Financial Performance - The company reported an accumulated deficit of $91.2 million as of December 31, 2022, with a net loss of approximately $24.3 million for the year ended December 31, 2022, compared to a net loss of $8.5 million in 2021[365]. - The net loss for 2022 was $24.3 million, compared to a net loss of $8.5 million in 2021, reflecting a significant increase in operational losses[374]. - Cash and cash equivalents decreased by 37.6% to approximately $18.5 million in 2022 from $29.7 million in 2021, indicating a substantial decline in liquidity[381]. - Net cash used in operating activities increased by 77.7% to approximately $19.0 million in 2022 from $10.7 million in 2021, primarily due to higher net losses[394]. - The company raised approximately $7.8 million from financing activities in 2022, a decrease of 75.3% compared to $31.6 million in 2021[396]. - The provision for income taxes increased to $20,777 in 2022 from $6,004 in 2021, primarily due to increased taxable income from subsidiary operations[380]. - The company has raised concerns regarding its ability to continue as a going concern due to the need for additional fundraising activities in the future[382]. Research and Development - The ongoing Phase 3 clinical study for brilaroxazine is estimated to cost approximately $16.9 million, with $13.2 million payable in 2023 and $3.7 million in 2024[370]. - The company is developing Phase 2 trial protocols for brilaroxazine in ADHD and pulmonary arterial hypertension (PAH), with submissions anticipated in the first half of 2023[357]. - The company has completed Phase 1 studies for brilaroxazine across multiple indications, including schizophrenia, bipolar disorder, and major depressive disorder[369]. - The company expects research and development expenses to increase significantly as it advances its development programs and prepares for potential commercialization[368]. - Research and development expenses increased to approximately $18.9 million in 2022 from $4.9 million in 2021, representing a 291% increase, primarily due to Phase 3 clinical trial activities and higher drug development costs[375]. - The company is focused on completing the clinical development of brilaroxazine for acute and maintenance schizophrenia[357]. - The company has received Orphan Drug designation from the FDA for brilaroxazine for the treatment of PAH and idiopathic pulmonary fibrosis (IPF)[355]. Capital and Financing - The company had cash and cash equivalents of approximately $18.5 million as of December 31, 2022, and anticipates needing additional capital to fund ongoing operations and clinical development[366]. - The company plans to seek additional financing through public or private equity or debt financings to support its clinical development and commercialization activities[366]. - As of December 31, 2022, the company had not exercised any of the Private Pre-Funded Warrants or Private Placement Warrants issued in the September 2022 Offering[387]. Accounting and Valuation - The company utilizes the Black-Scholes-Merton option pricing model to determine the fair value of stock options, relying on historical volatility data from comparable publicly traded companies due to the lack of specific historical data[400]. - The fair value hierarchy under ASC 820 consists of three levels, with the highest priority given to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1)[401]. - The company employs valuation techniques that maximize observable inputs and minimize unobservable inputs in determining the fair value of warrants[402]. - The company is not required to provide quantitative and qualitative disclosures about market risk as a smaller reporting company[405]. - As an emerging growth company, the company will adopt new or revised accounting standards at the same time as private companies, which may complicate financial statement comparisons with other public companies[404]. - The company expects its eligibility as an emerging growth company to end on December 31, 2023, following the fifth anniversary of its initial public offering[404]. - The company does not anticipate paying cash dividends on shares of its common stock[400]. General and Administrative Expenses - General and administrative expenses remained relatively stable at approximately $5.4 million in 2022 compared to $5.3 million in 2021, with a slight increase of 2% attributed to higher consultant fees and recruiting expenses[376].
Reviva Pharmaceuticals (RVPH) - 2022 Q4 - Annual Report