Tivic Health Systems(US:TIVC)2023-11-14 21:31Revenue Performance - Revenue for Q3 2023 decreased by $195 thousand, or 40.9%, compared to Q3 2022, primarily due to a 58% decrease in unit sales offset by a 54% increase in the per unit average sales price [117]. - For the nine months ended September 30, 2023, revenue decreased by $613 thousand, or 42.8%, compared to the same period in 2022, driven by a 57% decrease in unit sales and a 51% increase in the per unit average sales price [118]. - The company reported a revenue increase of 15% year-over-year, reaching $5.2 billion in Q3 2023 [171]. - The company projects a revenue growth of 12% for Q4 2023, with expected revenue between $5.5 billion and $5.7 billion [171]. Cost and Profitability - Gross profit for Q3 2023 was $108 thousand, an increase of $45 thousand compared to Q3 2022, despite lower revenue [115]. - Cost of sales for Q3 2023 decreased by $240 thousand, or 58%, compared to Q3 2022, primarily due to a decrease in sales volume [121]. - For the nine months ended September 30, 2023, cost of sales decreased by $639 thousand, or 54%, compared to the same period in 2022, primarily due to lower sales volume [122]. - Variable cost was $364 thousand, or $70.09 per unit, for the nine months ended September 30, 2023, compared to $1.0 million, or $85.49 per unit, for the same period in 2022 [122]. - Gross margin improved to 45%, up from 42% in the previous quarter [171]. Expenses and Financial Position - Research and development expenses for the three months ended September 30, 2023, decreased by $62 thousand compared to the same period in 2022, while remaining flat for the nine months ended September 30, 2023 [126]. - Sales and marketing expenses decreased by $901 thousand for the nine months ended September 30, 2023, compared to the same period in 2022, primarily due to reductions in unprofitable marketing spend [128]. - General and administrative expenses decreased by $914 thousand for the nine months ended September 30, 2023, compared to the same period in 2022, mainly due to lower consulting and professional fee expenses [130]. - As of September 30, 2023, the company had cash and cash equivalents of $5.2 million and an accumulated deficit of $35.6 million [131]. - The company experienced a net loss of $6.0 million for the nine months ended September 30, 2023, an improvement from a net loss of $7.8 million in the same period of 2022 [147]. - Net cash used in operating activities for the nine months ended September 30, 2023, was $6.7 million, consistent with the previous year, which also reported $6.7 million [146]. - Cash provided by financing activities increased significantly to $8.5 million for the nine months ended September 30, 2023, compared to only $56 thousand in the same period of 2022 [149]. Capital and Funding - The company raised approximately $4.8 million in net proceeds from the sale of 1,169,230 shares of common stock between July 11 and August 9, 2023 [107]. - The company completed a public offering on February 13, 2023, resulting in net proceeds of approximately $3.6 million from the sale of 200,000 shares [133]. - The company anticipates needing to raise additional capital to fund operations, including research and development and commercialization of future product candidates [142]. - The company raised capital through the sale of 1,369,230 shares of common stock during the nine months ended September 30, 2023 [149]. Strategic Initiatives - The company announced a new partnership with InStep Health to increase awareness of ClearUP, targeting approximately 2,500 healthcare professionals [110]. - The company has expanded its intellectual property portfolio and received its first international patent allowance [110]. - Product improvements are expected to enhance customer experience, including extended battery life and faster charging, anticipated to be in market by the end of Q4 2023 [110]. - The company is collaborating on a clinical trial to evaluate the treatment of postoperative pain after sinus surgery [110]. - The company completed an acquisition of a tech startup for $300 million to enhance its product offerings [171]. - The company plans to enter two new international markets by the end of 2024 [171]. Market and Operational Challenges - The company is currently facing challenges related to supply chain disruptions, which have led to increased inventory balances to ensure product availability [152]. - Inflationary pressures are expected to continue, potentially affecting the cost of products and components, although the company has not yet seen a material impact on its financial position [157]. - The ongoing geopolitical tensions, including the conflict between Russia and Ukraine, may lead to market disruptions and affect the company's ability to access additional funds [153]. - The company is evaluating alternative suppliers to mitigate risks associated with supply chain shortages and increased component costs [152]. Lease and Financial Structure - The company executed a noncancelable operating lease for approximately 9,091 square feet of office space, which expires in October 2025 [159]. - The company has not entered into any off-balance sheet arrangements, maintaining a straightforward financial structure [158].