Tivic Health Systems(US:TIVC)2025-05-15 20:31PART I - FINANCIAL INFORMATION Financial Statements 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 year22 Notes to Unaudited Condensed Financial Statements 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 indications20 - 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 restated25 - 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 stock687477 - 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 tranches129 - 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 million143145 Management's Discussion and Analysis of Financial Condition and Results of Operations 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 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)149150 - 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, 2025164165166 - 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 months168 - On March 28, 2025, the company exercised its option to license Entolimod for the neutropenia indication, paying the first $500,000 milestone in company stock185 Results of Operations 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 Agreement220 - 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 provider225 Liquidity and Capital Resources 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 million233 - 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 concern239245 - 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 investor236237238 - Subsequent to quarter end, the company raised $1.7 million in net proceeds from its Equity Distribution Agreement with Maxim236 Quantitative and Qualitative Disclosures about Market Risk 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 applicable277 Controls and Procedures 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 date279281 - 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, 2024283 - There were no changes in internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, internal controls285 PART II - OTHER INFORMATION Legal Proceedings 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 business288 Risk Factors 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, 2024290 Unregistered Sales of Equity Securities and Use of Proceeds 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 reported291 - The Company did not repurchase any of its equity securities during the three months ended March 31, 2025292 Defaults upon Senior Securities The company reports that there were no defaults upon senior securities during the period - None reported293 Mine Safety Disclosures This item is not applicable to the company's operations - Not applicable294 Other Information 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 arrangement295 Exhibits 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 Stock297