REVIVA PHARMACEUTICALS HOLDINGS, INC.
(successor to Tenzing Acquisition Corp.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2020
(Unaudited) 3.

Recently Issued Accounting StandardsPUBLIC OFFERING

Management does not believe that any recently issued, but not yet effective, accounting standards, if currently adopted, would haveOn June 1, 2021, the Company completed a material effect on the Company’s condensed consolidated financial statements.

Riskpublic offering (the “Offering”) of Units (each, a “Unit”), with each Unit consisting of (a) one share of common stock (or pre-funded warrant to purchase one share of common stock in lieu thereof, with an exercise price of $0.0001 per share, each a “Pre-Funded Warrant”) and Uncertainties

Management continues(b) one warrant to evaluate the impactpurchase 0.75 of the COVID-19 pandemic on the industry and has concluded that while it is reasonably possible that the virus could have a negative effect on the Company’s financial position, resultsshare of its operations and/or search for a target company, the specific impact is not readily determinable asour common stock, with an exercise price of the date of these financial statements. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

NOTE 4. INITIAL PUBLIC OFFERING

$4.125 per share (each, an “Investor Warrant”). Pursuant to the Initial Public Offering, the Company sold 6,325,0004,133,400 Units at a purchaseconsisting of (a) one share of common stock and (b) one Investor Warrant (inclusive the underwriter’s overallotment option of 1,200,000 of such Units), and 5,066,600 Units consisting of (a) one Pre-Funded Warrant and (b) one Investor Warrant. The Units had no stand-alone rights and were not certificated or issued as stand-alone securities. Accordingly, as result of the sale of such Units in the Offering, the Company issued in aggregate 4,133,400 shares of common stock, Pre-Funded Warrants exercisable for 5,066,600 shares of common stock, and Investor Warrants exercisable for 6,900,000 shares of common stock. The offering price was $3.75 for each Unit consisting of $10.00 per(a) one share of common stock and (b) one Investor Warrant, and $3.7499 for each Unit inclusiveconsisting of 825,000 Units sold(a) one Pre-Funded Warrant and (b) one Investor Warrant. Net proceeds from the Offering were approximately $31.5 million, after underwriter discounts, commissions, legal and accounting fees, and certain other costs of approximately $3.0 million.

4.BUSINESS COMBINATION

On December 14,2020, the Company consummated the Business Combination. Pursuant to the underwriters on August 30, 2018 uponMerger Agreement, at the underwriters’ electionEffective Time, Merger Sub merged with and into Reviva Pharmaceuticals, Inc., with Reviva Pharmaceuticals, Inc. as the surviving company in the Merger and, after giving effect to fully exercise their over-allotment option. Each Unit consistssuch Merger, Reviva Pharmaceuticals, Inc. becoming a wholly-owned subsidiary of one ordinary share and one Public Warrant. Each Public Warrant entitles the holder to purchase one ordinary share at an exercise price of $11.50 per share and is redeemable by the Company under certain circumstances (see Note 8)(together with its consolidated subsidiary).

NOTE 5. PRIVATE PLACEMENT

Simultaneously withUpon the closing of the Initial Public Offering, the Sponsor and the underwriter of the Initial Public Offering (and its designees) purchased an aggregate of 323,750 Private Units at a price of $10.00 per Private Unit, of which 310,000 Private Units were purchased by the Sponsor and 13,750 Private Units were purchased by the underwriter ($3,237,500 in the aggregate). On August 30, 2018, the Company consummated the sale of an additional 35,063 Private Units at a price of $10.00 per Private Unit, of which 33,000 Private Units were sold to the Sponsor and 2,063 Private Units were sold to the underwriter, generating gross proceeds of $350,630. Each Private Unit consists of one Private Share and one redeemable warrant (each, a “Private Warrant”). Each Private Warrant is exercisable to purchase one ordinary share at a price of $11.50 per share. The proceeds from the sale of the Private Units were added to the net proceeds from the Initial Public Offering held in the Trust Account. If the Company does not complete a Business Combination, within the Combination Period, the proceeds from the saleall shares of the Private Units will be used to fund the redemption of the Public Shares (subject to the requirements of applicable law)Reviva Pharmaceuticals, Inc. common stock and the Private Warrants will expire worthless.

NOTE 6. RELATED PARTY TRANSACTIONS

Founder Shares

In June 2018, the Company issued an aggregate of 1,437,500 founder shares to the Sponsor for an aggregate purchase price of $25,000 in cash. On August 20, 2018, the Company effectuated a 1.1-for-1 share dividend resulting in an aggregate of 1,581,250 founder shares outstanding. The founder shares included an aggregate of up to 206,250 shares subject to forfeiture by the Sponsor to the extent that the underwriters’ over-allotment was not exercised in full or in part, so that the Sponsor would collectively own 20% of the Company’spreferred stock issued and outstanding ordinary shares afterimmediately prior to the Initial Public Offering. On August 30, 2018, as a result of the underwriters’ election to fully exercise their over-allotment option, 206,250 Founder Shares are no longer subject to forfeiture.

The Founder Shares automaticallyBusiness Combination converted into common stock uponof Reviva Pharmaceuticals Holdings, Inc., with a par value of $0.0001 per share at an exchange rate of 0.152268 for common stock and 0.414647 for preferred stock.  Each issued and outstanding warrant to acquire shares of Reviva Pharmaceuticals, Inc. common stock were assumed by Reviva Pharmaceuticals Holdings, Inc. and automatically converted into a warrant for Reviva Pharmaceuticals Holdings, Inc. common stock, with its price and number of shares adjusted based on the common stock exchange rate of 0.152268.  Each outstanding option to acquire Reviva Pharmaceuticals, Inc. common stock (all of which were vested at the date of the Business Combination), were assumed by Reviva Pharmaceuticals Holdings, Inc. and automatically converted into an option to acquire shares of Reviva Pharmaceuticals Holdings, Inc. common stock at the common stock exchange rate of 0.152268.

In addition to the merger consideration set forth above, the Reviva Pharmaceuticals, Inc. security holders also have a contingent right to receive up to an additional 1,000,000 shares of Reviva Pharmaceuticals Holdings, Inc. (the “Earnout Shares”) based on the stock price performance of the common stock and the achievement by the Company of certain clinical trial milestones during the three (3) year period following the Closing (the “Earnout Period”). In order to receive the Earnout Shares, during the Earnout Period, both:

The Business Combination was accounted for as a reverse merger in accordance with GAAP. Under this method of accounting, Tenzing is treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the holders of Reviva Pharmaceuticals, Inc. having a majority of the voting power of the post-combination company, Reviva Pharmaceuticals, Inc. senior management comprising substantially all of the senior management of the post-combination company, the relative size of Reviva compared to Tenzing, and Reviva Pharmaceuticals, Inc. operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Business Combination was treated as the equivalent of Reviva Pharmaceuticals, Inc. issuing stock for the net assets of Tenzing, accompanied by a recapitalization. The net assets of Tenzing are stated at historical cost, with 0 goodwill or other intangible assets recorded.

The accompanying financial statements and related notes reflect the historical results of Reviva Pharmaceuticals, Inc. prior to the merger and do not include the historical results of Tenzing prior to the consummation of the Business Combination on a one-for-one basis.

The Sponsor has agreed not to transfer, assign or sell any of the founder shares (except to certain permitted transferees) until the earlier of  (i) one year after the date of the consummation of a Business Combination, or (ii) the date on which the closing price of the Company’s ordinary shares equals or exceeds $12.00 per share (as adjusted for stock splits, stock dividends, reorganizations and recapitalizations) for any 20 trading days within any 30-trading day period commencing 150 days after a Business Combination.

Convertible Promissory Notes – Related Party5.LOSSPER SHARE

On February 10, 2020,Loss per share calculations for all periods prior to the Company issuedBusiness Combination have been retrospectively adjusted for the Sponsor a convertible promissory note, pursuantequivalent number of shares outstanding immediately after the Business Combination to whicheffect the Company borrowed an aggregate amount of $750,000. Of such amount, $567,182 was usedreverse recapitalization. Subsequent to fund the extension loan into the Trust Account and the balance was used to finance transaction costs in connection with a Business Combination. During the nine months ended November 30, 2020, the Company issued the Sponsor additional convertible promissory notes, pursuant to which the Company borrowed an aggregate amount of $1,225,000. Of such amounts, $631,841 was used to fund the extension loans into the Trust Account and the balanceCombination, earnings per share will be used to finance transaction costs in connection with a Business Combination. The loans are non-interest bearing and due to be paid uponcalculated based on the earlierweighted average shares of (i) the consummation of a Business Combination and (ii) the date of the winding up of the Company. The loans are convertible into units at a purchase price of $10.00 per unit. The units would be identical to the Private Units. 

REVIVA PHARMACEUTICALS HOLDINGS, INC.
(successor to Tenzing Acquisition Corp.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2020
(Unaudited) common stock then outstanding.

On September 24, 2020,Basic and diluted net loss per share is computed by dividing the Company issued another convertible promissory note withnet loss for the Sponsor, pursuant to whichperiod by the Company borrowed an aggregate amountweighted average number of $350,000. Of such amount, $105,084 was used to fundcommon stock outstanding during the Fourth Extension loan into the Trust Account and the balance will be used to finance transaction costs in connection with a Business Combination.period. The loanweighted average shares of common stock outstanding is non-interest bearing and due to be paid upon the earlier of (i) the consummation of a Business Combination and (ii) the date of the winding up of the Company. The loan is convertible into units at a purchase price of $10.00 per unit; conversions greater than $75,000 are subject to shareholder approval. The units would be identical to the Private Units. 

On November 12, 2020, the Company issued another convertible promissory note with the Sponsor, pursuant to which the Company borrowed an aggregate amount of $200,000. Of such amount, $105,084 was used to fund the Fifth Extension loan into the Trust Account and the balance will be used to finance transaction costs in connection with a Business Combination. The loan is non-interest bearing and due to be paid upon the earlier of (i) the consummation of a Business Combination and (ii) the date of the winding upbased on the Company. The loan is convertible into units at a purchase price9,231,737 shares of $10.00 per unit; conversions greater than $75,000 are subject to shareholder approval. The units would be identical tocommon stock outstanding immediately after the Private Units.

As of November 30, 2020, there was $1,975,000 outstanding under the convertible promissory notes. On December 14, 2020,reverse recapitalization in connection with the Business Combination the Sponsor elected toand assumes these shares have the Working Capital Loans converted, pursuant to the termsbeen outstanding as of the Working Capital Loans, into Private Placement Units, resulting in the issuance of an aggregate of 197,500 Working Capital Shares and 197,500 Working Capital Warrants (together with the Working Capital Shares, the “Conversion Securities”). Upon issuancebeginning of the Conversion Securities all of the existing obligations of the company under the Working Capital Loans were satisfied in full and irrevocably discharged, terminated and released, and the Sponsor retained no rights with respect to such Working Capital Loans, other than the registration rights provided pursuant to such working capital loans.earliest period presented.

Related Party Loans

In order to finance transaction costs in connection with a Business Combination,For the Company’s Sponsor or an affiliate of the Sponsor, or the Company’s officersthree and directors may, but are not obligated to, loannine months ended September 30,2021, and 2020, the Company funds as may be required (“Working Capital Loans”). Such Working Capital Loans would be evidenced by promissory notes. The notes would either be repaid upon consummationhas excluded the potential effect of a Business Combination, without interest, or, at the lender’s discretion, upwarrants to $1,500,000 of notes may be converted upon consummation of a Business Combination into additional Private Units at a price of $10.00 per Unit. On December 8, 2020 the Company's shareholders approved a proposal to permit the Sponsor to convert an additional $500,000 of notes upon consummation of a Business Combination into additional Private Units at a price of $10.00 per Unit. In the event that a Business Combination does not close, the Company may use a portion of proceeds held outside the Trust Account to repay the Working Capital Loans but no proceeds held in the Trust Account would be used to repay the Working Capital Loans. 

NOTE 7. COMMITMENTS

Registration Rights

Pursuant to a registration rights agreement entered into on August 20, 2018, the holders of the founder shares, Private Units (and their underlying securities) and any Units that may be issued upon conversion of the Working Capital Loans (and underlying securities) are entitled to registration rights. The holders of 25% of these securities are entitled to make up to three demands, excluding short form demands, that the Company register such securities. In addition, the holders have certain “piggy-back” registration rights with respect to registration statements filed subsequent to the consummation of a Business Combination. The Company will bear the expenses incurred in connection with the filing of any such registration statements.

Underwriting Agreement

The underwriters are entitled to a deferred fee of 3.50% of the gross proceeds of the Initial Public Offering, or $2,213,750. The deferred fee will be paid in cash and shares only upon the closing of a Business Combination from the amounts held in the Trust Account, subject to the terms of the underwriting agreement. The deferred fee was partially paid in cash in the amount of $100,000, with the balance settled through the issuance of 300,000purchase shares of common stock valued at $2,113,750, upontotaling 13,883,732 and 1,603,403 shares respectively and the closingdilutive effect of the Business Combination from the amounts heldoutstanding stock options totaling 146,698, and 65,471 respectively in the Trust Account,calculation of diluted loss per share, as the effect would be anti-dilutive due to losses incurred. Additionally, 1,000,000 earn-out shares have been excluded as they are not considered issued for accounting purposes. 

6.WARRANTS

As of September 30,2021, there were public warrants outstanding to purchase an aggregate of 6,325,000 shares of common stock and private warrants outstanding to purchase an aggregate of 556,313 shares of common stock.

Each public warrant entitles the holder thereof to purchase one share of common stock at a price of $11.50 per share, subject to the terms of the underwriting agreement.

The Transactions will be consummated after the required approval by the stockholders of the Company and the satisfaction of certain other conditions as further described in the Merger Agreement.

NOTE 8. SHAREHOLDERS’ EQUITY

Ordinary Shares — The Company is authorized to issue an unlimited number of ordinary shares at no par value. Holders of the Company’s ordinary shares are entitled to one vote for each share. At November 30, 2020 and February 29, 2020, there were 2,859,476 and 2,704,587 ordinary shares issued and outstanding, respectively, excluding 2,264,955 and 4,964,590 ordinary shares subject to possible redemption, respectively.

Preferred Shares — The Company is authorized to issue an unlimited number of preferred shares at no par value, divided into five classes, Class A through Class E, each with such designation, rights and preferences as may be determined by a resolution of the Company’s board of directors to amend the Amended and Restated Memorandum and Articles of Association to create such designations, rights and preferences. The Company has five classes of preferred shares to give the Company flexibility as to the terms on which each Class is issued. All shares of a single class must be issued with the same rights and obligations. Accordingly, starting with five classes of preferred shares will allow the Company to issue shares at different times on different terms. At November 30, 2020 and February 29, 2020, there are no preferred shares designated, issued or outstanding.

REVIVA PHARMACEUTICALS HOLDINGS, INC.
(successor to Tenzing Acquisition Corp.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2020
(Unaudited) 

Warrants — The Public Warrants will become exercisable on the later of (a) the consummation of a Business Combination or (b) 12 months from the effective date of the registration statement relating to the Initial Public Offering. adjustment. No Public Warrants public warrants will be exercisable for cash unless the Company haswe have an effective and current registration statement covering the ordinaryissuance of the shares of common stock issuable upon exercise of the Public Warrantspublic warrants and a current prospectus relating to such ordinary shares. Notwithstanding the foregoing, if a registration statement covering the ordinary shares issuable upon the exercise of the Public Warrants is not effective within 90 days from the consummation of a Business Combination, the holders may, until such time as there is an effective registration statement and during any period when the Company shall have failed to maintain an effective registration statement, exercise the Public Warrants on a cashless basis pursuant to an available exemption from registration under the Securities Act. If an exemption from registration is not available, holders will not be able to exercise their Public Warrants on a cashless basis. The Public Warrants will expire five years from the consummation of a Business Combination or earlier upon redemption or liquidation.common stock.

The Company

We may call the public warrants for redemption, (excluding the Private Warrants), in whole and not in part, at a price of $0.01 per warrant:warrant;

The Private Warrantsprivate warrants are identicalsubstantially similar to the Public Warrants underlyingpublic warrants except such private warrants;

In no event will the Units soldCompany be required to net cash settle either the public or the private warrants.

The Company classified the private warrants pursuant to ASC 815 as derivative liabilities with subsequent changes in their fair values to be recognized in the Initial Public Offering, except thatconsolidated financial statements at each reporting date. The Company calculated the Private Warrantsfair value of the private warrants as of September 30,2021 as $650,886 using Black-Scholes model. The key inputs used in the Black-Scholes calculation were, the risk-free interest rate, expected volatility, expected life, exercise price and stock price. The risk-free interest rate was estimated to be 0.80%, the expected volatility was estimated to be 69.1%, and the ordinary shares issuable uponexpected life was estimated to be 4.21 years. The exercise price was $11.50, and the exercise ofstock price $4.07. Due to fair value changes during the Private Warrants will not be transferable, assignable or salable until after the completion of a Business Combination, subject to certain limited exceptions. Additionally, the Private Warrants will be exercisable on a cashless basisthree and will be non-redeemable so long as they are held by the initial purchasers or their permitted transferees. If the Private Warrants are held by someone other than the initial purchasers or their permitted transferees, the Private Warrants will be redeemable bynine months ended September 30,2021, the Company recorded a gain on remeasurement of warrant liabilities of $200,273 and exercisable by such holders on the same basis as the Public Warrants.$1,312,899, respectively.

If the Company calls the Public Warrants for redemption, management will have the option to require all holders that wish to exercise the Public Warrants to do so on a “cashless basis,” as described in the warrant agreement.

The exercise price and number of ordinary shares of common stock issuable uponon exercise of the warrants may be adjusted in certain circumstances including in the event of a stockshare dividend, extraordinary dividend or a recapitalization, reorganization, merger or consolidation. However,

Further, there were assumed warrants outstanding to purchase an aggregate of 126,268 shares of common stock. These warrants were classified as equity as of September 30,2021, and December 31, 2020. The fair value of these warrants on the warrants will not be adjusteddate of issuance was $1,279,182.

In connection with the Offering, the Company issued Pre-Funded Warrants exercisable for issuances5,066,600 shares of ordinary sharescommon stock. Total proceeds from the sale of Units including the Pre-Funded Warrants were approximately $19.0 million and the Pre-Funded Warrants are exercisable into 1 share of common stock at aan exercise price below its exercise price.of $0.0001 per share at any time after issuance. Additionally, in no event willconnection with the Offering, the Company be required to net cash settleissued Investor Warrants exercisable for 6,900,000 shares of common stock with an exercise price of $4.125 per share of common stock any time after issuance. The Investor Warrants expire on June 1, 2026. During the warrants. Ifthree and nine months ended September 30,2021, Investor Warrants for 0 and 23,849 shares of common stock were exercised with proceeds of $0 and $98,377, respectively. The Company has determined that as the Company is unable to completePre-Funded Warrants and Investor Warrants were issued at fair value in a Business Combination within the Combination Period and the Company liquidates the funds heldpublic offering of Units with no debt funding included in the Trust Account, holders of warrants will not receive any of such funds with respect to their warrants, nor will they receive any distribution fromoffering, the Company’s assets held outside of the Trust Account with respect to such warrants. Accordingly, the warrants may expire worthless.Pre-Funded Warrants and Investor Warrants should be classified as equity.

NOTE 9. FAIR VALUE MEASUREMENTS

7.STOCK OPTION PLANS AND STOCK-BASED COMPENSATION

Stock-Based Compensation Expense

The Company followsrecords stock-based compensation expense in connection with the guidance in ASC 820 for its financial assets and liabilities that are re-measured and reported atamortization of the fair value at each reporting period,of stock options granted to employees, non-employee consultants and non-financial assetsnon-employee directors. During the three months ended September 30,2021 and liabilities that are re-measured2020, the Company recorded stock-based compensation of $27,590 and reported at fair value at least annually.$0 respectively. During the nine months ended September 30,2021, and 2020, the Company recorded stock-based compensation of $44,679 and $0 respectively. As of September 30,2021, and 2020, the Company had unrecognized stock-based compensation expense of $220,676 and $0.

Determining Fair Value

Valuation and Recognition – The fair value of each option award is estimated on the date of grant using the Black-Scholes option-pricing model. The Black-Scholes pricing model utilizes the following assumptions:

Expected Term – Expected life of an option award is the average length of time over which the Company expects employees will exercise their options, which is based on historical experience with similar grants.

Expected Volatility - Expected volatility is based on the Company’s financial assets and liabilities reflects management’s estimate of amounts thathistorical stock volatility data over the Company would have received in connection with the saleexpected term of the assets orawards.

Risk-Free Interest Rate - The Company bases the risk-free interest rate on the implied yield currently available on U.S. Treasury zero-coupon issues with an equivalent expected term.

Dividend Yield – The Company has not paid a dividend and does not anticipate paying a dividend in connection with the transfer of the liabilitiesforeseeable future.

The assumptions used in an orderly transaction between market participants at the measurement date. In connection with measuringestimating the fair value of its assets and liabilities, the Company seeks to maximize the use of observable inputs (market data obtained from independent sources) and to minimize the use of unobservable inputs (internal assumptions about how market participants would price assets and liabilities). The following fair value hierarchy is used to classify assets and liabilities based on the observable inputs and unobservable inputs usedoptions granted in order to value the assets and liabilities:2021 are summarized as follows:

REVIVA PHARMACEUTICALS HOLDINGS, INC.
(successor to Tenzing Acquisition Corp.)
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2020
(Unaudited) Expected Term in years - 5.75 - 6.08

 The following table presents information about the Company’s assets that are measured at fair value on a recurring basis at November 30, 2020 and February 29, 2020, indicates the fair value hierarchy of the valuation inputs the Company utilized to determine such fair value:Volatility - 91.4% - 92.2%

Risk-free interest rate – 0.95% - 1.10%

Dividend Yield – 0.00%

Activity under the stock plans for the nine months ending September 30,2021, is as follows:

Options outstanding under the stock plans are as follows as of September 30,2021:

NOTE 10. SUBSEQUENT EVENTS

8.COMMITMENTS AND CONTINGENCIES

As described in Note 1,Clinical trials

Since 2010, the Company completedhas entered into multiple clinical trial agreements with medical institutions in the Business Combination on December 14, 2020.United States, Europe and Asia for the purpose of enrolling patients into various clinical trials. The agreements are substantially similar by trial and include a detailed listing of the clinical trial services for which the Company will pay, how much will be paid for each service, a set-up charge (if any), Investigational Review Board fees, contractual term, and other provisions. The clinical trial services provided by each site generally include the screening of prospective patients and, for those patients to be enrolled in the study, administration of the Company’s investigation drug according to the trial protocol, any required hospitalization, ancillary medical supplies, and 2-week patient follow-up. Further, each agreement requires the Company to indemnify each respective clinical site against any and all liability, loss, or damage it may suffer as a result of third-party claims; the Company maintains general product liability insurance of not less than $5 million in conjunction with this indemnification. The agreements may be terminated upon 30 days’ written notice, subject to conditions of paying all liabilities incurred through the date of termination. Additionally, with each screened patient, the Company incurs expense with other entities engaged to provide independent review of patient medical records.

As describedIndemnification

From time to time, in Note 6,its normal course of business, the Company's shareholders approvedCompany may indemnify other parties, with whom it enters into contractual relationships, including lessors and parties to other transactions with the Company. The Company may agree to hold other parties harmless against specific losses, such as those that could arise from a proposalbreach of representation, covenant or third-party infringement claims. It may not be possible to permitdetermine the Sponsormaximum potential amount of liability under such indemnification obligations due to convert an additional $500,000the unique facts and circumstances that are likely to be involved in each particular claim and indemnification provision. Historically, there have been no such indemnification claims. The Company has also indemnified its directors and executive officers, to the extent legally permissible, against all liabilities reasonably incurred in connection with any action in which such individual may be involved by reason of notes upon consummationsuch individual being or having been a director or executive officer.

Operating Leases

The Company adopted ASC 842 to our existing lease on January 1, 2020. The Company has elected to apply the short-term lease exception to leases of one year or less. Presently, the Company has a Business Combination into additional Private Unitssingle twelve-month lease on its Corporate Office located at a price of $10.00 per Unit on December 8, 2020. On December 14, 2020, upon issuance of the Conversion Securities all of the existing obligations of the company under the Working Capital Loans were satisfied in full and irrevocably discharged, terminated and released,19925 Stevens Creek Blvd., Suite 100, Cupertino, CA 95014. The monthly lease payment is approximately $1,200 and the Sponsor retained no rights with respect to such Working Capital Loans, other than the registration rights provided pursuant to such Working Capital Loans.lease was renewed on February 1, 2021, for another 12-month term.

ITEM 2. MANAGEMENT’SMANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysisAs a result of the Company’s financial condition and resultscompletion of operations should be read in conjunction with the unaudited condensed consolidatedBusiness Combination, the financial statements of Reviva Pharmaceuticals, Inc are now the financial statements of the Company. Prior to the Business Combination, the Company had no operating assets but, upon consummation of the Business Combination, the business and operating assets of Reviva Pharmaceuticals, Inc. acquired by the notes thereto contained elsewhere in this report. Certain information contained inCompany became the discussionsole business and analysis set forth below includes forward-lookingoperating assets of the Company. Accordingly, the financial statements that involve risksof Reviva Pharmaceuticals, Inc. and uncertainties.its respective subsidiary as they existed prior to the Business Combination and reflecting the sole business and operating assets of the Company going forward, are now the financial statements of the Company.

Cautionary Note Regarding Forward-Looking Statements

This Quarterly Report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Exchange Act that are not historical facts, and involve risks and uncertainties that could cause actual results to differ materially from those expected and projected.

All statements other than statements of historical fact included in this Quarterly Report on Form 10-Q including, without limitation, statements under this “Management’s Discussion and Analysis of Financial Condition and Results of Operations”section regarding the Company’sour financial position, business strategy and the plans and objectives of management for future operations, are forward-lookingforward- looking statements. When used in this Quarterly Report on Form 10-Q,section, words such as “anticipate,“anticipate,” “believe,“believe,” “estimate,“estimate,” “expect,“expect,” “intend”“intend” and similar expressions, as they relate to us or the Company’sour management, identify forward-looking statements. Such forward-looking statements are based on the beliefs of management, as well as assumptions made by, and information currently available to, the Company’sour management. Actual results could differ materially from those contemplated by the forward-lookingforward- looking statements as a result of certain factors detailed in our filings with the SEC.herein. All subsequent written or oral forward-looking statements attributable to us or persons acting on the Company’sour behalf are qualified in their entirety by this paragraph.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This report on Form 10-Q contains forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 under Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause our actual results, performance or achievements to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as “may,” “can,” “anticipate,” “assume,” “should,” “indicate,” “would,” “believe,” “contemplate,” “expect,” “seek,” “estimate,” “continue,” “plan,” “point to,” “project,” “predict,” “could,” “intend,” “target,” “potential” and other similar words and expressions of the future.

There are a number of important factors that could cause the actual results to differ materially from those expressed in any forward-looking statement made by us. These factors include, but are not limited to:

The foregoing does not represent an exhaustive list of matters that may be covered by the forward-looking statements contained herein or risk factors that we are faced with that may cause our actual results to differ from those anticipated in such forward-looking statements. Please see “Risk Factors” for additional risks which could adversely impact our business and financial performance.

All forward-looking statements are expressly qualified in their entirety by this cautionary notice. You are cautioned not to place undue reliance on any forward-looking statements, which speak only as of the date of this report or the date of the document incorporated by reference into this report. We have no obligation, and expressly disclaims any obligation, to update, revise or correct any of the forward-looking statements, whether as a result of new information, future events or otherwise. We have expressed our expectations, beliefs and projections in good faith and believe they have a reasonable basis. However, we cannot assure you that our expectations, beliefs or projections will result or be achieved or accomplished.

Company Overview

We are a former blank checkclinical-stage biopharmaceutical company incorporatedthat discovers, develops and seeks to commercialize next-generation therapeutics for diseases representing significant unmet medical needs and burden to society, patients, and their families. Our current pipeline focuses on March 20, 2018 under the name Tenzing Acquisition Corp. ascentral nervous system, respiratory, and metabolic diseases. We use a British Virgin Islands corporationchemical genomics driven technology platform and formedproprietary chemistry to develop new medicines. Our pipeline currently has two drug candidates, RP5063 (Brilaroxazine) and RP1208. Both are new chemical entities discovered in-house. We have been granted composition of matter patents for both RP5063 and R1208 in the United States (U.S.), Europe, and several other countries.

Our lead drug candidate, RP5063, is ready for continued clinical development for multiple neuropsychiatric indications. These include schizophrenia, bipolar disorder (BD), major depressive disorder (MDD), behavioral and psychotic symptoms, dementia or Alzheimer’s disease (BPSD), Parkinson’s disease psychosis (PDP), and attention deficit hyperactivity disorder (ADHD). Furthermore, RP5063 is also ready for clinical development for two respiratory indications — pulmonary arterial hypertension (PAH) and idiopathic pulmonary fibrosis (IPF). The U.S. Food and Drug Administration (FDA) has granted Orphan Drug designation to RP5063 for the purposetreatment of acquiring, engagingPAH in a share exchange, share reconstructionNovember 2016 and amalgamation with, purchasing all or substantially allIPF in April 2018. 

Our primary focus is to complete the clinical development of RP5063 for the treatment of acute and maintenance schizophrenia.

Subject to the receipt of additional financing, we may also continue the clinical development of RP5063 for the treatment of BD, MDD, BPSD, PDP, ADHD, PAH and IPF. Moreover, subject to the receipt of additional financing, we may also advance the development of our second drug candidate, RP1208, for the treatment of depression and obesity.

Impact of COVID-19

In response to the spread of COVID-19, we have taken temporary precautionary measures intended to help minimize the risk of the assets of, or engaging in any other similar Business Combination with one or more businesses or entities. We completedvirus to our Initial Public Offering on August 23, 2018employees and completed the Business Combination (as defined below) on December 14, 2020.community, including temporarily requiring employees to work remotely and suspending all non-essential travel for our employees.

Recent DevelopmentsAs a result of the COVID-19 pandemic, we may experience disruptions that could adversely impact our business. The COVID-19 pandemic may negatively affect clinical site initiation, patient recruitment and enrollment, patient dosing, distribution of drug to clinical sites and clinical trial monitoring for our clinical trials. The COVID-19 pandemic may also negatively affect the operations of the third-party contract research organizations that we intend to rely upon to assist us in conducting our clinical trials and the contract manufacturers who manufacture our drug candidates.

We are continuing to assess the potential impact of the COVID-19 pandemic on our business and operations. For additional information on the various risks posed by the COVID-19 pandemic, refer to Part I—Item 1A—Risk Factors of our Annual Report on Form 10-K/A, as filed with the Securities and Exchange Commission (the “SEC”) on May 7, 2021.

Business Combination and Domestication

On December 14, 2020, Reviva Pharmaceuticals Holdings, Inc. (the “Company”), a Delaware corporation and the Companysuccessor by re-domiciliation to Tenzing Acquisition Corp. (“Tenzing”), a British Virgin Islands exempted company, Tenzing Merger Subsidiary Inc., a Delaware corporation and wholly-owned subsidiary of Tenzing (“Merger Sub”), and Reviva Pharmaceuticals, Inc., a Delaware corporation (together with its consolidated subsidiary), consummated a business combination (the “Business Combination”) through the merger of Merger Sub with and into Reviva Pharmaceuticals, Inc., contemplated by the previously announced business combination with RevivaAgreement and Plan of Merger, dated as of July 20, 2020 (the “Merger Agreement”), by and among Tenzing, Merger Sub, pursuantReviva Pharmaceuticals, Inc., and the other parties thereto. Pursuant to the Merger Agreement.

UponAgreement, at the consummationeffective time of the Business Combination,Merger (the “Effective Time”), Merger Sub merged with and into Reviva Pharmaceuticals, Inc., with Reviva Pharmaceuticals, Inc. as the surviving company in the Merger and, after giving effect to such Merger, Reviva Pharmaceuticals, Inc. becoming a wholly-owned subsidiary of Reviva Pharmaceuticals Holdings, Inc. In connection(together with its consolidated subsidiary).

Old Reviva was incorporated in the closingstate of Delaware on May 1, 2006 and its subsidiary, Reviva Pharmaceuticals India Pvt. Ltd., was incorporated on December 23, 2014. Tenzing was formed pursuant to the laws of the British Virgin Islands on March 20, 2018.

The Business Combination was accounted for as a reverse merger in accordance with GAAP. Under this method of accounting, Tenzing was treated as the “acquired” company for financial reporting purposes. This determination was primarily based on the holders of Old Reviva expecting to have a majority of the voting power of the post-combination company, Old Reviva senior management comprising substantially all of the senior management of the post-combination company, the relative size of Old Reviva compared to Tenzing, and Old Reviva operations comprising the ongoing operations of the post-combination company. Accordingly, for accounting purposes, the Business Combination is treated as the Company changed its nameequivalent of Old Reviva issuing stock for the net assets of Tenzing, accompanied by a recapitalization. The net assets of Tenzing were stated at historical cost, with no goodwill or other intangible assets recorded. Operations prior to the Business Combination are those of Old Reviva.

Financial Overview

We are a clinical-stage biopharmaceutical company and have not generated any revenues from “Tenzing Acquisition Corp.”the sale of products. We have never been profitable, and our accumulated deficit as of September 30, 2021, was $63.1 million. Our net loss for the nine months ended September 30, 2021, was approximately $4.8 million. We expect to “Reviva Pharmaceuticals Holdings, Inc.”incur significant expenses and increased operating losses for the next several years. We expect our expenses to increase in connection with our ongoing activities to research, develop and commercialize our product candidates. Furthermore, we expect to incur additional costs associated with operating as a public company. We will need to generate significant revenues to achieve profitability, and we may never do so.

We expect our expenses will increase substantially in connection with our ongoing activities, as we:

We have funded our operations to date primarily from the issuance and sale of our equity and convertible equity securities. As of September 30, 2021, we had cash of approximately $33.5 million. To fund our current operating plans, we will need to raise additional capital. Our existing cash will not be sufficient for us to complete development of our product candidates and, if applicable, to prepare for commercializing any product candidate that may receive approval. Accordingly, we will continue to require substantial additional capital beyond our existing cash to continue our clinical development and potential commercialization activities, however, we believe that our existing cash, will be sufficient to fund our current operating plans through at least December 2022. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. We will seek to fund our operations through public or private equity or debt financings or other sources, which may include collaborations with third parties. Adequate additional financing may not be available to us on acceptable terms, or at all. Our failure to raise capital as and when needed would have a negative impact on our financial condition and our ability to pursue our business strategy. We cannot assure you that we will ever be profitable or generate positive cash flow from operating activities.

Research and Development Expenses

We focus our resources on research and development activities, including the conduct of preclinical and clinical studies and product development and expense such costs as they are incurred. We have not historically tracked or recorded research and development expenses on a project-by-project basis, primarily because we use our employee and infrastructure resources across multiple research and development projects, and it is not practical for us to allocate such costs on a project-by-project basis. Our research and development expenses primarily consist of employee-related expenses, including deferred salaries, salaries, benefits and taxes for personnel in research and development functions.

The largest recurring component of our total operating expenses has historically been research and development activities. we expect our research and development expenses will increase for the next several years as we advance our development programs, pursues regulatory approval of our product candidates in the U.S. and other jurisdictions and prepare for potential commercialization, which would require a significant investment in costs related to contract manufacturing, inventory buildup and sales and marketing activities.

Our primary product candidates and their current status is as follows:

** We completed the Phase 1 clinical study for RP5063 (Brilaroxazine) prior to starting the Phase 2 study in schizophrenia and schizoaffective disorder. We collected safety data for RP5063 (Brilaroxazine) in over 200 patients, including healthy subjects and patients with stable schizophrenia, acute schizophrenia and schizoaffective disorder. Generally, no separate Phase 1 study is required for conducting a Phase 2 study for an additional indication, provided the treatment doses in the Phase 2 study for an additional indication are within the range of doses tested in the previously completed Phase 1 study.

The successful development of our platform and product candidates is highly uncertain, and we may never succeed in achieving marketing approval for our product candidates RP5063 (Brilaroxazine), RP1208, or any future product candidates. We estimate that initial costs to conduct our Phase 3 clinical study for RP5063 could total approximately $21.0 million, with approximately $7.0 million payable over the course of calendar 2021, and approximately $10.0 million payable during calendar 2022, and approximately $4.0 million payable during calendar 2023. At this time, other than our estimates for conducting our Phase 3 clinical study for RP5063, we cannot reasonably estimate the nature, timing, or costs of the efforts necessary to finish developing any of our product candidates or the period in which material net cash, if any, from these product candidates may commence. This is due to the numerous risks and uncertainties associated with developing therapeutics, including the uncertainty of:

General Administrative Expenses

General and administrative expenses primarily consist of payroll and related costs for employees in executive, business development, finance, and administrative functions. Other significant general and administrative expenses include professional fees for accounting and legal services.

We expect general and administrative expenses to increase as we expand infrastructure and continue the development of our clinical programs. Other increases could potentially include increased costs for director and officer liability insurance, costs related to the hiring of additional personnel, and increased fees for directors, outside consultants, lawyers, and accountants. We expect to incur significant costs to comply with corporate governance, internal controls, and similar requirements applicable to public companies.

Critical Accounting Policies and Use of Estimates

Our critical accounting policies are disclosed in our Annual Report on Form 10-K/A for the year ended December 31, 2020, as filed with the SEC on May 7, 2021. Since the date of the Annual Report, there have been no material changes in our critical accounting policies.

Results of Operations

Our only activities through NovemberComparison of the three months ended September 30, 2020 were organizational activities, including those necessary to prepare2021, and 2020:

The following table summarizes our results of operations for the Initial Public Offering, identify a target company for a Business Combinationthree months ended September 30, 2021, and consummating the acquisition of Reviva. We generate non-operating income in the form of interest income on marketable securities. 2020:

Research& Development expenses

We incurred approximately $1.4 million and $1,000 in research and development expenses for the three months ended September 30, 2021, and 2020, respectively. The increase of approximately $1,422,000, or 148,943%, was primarily attributable to higher drug development costs, salary expenditures and increased consulting costs. Our research and development expenses are expected to increase for the foreseeable future as we continue to advance our platform and product candidates.

General Administrative Expenses

We incurred approximately $1.1 million and $511,000 in general and administrative expenses for the three months ended September 30, 2021, and 2020, respectively. The increase of $542,000, or 106%, was primarily attributable to an increase in salaries by $214,000, increase in insurance costs by $344,000 as a result of beingincrease in premiums as we are now a public company (for legal, financial reporting, accounting

Interest Expense

Interest expense for the three months ended September 30, 2021, and auditing compliance), as well as for2020 was approximately $0 and $146,000, respectively. The decrease was due diligence expenses in connection with completingto all investor notes being converted immediately prior to the Business Combination.

ForGain on Remeasurement of Warrant Liabilities

The gain on remeasurement of warrant liabilities of approximately $200,000 for the three months ended NovemberSeptember 30, 2020, we had2021, resulted from the decrease in calculated fair value principally as a net lossresult of $348,207, consisting of operating costs of $352,007, offset by interest income on marketable securities heldthe decline in our Trust Account of $3,800.stock price from June 30, 2021.

For

Comparison of the nine months ended NovemberSeptember 30, 2020, we had a net loss of $1,020,005, consisting of operating costs of $1,142,872, offset by interest income on marketable securities held in our Trust Account of $122,867.2021, and 2020:

For the three months ended November 30, 2019, we had net incomeThe following table summarizes our results of $136,808, consisting of interest income on marketable securities held in our Trust Account of $323,704, offset by operating costs of $166,022 and an unrealized loss on marketable securities held in our Trust Account of $20,874.

Foroperations for the nine months ended NovemberSeptember 30, 2019,2021, and 2020:

Research& Development expenses

We incurred approximately $2.2 million and $295,000 in research and development expenses for the nine months ended September 30, 2021, and 2020, respectively. The increase of approximately $1,894,000 or 642%, was primarily attributable to higher drug development costs, salary expenditures and increased consulting costs. Our research and development expenses are expected to increase for the foreseeable future as we had net incomecontinue to advance our platform and product candidates.

General Administrative Expenses

We incurred approximately $4.0 million and $1.6 million in general and administrative expenses for the nine months ended September 30, 2021, and 2020, respectively. The increase of $749,554, consistingapproximately $2.3 million, or 145%, was primarily attributable to $832,000 related to the increased use of interest incomeconsultants in connection with accounting and legal activities, increase in insurance costs by $1,031,000 as a result of increase in premiums as we are now a public company and $763,000 increase in salary and related expenses for new personnel. 

Interest Expense

Interest expense for the nine months ended September 30, 2021, and 2020 was approximately $0 and $375,000, respectively. The decrease was due to all investor notes being converted immediately prior to the Business Combination.

Gain on marketable securities held in our Trust AccountRemeasurement of $1,074,188 and an unrealizedWarrant Liabilities

The gain on marketable securities heldremeasurement of warrant liabilities of approximately $1.3 million for the nine months ended September 30, 2021, resulted from the decrease in our Trust Accountcalculated fair value principally as a result of $6,633, offset by operating costs of $331,267.the decline in stock price from December 31, 2020.

Liquidity and Capital Resources

At November 30, 2020,On June 1, 2021, we completed a public offering (the “Offering”) of Units (each, a “Unit”), with each Unit consisting of (a) one share of common stock (or pre-funded warrant to purchase one share of common stock in lieu thereof, with an exercise price of $0.0001 per share, each a “Pre-Funded Warrant”) and (b) one warrant to purchase 0.75 of a share of our common stock, with an exercise price of $4.125 per share (each, an “Investor Warrant”). Pursuant to the Offering, we sold 4,133,400 Units consisting of (a) one share of common stock and (b) one Investor Warrant (inclusive the underwriter’s overallotment option of 1,200,000 of such Units), and 5,066,600 Units consisting of (a) one Pre-Funded Warrant and (b) one Investor Warrant. The Units had marketable securities heldno stand-alone rights and were not certificated or issued as stand-alone securities. Accordingly, as result of the sale of such Units in the Trust AccountOffering, we issued in aggregate 4,133,400 shares of $34,649,855 (includingcommon stock, Pre-Funded Warrants exercisable for 5,066,600 shares of common stock, and Investor Warrants exercisable for 6,900,000 shares of common stock. The offering price was $3.75 for each Unit consisting of (a) one share of common stock and (b) one Investor Warrant, and $3.7499 for each Unit consisting of (a) one Pre-Funded Warrant and (b) one Investor Warrant. Net proceeds from the Offering were approximately $1,013,000$31.5 million, after underwriter discounts, commissions, legal and accounting fees, and certain other costs of interest income), substantially all of which is invested in money market funds, which invest in U.S. Treasury securities. Interest income earned on the balance in the Trust Account may be available to us to pay taxes.approximately $3.0 million

For the nine months ended November 30, 2020, cash used in operating activities amounted to $520,757. Net loss of $1,020,005 was offset by interest earned on marketable securities held in the Trust Account of $122,867. Changes in our operating assets and liabilities provided cash of $622,115.

For the nine months ended November 30, 2019, cash used in operating activities amounted to $178,741. Net income of $749,554 was offset by interest earned on marketable securities held in the Trust Account of $1,074,188 and an unrealized gain on securities held in the Trust Account of $6,633. Changes in our operating assets and liabilities provided cash of $152,526.

We used substantially all of the funds held in the Trust Account, including any amounts representing interest earned on the Trust Account (less deferred underwriting fees) to complete the Business Combination.

As of NovemberSeptember 30, 2020,2021, we had $36,595 incash of approximately $33.5 million. We expect to continue to incur significant expenses and operating losses for the foreseeable future as we continue our operating bank accounts, $34,649,855 in securities held inresearch and preclinical and clinical development of our product candidates; expand the Trust Accountscope of our current studies for our product candidates; initiate additional preclinical, clinical or other studies for our product candidates; change or add additional manufacturers or suppliers; seek regulatory and a working capital deficitmarketing approvals for any of $815,589. On December 14, 2020,our product candidates that successfully complete clinical studies; seek to identify, evaluate and validate additional product candidates; acquire or in-license other product candidates and technologies; maintain, protect and expand our intellectual property portfolio; attract and retain skilled personnel; and experience any delays or encounter issues with any of the Closing by and among Tenzing, Reviva and the other parties named therein under the Merger Agreement was consummated. above.

Until such time as Revivawe can generate substantial product revenue, if ever, Reviva expectswe expect to finance itsour cash needs through a combination of equity or debt financings and collaboration agreements. Reviva doesWe do not currently have any committed external sources of capital. We cannot provide any assurance

To the extent that new financingwe raise additional capital through the future sale of equity or debt, the ownership interest of our stockholders will be availablediluted, and the terms of these securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders.

If we raise additional funds through collaboration agreements in the future, we may have to usrelinquish valuable rights to our technologies, future revenue streams or product candidates or grant licenses on commercially acceptable terms if at all. These conditionsthat may not be favorable to us.

If we are unable to raise substantial doubt aboutadditional funds through equity or debt financings when needed, we may be required to delay, limit, reduce or terminate our abilityproduct development or future commercialization efforts or grant rights to continue asdevelop and market product candidates that we would otherwise prefer to develop and market ourselves.

The table below sets forth selected cash flow data for the periods presented:

Net Cash Used in Operating Activities

Net cash used in operating activities for the nine months ended September 30, 2021, was approximately $6.8 million, consisting primarily of a going concern.net loss of approximately $4.8 million, a noncash gain related to the remeasurement of warrant liabilities of approximately $1.3 million and an increase in net operating assets of approximately $700,000. The increase in net operating assets was primarily due to increases in prepaid expenses and decreases in accounts payable, offset by increases in accrued expenses and other liabilities.