NEW YORK, Dec. 01, 2022 (GLOBE NEWSWIRE) -- Diamond Equity Research, a leading equity research firm with a focus on small capitalization public companies has released update note on Tivic Health Systems, Inc. (NASDAQ: TIVC). The update note includes information on the Tivic Health Systems’ financial results, management commentary, recent developments, outlook, risks, and our revised valuation estimates.
The update note is available here. Highlights from the note include:
- Q3 2022 Key Financial Highlights - Tivic Health Systems, Inc. (“Tivic”) reported Q3 2022 revenue at $0.48 million (indicating a y-o-y increase of 72% compared to the same period last year). The impressive increase in revenue is attributable to an increase in the sales price and the growth in the company’s direct-to-consumer sales channels, which aligns well with the company’s growth strategy. For the nine months ended September 2022, Tivic’s revenue increased to $1.4 million (an increase of 65% from $868 thousand compared to the same period last year). Tivic’s direct-to-consumer unit sales volume increased 130% and 146% for 3-months and 9-months ended September 2022, respectively. Tivic’s 3Q 2022 R&D expenses were $399 thousand (compared to $175 thousand for the same period in 2021), primarily due to additional investments in product research, quality, and design. The company reported a 3Q 2022 gross profit of $63 thousand (as compared to a gross loss of $26 thousand for the same period last year) and a 3Q 2022 net loss of 2.6 million (compared to $2.3 million net loss in the same period last year). The increases in net loss were primarily attributable to an increase in selling, general, and administrative expenses, which was due to the expansion of the company’s sales and marketing efforts, costs related to the pending Reliefband acquisition, D&O insurance costs, increased rent, and increased headcount and professional services that are required for public company standards. As of September 30, 2022, Tivic reported cash and cash equivalents of $6.3 million.
- Securing Financing to Acquire Reliefband Assets - During 3Q 2022, Tivic Health Systems announced that it has entered into a definitive agreement to acquire Reliefband’s nausea product line and all related assets from Reliefband Technologies, LLC. Reliefband is an innovator in FDA-cleared wearable therapeutics for treating nausea and vomiting. Its wearable nerve stimulators can treat nausea associated with seven independent clinical indications, including nausea from motion sickness, pregnancy, migraines, anxiety, chemotherapy, medications, and hangovers. Tivic has agreed to a consideration of $33.5 million, out of which up to $1.5 million can be paid in the restricted common stock of Tivic. After satisfying certain customary closing conditions, the transaction is expected to be consummated by 4Q 2022 or 1Q 2023. On October 26, 2022, Tivic filed an S-1 Registration Statement with the SEC, a preliminary prospectus, showing its intent to secure additional financing to fund the Reliefband acquisition.
- Manufacturing Partnership with Microart - On November 2022, Tivic announced that it has entered into an agreement with Buffalo-based Microart Services Inc. to manufacture, on a non-exclusive basis, certain components and sub-assemblies of the company’s current and future products. The company expects that the new partnership with Microart will significantly reduce the cost of manufacturing its ClearUP product and potentially its future products. Tivic also soft-launched a new corporate branding in conjunction with an increase in the manufacturer’s suggested retail price by $20 per unit.
- Valuation – We have updated our valuation methodology, incorporating the Reliefband acquisition, latest financials and changes in our estimates. Furthermore, we have updated the share count and accounted for changes in changes in our comparable company analysis. The updated valuation methodology yielded a per-share value of $7.69 per share contingent on successful execution by the company.
About Tivic Health Systems, Inc.
Tivic Health Systems Inc. is a commercial-phase health technology company that develops and commercializes bioelectronic medicine. The company’s first commercial product, ClearUP® Sinus Relief, is a medical device intended to relieve sinus and nasal inflammation.
For more information, visit https://tivichealth.com/
About Diamond Equity Research
Diamond Equity Research is a leading equity research and corporate access firm focused on small capitalization companies. Diamond Equity Research is an approved sell-side provider on major institutional investor platforms including Factset, Morningstar, and Thomson One.
For more information, visit https://www.diamondequityresearch.com.
Disclosures:
Diamond Equity Research LLC is being compensated by Tivic Health Systems, Inc. (NASDAQ: TIVC) for producing research materials regarding Tivic Health Systems, Inc., and its securities, which is meant to subsidize the high cost of creating the report and monitoring the security, however, the views in the report reflect that of Diamond Equity Research. All payments are received upfront and are billed for an annual or semi-annual research engagement. As of 12/01/22, the issuer had paid us $35,000 for our services, which commenced 04/25/2022 and is billed annually. Diamond Equity Research LLC may be compensated for non-research related services, including presenting at Diamond Equity Research investment conferences, press releases and other additional services. The non-research related service cost is dependent on the company, but usually do not exceed $5,000. The issuer has not paid us for non-research related services as of 12/01/22. Issuers are not required to engage us for these additional services. Additional fees may have accrued since then. Although Diamond Equity Research company sponsored reports are based on publicly available information and although no investment recommendations are made within our company sponsored research reports, given the small capitalization nature of the companies we cover we have adopted an internal trading procedure around the public companies by whom we are engaged, with investors able to find such policy on our website public disclosures page. This report and press release do not consider individual circumstances and does not take into consideration individual investor preferences. Statements within this report may constitute forward-looking statements, these statements involve many risk factors and general uncertainties around the business, industry, and macroeconomic environment. Investors need to be aware of the high degree of risk in small capitalization equities including the complete loss of their investment. Investors can find various risk factors in the initiation report and in the respective financial filings for Tivic Health Systems, Inc.
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