TIVIC Health Systems

Kurta Law is investigating brokers who recommended that their clients purchase shares of Tivic Health Systems. This investment came with substantial risks that made it unsuitable for many investors. These risks appear in the prospectus, the SEC filing that companies use to disclose their business strategy and related risks prior to offering the securities for sale. Unsuitable investments violate FINRA Rule 2111 and Regulation Best Interest, and investors who incur losses may be able to recover via FINRA arbitration.

If your broker recommended that you invest in Tivic Health Systems, you may have a claim against the firm through FINRA arbitration.  FINRA arbitration offers a quicker and cheaper remedy for investors than suing in civil court. Contact (877) 600-0098 or email info@kurtalawfirm.com to speak to a securities attorney for free today.

What is Tivic Health Systems?

According to its website, Tivic Health Systems is commercial health tech company that focuses on the development of bioelectronic medicine. Tivic states that its “patented technology platform leverages stimulation on the trigeminal, sympathetic, and vagus nerve structures”.

At the time of the prospectus, Tivic Health Systems had one product on the market, the ClearUP, a handheld device using electrical waves to target inflammation. Tivic was also developing an additional device meant to relieve pain following sinus operations.

Investors should also know that Tivic Health Systems registered an emerging growth and small reporting company, meaning that it can make limited disclosures in its prospectus. Less information generally means more risk.

Tivic Health Systems Stock

Tivic Health Systems (TIVC) investments involve a high degree of risk, according to the company’s prospectus. Initially offered at $5.00 per share, the stock closed at $550.00 per share on November 8, 2021. Recently, the stock traded at $1.1758 per share. This massive drop in value was not surprising, given the risks clearly disclosed in the company’s prospectus.

Risks Associated With Tivic Health Systems Investments

Brokerage firms that approve an investment are required to understand the risks associated with an investment. Furthermore, brokers must accurately represent the risks associated with certain investments.

The prospectus states at the beginning of the “Risk Factors” section: “We were originally incorporated in 2016 and began selling our first product in 2019. Accordingly, we have a limited operating history, which makes an evaluation of our future prospects and execution ability difficult. Our revenue and income-producing potential is unproven, and our business model and strategy may continue to evolve.”

At the time of the prospectus filing, Tivic’s entire business model was centered around its initial products, which had yet to receive significant acceptance either clinically or from consumers: “It is not certain that our target customers will choose our technology for technical, cost, support or commercial reasons. If our target customers do not widely adopt and purchase our technology, our future growth will be limited. Further, our resources and investments may not be adequate to achieve the targeted level of manufacturing and sales set out in our business plan”.

Additionally, as stated within the prospectus, Tivic had identified material weaknesses with its own financial reporting: “In connection with the audit of our financial statements for the years ended December 31, 2020 and 2019, we and our independent registered public accounting firm identified a material weakness in our internal control over financial reporting. A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis. The material weakness in our case arose from an accumulation of significant deficiencies, which amounted to a material weakness in internal controls”.

Other Risks Associated With Commercialization:

The risks associated with this type of investment do not end in the laboratory. Besides the scientific proof that Tivic Health Systems still required, the prospectus stated that it would have to overcome the following business hurdles to successfully commercialize.

• Securing substantial additional funding.
• Developing and maintaining successful strategic relationships.
• Building a strong intellectual property portfolio.
• Creating larger market acceptance of the core technology.
• Developing further technology that will allow the company to stave off competition.
• Adapting to changes within the industry.
• Building and maintaining appropriate sales, distribution, and marketing capabilities through third parties.

Failure of any one of these goals could result in a total business failure and a complete loss for investors.

ThinkEquity Underwriter

ThinkEquity served as the underwriter of Tivic Health Systems. Investors should know about this broker’s potential conflicts of interest. An underwriter should keep potentially overly risky investments from trading on the public stock market. But because underwriters make money by bringing new stocks to market, they may have a motivation to overlook certain risks.

What Can I Do If I Suffered Losses?

If you lose money investing in Tivic Health Systems, consider reaching out to a Kurta Law securities attorney. Our securities attorneys have 5-star reviews on Google and a proven track record when it comes to securing fair settlements for our clients. Call (877) 600-0098 or email info@kurtalawfirm.com.