Welcome to the Tivic Health Systems Third Quarter 2023 Shareholder Update Conference Call. [Operator Instructions] Please note that the conference is being recorded. Statements made during this call contain forward-looking statements about Tivic's business. You should not place undue reliance on forward-looking statements as these statements are based upon management's current expectations, forecasts and assumptions and are subject to significant risks and uncertainties. These statements may be identified by words such as may, will, should, could, expect, intend, plan, anticipate, believe, estimate, predict, potential, forecast, continue or the negative of these terms or any other words or terms of similar meaning. Risks and uncertainties that could cause Tivic's actual results to differ materially from those set forth in any forward-looking statement include, but are not limited to, the matters listed under the Risk Factors in the company's annual report on Form 10-K for the year ended December 31, 2022, filed with the Securities and Exchange Commission on March 31, 2023, at the company's subsequent filings with the SEC. Statements and information, including forward-looking statements speak only to the date that they are provided, unless an earlier date is indicated. And Tivic does not undertake any obligation to publicly update any statements or information, including forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law. Now let me hand the call over to Jennifer Ernst, Tivic Health's Chief Executive Officer.

Hello, everyone, and thank you for joining us today. I'm Jennifer Ernst, CEO of Tivic. I'm joined today by our Interim CFO, Kimberly Bambach. And as usual, before she goes over the details of the financial performance, I'd like to start with a few comments on the quarter and a few highlights, as we continue fighting to build a stronger Tivic. Over the past 3 quarters, we've had a number of initiatives that are starting to pay off. As a reminder, earlier this year, we increased our pricing in response to durable increases in the underlying components of our product. We also tightened our marketing spend while retooling the marketing for a new price point, and again, opening up new health care-centric channels. To cut to the chase, these moves resulted in a 71% increase in gross profit versus the same period last year despite a decrease in revenue. So net, we made more dollars on fewer sales. This is what I've hoped for as we worked through these programs, and we can now start turning the marketing engine back up to increase volume. You may also recall that we had to make some difficult staffing decisions in Q2, requiring us to curtail some programs and maybe placing some potential opportunities into a holding pattern. But nonetheless, through that, we have maintained a focus on the critical business areas. So overall, these changes, combined with improved gross profit, resulted in a 30% decrease in operating expenses. We successfully closed new financing under our shelf registration statement with net proceeds to the company of approximately $4.8 million. And lastly, it's no secret, like many of the other companies in our space, we have faced compliance issues with our NASDAQ listing beginning in early 2023. This created enormous pressure on the share…

Thanks, Jennifer, and good afternoon, everyone. I am pleased to report the financial results for the quarter ending September 30, 2023. We posted third quarter revenue of $282,000, a decrease of $195,000 or 41% compared to the same quarter last year, primarily due to price point increase in the second quarter. This resulted in a 58% decrease in unit sales, offset by a 54% increase in the per unit average sales price. For the 3 months ended September 30, 2023, the cost of sales decreased by $240,000 or 58% compared to the same period in 2022, primarily driven by the decrease in sales volume. Variable cost was $73.57 per unit for the 3 months ended September 30, 2023, compared to $95.04 per unit for the same period in 2022. The decrease in variable cost was primarily driven by lower manufacturing and fulfillment costs. Fixed costs were $33.05 per unit for the 3 months ended September 30, 2023, compared to $10.48 per unit for the same period in 2022. The increase in the fixed cost was primarily due to the lower sales volume to absorb the fixed costs. Gross profit for the third quarter was $108,000, an increase of $45,000 or 71% compared to $63,000 in the same period 2022. The increase was due to price increases, optimization of the supply chain and product design as well as sales volume over which fixed and semi-fixed costs were allocated. Total operating expenses were $1.8 million for the third quarter 2023 compared to $2.65 million in the same period 2022. The decrease of $779,000 or 30.5% is attributed to lower consulting and professional fee expenses as well as other reduced general administrative expenses. As a result, our second quarter net loss was $1.8 million compared to $2.6 million in the same quarter last year. From July 11, 2023 to August 9, 2023, we sold an aggregate of 1.169 million shares of common stock to certain investors at prices ranging from $4 to $5.50 per share in a series of registered public offerings, resulting in aggregate gross proceeds to the company of approximately $5.2 million. Aggregate net proceeds to the company after expenses was approximately $4.8 million. As a result, our cash balance at the end of the quarter was $5.2 million, and we continue to maintain a no-debt balance sheet. On August 23, we implemented a 1-for-100 reverse stock split, and on September 15, 2023, we received confirmation from NASDAQ on our regaining compliance with the minimum bid price requirement. I will now hand the call back to Jennifer for any remarks.

Okay. Thank you, Kim. So to recap, Q2 was a reset. Q3 is the start of a recovery. We've realigned the team, we've revamped the cost structure of the business, we've reduced overhead expenses, we've undertaken a more focused marketing strategy and we've continued to see improvements in our gross margin. We've taken the first steps in opening new health care-focused channels. And between those commercial efforts for ClearUP and our research programs, we are increasing engagement with the health care community generally around the use of bioelectronic medicine, in the management of inflammation and inflammatory conditions. Our research pipeline now has begun moving forward at a bit brisker pace. We did experience delays in clinical enrollment in '22 and '23, but we now have a brisker pace of enrollment and a continued focus on new product outcomes and breakthrough opportunities. We are continuing to evaluate M&A opportunities but have expanded the lens a bit, thinking both about the diversification of the portfolio and in terms of strengthening the execution capabilities of the organization. Measures we took in the first 3 quarters involved tough decisions, some that had fairly painful short-term consequences, but we believe that they are important. They were important choices to make in setting the company on track to a stronger Tivic going forward. And I hope that our investors are seeing the start of that payback. And with that, I thank you for taking the time with us today. We appreciate your patience throughout this year, and I look forward to speaking with you again about Q4 in the New Year.

Thank you, everyone. This concludes today's event. You may disconnect at this time, and have a wonderful day. Thank you for your participation.