Tivic Health Reports Strong Growth in Second Quarter 2022 Financial Results

Rhea-AI Summary

Tivic Health (TIVC) reported remarkable financial results for Q2 2022, posting a 97% revenue increase to $528,000 compared to $268,000 in Q2 2021. The company achieved a stunning 265% growth in unit sales via direct-to-consumer channels. Despite rising costs, the average sales cost decreased from $97.18 to $90.26. R&D expenses rose to $497,000 due to team expansions, while sales and marketing expenditures surged to $1.1 million, reflecting strategic investments. However, these developments led to a net loss of $3 million, worsening from $1.1 million in the same quarter last year.

Positive

• 97% revenue growth from $268k to $528k year-over-year.
• 265% increase in unit sales through direct-to-consumer channels.
• Reduction in average per unit cost of sales from $97.18 to $90.26.

Negative

• Net loss increased to $3 million in Q2 2022 from $1.1 million in Q2 2021.
• R&D expenses rose significantly to $497,000, indicating higher operational costs.

265% growth in unit sales through direct-to-consumer channels, 97% overall revenue growth vs. Q2 2021

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 June 30, 2022.

Jennifer Ernst, CEO of Tivic Health commented, “Our second quarter results demonstrate clear traction on the three pillars of the strategy we laid out last November – increasing direct-to-consumer revenue, reducing cost of goods and seeding our product pipeline.”

Q2 Financial Highlights

• 97% increase in revenue from $268 thousand in Q2 2021 to $528 thousand in Q2 2022.
• 265% increase in unit sales through our direct-to-consumer channels from Q2 2021.
• Reduction in average per unit cost of sales from $97.18 to $90.26, despite increased variable costs due to higher shipping, fulfillment and transaction fees.

Corporate Highlights

• Significant progress made on elements of supply chain to support cost improvements and scaling.
• The 60-person randomized sham-controlled clinical trial for post-operative pain reduction is ongoing.
• Market studies on a promising new indication for migraines were completed.
• New patent issued, bringing Tivic Health’s patent portfolio to 5 issued patents, 18 pending, and 96 claims.

Financial Review for the Three Months Ended June 30, 2022

• For the second quarter of 2022, revenue increased $260 thousand, or 97%, primarily due to a 44% increase in unit sales and the optimization of existing sales channels. Units sold through our direct-to-consumer channels increased 265% compared to the second quarter of 2021.
• For the second quarter of 2022, cost of sales was $403 thousand compared to $301 thousand for the same period in 2021, an increase of $102 thousand, or 34%. The increase was primarily due to higher sales volume.
• For the second quarter 2022, research and development expenses were $497 thousand, a $305 thousand increase from $192 thousand for the same period in 2021. This increase was primarily due to increased headcount and increased costs for product research and design.
• Sales and marketing expenses were $1.1 million for the three months ended June 30, 2022, compared to $345 thousand for the same period in 2021, representing an increase of $780 thousand. The increase in sales and marketing expenses were due primarily to upgrading and optimizing e-commerce infrastructure, testing new advertising vehicles, expanding our co-operative marketing programs with channel partners and other strategic marketing investments.
• General and administrative expenses were $1.5 million for the three months ended June 30, 2022, compared to $485 thousand for the same period in 2021, representing an increase of $1.0 million. The increase was primarily attributable to increased headcount, legal and professional fees, D&O insurance costs and increased fees and professional services that are required for public company standards.
• These increases resulted in a net loss of $3.0 million for Q2 2022, compared to $1.1 million in Q2 2021.
• As of June 30, 2022, cash and short-term investments balance was $9.0 million.

Financial Review for the Six Months Ended June 30, 2022

• For the six months ended June 30, 2022, revenue increased $365 thousand, or 62%, compared to the same period in 2021, primarily due to a 36% increase in unit sales.
• For the six months ended June 30, 2022, cost of sales was $760 thousand compared to $602 thousand for the same period in 2021, an increase of $158 thousand, or 26%. The increase was primarily driven by higher sales volume in 2022.
• For the six months ended June 30, 2022, research and development expenses were $898 thousand, a $508 thousand increase from $390 thousand for the same period in 2021. The increase is primarily due to increased headcount and costs related to additional investments in product candidate research and design.
• Sales and marketing expenses were $1.8 million for the six months ended June 30, 2022, compared to $645 thousand for the same period in 2021, representing an increase of $1.2 million. The increase for the six-months ended June 30, 2022, was due primarily to the expansion of our sales and marketing efforts.
• General and administrative expenses were $2.7 million for the six months ended June 30, 2022, compared to $1.0 million for the same period in 2021, representing an increase of $1.7 million. The increase was primarily attributable to increased headcount, legal and professional fees, D&O insurance costs, increased rent and increased fees and professional services that are required for public company standards.

Conference Call:

Management will host a conference call and webcast on Monday, August 15, 2022, at 1:30 PM PT / 4:30 PM ET to discuss the company’s second quarter 2022 financial results and provide a business update.

The conference call will be available via telephone by dialing toll free 877-545-0320 local callers; or 973-528-0002 for international callers and using Participant Access Code: 492379.

The conference call will also be available via Webcast link: https://www.webcaster4.com/Webcast/Page/2865/46308

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) June 30, 2022 and December 31, 2021 (in thousands, except share and per share data)
		June 30,				December 31,
		2022				2021
ASSETS
Current assets
Cash and cash equivalents		$	9,049			$	12,975
Accounts receivable, net			92				92
Inventory, net			833				429
Prepaid expenses and other current assets			398				793
Total current assets			10,372				14,289
Property and equipment, net			13				11
Right-of-use assets, operating lease			607				687
Other assets			34				49
Total assets		$	11,026			$	15,036
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable		$	1,915			$	789
Other accrued expenses			293				267
Operating lease liability, current			170				163
Total current liabilities			2,378				1,219
Operating lease liability			461				545
Total liabilities			2,839				1,764
Commitments and contingencies
Stockholders’ equity
Preferred stock, $0.0001 par value, 10,000,000 shares authorized; no shares issued and outstanding at June 30, 2022 and December 31, 2021			—				—
Common stock, $0.0001 par value, 200,000,000 shares authorized; 9,621,484 and 9,715,234 shares issued and outstanding at June 30, 2022 and December 31, 2021, respectively			1				1
Additional paid in capital			32,990				32,817
Accumulated deficit			(24,804	)			(19,546	)
Total stockholders’ equity			8,187				13,272
Total liabilities and stockholders’ equity		$	11,026			$	15,036

Tivic Health Systems, Inc. Condensed Statements of Operations (Unaudited) Three and Six Months Ended June 30, 2022 and 2021 (in thousands, except share and per share data)
		Three Months Ended								Six Months Ended
		June 30,								June 30,
		2022				2021				2022				2021
Revenue		$	528			$	268			$	956			$	591
Cost of sales			403				301				760				602
Gross profit (loss)			125				(33	)			196				(11	)
Operating expenses:
Research and development			497				192				898				390
Sales and marketing			1,125				345				1,809				645
General and administrative			1,521				485				2,747				1,066
Total operating expenses			3,143				1,022				5,454				2,101
Loss from operations			(3,018	)			(1,055	)			(5,258	)			(2,112	)
Other income (expense):
Interest expense			—				(223	)			—				(497	)
Change in fair value of derivative liabilities			—				28				—				1
Other income			—				156				—				158
Total other income (expense)			—				(39	)			—				(338	)
Net loss		$	(3,018	)		$	(1,094	)		$	(5,258	)		$	(2,450	)
Net loss per share - basic and diluted		$	(0.32	)		$	(0.46	)		$	(0.55	)		$	(1.04	)
Weighted-average number of shares - basic and diluted			9,621,484				2,374,479				9,668,100				2,354,589

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20220815005618/en/

Media Contact:

Cheryl Delgreco

Cheryl.Delgreco@tivichealth.com

617-429-6749

Investor Contact:

Hanover International, Inc.

ir@tivichealth.com

Source: Tivic Health Systems, Inc.

FAQ

What were Tivic Health's revenue results for Q2 2022?

Tivic Health reported a revenue increase of 97% in Q2 2022, reaching $528,000.

How much did unit sales increase in Q2 2022 for TIVC?

Unit sales through direct-to-consumer channels increased by 265% compared to Q2 2021.

What was the net loss for Tivic Health in Q2 2022?

The net loss for Q2 2022 was $3 million, compared to $1.1 million in Q2 2021.

What factors contributed to the increase in R&D expenses for TIVC?

The increase in R&D expenses to $497,000 was primarily due to increased headcount and product research costs.

What is Tivic Health's current cash position as of June 30, 2022?

As of June 30, 2022, Tivic Health's cash and short-term investments balance was $9 million.