Reviva Pharmaceuticals Holdings, (NASDAQ: RVPH) has announced a significant underwritten public offering of common stock and warrants, as the company aims to raise $5 million to advance its research and development activities. This move comes as Reviva’s stock faces a dramatic 24% drop, reflecting investor reactions to the new issuance.
The Reviva Pharmaceuticals stock offering includes 4,761,905 shares of common stock or pre-funded warrants in lieu thereof, along with investor warrants to purchase an equivalent number of shares. The combined price for each share and accompanying warrant is set at $1.05, adhering to Nasdaq’s at-the-market rules. Pre-funded warrants are priced at $1.0499, with an exercise price of $0.0001 per share. These securities are set to close on August 22, 2024, subject to customary conditions
Reviva intends to use the net proceeds from this offering to support its Phase 3 RECOVER-2 trial, a global, randomized study crucial for the company’s development pipeline. The funds will also be allocated for working capital and general corporate needs. This trial is a pivotal step in advancing Reviva’s therapies targeting central nervous system, inflammatory, and cardiometabolic diseases.
Titan Partners Group, a division of American Capital Partners, is the sole bookrunner for this offering. Additionally, existing warrants held by investors will be amended, reducing their exercise price to $0.7964 per share and extending their expiry to five years post-offering.
Following the announcement, Reviva’s stock tumbled to $0.865, down 24.11% from its previous close of $1.14. The stock has experienced considerable volatility over the past year, with a 52-week range of $0.600 to $6.800. Despite this setback, the company’s price target remains optimistic, with analysts projecting a potential upside of 1,523.8%.
The drastic decline in Reviva’s stock price highlights the challenges and uncertainties faced by pharmaceutical companies in capital raising and market reactions. As Reviva continues to seek funding for its clinical trials and strategic objectives, investor sentiment will likely remain a crucial factor in its stock performance.
For now, Reviva Pharmaceuticals remains focused on advancing its clinical programs and achieving its research milestones, with the hope that these efforts will translate into long-term value and stability for its stakeholders.
