Full Press Release Details
Reviva Pharmaceuticals, Inc.
Consolidated Financial Statements
December 31, 2019 and 2018
| REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM | 2 | |
| Consolidated Balance Sheets | 4 | |
| Consolidated Statements of Operations | 5 | |
| Consolidated Statements of Stockholders' Deficit | 6 | |
| Consolidated Statements of Cash Flows | 7 | |
| Notes to Consolidated Financial Statements | 8 |
REPORT OF INDEPENDENT REGISTERED
PUBLIC ACCOUNTING FIRM
To the Board of Directors and
Shareholders of Reviva Pharmaceuticals Inc.
Cupertino, California
Opinion on the Financial Statements
We have audited the accompanying
consolidated balance sheets of Reviva Pharmaceuticals Inc. and subsidiary (collectively the "Company") as of December 31,
2019 and 2018, and the related consolidated statements of operations, stockholders' deficit, and cash flows for each of the
two years in the period ended December 31, 2019, and the related notes (collectively referred to as the "financial
statements"). In our opinion, the financial statements referred to above present fairly, in all material respects, the financial
position of the Company as of December 31, 2019 and 2018, and the consolidated results of its operations and its cash flows
for each of the two years in the two-year period ended December 31, 2019, in conformity with U.S. generally accepted accounting
The Company's ability to continue as
The accompanying consolidated
financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 2 to the
consolidated financial statements, the Company's significant recurring losses and accumulated deficit raise substantial doubt
about its ability to continue as a going concern. Management's plans in regard to these matters are described in Note 2.
The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.
These financial statements are
the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's
financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting
Oversight Board (United States) ("PCAOB") and are required to be independent with respect to the Company in
accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange
Commission and the PCAOB.
audits in accordance with the standards of the PCAOB and in accordance with auditing standards generally accepted in the
United States of America. Those standards require that we plan and perform the audit to obtain reasonable assurance about
whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company
is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part
of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose
of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly,
we express no such opinion.
Our audits included performing
procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing
procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and
disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates
made by management, as well as evaluating the overall presentation of the financial statements.We believe that our audits provide
a reasonable basis for our opinion.
Emphasis of Matter- COVID-19
As described in Note
10 to the consolidated financial statements, the World Health Organization has declared COVID-19 a global pandemic leading to
broader global economic uncertainties. The measures taken by government agencies to slow the progression of the disease is
uncertain and may adversely affect the Company's result of operations, cash flow and financial position. Our opinion is
not modified with respect to this matter.
We have served as the Company's
San Ramon, California
PHARMACEUTICALS, INC.
December 31, 2019 and 2018
| 2019 | 2018 | |||||||
| ASSETS | ||||||||
| Cash | $ | 193 | $ | 118,637 | ||||
| Property and equipment, net | 591 | 1,236 | ||||||
| Non-current assets | 1,816 | 1,816 | ||||||
| Total assets | $ | 2,600 | $ | 121,689 | ||||
| LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
| Liabilities | ||||||||
| Accounts payable | $ | 224,543 | $ | 66,371 | ||||
| Accrued expenses and other current liabilities | 2,722,875 | 1,046,895 | ||||||
| Contingent warrant, net | 101,525 | 107,934 | ||||||
| Convertible promissory notes, net | 3,765,087 | 4,865,087 | ||||||
| Total liabilities | 6,814,030 | 6,086,287 | ||||||
| Stockholders' deficit | ||||||||
| Preferred stock, par value $0.0001, 13,625,237 shares authorized, 5,802,350 undesignated | ||||||||
| Series 1 convertible preferred stock, 625,237 shares designated; 625,237 shares issued and outstanding (liquidation preference of $3,069,913) | 3,069,913 | 3,069,913 | ||||||
| Series 2 convertible preferred stock, 1,245,889 shares designated; 1,245,889 shares issued and outstanding (liquidation preference of $7,624,841) | 7,624,841 | 7,624,841 | ||||||
| Series 3 convertible preferred stock, 951,761 shares designated; 951,761 shares issued and outstanding (liquidation preference of $12,039,777) | 7,973,720 | 7,973,720 | ||||||
| Series 4 convertible preferred stock, 5,000,000 shares designated; 1,029,994 shares issued and outstanding (liquidation preference $15,861,892) | 10,401,500 | 10,401,500 | ||||||
| Common stock, par value of $0.0001; 35,000,000 shares authorized; 18,180,748 shares issued and outstanding | 618 | 618 | ||||||
| Additional paid-in capital | 18,644,683 | 18,644,683 | ||||||
| Accumulated deficit | (54,526,705 | ) | (53,679,873 | ) | ||||
| Total stockholders' deficit | (6,811,430 | ) | (5,964,598 | ) | ||||
| Total Liabilities and Stockholders' deficit | $ | 2,600 | $ | 121,689 |
accompanying notes are an integral part of these consolidated financial statements.
PHARMACEUTICALS, INC.
STATEMENTS OF OPERATIONS
For the Years Ended December 31, 2019 and 2018
| 2019 | 2018 | |||||||
| Operating expenses | ||||||||
| Research and development | $ | 195,744 | $ | 946,301 | ||||
| General and administrative | 181,116 | 175,579 | ||||||
| Total operating expenses | 376,860 | 1,121,880 | ||||||
| Loss from operations | (376,860 | ) | (1,121,880 | ) | ||||
| Other income (expense) | ||||||||
| Interest income | 201 | 1,365 | ||||||
| Interest expense | (469,373 | ) | (559,040 | ) | ||||
| Total other income (expense) | (469,172 | ) | (557,675 | ) | ||||
| Loss before provision for income taxes | (846,032 | ) | (1,679,555 | ) | ||||
| Provision for income taxes | 800 | 800 | ||||||
| Net loss | $ | (846,832 | ) | $ | (1,680,355 | ) |
accompanying notes are an integral part of these consolidated financial statements.
PHARMACEUTICALS, INC.
STATEMENTS OF STOCKHOLDERS' DEFICIT
For the Years Ended December 31, 2019 and 2018
| Series 1,2,3,4 Convertible Preferred Stock | Common Stock | Additional Paid-in Capital | Accumulated Deficit | Total Stockholders' Deficit | ||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||
| Balance, December 31, 2017 | 3,852,881 | $ | 29,069,974 | 18,180,748 | $ | 618 | $ | 18,623,629 | $ | (51,999,518 | ) | $ | (4,305,297 | ) | ||||||||||||||
| Stock-based compensation expense | - | - | - | - | 21,054 | - | 21,054 | |||||||||||||||||||||
| Net loss | - | - | - | - | - | (1,680,355 | ) | (1,680,355 | ) | |||||||||||||||||||
| Balance, December 31, 2018 | 3,852,881 | 29,069,974 | 18,180,748 | 618 | 18,644,683 | (53,679,873 | ) | (5,964,598 | ) | |||||||||||||||||||
| Net loss | - | - | - | - | - | (846,832 | ) | (846,832 | ) | |||||||||||||||||||
| Balance, December 31, 2019 | 3,852,881 | $ | 29,069,974 | 18,180,748 | $ | 618 | $ | 18,644,683 | $ | (54,526,705 | ) | $ | (6,811,430 | ) |
notes are an integral part of these consolidated financial statements.
PHARMACEUTICALS, INC.
STATEMENTS OF CASH FLOWS
For the Years Ended December 31, 2019 and 2018
| 2019 | 2018 | |||||||
| Cash flows from operating activities | ||||||||
| Net loss | $ | (846,832 | ) | $ | (1,680,355 | ) | ||
| Adjustments to reconcile net loss to net cash provided by (used in) operating activities | ||||||||
| Depreciation | 645 | 1,017 | ||||||
| Amortization of warrant expenses | - | 34,895 | ||||||
| Amortization of debt discount | - | 16,701 | ||||||
| Stock-based compensation expense | - | 21,054 | ||||||
| Mark-to-market of warrant liability | (6,409 | ) | - | |||||
| Changes in operating assets and liabilities | - | - | ||||||
| Non-current assets | - | 7,262 | ||||||
| Accounts payable | 158,172 | (6,654 | ) | |||||
| Accrued interest | 226,312 | 542,339 | ||||||
| Accrued expenses and other current liabilities | 249,668 | (7,622 | ) | |||||
| Net cash flow provided by (used in) operating activities | (218,444 | ) | (1,071,363 | ) | ||||
| Cash flows from financing activities | ||||||||
| Proceeds from issuance of convertible promissory notes | 100,000 | 175,000 | ||||||
| Net cash provided by (used in) financing activities | 100,000 | 175,000 | ||||||
| Net decrease in cash | (118,444 | ) | (896,363 | ) | ||||
| Cash, beginning of year | 118,637 | 1,015,000 | ||||||
| Cash, end of year | $ | 193 | $ | 118,637 | ||||
| Supplementary information: | ||||||||
| Cash paid for taxes | $ | 800 | $ | 800 | ||||
| Non cash transactions: | ||||||||
| Conversion of convertible promissory notes into accrued legal liability | $ | 1,200,000 | - | |||||
| Discount due to warrants issued with debt | - | $ | 34,895 | |||||
| Debt discount on issuance of convertible promissory notes | - | $ | 16,701 |
notes are an integral part of these consolidated financial statements.
REVIVA PHARMACEUTICALS, INC.
NOTES TO CONSOLIDATED
FINANCIAL STATEMENTS
December 31, 2019 and 2018
1. NATURE OF OPERATIONS
Pharmaceuticals, Inc. (the "Parent") was incorporated in the state of Delaware and registered in California,
and commenced operations on May 1, 2006 and its Indian subsidiary, Reviva Pharmaceuticals India Pvt. Ltd., was
incorporated in 2014 (referred herein as "the Company"). The Company is an emerging research based pharmaceutical
company focused on developing a portfolio of internally discovered next generation safe and effective therapeutic drugs by
using an integrated chemical genomics technology platform and proprietary chemistries. The Company is currently focused on
developing drugs for the central nervous system (CNS), cardiovascular (CV), metabolic and inflammatory diseases.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying consolidated
financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America
("GAAP"). The summary of significant accounting policies presented below is designed to assist in understanding the
Company's financial statements. Such financial statements and accompanying notes are the representations of Company's
management, who is responsible for their integrity and objectivity.
Principals of consolidation
The accompanying consolidated
financial statements include the accounts of the Reviva Pharmaceuticals, Inc. and its wholly owned subsidiary Reviva Pharmaceuticals, India
Pvt Ltd. The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally
accepted in the United States of America. All transactions and balances between the parent and its subsidiary have been eliminated
incurred operating losses and negative cash flows since inception. The Company has a limited history of operations and its
prospects are subject to risks, expenses, and uncertainties frequently encountered by companies in pharmaceutical industry.
These risks include, but are not limited to, the uncertainty of successfully developing its products, availability of
additional financing, obtaining regulatory approvals and the uncertainty of achieving future profitability. The Company has a
limited operating history and has yet to generate material revenues from commercial operations. To date, the Company has been
funded primarily by equity financings and convertible promissory notes. The Company's ultimate success is dependent
upon its ability to raise additional capital, to obtain necessary regulatory approvals for its products, and to successfully
develop and market its products.