Item 1.01 Entry into a Material Definitive Agreement.
On February 8, 2023, Tivic Health Systems, Inc., a Delaware corporation (the “Company”), entered into an underwriting agreement (the “Underwriting Agreement”) with ThinkEquity LLC, as representative of the underwriters (the “Underwriter”), pursuant to which the Company agreed to issue and sell to the Underwriter in a firm commitment underwritten public offering (the “Offering”), 20,000,000 shares (the “Shares”) of the Company’s common stock, par value $0.0001 per share (“Common Stock”), at a public offering price of $0.25 per share, less underwriting discounts and commissions, resulting in gross proceeds to the Company of $5.0 million.
In addition, pursuant to the Underwriting Agreement, the Company granted the Underwriter a 45-day option (the “Overallotment Option”) to purchase up to an additional 3,000,000 shares of Common Stock, solely to cover over-allotments.
The Offering closed on February 13, 2023, with the sale of 20,000,000 Shares of Common Stock to the Underwriter. The net proceeds to the Company, after deducting the underwriting discount and commissions and estimated expenses of the Offering payable by the Company, was approximately $4.1 million. The Company intends to utilize the net proceeds from this Offering for the continued expansion of sales of its ClearUp product, including the penetration of healthcare professional networks, and clinical and regulatory costs for the expansion of existing and new Company product candidates. In addition, the Company may use a portion of the net proceeds to pursue potential strategic investments and acquisitions, although the Company does not currently have any specific plans or arrangements to do so.
Additionally, pursuant to the Underwriting Agreement, on February 13, 2023, the Company issued designees of the Underwriter warrants to purchase an aggregate of 1,000,000 shares of Common Stock (the “Representative’s Warrants,” and together with the Shares, the “Securities”), representing 5.0% of the aggregate Shares sold in the Offering, as partial consideration for services rendered in connection with the Offering. The Representative’s Warrants have an initial exercise price of $0.3125 per share, and will be exercisable for a four-year period commencing 180 days following the commencement of sales in the Offering.
The Securities were registered pursuant to the registration statement on Form S-1 (File No. 333-268010), which was initially filed with the Securities and Exchange Commission (the “Commission”) on October 26, 2022, and amended on December 09, 2022, December 20, 2022, January 6, 2023, February 1, 2023, and February 9, 2023, which the Commission declared effective on February 8, 2023 (the “Registration Statement”).
The Underwriting Agreement contains representations, warranties and covenants made by the Company that are customary for an offering of this type. Under the terms of the Underwriting Agreement, the Company has agreed to customary closing and indemnification obligations, including for liabilities under the Securities Act of 1933, as amended. In addition, pursuant to the terms of the Underwriting Agreement, the Company and its executive officers, directors and certain of its shareholders have entered into lock-up agreements providing that the Company and each of these persons may not, subject to limited exceptions, offer, sell, transfer or otherwise dispose of the Company’s securities for a period of three months following the effective date of the Underwriting Agreement.
The foregoing summaries of the terms of the Underwriting Agreement and the Representative’s Warrants are subject to, and qualified in their entirety by reference to, the Underwriting Agreement and the form of Representative’s Warrant, copies of which are attached to this Current Report on Form 8-K as Exhibits 1.1 and 4.1, respectively, and are incorporated herein by reference.