Tivic Health Systems(TIVC) - 2025 Q2 - Quarterly Report

PART I - FINANCIAL INFORMATION Financial Statements 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 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 - The company diversified into immunotherapeutics by licensing Entolimod™ from Statera Biopharma for Acute Radiation Syndrome (ARS) and neutropenia[18][85] - 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] - A 1-for-17 reverse stock split on March 7, 2025, retroactively restated all share and per-share amounts in financial statements[23] - A manufacturing agreement with Scorpius BioManufacturing for Entolimod involves an estimated $4.1 million investment over two years[91][92] - 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][130] Management's Discussion and Analysis of Financial Condition and Results of Operations 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 - Tivic Health transitioned into a diversified immunotherapeutics company, focusing on its bioelectronic ncVNS program and new biopharma program with Entolimod™[166] - 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][178] - ClearUP®, an FDA-approved device for sinus pain, is supported by alternative monetization strategies as the company shifts its primary focus[166][169] Results of Operations 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][230] - Research and development expenses increased by $432 thousand for H1 2025, driven by the new biopharma program and Entolimod manufacturing costs[238] - 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] Liquidity and Capital Resources - 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][251] - 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][248][250] - Strategic focus shifted from ClearUP to advancing biologic (TLR5) and bioelectronic (vagus nerve stimulation) pipelines, anticipating increased operating expenses[245][252] - 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][258] Quantitative and Qualitative Disclosures about Market Risk As a smaller reporting company, the company indicates this disclosure is not applicable - This section is not applicable to the company[294] Controls and Procedures 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] - 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][301] - No material changes occurred during the quarter affecting internal control over financial reporting[302] PART II - OTHER INFORMATION Legal Proceedings 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] Risk Factors 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] Unregistered Sales of Equity Securities and Use of Proceeds 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] - The company did not repurchase any outstanding equity securities during H1 2025[309] Other Information 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] Exhibits 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][314]