Tivic Health Systems Conference Summary Company Overview - **Company**: Tivic Health Systems (NasdaqCM:TIVC) - **Focus**: Development of non-invasive medical devices targeting neural pathways and a strong late-stage pipeline in biopharmaceuticals, particularly in immunomodulation and cancer therapeutics [1][2] Key Points Transformation and Pipeline Development - Tivic Health has undergone a significant transformation by acquiring newly licensed assets, leading to a robust late-stage portfolio in biopharmaceuticals [2] - The company maintains a clean capital structure with no debt and anticipates significant value inflection points in the near future [2] Biopharmaceutical Focus - The company is focusing on immunomodulation, utilizing the immune system to combat diseases and improve health outcomes [3] - A biologic licensing agreement was established, including a phase three recombinant protein funded by BARDA for radiation countermeasures, with potential applications in cancer [3][4] Entolimod and Market Opportunities - **Entolimod**: A TLR5 agonist with dual capabilities to treat acute radiation syndrome and cancer-related conditions, showing a 300% increase in survival rates with a single dose [9][23] - The market for GCSF drugs, which Entolimod aims to compete against, is valued at approximately $7.2 billion in 2023, with a broader neutropenia market of around $20 billion [9][31] - Entolimod is positioned as a military countermeasure for nuclear disasters, with a potential market opportunity of $5.2 billion for stockpiling [9][10] Clinical and Regulatory Progress - The company has made significant strides in customer engagement and manufacturing agreements, moving towards a Biologics License Application (BLA) filing [5][10] - The FDA has granted fast track and orphan drug designations for Entolimod, facilitating expedited regulatory processes [11] Future Directions and Strategic Focus - The company plans to focus on Entolimod over the next 6 to 18 months while also exploring other high-potential areas, including cancer therapeutics and vagus nerve stimulation technologies [17][35] - By 2026, Tivic Health aims to have GMP materials ready, FDA meetings completed, and customer interest solidified [34] Additional Insights - The company operates with a capital-light model and has a strong team with extensive experience in drug launches and biopharmaceutical development [16][25] - There is potential for partnerships with larger organizations to scale production and market reach effectively [29] - The vagus nerve technology remains a promising area for future development, with established research backing its efficacy [13][12] Conclusion Tivic Health Systems is positioned for growth with its innovative biopharmaceutical pipeline, particularly through Entolimod, which addresses significant market needs in radiation countermeasures and cancer therapeutics. The company's strategic focus on regulatory pathways and partnerships will be crucial for its success in the coming years.

Financial Data and Key Metrics Changes - Revenue net of returns totaled $86,000 for Q2 2025 compared to $140,000 in Q2 2024, and $156,000 for the first half of 2025 compared to $474,000 for the first half of 2024, reflecting a significant decline due to decreased unit sales of ClearUp [16][17] - Cost of sales decreased to $32,000 from $110,000 in the year-ago quarter, and gross margins increased to 63% for Q2 2025 compared to 21% a year ago, driven by reductions in product support and fulfillment costs [17][18] - Net loss was $1,900,000 for Q2 2025 compared with $1,300,000 for Q2 2024, and $3,400,000 for the first half of 2025 compared with $2,700,000 for the first half of 2024 [18][19] Business Line Data and Key Metrics Changes - The decline in revenue was primarily due to reduced unit sales of ClearUp, as the company intentionally decreased marketing expenditures to focus on advancing its TLR5 program [17] - Operating expenses increased to $2,000,000 for Q2 2025 compared with $1,300,000 for Q2 2024, mainly due to increased research and development investments in the biologics program [18] Market Data and Key Metrics Changes - The market for neutropenia drugs is projected to be between $19 billion to $24 billion over the next few years, with entolimod potentially addressing a significant portion of this market [10] Company Strategy and Development Direction - The company is transitioning towards the biopharmaceutical market and away from the consumer device market, planning to exit the consumer health tech business by year-end [14] - The exclusive licensing of Sotero Biopharma's TLR5 portfolio is expected to provide a late-stage, highly derisked drug candidate, with significant sales potential from government contracts for acute radiation syndrome (ARS) treatments [4][5] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the potential of entolimod and its derivatives to treat radiation and chemotherapy side effects, emphasizing the importance of their strategic pipeline [11][12] - The company is focused on advancing its clinical and commercial opportunities, with key milestones including the transfer of existing INDs and validation of GMP materials [22][23] Other Important Information - The company raised gross proceeds of $900,000 through equity financing, which will support progress towards GMP manufacturing validation for entolimod [19] - Management highlighted the importance of talent acquisition to support clinical work and government relations, indicating a strategic alignment with their new focus [21] Q&A Session Summary - No specific questions and answers were provided in the content, thus this section is not applicable.

Financial Performance - Revenue net of returns was $86,000 for the quarter, down from $140,000 in the prior year, and $156,000 for the first half of 2025 compared to $474,000 for 2024, attributed to decreased unit sales of ClearUp due to reduced marketing expenditures [24][25] - Gross margin increased to 63% for the second quarter, up from 21% a year ago, and 67% from 42% for the first half of 2025 compared to 2024, driven by reduced product support and fulfillment costs [25][26] - Operating expenses rose to $2.0 million for the second quarter from $1.3 million in the prior year, primarily due to increased research and biologics investment, while net loss was $1.9 million compared to $1.3 million in the prior year [3][26] Strategic Shift - The company plans to exit the consumer health technology business and focus exclusively on prescription-based therapeutics, citing underperformance in ClearUp sales [5][22] - An exclusive license was obtained for Sotero Biopharma's TLR5 agonist portfolio, including entolimod, which is seen as a potential growth engine with significant U.S. government contract opportunities for Acute Radiation Syndrome (ARS) [5][8] - Management is pursuing regulatory progress for entolimod, which has received fast track designation and orphan drug status, with a type B FDA meeting planned to advance a Biologic License Application (BLA) filing [5][15] Clinical Development and Manufacturing - GMP manufacturing validation for entolimod has been initiated with Scorpius Biomanufacturing, moving towards key biologics license application steps [6][16] - The company completed all study visits in an optimization study for the noninvasive cervical vagus nerve stimulation (NCVNS) device, with results expected later this year [6][21] - The potential market for neutropenia drugs is estimated between $19 billion to $24 billion, with entolimod positioned to address this market by preventing cell death during radiation treatment [17][18] Leadership and Talent Acquisition - Lisa Wolf has been confirmed as CFO, with key hires from Statera to support regulatory, clinical, and business development efforts [7][28] - The company has made significant adjustments to its staff to align with the new strategic focus, including the transition of the chief scientific officer to a consultancy role [7][28] Future Outlook - The company anticipates completing the transfer of existing INDs from Statera, cell line verification, and the first batch of GMP materials, along with reporting on the VNS trial results [30] - Management emphasizes the importance of the entolimod opportunity, with a single contract for ARS potentially totaling several hundred million dollars [9][13]

[PART I - FINANCIAL INFORMATION](index=3&type=section&id=PART%20I%20-%20FINANCIAL%20INFORMATION) [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents unaudited condensed financial statements for Q2 2025 and 2024, including balance sheets, statements of operations, equity, and cash flows, detailing accounting policies, immunotherapeutics diversification, financing, and going concern uncertainty [Condensed Financial Statements](index=4&type=section&id=Condensed%20Financial%20Statements) Balance Sheets (in thousands) | Metric | June 30, 2025 (Unaudited) | December 31, 2024 (Audited) | | :--- | :--- | :--- | | Cash and cash equivalents | $1,184 thousand | $2,002 thousand | | Total current assets | $1,842 thousand | $2,639 thousand | | Licensed technology | $2,243 thousand | $0 | | **Total assets** | **$4,508 thousand** | **$2,807 thousand** | | Total current liabilities | $821 thousand | $272 thousand | | **Total liabilities** | **$821 thousand** | **$272 thousand** | | **Total stockholders' equity** | **$3,687 thousand** | **$2,535 thousand** | Statements of Operations (in thousands) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $86 thousand | $140 thousand | $156 thousand | $474 thousand | | Gross profit | $54 thousand | $30 thousand | $104 thousand | $197 thousand | | Total operating expenses | $1,988 thousand | $1,296 thousand | $3,544 thousand | $2,944 thousand | | **Net loss** | **($1,931) thousand** | **($1,266) thousand** | **($3,433) thousand** | **($2,747) thousand** | | Net loss per share | ($2.19) | ($5.37) | ($4.64) | ($17.05) | Statements of Cash Flows (in thousands) | Cash Flow Activity (Six Months Ended June 30) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | ($2,716) thousand | ($2,953) thousand | | Net cash used in investing activities | ($546) thousand | $0 | | Net cash provided by financing activities | $2,444 thousand | $3,251 thousand | | **Net (decrease) increase in cash** | **($818) thousand** | **$298 thousand** | | **Cash at end of period** | **$1,184 thousand** | **$3,693 thousand** | [Notes to Unaudited Condensed Financial Statements](index=9&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) - The company diversified into immunotherapeutics by licensing Entolimod™ from Statera Biopharma for Acute Radiation Syndrome (ARS) and neutropenia[18](index=18&type=chunk)[85](index=85&type=chunk) - The company's **$3.4 million net loss** for H1 2025, **$47.0 million accumulated deficit**, and **$1.2 million cash reserves** raise substantial doubt about its going concern ability[20](index=20&type=chunk) - A **1-for-17 reverse stock split** on March 7, 2025, retroactively restated all share and per-share amounts in financial statements[23](index=23&type=chunk) - A manufacturing agreement with Scorpius BioManufacturing for Entolimod involves an estimated **$4.1 million investment** over two years[91](index=91&type=chunk)[92](index=92&type=chunk) - New financing includes an Equity Line of Credit with Mast Hill Fund for up to **$25 million** and a Tranched Financing agreement for up to **$8.4 million** in Series B Preferred Stock and Warrants[115](index=115&type=chunk)[130](index=130&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=46&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) This MD&A details the company's strategic shift to immunotherapeutics and ncVNS, showing decreased ClearUP revenue, increased R&D and G&A expenses, a wider net loss, and ongoing liquidity challenges with new financing efforts [Business Overview](index=46&type=section&id=Business%20Overview) - Tivic Health transitioned into a diversified immunotherapeutics company, focusing on its bioelectronic ncVNS program and new biopharma program with Entolimod™[166](index=166&type=chunk) - Entolimod™, a late-stage biopharmaceutical candidate, has FDA Fast Track designation for Acute Radiation Syndrome (ARS) and is planned for a Phase 2 neutropenia study[167](index=167&type=chunk)[178](index=178&type=chunk) - ClearUP®, an FDA-approved device for sinus pain, is supported by alternative monetization strategies as the company shifts its primary focus[166](index=166&type=chunk)[169](index=169&type=chunk) [Results of Operations](index=60&type=section&id=Results%20of%20Operations) Key Financial Metrics (in thousands) | Metric (in thousands) | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Six Months Ended June 30, 2025 | Six Months Ended June 30, 2024 | | :--- | :--- | :--- | :--- | :--- | | Revenue | $86 | $140 | $156 | $474 | | Gross Profit | $54 | $30 | $104 | $197 | | R&D Expenses | $655 | $302 | $990 | $558 | | Sales & Marketing | $426 | $207 | $605 | $712 | | G&A Expenses | $907 | $787 | $1,949 | $1,674 | | **Net Loss** | **($1,931)** | **($1,266)** | **($3,433)** | **($2,747)** | - Revenue decreased **39%** for Q2 and **67%** for H1 2025 year-over-year, primarily due to reduced ClearUP advertising spend and capital reallocation to the TLR5 program[229](index=229&type=chunk)[230](index=230&type=chunk) - Research and development expenses increased by **$432 thousand** for H1 2025, driven by the new biopharma program and Entolimod manufacturing costs[238](index=238&type=chunk) - Gross margin increased by **41%** in Q2 2025 and **25%** in H1 2025 year-over-year, due to supply chain restructuring and lower-cost logistics[236](index=236&type=chunk) [Liquidity and Capital Resources](index=64&type=section&id=Liquidity%20and%20Capital%20Resources) - As of June 30, 2025, the company had **$1.2 million** in cash and **$47.0 million** accumulated deficit, raising substantial doubt about its going concern ability due to insufficient funds for the next twelve months[245](index=245&type=chunk)[251](index=251&type=chunk) - Operations are financed through equity sales, including an Equity Distribution Agreement with Maxim, an Equity Purchase Agreement with Mast Hill for up to **$25 million**, and a Preferred Purchase Agreement for up to **$8.4 million** in tranched financing[247](index=247&type=chunk)[248](index=248&type=chunk)[250](index=250&type=chunk) - Strategic focus shifted from ClearUP to advancing biologic (TLR5) and bioelectronic (vagus nerve stimulation) pipelines, anticipating increased operating expenses[245](index=245&type=chunk)[252](index=252&type=chunk) - The company plans to reduce ClearUP advertising and is considering alternative monetization strategies, including a potential strategic transaction or exit from the consumer business by year-end[231](index=231&type=chunk)[258](index=258&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=77&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) As a smaller reporting company, the company indicates this disclosure is not applicable - This section is not applicable to the company[294](index=294&type=chunk) [Controls and Procedures](index=77&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective as of June 30, 2025, but acknowledges a material weakness in internal control over financial reporting from December 31, 2024, due to a small accounting team, with remediation efforts underway - The CEO and CFO concluded that disclosure controls and procedures were effective as of June 30, 2025[298](index=298&type=chunk) - A material weakness in internal controls over financial reporting was identified as of December 31, 2024, due to the small accounting team, with remediation under evaluation[300](index=300&type=chunk)[301](index=301&type=chunk) - No material changes occurred during the quarter affecting internal control over financial reporting[302](index=302&type=chunk) [PART II - OTHER INFORMATION](index=80&type=section&id=PART%20II%20-%20OTHER%20INFORMATION) [Legal Proceedings](index=80&type=section&id=Item%201.%20Legal%20Proceedings) The company is not currently involved in any material legal proceedings that would significantly adversely affect its business or financial condition - The company is not currently a party to any material legal proceedings, litigation, or claims[305](index=305&type=chunk) [Risk Factors](index=80&type=section&id=Item%201A.%20Risk%20Factors) No material changes to risk factors previously disclosed in the Annual Report on Form 10-K have occurred - No material updates or changes to risk factors previously disclosed in the company's Annual Report have occurred[307](index=307&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=80&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) No unregistered sales of securities not previously reported on Form 8-K occurred during Q2 2025, nor were any stock repurchases made - No unregistered sales of securities not previously disclosed in a Current Report on Form 8-K occurred during Q2 2025[308](index=308&type=chunk) - The company did not repurchase any outstanding equity securities during H1 2025[309](index=309&type=chunk) [Other Information](index=80&type=section&id=Item%205.%20Other%20Information) No directors or officers adopted, modified, or terminated a Rule 10b5-1 trading arrangement during H1 2025 - None of the company's directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement during H1 2025[312](index=312&type=chunk) [Exhibits](index=80&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the quarterly report, including various agreements, warrants, and SEC-required certifications - The report includes a list of filed exhibits, such as warrants, securities purchase agreements, license agreements, employment agreements, and officer certifications[313](index=313&type=chunk)[314](index=314&type=chunk)

[Management Commentary & Strategic Transformation](index=1&type=section&id=Management%20Commentary%20%26%20Strategic%20Transformation) Tivic is strategically transforming, shifting resources from ClearUP to its biopharmaceutical pipeline to enhance shareholder value - Tivic is strategically transforming by expanding into biopharmaceuticals to treat diseases by addressing both biochemical and bioelectronic systems[2](index=2&type=chunk) - The company is shifting resources away from its consumer healthtech device, ClearUP, and plans to exit that business by the end of 2025 to maximize focus on its clinical pipeline[3](index=3&type=chunk) [Corporate Highlights](index=1&type=section&id=Corporate%20Highlights) Tivic advanced Entolimod™ and ncVNS development, securing **$1.4 million** preferred equity and a **$25 million** credit line - Secured positive interest from the White House and FDA for potential military and defense applications of its drug candidate Entolimod™ to treat Acute Radiation Syndrome (ARS)[3](index=3&type=chunk) - Extended the worldwide license of Entolimod™ to include the treatment of neutropenia, a condition that reduces the body's ability to fight infections[3](index=3&type=chunk) - Completed all study visits in the Optimization Study for its patent-pending non-invasive cervical vagus nerve stimulation (ncVNS) device[3](index=3&type=chunk) - Raised **$1.4 million** from a preferred equity purchase agreement that provides for up to **$8.4 million** in total financing and entered into a separate **$25 million** equity line of credit[3](index=3&type=chunk) [Financial Performance Summary](index=2&type=section&id=Financial%20Performance) Q2 2025 results show decreased revenue, improved gross margin, increased operating expenses, and net loss due to biopharma investments Q2 & H1 2025 Financial Highlights (in thousands) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | YTD 2025 (in thousands) | YTD 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenue | $86 | $140 | $156 | $474 | | Gross Profit | $54 | $30 | $104 | $197 | | Operating Expenses | $2,000 | $1,300 | $3,500 | $3,000 | | Net Loss | ($1,900) | ($1,300) | ($3,400) | ($2,700) | - The decrease in revenue is attributed to lower unit sales of ClearUP™, resulting from reduced advertising expenses as the company focuses resources on its TLR5 program[8](index=8&type=chunk) - Gross margin for the first six months of 2025 improved to **67%** compared to **42%** in the same period of 2024[8](index=8&type=chunk) - As of June 30, 2025, the company held **$1.2 million** in cash and cash equivalents with no debt on its balance sheet. An additional **$7.0 million** remains available through a committed preferred equity purchase agreement[8](index=8&type=chunk) [Financial Statements](index=4&type=section&id=Financial%20Statements) This section presents Tivic's condensed balance sheets and statements of operations, outlining financial position and performance [Condensed Balance Sheets](index=4&type=section&id=Condensed%20Balance%20Sheets) Tivic's balance sheet as of June 30, 2025, shows total assets of **$4.5 million**, increased liabilities, and higher stockholders' equity Condensed Balance Sheet (in thousands) | Account | June 30, 2025 (Unaudited, in thousands) | December 31, 2024 (Audited, in thousands) | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $1,184 | $2,002 | | Total Current Assets | $1,842 | $2,639 | | Total Assets | $4,508 | $2,807 | | **Liabilities & Equity** | | | | Total Current Liabilities | $821 | $272 | | Total Liabilities | $821 | $272 | | Total Stockholders' Equity | $3,687 | $2,535 | | Total Liabilities and Stockholders' Equity | $4,508 | $2,807 | [Condensed Statements of Operations](index=5&type=section&id=Condensed%20Statements%20of%20Operations) Q2 2025 saw a net loss of **$1.9 million** on **$86,000** revenue, driven by increased R&D expenses for biopharma programs Condensed Statement of Operations (in thousands, except per share data) | Metric | Q2 2025 (in thousands) | Q2 2024 (in thousands) | H1 2025 (in thousands) | H1 2024 (in thousands) | | :--- | :--- | :--- | :--- | :--- | | Revenues | $86 | $140 | $156 | $474 | | Gross Profit | $54 | $30 | $104 | $197 | | Research and development | $655 | $302 | $990 | $558 | | Total Operating Expenses | $1,988 | $1,296 | $3,544 | $2,944 | | Net Loss | $(1,931) | $(1,266) | $(3,433) | $(2,747) | | Net Loss Per Share | $(2.19) | $(5.37) | $(4.64) | $(17.05) | - The increase in net operating loss was driven by higher operating expenses, particularly in Research and Development, which more than doubled year-over-year for the second quarter[14](index=14&type=chunk) [Business Overview](index=2&type=section&id=About%20Tivic) Tivic is an immunotherapeutics company using dual biopharmaceutical and bioelectronic platforms to address unmet medical needs - Tivic's business model is a dual platform using the body's biopharmaceutical and bioelectronic systems to target the immune system[7](index=7&type=chunk) - The lead drug candidate, Entolimod™, is a novel TLR5 agonist in late-stage development for acute radiation syndrome and has been granted Fast Track designation by the FDA[9](index=9&type=chunk) - The bioelectronic program is developing a non-invasive vagus nerve stimulation device with the potential to deliver clinical outcomes comparable to surgically implanted devices[10](index=10&type=chunk)

Tivic Health Systems (TIVC) Conference Summary Company Overview - Tivic Health Systems is a late-stage diversified immunotherapeutics company focused on harnessing the immune system to fight diseases and restore health [3][4] - The company has transitioned from a single product company to a diversified portfolio, including a program in vagus nerve stimulation and a phase three immunotherapy program [5][6] Key Developments - Tivic has licensed a phase three immunotherapy program involving two molecules, with significant prior funding of approximately $140 million from agencies like DARPA and DOD [5][12] - The company is positioned in a $183 billion market segment with multiple commercial and clinical catalysts expected in the next 18 months [7] Product Pipeline - The newly licensed asset, Entelimod, is engineered to activate specific receptors in the immune system, showing promising results in treating acute radiation syndrome [11][12] - The acute radiation syndrome treatment has demonstrated a threefold increase in survival rates in mouse trials after radiation exposure [16][17] - The company is also exploring applications for neutropenia, a condition with a current market of approximately $10 billion, expected to grow to over $20 billion by 2032 [21][22] Competitive Advantage - Tivic's approach combines bioelectronic and biologic therapies, targeting both overactive and underactive immune systems [8][30] - The company’s bioelectronic portfolio aims to modulate the vagus nerve non-invasively, presenting a compelling alternative to existing surgical solutions [32][40] Market Opportunities - The acute radiation syndrome indication is seen as a significant opportunity for stockpiling orders, potentially ranging from $25 million to $250 million [20] - The G-CSF market, which currently stands at $7.2 billion, is expected to grow to $14.5 billion, providing a substantial opportunity for Tivic’s products [26] Clinical Trials and Regulatory Pathways - All trials for acute radiation syndrome have been completed, and the company is looking to start new trials for neutropenia [42] - Tivic has initiated GMP manufacturing processes and is in discussions with the FDA for potential expedited pathways to market [19][15] Financial Position - The company has maintained a clean cap table with no debt and good trading volumes, regaining NASDAQ minimum bid compliance as of March 31 [6][44] - An $8.4 million financing has been signed, with plans for a shareholder meeting to approve announced financings [46] Conclusion - Tivic Health is at a pivotal point with a diversified portfolio and significant market opportunities, particularly in immunotherapy and bioelectronic medicine, positioning itself for potential growth and investment [3][48]

Tivic Health Systems (TIVC) Conference Summary Company Overview - Tivic Health Systems is undergoing a significant transformation, shifting from a single product over-the-counter device company to a diversified immunotherapeutics company focused on immunotherapeutic applications and bioelectronic programs [3][4][31]. Core Business Developments - The company has licensed a phase three immunotherapy program, specifically a TLR five agonist, which includes two molecules and over 40 clinical trials, with a focus on acute radiation syndrome and additional indications in oncology and longevity [5][6][9]. - The TLR five program has received significant investment, totaling over $140 million, and has garnered interest from government agencies for its potential applications in emergency situations related to radiation exposure [10][11]. Product Pipeline and Market Potential - **Acute Radiation Syndrome (ARS)**: The TLR five drug, entolimod, has shown a threefold increase in survival rates in clinical trials and is on a fast track for FDA approval. The company is exploring emergency use designations to expedite market entry [12][15]. - **Neutropenia Market**: The market for neutropenia treatments is projected to exceed $20 billion by 2032, with TLR five drugs positioned to capture significant market share [17][20]. - **Vagus Nerve Stimulation (VNS)**: Tivic is developing a noninvasive VNS device, which has shown promising results in clinical trials, including a 60% decrease in gamma waves and a 2x increase in heart rate variability [21][23]. Strategic Positioning - The company is strategically positioned to leverage its dual approach of biologics and bioelectronic therapies to address immune system dysfunction across various diseases [7][8][31]. - Tivic Health aims to differentiate itself from competitors by offering noninvasive alternatives to existing implanted technologies, potentially expanding market access [25][27]. Financial and Operational Insights - The company has resolved previous Nasdaq deficiencies and currently has no debt, with a stable trading volume and a well-structured cap table [29][30]. - Recent financing efforts have provided sufficient capital to sustain operations for the next 12 to 18 months [44][45]. Distribution and Revenue Generation - The distribution strategy for the TLR five product will focus on government sales, requiring a limited sales team and leveraging existing consultant relationships [32][33]. - Revenue generation timelines are contingent on emergency use designations, with potential revenue starting within 12 to 18 months [34]. Challenges and Considerations - The company acknowledges the competitive landscape in the depression treatment market, which is heavily defended by pharmaceutical companies, and anticipates a complex regulatory pathway for its VNS device [36][38]. - The over-the-counter product line is currently breakeven, and the company is considering strategic alternatives for this segment [46][48]. Conclusion - Tivic Health Systems is positioned for growth through its innovative immunotherapeutic and bioelectronic product offerings, with a focus on addressing significant market needs in radiation exposure and immune system disorders. The company is actively pursuing regulatory pathways and strategic partnerships to enhance its market presence and financial stability [31][59].

Financial Data and Key Metrics Changes - Revenue for Q1 2025 totaled $70,000, a decline from $334,000 in Q1 2024, primarily due to an 81% decrease in unit sales linked to a 92% reduction in advertising spend [11][12] - Cost of sales decreased to $20,000 from $167,000 in the prior year, resulting in an increase in gross margins from 50% to 72% [12] - Operating expenses remained flat at $1,600,000 for Q1 2025 compared to the same period in 2024, with a net loss of $1,500,000 for both quarters [12][13] - Cash and cash equivalents were $669,000 as of March 31, 2025, down from $2,000,000 at the end of 2024 [13] Business Line Data and Key Metrics Changes - The company transitioned from a single product focus to a diversified immunotherapeutics company, emphasizing a clinical pipeline targeting immune system dysregulation [4][5] - Significant investment was made in securing biopharmaceutical assets and supporting clinical research in non-invasive vagus nerve stimulation [9] Market Data and Key Metrics Changes - The treatment market for neutropenia is expected to reach $20 billion by 2029, indicating a substantial growth opportunity for the company [36] Company Strategy and Development Direction - The company is focused on enhancing shareholder value by prioritizing assets with the greatest potential for substantial returns, including the licensing agreement for entelimod [9][10] - A strategic shift towards immunotherapeutics is underway, with plans to advance both late and early-stage treatments in the pipeline [42] Management's Comments on Operating Environment and Future Outlook - Management acknowledged the high economic uncertainty and the impact of reduced advertising on revenue, but emphasized the importance of capital management for future returns [10] - The company views 2025 as a year of tremendous opportunity with several key milestones expected in the second half of the year [44] Other Important Information - The FDA granted Fast Track status and orphan drug status for entelimod, with potential for accelerated pathways and emergency use designations [37] - The company has secured an $8.4 million tranche funding agreement to support its transformation [8] Q&A Session Summary - No specific questions and answers were provided in the content, as the call was pre-recorded and questions were submitted in advance.

Financial Data and Key Metrics Changes - Revenue for Q1 2025 totaled $70,000, a decline from $334,000 in Q1 2024, primarily due to an 81% decrease in unit sales linked to a 92% reduction in advertising spend [10][11] - Cost of sales decreased to $20,000 from $167,000 in the prior year, resulting in an increase in gross margins from 50% to 72% [11] - Operating expenses remained flat at $1,600,000 for Q1 2025 compared to the same period in 2024, with a net loss of $1,500,000 remaining unchanged year-over-year [11][12] - Cash and cash equivalents were $669,000 at the end of Q1 2025, down from $2,000,000 at the end of 2024, with working capital at $520,000 [12] Business Line Data and Key Metrics Changes - The company transitioned from a single product focus to a diversified immunotherapeutics company, emphasizing a clinical pipeline targeting immune system dysregulation [4][5] - Significant investment was made in securing and operationalizing biopharmaceutical assets, particularly in the licensing agreement with Staterra for entelimod and its derivative [8][14] Market Data and Key Metrics Changes - The market for neutropenia treatment is projected to reach $20 billion by 2029, indicating a significant opportunity for the company’s new drug candidates [33] - The company is positioned to address diseases caused by both underactive and overactive immune systems, which is a unique market opportunity [40] Company Strategy and Development Direction - The strategic focus is on enhancing shareholder value by prioritizing assets with the greatest potential for substantial returns, including the advancement of entelimod and the vagus nerve stimulation program [8][9] - The company aims to transition into high-value markets while managing capital to minimize dilution for investors [7][8] Management's Comments on Operating Environment and Future Outlook - Management highlighted the importance of the licensing agreement with Staterra as a significant strategic shift, providing a foundation for growth and value creation [16][18] - The FDA granted Fast Track and orphan drug status to entelimod, with potential for accelerated pathways and emergency use designations [35] Other Important Information - The company has entered into an $8,400,000 tranche funding agreement to support its transformation and has secured a $25,000,000 equity line of credit [7][12] - The company is committed to advancing its non-invasive vagus nerve stimulation program, with ongoing clinical studies expected to yield results in the near future [39][40] Q&A Session Summary Question: What is the company's strategy regarding the new licensing agreement? - The licensing agreement with Staterra is seen as a major opportunity to accelerate value creation and leverage the company’s commercial infrastructure for long-term growth [14][16] Question: How does the company plan to address the decline in revenue? - The company intentionally reduced advertising spend to focus on capital resources for biopharmaceutical assets, which impacted revenue but is expected to lead to greater long-term value [10][11] Question: What are the expected milestones for entelimod? - The company is focused on validating the manufacturing process for entelimod and preparing for the biological licensing application with the FDA, with significant confidence in the collaboration for successful outcomes [36][40]

PART I - FINANCIAL INFORMATION [Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited condensed financial statements for the three months ended March 31, 2025 and 2024, including balance sheets, statements of operations, stockholders' equity, and cash flows, with accompanying notes on accounting policies, key transactions, and the going concern assessment Condensed Balance Sheet Data (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $669 | $2,002 | | Total current assets | $1,261 | $2,639 | | Licensed technology | $2,226 | $0 | | Total assets | $3,777 | $2,807 | | Total current liabilities | $741 | $272 | | Total stockholders' equity | $3,036 | $2,535 | Condensed Statement of Operations Data (in thousands) | Account | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Revenue | $70 | $334 | | Gross profit | $50 | $167 | | Total operating expenses | $1,556 | $1,648 | | Loss from operations | $(1,506) | $(1,481) | | Net loss | $(1,502) | $(1,481) | | Net loss per share | $(2.52) | $(17.15) | Condensed Statement of Cash Flows Data (in thousands) | Cash Flow Activity | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(889) | $(1,666) | | Net cash used in investing activities | $(526) | $0 | | Net cash provided by (used in) financing activities | $82 | $(61) | | Net decrease in cash and cash equivalents | $(1,333) | $(1,727) | - The company has incurred recurring net losses and negative cash flows, with cash and cash equivalents at **$0.7 million** as of March 31, 2025, raising substantial doubt about its ability to continue as a going concern within one year[22](index=22&type=chunk) [Notes to Unaudited Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Financial%20Statements) These notes provide detailed explanations of the financial statements, covering key events such as the Statera license acquisition, a reverse stock split, equity line of credit, preferred stock designations, and significant subsequent financing and manufacturing agreements - In February 2025, the Company acquired an exclusive worldwide license from Statera Biopharma for the late-stage TLR5 agonist Entolimod™ for treating Acute Radiation Syndrome (ARS) and an option for additional indications[20](index=20&type=chunk) - Effective March 7, 2025, the Company implemented a **1-for-17 reverse stock split** of its common stock, with all share and per-share amounts retroactively restated[25](index=25&type=chunk) - The acquisition of the Statera license was accounted for as an asset acquisition, with a total consideration of **$1.7 million** (**$1.2 million** in stock, **$0.5 million** in cash and capitalized costs), and the company also exercised an option for the neutropenia indication for an additional **$500 thousand** in stock[68](index=68&type=chunk)[74](index=74&type=chunk)[77](index=77&type=chunk) - Subsequent to the quarter end, on April 29, 2025, the company entered into a Securities Purchase Agreement to sell up to **$8.4 million** of new Series B Preferred Stock and warrants in several tranches[129](index=129&type=chunk) - On May 9, 2025, the Company entered into a Statement of Work with Scorpius BioManufacturing to serve as the primary U.S. manufacturer for Entolimod, with an estimated total investment of approximately **$4.1 million**[143](index=143&type=chunk)[145](index=145&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=39&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's transformation into a diversified therapeutics company, analyzing the Q1 2025 revenue decrease, operating expenses, liquidity issues, and future funding requirements, while reiterating substantial doubt about its going concern ability and outlining recent strategic financing and manufacturing partnerships [Business Overview and Updates](index=39&type=section&id=Business%20Overview%20and%20Updates) The company has diversified into a therapeutics company with bioelectronic and biopharma programs, with recent updates including regaining Nasdaq compliance via a reverse stock split and establishing a $25 million equity line of credit - The company is now a diversified therapeutics company with a bioelectronic program (ClearUP, VNS) and a biopharma program focused on the late-stage TLR5 agonist, Entolimod™, for acute radiation syndrome (ARS)[149](index=149&type=chunk)[150](index=150&type=chunk) - The company regained compliance with Nasdaq's minimum bid price requirement in April 2025 after implementing a **1-for-17 reverse stock split** on March 7, 2025[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) - On March 18, 2025, the company entered into a **$25 million** Equity Line of Credit with Mast Hill Fund, L.P., allowing it to sell shares at its discretion over 24 months[168](index=168&type=chunk) - On March 28, 2025, the company exercised its option to license Entolimod for the neutropenia indication, paying the first **$500,000** milestone in company stock[185](index=185&type=chunk) [Results of Operations](index=53&type=section&id=Results%20of%20Operations) For Q1 2025, revenue decreased by 79% to **$70 thousand** due to reduced advertising, while gross profit was **$50 thousand**, operating expenses slightly decreased, and net loss remained stable at approximately **$1.5 million** Comparison of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Revenue | $70 | $334 | $(264) | | Gross Profit | $50 | $167 | $(117) | | Research and development | $335 | $256 | $79 | | Sales and marketing | $179 | $505 | $(326) | | General and administrative | $1,042 | $887 | $155 | | Net loss | $(1,502) | $(1,481) | $(21) | - The **79% decrease in revenue** was primarily due to an **81% decrease in units sold**, associated with a **92% decrease in advertising spend** as capital was reallocated to the Statera Licensing Agreement[220](index=220&type=chunk) - Gross margin increased by **21%** compared to the same period in 2024, attributed to the restructuring of the supply chain and a move to a lower-cost logistics provider[225](index=225&type=chunk) [Liquidity and Capital Resources](index=57&type=section&id=Liquidity%20and%20Capital%20Resources) The company faces substantial doubt about its going concern ability due to limited cash and a significant accumulated deficit, necessitating reliance on recently secured financing arrangements to fund future operations - As of March 31, 2025, the company had cash of **$0.7 million**, working capital of **$0.5 million**, and an accumulated deficit of **$45.0 million**[233](index=233&type=chunk) - Management believes its cash and financial resources are insufficient to meet anticipated needs for the next twelve months, which raises substantial doubt about the Company's ability to continue as a going concern[239](index=239&type=chunk)[245](index=245&type=chunk) - The company has established several financing facilities to raise capital, including an Equity Distribution Agreement with Maxim, a **$25 million** Equity Purchase Agreement with Mast Hill, and an **$8.4 million** Preferred Purchase Agreement with an investor[236](index=236&type=chunk)[237](index=237&type=chunk)[238](index=238&type=chunk) - Subsequent to quarter end, the company raised **$1.7 million** in net proceeds from its Equity Distribution Agreement with Maxim[236](index=236&type=chunk) [Quantitative and Qualitative Disclosures about Market Risk](index=68&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risk) This section is noted as not applicable, indicating the company does not have significant exposure to market risks - The company has indicated that this item is not applicable[277](index=277&type=chunk) [Controls and Procedures](index=68&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded disclosure controls were effective, but identified a material weakness in internal control over financial reporting due to limited team size, with no material changes during the quarter - Management concluded that disclosure controls and procedures were effective as of the evaluation date[279](index=279&type=chunk)[281](index=281&type=chunk) - A material weakness in internal controls over financial reporting was identified, stemming from the small size of the accounting and financial reporting team, leading to the conclusion that internal control was not effective as of December 31, 2024[283](index=283&type=chunk) - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls[285](index=285&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=71&type=section&id=Item%201.%20Legal%20Proceedings) The company reports that it is not currently a party to any material legal proceedings, litigation, or claims that would have a material adverse effect on its business or financial condition - The company is not currently a party to any legal proceedings which would have a material adverse effect on its business[288](index=288&type=chunk) [Risk Factors](index=71&type=section&id=Item%201A.%20Risk%20Factors) The company states there have been no material updates or changes to the risk factors previously disclosed in its Annual Report on Form 10-K for the year ended December 31, 2024 - There have been no material updates or changes to the risk factors previously disclosed in the Company's Annual Report on Form 10-K for the year ended December 31, 2024[290](index=290&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=71&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) During the first quarter of 2025, the company did not have any unregistered sales of its equity securities that were not already reported on a Form 8-K, nor did it repurchase any outstanding equity securities - There were no unregistered sales of securities during the quarter ended March 31, 2025, that were not previously reported[291](index=291&type=chunk) - The Company did not repurchase any of its equity securities during the three months ended March 31, 2025[292](index=292&type=chunk) [Defaults upon Senior Securities](index=71&type=section&id=Item%203.%20Defaults%20upon%20Senior%20Securities) The company reports that there were no defaults upon senior securities during the period - None reported[293](index=293&type=chunk) [Mine Safety Disclosures](index=71&type=section&id=Item%204.%20Mine%20Safety%20Disclosures) This item is not applicable to the company's operations - Not applicable[294](index=294&type=chunk) [Other Information](index=71&type=section&id=Item%205.%20Other%20Information) The company discloses that none of its directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the first quarter of 2025 - During the three months ended March 31, 2025, no directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement[295](index=295&type=chunk) [Exhibits](index=71&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including Certificates of Designation for Series A and B Preferred Stock, various securities purchase and registration rights agreements, an exclusive license agreement with Statera, and a statement of work with Scorpius BioManufacturing - Lists key agreements filed as exhibits, including the Exclusive License Agreement with Statera, the Equity Purchase Agreement with Mast Hill, and the Securities Purchase Agreement for Series B Preferred Stock[297](index=297&type=chunk)