Tivic Health Systems, Inc. [TIVC] Filings

10-Q 1 tivc-20220930.htm 10-Q 10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the quarterly period ended September 30, 2022

☐ Transmission Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from ______ to ______

Commission file number: 001-41052

Tivic Health Systems, Inc.

(Exact name of registrant as specified in its charter)

Delaware
(State or other jurisdiction of incorporation or organization)

81-4016391
(I.R.S. Employer Identification No.)

25821 Industrial Blvd., Suite 100
Hayward, CA 94545
(Address of principal executive offices including zip code)

 
(888) 276-6888
(Registrant’s telephone number, including area code)

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of Each Class
Common Stock, par value $0.0001 per share

Trading Symbol(s)
TIVC

Name of Each Exchange on Which Registered
The Nasdaq Stock Market LLC

Indicate by check mark whether the registrant (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b‑2 of the Exchange Act (Check one):



☐ Large accelerated Filer	☐ Accelerated Filer
☒ Non-accelerated Filer	☒ Smaller reporting company
☒ Emerging Growth Company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b‑2 of the Exchange Act). Yes ☐ No ☒

As of November 9, 2022, 9,677,734 shares of the registrant’s common stock, par value $0.0001 per share, were issued and outstanding.

Table of Contents



PART I - FINANCIAL INFORMATION

		Page
Item 1.	Financial Statements	1

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	17

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	27

Item 4.	Controls and Procedures	28

PART II - OTHER INFORMATION

Item 1.	Legal Proceedings	30

Item 1A.	Risk Factors	30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 3.	Defaults upon Senior Securities	31

Item 4.	Mine Safety Disclosures	31

Item 5.	Other Information	31

Item 6.	Exhibits	32

	Signatures	33

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

Our condensed financial statements included in this Quarterly Report on Form 10‑Q are as follows:


Condensed Balance Sheets as of September 30, 2022 (unaudited) and December 31, 2021	2
Condensed Statements of Operations for the three and nine months ended September 30, 2022 and 2021 (unaudited)	3
Condensed Statements of Stockholders’ Equity for the three and nine months ended September 30, 2022 and 2021 (unaudited)	4
Condensed Statements of Cash Flow for the nine months ended September 30, 2022 and 2021 (unaudited)	5
Notes to Condensed Financial Statements (unaudited)	6

This Quarterly Report on Form 10‑Q for the quarter ended September 30, 2022, should be read in conjunction with the Company’s Annual Report on Form 10‑K for the year ended December 31, 2021, filed with the Securities and Exchange Commission (“SEC”) on March 31, 2022.

The accompanying condensed financial statements and footnotes have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the SEC instructions to Form 10‑Q. In the opinion of management, all adjustments considered necessary for a fair presentation have been included. Operating results for the interim period ended September 30, 2022 are not necessarily indicative of the results that can be expected for the full year.

Tivic Health Systems, Inc.

Condensed Balance Sheets (Unaudited)

September 30, 2022 and December 31, 2021

(in thousands, except share and per share data)


	September 30,			December 31,
	2022			2021
ASSETS
Current assets
Cash and cash equivalents	$	6,328		$	12,975
Accounts receivable, net		95			92
Inventory, net		761			429
Deferred offering costs		79			—
Prepaid expenses and other current assets		331			793
Total current assets		7,594			14,289
Property and equipment, net		15			11
Right-of-use assets, operating lease		565			687
Other assets		34			49
Total assets	$	8,208		$	15,036

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	1,602		$	789
Other accrued expenses		261			267
Operating lease liability, current		160			163
Total current liabilities		2,023			1,219
Operating lease liability		413			545
Total liabilities		2,436			1,764
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding at September 30, 2022 and December 31, 2021		—			—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 9,677,734 and 9,715,234 shares issued and outstanding at September 30, 2022 and December 31, 2021, respectively		1			1
Additional paid in capital		33,159			32,817
Accumulated deficit		(27,388	)		(19,546	)
Total stockholders’ equity		5,772			13,272
Total liabilities and stockholders’ equity	$	8,208		$	15,036

The accompanying notes are an integral part of these unaudited condensed financial statements.

Tivic Health Systems, Inc.

Condensed Statements of Operations (Unaudited)

Three and Nine Months Ended September 30, 2022 and 2021

(in thousands, except share and per share data)


	Three Months Ended						Nine Months Ended
	September 30,						September 30,
	2022			2021			2022			2021
Revenue	$	477		$	277		$	1,432		$	868
Cost of sales		414			303			1,176			904
Gross profit (loss)		63			(26	)		256			(36	)
Operating expenses:
Research and development		399			175			1,295			565
Sales and marketing		487			450			2,291			1,095
General and administrative		1,761			578			4,512			1,645
Total operating expenses		2,647			1,203			8,098			3,305
Loss from operations		(2,584	)		(1,229	)		(7,842	)		(3,341	)
Other income (expense):
Interest income (expense)		1			(1,171	)		1			(1,668	)
Change in fair value of derivative liabilities		—			80			—			81
Other income (expense)		(1	)		—			(1	)		158
Total other income (expense)		0			(1,091	)		0			(1,429	)
Net loss	$	(2,584	)	$	(2,320	)	$	(7,842	)	$	(4,770	)
Net loss per share - basic and diluted	$	(0.27	)	$	(0.90	)	$	(0.81	)	$	(1.96	)
Weighted-average number of shares - basic and diluted		9,677,734			2,578,180			9,671,347			2,429,939

The accompanying notes are an integral part of these unaudited condensed financial statements.

Tivic Health Systems, Inc.

Condensed Statements of Stockholders’ Equity (Deficit) (Unaudited)

Three and Nine Months Ended September 30, 2022 and 2021

(in thousands except share and per share data)

For the Three and Nine Months Ended September 30, 2021


	Convertible								Additional					Total
	Preferred Stock				Common Stock				Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares		Amount		Capital		Deficit			Deficit
Balances at January 1, 2021		8,908,600	$	1		2,324,479	$	—	$	9,874	$	(11,052	)	$	(1,177	)
Exercise of stock options		—		—		50,000		—		6		—			6
Stock-based compensation expense		—		—		—		—		10		—			10
Net loss		—		—		—		—		—		(1,356	)		(1,356	)
Balances at March 31, 2021		8,908,600	$	1		2,374,479	$	—	$	9,890	$	(12,408	)	$	(2,517	)
Stock-based compensation expense		—		—		—		—		8		—			8
Net loss		—		—		—		—		—		(1,094	)		(1,094	)
Balances at June 30, 2021		8,908,600	$	1		2,374,479	$	—	$	9,898	$	(13,502	)	$	(3,603	)
Exercise of stock options		—		—		346,979		—		56		—			56
Issuance of common stock		—		—		112,500		—		—		—			—
Issuance of warrant		—		—		—		—		52		—			52
Stock-based compensation expense		—		—		—		—		23		—			23
Net loss		—		—		—		—		—		(2,320	)		(2,320	)
Balances at September 30, 2021		8,908,600	$	1		2,833,958	$	—	$	10,029	$	(15,822	)	$	(5,792	)

For the Three and Nine Months Ended September 30, 2022


										Additional					Total
	Preferred Stock				Common Stock					Paid-in		Accumulated			Stockholders’
	Shares		Amount		Shares			Amount		Capital		Deficit			Equity
Balances at January 1, 2022		—	$	—		9,715,234		$	1	$	32,817	$	(19,546	)	$	13,272
Stock-based compensation expense		—		—		—			—		61		—			61
Net loss		—		—		—			—		—		(2,240	)		(2,240	)
Balances at March 31, 2022		—	$	—		9,715,234		$	1	$	32,878	$	(21,786	)	$	11,093
Repurchase of restricted common stock		—		—		(93,750	)		—		—		—			—
Stock-based compensation expense		—		—		—			—		112		—			112
Net loss		—		—		—			—		—		(3,018	)		(3,018	)
Balances at June 30, 2022		—	$	—		9,621,484		$	1	$	32,990	$	(24,804	)	$	8,187
Exercise of stock options		—		—		56,250			—		56		—			56
Stock-based compensation expense		—		—		—			—		113		—			113
Net loss		—		—		—			—		—		(2,584	)		(2,584	)
Balances at September 30, 2022		—	$	—		9,677,734		$	1	$	33,159	$	(27,388	)	$	5,772

The accompanying notes are an integral part of these unaudited condensed financial statements.

Tivic Health Systems, Inc.

Condensed Statements of Cash Flows (Unaudited)

Nine Months Ended September 30, 2022 and 2021

(in thousands)


	Nine Months Ended
	September 30,
	2022			2021
Cash flows from operating activities
Net loss	$	(7,842	)	$	(4,770	)
Adjustments to reconcile net loss to net cash used in operating activities:
Stock based compensation		286			41
Depreciation		7			6
Change in fair value of derivative liabilities		—			(81	)
Amortization of debt discount		—			1,613
Amortization of right-of-use asset		122			—
Accounts receivable allowances		—			(9	)
Reserve for inventory obsolescence		—			(8	)
Forgiveness of PPP loan		—			(157	)
Issuance of common stock warrant		—			52
Changes is operating assets and liabilities:
Accounts receivable		(3	)		(68	)
Inventory		(332	)		(42	)
Prepaid expenses and other current assets		462			30
Deferred offering costs		(79	)		(555	)
Accounts payable		813			929
Accrued expenses		(6	)		167
Lease liabilities		(135	)		—
Other assets		15			—
Net cash used in operating activities		(6,692	)		(2,852	)
Cash flows from investing activities
Acquisition of property and equipment		(11	)		—
Net cash used in investing activities		(11	)		—
Cash flows from financing activities
Repayment of notes payable borrowings		—			(19	)
Payment of deferred offering costs		—			—
Proceeds from convertible notes payable borrowings		—			2,613
Proceeds from exercise of stock options		56			62
Net cash provided by financing activities		56			2,656
Net decrease in cash and cash equivalents		(6,647

Tivic Health Systems, Inc. [TIVC] Filings
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S-1	[2022-10-26]
10-Q	[2022-08-15]
10-Q	[2022-05-16]
10-K	[2022-03-31]
S-1	[2021-08-03]