Tivic Health Reports First Quarter 2022 Financial Results

Rhea-AI Summary

Tivic Health Systems, Inc. (TIVC) reported a strong first quarter 2022 with a 33% increase in net revenue to $428K compared to $323K in Q1 2021. Notably, gross profit surged 219% to $70K, driven by a 77% growth in direct-to-consumer unit sales. Overall unit sales rose by 28%, aided by the termination of less profitable retail arrangements. However, total expenses rose significantly, including $684K in sales and marketing, reflecting increased advertising and e-commerce efforts. Cash reserves stood at approximately $10.8 million as of March 31, 2022.

Positive

• 33% increase in net revenue to $428K.
• 219% increase in gross profit to $70K.
• 77% growth in unit sales through direct-to-consumer channels.

Negative

• General and administrative expenses increased to $1.2 million from $581K, raising concerns over cost management.
• Research and development expenses rose to $401K, reflecting higher investment but also increased risk.

77% year-over-year growth in unit sales direct-to-consumer; 219% increase in gross profit.

SAN FRANCISCO--(BUSINESS WIRE)-- Tivic Health® Systems, Inc. (“Tivic Health”, Nasdaq: TIVC), a commercial-phase health technology company that develops and commercializes bioelectronic medicine, today announced its financial results for the quarter ended March 31, 2022.

“I am pleased that our strategy to grow direct-to-consumer sales is driving both our revenue growth and increased gross margins. Increasing sales through direct-to-consumer channels is the first cornerstone in the strategic plan laid out by the company as part of its IPO last November,” commented Jennifer Ernst, Tivic Health’s CEO. “With a growing volume of unit sales and strong customer reviews, we believe we are building confidence among consumers and health care professionals for our bioelectronic platform used in the treatment of sinus pain and congestion.”

First Quarter 2022 Financial Highlights Compared to First Quarter 2021

• 33% increase in net revenue
• 219% increase in gross profit on 28% growth in overall unit sales
• 77% growth in unit sales through direct-to-consumer channels
• Tivic Health featured in the ABC News Report: “New Bioelectronic Technologies Could Signal the Future of Medicine.”
• ClearUP Sinus Pain Relief named best sinus pain relief solution of 2021 by Global Health & Pharma Magazine.

First Quarter 2022 Financial Review

Net revenue for the first quarter 2022 was $428 thousand, an increase of $105 thousand (or 33%) compared to $323 thousand in the same period 2021, primarily due to increased unit sales of 28% and termination of less profitable retail distribution arrangements.

Cost of sales for the first quarter 2022 was $358 thousand, an increase of $57 thousand (or 19%) compared to $301 thousand in the same period 2021. The period over period increase was primarily due to the increase in unit sales of 28%.

Gross profit for the first quarter 2022 was $70 thousand, an increase of $48 thousand (or 219%) compared to $22 thousand in the same period 2021. The increase was primarily due to a higher percentage of sales through distribution channels with higher margins, and termination of low-margin “product discovery” contracts entered into in 2020. The increase was partially offset by the effect of the ongoing global supply chain concerns impacting component, materials and shipping costs.

Sales and marketing expenses were $684 thousand for the first quarter 2022, compared to $300 thousand in the same period 2021. The increase of $384 thousand was due primarily to expansion of our sales and marketing efforts, including (i) expanding advertising reach; (ii) growing our social media presence; (iii) upgrading and optimizing e-commerce infrastructure; and (iv) other marketing initiatives.

Research and development expenses were $401 thousand for the first quarter 2022, a $203 thousand increase from $198 thousand for the same period in 2021. The increase was primarily related to activities in the migraine treatment area and initiation of double-blind randomized controlled trial for post-operative pain relief following sinus surgery.

General and administrative expenses were $1.2 million for the first quarter 2022, compared to $581 thousand in the same period 2021. The increase of $645 thousand was primarily attributable to D&O insurance, audit fees, consulting fees and other professional services to upgrade the corporate and finance functions to public company standards.

As of March 31, 2022, the company had cash and cash equivalents of approximately $10.8 million compared to approximately $13.0 million on December 31, 2021.

Conference Call:

Management will host a conference call on Monday, May 16, 2022, at 4:30 p.m. Eastern Time to discuss the company’s first quarter 2022 financial results and provide a business update.

The conference call will be available via telephone by dialing toll free 888-506-0062 for local callers; or 973-528-0011 for international callers and using entry code 535202.

The conference call will also be available via Webcast link: https://www.webcaster4.com/Webcast/Page/2865/45466.

An audio replay of the call will be available from the “Recent Press” page on the Tivic Health website at https://tivichealth.com/investor/.

About Tivic Health

Tivic Health Systems, Inc. is a commercial-phase health technology company delivering non-invasive bioelectronic treatments that provide consumers a choice in the treatment of inflammation and related conditions. For more information visit https://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. Additional information concerning Tivic Health and its business, including a discussion of factors that could materially affect the company operating results, is contained in the company’s Annual Report on Form 10-K for the year ended December 31, 2021, filed with the Securities and Exchange Commission on March 31, 2022, under the heading “Risk Factors,” as well as the company’s subsequent filings with the Securities and Exchange Commission. 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 (Unaudited) March 31, 2022 and December 31, 2021 (in thousands, except share and per share data)
		March 31,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	10,801			$	12,975
Accounts receivable, net			117				92
Inventory, net			447				429
Prepaid expenses and other current assets			633				793
Total current assets			11,998				14,289
Property and equipment, net			16				11
Right-of-use assets, operating lease			647				687
Other assets			33				49
Total assets		$	12,694			$	15,036
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	625			$	789
Other accrued expenses			304				267
Operating lease liability, current			168				163
Total current liabilities			1,097				1,219
Operating lease liability			504				545
Total liabilities			1,601				1,764
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding at March 31, 2022 and December 31, 2021			—				—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 9,715,234 shares issued and outstanding at March 31, 2022 and December 31, 2020, respectively			1				1
Additional paid in capital			32,878				32,817
Accumulated deficit			(21,786	)			(19,546	)
Total stockholders’ equity			11,093				13,272
Total liabilities and stockholders’ equity		$	12,694			$	15,036

Tivic Health Systems, Inc. Condensed Statements of Operations (Unaudited) Three Months Ended March 31, 2022 and 2021 (in thousands, except share and per share data)
		Three Months Ended
		March 31,
		2022				2021
Revenue		$	428			$	323
Cost of sales			358				301
Gross profit			70				22
Operating expenses:
Research and development			401				198
Sales and marketing			684				300
General and administrative			1,226				581
Total operating expenses			2,311				1,079
Loss from operations			(2,241	)			(1,057	)
Other income (expense):
Interest expense			—				(274	)
Change in fair value of derivative liabilities			—				(27	)
Other income			1				2
Total other income (expense)			1				(299	)
Loss before provision for income taxes			(2,240	)			(1,356	)
Net loss and comprehensive loss		$	(2,240	)		$	(1,356	)
Net loss per share - basic and diluted		$	(0.23	)		$	(0.58	)
Weighted-average number of shares - basic and diluted			9,715,234				2,334,479

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220516005307/en/

Media Contact:

Cheryl Delgreco

Cheryl.Delgreco@tivichealth.com

617-429-6749

Investor Contact:

ir@tivichealth.com

Source: Tivic Health Systems, Inc.

FAQ

What were Tivic Health's Q1 2022 revenue results?

Tivic Health reported a net revenue of $428 thousand for Q1 2022, a 33% increase compared to Q1 2021.

How did gross profit perform in the first quarter of 2022 for TIVC?

The gross profit for Q1 2022 was $70 thousand, marking a substantial 219% increase from the previous year.

What factors contributed to the increase in net revenue for Tivic Health?

Increased unit sales by 28% and the termination of less profitable retail distribution arrangements contributed to the net revenue rise.

What are the future plans for Tivic Health following the Q1 2022 results?

Tivic Health plans to expand its direct-to-consumer sales strategy, enhancing revenue and gross margins.