10-K: Tivic Health Pivots to Biopharma, Faces Going Concern Doubt

Tivic Health Systems, Inc. completed a strategic transformation in 2025, shifting from bioelectronic devices to a biopharmaceutical focus on its TLR5 agonist program Entolimod, while reporting significant losses and raising substantial doubt about its ability to continue as a going concern.

Summary

• Tivic Health Systems, Inc. underwent a material strategic transformation in 2025, pivoting from a diversified bioelectronic medical device company to a focused biopharmaceutical company centered on its Toll-like Receptor 5 (TLR5) agonist franchise, Entolimod and Entolasta.
• The company acquired worldwide exclusive license rights and options to Entolimod and Entolasta from Statera Biopharma, Inc. in February 2025, including a complete regulatory, clinical, and non-clinical data package.
• In December 2025, Tivic established Velocity Bioworks as a wholly-owned Contract Development and Manufacturing Organization (CDMO) subsidiary through the acquisition of manufacturing and development assets from Scorpius Biomanufacturing.
• Tivic ceased sales of its ClearUP sinus device and related operations by year-end 2025 and suspended development of its non-invasive cervical vagus nerve stimulation platform to concentrate resources on the TLR5 platform and Velocity Bioworks.
• The company reported a net loss of $8.9 million for the year ended December 31, 2025, an increase from $5.7 million in 2024.
• Cash used in operating activities increased to $7.0 million in 2025 from $5.7 million in 2024.
• As of December 31, 2025, the company had cash and cash equivalents of $12.6 million and an accumulated deficit of $52.6 million.
• Management has identified a material weakness in internal control over financial reporting due to staffing levels.
• On March 19, 2026, Nasdaq notified the company of non-compliance with the minimum bid price requirement, as its common stock traded below $1.00 per share for 30 consecutive business days.

Sentiment

Score: 3

Explanation: StockSavvy.ai views this as a high-risk, transformative period. While the strategic pivot to biopharma and the acquisition of promising assets like Entolimod are positive, the significant financial losses, going concern doubt, and Nasdaq delisting risk create substantial uncertainty.

Positives

• Successfully executed a deliberate and material strategic transformation, pivoting to a focused biopharmaceutical company built around the TLR5 agonist franchise.
• Acquired worldwide exclusive license rights to the late-stage TLR5 agonist Entolimod for acute radiation syndrome (ARS) and its second-generation compound, Entolasta, from Statera Biopharma, Inc.
• Entolimod has been granted FDA Fast Track and Orphan Drug designations for the prevention and treatment of ARS.
• Established Velocity Bioworks as a wholly-owned CDMO subsidiary, securing a robust U.S.-based manufacturing site for Entolimod and creating new revenue opportunities by serving third-party clients.
• Velocity Bioworks demonstrated a 200-fold manufacturing scale-up for Entolimod at 50-liter fermentation volume in January 2026, meeting all drug release specifications for purity and potency.
• Active engagement with U.S. government agencies (BARDA, DoW/DTRA, FDA, NIH, NIAID) via the TechWatch process to advance discussions on federal funding and potential Strategic National Stockpile procurement of Entolimod.
• Entolimod demonstrated superior non-human primate (NHP) survival data in pivotal studies for ARS, showing 75% survival vs. 27.5% for placebo (absolute +47.5% improvement, odds ratio 7.9) without supportive care, outperforming approved G-CSF agents.
• Entolimod offers a differentiated therapeutic profile by stimulating multi-lineage hematopoietic recovery (neutrophil, platelet, erythrocyte) and concurrently protecting GI mucosal integrity, a benefit not provided by single-lineage G-CSF agents.
• Entolimod has shown oncological compatibility in tumor models, not protecting tumor cells from cytotoxic therapy and demonstrating additive antitumor immune effects.
• The second-generation molecule, Entolasta, is pharmacologically optimized to address rapid neutralizing antibody formation, making it potentially suitable for indications requiring repeated administration.
• Secured a financing package led by 3i, LP, comprising $16 million in debt and up to $75 million in preferred convertible equity to support the Velocity Bioworks acquisition.
• Michael K. Handley, an industry veteran with 27 years of biopharmaceutical commercialization experience, was appointed Chief Executive Officer in March 2026.

Negatives

• Incurred a net loss of $8.9 million for the year ended December 31, 2025, an increase from $5.7 million in 2024.
• Used $7.0 million in cash for operating activities in 2025, compared to $5.7 million in 2024.
• Reported an accumulated deficit of $52.6 million as of December 31, 2025.
• Cash and financial resources may be insufficient to meet anticipated needs for the next twelve months, raising substantial doubt about the company's ability to continue as a going concern.
• Identified a material weakness in internal control over financial reporting due to the small size of the accounting and financial reporting team, which could lead to undetected material misstatements.
• Received a Nasdaq notification on March 19, 2026, for non-compliance with the minimum bid price requirement, risking delisting if compliance is not regained by September 15, 2026.
• The wind-down of the ClearUP business resulted in approximately $347 thousand in charges in 2025 and is expected to incur an additional $20 thousand to $50 thousand in 2026.
• Expects minimal to no revenue from the discontinued consumer health business until regulatory approval and commercialization of new product candidates.
• The CDMO business model (Velocity Bioworks) is unproven and subject to significant execution risk, with no meaningful revenue generated from third-party contracts to date.
• The assets acquired for Velocity Bioworks were from a company (Scorpius) that experienced significant financial distress, workforce reductions, and operational restructuring prior to acquisition.
• CDMO operations are subject to extensive regulatory oversight (CGMP), and failures to comply could result in sanctions, facility shutdowns, or loss of manufacturing authorizations.
• The single-site manufacturing footprint of Velocity Bioworks creates concentration risk, making operations vulnerable to disruptions.
• CDMO contracts are typically project-based and do not guarantee recurring revenue, exposing the company to customer concentration risk and potential revenue loss from client program failures.
• The fast track designation for Entolimod does not guarantee a faster development or regulatory review or approval process.
• The company has limited to no prior experience in biopharmaceutical development and operating as a CDMO, posing integration challenges.
• Has not conducted a formal freedom to operate analysis for patents related to its technology, potentially exposing it to intellectual property infringement claims.
• The laws of some foreign countries may not protect intellectual property rights to the same extent as the United States, limiting global enforcement.
• The stock price has fluctuated significantly and is expected to continue to be volatile.
• Does not expect to pay any cash dividends for the foreseeable future.
• Future issuances of stock or other securities could dilute the ownership interests of existing stockholders.
• Will lose emerging growth company status by December 31, 2026, leading to additional public company reporting and disclosure requirements and increased compliance costs.
• Operating in a period of economic uncertainty and capital markets disruption, impacted by geopolitical instability and inflation, which could harm financial condition.
• Potential for increased costs due to tariffs and trade restrictions, particularly with China, affecting supply chains and profitability.
• Subject to anti-corruption, anti-bribery, and anti-money laundering laws, with non-compliance potentially leading to substantial civil and criminal fines.

Risks

• Cash and financial resources may be insufficient to meet anticipated needs for the next twelve months, raising substantial doubt about the ability to continue as a going concern.
• The company has a relatively limited operating history in biopharmaceuticals and CDMO, making an evaluation of future prospects and execution ability difficult.
• Operating results are likely to be volatile and may not be a reliable indicator of future performance due to strategic transactions, market receptiveness, clinical trial spending, supply chain disruptions, and delays.
• Failure to manage growth effectively, including integrating in-licensed products and scaling the CDMO, could materially and adversely affect the business.
• A history of net losses and expectation of substantial additional operating losses for the foreseeable future, with no assurance of achieving or maintaining profitability.
• Identified a material weakness in internal control over financial reporting associated with staffing levels, which could lead to material misstatements not being prevented or detected timely.
• Expects to need additional capital, which, if obtainable, could dilute the ownership interest of investors.
• Cash expenditures associated with the Statera license and operating as a CDMO may create liquidity and cash flow risks.
• Potential CDMO revenues are subject to significant risks from customer insolvency, funding constraints, and the failure of customer programs to advance through clinical development.
• The business plan depends heavily on revenues from in-licensed pharmaceutical products, the clinical and consumer acceptance of which is unproven.
• Limited prior experience in biopharmaceutical products and potential inability to effectively integrate licensed or acquired technology into operations.
• Disruptions at the FDA and foreign regulatory authorities caused by government shutdowns, funding shortages, or staffing limitations could negatively impact the business.
• Economic uncertainty and capital markets disruption, significantly impacted by geopolitical instability (Russia-Ukraine, Israel-Hamas-Iran conflicts), could harm financial condition and results of operations.
• International trade disputes, including those with China, could result in tariffs and other protectionist measures, adversely affecting business and capital raising.
• Reliance on third-party service providers for information systems and operating infrastructure exposes the company to cybersecurity risks and cyber incidents.
• Dependence on the senior management team and the risk of losing key personnel or an inability to attract and retain highly skilled personnel.
• The size and expected growth of the available market for products have not been established with precision and may be smaller than estimated.
• Insurance may not adequately cover operating risk or litigation exposure.
• The CDMO business model is unproven and subject to significant execution risk, with no guarantee of attracting or retaining external customers at sufficient volume or pricing.
• Potential challenges in integrating acquired Scorpius assets and retaining necessary personnel for Velocity Bioworks.
• CDMO operations are subject to extensive regulatory oversight (CGMP), and failures to comply could result in suspension or loss of manufacturing authorizations.
• Risks related to the handling, use, and disposal of hazardous materials at the San Antonio manufacturing facility, including environmental liabilities.
• CDMO operations are subject to concentration risk due to a single-site manufacturing footprint.
• CDMO activities create potential liability exposure from manufacturing errors and product defects.
• May not be able to obtain regulatory approval in a timely manner or at all, and future clinical trials may not be favorable, especially relying on the FDA Animal Rule.
• Compensatory arrangements with scientific advisors or consultants could result in increased regulatory scrutiny and delay or denial of marketing approval.
• Failure to obtain regulatory approval in international jurisdictions could prevent marketing products abroad.
• Fast track designation for Entolimod may not actually lead to a faster development or regulatory review or approval process.
• If the FDA does not conclude that product candidates satisfy Section 505(b)(2) regulatory approval pathway requirements, the approval process could be significantly longer and costlier.
• If physicians and patients do not accept and use the drugs, the company will not achieve sufficient product revenues.
• Changes in the regulatory landscape for products and product candidates could render the business model contrary to applicable requirements.
• Subject to consumer protection laws that regulate marketing practices and prohibit unfair or deceptive acts or practices.
• Subject to U.S. and certain foreign export and import controls, sanctions, embargoes, anti-corruption laws, and anti-money laundering laws.
• Reliance on foreign vendors and suppliers exposes the company to geopolitical instability, trade policy, tariffs, and evolving biosecurity legislation (e.g., BIOSECURE Act).
• Expects to become subject to the requirements of the Sunshine Act, leading to increased scrutiny and costs.
• High dependence on intellectual property (IP), with methods of protection potentially inadequate or costly, and risk of IP infringement claims.
• Inability to enforce IP rights throughout the world due to varying foreign laws.
• Stock price may fluctuate significantly, and investors may not be able to resell shares at or above purchase price.
• Future issuances of stock or other securities could dilute the holdings of stockholders.
• Inability to comply with Nasdaq continued listing requirements could lead to delisting.
• Will lose emerging growth company status by December 31, 2026, leading to additional public company reporting and disclosure requirements and increased legal and compliance costs.
• If unable to implement and maintain effective internal control over financial reporting, investors may lose confidence in financial reports.
• Failure to meet public guidance on operating and financial performance could cause stock price to decline.
• Anti-takeover provisions in charter documents and Delaware law could make an acquisition more difficult.
• Exclusive forum provisions could result in increased costs for stockholders to bring claims and limit their ability to obtain a favorable judicial forum.
• If securities or industry analysts do not publish research or publish unfavorable or inaccurate research, the market price and trading volume of common stock could decline.
• Significant costs and heightened regulations as a public company could lower profits or make business operations more difficult.
• Actual or perceived failures to comply with data privacy and security laws could adversely affect the business.
• Changes in accounting standards and subjective assumptions, estimates, and judgments by management could significantly affect financial results.
• Adversely affected by the effects of inflation, increasing overall cost structure.

Future Outlook

The company is focused on advancing Entolimod and Entolasta through regulatory approval for Acute Radiation Syndrome (ARS) and into government procurement, while also expanding Entolimod's designations into oncology-related conditions like neutropenia, thrombocytopenia, and mucositis. IND-enabling studies for Entolasta are planned for 2026 and 2027. Velocity Bioworks is expected to support internal manufacturing needs and generate revenue from third-party CDMO services. The company anticipates incurring substantial additional operating losses for the foreseeable future to fund research and development, clinical trials, and commercialization efforts, and expects to need additional capital. Revenues are not expected until regulatory approval and commercialization of product candidates. The company will lose its emerging growth company status by December 31, 2026, leading to increased compliance costs. Management intends to address the material weakness in internal controls and regain Nasdaq compliance.

Management Comments

• Our management team is primarily responsible for assessing and managing our strategic risk exposures, including material risks from cybersecurity threats, with assistance from third-party service providers.
• The Company is now focused on (1) advancing Entolimod and its next generation compound Entolasta through regulatory approval for acute radiation syndrome and into government procurement and (2) expanding Entolimod's designations into oncology-related conditions, including neutropenia, thrombocytopenia and general and specific mucositis.
• Velocity Bioworks demonstrated a 200-fold (200x) manufacturing scale-up for Entolimod at 50-liter fermentation volume, meeting all drug release specifications for purity and potency.
• We believe these anti-apoptotic and prophylactic properties position our TLR5 agonists as compelling alternatives or adjunctive therapies to currently marketed G-CSF treatments.
• We expect the wind-down of the consumer business to be substantially complete by year-end. While we will generate minimal revenue during this transition, we are retaining all intellectual property associated with our bioelectronic research for future monetization.
• This integrated model is designed to drive operational efficiencies and provide a path toward diversified profitability.
• Management expects to incur substantial additional operating losses for the foreseeable future to conduct pre-clinical and clinical trials, complete development or acquisition of new product lines, obtain regulatory approvals, launch and commercialize our products and continue research and development programs.
• We do not expect revenues until such time, if ever, that we obtain regulatory approval and are able to commercialize and derive revenue from the sale of our product candidates.
• Management assessed our internal control over financial reporting as of December 31, 2025... determined that there was a material weakness in the Company's internal controls over financial reporting due to the small size of our accounting and financial reporting team.

Industry Context

StockSavvy.ai notes that Tivic Health's strategic pivot positions it in the competitive biopharmaceutical market, specifically targeting Acute Radiation Syndrome (ARS) and oncology-related neutropenia. The global ARS market is projected to grow from $5.47 billion in 2025 to $7.80 billion by 2032, while the global G-CSF market (for neutropenia) was valued at approximately $8.3 billion in 2022-23. The company aims to differentiate Entolimod from existing G-CSF agents like filgrastim and pegfilgrastim by offering multi-lineage hematopoietic recovery and GI mucosal protection. The establishment of Velocity Bioworks as a CDMO subsidiary places Tivic in a highly competitive service market, where it will compete against established organizations with greater resources.

Comparison to Industry Standards

• Entolimod's pivotal NHP study (Rs-23) demonstrated a 75% survival rate versus 27.5% for placebo (absolute +47.5% improvement, odds ratio 7.9) without supportive care in rhesus macaques irradiated at LD70/60. This compares favorably to filgrastim, which showed no improvement (-5% change) in survival without supportive care in LD65/60 irradiated NHP.
• Pegfilgrastim, another approved G-CSF agent, required multi-dose regimens plus intensive supportive care to achieve survival improvements in NHP studies, whereas Entolimod achieved greater survival benefit with a single post-exposure dose and no supportive care.
• Unlike FDA-approved G-CSF agents (filgrastim, pegfilgrastim, sargramostim) and romiplostim, no single approved agent restores multi-lineage hematopoiesis (neutrophil + platelet + RBC) and concurrently protects GI mucosal integrity, a key differentiated feature of Entolimod.
• Entolimod's safety profile in human studies (150 healthy subjects) is characterized by a predictable, self-limiting, flu-like symptom complex, with 78% of treatment-emergent adverse events (TEAEs) being Grade 1 or 2, and only 2.6% serious adverse events (SAEs), all resolved. This selective cytokine induction profile distinguishes it from compounds that broadly stimulate the immune system and risk cytokine storm.

Management Changes

Corporate Governance

Legal Proceedings

• Not currently a party to any material legal proceedings.
• May, in the ordinary course of business, face various claims brought by third parties, including intellectual property rights, employment matters, and product safety or efficacy claims, which could lead to costly litigation and reputational harm.

Related Party Transactions

• **Statera Biopharma, Inc.**: Entered into an Exclusive License Agreement on February 11, 2025, for Entolimod and Entolasta, involving a $1.5 million license fee ($300k cash, $1.2M stock), milestone payments, and royalty payments on net sales. The Neutropenia Option was exercised on March 28, 2025, with a $500k milestone payment in company stock. An Amended and Restated Exclusive License Agreement on June 18, 2025, allowed royalty payments in cash or securities and directed 80% of subsequent payments to Avenue Venture Opportunities Fund, L.P. until a $5.6 million lien is paid off.
• **3i, LP**: Led a financing package for the Velocity Bioworks acquisition, including $16 million in debt and up to $75 million in preferred convertible equity. Acquired all outstanding Series B Preferred Stock from Helena on December 9, 2025, and entered into an Amendment to Securities Purchase Agreement, extending the termination date and lowering the Series B Floor Price to $0.39 per share. Also entered into a Securities Purchase Agreement for a $16.253 million senior secured convertible note and a warrant to purchase 4,553,213 common shares, granting security interests in collateral.
• **Helena Global Investment Opportunities 1 Ltd.**: Entered into a Securities Purchase Agreement on April 29, 2025, for up to 8,400 shares of Series B Preferred Stock and warrants for up to $8.4 million. Completed four tranches, raising $4.9 million, before assigning the agreement to 3i, LP on December 9, 2025.
• **Avenue Venture Opportunities Fund, L.P.**: Holds a lien of up to $5.6 million on the licensed technology and receives 80% of subsequent payments due to Statera under the A&R License Agreement until the payoff amount is met.
• **Tumim Stone Capital, LLC**: Entered into a Common Stock Purchase Agreement on February 6, 2026, allowing the company to sell up to $50 million in common stock. Issued a pre-funded warrant to purchase 437,012 common shares as a commitment fee.
• **Craft Capital Management LLC**: Served as placement agent for the Tranched Financing, receiving cash fees (e.g., $56k in June 2025, $56k in July 2025, $140k in August 2025, $140k in September 2025) and warrants to purchase common stock (e.g., 10,000 shares in June 2025, 11,068 shares in July 2025, 29,830 shares in August 2025, 32,249 shares in September 2025).
• **Texas Research and Technology Foundation (TRTF)**: VBI entered into an Office Sublease on March 13, 2026, for approximately 8,122 square feet of office space.
• **TPB Merchants Ice LLC**: VBI entered into a Building Lease Agreement (Microbial Building Lease) on March 13, 2026, for an approximately 8,024 square foot facility.
• **Merchants Ice II, LLC**: VBI entered into a Lease (Mammalian Building Lease) on March 9, 2026, for an approximately 20,144 square foot facility.

Stakeholder Impact

• **Shareholders**: Face significant dilution risk from future equity raises, potential negative impact on liquidity and share price due to Nasdaq delisting risk, and no expected cash dividends. Anti-takeover provisions and exclusive forum clauses may limit their influence. Increased compliance costs are expected after losing emerging growth company status.
• **Employees**: The acquisition of Velocity Bioworks added approximately 45 employees. The company faces challenges in retaining key technical and manufacturing personnel. Equity incentive plans are in place to attract and motivate staff. Former CEO Jennifer Ernst received a separation package.
• **Customers (Biopharma)**: Potential for new treatments for Acute Radiation Syndrome and oncology-related conditions with a differentiated product profile (multi-lineage recovery, GI protection).
• **Customers (CDMO)**: Will have access to specialized biomanufacturing services from Velocity Bioworks. However, the CDMO business model is unproven, and client program failures could impact revenue.
• **Suppliers**: Exposed to risks from global supply chain constraints, increased costs due to inflation and tariffs, and potential need to qualify alternative suppliers due to evolving biosecurity legislation.
• **Creditors**: The company's 'going concern' doubt raises significant risk. A senior secured convertible note was issued to 3i, LP, and Avenue Venture Opportunities Fund, L.P. holds a lien on licensed technology, indicating secured positions for some creditors.
• **Regulatory Authorities**: The company is actively engaging with FDA, BARDA, DTRA, NIH, and NIAID for Entolimod's development and procurement. Compliance with cGMP, GLP, GCP, and other biopharmaceutical regulations is critical, as is adherence to U.S. and foreign export/import controls and anti-corruption laws.

Next Steps

• Advance Entolimod and Entolasta through regulatory approval for Acute Radiation Syndrome (ARS) and into government procurement.
• Expand Entolimod's designations into oncology-related conditions, including neutropenia, thrombocytopenia, and mucositis.
• Begin advancing Entolasta through IND-enabling studies in 2026 and 2027.
• Validate the manufacturing process required for the submission of a Biologics License Application (BLA) to the FDA.
• Explore opportunities for the emergency use of Entolimod in select international markets prior to formal U.S. commercialization.
• Leverage the active IND application to initiate Phase 2 clinical studies targeting neutropenia and other oncology-related indications.
• Evaluate optimal accounting and finance personnel levels and enhance relevant processes and procedures to address the material weakness in internal control over financial reporting.
• Actively monitor the closing bid price for the common stock and consider available options to resolve the Nasdaq minimum bid price deficiency and regain compliance by September 15, 2026.
• File a registration statement with the SEC to register shares for resale under the Common Stock Purchase Agreement with Tumim Stone Capital, LLC.
• Hold a meeting of stockholders no later than March 9, 2026, to seek approval to waive the Exchange Cap related to the Series B Preferred Stock.
• Continue active engagement with U.S. government agencies (BARDA, DoW/DTRA, FDA, NIH, NIAID) regarding potential federal funding and Strategic National Stockpile procurement pathways.
• Negotiate a $1 per year lease with an affiliate of Statera for the proper care, storage, and handling of Entolimod bulk drug substance and drug product lots.
• May consider opportunities for strategic acquisitions, licensing, or business combinations that align with the growth plan.

Key Dates

Recommendation

The company faces severe financial distress, evidenced by increasing net losses, negative cash flows, and explicit 'substantial doubt about its ability to continue as a going concern.' The Nasdaq delisting notice further highlights significant operational and financial challenges. While the strategic pivot to biopharma and the acquisition of promising assets like Entolimod offer long-term potential, the immediate risks, including unproven business models for both biopharma and CDMO, material weakness in internal controls, and the need for substantial additional capital with potential for significant dilution, outweigh any near-term positives. A seasoned investor would likely view the current risk profile as too high, suggesting an exit or avoidance of the stock until significant operational and financial stability is demonstrated.

Keywords

Biopharmaceutical, TLR5 agonist, Entolimod, Acute Radiation Syndrome, Neutropenia, CDMO, Velocity Bioworks, FDA Fast Track, Orphan Drug, Oncology, Immunotherapy, Nasdaq, Going Concern, Capital Raise, Cybersecurity, Intellectual Property, Statera Biopharma, Scorpius Biomanufacturing