Note 4 - Business Combination |
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Dec. 31, 2025 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Notes to Financial Statements | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination [Text Block] |
Asset Purchase Transaction
On December 9, 2025, Tivic Health Systems, Inc., through a newly formed wholly owned subsidiary, Velocity Bioworks, Inc. entered into an Asset Purchase Agreement (the “APA”) and Secured Party Bill of Sale (the “Bill of Sale”) with 3i, LP (“3i”), in its capacity as collateral agent of Scorpius Holdings, Inc. (“Scorpius”) pursuant to which, VBI acquired all of personal property and assets (collectively, the "Acquired Assets"), but assumed no liabilities in respect to the period prior to the closing on December 10, 2025, of Scorpius, in a public sale pursuant to Article 9 of the Uniform Commercial Code. In October 2025, as a result of Scorpius’ default under certain secured notes and related security agreements, 3i exercised its rights and remedies with respect to certain collateral of Scorpius and its affiliate guarantors, including the Acquired Assets, and determined to sell such collateral in a public auction pursuant to Article 9, at which auction the Company submitted the winning bid. The Acquired Assets include, without limitation, equipment, contract rights, IT systems, software, files, records, documents, intellectual property, and goodwill related to Scorpius’ contract development and manufacturing organization (“CDMO”) business. Prior to the acquisition, Scorpius served as the primary U.S. manufacturer for the Company’s late-stage TLR5 agonist, Entolimod, for the treatment of acute radiation syndrome. As a result of VBI’s acquisition of the Acquired Assets, all manufacturing and related services previously provided by Scorpius to the Company through its CDMO business will be completed in-house and the Company intends to expand its business operations to provide similar services to other clients in the future.
Pursuant to the APA, as consideration for the Acquired Assets, the Company (on behalf of VBI) issued to 3i a senior convertible note payable in the amount of $16,253,147 at the closing of the Acquisition. Consistent with customary practices in a sale under Article 9, the APA does not contain representations, warranties, covenants or indemnities of the Collateral Agent, and the assets were sold “as is.”
The allocation of the purchase price to the estimated fair value of the assets acquired at the acquisition date, is as follows (in thousands):
The Company accounted for the acquisition of Scorpius using the acquisition method of accounting in accordance with ASC 805, Business Combinations. The purchase price has been allocated on a preliminary basis to the assets assumed based on management’s current estimates of their fair values as of the acquisition date of December 10, 2025. Because the Company has not yet completed the valuation analyses necessary to finalize the fair values of certain assets acquired, the purchase price allocation is considered provisional.
During the measurement period, which will not exceed one year from the acquisition date, the Company will continue to obtain information to assist in completing the valuation analyses and expects to finalize the purchase price allocation as soon as practicable. Measurement‑period adjustments, if any, will be recognized in the period in which the adjustments are determined, with a corresponding adjustment to goodwill, and the results of prior periods presented will be revised as if the accounting for the business combination had been completed as of the acquisition date, including related impacts on depreciation, amortization, and other income statement amounts, as required by ASC 805.
Unaudited Pro Forma Financial Information
The following tables reflect the unaudited pro forma combined results of operations for the year ended December 31, 2025 as if the acquisition of Scorpius had taken place on January 1, 2025. The unaudited pro forma financial information includes the effects of certain adjustments, including the amortization of acquired intangible assets and the associated tax effect and the elimination of the Company’s and the acquiree’s non-recurring acquisition related expenses (in thousands):
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