Business Context and Reporting Period
This Form 8-K was filed by Tivic Health Systems, Inc. on October 14, 2022, reporting an agreement entered into on October 7, 2022. The filing identifies Tivic Health Systems, Inc. as the registrant; the supplied metadata identifies Valion Bio, Inc., which does not match the filing text.
Tivic’s wholly owned subsidiary, RB Buyer Co., LLC, agreed to acquire substantially all assets and certain specified liabilities of Reliefband Technologies, LLC related to its electronic nerve stimulation devices.
Key Financial and Transaction Metrics
- Aggregate cash purchase price: $33.5 million, subject to working-capital adjustments, transaction expenses and Reliefband indebtedness at closing.
- Up to $1.5 million of the consideration may be paid in restricted Tivic common stock, based on the 30-trading-day VWAP before closing.
- Any stock issuance is capped at 19.99% of Tivic’s shares outstanding immediately before closing.
- $1.675 million of the consideration will be placed in escrow for 24 months and may be used for indemnification claims.
- The filing does not provide revenue, profit, cash-flow, margin, debt, liquidity or post-acquisition earnings estimates.
Material Changes Versus the Prior Comparable Period
The filing does not present comparative financial statements or operating results. The material development is Tivic’s proposed acquisition of the Reliefband business, which would expand its assets and product portfolio but also require significant financing.
Guidance, Outlook, Risks and Unusual Items
- Closing is subject to customary conditions, including no material adverse effect on Reliefband, third-party consents, completion of specified regulatory filings and Tivic’s financing of the acquisition consideration.
- Closing is expected on the third business day after applicable conditions are satisfied or waived.
- The agreement may be terminated in specified circumstances, including material breach, mutual consent or failure to close by February 6, 2023.
- If termination results from Tivic’s failure to publicly file a Form S-1 related to the financing, the buyer must pay Reliefband a $200,000 breakup fee.
- Reliefband’s representations and warranties are supported by representations and warranties insurance, subject to exclusions and retention.
- At closing, the parties expect to execute asset-assignment documents, an escrow agreement, a transition assistance agreement and, if stock is issued, a registration rights agreement with piggyback rights.
Investor Verification Items
- Verify whether the acquisition closed, the final purchase price and any working-capital, debt or expense adjustments.
- Verify the financing used to fund the transaction, including any Form S-1, equity issuance, dilution and related debt.
- Verify whether any portion of the consideration was paid in stock and the number of shares issued.
- Review subsequent SEC filings for Reliefband’s financial statements, purchase-accounting treatment, goodwill or intangible assets and pro forma operating results.
- Assess the status of the $1.675 million escrow, indemnification claims and any termination or breakup-fee obligations.