Tivic Health Systems, Inc. Announces Entry Into Material Lease Agreements with Velocity Bioworks, Inc.

San Antonio, TX – March 13, 2026 – Tivic Health Systems, Inc. (“Tivic” or “the Company”) has filed an 8-K announcing the entry into a series of significant lease agreements with Velocity Bioworks, Inc. (“VBI”). These agreements pertain to critical real estate assets and may have material impacts on Tivic’s financials and operational footprint. The details below offer a comprehensive overview of the transactions and their potential implications for investors and shareholders.

Key Points from the Report

• Execution of Lease Agreements: Tivic has executed three key agreements involving VBI and its affiliates:
  • Microbial Building Lease – Lease agreement with TPB Merchants Ice LLC for “Building 7,” located at 1305 E. Houston St., San Antonio, Texas, comprising approximately 8,042 square feet.
  • Mammalian Building Lease – Lease agreement with Merchants Ice II, LLC, signed March 9, 2026.
  • Office Sublease – Sublease agreement among VBI, Texas Research and Technology Foundation, and TPB Merchants Ice LLC, signed March 13, 2026.
• Lease Terms: The Building Lease defines “Tenant’s Share” as 100% of the Taxes and Operating Expenses attributable to the leased Building, plus a pro-rata share (5.41%) of Complex Common Area Operating Expenses. Should the rentable square footage of the Complex change after the Effective Date, this percentage will be recalculated but will not increase.
• Security Deposit: VBI is required to provide a standby letter of credit in the amount of \$350,000 as security for the performance of its obligations under the lease.
• Escalating Rent Schedule: The lease provides for a step-up in annual rent over the term. For example:
  • Months 13-24: \$341,470 annual rent (\$28,455.83/month)
  • Months 25-36: \$441,890 annual rent (\$36,824.17/month)
  • Months 49-60: \$642,730 annual rent (\$53,560.83/month)
  • Months 73-84: \$1,033,570 annual rent (\$86,130.83/month)
  • Months 85-96: \$1,243,990 annual rent (\$103,665.83/month)

  This escalating rent structure has the potential to materially increase recurring revenue for Tivic over time.

• Additional Rent and Operating Expenses: In addition to base rent, VBI will pay its allocated share of operating expenses, property taxes, insurance, and other costs as specified in the lease. Notably, capital expenditures required by law or to control operating costs may also be passed through and amortized.
• Option to Purchase: The lease includes an Option to Purchase clause, granting VBI the right to purchase the property under conditions specified in the agreement.
• Maintenance and Condition: VBI is required to maintain the landlord’s furniture, fixtures, and equipment (“FF&E”) in good working order, accepting them “as-is, where-is.” All maintenance and repair obligations for FF&E rest with the tenant, and any modifications require landlord approval.
• Assignment and Subletting: Assignment or subletting by VBI is restricted and requires landlord approval. Landlord is entitled to recover costs up to \$50,000 related to any assignment or sublease.
• Insurance Requirements: VBI must maintain robust insurance, including property coverage for full replacement value, and umbrella liability policies with limits of at least \$5 million per occurrence/aggregate. Insurance providers must be highly rated.
• Compliance and Environmental Clauses: VBI must comply with all laws, including environmental regulations. Any contamination caused by VBI must be remediated at its sole expense, and documentation regarding hazardous materials must be provided to the landlord upon request.
• Signatories: The lease is executed by William D. Sutherland (for TPB Merchants Ice LLC) and Michael Handley, CEO of Velocity Bioworks, Inc.

Potential Price-Sensitive and Shareholder-Relevant Information

• Material Increase in Recurring Revenue:
  • The long-term, escalating lease payments provide Tivic with a significant and predictable income stream.
  • The rent schedule shows substantial increases over time, likely to have a positive impact on Tivic’s financial performance and cash flows.
• Option to Purchase:
  • The inclusion of a purchase option gives VBI the right to acquire the property, which could result in a future one-time gain or asset sale for Tivic.
• Credit Enhancement:
  • The \$350,000 letter of credit requirement reduces Tivic’s risk of tenant default, enhancing the security of future cash flows.
• Operating Expense Pass-Throughs:
  • The tenant is responsible for all taxes, operating expenses, and certain capital expenditures, insulating Tivic from cost inflation and preserving profit margins.
• No Immediate Dilution or Debt Increase:
  • The transaction does not appear to involve equity issuance or new debt for Tivic, meaning no immediate dilution for existing shareholders.
• Potential Risks:
  • Future rent and cost escalation are dependent on VBI’s ongoing financial health and ability to meet its obligations over a multi-year term.
  • Landlord retains rights in case of tenant default, and assignment/subletting is tightly controlled to protect Tivic’s interests.
• Significant Commercial Real Estate Transaction:
  • Given the size of the leases (both in dollar terms and square footage), this transaction is likely to materially impact Tivic’s financial statements, and may influence investor perception and share price upon full disclosure and market reaction.

Summary Table: Key Lease Terms

Conclusion

These lease agreements represent a significant strengthening of Tivic Health Systems’ commercial real estate asset utilization and recurring revenue base. The long-term, escalating nature of the lease payments, combined with strong tenant obligations and security instruments, are likely to be viewed favorably by shareholders and may positively affect Tivic’s share price. The inclusion of a purchase option and comprehensive risk mitigation through insurance and operating expense pass-throughs further enhances the attractiveness of the transaction.

Disclaimer: This article is for informational purposes only and does not constitute investment advice or a recommendation to buy or sell any securities. Investors should conduct their own due diligence and consult with their financial advisors before making any investment decisions. The information is based on the latest available filings as of March 13, 2026, and may be subject to change.

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