REVA Medical, Inc.

In August 2018, the FASB issued ASU 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework - Changes to the Disclosure Requirements for Fair Value Measurement. This new guidance removes certain disclosure requirements related to the fair value hierarchy, modifies existing disclosure requirements related to measurement uncertainty and adds new disclosure requirements. The new disclosure requirements include disclosing the changes in unrealized gains and losses for the period included in other comprehensive income for recurring Level 3 fair value measurements held at the end of the reporting period and the range and weighted average of significant unobservable inputs used to develop Level 3 fair value measurements. This new guidance is effective for the Company beginning on January 1, 2020, with early adoption permitted. Certain disclosures in the new guidance will need to be applied on a retrospective basis and others on a prospective basis. While the Company is currently assessing the impact of the new guidance, it is not expected to have a material impact on our  consolidated financial statements.

Our initial commercial launch plan for Fantom assumed we were bringing to market a second generation product with better performance than the then worldwide leading first generation product from Abbott Laboratories, Absorb.  After our launch, however, Abbott withdrew Absorb from the market and the negative publicity related to Absorb’s adverse events has severely impacted the market for bioresorbable scaffolds. In August 2018, the European Society of Cardiology (“ESC”) announced the publication of new ESC/European Association for Cardio-Thoracic Surgery guidelines on myocardial revascularization (the “2018 ESC Guidelines”). According to the 2018 ESC Guidelines, clinical practice guidelines summarize and evaluate all available evidence at the time of the writing process on a particular issue with the aim of assisting physicians in selecting the best management strategies for an individual patient with a given condition, taking into account the impact on outcome as well as the risk–benefit ratio of particular diagnostic or therapeutic means. The publication also states that the 2018  ESC Guidelines “do not override…the individual responsibility of health professionals to make appropriate and accurate decisions in consideration of each patient’s health condition…Nor…exempt health professions from…consideration of updated recommendations or guidelines issued by the competent public health authorities…”  The 2018 ESC Guidelines state that the safety and efficacy profile of Absorb (based on randomized trial data) has been compared with contemporary drug-eluting stents

bioresorbable scaffolds. In August 2018, the European Society of Cardiology (“ESC”) announced the publication of new ESC/European Association for Cardio-Thoracic Surgery guidelines on myocardial revascularization (the “2018 ESC Guidelines”). According to the 2018 ESC Guidelines, clinical practice guidelines summarize and evaluate all available evidence at the time of the writing process on a particular issue with the aim of assisting physicians in selecting the best ^{management strategies for an individual patient with a given condition, taking into account the impact on outcome as well as the risk–benefit ratio of particular diagnostic or therapeutic means. The publication also states that the 2018  ESC Guidelines “do not override…the individual responsibility of health professionals to make appropriate and accurate decisions in consideration of each patient’s health condition…Nor…exempt health professions from…consideration of updated recommendations or guidelines issued by the competent public health authorities…”  The 2018 ESC Guidelines state that the safety and efficacy profile of Absorb (based on randomized trial data) has been compared with contemporary drug-eluting stents in several trials, that the findings of these trials as well as meta-analyses “consistently indicate the inferior efficacy and safety of Absorb compared with contemporary drug-eluting stents during long-term follow-up”, and that “bioresorbable scaffolds should not be used outside well-controlled clinical studies.”  The 2018 ESC Guidelines encourage consideration of prolonged DAPT therapy.}   In the 2018 ESC Guidelines, the ESC recommends that bioresorbable scaffolds have a Class III designation, which means that there is “evidence or general agreement that the given treatment or procedure is not useful/effective, and in some cases may be harmful.” 

We cannot predict the extent of our future operating losses and accumulated deficit, we may never generate sufficient revenues or positive cash flow to achieve or sustain profitability, and we may be unable to repay our convertible notes when required to do so, either at maturity or earlier. To become and remain profitable, we must succeed in commercializing products with significant market potential. This will require us to succeed in a range of challenging activities, including those listed above. We may not succeed in these activities and we may be unsuccessful in developing alternatives; therefore, we may not ever achieve profitability. If we do achieve profitability, we may not be able to sustain it. Our failure to achieve or sustain profitability could negatively affect the value of our securities  and our ability to attract and retain personnel, raise capital, execute our long-term business strategy or continue operations.

In addition to our current capital needs, we may need additional funding in the future to continue to meet our operating, capital, and debt service needs, and we may be unable to raise capital when needed or on acceptable terms.

We may raise additional capital at any time and may do so through one or more financing alternatives, including public or private sales of our equity securities, debt financings, collaborations, licensing arrangements or other strategic transactions. Each of these financing alternatives carries certain risks. Raising capital through the issuance of common stock, or securities convertible, exercisable or exchangeable for shares of our common stock, may depress the market price of our stock and may substantially dilute our existing stockholders. In addition, our currently outstanding convertible notes are convertible into shares of our common stock at any time at the option of the holder. If we instead seek to raise capital through strategic transactions, such as licensing arrangements, we may be required to relinquish valuable rights. Debt financings could involve covenants that restrict our operations. These restrictive covenants may include limitations on additional borrowing and specific restrictions on the use of our assets, as well as prohibitions on our ability to create liens or make investments and may, among other things, preclude us from