Gross Profit Increase by 61.3%; extends
innovation pipeline to include vagus nerve stimulation.
Tivic Health® Systems, Inc. (“Tivic”, Nasdaq: TIVC), a health
tech company that develops and commercializes bioelectronic
medicine, is pleased to announce its financial results for the
first quarter of 2023 ended March 31, 2023 (“Q1 2023”).
First Quarter 2023 Financial Summary
- Gross profit increased 61.3% to $113 thousand in the first
quarter of 2023, compared with $70 thousand in the first quarter of
2022, on a decrease of 12% in total revenue to $376 thousand in the
first quarter 2023 from $428 thousand in first quarter 2022.
- Net loss of $2.1 million in the first quarter of 2023, compared
with $2.2 million in the first quarter of 2022.
- Cash and cash equivalents totaled $5.2 million as of the
quarter’s end.
First Quarter 2023 Business Highlights
- Increased gross profit by 61.3% by increasing average selling
price by 17% and reducing variable unit cost by 15% vs. the prior
year’s first quarter.
- Invested in product improvements to enhance customer experience
and support cost-effective product line expansion.
- Completed a product versioning plan to target additive market
segments with higher price tolerance and greater likelihood to
purchase.
- Obtained recertification of ISO 13485 Quality Management System
and the European Medical Device CE-Mark in support of international
markets.
- Broadened our intellectual property portfolio, to include new
therapeutic targets via vagus nerve stimulation.
- Expanded collaboration with a renowned international hospital,
which started with a focus solely on functional endoscopic sinus
surgery and has been expanded to include additional surgical
interventions in facial plastic surgery and sinus surgeries.
- Initiated partnership with The Feinstein Institute for Medical
Research on a pilot study of Tivic’s internally tested non-invasive
targeting of vagus nerve activity. Successful completion of this
study has the potential to open new product opportunities in
neurology, cardiology, and rheumatology.
- Closed financing activities of $5.0 million in February 2023,
with net proceeds to the company of approximately $3.6
million.
- As of the quarter close, the company had $5.2 million in cash
and cash equivalents including proceeds from financing.
Recent Developments
- Launched B2B (business-to-business) sales portal in April
2023.
- Implemented pricing increases on ClearUP in April 2023, aligned
with rigorous price testing completed in Q1 2023.
Management Commentary
“In the first quarter of 2023, several important initiatives
began showing results. With new manufacturing partners, our gross
margins improved significantly, with additional improvements
expected in Q2. In addition, market testing supported a significant
retail price increase, which was implemented in April. Expansion in
the margin to over 50% should allow us to sell profitably through
more diverse channels. These represent critical turning points for
our ClearUP business,” said Jennifer Ernst, Chief Executive Officer
of Tivic. She continued, “We also saw the expansion of one
externally funded clinical program and initiated a second
innovation program in partnership with The Feinstein Institute at
Northwell Health, leaders in bioelectronic medicine. These
product-oriented innovation activities are designed to expand our
bioelectronic portfolio.”
Ernst concluded, “The past two years have been challenging, and
I believe we are now turning a corner within our ClearUP business
while putting the foundation in place for growth beyond current
revenue streams. I look forward with excitement to the remainder of
the year.”
First Quarter 2022 Financial Review
Net revenue for the first quarter of 2023 was $376 thousand, a
decrease of $52 thousand (or 12%) compared to $428 thousand in the
same period in 2022, primarily due to decreased unit sales of 27%
and termination of less profitable retail distribution
arrangements.
The cost of sales for the first quarter of 2023 was $263
thousand, a decrease of $95 thousand (or 27%) compared to $357
thousand in the same period in 2022. The period-over-period
decrease was primarily due to the decrease in unit sales of
27%.
Gross profit for the first quarter of 2023 was $113 thousand, an
increase of $43 thousand (or 61%) compared to $70 thousand in the
same period in 2022. The increase was due to a higher average price
point and lower variable cost per unit.
Sales and marketing expenses were $458 thousand for the first
quarter of 2023, compared to $684 thousand in the same period in
2022. The decrease of $226 thousand was due to more targeted
marketing spend in the first quarter focused on driving direct
sales.
Research and development expenses were $490 thousand for the
first quarter of 2023, an $89 thousand increase from $401 thousand
for the same period in 2022. The increase was primarily related to
the initiation of the company’s vagus nerve program and development
activities associated with product line expansion.
General and administrative expenses were $1.3 million for the
first quarter of 2023, compared to $1.2 million in the same period
in 2022. The increase of $55 thousand was primarily attributable to
personnel-related costs offset by lower insurance costs.
As of March 31, 2023, the Company had $5.2 million of cash and
cash equivalents, including proceeds from the offering closed in Q1
2023.
The Company’s MD&A and consolidated financial statements for
the first quarter ended March 31, 2023, will be filed on May 15,
2023, with the company’s Quarterly Report on Form 10-Q. The
company's previous public filings may be found on www.sec.gov and
can also be located on Tivic’s website at:
https://tivichealth.com/investor/#SEC.
Conference Call and Webcast Information
Management will host a conference call
on Monday, May 15, 2023, at 4:30 p.m. Eastern Time to discuss the
company’s first quarter 2023 financial results and provide a
business update.
The conference call will be available via telephone by dialing
toll-free 877-545-0523 for local callers; or 973-528-0016 for
international callers and using entry code 888610.
The conference call will also be available via Webcast link:
https://www.webcaster4.com/Webcast/Page/2865/48259
An audio replay of the call will be available from the
“Investor” page on the Tivic Health website at
https://tivichealth.com/investor/.
About Tivic
Tivic is a commercial health tech company advancing the field of
bioelectronic medicine. Tivic’s patented technology platform
leverages stimulation on the trigeminal, sympathetic, and vagus
nerve structures. Tivic’s non-invasive and targeted approach to the
treatment of inflammatory chronic health conditions gives consumers
and providers drug-free therapeutic solutions with high safety
profiles, low risk, and broad applications. Tivic’s first
commercial product ClearUP is an FDA approved, award-winning,
handheld bioelectronic sinus device. ClearUP is clinically proven,
doctor recommended, and is available through online retailers and
commercial distributors. For more information visit
http://tivichealth.com @TivicHealth
Forward-Looking Statements
This press release may contain “forward-looking statements” that
are subject to substantial risks and uncertainties. All statements,
other than statements of historical fact, contained in this press
release are forward-looking statements. Forward-looking statements
contained in this press release may be identified by the use of
words such as “anticipate,” “believe,” “contemplate,” “could,”
“estimate,” “expect,” “intend,” “seek,” “may,” “might,” “plan,”
“potential,” “predict,” “project,” “target,” “aim,” “should,”
“will” “would,” or the negative of these words or other similar
expressions, although not all forward-looking statements contain
these words. Forward-looking statements are based on Tivic Health
Systems, Inc.’s current expectations and are subject to inherent
uncertainties, risks, and assumptions that are difficult to
predict. Further, certain forward-looking statements are based on
assumptions as to future events that may not prove to be accurate.
Actual results could differ materially from those contained in any
forward-looking statement as a result of various factors,
including, without limitation: market, economic and other
conditions; supply chain constraints; macroeconomic factors,
including inflation; the company’s ability to raise additional
capital on favorable terms; changes in regulatory requirements; and
unexpected costs, charges or expenses that reduce Tivic’s capital
resources. Given these risks and uncertainties, you are cautioned
not to place undue reliance on such forward-looking statements. For
a discussion of other risks and uncertainties, and other important
factors, any of which could cause Tivic’s actual results to differ
from those contained in the forward-looking statements, see Tivic’s
filings with the SEC, including, its Annual Report on Form 10-K for
the year ended December 31, 2022, filed with the SEC on March 31,
2023, under the heading “Risk Factors,” as well as the company’s
subsequent filings with the SEC. Forward-looking statements
contained in this press release are made as of this date, and Tivic
Health Systems, Inc. undertakes no duty to update such information
except as required by applicable law.
Tivic Health Systems, Inc.
Condensed Balance Sheets
(in thousands, except share and per
share data)
March 31, 2023
December 31, 2022
(Unaudited)
(Audited)
ASSETS
Cash and cash equivalents
$
5,167
$
3,517
Other current assets
1,315
1,770
TOTAL CURRENT ASSETS
6,482
5,287
PROPERTY AND EQUIPMENT, NET
104
12
NONCURRENT ASSETS
515
557
TOTAL ASSETS
$
7,101
$
5,856
LIABILITIES AND STOCKHOLDERS’
EQUITY
Accounts payable and accrued expenses
$
1,391
$
1,696
Other current liabilities
182
163
TOTAL CURRENT LIABILITIES
1,573
1,859
TOTAL LONG-TERM LIABILITIES
323
367
STOCKHOLDERS' EQUITY
Common stock
3
1
Additional paid in capital
36,960
33,271
Accumulated deficit
(31,758
)
(29,642
)
TOTAL STOCKHOLDERS' EQUITY
5,205
3,630
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY
$
7,101
$
5,856
Tivic Health Systems, Inc.
Condensed Statements of
Operations
(Unaudited)
(in thousands, except share and per
share data)
Three Months Ended March
31,
2023
2022
REVENUES
$
376
$
428
COST OF SALES
263
358
GROSS PROFIT
113
70
OPERATING EXPENSES
Research and development
490
401
Sales and marketing
458
684
General and administrative
1,281
1,226
TOTAL OPERATING EXPENSES
2,229
2,311
NET OPERATING LOSS
(2,116
)
(2,241
)
OTHER INCOME, NET
—
1
NET LOSS
$
(2,116
)
$
(2,240
)
NET LOSS PER SHARE - BASIC AND DILUTED
$
(0.11
)
$
(0.23
)
WEIGHTED-AVERAGE NUMBER OF SHARES - BASIC
AND DILUTED
20,122,178
9,715,234
View source
version on businesswire.com: https://www.businesswire.com/news/home/20230515005816/en/
Investor Contact: Hanover International, Inc.
ir@tivichealth.com
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