Tivic Health Systems reports Q3 net loss of $2.6M; accelerates focus on Entolomod for oncology and military stockpile initiatives

We have filed new intellectual property IP that supports the potential use of our TLR5 agonists as adjunctive therapies for immuno oncology cancer therapeutics. We have completed the optimization study for our VNS device design uncovering the key parameters that had the strongest influence on the autonomic nervous system activity and we are completing the exit from the consumer health market in increasing focus on prescription therapeutics. Today. Let me focus more on our fully licensed Entolomod portfolio and report to you where this drug candidate stands from a clinical development perspective. Entolimod itself is a first in class, late stage, highly de risked drug candidate and the first commercial opportunity for TIVIC with Entolimod is for acute radiation syndrome which we are developing as a potential military stockpile drug. Entelemod for ARS is intended to be used as a countermeasure to exposure from lethal levels of ionizing radiation. Entolimod is of strategic value because its novel mechanism of action gives it the potential to treat radiation caused damage to the GI tract. Unlike the GCSF drugs that are currently stockpiled for ars, we are focusing our efforts on building relationships with US and allied governments and on intellimod's manufacturing readiness. Following the feedback we received from speaking with military officials at the Military Health System Research Symposium and with the support of BARDA stakeholders, we requested a TechWatch meeting. Participating in a TechWatch meeting with Barda and its interagency partners would give us further opportunity to discuss their interest in Entolimod for ARS and in the follow on molecule Entolimod. Also this quarter we completed the transfer of two entolomod inds from Statera to Tivic. They cover the development of entolomod for ARS and for advanced cancer. The transfer of these inds enables us to move forward with Entolimod clinical programs in neutropenia and lymphocyte exhaustion. With existing human safety data and prior dosing studies, we anticipate being able to move directly into phase 2 clinical studies. In both of these indications, we believe our TLR5 mechanism of action could yield a wider range of clinical benefits than the approved colony stimulating factor or GCSF class of drugs. Importantly, this includes addressing radiation caused and chemotherapy caused damage to the GI tract. Specifically, the GCSF drug class stimulates new blood cell formation only, whereas Tivic's TLR5 mechanism of action engages a pathway that prevents cell death, a mechanism that can unlock benefits across multiple organ systems including the GI tract. Prior studies have shown that Entolimod has the potential to be used prior to exposure, for example in advance of a medical radiation treatment to protect critical cells responsible for white blood cell production and the epithelial lining of the GI tract. These features of Entolimod open opportunities in the oncology space and these inds enable us to conduct clinical trials in these oncology related applications. I'm also pleased to report the successful verification of the Entolimod cell line. Working with our contract manufacturing organization, we successfully produced new Entolimod proteins. In vitro testing verified that the resulting protein structure and yields are suitable to move into larger batch production. This represented tivic's first production of any form of biologic and represented a major manufacturing milestone that advances us along the path to current good manufacturing practices or cgmp. CGMP is a required step in preparing for the biologics license application. Unfortunately, the contract manufacturer with whom we have been working has experienced financial stress in the wake of government actions earlier this year, actions that impacted several of their customers programs. So while this has resulted in delays to our original schedule, we are working closely with the team and with their investors to establish stability and traction. At the same time, we've made good progress with other manufacturing partners to ensure we are able to meet our timelines and production requirements. And now, just a few updates. Turning to our VNS program, this week we announced the results of the findings from the optimization trial for our non invasive vagus nerve stimulation program. The study served to isolate parameters that most significantly impacted autonomic system activity and admittedly we had some surprise findings, ones that suggested we may be able to influence both sympathetic and parasympathetic activity. Whereas our prior work had focused solely on the parasympathetic effects, this learning may cause us to reassess the initial commercial focus that we were targeting now. Our findings are particularly compelling because they advance the field of neurostimulation. Personalization of the stimulation frequency, the lateral placement of the stimulation electrodes and the duration of treatment all impacted the clinical outcome and not necessarily in the expected ways. While modern implanted devices are often utilizing real time data to tune treatment, our study confirmed the hypothesis that VNS stimulation parameters delivered non invasively can benefit significantly from personalization as a means to increase responder rates and increase the clinical effects. Because of the greater understanding gained from this trial, we are evaluating alternative commercial opportunities that could be enabled now. The program has taken a little bit of a backseat this year with our limited resources committed predominantly to the integration of our lead biologics candidate and its follow on applications in oncology. We remain confident though, that our non invasive VNS approach has the potential to deliver clinical outcomes similar to or better than those of surgically implanted vagus nerve devices. And at this point I'd like to ask Lisa Wolf to review the financial results for the quarter.

Thank you Jennifer. For ease of listening, all of the financial metrics I will be reporting compare the third quarter ended September 30, 2025 to the prior year quarter ended September 30, 2024 and the nine months ended September 30, 2025 to the nine months ended September 30, 2024. Unless otherwise stated, financial results for the third quarter and first nine months of the year reflect our transition as a company with our focus towards the bio pharmaceutical market and away from the consumer device market. As mentioned in our last quarterly call, we plan to exit the consumer device market by the end of the year. Toward that end, during the third quarter we recorded reserves for excess and obsolete inventory of 230,000 which is included in cost of goods sold. We also wrote off certain assets related to clear up with a net book value of 117,000 which is included in other expenses. We do not expect to incur additional significant costs associated with our exit from the consumer device business. Additionally, we have now discontinued the allocation of any significant resources toward clear up sales. As part of this progression, the company launched a new corporate website that puts the emphasis on our transformed mission and expanded clinical pipeline. Revenue net of returns totaled 146,000 for the quarter compared to 126,000 in in the year ago quarter. Revenue net of returns totaled 302,000 for the nine month period compared to 600,000 in 2024. The increase in the quarter was a result of increased unit sales driven by reduced selling prices as we pushed to reduce inventory prior to exiting the business. The decrease for the nine month period was primarily due to decreased unit sales resulting from reductions in our advertising spend. As we focused our resources on the advancement of our TLR5 program. Cost of sales increased to 291,000 from 82,000 in the year ago quarter primarily due to the 230,000 of inventory reserves recorded in the third quarter of 2025. Cost of sales decreased to 343,000 from 359,000 for the nine month period from primarily due to lower unit sales offset by the 230,000 inventory reserve. Gross margins excluding the 230,000 inventory reserve were 42% for the third quarter compared to 35% for the year ago Quarter gross margins excluding the 230,000 inventory Reserve were 37% for the nine month period compared to 40% for the year ago. Quarter operating expenses were $2.3 million for the third quarter of 2025 compared with $1.5 million for the same period in 2024. Operating expenses for the first nine months of 2025 were 5.9 million compared to 4.4 million for the first nine months of 2025. The increases for the quarter were due to increased research and development investments in our biologics program, increased corporate costs and increases in advertising costs for Clear up as we push to sell through that inventory prior to our exit from the consumer business. The increases for the nine month period were primarily due to increased research and development investments in our biologics programs and increased corporate costs offset by reductions in sales and marketing costs for Clear up as we focused our resources into the advancement of the TLR5 program. Net loss was 2.6 million for the third quarter of 2025 compared with 1.4 million for the third quarter of 2024. Net loss for the nine month period of 2025 was 6 million, compared with 4.2 million for the same period in 2024. At September 30, 2025, cash and cash equivalents totaled 3.5 million compared with 2 million at December 31, 2024. We believe that these funds, along with remaining planned tranches of our Preferred Purchase Agreement, will allow us to make meaningful progress toward GMP manufacturing validation for Entolimod, which is a key value inflection point for the company. There's also no debt on the balance sheet and with that I'd like to turn the call back to Jennifer for closing remarks.

Thank you, Lisa. So to recap, we started a process in February to transform the business and today this transformation is well underway. In the third quarter and subsequent weeks we've transferred to IND to Tivic, completed the cell line verification required to enable a future BLA with the fda. We wound down the consumer health tech business, we advanced discussions of potential pathways to deploying Entolimod as a military countermeasure and stockpile drug, and last but not least, we closed the additional tranches of the company's 8.4 million financing for a total of 3.8 million in net proceeds during the third quarter. So yes, the transformation progress is well underway and I want to thank you for listening and for your continued interest in tivic. We look forward to continuing our progress in the coming weeks and months as we focus on advancing.