Tivic Health Systems, Inc.

and the questions you have submitted in advance will be answered following the prepared remarks. This call is being webcast, and the replay will be available on the IR section of the company's website for three months. Before we begin, let me remind you that during today's call, management will make various forward-looking statements. Investors are questioned that these forward-looking statements are based on current expectations and are subject to risks and uncertainties. That could cause actual results or outcomes to differ materially from those indicated in our forward-looking statements. Please read the safe harbor statement contained in the press release, Terrific Health issued today, as well as the risk factors contained in Terrific Health's filings with the SEC, including its annual report on Form 10-K of the year end December 31, 2024, and the Form 10-Q report to be filed with the SEC today, as well as other companies' SEC filings. On today's call, we have Trivik Health's Chief Executive Officer, Jennifer Earnest, Interim Chief Financial Officer, Lisa Wolf, and Chief Operating Officer and President of Trivik Biopharma, Michael Hanley. Now let me turn the call over to Jennifer Earnest.

Thank you to the operator for that introduction, and welcome to both the investors that are listening today and to those that are listening at another time. I'm Jennifer Ernst, CEO of Tivic Health, and it is my absolute pleasure to be here with you today to share some of the perspectives on our first quarter of 2025. There's really no doubt in my mind that this will be one of the defining moments in Tivic's history. In recent months, we have catalyzed an aggressive reinvention of Tivic, It's tempting to point to a single event or a quarter, but really what we're reporting on today is the culmination of work undertaken and hard-fought battles we've had along the way that brought us to a point where we could transform the company. Last year, we were a single-product company, selling over-the-counter into a crowded direct-to-consumer marketplace. Today, and going forward, we are a diversified immunotherapeutics company. We are building on our history in immunology with a clinical pipeline and product candidates that focus on diseases where immune system dysregulation plays a central role. In lay terms, when the immune system isn't functioning properly, health suffers, and we have ways to address both the overactive and underactive immune systems. In February, we secured exclusive worldwide rights to a late-stage immunomodulatory drug candidate called Entelamod. We also secured options on rights to its derivative, Entelasta. Today, I'm joined by Michael Handley, our new Chief Operating Officer and President of Tific Biopharma. Mike joined us from Cetera Biopharma and has previously launched 17 new drugs, including those that we hope Entelamod and Entelasta will supplant. So surely I'll be asking him to provide more details about the licensed compounds, showcasing the value creation opportunity that these represent for TIVIC investors. We have rapidly begun advancing IntelliMog along its commercialization pathway. For clarity, phase three trials are already complete under the FDA's animal pathway rules, meaning that we believe we are poised to move this rapidly forward. Just this week, we announced that we have entered into a manufacturing validation agreement for GMP production and scale-up. With Intalamod fully validated for treatment of acute radiation syndrome, the first indication that we'll be pursuing, entering GMP manufacturing is an inflection point that represents the transition from clinical to commercialization phase. It is also the necessary first step in preparing the application to the FDA. So today, the licensing agreement will be our focus, but it's not the only focus for the company. The immunomodulatory effects of entolamide and entolaster are highly complementary to the work we are advancing in non-in-Vegas vagus nerve stimulation. I expect to hear or share more about the vagus nerve stimulation program next quarter. We now have, as a company, the scientific foundation that we believe will enable us to seize opportunities to address diseases caused by either under or overactive immune systems. Importantly, in this context, we've also signed an $8.4 million tranche funding agreement that is designed to infuse capital at critical inflection points while allowing the company to build market value. Structurally, we've taken an approach that offers investors less dilution while we continue to accelerate the transformation of the company into high-value markets. Shortly, I will turn this call over to Lisa Wolfe, our interim CFO, to review our Q1 financial performance. But before doing so, just a few more comments on how we have navigated a significant strategic transition. Our priority has been on enhancing shareholder value and utilizing our resources to prioritize the assets that hold the greatest potential to deliver substantial returns. That meant in Q1, we invested in securing and operationalizing the biopharmaceutical assets and supporting the clinical research in non-invasive vagus nerve stimulation. In order to manage our resources, our board of directors and the leadership of CIVIC made the strategic choice to significantly reduce advertising into our D2C product, ClearUp. At the time we were under NASDAQ review and the world at large is facing high economic uncertainty, we believe this was the right decision. It allowed us to set the transformation in motion without taking in capital under onerous terms. Decreasing advertising spend, though, did have a commensurate impact on revenue. Investors should expect that we will continue to endeavor to manage the capital of the company in ways that offer the best opportunities for return. And with that, I'd like to hand the next section over to Lisa.

Thank you, Jennifer. For ease of listening, all of the financial metrics I'll be reporting compare the first quarter ended March 31, 2025 to the prior year quarter ended March 31, 2024, unless otherwise stated. Revenue net of returns totaled 70,000 compared to 334,000 in the year-ago quarter. The decline was primarily due to a decrease in unit sales of 81% associated with reductions in our overall marketing spend. We intentionally reduced our advertising spend by 92% in order to focus our capital resources into this Daterra licensing agreement. Cost of sales decreased to $20,000 from $167,000 in the year-ago quarter, primarily due to the 81% decrease in unit sales. Gross margins increased from 50% to 72% as we reduced our product support and fulfillment costs. Operating expenses remain flat at $1.6 million for the first quarter of 2025, compared with the same period in 2024. We plan to increase our research and development investments in our vagus nerve platform and clinical applications, and to advance the development of TIVX-licensed TLR5 agonist programs, specifically in Intelamod and Intelasta. Net loss for the quarter remained flat at $1.5 million for the first quarter of 2025 compared with the first quarter of 2024. At March 31, 2025, cash and cash equivalents totaled $669,000 compared with $2 million at December 31, 2024. The company had working capital of $520,000 at March 31, 2025. We have no debt as of the end of the first quarter of 2025. Subsequent to the end of the quarter, we raised net proceeds of $1.7 million pursuant to the Equity Distribution Agreement, or ATM, program. In March, we secured a $25 million equity line of credit. Our first drawdown is expected to take place in the second quarter. Generally, the funds will be used to support advancing TIVX clinical and pre-commercial activities. On May 9th, we entered into an $8.4 million strategic financing with an investor that provides the critical funds needed to support the company's transformation. We believe these funds, along with the other sources of capital currently available, such as the equity line of credit, will be sufficient to fund the company through GMP manufacturing validation for Intolamod, a key value inflection point. With that, I will turn the call back over to Jennifer. Thank you, Lisa.

And as I said earlier, today is focused on sharing more information about the TLR5 biologic program that we have initiated through this licensing agreement with Statera Biopharma. This is a big move for the company. It's also an opportunity to dramatically accelerate the value creation. And for that reason, I want to provide investors more color and insight on the opportunity, the structure of the engagement with Statera, and with our financing partners, as well as the commercial roadmap, as I turn this over to Michael in a few moments to provide more depth on the scientific perspective and IntelliMod's history. Briefly, we have licensed an asset that has had over $140 million invested previously by agencies such as the DOD, Department of Defense, DARPA, the Defense Advanced Research Program Agency, NASA and BARDA, the agency focused on countermeasures for, among other threats, radiological and nuclear threats. It's no wonder, then, that senior officials at the White House and FDA welcomed our briefing a few weeks ago and showed positive indications to help this important drug candidate move forward for utilization by the US and our allies. Now, how this came to be. Civic has been searching for an asset to bring into the company that would complement the emerging immunomodulatory effects that we are seeing from our BNS program, one that would provide disproportionate value creation opportunity for our investors. At the same time, Satara Biopharma had been looking for a partner that had the requisite commercial infrastructure and experience, including the NASDAQ listing, to provide returns to shareholders. For clarity, Cetera wasn't simply looking for an exit strategy, but a partnership, a partnership that could provide long-term value creation for their shareholders. So it truly was one of those rare occasions when two parties' needs and strategic interests were perfectly aligned, and we believe the combination of our scientific and clinical resources has potential to offer significant synergy in the market over time. The licensing agreement we entered into allows TIVIC to flexibly advance Entelamod for acute radiation syndrome and other indications, as well as for Entelasta, a derivative Entelamod. Entelasta is to respond to changes in market conditions and to utilize capital as appropriate. As the program progresses, Sotero will receive additional payments in equity or cash for milestones and royalties, giving them the long-term value creation opportunity that they were looking for. We're also able to expand the license as we conduct a complete clinical validation of Entolimod's use for additional indications. For example, after signing the initial agreement for Entolimod for acute radiation syndrome, we expanded our license to include the neutropenia indication. Now, I want investors to understand this is an opportunity that has very long legs. It's not a one-off. It's a significant strategic shift in the company. And fundamentally, it's a new foundation for growth. So at the time of signing the agreement, we felt the TIVX valuation did not fully reflect the opportunity with our BNS portfolio. And likewise, Cistera felt that as an OTC company, it could not get the market credit it deserves for the assets. So I am thrilled about the opportunity to now be bringing these forward under our NASDAQ company, and I'm thrilled about the progress we are making. TIVX is a much better position and stronger company as a result. Now, I would be remiss, though, if I didn't point out that having Michael Handley, the former CEO of Satara Biopharma, join us in a dual role as Chief Operating Officer and President of Biopharma, gave both me and the rest of the board, let's just say, a level of enthusiasm that really sealed the deal. So to introduce Mike, he brings the civic hands-on experience launching 17 FDA-approved drugs, as well as experience in neuromodulation like that in our bioelectronics portfolio. It truly is a rare combination, one that I and our team has welcomed. Importantly, out of his impressive track record, one particularly important piece of information. Michael was directly involved in developing and launching the two drugs that are currently approved for the indications we are targeting with Entolamide. So, yes, there are approved drugs and a multibillion-dollar category, but none of the approved drugs offer the suite of benefits that Entolamide and Entolasta have demonstrated in clinical trials. From his role at Spatera, he saw an opportunity for significant improvements in treatment, not only for acute radiation syndrome, but also for a host of other diseases involving suppressed immune activity, diseases that can be caused by radiation exposure, obviously medical or otherwise, from certain medications, from genetics, and even simply from getting old. So this, I think, is a good place for me to turn the call over to Michael. to provide more information on the history and scientific aspects of the drugs in Tolimod and then Telasta, after which I will briefly touch on our BNS program.

Michael, are you ready to take it away?

Jennifer, thank you so much for your kind and warm introduction. I can't tell you how excited I am to be a part of the TIVIC team and also to take part in the TIVIC first quarter conference call. I'm already engaged in advancing TIVIC's newest clinical assets, and I'm confidently anticipating the commercialization of TIVX's first TLR5 drug candidate in Telomod, and I will walk us through the proposed steps today. First, some background. The toll-like receptor 5, or TLR5 as we've been calling it, is a unique receptor that can be targeted by therapies to modulate the immune system. As we all know, the immune system has a broad range of effects on many diseases, and if not working properly, can result in patient sickness or death. In the case of radiation exposure, either medical radiation for the treatment of cancer or nuclear radiation exposure, there are two cells in the bodies that are significantly affected by ionizing radiation. The first to be affected is the hemopoietic cells in your bone marrow. These are cells that produce your white blood cells to fend off infections. The second cells that are typically targeted by radiation are gastrointestinal cells that line your intestine. These are responsible for nutrient absorption. If either of these cells are damaged or destroyed, an individual will not be able to fight off infections or absorb nutrients, eventually resulting in the patient's death. This is where our TLR5 agonist, entolamide, and its next-generation version, entolasta, both drugs that activate the TLR5 receptor, in turn activate several key pathways that protect and stimulate the hemopoietic cells in the bone marrow and also protect the GI endothelial cells from dying. In acute radiation syndrome, or ARS as we've been calling it, which is our first targeted indication and is used in biodefense applications, the body is exposed to lethal levels of ionizing radiation. This is typically due to nuclear detonations or nuclear fallout. Now, the U.S. government maintains what is called a national stockpile of emergency use products. This means that Entelmod, as an ARS countermeasure, could be of interest to the U.S. federal, state, and local governments. as well as some of our U.S. allied governments. Now turning to Intalamod's mechanism of action. Intalamod is a bioengineered derivative of the flagellin protein. It was designed to retain its specific TLR5 activity while increasing its stability, reducing its immunogenicity or risk of adverse immune responses, and enabling high-yield production or commercialization manufacturing. Radiation exposure, whether caused by medical treatments or from warfare scenarios, results in damage to bone marrow and GI cells and eventually cell death. This is primarily due to the loss of p53 function. The p53 gene is a crucial tumor suppressor that aids in maintaining cellular health by regulating the cell cycle. It also facilitates DNA repair and induces apoptosis in response to severe DNA damage. Without this tumor-suppressing effect, cancer cells are allowed to continue their abnormal proliferation despite the DNA damage they may have. The result typically leads to patient death. Now, Intolamide acts by stopping the process and making it an anti-apoptosis. In other words, it inhibits the cells from killing themselves and providing critical action in suppressing the p53 gene. There are currently several approved treatments for ARS on the market, as Jennifer referred to. However, they come with some limitations. We believe Intolimod is a superior product candidate for the following reasons. First, it is the only drug that protects the bone marrow and the GI tract. Second, it's the only drug that can also be used prophylactically or as a preventative treatment instead as only as a therapeutic treatment. Let's talk about Intolimod's development. Since it is not feasible or ethical to test the efficacy of Entelamid on humans, i.e., exposing them to radiation, it has been developed under the FDA's animal rule. The animal rule authorizes companies like TIVIC to test a drug in animals and not humans. Consequently, the FDA will only rely on data from animal studies or efficacy data to provide evidence of the product's effectiveness. under circumstances where there is reasonably well-understood mechanism of action for the product, in this case, entolamide. In terms of data, a pivotal efficacy study was conducted in 179 non-human primates. It demonstrated with a high degree of statistical significance that a single injection of entolamide administered 25 hours after exposure of a 70% lethal dose of radiation improved the animal survival by nearly threefold compared to the control group who did not receive the drug. Dose dependence of intolerance efficacy was demonstrated with doses above the minimal efficacious dose. This established a plateau at approximately 75% survival at 60 days after lethal radiation, which compared to 27.5% survival rate for the placebo group, the group that doesn't receive the drug. With respect to safety data in humans, there are data from more than 230 human patients in which Intolamide has been tested. Of these, 150 were healthy human subjects. In these subjects, they demonstrated the safety profile and established the dose dependent effect of Intolamide on efficacy biomarkers in humans. A phase one open label dose escalation trial of Intolamide was conducted in 26 patients with advanced cancer in the United States. The data for the US study were presented at the annual meeting of the American Society of Clinical Oncology, or ASCO. And in two cancer oncology studies, more than 60 cancer patients were administered Intolamide and showed a statistical increase in white blood cell count, which is a distinct biomarker of what Intolamide is doing. This demonstrates the efficacy of the drug. Additionally, which was observed and is expected, were a few transient adverse effects. There are mild decrease in blood pressure, a slight elevation in the liver enzyme, and a transient to mild to moderate flu-like symptoms, which go away after a few hours. In addition to the ARS indication, it is believed that Entelmod and Entelasta will have utility in treating the following human ailments. Neutropenia, as Jennifer pointed out earlier, which is characterized by abnormally low concentration of neutrophils in the blood and serves as the primary defense against infections. Neutropenia has a wide range of causes, from genetics to cancer treatments and age. Currently, it's an unmet medical need that continues to grow worldwide. The treatment market is expected to reach $20 billion by 2029. Also, entolamide could be used for the treatment of lymphocyte exhaustion, which is seen in all patients that have been treated with chemotherapy and radiation. This is additionally a multibillion-dollar market. Another indication that may be pursued is immunosenescence, or the slow inactivation of the immune system as one ages. In a Phase II clinical trial conducted at the Mayo Clinic, it was demonstrated that a single dose of Entelamod helped activate the immune system in a geriatric population who had a suboptimal immune response. The condition will eventually affect every living person as they become older. All of us are susceptible to immunosenescence. This is why we are excited about the potential of both Intalamud and Intilasa to help patients overcome a number of immune dysfunction illnesses, and it's cause for great excitement. With that, I'll turn it back over to Jennifer for her final remarks.

Jennifer? Thank you, Michael.

I truly hope that this last section you covered helps our investors understand the significant potential opportunity with the TLR-5 program with Intolamod and Intolapsa. I think it's important to also add that the FDA granted fast-track status to Intolamod and orphan drug status for ARS. We recently met with senior leadership at the FDA. We confirmed these opportunities and opportunities for additional accelerated pathways and potentially emergency use designations both in the U.S. and under export control outside the U.S., In terms of the progress you mentioned, yesterday we announced our GMP manufacturing validation for Intolamide. And for clarity's sake, I want to underscore that the drug itself has already been validated in the type of studies that Michael went over. It's been validated for acute radiation syndrome through phase three trials under the animal rule. Filing the biological licensing application of BLA with the FDA, however, requires us to also validate the manufacturing process itself. which is what we announced and are now undertaking. Given Scorpius's team's significant experience in biological manufacturing, we have a very high level of confidence in this collaboration and made successful outcomes. So to set context once the manufacturing process is validated, we will then need to secure bioequivalency data and one year of stability data before filing the complete VLA with the FDA. We will obviously be communicating as each of those milestones are completed. I did promise I would briefly speak to our VNS program. I don't want to give investors the impression that our VNS program is no longer a focus. While we have reduced investment in ClearUp, we are still deeply committed to the non-invasive VNS work that we have initiated. Our prior studies of our non-invasive vagus nerve stimulation methods have already shown exciting results related to biological changes in autonomic, cardiac, and central nervous systems. We are currently receiving positive signals out of the second study that these effects, effects that were strong by any standard when we first reported them, can be further optimized within the ongoing clinical work that we were doing at the Feinstein Institute. It goes between the Feinstein Institute and we expect. Based on some of the early positive results that we got from the Feinstein Institute, we opted to add additional work increasing the robustness and completeness of the data. This did slightly delay our readouts. We expect that all phases of the optimization study will be complete in another month or so, which means you can expect to hear complete data readouts coming out over the summer. We expect to provide a more comprehensive report this summer, and I will focus then on the next call on more of the key data showing the true advancements in the state of the art in vagus nerve stimulation. The product candidates that will be emerging from this program are expected to be highly differentiated from the wellness products that are seen in market today, offering instead medically sound, clinically validated, robust alternatives to implanted vagus nerve stimulation devices.

So in closing,

We are aggressively accelerating the strategic transformation of PIVIC into a diversified immunotherapeutics company with both late and early stage treatments in the pipeline. We have a robust pipeline for addressing both over and underactive immune systems. This is a very unique position in the market. We believe we have access to sufficient capital to meet our near-term and strategic priorities and are well aligned with our financing partners for building long-term value. And in the short term, we have a number of catalyst opportunities as we move Entalimod towards commercialization and enter additional clinical trials for both the biologic and our BNS bioelectronic product candidates. We will, in the near future, be sending out our annual general meeting announcements. And at the annual general meeting, investors will have an opportunity to vote on several measures that are associated with this strategic transformation. I hope that we will be looking forward to your support. Now, we view 2025 as a year of tremendous opportunity, one with a number of key milestones that will be coming in the second half of the year. We look forward to reporting to you as we move the company increasingly into the new areas, delivering what we expect will be life-changing treatments for patients in need and strong value creation for shareholders. And with that, I'd like to say thank you for the time you've taken today and have a very good rest of your day.

Thank you. This will conclude today's conference. You may disconnect your lines at this time, and thank you for your participation.