S-1: Tivic Health Files S-1 for Major Share Resale and Contingent $8.4M Capital Infusion Amidst Going Concern Warning

Tivic Health Systems, Inc. has filed an S-1 registration statement to facilitate the resale of up to 8.4 million common shares by a selling stockholder, while simultaneously detailing a new financing agreement that could provide the company with up to $8.4 million in proceeds, despite an auditor's 'going concern' warning.

Summary

• Tivic Health Systems, Inc. has filed an S-1 registration statement to register the offer and resale of up to 8,438,949 shares of common stock by Helena Global Investment Opportunities 1 Ltd. (the Selling Stockholder).
• The shares consist of up to 6,491,499 shares issuable upon conversion of Series B Non-Voting Convertible Preferred Stock and up to 1,947,450 shares issuable upon exercise of Warrants, both to be issued to the Selling Stockholder under a Securities Purchase Agreement dated April 29, 2025.
• The company will not receive proceeds from the Selling Stockholder's resale of common stock, but may receive up to $8.4 million from the sale of Series B Preferred Stock and the exercise of Warrants by the Selling Stockholder.
• The $8.4 million financing is structured in six tranches, with the initial $700,000 tranche contingent on the S-1 effectiveness, and subsequent tranches dependent on stockholder approval to exceed a 19.99% exchange cap.
• Tivic Health is a diversified therapeutics company with a bioelectronic program, including the FDA-approved ClearUP device for sinus pain and congestion, and a focus on non-invasive vagus nerve stimulation (ncVNS).
• The company's clinical pipeline includes a late-stage Toll-like Receptor 5 (TLR5) agonist, Entolimod, for acute radiation syndrome (ARS), which has Fast Track and Orphan Drug designation from the FDA, and is also being developed for neutropenia.
• An independent registered public accounting firm's report on the company's financial statements for the fiscal year ended December 31, 2024, contains an explanatory paragraph describing conditions that raise substantial doubt about the company's ability to continue as a going concern.
• The company implemented a 1-for-17 reverse stock split effective March 7, 2025, and a 1-for-100 reverse stock split effective August 23, 2023.
• As of June 4, 2025, the company had 965,899 shares of common stock outstanding, with the offering potentially increasing the total to 9,404,848 shares assuming full conversion and exercise at the Floor Price of $1.294 per share.

Sentiment

Score: 3

Explanation: The filing reveals a 'going concern' warning from auditors, indicating significant financial distress. The proposed capital raise, while necessary for operations, involves substantial potential dilution (nearly 10x increase in shares outstanding) and is subject to conditions, which introduces considerable uncertainty and risk for investors. These negative factors largely outweigh the positive developments in the product pipeline.

Positives

• The company has secured a potential capital raise of up to $8.4 million through the sale of Series B Preferred Stock and Warrants, which is crucial for its working capital and general corporate purposes.
• Tivic Health's commercial product, ClearUP Sinus Pain Relief, is the first FDA-approved bioelectronic treatment for its indications, demonstrating regulatory success and market presence.
• Initial clinical validation study results for the non-invasive cervical Vagus Nerve Stimulation (ncVNS) program are encouraging, showing a 97% increase in heart rate variability and changes in brain activity consistent with reduced arousal and anxiety.
• The acquisition of exclusive worldwide license rights to Entolimod, a late-stage TLR5 agonist, positions the company in a critical therapeutic area with Fast Track and Orphan Drug designations for Acute Radiation Syndrome (ARS).
• Entolimod has benefited from over $140 million in prior investment, including $35.6 million from U.S. government agencies, indicating significant prior validation and strategic importance.
• The company is actively advancing its clinical pipeline, with enrollment completed for an ncVNS optimization study in November 2024 and plans for disease-specific trials in the second half of 2025.
• A market assessment by Fletcher Spaght identified approximately 30 potential medical use cases for ncVNS technology, highlighting broad applicability and market opportunity.

Negatives

• The company's independent registered public accounting firm's report includes an explanatory paragraph raising substantial doubt about Tivic Health's ability to continue as a going concern.
• The potential issuance of up to 8,438,949 shares of common stock upon conversion of Series B Preferred and exercise of Warrants represents significant potential dilution to existing stockholders, nearly a 10x increase from the current 965,899 shares outstanding.
• The sale of a substantial number of shares by the Selling Stockholder could depress the market price of Tivic Health's common stock.
• The full $8.4 million capital raise is contingent on several conditions, including stockholder approval to exceed the 19.99% exchange cap, introducing uncertainty regarding the total funds the company will receive.
• The Selling Stockholder has no obligation to fund the second or subsequent tranches until stockholder approval is obtained, potentially delaying critical funding.
• Investors who purchase shares from the Selling Stockholder at different times may pay different prices and experience varying levels of dilution.

Risks

• The company may be unable to sell the full number of securities committed under the Purchase Agreement due to unfulfilled conditions precedent, such as the effectiveness of the registration statement or obtaining Stockholder Approval for the Exchange Cap.
• Investors who buy shares at different times from the Selling Stockholder will likely pay different prices and may experience different levels of dilution, potentially substantial dilution.
• The sale of a substantial number of common shares by the Selling Stockholder could cause the price of the company's common stock to decline and make it more difficult for the company to raise equity capital in the future.
• Management will have broad discretion over the use of net proceeds from the capital raise, and there is no guarantee that these proceeds will be invested successfully or yield a favorable return.
• Future equity offerings could lead to additional dilution for existing stockholders.
• The company faces significant risks related to governmental regulation, managing and maintaining growth, volatility of its stock price, and the commercial viability of its product candidates.
• There is substantial doubt about the company's ability to continue as a going concern, as noted by its independent auditors.
• The company's ability to maintain compliance with the listing requirements of the Nasdaq Capital Market is a forward-looking risk.

Future Outlook

Tivic Health intends to use the results of its non-invasive cervical Vagus Nerve Stimulation (ncVNS) clinical research and proprietary market research to prioritize targets for disease-specific trials planned for the second half of 2025. For its TLR5 program, the immediate focus for Entolimod is validation of the manufacturing process, including first lot manufacturing and bioequivalency testing, sufficient to submit a Biologics License Application (BLA) to the FDA. The company is also preparing to file an Investigational New Drug (IND) application and initiate a Phase 2 clinical study for Entolimod for the treatment of neutropenia.

Management Comments

• "Our bioelectronic program is developing non-invasive medical devices to meaningfully improve treatment options in neurologic, cardiac and autonomic-related diseases."
• "We are further developing our bioelectronic portfolio with a focus on non-invasive vagus nerve stimulation."
• "Our TLR5 program focuses on immunotherapeutics about to activate underactive immune systems."
• "Our immediate focus with Entolimod will be validation of the manufacturing process, including first lot manufacturing and bioequivalency testing sufficient to submit a biologics license application (BLA) to the FDA."
• "We currently intend to use any proceeds that we receive pursuant to the Purchase Agreement and upon exercise of the Warrants for general corporate purposes, including operating expenses, capital expenditures and working capital."

Industry Context

The document highlights the significant growth in the Vagus Nerve Stimulation (VNS) market, forecasted to reach $21 billion in the next five years with a compounded annual growth rate of 10.6%. This indicates a substantial and expanding market opportunity for Tivic Health's non-invasive VNS technology. The company's focus on non-invasive devices aligns with a broader industry trend towards less invasive medical treatments. The acquisition of Entolimod positions Tivic in the immunotherapeutics space, particularly for acute radiation syndrome, a niche but critical area with demonstrated government interest and funding, suggesting alignment with national health and security priorities.

Comparison to Industry Standards

• The VNS market is forecasted to be worth $21 billion in the next five years, growing at a compounded annual growth rate of 10.6%, indicating a robust and expanding market for Tivic's ncVNS technology, which compares favorably to general medical device market growth rates.
• Implanted VNS stimulators are approved or nearing approval for conditions like depression, PTSD, epilepsy, chronic stroke, and rheumatoid arthritis, setting a precedent for VNS efficacy and driving practitioner awareness and reimbursement pathways that Tivic's non-invasive approach can potentially leverage, positioning it to capitalize on established market acceptance.
• Entolimod has received Fast Track and Orphan Drug designation from the FDA, which are regulatory incentives typically granted to drugs that address serious conditions and fill unmet medical needs, suggesting its potential significance in the ARS treatment landscape compared to standard drug development timelines.
• The $140 million in prior investment in Entolimod and Entolasta, including $35.6 million from U.S. government agencies (Department of Defense, Defense Threats Reduction Agency, NASA, NIH, Department of Army), indicates substantial external validation and strategic importance of the TLR5 program, aligning with national security and public health priorities, a level of funding often seen in critical biodefense or rare disease programs.

Management Changes

Corporate Governance

Related Party Transactions

• Securities Purchase Agreement with Helena Global Investment Opportunities 1 Ltd. for the sale of up to $8.4 million in Series B Preferred Stock and Warrants.
• Equity Purchase Agreement with Mast Hill Fund, L.P. for the right to sell up to $25 million shares of common stock, with 29,800 restricted shares of common stock issued as commitment shares.
• Exclusive License Agreement and Securities Purchase Agreement with Statera Biopharma, Inc. for the acquisition of worldwide exclusive license rights to Entolimod, involving a $300,000 cash payment and issuance of 945,785 common shares and 359.6691 Series A Preferred shares.
• Securities Purchase Agreement with Statera Biopharma, Inc. and Avenue Venture Opportunities Fund, L.P. for the acquisition of the neutropenia indication for Entolimod, involving the issuance of 55,704 common shares and 131.1267 Series A Preferred shares.

Stakeholder Impact

• **Shareholders:** Face significant potential dilution (nearly 10x) from the conversion of Series B Preferred Stock and exercise of Warrants, which could lead to a substantial decline in the per-share value of their holdings. The 'going concern' warning also poses a direct risk to their investment.
• **Company (Operations & Liquidity):** The potential capital raise of up to $8.4 million is critical for the company's working capital and general corporate purposes, potentially improving its liquidity position and supporting ongoing product development. However, failure to secure the full funding due to conditions could severely impact operations.
• **Management:** Will have broad discretion over the use of any proceeds received, which places significant responsibility on their judgment for effective allocation of funds.
• **Employees:** Continued operations and product development, supported by the capital raise, could provide stability, but the 'going concern' warning indicates potential instability.

Next Steps

• Obtain stockholder approval to issue additional shares in accordance with Nasdaq Rules to allow for subsequent tranches of the Series B Preferred Stock and Warrant exercises.
• File a proxy statement on Schedule 14A with the SEC to obtain stockholder approval no later than twenty (20) days from April 29, 2025.
• Validate the manufacturing process for Entolimod, including first lot manufacturing and bioequivalency testing, to submit a Biologics License Application (BLA) to the FDA.
• Prepare and file an Investigational New Drug (IND) application for Entolimod for the treatment of neutropenia.
• Initiate a Phase 2 clinical study for Entolimod for the treatment of neutropenia.
• Prioritize targets for disease-specific trials for ncVNS planned for the second half of 2025, based on clinical research and market research.
• Use commercially reasonable efforts to keep the registration statement effective and available for the resale of securities by the Selling Stockholder.

Key Dates

Recommendation

Keywords

Tivic Health Systems, TIVC, SEC filing, S-1, common stock, Series B Preferred Stock, warrants, capital raise, dilution, bioelectronic therapeutics, ClearUP, vagus nerve stimulation, ncVNS, TLR5 agonist, Entolimod, acute radiation syndrome, neutropenia, FDA approval, medical device, immunotherapeutics, Nasdaq Capital Market, going concern