Goldman Sachs and Senrigan to Provide Financing

SAN DIEGO, Sept. 25, 2014 (GLOBE NEWSWIRE) -- REVA Medical, Inc. (ASX:RVA) ("REVA" or the "Company") announced today that it has entered into a convertible note deed with Goldman Sachs International ("Goldman Sachs"), a wholly owned subsidiary of Goldman Sachs Group, Inc., and Senrigan Master Fund ("Senrigan"), an investment vehicle managed by Senrigan Capital, which, if approved by stockholders, will provide funding for the Company's ongoing operating, clinical, and capital needs including, specifically, the clinical testing and planned CE Mark application of its Fantom bioresorbable scaffold.

Under the convertible note deed, REVA will issue an aggregate principal amount of US$25 million in senior unsecured convertible notes and 8,750,000 options; each option allows the purchase of one share of REVA's common stock. If the options are exercised in full at their maximum exercise price of A$3.00 per share, they would generate approximately US$23.2 million of additional capital, based on current exchange rates. The convertible notes and options will be offered to Goldman Sachs and Senrigan under a prospectus to be prepared in accordance with the requirements of Chapter 6D of the Australian Corporations Act 2001 (Cth).

"We are extremely pleased to have the support of global institutional investors Goldman Sachs and Senrigan," commented REVA's Chief Executive Officer, Bob Stockman. "Securing this commitment, together with our polymer and clinical trial expertise, allows REVA to move Fantom forward quickly into our clinical trial and ultimately to market."

Fantom is a single-piece coronary stent made from REVA's proprietary polymer, which allows for complete visibility of the stent when placed in the artery, an attribute unique to REVA. Additionally, Fantom's polymer properties allow it to dissolve over time, leaving the artery free of a permanent implant and thereby allowing the artery to return to its natural movement, or "vasomotion." Resorbable stents are commonly referred to as "scaffolds."

The Fantom scaffold is currently in the latter stages of development and preclinical testing. The Company anticipates initiating a human clinical trial of Fantom before year-end. The clinical trial is designed to enroll up to 125 patients and provide the data needed to apply for CE Marking, the regulatory approval needed prior to commercially selling the device in Europe and other international markets under the CE Mark. REVA expects to apply for CE Mark by mid-2016 and anticipates that this financing will provide the capital needed to reach commercialization.

The convertible notes will have a five-year term, bear interest at 7.54% annually, and allow for cash redemption options by the holder at 26 months, at maturity, and upon a change of control or following an event of default under the convertible note deed. While interest compounds annually, it is payable only upon redemption.

The noteholders are allowed to convert some or all of the convertible notes into the trading securities of the Company at any time at an initial conversion price of A$0.25 per CHESS Depositary Interest (or "CDI"). The conversion price is subject to adjustment in accordance with the terms of the convertible note deed. Currently, REVA's securities are traded in the form of CDIs on the Australian Securities Exchange ("ASX"); 10 CDIs equal one share of the Company's common stock.

The notes will automatically convert to CDIs in the event the Company has received CE Mark approval for Fantom and the market price of the Company's CDIs exceeds A$0.60 for 20 consecutive trading days. Based on current exchange rates and the initial conversion price, the maximum number of CDIs that may be issued on conversion of all the convertible notes is approximately 113.4 million (or 11.3 million shares of common stock).

The exercise price of each option is set at A$2.50 (or the equivalent of A$0.25 per CDI) until such time as REVA has completed full patient enrollment in its CE Mark clinical trial of Fantom, at which time the exercise price will increase to A$3.00 (or A$0.30 per CDI).

Closing of the transaction is subject to, among other things, approval by REVA's stockholders. Accordingly, a special meeting of stockholders will be held. The Proxy Statement for the special meeting will include additional details regarding the terms of the convertible notes and options and will be mailed to all stockholders.

A summary of the principal terms of the convertible notes and the options is attached to this announcement.

About REVA Medical, Inc.

REVA is a development stage medical device company located in San Diego, California, USA, that is focused on the development, testing, and eventual commercialization of its proprietary bioresorbable stents, which are called "scaffolds" because of their temporary nature. The Company's scaffolds are being developed as an alternative to metal stents, which are small tube-like devices permanently implanted into an artery to treat coronary artery disease. Scaffolds provide restoration of blood flow, support the artery through the healing process, then disappear (or "resorb") from the body over a period of time. This resorption allows the return of natural movement and function of the artery, a result not attainable with permanent metal stents. The Company has conducted clinical studies of its scaffold technologies; a total of 112 patients were enrolled in its most recent clinical trial in Australia, Brazil, Europe, and New Zealand, with enrollment completed during January 2014. The patients in this trial will be followed for a total of five years, with primary data to be obtained at nine and 12 months. The Company is now developing and testing its Fantom^TM scaffold, with initial human implants planned for late 2014 at multiple centers in Brazil and Europe. The Fantom scaffold has been designed to offer distinct ease-of-use features including complete scaffold visibility under x-ray, expansion with one continuous inflation, no procedural time limitations, and standard storage and handling. REVA will require successful clinical results and regulatory approval before it can commercialize Fantom or any of its other products.

About Senrigan Master Fund, an investment vehicle managed by Senrigan Capital

Senrigan Capital is an asset management company founded by Nick Taylor in 2009 to focus on Asia Pacific event-driven strategies. The firm invests in companies undergoing, or anticipated to undergo, transformative events, including mergers and acquisitions and capital markets transactions.

About Goldman Sachs International, a wholly owned subsidiary of Goldman Sachs Group, Inc.

The Goldman Sachs Group, Inc. is a leading global financial services firm that provides a wide range of financial services to a substantial and diversified client base that includes corporations, financial institutions, governments and high net worth individuals. Founded in 1869, the firm is headquartered in New York and maintains offices in all major financial centers around the world.

Non-Solicitation

This announcement and the information contained herein is neither an offer to sell nor a solicitation to buy any securities and does not constitute or form part of an offer to sell securities in the United States ("U.S.") or in any jurisdiction in which such offer, solicitation, or sale is unlawful. Any public offering of securities in the U.S. will be made by means of a prospectus that will contain detailed information about REVA and its management, as well as financial statements. The notes and the options referred to herein have not been and will not be registered under the Securities Act of 1933, as amended, or under any state securities laws and may not be offered or sold in the U.S. absent registration or an applicable exemption from registration.

Forward-Looking Statements

This announcement contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and that are based on management's beliefs, assumptions, and expectations and on information currently available to management. Forward-looking statements generally can be identified by the use of forward-looking terminology such as, anticipate," "believe," "expect," "may," "will," "intend," "plan," "estimate," "continue," "would" or similar expressions or the negative of those terms or expressions. Such statements involve risks and uncertainties, which could cause actual results to vary materially from those expressed in or indicated by the forward-looking statements. All statements that are not statements of historical fact, including those statements that address future operating performance and events or developments that we expect or anticipate will occur in the future, are forward-looking statements, such as those statements regarding our ability to raise financing to fund our operations on terms favorable to us or at all, our ability to obtain the regulatory approvals, our ability to timely and successfully complete our clinical trials, our ability to protect our intellectual property position, our ability to commercialize our products if and when approved, our ability to develop and commercialize new products, and our estimates regarding our capital requirements and financial performance, including profitability. You should not place undue reliance on these forward-looking statements. Although management believes these forward-looking statements are reasonable as and when made, forward-looking statements are subject to a number of risks and uncertainties that may cause our actual results to vary materially from those expressed in the forward-looking statements, including the risks and uncertainties that are described in the "Risk Factors" section of our Annual Report on Form 10-K filed with the United States Securities and Exchange Commission (the "SEC") on March 17, 2014. REVA cautions you not to place undue reliance on forward-looking statements, which reflect an analysis only and speak only as of the date when made. REVA does not assume any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

ATTACHMENT

Summary of Certain Key Terms of the Notes:

Face Value: the Notes each have a face value of US$100,000.

Form and Status: the Notes are direct, unsubordinated, unconditional and unsecured obligations of the Company in certificated form, and will at all times rank pari passu in right of payment with all other existing and future unsecured and unsubordinated senior obligations of the Company (other than unsecured obligations preferred by mandatory provisions of law) and senior in right of payment to all existing and future subordinated obligations of the Company.

Maturity: the Notes mature and shall be repaid in an amount equal to Face Value plus accrued Interest on the earlier to occur of an event of default (as defined in the Deed) or the date 60 months from the date of issue of the Notes unless a Note has been previously converted, redeemed or cancelled. 

Optional Redemption: a Noteholder may elect to cause the Company to redeem all or some of its Notes which have not otherwise been converted, redeemed or cancelled on the date which is 26 months after the date of issue of the Notes, at an amount equal to Face Value plus accrued Interest, upon providing the Company with at least 30 calendar days prior written notice.

Redemption Following a Change of Control Event: following the occurrence of certain change of control events, as further described in the Deed, each Noteholder may give the Company an irrevocable notice requiring the Company to redeem all or any part of their Notes for the greater of (a) the Face Value of the Notes plus accrued Interest and (b) the Cash Settlement Amount (as defined under "Option Conversion" below), provided such Noteholder gives written notice of its decision to redeem within five business days of the change of control event.

Stockholder Rights: the Notes do not provide the holder voting rights or other rights as a stockholder of the Company unless and until converted.

Interest: interest will accrue in respect of the Notes at the rate of 7.54% per annum (increased to 9.54% per annum if any payments are past due); provided that interest is payable only upon redemption of the Notes for cash. No interest is payable on any Note that is converted into shares of common stock (represented by CDIs) in accordance with the terms of the Deed.

Optional Conversion: at any time following the date of issue of the Notes but prior to the maturity date, a Noteholder may give the Company an irrevocable notice electing to convert (the "Conversion Notice") all or some of the Notes held by the Noteholder and specifying the number of Notes the Noteholder is electing to convert into shares of the Company's common stock (represented by CDIs). 

The terms of the Notes contain provisions for the adjustment of the conversion price, which will initially be A$2.50 per share of our common stock (or A$0.25 per CDI), subject to adjustment as described under "Adjustment of Conversion Price" below.

The number of shares of the Company's common stock (equivalent to 10 CDIs) to be issued upon conversion of the Notes is determined by dividing the face value of the Note converted (translated from U.S. dollars into Australian dollars at the exchange rate fixed on the subscription date for the Note) by the conversion price in effect on the conversion date.

Upon receipt of a Conversion Notice, the Company may, in lieu of issuing shares of common stock (represented by CDIs) to the Noteholder, give the Noteholder notice that the Company is electing to redeem the Notes subject to the Conversion Notice for an amount equal to the number of CDIs which would have been issued on conversion multiplied by the average daily volume-weighted average price on the ASX of the CDIs during the 20 trading days after receipt of the Conversion Notice (the "Cash Settlement Amount").

Adjustment of Conversion Price: the terms of the Notes contain provisions for the adjustment of the conversion price upon the occurrence of certain events, including reorganisation of issued capital, certain dividends, distributions and issuance by the Company of equity securities at a price below current market value. If such events occur, the conversion price will be adjusted in accordance with the terms of the Deed to ensure the economic value of the Notes is not adversely affected by the event.

Automatic Conversion: Noteholders shall automatically be deemed to have given the Company an irrevocable Conversion Notice in respect of all of the Notes then held by the Noteholder in the event that both (a) the average daily volume weighted-average price of the Company's CDIs as traded on the ASX equals or exceeds A$0.60 for a period of 20 consecutive trading days and (b) the Company has received CE Mark approval for its Fantom product.

Restrictions on Transfer: subject to certain conditions, a Note or Option may be assigned or transferred to affiliates of the Noteholder, other Noteholders and to any party that is not a competitor (as defined in the Deed) of the Company, provided that the Notes may be transferred to any person, including a competitor of the Company, either upon the occurrence of a change of control event or while an event of default subsists.

Restrictions on Issuance of Equity Securities: for so long as any Notes remain outstanding or Options remain unexercised, the Company may not raise additional capital through the sale or issuance of its equity securities (or securities convertible or exercisable for such securities) except (i) upon the exercise or conversion of securities currently outstanding, (ii) up to an aggregate of 8,700,000 shares of common stock upon equity issuances completed within 6 months of the issuance of the Note or upon the issuance of securities pursuant to the Company's incentive equity plans, (iii) upon a stock split or stock dividend to all holders of the Company's common stock, (iv) to the extent, acting in good faith and in accordance with their fiduciary duties to the Company under applicable law, the directors of the Company form the view that the failure to make such an offering would be a breach of their fiduciary duties, or (v) in certain other limited circumstances set forth in the Deed.

Right of First Refusal: the Noteholders shall have a right of first offer and right of first refusal to acquire all or any portion of any finance debt (as defined in the Deed) that the Company determines to raise while the Notes remain outstanding, subject to certain limited exceptions.

Covenants: for so long as any Notes remain outstanding, the Company shall not take certain actions, including, among other things, (i) declaring or paying any dividend, (ii) issuing any finance debt (as defined in the Deed) in excess of $10,000,000, (iii) granting any security interest in respect of or dispose of the Company's intellectual property, or (iv) substantially changing the general nature or scope of its business, subject to such exceptions as specified in the Deed.

NASDAQ Listing and Registration Rights: provisions of the Deed require the Company to use reasonable efforts to seek to list its common stock on NASDAQ as soon as practicable after September 2015. Additionally, as a condition precedent to issue of the Notes and Options, the Company must enter into an Amended and Restated Investors' Rights Agreement with each Noteholder and each investor that is a party to the existing Amended and Restated Investors' Rights Agreement with the Company dated December 16, 2010. The Amended and Restated Investors' Rights Agreement will be substantially in the form set forth in Schedule 8 to the Deed and will provide each Noteholder, subject to the terms and conditions therein, with the right to require the Company to file a registration statement with the SEC in respect of any securities in the Company held by each such Noteholder to facilitate the sale of such securities on the same basis, and in the same circumstances, as each of the investors that are a party to the existing Amended and Restated Investors' Rights Agreement.

Lock-Up Agreements: each of Robert B. Stockman (REVA's Chairman and Chief Executive Officer) and Robert K. Schulz (REVA's President and Chief Operating Officer) have agreed to enter into Lock-Up Agreements with the Noteholders whereby each will agree not to offer, sell, contract to sell, pledge, grant any option to purchase, make any short sale, file a registration statement with respect to, or otherwise dispose of (including entering into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequence of ownership interests) any shares or CDIs of the Company or any securities that are convertible into or exchangeable for, or that represent the right receive any shares or CDIs of the Company, subject to certain exceptions as further described in the form of Lock-Up Agreement in Schedule 7 of the Deed.

Modifications to Notes: provisions of the Notes may generally be modified, amended or waived by Noteholders that represent at least two-thirds of the outstanding principal face value amount of all outstanding Notes acting at a meeting or by written consent; provided, however, that unanimous consent of the Noteholders holding all of the outstanding notes is required to, amongst other items, (i) extend the term of the notes or their maturity date, (ii) reduce the amount of any payment of principal, interest, fees or any other payment obligation of the Company or (iii) change when and on what terms the Notes will convert or be redeemed, cancelled or otherwise repaid or prepaid.

An "Event of Default" includes, in summary:

(a)  Failure to pay:  a failure by the Company to pay an amount due under and in the manner required by the Deed;

(b)  Cross default:  finance debt of the Group that, in aggregate, exceeds US$1,000,000, is not paid when due or becomes due and payable prior to its maturity date;

(c)  Revocation:  an authorisation, approval or consent material to the Company or its business is cancelled, repealed, revoked or terminated or has expired, amended or modified in a manner which is likely to have a material adverse effect (as defined in the Deed);

(d)  Failure to perform:  the Company or key management fails to perform any material obligation under the Deed, the Amended and Restated Investors' Rights Agreement or the Lock-up Agreement;

(e)  Misrepresentation:  any warranty or representation made by the Company under the Deed becomes false or misleading or incorrect in any material respect when made;

(f)  Insolvency event: an insolvency event (as defined in the Deed) occurs in relation the Company;

(g)  Breach of law:  the Company or any of its subsidiaries is in material breach of an applicable law, regulation, authorisation, listing rule, or court order, official directive or ruling of any Government Agency binding on it which is likely to have a material adverse effect (as defined in the Deed);

(h)  Termination:  any person becomes entitled to repudiate, terminate, rescind or avoid any material provision of the Deed, the Amended and Restated Investors' Rights Agreement or the Lock-up Agreement; or

(i)  Listing:  CDIs cease to trade on ASX or are suspended from trading for more than 5 consecutive trading days or, where the Company's common stock is quoted on an alternative exchange, the shares of the Company's common stock cease to trade or are suspended from trading on such exchange for more than 5 consecutive trading days.

The foregoing description is a summary of certain of the material provisions of the Notes and the Deed and does not purport to be complete. This summary is subject to and is qualified by reference to all the provisions of the Notes and the Deed, including the definitions of certain terms used in the Deed.

Summary of Certain Key Terms of the Options:

(a)  The Options may be exercised at any time after issuance until they expire.

(b)  The Options will automatically expire at 5.00pm Delaware, United States of America time on the date 60 months following the date of issue.

(c)  The Options confer the right to subscribe for one share of the Company's common stock (equivalent to 10 CDIs) per Option upon the payment of the exercise price of:

(i)  A$2.50 (translated into US dollars at the prevailing rate on the date of issue of the Options) where the Option is exercised before a defined Company milestone of full patient enrollment in the Company's CE Mark clinical trial of the Fantom product has occurred, or

(ii)  A$3.00 (translated into US dollars at the prevailing rate on the date of issue of the Options) where the Option is exercised after full CE Mark clinical trial enrollment.

(d)  There are no participating rights or entitlements inherent in the Options and holders of the Options will not be entitled to participate in new issues of capital that may be offered to securityholders (except where the holder has first exercised any of their Options before the record date to participate in the new issue). 

(e)  In the event of any re-organisation (including reconstruction, consolidation, subdivision, reduction or return of capital) of the issued capital of the Company, the Options will be re-organised as required by the ASX Listing Rules.

(f)  If there is a bonus issue to the holders of CDIs, the number of CDIs over which an Option is exercisable will be increased by the number of CDIs which the Optionholder would have received if they had exercised their Options before the record date for the bonus issue.

(g)  In the event the Company proceeds with a pro rata issue (except a bonus issue) of securities to any holder of shares or CDIs of the Company after the date of issue of the Options, the exercise price for the Option will be reduced in accordance with the formula set out in ASX Listing Rule 6.22.2.

(h)  The Options will not be quoted on ASX or any other securities exchange.

(i)  CDIs allotted pursuant to an exercise of the Options will rank, from the date of allotment, equally with the existing CDIs of the Company in all respects.

(j)  The Company will make an application to have those CDIs allotted pursuant to an exercise of the Options listed for official quotation by ASX.

(k)  The Options will be exercisable by the delivery to the registered office of the Company of a notice in writing stating the intention of the Optionholder to exercise all or a specified number of the Options held by them (an "Exercise Notice") accompanied by the relevant option certificate and payment to the Company of the relevant exercise price. An exercise of only some of the Options will not affect the rights of the Optionholder to the balance of the Options held by them.

(l)  Immediately after receipt by the Company of a valid Exercise Notice and payment of the exercise price by the Optionholder in immediately available funds (and in any event no later than two Business Days thereafter), the Company must:

(i)  allot and issue to the Optionholder the number of fully paid CDIs equal to the number of the Options which have been exercised;

(ii)  enter the Optionholder into the Company's register of members as the holder of the relevant number of CDIs;

(iii)  deliver to the Optionholder a holding statement showing the Optionholder as the holder of the relevant number of CDIs; and

(iv)  apply for and use its reasonable efforts to obtain Official Quotation of the relevant number of CDIs by ASX as soon as practicable on such terms and conditions as are usual for quotation of securities on ASX.

(m)  The rights of the Optionholders and the obligations of the Company in relation to the Options are separate and independent of the Deed and the Notes.

The foregoing description is a summary of certain of the material provisions of the Options and the Deed and does not purport to be complete. This summary is subject to and is qualified by reference to all the provisions of the Options and the Deed, including the definitions of certain terms used in the Deed.