODUCTS OR LICENSED METHODS WILL NOT INFRINGE ANY PATENT OR OTHER PROPRIETARY RIGHT.

13.4. IN NO EVENT WILL EITHER PARTY BE LIABLE FOR ANY INCIDENTAL, DIRECT, INDIRECT, SPECIAL OR CONSEQUENTIAL DAMAGES, INCLUDING WITHOUT LIMITATION, LOST PROFITS, RESULTING FROM THIS AGREEMENT, INCLUDING THE  MANUFACTURE, SALE, OR USE OF THE INVENTIONS OR LICENSED PRODUCTS OR RUTGERS INTELLECTUAL PROPERTY OR LICENSEE INVENTIONS LICENSED HEREUNDER.  

13.5. Except as set forth in Sections 13.1 and 13.2, nothing in this Agreement shall be construed as:

(i) a warranty or representation by Rutgers as to the validity or scope of any Rutgers’ Patent Rights or a warranty or representation by Licensee as to the validity or scope of any patent that may claim a Licensee Invention; or

(ii) a warranty or representation that anything made, used, sold or otherwise disposed of under any license granted in this Agreement is or will be free from infringement of patents or other intellectual property rights of third parties; or

(iii) an obligation to bring or prosecute actions or suits against third parties except as provided in Article 16; or

(iv) conferring by implication, estoppel or otherwise any license or rights under any patents or other intellectual property of Rutgers or Licensee other than Rutgers’ Patent Rights and Rutgers’ Technology and Licensee Inventions; or

(v) an obligation to furnish any know-how not provided in Rutgers intellectual property licensed hereunder.

14. PATENT PROSECUTION AND MAINTENANCE

14.1. Rutgers shall diligently prosecute and maintain the United States pending patent

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applications and issued patents comprising the Rutgers’ Patent Rights using counsel of its choice.  Rutgers' counsel shall take instructions only from Rutgers.  Prior to making filings, and providing reasonable time for Licensee to comment and consult with Rutgers, Rutgers shall keep Licensee informed and apprised of the continuing prosecution of Rutgers’ Patent Rights.  Licensee agrees to keep this documentation confidential. 

14.2. Rutgers shall give due consideration to amending any patent application to include claims reasonably requested by Licensee to protect the Licensed Products contemplated to be sold under this Agreement.  If Rutgers elects not to file any patent application included within the Rutgers’ Patent Rights in any country, or decides to abandon any pending application or issued patent the Rutgers’ Patent Rights in any country, then Rutgers shall provide reasonable advance written notice to Licensee, and Licensee shall have the right at its sole expense to assume control of the preparation, filing, prosecution and maintenance of such patent application or patent at its own expense (provided Rutgers shall remain the owner thereof).

14.3. All unreimbursed costs incurred by Rutgers after the Effective Date for preparing, filing, prosecuting and maintaining the patent applications and/or patents included within the Rutgers’ Patent Rights, including but not limited to patent applications and patents covered by Rutgers’ Patent Rights and included pursuant to Section 14.4 shall be borne by Licensee.  Such costs shall be payable by Licensee within thirty (30) days of the billing date.  If Licensee fails to pay patent costs in a timely manner as required in this Section, Rutgers may, at its discretion, require Licensee to pay estimated patent costs in advance as a condition for maintaining this license.  If Rutgers licenses the Rutgers’ Patent Rights to a third party licensee(s), then Licensee and such third party licensee(s) shall each share in such patent costs incurred after the dates of such third party license(s).  In principle, such sharing shall be pro rata, so long as the relative markets and scope of license of this License and such third party license(s) are approximately the same; if not, Rutgers reserves the right to make an equitable allocation of patents costs among licensees.  Should a situation arise, where protection of the patent rights licensed under this Agreement requires seeking a declaratory judgment, filing an interference or other exceptional action with potential high costs associated, Rutgers shall consult with Licensee to determine whether Licensee wishes to Rutgers to pursue such action (at Licensee’  expense).  Should Licensee choose not to pursue such actions, Rutgers reserves the right, but is under no obligation to pursue such action at its own expense.

14.4. Rutgers shall, at the request of Licensee, file, prosecute, and maintain patent applications and patents covered by Rutgers’ Patent Rights in foreign countries.  Licensee consents to the filing of all PCT and foreign patent applications that have already been filed as of the Effective Date. Rutgers shall provide Licensee copies of all PCT and foreign patent applications that have been filed within thirty

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(30) days after the Effective Date. Licensee shall notify Rutgers within six (6) months of the filing of the corresponding United States application of its decision to obtain all other foreign patents.  This notice shall be in writing and shall identify the countries desired.  The absence of such a notice from Licensee shall be considered by Rutgers to be an election not to request foreign rights. 

14.5. Licensee's obligation to underwrite and to pay patent prosecution costs shall continue for so long as this Agreement remains in effect, provided, however, that Licensee may terminate its obligations with respect to any given patent application or patent upon three (3) months' prior written notice to Rutgers.  Rutgers shall use reasonable efforts to curtail future patent costs when such a notice is received from Licensee.  Licensee shall promptly pay patent costs which cannot be so curtailed.  Commencing on the effective date of such notice, Rutgers may continue prosecution and/or maintenance of such application(s) or patent(s) at its sole discretion and expense, and Licensee shall have no further right or licenses thereunder.

14.6. Rutgers shall have the right to file patent applications at its own expense in any country or countries in which Licensee has not elected to pay Rutgers’ prosecution and maintenance costs for securing patent rights or in which Licensee's license to the Rutgers’ Patent Rights has terminated.  So long as this Agreement remains in effect such applications and resultant patents shall not be freely licensed by Rutgers to third parties within the Licensed Field.  If the Licensee's license to the Rutgers’ Patent Rights has terminated such applications and resultant patents shall not be subject to this Agreement and may be freely licensed by Rutgers to third parties together with non-exclusive rights to the Rutgers’ Technology in such countries.  In the event Rutgers intends to exercise this right, it shall notify Licensee in writing of its intent to do so and the countries where it intends to file patent applications.  Licensee shall then have thirty (30) days to maintain its license to such patent rights and applications (“Prosecution Funding Right”) by notifying Rutgers in writing that it wishes to again add such countries to this Agreement and to pay the applicable prosecution and maintenance costs for doing so.

15. PATENT MARKING

15.1. Licensee shall mark all Licensed Products made, used, sold imported, exported, or otherwise disposed of under the terms of this Agreement, and/or their containers, in accordance with the applicable patent marking laws.

16. PATENT INFRINGEMENT

16.1. In the event that Licensee shall learn of the substantial infringement of any patent

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licensed under this Agreement in the Licensed Field, Licensee shall notify Rutgers  in writing and shall provide Rutgers with reasonable evidence of such infringement.  Both parties to this Agreement agree that during the period and in a jurisdiction where Licensee has exclusive rights under this Agreement, neither will notify a third party of the infringement of any of Rutgers’ Patent Rights in the Licensed Field, without first obtaining consent of the other Party, which consent shall not be unreasonably denied, provided that for purposes of this Section, Licensee’s Sublicensees shall not be deemed to be “third parties” as that term used herein.  Both parties shall use their diligent efforts in cooperation with each other to terminate such infringement without litigation. 

16.2. Licensee may request that Rutgers take legal action against the infringement of Rutgers’ Patent Rights in the Licensed Field.  Such request shall be made in writing and shall include reasonable evidence of such infringement and damages to Licensee.  If the infringing activity has not been abated within ninety (90) days following the effective date of such request, Rutgers shall have the right to commence suit on its own account or refuse to commence such suit. However, in the event Rutgers elects to bring suit in accordance with this paragraph, Licensee may thereafter join such suit at its own expense.  Rutgers shall give notice of its election in writing to Licensee by the end of the one-hundredth (100th) day after receiving notice of such request from Licensee.  However, Licensee may thereafter bring suit for patent infringement in its own name and if required for standing purposes in the name of Rutgers if and only if Rutgers refuses to commence suit and if the infringement occurred during the period and in a jurisdiction where Licensee had exclusive rights under this Agreement.  However, in the event Licensee elects to bring suit in accordance with this paragraph, Rutgers may thereafter join such suit at its own expense. Such legal action as is decided upon shall be at the expense of the party on account of whom suit is brought.

16.3. Each party agrees to cooperate with the other in litigation proceedings instituted hereunder but at the expense of the party on account of whom suit is brought for out-of-pocket expenses.  Such litigation shall be controlled by the party bringing the suit.  Each party may be represented by counsel of its choice at its own expense.  Any recovery or damages or settlement amounts derived from any such action shall first be applied to reimburse each party for the total cost of such action, with the remainder to be allocated among the parties as follows: the party bringing the action shall receive from the other party, and the other party shall assign to the party bringing the action eighty percent (80%) of such remainder, and the other party shall receive from the party bringing the action, and the party bringing the action shall assign twenty percent (20%) of such remainder to the other party.

17. INDEMNIFICATION AND INSURANCE

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17.1. To the maximum extent permitted by law, Licensee shall indemnify, hold harmless and defend Rutgers, its governors, trustees, officers, employees, students, agents and the Inventors (“Indemnified Parties”) against any and all third party claims, suits, losses, liabilities, damages, costs, fees and expenses (including reasonable attorneys' fees) (collectively, “Claims”) resulting from or arising out of the exercise of the rights granted under this license or any sublicense by Licensee, its Affiliates and Sublicensees.  This indemnification shall include, but is not limited to, any and all claims alleging products liability.  Rutgers shall remain liable for, and the foregoing indemnification obligation shall not include, any claims of infringement arising out of the Inventions, the Rutgers’ Patent Rights or the Rutgers’ Technology and any claims arising out of the gross negligence, to the extent negligence is applicable, or willful misconduct of Rutgers.

17.2. Throughout the term of this Agreement, and to the extent applicable from and after the date of first transfer of a Licensed Product and for the life of all Licensed Products used or transferred, Licensee shall maintain commercially issued policies of insurance, or a program of self-insurance if such program is approved in advance in writing by an authorized representative of Rutgers, which provide coverage and limits as required by statute or as necessary to prudently insure the activities and operations of Licensee.  The commercial general liability insurance policy, or liability self-insurance program, shall include the interests of Rutgers as an additional insured and provide coverage limits of not less than $5,000,000 combined single limits as respects premises, operations, contractual liability and, if applicable, liability arising out of products and/or completed operations.  Licensee shall provide Rutgers with certificates of insurance for commercially insured policies, or a letter from Licensee’s independent auditors stating its opinion as to the adequacy of any self-insurance program.

17.3. It is expressly agreed that the insurance or self-insurance are minimum requirements which shall not in any way limit the liability of Licensee and shall be primary coverage. Any insurance or self-insurance program maintained by Rutgers shall be excess and noncontributory.

17.4. Rutgers shall promptly notify Licensee in writing of any claim or suit brought against Rutgers in respect of which Rutgers intends to invoke the provisions of Article 17.  Licensee shall keep Rutgers informed on a current basis of its defense of any claims pursuant to Article 17.

18. NOTICES

18.1. Any notice or payment required to be given to either party shall be deemed to have been properly given and to be effective (a) on the date of delivery if

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delivered in person, (b) five (5) days after mailing if mailed by first-class certified mail, postage paid and deposited in the United States mail, to the respective addresses given below, or to such other address as it shall designate by written notice given to the other party, (c) on the date of delivery if delivered by express delivery service such as Federal Express or DHL or (d) or as otherwise agreed upon in writing by the parties. 

In the case of Licensee:	REVA Medical, Inc. 5751 Copley Drive, Suite B San Diego, CA 92111                   Attention: President Telefax No. (858) 966-3099 Telephone No (858) 966-3000
In the case of Rutgers:	Rutgers, The State University Office of Technology Commercialization Attention: Director ASB III, 3 Rutgers Plaza New Brunswick, NJ 08901 Telefax No. (732) 932-0115 Telephone No (732) 932-0146

19. ASSIGNABILITY

19.1. Neither this Agreement nor any right or obligation hereunder is assignable in whole or part by any party without the prior written consent of the other party.  Notwithstanding the foregoing, either party may assign this Agreement, without such consent, to a third party in connection with a Change of Control of or by the assigning party.  This Agreement shall inure to the benefit of each of the party's successors and assignees, provided that such successors or assignees assume the party's obligations under this Agreement.

20. LATE PAYMENTS

20.1. In the event any amounts due Rutgers hereunder, including but not limited to royalty payments, fees and patent cost reimbursements, are not received when due, Licensee shall pay to Rutgers interest charges at a rate of ten (10) percent per annum, compounded monthly, or the highest rate permitted by law, if less than ten (10) percent.  Such interest shall be calculated from the date payment was due until actually received by Rutgers.

21. WAIVER

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21.1. It is agreed that failure to enforce any provisions of this Agreement by a party shall not be deemed a waiver of any breach or default hereunder by the other party. It is further agreed that no express waiver by either party hereto of any breach or default of any of the covenants or agreements herein set forth shall be deemed a waiver as to any subsequent and/or similar breach or default.

22. FAILURE TO PERFORM

22.1. In the event of a failure of performance due under the terms of this Agreement and if it becomes necessary for either party to undertake legal action against the other on account thereof, then the prevailing party shall be entitled to reasonable attorneys' fees in addition to costs and necessary disbursements.

23. PRIOR AGREEMENTS

23.1. This Agreement supersedes and replaces in its entirety the 2004 License Agreement (as amended) between the parties; provided that Section 2.6 and Articles 9, 14 and 21 of the 2004 License Agreement shall survive.

24. GOVERNING LAWS

24.1. THIS AGREEMENT SHALL BE INTERPRETED AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW JERSEY WITHOUT REGARD TO ITS CONFLICTS OF LAW PROVISIONS, but the scope and validity of any patent or patent application shall be governed by the applicable laws of the country of such patent or patent application.

25. FOREIGN GOVERNMENT APPROVAL OR REGISTRATION

25.1. If this Agreement or any associated transaction is required by the law of any nation to be either approved or registered with any governmental agency, Licensee shall assume all legal obligations to do so and the costs in connection therewith.  Rutgers shall provide reasonable assistance to Licensee regarding compliance with the same at Licensee's cost.

26. EXPORT CONTROL LAWS

26.1. Licensee shall observe all applicable United States and foreign laws with respect to the transfer of Licensed Products and related technical data to foreign countries, including, without limitation, the International Traffic in Arms

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Regulations (ITAR) and the Export Administration Regulations.  Rutgers shall provide reasonable assistance to Licensee regarding compliance with the same at Licensee's cost. 

27. CONFIDENTIALITY

27.1. Each receiving party ("Recipient")

(i) shall not use any Confidential Information  of the other party ("Discloser") except for the sole purpose of performing this Agreement,

(ii) shall safeguard the same against disclosure to others with the same degree of care as it exercises with its own information of a similar nature, but using at least reasonable diligent efforts and

(iii) shall not disclose or permit the disclosure of Discloser Confidential Information to others (except to its employees, agents or consultants who are bound by a like obligation of confidentiality) without the express written permission of Discloser, except that Recipient shall not be prevented from using or disclosing any Confidential Information:

(a) which Recipient can demonstrate by written records was previously known to it; or

(b) which is now, or becomes in the future, information generally available to the public in the form supplied, other than through acts or omissions of Recipient; or

(c) which is lawfully obtained by Licensee from sources independent of Discloser who were entitled to provide such information to Recipient; or

(d) which is required by law to be disclosed by Recipient.

If Recipient learns or believes that any person who has had access to the Confidential Information of Discloser has violated or intends to violate the confidentiality or use restrictions of this Agreement, Recipient shall immediately notify Discloser and shall cooperate with Discloser in seeking injunctive or other equitable relief against any such person.  The obligations under this Section 27.1 shall remain in effect during the term of this Agreement and for five (5) years from the date of termination or expiration of this Agreement.

28. MISCELLANEOUS

28.1. The headings of the several articles are inserted for convenience of reference only and are not intended to be a part of or to affect the meaning or interpretation of this Agreement.

28.2. This Agreement will not be binding upon the parties until it has been signed

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below on behalf of each party by a duly authorized representative. 

28.3. No amendment or modification hereof (including without limitation adding additional Inventions and patents to Exhibit A) shall be valid or binding upon the parties unless made in writing and signed on behalf of each party by a duly authorized representative.

28.4. This Agreement, including the Exhibits attached hereto, embody the sole, entire and final understanding of the parties and shall supersede all previous and contemporaneous communications, representations or understandings, either oral or written, between the parties relating to the subject matter hereof.  

28.5. Licensee shall not enter into any agreements relating to this Agreement with Rutgers Inventors or other Rutgers employees or students in contravention of the legal rights or policies of Rutgers.

28.6. In case any of the provisions contained in this Agreement shall be held to be invalid, illegal or unenforceable in any respect,

(i) such invalidity, illegality or unenforceability shall not affect any other provisions hereof,

(ii) the particular provision, to the extent permitted by law, shall be reasonably construed and equitably reformed to be valid and enforceable and if the provision at issue is a commercial term, it shall be equitably reformed so as to maintain the overall economic benefits of the Agreement as originally agreed upon by the parties, and

(iii) this Agreement shall be construed as if such invalid or illegal or unenforceable provisions had never been contained herein.

28.7. Rutgers shall have the right to terminate this Agreement forthwith by giving written notice of termination to Licensee at any time upon or after the filing by Licensee of a petition in bankruptcy or insolvency, or upon or after any adjudication that Licensee is bankrupt or insolvent, or upon or after the filing by Licensee of any petition or answer seeking judicial reorganization, readjustment or arrangement of the business of Licensee under any law relating to bankruptcy or insolvency, or upon or after the appointment of a receiver for all or substantially all of the property of Licensee, or upon or after the making of any assignment or attempted assignment for the benefit of creditors, or upon or after the institution of any proceeding by Licensee or passage of any resolution by Licensee for the liquidation or winding up of Licensee’s business or for termination of its corporate life.

28.8. Neither party or its Affiliates shall originate any publicity, news release or other public announcement, written or oral, relating to this Agreement or the existence of an arrangement between the parties or the terms and conditions of this

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Agreement, except as required by law, without the prior written approval of the other party, which approval shall not be unreasonably withheld.  Notwithstanding the foregoing, disclosures may be made by either party 

(i) to its accountants, banks, financing sources, lawyers and other professional advisors, provided that such parties undertake in writing to keep such information confidential, or

(ii) as required by applicable laws and regulations, including those of the U.S. Securities and Exchange Commission, or

(iii) to governmental agencies with respect to the tax treatment or tax structure contemplated by this Agreement, or

(iv) to actual or prospective Sublicensees or assignees.

28.9. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

28.10. Nothing herein shall be deemed to constitute one party as the agent or representative of the other party or both parties as joint ventures or partners.  Each party as an independent contractor.

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IN WITNESS WHEREOF, both Rutgers and Licensee have executed this Agreement by their duly authorized.

REVA Medical, Inc.	Rutgers, The State University of New Jersey, Office of Technology Commercialization
By  /s/ Robert K. Schultz	By   /s/ Dipanjan Nag
(Signature)	(Signature)
Robert K. Schultz	Dipanjan Nag
President	Executive Director Office of Technology Commercialization
7-1-2010	7/8/10
(Date)	(Date)

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EXHIBIT A.

Exhibit A

This Exhibit A lists Inventions covering a wide range of polymer compositions.  These Inventions are included in this Agreement only to the extent they apply to “Licensed Polymers”, as defined in Section 1.10 of this Agreement.  Claims that are not applicable and claims that relate to uses outside the Licensed Field as defined in Section 1.8 of this agreement are excluded.  Exhibit A will be periodically updated by Rutgers and Licensee to include Improvements.

Exhibit A includes U.S. Patent Number(s) listed and any reissues, extensions (including governmental equivalents thereto), divisionals, renewals, substitutions, continuations, continuations-in-part, reexaminations, and any other pending, issued or hereafter filed, foreign counterpart of any such applications corresponding to all of the foregoing, owned or controlled by Rutgers, and any disclosures, U.S. provisional patent applications, patent registrations, utility models, registered or unregistered designs, Improvements with respect Polycarbonates, and Rutgers Technology with respect to Polycarbonates (information, know-how, data rights, trade secrets, mask works, and physical objects to the extent reasonably necessary or useful to practice the Inventions) that is patentable or non-patentable.

Legend: Fox: Fox Rothschild LLP; CRBCP: Caesar, Rivise, Bernstein, Cohen & Pokotilow, Ltd.; KMOB: Knobbe, Martens, Olson & Bear, LLP.; RSU: Rutgers, The State University of New Jersey; Integra LS:  ; N/A: Not Applicable; Inventors (RSU = Rutgers Inventors; REVA = Licensee Inventors, Joint = Rutgers and Licensee Inventors); % REVA Patent Costs refers to current share of patent costs as Rutgers has other licensees for the same patents but different licensed fields or claims.

Designation: The following patents are subject to the license terms of Article 1.8(i).

#

Fox short #

Fox (70439, 74584) or CRBCP

RSU#

Type

Status

Patent Application #

Patent Filing Date

Patent No. or Publication No.

Patent Expiry Date

Inventors

% REVA Patent Cost Sept.09

Patent Assignee

Patent Title

1

***

***

88-0525-1

New

Issued

***

***

***

***

RSU

***%

RSU

Polyiminocarbonate synthesis

2

***

***

89-0530-1

New

Issued

***

***

***

***

RSU

***%

RSU

Synthesis of amino acid-derived bioerodible polymers

3

***

***

91-0304-1

DIV

Issued

***

***

***

***

RSU

***%

RSU

Polyiminocarbonate synthesis

4

***

***

89-0529-1

New

Issued

***

***

***

***

RSU

***%

RSU

Poly(N-substituted iminocarbonate)

5

***

***

92-0108-1

DIV

Issued

***

***

***

***

RSU

***%

RSU

Synthesis of Amino Acid-Derived Bioerodible Polymers

6

***

***

95-0410-DD1

DIV

Reissued as RE 37,795

***

***

***

***

RSU

***%

RSU

Synthesis of tyrosine derived diphenol monomers

7

***

***

99-0095

Reissue

Reissue

***

***

***

***

RSU

***%

RSU

Synthesis of tyrosine derived diphenol monomers

8

***

***

92-1119-1

DIV

Issued

***

***

***

***

RSU

***%

RSU

Poly(N-phenyl urethane) from poly(N-substituted iminocarbonate)

9

***

***

92-0624-1

DIV

Issued

***

***

***

***

RSU

***%

RSU

Polyiminocarbonate synthesis

10

***

***

95-0410-D

CIP

Reissued as RE 37,160

***

***

***

***

RSU

***%

RSU

Synthesis of tyrosine derived diphenol monomers

11

***

***

99-0105

Reissue

Reissue

***

***

***

***

RSU

***%

RSU

Syntheses tyrosine-derived diphenol MMRS

12

***

***

95-0615-1

New

Issued

***

***

***

***

RSU

***%

RSU

Copolymers of tyrosine-based polycarbonate and poly(alkylene oxide)

13

***

***

95-0615-1-CIP

New

Issued

***

***

***

***

RSU

***%

RSU

Copolymers of tyrosine-based polyarylates and poly(alkylene oxides)

14

***

***

00-0116 (USDIV)

DIV

Issued

***

***

***

***

RSU

***%

RSU

Copolymers of tyrosine-based polyarylates and poly(alkylene oxides)

15

***

***

RU 96-0606-1

US np

Issued

***

***

***

***

RSU

***%

RSU

Monomers derived from hydroxy acids and polymers prepared therefrom

16

***

***

97-0037 (USA)

New

Issued

***

***

***

***

RSU

***%

RSU

Biodegradable, anionic polymers derived from the amino acid L-tyrosine

17

***

***

03-075 (USA)

DIV

Issued

***

***

***

***

RSU

***%

RSU

Radio-opaque polymer biomaterials

18

***

***

04-127 (US)

CONT

Issued

***

***

***

***

RSU

***%

RSU

Radio-opaque polymer biomaterials (device claims)

19

***

***

03-075

CONT

Issued

***

***

***

***

RSU

***%

RSU

Radio-opaque polymeric medical devices

20

***

***

98-0012A

US np

Issued

***

***

***

***

RSU

***%

RSU

Radio-opaque polymer biomaterials

21

***

***

04-165 (USA)

New

Pending

***

***

***

Joint

***%

RSU

Inherently radiopaque polymeric products for embolotherapy

22

***

***

RU 03-175   or 05-125

New

Pending

***

***

***

Joint

***%

RSU

Radiopaque polymeric stents

#

Fox short #

Fox (70439, 74584) or CRBCP

RSU#

Type

Status

Patent Application #

Patent Filing Date

Patent No. or Publication No.

Patent Expiry Date

Inventors

% REVA Patent Cost Sept.09

Patent Assignee

Patent Title

23

***

***

04-118 (US)

CONT

Pending

***

***

***

RSU

***%

RSU

Radio-opaque polymer biomaterials

24

***

***

RU 08-025

New

Pending

***

***

***

Joint

***%

RSU

N-Methyl Substituted Amine (N-Substituted Monomers and Polymers)

25

***

***

TBD

prov

Pending

***

***

.

Rutgers

***%

Pending

Imine Monomers And Polymers Thereof  (Polyimide Carbonates)

26

***

***

98-0012

CONT

Pending

***

***

***

RSU

***%

RSU

Radio-opaque polymer biomaterials

27

***

***

RU 08-037

PCT (US designated)

Pending

***

***

Rutgers

***%

Pending

Bioresorbable Polymers Synthesized From Monomer Analogs Of Natural Metabolites (based on Fox-201 provisional 61/097,494)

28

***

***

97-0037

CONT of 6,120,491

Pending

***

***

***

RSU

***%

RSU

Biodegradable, Anionic Polymers  Derived From the Amino Acid L-tyrosine

29

N/A

N/A

RU08-037

Technology Know-How

Unfiled

N/A

N/A

N/A

N/A

RSU

N/A

RSU

Tech Transfer on 01/15/2008: New Amino Acid Monomer (i.e., tetra-iodinated monomers)

Designation: The following patents are subject to the license terms of Article 1.8(ii).

#

Fox short #

Fox (70439, 74584) or CRBCP or KMOB

RSU#

Type

Status

Patent Application #

Patent Filing Date

Patent No. or Publication No.

Patent Expiry Date

Inventors

% REVA Patent Cost Sept.09

Patent Assignee

Patent Title

1

N/A

***

REVA case

New

Issued

***

***

***

***

REVA

***%

REVA

Inherently Radiopaque Bioresorbable Polymers For Multiple Uses

2

N/A

***

REVA case

New

Pending

***

***

***

REVA

***%

REVA

N-Substituted Monomers and Polymers (Alkylated Other)

3

***

***

TBD

US

Pending

***

***

Joint

***%

Pending

Inherently Radio-Opaque Polymers For Medical Devices (IRPLP's) (based on Fox-212 provisional 61/104,724)

4

***

***

TBD

PCT

Pending

***

***

Joint

***%

Pending

Inherently Radio-Opaque Polymers For Medical Devices (IRPLP's) (based on Fox-212 provisional 61/104,724)

5

***

***

TBD

US

Pending

***

***

Joint

***%

Pending

Phase-Separated Biocompatible Polymer Compositions For Medical Uses (FTTPs)  (based on Fox-295 provisional 61/104,728)

6

***

***

TBD

PCT

Pending

***

***

Joint

***%

Pending

Phase-Separated Biocompatible Polymer Compositions For Medical Uses (FTTPs) (based on Fox-295 provisional 61/104,728)

7

***

***

TBD

prov

Pending

***

***

Joint

***%

Pending

Tyrosine-Derived Biocompatible Polymers for Medical Devices (Flexi-Ty)

8

***

***

TBD

prov

Pending

***

***

.

Joint

***%

Pending

Compliant Biocompatible Polymer Compositions for Medical Uses (Carbonate Monomers , Broader version of Flexi-DAT (PolyT-T))

Legend: Fox: Fox Rothschild LLP; CRBCP: Caesar, Rivise, Bernstein, Cohen & Pokotilow, Ltd.; KMOB: Knobbe, Martens, Olson & Bear, LLP.; RSU: Rutgers, The State University of New Jersey; Integra LS:  ; N/A: Not Applicable; Inventors (RSU = Rutgers Inventors; REVA = Licensee Inventors, Joint = Rutgers and Licensee Inventors); % REVA Patent Costs refers to current share of patent costs as Rutgers has other licensees for the same patents but different licensed fields or claims.

Designation: The following patents are subject to the license terms of Article 1.8(ii).

#

Fox short #

Fox (70439, 74584) or CRBCP or KMOB

RSU#

Type

Status

Patent Application #

Patent Filing Date

Patent No. or Publication No.

Patent Expiry Date

Inventors

% REVA Patent Cost Sept.09

Patent Assignee

Patent Title

9

***

***

TBD

Develop PR

Not yet filed

.

Joint

***%

TBD

Iodinated Benzyl Esters

10

***

***

TBD

Unfiled

Not yet filed

.

Joint

***%

TBD

N-Alkyl Supermonomers

11

Unassigned

TBD

Unfiled

Not yet filed

Joint

***%

TBD

Fracture Toughened PL Carbonates (FTPLPs)

TBD: to Be Determined

REVA Medical, Inc.

Rutgers, The State University of New Jersey,

Office of Technology Commercialization

By /s/ Robert Shultz

By /s/ Yair Harel

(Signature)

(Signature)

Robert Schultz, President & COO

7-25-10

7/23/10

(Date)

(Date)

Exhibit A Version  1   (Original)

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Regina E. Groves, 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: November 9, 2015

/s/ Regina E. Groves

Regina E. Groves

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: November 9, 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 September 30, 2015, as filed with the Securities and Exchange Commission (the “Report”), Regina E. Groves, 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: November 9, 2015

/s/ Regina E. Groves

Regina E. Groves

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 ($)		1 Months Ended					9 Months Ended		12 Months Ended
	Jan. 02, 2015	May. 31, 2015	Mar. 31, 2015	May. 31, 2013	Jan. 31, 2013	Jul. 31, 2012	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Stock-Based Compensation
Granted (in shares)							2,152,500		637,000
Additional information related to fair values of options granted
Granted (in shares)							2,152,500		637,000
Equity awards to employees
Stock-Based Compensation
Term of options granted under the plan							10 years
Additional information related to fair values of options granted
Expiration term							10 years
Weighted average grant date fair value (in dollars per share)							$ 2.40
Intrinsic value of options exercised							$ 417,000	$ 561,000
Risk-free interest rate (as a percent)							1.82%	2.33%
Expected volatility of common stock (as a percent)							55.60%	59.30%
Expected life							6 years 1 month 28 days	6 years 1 month 21 days
Dividend yield (as a percent)							0.00%	0.00%
Equity awards to consultants
Stock-Based Compensation
Granted (in shares)							0	110,000
Additional information related to fair values of options granted
Weighted average grant date fair value (in dollars per share)								$ 1.15
Granted (in shares)							0	110,000
Risk-free interest rate (as a percent)								2.47%
Expected volatility of common stock (as a percent)								58.70%
Expected life								9 years 2 months 9 days
Dividend yield (as a percent)								0.00%
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							7,956,153
Vesting periods							4 years
Tax benefits from stock based compensation							$ 0
2010 Equity Incentive Plan [Member] | Share-based Compensation Award, Tranche One
Stock-Based Compensation
Vesting percentage							25.00%
2010 Equity Incentive Plan [Member] | Share-based Compensation Award, Tranche Two
Stock-Based Compensation
Vesting percentage							75.00%
2010 Equity Incentive Plan [Member] | Equity awards to employees
Stock-Based Compensation
Granted (in shares)			316,000
Additional information related to fair values of options granted
Granted (in shares)			316,000
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
Shares of restricted stock cancelled							0
2010 Equity Incentive Plan [Member] | Restricted stock units
Stock-Based Compensation
Shares of restricted stock awarded							0
Shares of restricted stock cancelled							0
Number of shares awarded		160,000	824,200
Employee share of common stock upon vesting							1
Maximum | 2010 Equity Incentive Plan [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
Additional information related to fair values of options granted
Expiration term							10 years
Maximum | 2010 Equity Incentive Plan [Member] | Equity awards to employees
Stock-Based Compensation
Vesting period							2 years
Maximum | 2010 Equity Incentive Plan [Member] | Restricted stock units
Stock-Based Compensation
Vesting period							2 years
Weighted Average [Member] | 2010 Equity Incentive Plan [Member] | Equity awards to employees
Stock-Based Compensation
Vesting period							15 months
Weighted Average [Member] | 2010 Equity Incentive Plan [Member] | Restricted stock units
Stock-Based Compensation
Vesting period							17 months
Minimum | 2010 Equity Incentive Plan [Member] | Equity awards to employees
Stock-Based Compensation
Vesting period							9 months
Minimum | 2010 Equity Incentive Plan [Member] | Restricted stock units
Stock-Based Compensation
Vesting period							14 months

XML

Balance Sheet Details

9 Months Ended

Sep. 30, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

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,			September 30,
	2014			2015
	(in thousands)
Property and Equipment:
Furniture, office equipment, and software	$	648		$	651
Laboratory equipment		5,187			5,839
Leasehold improvements		2,361			2,385
		8,196			8,875
Accumulated depreciation and amortization		(5,276	)		(5,988	)
	$	2,920		$	2,887
Accrued Expenses and Other Current Liabilities:
Accrued salaries and other employee costs	$	1,315		$	736
Accrued operating expenses		769			800
Accrued use taxes and other		129			178
	$	2,213		$	1,714

XML

Stock-Based Compensation (Details 4) - Equity awards to consultants - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Additional information related to fair values of options granted
Total stock-based compensation	$ 10	$ 27	$ 59
Research and development expense
Additional information related to fair values of options granted
Total stock-based compensation	(6)		67
General and administrative expense
Additional information related to fair values of options granted
Total stock-based compensation	$ 16	$ 27	$ (8)

XML

Stock-Based Compensation (Details 3) - Equity awards to employees	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Additional information related to fair values of options granted
Risk-free interest rate (as a percent)	1.82%	2.33%
Expected volatility of common stock (as a percent)	55.60%	59.30%
Expected life	6 years 1 month 28 days	6 years 1 month 21 days
Dividend yield (as a percent)	0.00%	0.00%

XML

Commitments and Contingencies (Details)	9 Months Ended
	Sep. 30, 2015 USD ($) $ / item
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
Commitment and Contingencies
Royalty payment per unit (in dollar per unit) | $ / item	25
Maximum
Commitment and Contingencies
Royalty payment per unit (in dollar per unit) | $ / item	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

Net Loss Per Common Share (Details) - shares	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Weighted Average Shares Excluded from EPS:
Total weighted average shares excluded	25,759,982	4,492,401	25,442,872	4,479,476
Options to purchase common stock
Weighted Average Shares Excluded from EPS:
Total weighted average shares excluded	4,466,191	4,408,842	4,425,491	4,384,484
Restricted stock
Weighted Average Shares Excluded from EPS:
Total weighted average shares excluded	53,435	83,559	64,869	94,992
Restricted stock units
Weighted Average Shares Excluded from EPS:
Total weighted average shares excluded	984,200		696,356
Warrants to purchase common stock
Weighted Average Shares Excluded from EPS:
Total weighted average shares excluded	8,750,000		8,750,000
Common share equivalents from convertible notes
Weighted Average Shares Excluded from EPS:
Total weighted average shares excluded	11,506,156		11,506,156

XML

Convertible Notes Payable and Warrants to Purchase Common Stock

9 Months Ended

Sep. 30, 2015

Convertible Notes Payable And Warrants To Purchase Common Stock Disclosure [Abstract]

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 at least 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 September 30, 2015 was calculated to be $57,540,000, which was $32,540,000 more than the unpaid principal balance of the Notes. The increases of $14,490,000 and $19,760,000 in the fair value of the Notes during the three and nine months ended September 30, 2015, respectively, were recorded as losses in the consolidated statement of operations.

In connection with the issuance of the Notes in November 2014, we issued warrants to the noteholders to purchase up to 8,750,000 shares of common stock. On October 1, 2015, a total of 4,375,000 warrants were exercised for $9,506,000 cash proceeds. The remaining 4,375,000 warrants are exercisable immediately at $2.6073 per share and expire in November 2019 if not exercised. None of the warrants had been exercised as of September 30, 2015.

The fair value of the warrants as of September 30, 2015 was calculated to be $29,940,000. The increases of $13,690,000 and $14,551,000 in fair value of the warrant liability during the three and nine months ended September 30, 2015, respectively, were recorded as losses in the consolidated statement of operations.

XML

Subsequent Events (Details) - USD ($)		9 Months Ended
	Oct. 01, 2015	Sep. 30, 2015	Dec. 31, 2014
Subsequent Event [Line Items]
Common stock, shares outstanding		33,707,778	33,529,778
Subsequent Event
Subsequent Event [Line Items]
Proceeds from exercise of warrants	$ 9,506,000
Common stock, shares outstanding	38,082,778
Warrants outstanding	4,375,000
Warrants to purchase common stock
Subsequent Event [Line Items]
Warrants exercised		0
Warrants to purchase common stock | Subsequent Event
Subsequent Event [Line Items]
Warrants exercised	4,375,000

XML

Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current Assets:
Cash and cash equivalents	$ 11,845	$ 25,814
Short-term investments	497	995
Prepaid expenses and other current assets	287	406
Total current assets	12,629	27,215
Non-Current Assets:
Property and equipment, net	2,887	2,920
Other non-current assets	60	60
Total non-current assets	2,947	2,980
Total Assets	15,576	30,195
Current Liabilities:
Accounts payable	711	651
Accrued expenses and other current liabilities	1,714	2,213
Total current liabilities	2,425	2,864
Long-Term Liabilities:
Convertible Notes Payable	57,540	37,780
Common stock warrant liability	29,940	15,389
Other long-term liabilities	1,902	611
Total Long-term liabilities	89,382	53,780
Total Liabilities	$ 91,807	$ 56,644
Commitments and contingencies (Note 7)
Stockholders' Equity (Deficit):
Common stock	$ 3	$ 3
Undesignated preferred stock ― $0.0001 par value; 5,000,000 shares authorized; no shares issued or outstanding
Additional paid-in capital	$ 228,683	$ 226,094
Accumulated deficit	(304,917)	(252,546)
Total Stockholders' Equity (Deficit)	(76,231)	(26,449)
Total Liabilities and Stockholders' Equity (Deficit)	$ 15,576	$ 30,195
Class B common stock
Stockholders' Equity (Deficit):
Common stock

XML

Background and Basis of Presentation

9 Months Ended

Sep. 30, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

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 enrolled 110 patients in a clinical trial with Fantom between March 2015 and September 2015, from which we will obtain follow-up data at a six-month time point. 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 and other countries that recognize the European CE Mark.

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 (the “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 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 nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period.

Liquidity:  In November 2014, we completed a financing to provide ongoing capital for our operations. The financing comprised the issuance of $25,000,000 in convertible notes and 8,750,000 warrants for the purchase of common stock. The convertible notes and the warrants remained outstanding, and we had $12,342,000 in cash and investments available for operations, as of September 30, 2015. Subsequent to our third quarter end, on October 1, 2015, we received cash proceeds of $9,506,000 from the issuance of common stock upon the exercise of 4,375,000 warrants, which provided us cash and investments available for operations of $21,848,000 as of October 1, 2015. We believe this October 1, 2015 balance will be sufficient to fund our operating and capital needs into, and possibly through, the third fiscal quarter of 2016. The remaining 4,375,000 warrants are exercisable at a price of $2.6073 per share; when and if they are exercised, we have the potential to receive $11,407,000 additional cash proceeds.

We have experienced recurring losses and negative cash flows from operating activities since our inception and, as of September 30, 2015, we had an accumulated deficit of $304,917,000. 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. These conditions, combined with the uncertainty of the timing of receipt of proceeds, if any, from the exercise of warrants to purchase common stock, raise substantial doubt about our ability to continue as a going concern.

1. Background and Basis of Presentation (continued)

Liquidity (continued): If the remaining warrants are not exercised, or are not exercised to coincide with the timing of our liquidity needs, or even if the warrants are exercised, 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. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

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

Convertible Notes Payable and Warrants to Purchase Common Stock (Details)		1 Months Ended	3 Months Ended	9 Months Ended
	Oct. 01, 2015 USD ($) shares	Nov. 30, 2014 USD ($) item Note $ / shares shares	Sep. 30, 2015 USD ($)	Sep. 30, 2015 USD ($) shares	Dec. 31, 2014 USD ($)
Number of convertible notes payable | Note		250
Proceeds from notes payable and warrants		$ 25,000,000
Convertible Notes Payable			$ 57,540,000	$ 57,540,000	$ 37,780,000
Convertible notes excluding unpaid principal balance				32,540,000
Increase (decrease) in fair value of Notes			14,490,000	19,760,000
Warrants issued to purchase common stock (in shares) | shares		8,750,000
Common stock warrant liability			29,940,000	29,940,000	$ 15,389,000
Increase (decrease) in fair value of Warrants			$ 13,690,000	$ 14,551,000
Subsequent Event
Proceeds from exercise of warrants	$ 9,506,000
Warrants to purchase common stock
Convertible rate into common stock | $ / shares		$ 2.6073
Warrants exercised | shares				0
Warrants to purchase common stock | Subsequent Event
Warrants exercised | shares	4,375,000
Convertible Notes Payable
Face Amount		$ 100,000
Number of converted shares of common stock | shares		11,506,155
Convertible rate into common stock | $ / shares		$ 2.17275
Consecutive trading days | item		20
Interest rate (as a percent)		7.54%
Minimum | Convertible Notes Payable
Market trading price | $ / shares		$ 0.60

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Income Taxes (Details)	9 Months Ended
	Sep. 30, 2015 USD ($)
Income Tax Disclosure [Abstract]
Provision for income taxes	$ 0
Deferred tax assets	0
Deferred tax liability	$ 0

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Fair Value Measurements

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

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, which we consider 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; these other financial instruments include cash, investments, accounts payable, and accrued expenses. Utilizing the lowest level inputs available under the measurement hierarchy, the fair values of our measured financial instruments are as follows:

	Level 2		Level 3
Fair Value at December 31, 2014:	(in thousands)
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 September 30, 2015:
Assets:
Certificates of deposit due in one year or less	$	496	$	—
Liabilities:
Convertible notes payable		—		57,540
Common stock warrant liability		—		29,940
	$	—	$	87,480

 2.  Fair Value Measurements (continued)

We had no Level 1 financial instruments through September 30, 2015.

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 September 30, 2015 were $4,000 and $1,000, 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 in November 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,	September 30,
	2014	2015
Market price per share of common stock	$3.35	$5.62
Risk-free interest rate	2.30%	1.95%
Expected volatility of common stock	87.2%	88.5%
Expected life – years	4.87	4.12
Bond yield of equivalent securities	28.4%	29.0%

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 $28,180,000 and $34,311,000 in unrealized losses arising from the change in fair value on our Level 3 financial liabilities were recorded during the three- and nine-month periods ended September 30, 2015, respectively. Our Level 3 fair value activity through September 30, 2015 is as follows:

	Level 3
	(in thousands)
Balance at December 31, 2014	$	53,169
Losses from Change in Fair Value:
Convertible notes payable		5,270
Common stock warrant liability		861
Balance at June 30, 2015		59,300
Losses from Change in Fair Value:
Convertible notes payable		14,490
Common stock warrant liability		13,690
Balance at September 30, 2015	$	87,480

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Consolidated Balance Sheets (Parenthetical) (Unaudited) - $ / shares	Sep. 30, 2015	Dec. 31, 2014
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	33,707,778	33,529,778
Common stock, shares outstanding	33,707,778	33,529,778
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
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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Balance Sheet Details (Tables)

9 Months Ended

Sep. 30, 2015

Balance Sheet Details [Abstract]

Schedule of Property and Equipment

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

	December 31,			September 30,
	2014			2015
	(in thousands)
Property and Equipment:
Furniture, office equipment, and software	$	648		$	651
Laboratory equipment		5,187			5,839
Leasehold improvements		2,361			2,385
		8,196			8,875
Accumulated depreciation and amortization		(5,276	)		(5,988	)
	$	2,920		$	2,887
Accrued Expenses and Other Current Liabilities:
Accrued salaries and other employee costs	$	1,315		$	736
Accrued operating expenses		769			800
Accrued use taxes and other		129			178
	$	2,213		$	1,714

Schedule of Accrued Expenses and Other Current Liabilities

	December 31,			September 30,
	2014			2015
	(in thousands)
Property and Equipment:
Furniture, office equipment, and software	$	648		$	651
Laboratory equipment		5,187			5,839
Leasehold improvements		2,361			2,385
		8,196			8,875
Accumulated depreciation and amortization		(5,276	)		(5,988	)
	$	2,920		$	2,887
Accrued Expenses and Other Current Liabilities:
Accrued salaries and other employee costs	$	1,315		$	736
Accrued operating expenses		769			800
Accrued use taxes and other		129			178
	$	2,213		$	1,714

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Nov. 01, 2015
Document And Entity Information [Abstract]
Entity Registrant Name	REVA Medical, Inc.
Entity Central Index Key	0001496268
Document Type	10-Q
Document Period End Date	Sep. 30, 2015
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Trading Symbol	RVA
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		38,082,778
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2015

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		2,152,500		$4.50
Cancelled		(232,342	)	$2.85
Exercised		(178,000	)	$1.25
Balance at September 30, 2015		5,985,583		$6.44

Equity awards to employees

Schedule of the expense (income) recorded under the plan

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
Employee Stock-Based Compensation:	(in thousands)
Research and development expense	$	282	$	448	$	855	$	1,162
General and administrative expense		465		535		2,026		1,179
	$	747	$	983	$	2,881	$	2,341

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

	Nine Months Ended
	September 30,
	2014		2015
Risk-free interest rate		2.33%		1.82%
Expected volatility of common stock		59.3%		55.6%
Expected life in years		6.14		6.16
Dividend yield		0%		0%

Equity awards to consultants

Schedule of the expense (income) recorded under the plan

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2015		2014			2015
Consultant Stock-Based Compensation:	(in thousands)
Research and development expense	$	(6	)	$	—	$	67		$	—
General and administrative expense		16			—		(8	)		27
	$	10		$	—	$	59		$	27

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Consolidated Statements of Operations and Comprehensive Loss (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Operating Expense:
Research and development	$ 4,404	$ 2,930	$ 11,735	$ 10,782
General and administrative	1,818	1,516	4,973	5,768
Loss from operations	(6,222)	(4,446)	(16,708)	(16,550)
Other Income (Expense):
Interest income	1	1	7	6
Interest expense	(475)		(1,410)
Loss on change in fair value of convertible notes payable and warrant liability	(28,180)		(34,311)
Other income	8	48	51	38
Other income (expense)	(28,646)	49	(35,663)	44
Net Loss and Comprehensive Loss	$ (34,868)	$ (4,397)	$ (52,371)	$ (16,506)
Net Loss Per Common Share:
Net loss per share, basic and diluted	$ (1.04)	$ (0.13)	$ (1.56)	$ (0.49)
Shares used to compute net loss per share, basic and diluted	33,647,104	33,383,894	33,543,151	33,361,805

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2015

Commitments And Contingencies Disclosure [Abstract]

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

9 Months Ended

Sep. 30, 2015

Disclosure Of Compensation Related Costs Sharebased Payments [Abstract]

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 7,956,153 shares are reserved for issuance under the Plan as of September 30, 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. 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		2,152,500		$4.50
Cancelled		(232,342	)	$2.85
Exercised		(178,000	)	$1.25
Balance at September 30, 2015		5,985,583		$6.44

The majority of options granted by the Company vest over four years, with 25 percent vesting on the one-year anniversary of the vesting commencement date and 75 percent vesting in equal monthly installments thereafter. 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.

No tax benefits arising from stock-based compensation have been recognized in the consolidated statements of operations and comprehensive loss through September 30, 2015.

6. Stock-Based Compensation (continued)

The Plan (continued):  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 September 30, 2015, none of the restricted stock had been cancelled.

During March 2015, we awarded 824,200 restricted stock units (“RSUs”) to employees. These 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. During May 2015, we awarded 160,000 RSUs to employee and non-employee directors; such RSUs vest on the earlier of May 26, 2016 or one day prior to our 2016 annual stockholder meeting. Each RSU entitles the recipient to one share of our common stock upon vesting. Through September 30, 2015, none of the RSUs had vested and none had 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 requisite service period on a straight-line basis. For the options and RSUs that vest upon performance achievements, we record only the compensation expense for the performance targets that are probable of being achieved and we record such expense on a straight-line basis over the vesting period. During the nine months ended September 30, 2015, we determined that two of the three performance targets for our performance-based awards were probable of being achieved and, therefore, recorded expense for those awards only. Stock-based compensation arising from employee options and awards under the Plan is as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
Employee Stock-Based Compensation:	(in thousands)
Research and development expense	$	282	$	448	$	855	$	1,162
General and administrative expense		465		535		2,026		1,179
	$	747	$	983	$	2,881	$	2,341

The fair value of restricted stock and RSU awards is equal to the closing market price of our common stock on the date of award. The fair value of options granted was estimated on the date of grant using the following weighted-

average assumptions:

	Nine Months Ended
	September 30,
	2014		2015
Risk-free interest rate		2.33%		1.82%
Expected volatility of common stock		59.3%		55.6%
Expected life in years		6.14		6.16
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 requisite service 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 nine months ended September 30, 2015 had a weighted average grant date fair value of $2.40.

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2014 and 2015 was $561,000 and $417,000, respectively.

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 nine months ended September 30, 2014; no options were granted to consultants during the nine months ended September 30, 2015. All stock options granted to consultants had either vested or been cancelled as of March 31, 2015; therefore, no compensation expense was recorded during the three months ended September 30, 2015. Stock-based compensation expense or (income) arising from consultant options granted under the Plan is as follows:

	Three Months Ended					Nine Months Ended
	September 30,					September 30,
	2014			2015		2014			2015
Consultant Stock-Based Compensation:	(in thousands)
Research and development expense	$	(6	)	$	—	$	67		$	—
General and administrative expense		16			—		(8	)		27
	$	10		$	—	$	59		$	27

The weighted-average fair value of unvested consultant options at September 30, 2014 was estimated to be $1.15 per share based on weighted-average assumptions of a risk-free interest rate of 2.47 percent, volatility of 58.7 percent, an option life of 9.19 years, and a dividend yield of zero percent. 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) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Property and Equipment:
Property and equipment, gross	$ 8,875	$ 8,196
Accumulated depreciation and amortization	(5,988)	(5,276)
Property and equipment, net	2,887	2,920
Accrued Expenses and Other Current Liabilities:
Accrued salaries and other employee costs	736	1,315
Accrued operating expenses	800	769
Accrued use taxes and other	178	129
Accrued expenses and other current liabilities, total	1,714	2,213
Furniture, office equipment, and software
Property and Equipment:
Property and equipment, gross	651	648
Laboratory equipment
Property and Equipment:
Property and equipment, gross	5,839	5,187
Leasehold improvements
Property and Equipment:
Property and equipment, gross	$ 2,385	$ 2,361

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Net Loss Per Common Share (Tables)

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

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

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
Weighted Average Shares Excluded from EPS:
Options to purchase common stock		4,408,842		4,466,191		4,384,484		4,425,491
Unvested restricted stock		83,559		53,435		94,992		64,869
Restricted stock units		—		984,200		—		696,356
Warrants to purchase common stock		—		8,750,000		—		8,750,000
Common share equivalents of convertible notes		—		11,506,156		—		11,506,156
		4,492,401		25,759,982		4,479,476		25,442,872

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Background and Basis of Presentation (Policies)

9 Months Ended

Sep. 30, 2015

Organization Consolidation And Presentation Of Financial Statements [Abstract]

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 (the “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 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 nine months ended September 30, 2015 are not necessarily indicative of the results to be expected for the year ending December 31, 2015 or for any other interim period.

Liquidity

Liquidity:  In November 2014, we completed a financing to provide ongoing capital for our operations. The financing comprised the issuance of $25,000,000 in convertible notes and 8,750,000 warrants for the purchase of common stock. The convertible notes and the warrants remained outstanding, and we had $12,342,000 in cash and investments available for operations, as of September 30, 2015. Subsequent to our third quarter end, on October 1, 2015, we received cash proceeds of $9,506,000 from the issuance of common stock upon the exercise of 4,375,000 warrants, which provided us cash and investments available for operations of $21,848,000 as of October 1, 2015. We believe this October 1, 2015 balance will be sufficient to fund our operating and capital needs into, and possibly through, the third fiscal quarter of 2016. The remaining 4,375,000 warrants are exercisable at a price of $2.6073 per share; when and if they are exercised, we have the potential to receive $11,407,000 additional cash proceeds.

We have experienced recurring losses and negative cash flows from operating activities since our inception and, as of September 30, 2015, we had an accumulated deficit of $304,917,000. 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. These conditions, combined with the uncertainty of the timing of receipt of proceeds, if any, from the exercise of warrants to purchase common stock, raise substantial doubt about our ability to continue as a going concern.

1. Background and Basis of Presentation (continued)

Liquidity (continued): If the remaining warrants are not exercised, or are not exercised to coincide with the timing of our liquidity needs, or even if the warrants are exercised, 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. The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

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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Net Loss Per Common Share

9 Months Ended

Sep. 30, 2015

Earnings Per Share [Abstract]

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; common share equivalents are included in the calculation of diluted net loss per share only when their effect is dilutive.

The following weighted average shares were excluded from the computations of diluted net loss per share because including them would have been antidilutive.

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2014		2015		2014		2015
Weighted Average Shares Excluded from EPS:
Options to purchase common stock		4,408,842		4,466,191		4,384,484		4,425,491
Unvested restricted stock		83,559		53,435		94,992		64,869
Restricted stock units		—		984,200		—		696,356
Warrants to purchase common stock		—		8,750,000		—		8,750,000
Common share equivalents of convertible notes		—		11,506,156		—		11,506,156
		4,492,401		25,759,982		4,479,476		25,442,872

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Subsequent Events

9 Months Ended

Sep. 30, 2015

Subsequent Events [Abstract]

Subsequent Events

9.  Subsequent Events

On October 1, 2015, the Company received cash proceeds of $9,506,000 and issued 4,375,000 shares of common stock from the exercise of warrants. Following the exercise, a total of 38,082,778 shares of common stock were outstanding and 4,375,000 warrants remained outstanding.

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2015

Fair Value Disclosures [Abstract]

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

	Level 2		Level 3
Fair Value at December 31, 2014:	(in thousands)
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 September 30, 2015:
Assets:
Certificates of deposit due in one year or less	$	496	$	—
Liabilities:
Convertible notes payable		—		57,540
Common stock warrant liability		—		29,940
	$	—	$	87,480

Summary of assumptions used to value the Notes and warrants

	December 31,	September 30,
	2014	2015
Market price per share of common stock	$3.35	$5.62
Risk-free interest rate	2.30%	1.95%
Expected volatility of common stock	87.2%	88.5%
Expected life – years	4.87	4.12
Bond yield of equivalent securities	28.4%	29.0%

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		5,270
Common stock warrant liability		861
Balance at June 30, 2015		59,300
Losses from Change in Fair Value:
Convertible notes payable		14,490
Common stock warrant liability		13,690
Balance at September 30, 2015	$	87,480

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Fair Value Measurements (Details) - USD ($)	3 Months Ended	6 Months Ended	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Jun. 30, 2015	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2015	Dec. 31, 2014
Certificates of deposit due in one year or less					$ 497,000	$ 995,000
Convertible Notes Payable					57,540,000	37,780,000
Common stock warrant liability					$ 29,940,000	$ 15,389,000
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Market price per share of common stock					$ 5.62	$ 3.35
Risk-free interest rate			1.95%	2.30%
Expected volatility of common stock			88.50%	87.20%
Expected life – years			4 years 1 month 13 days	4 years 10 months 13 days
Bond yield of equivalent securities			29.00%	28.40%
Unrealized gains (losses) arising from change in fair value of Level 3 financial liabilities	$ (28,180,000)		$ (34,311,000)
Losses/(Gains) from Change in Fair Value:
Convertible notes payable	14,490,000		19,760,000
Common stock warrant liability	13,690,000		14,551,000
Level 2
Unrealized losses					$ 1,000,000	$ 4,000,000
Level 2 | Certificates of Deposit
Certificates of deposit due in one year or less					496,000	991,000
Level 3
Convertible Notes Payable					57,540,000	37,780,000
Common stock warrant liability					29,940,000	15,389,000
Liabilities	87,480,000	$ 53,169,000	53,169,000	$ 53,169,000	$ 87,480,000	$ 53,169,000
Fair Value Assumptions and Methodology for Assets and Liabilities [Abstract]
Unrealized gains (losses) arising from change in fair value of Level 3 financial liabilities	(28,180,000)		(34,311,000)
Financial Liabilities Fair Value Disclosure.
Beginning balance	59,300,000	53,169,000	53,169,000
Losses/(Gains) from Change in Fair Value:
Convertible notes payable	14,490,000	5,270,000
Common stock warrant liability	13,690,000	861,000
Ending balance	$ 87,480,000	$ 59,300,000	$ 87,480,000	$ 53,169,000

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Stock-Based Compensation (Details 1) - $ / shares	9 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Options Outstanding
Balance at the beginning of period (in shares)	4,243,425	4,046,650
Granted (in shares)	2,152,500	637,000
Cancelled (in shares)	(232,342)	(180,500)
Exercised (in shares)	(178,000)	(259,725)
Balance at the end of period (in shares)	5,985,583	4,243,425
Weighted Average Exercise Price
Balance at the beginning of period (in dollars per share)	$ 7.01	$ 7.15
Granted (in dollars per share)	4.50	3.53
Cancelled (in dollars per share)	2.85	6.61
Exercised (in dollars per share)	1.25	0.95
Balance at the end of period (in dollars per share)	$ 6.44	$ 7.01

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Cash Flows from Operating Activities:
Net loss	$ (52,371)	$ (16,506)
Non-cash adjustments to reconcile net loss to net cash used for operating activities:
Depreciation and amortization	811	780
Stock-based compensation	2,368	2,940
Interest on convertible notes payable	1,410
Loss on change in fair value of convertible notes payable and warrant liability	34,311
Other non-cash expenses	41	14
Changes in operating assets and liabilities:
Prepaid expenses and other current assets	119	235
Accounts payable	36	(647)
Accrued expenses and other current liabilities	(490)	(858)
Other long-term liabilities	(119)	(78)
Net cash used for operating activities	(13,884)	(14,120)
Cash Flows from Investing Activities:
Purchases of property and equipment	(754)	(383)
Maturities of investments	498	1,492
Net cash provided by (used for) investing activities	(256)	1,109
Cash Flows from Financing Activities:
Proceeds from issuances of common stock	221	222
Costs of issuing convertible notes payable and warrants	(50)	(143)
Net cash provided by financing activities	171	79
Net Decrease in Cash and Cash Equivalents	(13,969)	(12,932)
Cash and Cash Equivalents at Beginning of Period	25,814	19,229
Cash and Cash Equivalents at End of Period	11,845	6,297
Supplemental Non-Cash Information:
Property and equipment in accounts payable at end of period	$ 36	$ 2

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Income Taxes

9 Months Ended

Sep. 30, 2015

Income Tax Disclosure [Abstract]

Income Taxes

5. Income Taxes

We have reported tax net operating losses since our inception through September 30, 2015; therefore, no provision for income taxes has been recorded since our inception. The net operating tax 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 tax 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 2) - Equity awards to employees - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Employee Stock-Based Compensation:
Total stock-based compensation	$ 983	$ 747	$ 2,341	$ 2,881
Research and development expense
Employee Stock-Based Compensation:
Total stock-based compensation	448	282	1,162	855
General and administrative expense
Employee Stock-Based Compensation:
Total stock-based compensation	$ 535	$ 465	$ 1,179	$ 2,026

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Background and Basis of Presentation (Details)		1 Months Ended	9 Months Ended
	Oct. 01, 2015 USD ($) shares	Nov. 30, 2014 USD ($) $ / shares shares	Sep. 30, 2015 USD ($) item shares	Dec. 31, 2014 USD ($)	Dec. 31, 2010
Background and Basis of Presentation
Number of patients enrolled in a clinical trial of bioresorbable stent product | item			110
Common Stock Conversion Rate					10
Liquidity
Cash and investments			$ 12,342,000
Proceeds from notes payable and warrants		$ 25,000,000
Warrants issued to purchase common stock (in shares) | shares		8,750,000
Retained Earnings (Accumulated Deficit)			$ (304,917,000)	$ (252,546,000)
Subsequent Event
Liquidity
Proceeds from exercise of warrants	$ 9,506,000
Cash and investments	$ 21,848,000
Warrants to purchase common stock
Liquidity
Warrants exercised | shares			0
Convertible rate into common stock | $ / shares		$ 2.6073
Warrants to purchase common stock | Subsequent Event
Liquidity
Warrants exercised | shares	4,375,000
Expected | Maximum
Liquidity
Proceeds from exercise of warrants			$ 11,407,000