Tivic Health Systems Inc
For the period ended Sep 30, 2024. Filed Nov 14, 2024.
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A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2024 · Filed Nov 14, 2024
VBIO$0.51+1.6%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2024-06-30; filed 2024-08-14.
0000950170-24-097056
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2024-09-30; filed 2024-11-14.
0000950170-24-127072
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 54 previous paragraphs and 142 current paragraphs.
36 unchanged; 9 reworded; 96 added; 9 removed; 0 previous and 1 current paragraphs rearranged.
Tables are not compared: 0 previous and 2 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (96)
Current report
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Current report
On May 17, 2024, we entered into a Collaboration and Research Support Agreement with The Feinstein Institutes for Medical Research to further optimize responses in Autonomic Nervous System (“ANS”) function in response to Tivic's ncVNS. Total length of the project is expected to be one year. The study, being run by The Feinstein Institute of Bioelectronic Medicine, will identify device parameters, including frequency and duration of treatment, that optimally influence ANS function.
Current report
On September 18, 2024, we announced approval for the contracted clinical work by Northwell Health's Institutional Review Board, required before enrollment of subjects.
Current report
On October 29, 2024, we announced enrollment of the first subject in this optimization study for our patent pending, non-invasive vagus nerve stimulation device. The results will be used to inform clinical indication priority and commercial development. Enrollment is expected to be complete by early December.
Current report
VNS Commercial Strategy
Current report
On September 17, 2024, we announced our partnership with Fletcher Spaght, Inc ("FSI"), a leading healthcare growth strategy firm, to accelerate development of our commercial strategy for ncVNS. The firm has begun a comprehensive market assessment of our ncVNS technology drawing from clinical outcomes from our Phase 1 trial. FSI and Tivic initially identified approximately 30 potential medical use cases for our ncVNS technology in neurologic, cardiac, psychiatric and autonomic nervous system diseases. FSI is now working closely with our scientific and clinical leadership to identify the strongest market entry points by interviewing clinical key opinion leaders and payers The work with FSI will help us sharpen our go-to-market strategy, clinical study plans, reimbursement pathway, and product development pipeline for our vagus nerve stimulation program.
Current report
September 2024 Equity Distribution Agreement
Current report
On September 13, 2024 we entered into an Equity Distribution Agreement (the "Distribution Agreement") with Maxim Group LLC, pursuant to which we may offer and sell, from time to time, through or to Maxim, as sales agent or principal, shares of our common stock. We will pay Maxim a commission of 3% of the aggregate gross proceeds from each sale of shares. We also agreed to reimburse Maxim for certain specified fees and expenses of up to $40 thousand, plus an additional $5 thousand for each bringdown. The agreement will terminate upon the earlier of (i) the sale of all shares of common stock having an aggregate offering price of $10 million; (ii) twenty four months from the date of the agreement; (iii) the mutual termination of the agreement upon fifteen days' prior written notice; and (iv) as otherwise permitted therein. In September 2024, we sold a total of 59,811 shares of our common stock with gross proceeds of $18 thousand. The Company paid Maxim $545 in commissions. Net proceeds to the Company, after deducting commissions and offering expenses paid by the Company, was approximately $15 thousand.
Current report
Appointment of Lisa Wolf as interim Chief Financial Officer
Current report
Effective October 1, 2024, Lisa Wolf has been appointed as the Company’s new interim Chief Financial Officer and Principal Financial and Principal Accounting Officer. Ms. Wolf has been retained to provide such services as a non-employee consultant of the Company. Ms. Wolf has played a key role in supporting the Company’s accounting and Securities and Exchange Commission reporting functions on an out-sourced basis since June 2022, when she joined Murdock Martell as Vice President.
Current report
Resignation of Kimberly Bambach as interim Chief Financial Officer
Current report
On September 12, 2024, Kimberly Bambach tendered her resignation from her role as interim Chief Financial Officer of the Company, effective October 1, 2024. Ms. Bambach will continue to provide services to the Company in an advisory role after the effective date of her resignation. Ms. Bambach has advised the Company that her decision to step down from the role of interim Chief Financial Officer was not based on any disagreement with the Company on any matter relating to its operations, policies or practices.
Current report
In Q3, we received IRB approval and announced first subject enrollment in Q4.
Current report
In Q3, we engaged Fletcher Spaght, Inc to perform a market assessment of our ncVNS technology drawing from clinical outcomes from the clinical study.
Current report
Results of Operations
Current report
Comparison of the Three and Nine Months Ended September 30, 2024 and 2023
Current report
The following table summarizes our results of operations (in thousands):
Current report
Revenue
Current report
Revenue is currently generated through the sale of our ClearUP device and ancillary products, including accessories and accelerated shipping charges, and is net of return reserves. Sales are currently made directly to consumers online through our own website, and Amazon. In addition, the ClearUP device is also sold via our distribution partners Cardinal Health and McKesson to major retailers and specialty retailers, such as FSA Store, Walmart, BestBuy, and Target. Noninvasive bioelectronic medicine is an emerging market space that provides consumers with non-drug treatments for various diseases and ClearUP is the first FDA-approved bioelectronic treatment for sinus pain and congestion.
Current report
For the three months ended September 30, 2024, revenue decreased overall by $156 thousand, or 56%, compared to the same period in 2023, primarily due to a 55% decrease in the number of units sold.
Current report
For the nine months ended September 30, 2024, revenue decreased overall by $219 thousand, or 27%, compared to the same period in 2023, primarily due to a 36% decrease in unit sales, offset by a 13% increase in the per unit average sales price.
Current report
We expect some continued variability in sales due to reduction in marketing spend.
Current report
Cost of Sales
Current report
Cost of sales consists primarily of the materials and services to manufacture our products, the internal personnel costs to oversee manufacturing and supply chain functions, and the shipment of goods to customers. Cost of sales is expected to vary on an absolute basis as sales volume increases or decreases.
Current report
For the three months ended September 30, 2024, cost of sales decreased by $92 thousand, or 53%, compared to the same period in 2023, primarily driven by the decrease in unit sales. We incurred $21 thousand of disposal costs associated with our move to a new logistics provider in August 2024. We expect reduced product support and fulfillment charges in the future with the new provider. Excluding the $21 thousand disposal charge in the third quarter of 2024, variable cost was $45 thousand, or $60.68 per unit, for the three months ended September 30, 2024, compared to $120 thousand, or $73.57 per unit, for the same period in 2023. Fixed costs were $16 thousand, or $21.41 per unit, for the three months ended September 30, 2024, compared to $54 thousand, or $33.05 per unit, for the same period in 2023. The decrease in the fixed cost was primarily due to lower product support costs.
Current report
For the nine months ended September 30, 2024, cost of sales decreased by $178 thousand, or 34%, compared to the same period in 2023, primarily driven by the decrease in sales volume, offset by $21 thousand of disposal costs and $20 thousand of inventory obsolescence write-offs. Variable cost, excluding the disposal costs and inventory write-offs, was $229 thousand, or $68.86 per unit, for the nine months ended September 30, 2024, compared to $364 thousand, or $70.09 per unit, for the same period in 2023. Fixed costs were $88 thousand, or $26.47 per unit, for the nine months ended September 30, 2024, compared to $173 thousand, or $33.37 per unit, for the same period in 2023. The decrease in the fixed cost was primarily due to lower product support costs.
Current report
Gross Margin
Current report
Gross margin has been and will continue to be affected by, and is likely to fluctuate on a quarterly basis due to, a variety of factors, including sales volumes, product and channel mix, pricing strategies, costs of finished goods, reserves for obsolescence, disposal costs of returned and/or obsolete inventory, product return rates, new product launches and potential new manufacturing partners and suppliers.
Current report
Operating Expenses
Current report
Research and Development Expenses
Current report
Research and development expenses consist primarily of costs incurred to conduct research, including the discovery, development and validation of product candidates. Research and development expenses include personnel costs, including stock-based compensation expense, third-party contractor services, including development and testing of prototype devices, and maintenance of limited in-house research facilities. We expense research and development costs as they are incurred. We expect research and development expenses to increase with the discovery and validation of new product candidates.
Current report
For the three months ended September 30, 2024, research and development expenses increased by $85 thousand compared to the same period in 2023. For the nine months ended September 30, 2024, research and development expenses decreased by $315 thousand compared to the same period in 2023. The increase in the three month period was due to increased costs associated with research related to vagus nerve stimulation. The decrease for the nine month period was due to reduced headcount and certain expenses incurred in 2023 which did not recur in 2024. The emphasis of research and development activities in both 2023 and 2024 are primarily related to studies at The Feinstein Institutes for Medical Research on vagus nerve stimulation and intellectual property protection.
Current report
Sales and Marketing Expenses
Current report
Sales and marketing expenses include personnel costs and expenses for advertising and other marketing services. Personnel costs consist of salaries, bonuses, benefits and stock-based compensation expense. We may see sales and marketing expenses increase modestly if we continue to expand our markets and distribution channels.
Current report
For the three months ended September 30, 2024, sales and marketing expenses decreased by $246 thousand compared to the same period in 2023. For the nine months ended September 30, 2024, sales and marketing expenses decreased by $444 thousand compared to the same period in 2023. The decreases were due to reduced headcount and consulting fees as well as reductions in agency, website and other costs.
Current report
General and Administrative Expenses
Current report
General and administrative expenses include D&O insurance, personnel costs, expenses for outside professional services and other expenses. Personnel costs consist of salaries, bonuses, benefits and stock-based compensation expense. Outside professional services consist of legal, finance, accounting and audit services, and other consulting fees. We expect general and administrative expenses to remain relatively flat.
Current report
For the three months ended September 30, 2024, general and administrative expenses decreased by $232 thousand compared to the same period in 2023. For the nine months ended September 30, 2024, general and administrative expenses decreased by $1.2 million compared to the same period in 2023. The decrease for the three month period was primarily due to reduced headcount and elimination of the lease expenses due to the change in our headquarters in the second quarter of 2024. The decrease for the nine month period was attributable to reduced headcount, reduced lease expenses, lower consulting and professional fee expenses, as well as other general administrative expenses.
Current report
Liquidity and Capital Resources
Current report
Sources of Liquidity
Showing the first 40 of 96 passages. Open the source sections for the rest.
Removed paragraphs (9)
Previous report
A sham-controlled investigator-initiated trial is in progress with the Icahn School of Medicine at Mount Sinai, to extend the use of Tivic’s handheld monopolar platform to the management of pain resulting from functional endoscopic sinus surgery and other facial surgeries. If successful, the Company may develop additional products addressing this clinical use case, which would require new regulatory clearances for a novel indication.
Previous report
We have also previously evaluated the market opportunity for use of ClearUP as part of a migraine treatment toolkit. While we believe that both clinical and market rationale are positive for such use, we have, for the time being, determined to down-prioritize any clinical studies of migraine-related indications based on the aggressive competition among entrenched incumbents and limited uptake, to date, of existing devices for the treatment and/or prevention of migraine.
Previous report
On May 17, 2024, we entered into a Collaboration and Research Support Agreement with Feinstein, pursuant to which we will collaborate with Feinstein in the development and drafting of a protocol (the “Protocol”) to advance a research program designed to test Autonomic Nervous System (“ANS”) function and/or balance in healthy able-bodied individuals in response to neuromodulation of the ANS by our neurostimulation device, by leveraging and augmenting the NDS Lab’s multi-modal index to quantify the activation status of the ANS during various of clinically relevant tests, and to submit such Protocol and the research study described therein (the “Study”) for institutional and IRB approval. If the Protocol and Study are approved, the Study shall be implemented pursuant to the Protocol and shall be governed by the terms of the agreement. Total length of the project is expected to be one year.
Previous report
May 2024 Public Offering
Previous report
On May 13, 2024, we sold an aggregate of (i) 4,710,000 shares of common stock, (ii) Series A warrants to purchase up to 4,710,000 shares of common stock and (iii) Series B warrants to purchase up to 7,065,000 shares of common stock to certain investors in a registered public offering at a combined public offering price of $0.85 per share and accompanying warrants. We also issued Maxim Group LLC, who served as the placement agent for the offering, warrants to purchase 188,400 shares of common stock as partial compensation for services rendered in connection with the offering. The securities were registered pursuant to the registration statement on Form S-1 (File No. 333-278383), which was initially filed with the Securities and Exchange Commission (the “SEC”) on March 29, 2024, and amended on April 29, 2024 and May 8, 2024, and declared effective on May 9, 2024.
Previous report
Appointment of Christina Valauri to the Board
Previous report
On June 17, 2024, our board of directors (the “Board”) appointed Christina Valauri as a director of the Company, effective July 1, 2024, to fill a vacancy in the Class I class of directors of the Board. Additionally, Ms. Valauri was appointed to serve as a member of the Compensation Committee, Audit and Risk Committee and Nominations and Corporate Governance Committee of the Board, and replaced Karen Drexler as chairperson of the Nominations and Corporate Governance Committee, in each case effective July 1, 2024. Ms. Drexler continues to serve as a member of the Nominations and Corporate Governance Committee.
Previous report
Resignation of Karen Drexler from the Board
Previous report
On June 17, 2024, Karen Drexler tendered her resignation from the Board and each of the Compensation Committee, Audit and Risk Committee and Nominations and Corporate Governance Committee thereof, in each case effective September 30, 2024. Ms. Drexler’s decision to resign from her positions as a director on the Company’s Board was not the result of any disagreement with the Company on any matter relating to the Company’s operations, policies or practices, and it is expected that Ms. Drexler will continue to serve as an advisor to the Company and the Board after her resignation is effective.
Reworded paragraphs (9)
Previous wording
Tivic Health is a health tech company focused on bioelectronic medicine. Bioelectronic medicine is a branch of the global neuromodulation market that treats disease and conditions by modulating the electrical signals carried along various nerve pathways. The field grew out of the neuromodulation industry and relied, historically, on implantable devices (e.g., pacemakers, spinal implants, deep brain stimulators). IDTechEx has identified several fast-growing areas in the bioelectronic medicine field, including peripheral nerve stimulation, which it has indicated is forecasted to grow at a 35% CAGR from 2019 through 2029. Tivic currently has two non-invasive bioelectronic platforms designed to deliver therapeutic benefits via manipulation of such signals without the use of traditional implanted technology.
Current wording
Tivic Health is a health tech company focused on bioelectronic medicine. Bioelectronic medicine is a branch of the global neuromodulation market that treats disease and conditions by modulating the electrical signals carried along various nerve pathways. The field grew out of the neuromodulation industry which relied, historically, on implantable devices (e.g., pacemakers, spinal implants, deep brain stimulators). IDTechEx has identified several fast-growing areas in the bioelectronic medicine field, including peripheral nerve stimulation, which it has indicated is forecasted to grow at a 35% CAGR from 2019 through 2029. Tivic currently has two non-invasive bioelectronic platforms designed to deliver therapeutic benefits via manipulation of such signals without the use of traditional implanted technology.
Previous wording
The second platform is a research-stage platform directed to vagus nerve stimulation, which is currently undergoing clinical evaluation.
Current wording
The second platform is a clincal-stage platform directed to vagus nerve stimulation. .
Previous wording
Customers can purchase ClearUP products directly from Tivic via our own website and through major online stores, including Amazon, Walmart, BestBuy, FSAStore and HSA Store. The Company has also entered distribution agreements with McKesson, Cardinal Health and Amerisource Bergen (now Cencora).
Current wording
Customers can purchase ClearUP products directly from Tivic via our own website and through major online stores, including Amazon, Walmart, BestBuy, FSAStore and HSA Store. The Company has also entered distribution agreements with McKesson, Cardinal Health and Cencora (previously Amerisource Bergen).
Previous wording
Previous studies of non-invasive VNS devices have reported mixed results regarding autonomic nervous system changes. The magnitude of our ncVNS data imply potential for greater clinical effects and enhanced reproducibility. While these results were in healthy subjects, the data suggest our ncVNS approach may have clinical utility in several patient populations including those with epilepsy, post-traumatic stress disorder, and ischemic stroke, among others.
Current wording
The magnitude of our ncVNS data imply potential for greater clinical effects and enhanced reproducibilit than demontrated by previous studies of non-invasive VNS devices. These results in healthy subjects suggest our ncVNS approach may have clinical utility in several patient populations including those with post-traumatic stress disorder, cardiac disease, inflammatory conditions, and ischemic stroke, among others.
Previous wording
On August 13, 2024, Tivic received the final report from an investigator-led double-blind study funded by the Icahn School of Medicine at Mount Sinai on the use of microcurrent as an alternative for the treatment of pain following functional endoscopic sinus surgery, rhinoplasty and other forms of sino-nasal surgeries. No statistically significant differences were identified between users of the active microcurrent device and sham device. Given the relatively small market size and lack of definitive indicators of clinical utility, the Company currently has no plans to fund additional research in this area.
Current wording
On August 13, 2024, Tivic received the final report from an investigator-led double-blind study funded by the Icahn School of Medicine at Mount Sinai on the use of microcurrent as an alternative for the treatment of pain following functional endoscopic sinus surgery, rhinoplasty and other forms of sino-nasal surgeries. No statistically significant differences were identified between users of the active microcurrent device and sham device. Given the relatively small market size and lack of definitive indicators of clinical utility, the Company currently has no plans to fund additional research in this area, prioritizing, instead, its work on vagus nerve stimulation.
Previous wording
In the first half of 2024, we invested in our product, innovation and development as follows:
Current wording
In the first nine months of 2024, we invested in our product, innovation and development as follows:
Previous wording
In Q2, we engaged The Feinstein Institute for the next phase of our clinical optimization study. This Phase 1a study will refine stimulation parameters for use in specific disease conditions.
Current wording
In Q2, we engaged The Feinstein Institute for additional clinical work to optimize our ability to trigger responses of the automatic nervous system with non-invasive vagus nerve stimulation. This Phase 1a optimization study will refine stimulation parameters of interest for specific disease conditions.
Previous wording
We established a low-volume internal manufacturing and test facility sufficient to address foreseeable needs.
Current wording
We established a new low-volume internal manufacturing and test facility sufficient to address foreseeable needs.
Previous wording
We received gross proceeds from the offering of approximately $4.0 million, before deducting placement agent fees and other offering expenses payable by the Company. Net proceeds to the Company from the offering, after deducting the placement agent fees and expenses and other offering expenses (excluding proceeds to the Company, if any, from the future exercise of the warrants issued in connection with the offering), were approximately $3.3 million. See Notes 9 and 10 to our condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10 Q for additional information regarding the securities sold in this offering.
Current wording
For a description of recent accounting pronouncements, see Note 2 to our condensed financial statements included in Part I, Item 1 of this Quarterly Report on Form 10‑Q.
Rearranged current paragraphs (1)
Current report — wording carried from elsewhere
On May 30, 2024, we entered into a Co-Working Space Agreement, pursuant to which we rent office space located at 47685 Lakeview Blvd., Fremont, California for a total $1 thousand a month. The agreement has an initial term of six months, commencing June 1, 2024, after which it will automatically renew on a month to month basis until terminated.