What changed in this filing

/stocks — the workspaceLOADING

Item 7A. Quantitative and Qualitative Disclosures About Market Risk

2025-03-27 compared with 2024-03-28 · 551 added, 578 removed, 556 unchanged (67% of the section changed)

Quantitative and Qualitative Disclosures About Market Risk.

Interest rate risk

Our cash and cash equivalents as of December 31, 2023 consisted of $21,716,077 in bank deposits and money market funds that earn interest.

We believe such interest-earning instruments carry a low degree of interest rate

The goals of our investment policy are liquidity and capital preservation;

we do not enter into investments for trading or speculative purposes and have not used any derivative financial instruments to manage our interest rate exposure.

believe that we do not have any material exposure to changes in the fair value of these assets as a result of changes in interest rates due to the short-term nature of our cash and cash equivalents.

Foreign currency exchange risk

As we expand internationally, our results of operations and cash flows may become increasingly subject to fluctuations due to changes in foreign currency exchange rates.

Our functional currency is the U.S.

dollar, and our

revenue is denominated primarily in U.S.

For the years ended December 31, 2023 and 2022, all our sales were in U.S.

Our expenses are generally denominated in the currencies in which our operations are located, which is primarily

in the United States.

A 10% change in exchange rates would not result in a material change in fair value of our cash and accounts receivable in 2023.

As our operations in countries outside of the United States grow, our results of operations and

cash flows may be subject to fluctuations due to changes in foreign currency exchange rates, which could harm our business in the future.

To date, we have not entered into any material foreign currency hedging contracts, although we may do so in

Concentration of credit risk

As of December 31, 2022, substantially all of our cash and cash equivalents were held at Silicon Valley Bank (SVB), and the amounts frequently exceeded federally insured limits.

On March 10, 2023, the Federal Deposit

Insurance Corporation (FDIC) announced that SVB had been closed by the California Department of Financial Protection and Innovation.

The United States Department of the Treasury announced in a joint statement with the Federal Reserve and FDIC that

depositors of SVB will have access to all of their money starting March 13, 2023, including funds exceeding federally insured limits.

As a result we did not experience any losses with respect to our funds that had been deposited with SVB.

exposed to credit risk in the event of default by the financial institutions holding our cash and cash equivalents.

If we are unable to access our cash and cash equivalents as needed, our financial position and ability to operate our business will

be adversely affected.

Emerging Growth Company Status

18 unchanged sentences

We have audited the accompanying balance sheets of Femasys Inc.

(the Company) as of December 31, 2023 and 2022, the related

statements of comprehensive loss, stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2023, and the related notes (collectively, the financial statements).

In our opinion,

the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the years in the two-year period ended

December 31, 2023, in conformity with U.S.

(the Company) as of December 31, 2024 and 2023, the related statements of comprehensive loss,

stockholders’ equity, and cash flows for each of the years in the two-year period ended December 31, 2024, and the related notes (collectively, the financial statements).

In our opinion, the financial statements present fairly, in all

material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, in conformity with U.S.

generally accepted accounting principles.

Going Concern

The accompanying financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 1 to the financial

statements, the Company has suffered recurring losses and negative cash flows from operations, has a net accumulated deficit and expects to incur additional losses and negative operating cash flows.

In addition, the Company’s convertible

notes mature in November 2025, if not converted sooner.

These factors raise substantial doubt about its ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 1.

The financial

statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for Opinion

23 unchanged sentences

Accounts receivable, net

Inventory, net

Prepaid and other current assets

19 unchanged sentences

Accrued expenses

Convertible notes payable, net (including related parties)

Clinical holdback – current portion

Lease liabilities – current portion

Operating lease liabilities – current portion

Total current liabilities

2 unchanged sentences

Convertible notes payable, net (including related parties)

Lease liabilities – long-term portion

Operating lease liabilities – long-term portion

Total long-term liabilities

9 unchanged sentences

( 127,198,257

( 108,381,629

Total stockholders’ equity

12 unchanged sentences

Loss from operations

Other income (expense):

Other (expense) income:

Interest income

Interest expense

Other expense

Total other income

Total other (expense) income

Loss before income taxes

12 unchanged sentences

Balance at December 31, 2022

Issuance of common stock for cash upon exercise of options

Issuance of common stock in connection with Employee Stock Purchase Plan

Issuance of common stock in connection with at-the-market offering, net of issuance costs

Share-based compensation expense

Expiration of warrant

Balance at December 31, 2022

Issuance of common stock and warrants in connection with April 2023 Financing, net of offering costs

7 unchanged sentences

( 108,381,629

Issuance of common stock in connection with at-the-market offering, net of issuance costs

Issuance of common shares in payment of convertible note interest, including related parties

Issuance of common stock in connection with Employee Stock Purchase Plan

Share-based compensation expense

Expiration of warrant

Balance at December 31, 2024

( 127,198,257

See accompanying notes to financial statements.

5 unchanged sentences

Amortization of right-of-use assets

Inventory reserve

Accounts receivable reserve

Loss on fixed asset dispositions

10 unchanged sentences

Cash flows from investing activities:

Acquisition of patents

Purchases of property and equipment

7 unchanged sentences

Proceeds from exercise of common warrants

Proceeds from common stock issued through ESPP and exercised options

Proceeds from common stock issued through ESPP

Proceeds from at-the-market sales of common stock

Issuance costs for at-the-market sales of common stock

Payments of deferred offering costs

Repayment of note payable

Payments under lease obligations

Net cash provided by (used in) financing activities

Net cash provided by financing activities

Net change in cash and cash equivalents

6 unchanged sentences

Right-of-use asset obtained in exchange for a lease liability

Commissions costs relating to certain proceeds from issuance of common stock

Prepaid insurance financed with promissory notes

Property and equipment costs included in accounts payable

Fair value of warrants issued in connection with convertible notes

Payment of convertible note interest in common stock

Deferred offering costs reclassified to additional paid-in-capital

4 unchanged sentences

Delaware on February 19, 2004 and is headquartered in Suwanee, Georgia.

The Company is a leading biomedical company focused on addressing significant unmet needs of women worldwide with a broad portfolio of in-office, accessible, and innovative

therapeutic and diagnostic products solutions, including a lead revolutionary product candidate and FDA-cleared products.

The Company’s mission is to provide women with superior minimally-invasive, non-surgical product technologies, accessible

in the office, improving patient care and overall health economics focused on servicing the reproductive health needs for those seeking solutions for infertility issues (FemaSeed®) or permanent birth control (FemBloc ® ).

The Company currently operates as one segment with

an initial focus on servicing the reproductive health needs for those seeking solutions for infertility issues or permanent birth control.

Femasys has an expansive intellectual property portfolio which covers both design and utility patents in the U.S.

significant ex-U.S.

markets for each product initiative.

Femasys has taken concepts internally conceived and protected through development, including domestic and foreign regulatory approvals, and production, through in-house manufacturing.

FemaSeed, a solution which enables directed intratubal insemination to improve on traditional intrauterine insemination (IUI) and provides a lower cost option to in vitro fertilization methods, received approval to sell FemaSeed in Canada in April

In September 2023 the Company received 510(k) clearance from the FDA for FemaSeed for intratubal insemination.

The clinical trial was still ongoing at the time of receiving regulatory clearance, however, enrollment was completed in November

FemVue®, a solution that enables fallopian tube assessment with ultrasound as an alternative to the radiologic approach (hysterosalpingogram) for the diagnosis of infertility, is approved for sale in the U.S., Japan, and Canada.

allows for fallopian tube evaluation after a FemBloc procedure to confirm occlusion (or procedure success).

FemCerv® is a solution for complete tissue sampling with minimal contamination of the endocervical canal as an alternative to the single

biopsy method, and is approved for sale in the U.S.

FemCath®™, allows for selective evaluation of an individual fallopian tube as an alternative to the traditional intrauterine catheter that is undirected, is approved for sale in the

FemBloc, the Company’s solution for permanent birth control, is based on the Company’s non-surgical platform technology and in June 2023 Femasys received FDA approval of our IDE to evaluate the safety and efficacy of FemBloc, our

non-surgical, non-implant, in-office solution for permanent birth control in a pivotal clinical trial.

In August 2023 Femasys announced the initiation of enrollment in the FINALE [Prospective Multi-Center Trial for FemBloc Intratubal Occlusion for

TranscervicAL Permanent Birth Control] pivotal trial designed to evaluate the safety and efficacy of FemBloc.

This prospective, multi-center, open-label, single-arm study design includes pregnancy rate as the primary endpoint, which will be

analyzed once 401 women have used FemBloc for one year for permanent birth control.

In addition, the study is designed as a roll-in beginning with enrollment of 50 women for a clinical readout primarily of preliminary safety data prior to enrolling the remaining subjects.

An interim analysis of clinical data endpoints is planned once 300 women have used FemBloc for permanent birth control for one year .

Follow-up will continue annually for five years post-market.

The Company is a leading biomedical innovator, addressing significant unmet needs in

women’s health worldwide, with a broad patent-protected portfolio of disruptive, accessible, in-office therapeutic and diagnostic products.

The Company is a U.S.

manufacturer that has received global regulatory approvals for its product

portfolio, which are currently being commercialized in the U.S.

and select countries.

FemaSeed® Intratubal Insemination, a groundbreaking infertility treatment delivering sperm directly to the site of conception, is U.S.

FDA-cleared and

approved in Europe, United Kingdom (UK), Canada and Israel.

Peer-reviewed publication of positive data from its pivotal clinical trial of FemaSeed demonstrated effectiveness and safety.

FemVue®, a companion diagnostic for fallopian tube

assessment via ultrasound, is U.S.

FDA-cleared and approved in Europe, UK, Canada, Japan and Israel.

FemCerv®, an endocervical tissue sampler for cervical cancer diagnosis, is U.S.

FDA-cleared and approved in Europe, UK, Canada and Israel.

FemBloc® permanent birth control is a revolutionary first-of-its-kind non-surgical approach, that involves minimally-invasive placement of a patented delivery system for precise delivery of our proprietary synthetic tissue adhesive (blended

polymer) into both fallopian tubes simultaneously.

Over time, the blended polymer fully degrades and produces nonfunctional scar tissue to permanently

block the fallopian tubes in the safest most natural approach.

This is in stark contrast to centuries-old surgical sterilization with reported risks that include infection, minor or major bleeding, injury to nearby organs, anesthesia-related

events, and even death.

Along with the various surgical risks, some patients may not qualify as good surgical candidates due to obesity or medical comorbidities.

The FemBloc non-surgical approach has the potential to offer a safer,

more accessible in-office alternative with fewer risks, contraindications, and substantially lower cost.

Peer-reviewed publication of positive data from its initial clinical trials of FemBloc demonstrated compelling effectiveness and five-year

In March 2025, the Company announced CE mark certification under EU MDR as the first regulatory approval in the world for the FemBloc delivery system for non-surgical female permanent birth control.

For the FemBloc blended polymer, an integral part of the FemBloc permanent birth control, the Company has successfully completed an expedited G12 Special MDR Audit for Class III devices and the Notified Body has recommended for CE mark

approval pending the final stages of EMA review, with potential approval expected mid-2025.

In March 2025, we announced strategic distribution partnerships for

FemBloc in Spain.

T he pivotal clinical trial (clinicaltrials.gov:

NCT05977751) is now enrolling participants for U.S.

FemCath® and FemChec®, companion diagnostic products for FemBloc’s

ultrasound-based confirmation test, are U.S.

FDA-cleared and approved in Europe and Canada.

The Company is a woman-founded and led company with an expansive, internally created intellectual property portfolio with approximately 200 issued patents globally, in-house chemistry, manufacturing, and controls (CMC) and device manufacturing capabilities and proven ability to

develop products with commercialization efforts underway.

Basis of Presentation

The Company has prepared the accompanying financial statements pursuant to the rules and regulations of the U.S.

The Company has prepared the accompanying financial statements

in accordance with accounting principles generally accepted in the United States of America (GAAP) and pursuant to the rules and regulations of the U.S.

Securities and Exchange Commission (SEC).

The Company had previously disclosed in

the financial statements as of and for the year ended December 31, 2022, that substantial doubt regarding the Company’s ability to continue as a going concern existed.

The Company has incurred net operating losses in every year since inception

and has an accumulated deficit as of December 31, 2023 of $ 108,381,629 .

As of December 31, 2024, the Company has cash and cash equivalents of $ 3,451,761 .

The Company plans to finance

its operations and development needs with its existing cash and cash equivalents, additional equity and/or debt financing arrangements, and revenue primarily anticipated from domestic sales of FemaSeed and FemVue and international sales of

FemaSeed, FemVue and FemBloc to support the Company’s commercial efforts and research and development activities, primarily focused on FemBloc.

There can be no assurance that the Company will be able to obtain additional financing on terms

acceptable to the Company, on a timely basis, or at all.

If the Company is not able to obtain sufficient funds on acceptable terms when needed, the Company’s business, results of operations, and financial condition could be materially adversely

For the year ended December 31, 2024, the Company generated a

net loss of $ 18,816,628 .

The Company expects such losses to increase over the next few years as the Company advances FemBloc through

clinical development until FDA approval is received and the product is available to be marketed.

Although the Company has a history of negative cash flows from operations and losses, the Company raised $ 20,800,182 , net during 2023 (see Notes 7 and 9).

As of December 31, 2023, the Company has cash and cash equivalents of $ 21,716,077 .

Based on the improvement in its cash position during 2023, the Company believes it has sufficient financial resources to fund operations and meet its capital requirements and

anticipated obligations as they come due in the next twelve months.

Therefore, the Company has concluded that the conditions and events raising substantial doubt no longer exist.

The Company plans to finance its operations and development needs

with its existing cash and cash equivalents, in the future with additional equity and/or debt financing arrangements, and revenue primarily from the sale of FemVue and FemaSeed to support the Company’s research and development activities, largely

in connection with FemBloc.

While we believe that our cash will provide sufficient cash to fund operations to meet our capital requirements and anticipated obligations as they become due, uncertainty around the Company’s product acceptance in the

market could have a negative impact on our liquidity.

There can be no

assurance that the Company will be able to obtain additional financing on terms acceptable to the Company, on a timely basis, or at all.

If the Company is not able to obtain sufficient funds on acceptable terms when needed, the Company’s

business, results of operations, and financial condition could be materially adversely impacted.

The Company’s ability to meet its obligations in the ordinary course of business is dependent upon its ability to manage financing and generate

sufficient cash flow to meet its obligations and ultimately to attain profitable operations.

Although management plans to ensure the Company will continue as a going concern, there is no assurance that viability can be obtained since the

availability and amount of such funding is not certain.

As such, there can be no assurance that the Company will be able to obtain additional liquidity if needed or under acceptable terms, if at all.

The Company expects such losses to increase over the next few years as the Company commercializes FemaSeed and

its other products and advances FemBloc through clinical development if and until FDA approval is received and is available to be marketed in the U.S.

The financial statements have been prepared on a going-concern

basis, which contemplates the realization of assets and the satisfaction of liabilities in the normal course of business.

The Company has incurred net operating losses in every year since inception and has an accumulated deficit as of December

31, 2024 of $ 127,198,257 and expects to incur additional losses and negative operating cash flows for at least the next twelve months.

The Company’s ability to meet its obligations is dependent upon its ability to generate sufficient cash flows from operations and future financing transactions.

Although management expects the Company will continue as a going concern, there is no

assurance that management’s plans will be successful since the availability and amount of such funding is not certain.

Accordingly, substantial doubt exists about the Company’s ability to continue as a going concern for at least one year from the

issuance of these financial statements.

The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability of assets or the amounts and classifications of liabilities that may result

from the possible inability of the Company to continue as a going concern.

Summary of Significant Accounting Policies

Use of Estimates in Preparation of Financial Statements

The preparation of

financial statements in conformity with U.S.

generally accepted accounting principles (GAAP) requires the Company to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and

liabilities at the date of the financial statements, and the reported amounts of revenue and expense during the reporting periods.

The most significant estimates used in these financial statements include stock options, warrants, the valuation of

useful lives of property and equipment, and clinical trial cost accruals .

The preparation of financial statements in conformity with

financial statements, and the reported amounts of revenue and expense during the reporting periods.

The most significant estimates used in these financial statements include stock options, warrants, the valuation of useful lives of property and

equipment, and clinical trial cost accruals .

Actual results could differ from those estimates.

Certain Risk and Uncertainties

Most of the products being developed by the Company, such as FemBloc, will require approval from the FDA or corresponding foreign regulatory agencies prior to commercial sales.

Intratubal Insemination Product, FemCath (formally FemVue) Cornual Balloon Catheter, FemVue Saline‑Air Device, FemChec Pressure Management Device, and FemCerv Endocervical Sampler have achieved FDA clearance.

FemaSeed, FemCath and FemCerv have

also received approval in Canada and FemVue has also received approval to sell in Canada, Hong Kong and Japan.

There can be no assurance the Company’s other products in development will receive the necessary clearances.

If the Company is denied

clearance or clearance is delayed, it might have a material adverse impact on the Company.

The medical device industry is characterized by frequent and extensive litigation

and administrative proceedings over patent and other intellectual property rights.

Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often difficult to predict, and the outcome may be

uncertain until the court has entered final judgment and all appeals are exhausted.

Certain Risks and Uncertainties

Products being developed by the Company, such as FemBloc, will require

approval from the FDA or corresponding foreign regulatory agencies prior to commercial sales.

FemaSeed Intratubal Insemination is U.S.

FDA-cleared and approved in Europe, United Kingdom (UK), Canada and Israel.

FemVue, a companion diagnostic for

fallopian tube assessment via ultrasound, is U.S.

FDA-cleared and approved in Europe, UK, Canada, Japan and Israel.

FemCerv, an endocervical tissue sampler for cervical cancer diagnosis, is U.S.

FDA-cleared and approved in Europe, UK, Canada and

FemCath and FemChec, companion diagnostic products for FemBloc’s ultrasound-based confirmation test, are U.S.

FDA-cleared and approved in Europe and Canada.

There can be no assurance the Company’s other products in development will

receive the necessary approvals/ clearances.

If the Company is denied regulatory approval/ clearance or approval/ clearance is delayed, it might have a materially adverse impact on the Company.

The medical device industry is characterized by frequent and

extensive litigation and administrative proceedings over patent and other intellectual property rights.

Whether a product infringes a patent involves complex legal and factual issues, the determination of which is often difficult to predict, and

the outcome may be uncertain until the court has entered final judgment and all appeals are exhausted.

The Company’s competitors may assert that its products or the use of its products are covered by United States or foreign patents held by them.

If such relevant

patents are upheld as valid and enforceable and the Company is found to infringe, the Company could be prevented from selling its products unless it can obtain a license to use technology or ideas covered by such patents or are able to redesign its

products to avoid infringement.

A license may not be available at all or on commercially reasonable terms, and it may not be able to redesign its products to avoid infringement.

The Company relies on single source suppliers to provide certain components of all

its products commercially available and those under development.

If such relevant patents are upheld as valid and enforceable and the Company is found to infringe, the Company could be prevented from selling its products unless it can obtain a license to use technology or ideas covered by such patents or are

able to redesign its products to avoid infringement.

A license may not

be available at all or on commercially reasonable terms, and it may not be able to redesign its products to avoid infringement.

The Company relies on some single source suppliers to provide

certain components of its products commercially available and those under development.

The Company purchases these components on a purchase order basis.

If the Company overestimates its component requirements, it could have excess inventory, which would increase its

costs and result in write‑downs harming its operating results.

If the Company overestimates its component requirements, it could have excess inventory,

which would increase its costs and result in write‑downs harming its operating results.

If the Company underestimates its requirements, it may not have an adequate supply, which could interrupt the manufacturing of its products.

Fair Value of Financial Instruments

Certain of the Company’s financial instruments, including cash, notes

payable and other liabilities approximate their fair value because of the short‑term maturity of these financial instruments.

The fair value of the Company’s cash equivalents is based on Level 1 inputs, and the fair value of stock options,

convertible notes and warrants are based on Level 3 inputs.

See Notes 3, 7, 9 and 10 for additional details.

Certain of the Company’s financial instruments, including cash, accounts receivable and other

liabilities approximate their fair value because of the short‑term maturity of these financial instruments.

Cash and Cash Equivalents

3 unchanged sentences

Accounts Receivable

The Company grants trade credit to customers in the normal

course of business and does not require collateral or any other security to support its receivables.

The Company grants trade credit to

customers in the normal course of business and does not require collateral or any other security to support its receivables.

Management reviews its accounts receivable monthly for any collection issues.

Potentially uncollectible accounts are written off to bad debt

expense when it is determined that the likelihood a customer account is uncollectible is probable.

For the year ending December 31, 2023, the Company had no

write-offs, compared to $ 977 in 2022.

Potentially uncollectible accounts are

written off to bad debt expense when it is determined that the likelihood a customer account is uncollectible is probable.

As of December 31, 2024 and 2023, the Company’s reserves for uncollectible accounts were $ 10,000 and $ 2,000 , respectively.

Inventories are stated at the lower of cost or net realizable

Cost, which includes amounts related to materials, labor and overhead, is determined on a first‑in, first‑out basis.

Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of

completion, disposal, and transportation.

Management reviews inventories continually for aging or

obsolescence and accounts for such items once identified.

In 2023 and 2022, the Company disposed of inventory in the amount of $ 4,409 and

$ 2,847 , respectively.

As of December 31, 2023 and 2022, the FemVue reserve for slow moving, obsolete, or unusable inventories was $ 3,580 and $ 2,103 , respectively.

Inventory stated at cost,

net of reserve, consisted of the following as of December 31:

accounts receivable are recorded at the invoiced amount, net of allowance for credit loss and do not bear interest.

Amounts collected on trade accounts receivable are included in net cash provided by operating activities in the statements of cash

Inventories are stated at the lower of cost or net realizable value.

includes amounts related to materials, labor and overhead, is determined on a first‑in, first‑out basis.

Net realizable value is the estimated selling price in the ordinary course of business less reasonably predictable costs of completion,

disposal, and transportation.

Inventory stated at cost, consisted of the

following as of December 31:

Work in progress

Finished goods

Inventory, net

The Company has research tax credits that are available to the

Company to offset future payroll withholding liabilities.

As of December 31, 2023 and 2022, the total amount of these credits is $ 928,234

and $ 891,062 , respectively.

The Company has research tax credits that are available to the Company to offset

future payroll withholding liabilities.

As of December 31, 2024 and 2023, the total amount of these credits is $ 1,030,809 and $ 928,234 , respectively.

The Company has included these amounts on the accompanying balance sheets as follows as of December 31:

3 unchanged sentences

Property and Equipment

Property and equipment are carried at cost less

accumulated depreciation and, if applicable, impairment charges.

Expenditures which materially increase value or extend useful lives of assets are capitalized, while maintenance and repairs which do not improve or extend the lives of the

respective assets are charged to operations when incurred.

Property and equipment are carried at cost less accumulated depreciation

and, if applicable, impairment charges.

Expenditures which materially increase value or extend useful lives of assets are capitalized, while maintenance and repairs which do not improve or extend the lives of the respective assets are charged to

operations when incurred.

Gains and losses on the retirement or disposal of individual assets are included in the results of operations.

5 unchanged sentences

Machinery and equipment

Depreciation expense for the years ended 2023 and

2022 was $ 468,391 and $ 521,151 ,

respectively.

In 2023, the Company disposed of property and equipment at a cost of $ 187,826 with a net book value of $ 47,538 , which is recorded in operating expenses on the statements of comprehensive loss.

In 2022, the Company

disposed of property and equipment at a cost of $ 28,234 with a net book value of $ 2,285 , which is recorded in other expense on the statements of comprehensive loss.

Depreciation expense for the years ended 2024 and 2023 was $ 277,178 and $ 468,391 , respectively.

2024, the Company disposed of property and equipment at an original cost of $ 82,507 with a net book value of $ 676 , which is recorded in operating expenses on the statements of comprehensive loss.

In 2023, the Company disposed of property and equipment at a cost of

$ 187,826 with a net book value of $ 47,538 ,

which is recorded in operating expenses on the statements of comprehensive loss.

Impairment of Long-Lived Assets

The Company reviews long‑lived assets, including property and equipment and definite

lived intangibles, for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

An impairment loss would be recognized when estimated undiscounted future cash

flows expected to result from the use of the asset group and its eventual disposition is less than its carrying amount.

The Company reviews long‑lived assets, including property and equipment and definite lived intangibles,

for impairment whenever events or changes in business circumstances indicate that the carrying amount of the asset group may not be fully recoverable.

An impairment loss would be recognized when estimated undiscounted future cash flows expected to

result from the use of the asset group and its eventual disposition is less than its carrying amount.

Impairment, if any, is measured as the amount by which the carrying amount of a long‑lived asset group exceeds its fair value.

The Company has no t recorded any impairment losses to date.

The Company records operating leases as right-of-use assets and operating lease

liabilities in its balance sheets for all operating leases with terms exceeding one year .

Right-of-use assets represent the right to use

an underlying asset for the lease term, including extension options considered reasonably certain to be exercised, and operating lease liabilities to make lease payments.

Right-of-use assets and operating lease liabilities are recognized based on

the present value of lease payments over the lease term.

To the extent that lease agreements do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the lease commencement date to determine

the present value of lease payments.

The Company records operating leases as right-of-use assets and operating lease liabilities in its

balance sheets for all operating leases with terms exceeding one year .

Right-of-use assets represent the right to use an underlying

asset for the lease term, including extension options considered reasonably certain to be exercised, and operating lease liabilities to make lease payments.

Right-of-use assets and operating lease liabilities are recognized based on the present

value of lease payments over the lease term.

To the extent that lease agreements do not provide an implicit rate, the Company uses its incremental borrowing rate based on information available at the lease commencement date to determine the present

value of lease payments.

The expense for operating lease payments is recognized on a straight-line basis over the lease term and is included in operating expenses in the Company’s statements of comprehensive loss.

Non-lease components

included in lease agreements are accounted for separately.

The Company records finance leases as right-to-use assets and finance lease liabilities in its balance sheets for all finance leases with terms exceeding one year , similar to operating leases, and records interest expense and depreciation expense on the right-of-use asset in the statements of

comprehensive loss.

Non-lease components included in

lease agreements are accounted for separately.

The Company records finance leases as right-of-use assets and finance lease liabilities in its balance sheets for all finance leases with terms exceeding one year , similar to operating leases, and records interest expense and depreciation expense on the right-of-use asset in the statements of comprehensive loss.

Intangible Assets

Intangible assets consist of patent and trademark application costs and related

legal fees, carried at cost less accumulated amortization and, if applicable, impairment charges.

Intangible assets consist of patent and trademark application costs and related legal fees, carried at

cost less accumulated amortization and, if applicable, impairment charges.

Amortization is computed using the straight‑line method over a weighted average useful life of three years and is recorded in depreciation and amortization expense within the results of operations.

2 unchanged sentences

Net book value

Amortization expense for intangible assets for the years ended December 31, 2023 and

2022 was $ 3,294 and $ 21,799 ,

respectively.

Amortization expense for intangible assets for the years ended December 31, 2024 and 2023 was $ 20,140 and $ 3,294 , respectively.

Deferred Offering Costs

Deferred offering costs, which consisted mainly of legal, consulting, and accounting

fees directly attributable to a strategic financing transaction, were capitalized in accordance with Staff Accounting Bulletin (SAB) Topic 5.A Expenses of Offering , codified in Accounting Standards

Codification (ASC) 340-10-S99-1 Other Assets and Deferred Costs .

Deferred offering costs, which consisted mainly of legal, consulting, and accounting fees directly

attributable to a strategic financing transaction, are capitalized in accordance with Staff Accounting Bulletin (SAB) Topic 5.A Expenses of Offering , codified in Accounting Standards Codification (ASC)

340-10-S99-1 Other Assets and Deferred Costs .

During 2022, the Company incurred $ 232,845 in deferred offering costs in connection with prospectuses filed in July 2022, including an offering to sell up to $ 150 million in stock, debt securities and warrants, and an Equity Distribution Agreement entered into with Piper Sandler which included an at-the-market (ATM) facility.

deferred offering costs will be offset against the total proceeds from the issuance of common stock available under the prospectuses, and the Company will expense any remaining balance of deferred offering costs if $ 150 million prospectuses is terminated or aborted.

deferred offering costs are offset against the total proceeds from the issuance of common stock available under the prospectuses, and the Company will expense any remaining balance of deferred offering costs if $ 150 million prospectuses are terminated or aborted.

As of December 31, 2024, and 2023, the Company offset $ 3,143 and $ 17,952 , respectively of deferred offering costs in

connection with the gross proceeds issued under the prospectuses.

As of December 31, 2023 and 2022, deferred offering costs capitalized were $ 214,798 and $ 232,750 , respectively, and

are included in other long-term assets in the accompanying balance sheet.

As of December 31, 2024, deferred offering costs capitalized were $ 211,654 , and are included in prepaid and other current assets in the accompanying balance sheet.

As of December 31, 2023, deferred offering costs

capitalized were $ 214,798 , and are included in other long-term assets in the accompanying balance sheet.

Accrued Expenses

Accrued compensation costs include incentive compensation and unused paid time off.

Accrued clinical trial expenses include research and development costs for third-party services, largely related to the Company’s clinical trials, which are estimated based upon the services provided but not yet invoiced.

These costs, at times, may

be a significant component of the research and development expenses and the Company makes estimates in determining the accrued expense each period.

Accrued clinical

trial expenses include research and development costs for third-party services, largely related to the Company’s clinical trials, which are estimated based upon the services provided but not yet invoiced.

These costs, at times, may be a significant

component of the research and development expenses and the Company makes estimates in determining the accrued expense each period.

As actual costs become known, the Company adjusts its accrual.

Other accrued expenses include director fees, taxes and other miscellaneous accrued expenses.

accrued expenses include director fees, taxes and other miscellaneous accrued expenses.

Accrued expenses consisted of the following as of December 31:

5 unchanged sentences

Clinical Holdback

As part of the regulatory approval process for taking its products to market or

conducting post-market clinical studies to support marketing efforts for products with regulatory clearance, the Company enters into certain Clinical Trial Agreements (CTAs) which include, among other things, the compensation and payment schedule

the participating medical institutions and physicians will receive for all costs in connection with the clinical trial (or study) under the terms of the CTA.

As individual patients are enrolled in the study by the participating medical institution

or physician, the Company pays certain per study fees according to the CTA for the duration of the trial.

As invoices are received by the Company from the medical institution or physician, the Company retains any agreed upon percentage of total

invoiced costs, generally ranging between 5 % - 15 %, that is withheld from payment until the end of the study.

As part of the regulatory approval process for taking its products to market or conducting post-market

clinical studies to support marketing efforts for products with regulatory clearance, the Company enters into certain Clinical Trial Agreements (CTAs) which include, among other things, the compensation and payment schedule the participating

medical institutions and investigators will receive for all costs in connection with the clinical trial (or study) under the terms of the CTA.

As individual participants are enrolled in the study by the participating medical institution or

investigator, the Company pays certain per study fees according to the CTA for the duration of the trial.

As invoices are received by the Company from the medical institution or investigator, the Company retains any agreed upon percentage of total

invoiced costs, generally ranging between 5 % - 15 %, which is withheld from payment until the end of the study.

These retained amounts are recorded as clinical holdback, a liability, on the accompanying balance sheets, and all expenses

incurred in connection with these CTA activities are expensed as services are provided, which are included as research and development expenses on the accompanying statements of comprehensive loss.

The following table shows the activity within the clinical holdback liability

accounts for the year ended December 31, 2023:

The following table shows the activity within the clinical holdback liability accounts for the year

ended December 31, 2024:

Balance at December 31, 2023

4 unchanged sentences

Clinical holdback - long-term portion

The following table shows the activity within the clinical holdback liability

accounts for the year ended December 31, 2022:

The following table shows the activity within the clinical holdback liability accounts for the year

ended December 31, 2023:

Balance at December 31, 2022

5 unchanged sentences

C onvertible Notes with Warrants (November 2023 Financing)

The Company accounts for its convertible notes (“Notes”) based on an assessment of the convertible note terms and applicable guidance ASC 470-20, Debt with Conversion and Other Options and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Eq uity.

The convertible notes are recorded as a long-term

liability in the balance sheets and the Company did not separate the conversion feature from the host contract as it did not meet the requirements for accounting as a derivative instrument.

The convertible notes are accounted for as a single

liability measured at its amortized cost.

The Company accounts for its convertible notes (“Notes”) based on an assessment of the convertible note terms and applicable guidance ASC 470-20, Debt

with Conversion and Other Options and ASC 815-40, Derivatives and Hedging—Contracts in Entity’s Own Eq uity .

The convertible notes are recorded as a

long-term and short-term liability, as applicable, in the balance sheets and the Company did not separate the conversion feature from the host contract as it did not meet the requirements for accounting as a derivative instrument.

The convertible

notes are accounted for as a single liability measured at its amortized cost.

The Company accounts for the warrants issued in conjunction with the convertible notes based on an assessment of applicable guidance under ASC 480, Distinguishing Liabilities from Equity and ASC 815.

The warrants are recorded as equity and do not qualify for derivative accounting.

Under ASC 470-20, for debt issued with warrants, the Company treats the

warrants as a debt discount, recorded as a contra-liability against the debt, and amortize the balance over the life of the underlying debt as interest expense in the statements of comprehensive loss.

The offset to the contra-liability is

recorded as additional paid-in capital in the balance sheets.

Under ASC 470-20, for debt issued with warrants, the Company treats the warrants as a debt

discount, recorded as a contra-liability against the debt, and amortizes the balance over the life of the underlying debt as interest expense in the statements of comprehensive loss.

The offset to the contra-liability is recorded as additional

paid-in capital in the balance sheets.

The convertible notes are recorded net of debt issuance costs and a discount.

The portion of the debt issuance costs allocated

to the convertible notes, based on the amount of proceeds allocated between the convertible notes and warrants, is being amortized over the term of the convertible notes using the effective interest method in addition to the discount initially

recognized for the fair value of warrants from the convertible notes.

The portion of the debt issuance costs allocated to the convertible

notes, based on the amount of proceeds allocated between the convertible notes and warrants, is being amortized over the term of the convertible notes using the effective interest method in addition to the discount initially recognized for the

fair value of warrants from the convertible notes.

The amortization of debt issuance costs and discount is included in interest expense in the statements of comprehensive loss.

If the debt is retired early, the associated

debt discount will then recognized immediately as interest expense in the statements of comprehensive loss.

If the debt is retired early, the associated debt discount will

then be recognized immediately as interest expense in the statements of comprehensive loss.

See Note 7 for additional information on the November 2023 Financing.

Common Stock Warrants

The Company accounts for its common stock warrants as equity-classified instruments based on an assessment of the warrant’s

specific terms and applicable authoritative guidance under ASC 480 and ASC 815.

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability

pursuant to ASC 480, and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially

require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

For issued warrants that meet all of the criteria for equity classification, the warrants are required to be

recorded as a component of additional paid-in capital at the time of issuance.

The Company accounts for its common stock warrants as equity-classified instruments based on an assessment of the warrants’ specific terms and

applicable authoritative guidance under ASC 480 and ASC 815.

The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC 480, whether the warrants meet the definition of a liability pursuant to ASC 480,

and whether the warrants meet all of the requirements for equity classification under ASC 815, including whether the warrants are indexed to the Company’s own common stock and whether the warrant holders could potentially require “net cash

settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification.

For issued warrants that meet all of the criteria for equity classification, the warrants are required to be recorded as a

component of additional paid-in capital at the time of issuance.

Revenue Recognition

The Company’s policy is to recognize revenue when a customer obtains control of the

promised goods under ASC 606, Revenue from Contracts with Customers.

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods, and the Company has elected to

exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price.

The Company does not have multiple performance obligations in its customer orders, so revenue is recognized upon shipment of the Company’s

goods based upon contractually stated pricing at standard payment terms ranging from 30 to 60 days.

The Company’s policy is to recognize revenue when a customer obtains control of the promised goods

under ASC 606, Revenue from Contracts with Customers .

The amount of revenue recognized reflects the consideration to which the Company expects to be entitled to receive in exchange for these goods, and the

Company has elected to exclude amounts collected from customers for all sales (and other similar) taxes from the transaction price.

Revenue is recognized upon shipment of the Company’s goods based upon contractually stated pricing at standard

payment terms ranging from 30 to 60

All revenue is recognized point in time and no revenue is recognized over time.

There was no revenue recognized during the years ended December 31, 2023 and 2022 from performance obligations satisfied or partially satisfied in prior periods.

Additionally, there were no unsatisfied performance obligations as of December 31, 2023 and 2022.

The majority of products sold directly to U.S customers are shipped via common

carrier, and the customer pays for shipping and handling and assumes control Free on Board (FOB) shipping point.

There was no revenue recognized during the

years ended December 31, 2024 and 2023 from performance obligations satisfied or partially satisfied in prior periods.

Additionally, there were no

unsatisfied performance obligations as of December 31, 2024 and 2023.

The majority of products sold directly to U.S.

customers are shipped via common carrier, and the

customer pays for shipping and handling and assumes control Free on Board (FOB) shipping point.

Products shipped to the Company’s international distributors are in accordance with their respective agreements;

however, the shipping

terms are generally EX-Works, reflecting that control is assumed by the distributor at the shipping point.

however, the shipping terms are

generally EX-Works, reflecting that control is assumed by the distributor at the shipping point.

Returns are only accepted with prior authorization from the Company.

Items to be returned must be in original unopened cartons and are

subject to a 30 % restocking fee.

Items to be returned must be in original unopened cartons and are subject to a 30 % restocking fee.

As of December 31, 2024, the Company has not had a history of significant returns.

The following table summarizes the Company’s sale primarily from

FemVue, by geographic region for the years ending December 31:

The following table summarizes the Company’s sales by geographic region for the years ending December

Primary geographical markets

International

License, Manufacturing, and Supply Agreement – Bayer Yakuhin

The Company entered into a FemVue License, Manufacturing, and Supply Agreement with Bayer Yakuhin, Ltd., a wholly owned subsidiary of

Bayer AG, in 2012.

The Company sells products based on purchase orders provided by Bayer Yakuhin in accordance with their agreement.

Control and risk of ownership transfer at the time of shipment and Femasys records revenue at that time.

License, Manufacturing, and Supply Agreements

The Company entered into a FemVue License, Manufacturing, and Supply Agreement with Bayer Yakuhin, Ltd., a wholly owned subsidiary of Bayer AG, in 2012.

The Company sells products

based on purchase orders provided by Bayer Yakuhin in accordance with their agreement.

Control and risk of ownership transfer at the time of shipment and the Company records revenue at that time.

The Company entered in distributor agreements with Comercial Medico Quirurigca, SA (“Comercial”) and Durgalab in September 2024.

The Company sells products based on purchase orders

provided by Comercial and Durgalab in accordance with their agreements.

Control and risk of ownership transfer at the time of shipment and the Company records revenue at that time.

Concentration of Credit Risk

Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of cash, cash equivalents, and accounts receivable.

As of December 31, 2022, the Company maintained substantially all its cash and cash equivalents primarily in one bank, Silicon Valley Bank (SVB), in amounts which, at times, exceed federally insured limits, which Management believed, at that

time, SVB was financially sound and minimal credit risk existed with respect to these holdings.

As of March 15, 2023, the Company transferred substantially all of its cash and cash equivalents to another financial institution, Wells Fargo Bank.

The Company generates revenue from sales directly to U.S.

customers and to the Company’s international distributors with all prices in U.S.

the year ended December 31, 2022, Bayer Yakuhin, Ltd.

accounted for 10 % of total revenue.

No other customers accounted for more than 10% of total revenue for the year

ended December 31, 2023.

As of December 31, 2023 and 2022, the Company had two customers and one customer, respectively, with accounts receivable balances greater than 10% of total receivables.

The balances for these customers were 19 % and 11 % as of December 31, 2023

and 10 % as of December 31, 2022 .

customers and to

the Company’s international distributors with all prices in U.S.

For the year ended December 31, 2024, two customers

accounted for more than 10% of total revenue.

The revenues were 15 % and 12 % of total revenues, respectively.

As of December 31, 2024, three

customers had accounts receivable balances greater than 10% of total receivables.

The accounts receivable balances were 23 %, 21 % and 12 %, respectively.

year ended December 31, 2023, no customers accounted for more than 10% of total revenue, and the Company had two customers with accounts receivable balances greater than 10% of total receivables.

The balances for these customers were 19 % and 11 %.

Research and Development

The Company’s research and development expenses consist of engineering, product

development, and clinical and regulatory expenses and are expensed as incurred.

The Company’s research and development expenses consist of engineering, product development, clinical,

quality assurance and regulatory expenses and are expensed as incurred.

These expenses include direct expenses related to employee compensation, including salary, benefits and stock-based compensation;

expenses related to consulting fees,

testing fees, materials, and supplies;

expenses related to consulting fees, testing

fees, materials, and supplies;

and activities conducted by third-party service providers, which include the conducting of preclinical studies and clinical trials.

Sales and Marketing

The Company’s sales and marketing

expenses consist of direct expenses related to employee compensation, including salary, benefits and stock-based compensation, advertising and marketing, business development, customer service and travel.

The Company’s sales and marketing expenses consist of

direct expenses related to employee compensation, including salary, benefits and stock-based compensation, advertising and marketing, business development and travel.

General and Administrative

The Company’s general and administrative expenses include accounting, human

resources, and general corporate expenses.

The Company’s general and administrative expenses include accounting, human resources, and general

corporate expenses.

These expenses are primarily related to employee compensation, including salary, benefits, and stock‑based compensation.

General corporate expenses generally relate to office rent, utilities, insurance,

legal, and professional fees.

General corporate expenses generally relate to office rent, utilities, insurance, legal, and professional

Advertising Expense

4 unchanged sentences

Stock-Based Compensation

Share‑based payments, including grants of stock options, are recognized in the

financial statements based on their fair value.

The fair value of stock options is estimated using the Black‑Scholes model.

This model requires the input of highly subjective assumptions, including the expected term of the award, expected stock

volatility, and the price of the underlying shares of stock.

The Company recognizes all employee and nonemployee stock-based

compensation as a cost in the financial statements.

Equity-classified awards are measured at the grant-date fair value of the award.

The Company estimates grant-date fair value using the Black-Scholes option pricing model and records forfeitures

as they are incurred.

Details of the stock‑based compensation and accounting treatment are discussed in Note 10.

The Company utilizes the asset‑and‑liability method of accounting for income taxes

as set forth in ASC 740, Income Taxes .

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and

the amounts used for income tax purposes, as well as the net operating loss, capital loss, and tax credit carry forwards.

The Company utilizes the asset‑and‑liability method of accounting for income taxes as set forth in ASC

740, Income Taxes .

Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for

income tax purposes, as well as the net operating loss, capital loss, and tax credit carry forwards.

Valuation allowances are established against deferred tax assets if it is more likely than not that they will not be realized.

ASC 740 prescribes a recognition threshold and measurement attribute for the

financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return.

The standard requires that the Company recognize in its financial statements the impact of a tax position if that position is more

likely than not of being sustained on audit, based on the technical merits of the position.

The Company has determined it had no

unrecognized tax benefits as of December 31, 2023 and 2022.

As of December 31, 2023, the 2020 through 2023 tax years remain subject to

examination by federal and most state tax authorities.

ASC 740 prescribes a recognition threshold and measurement attribute for the financial statement

recognition and measurement of a tax position taken or expected to be taken in a tax return.

The standard requires that the Company recognize in its financial statements the impact of a tax position if that position is more likely than not of being

sustained on audit, based on the technical merits of the position.

The Company has determined it had no unrecognized tax benefits as

of December 31, 2024 and 2023.

As of December 31, 2024, the 2021 through 2024 tax years remain subject to examination by federal and

most state tax authorities.

The use of net operating losses generated in tax years prior to 2021 may also subject returns for those years to examination.

For the years ended December 31, 2023 and 2022, the Company recorded no other income.

Net Loss per Share Attributable to Common Stockholders

Basic net loss per share attributable to common stockholders is calculated by

dividing the net loss attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of common stock equivalents.

The net loss attributable to common stockholders

is calculated by adjusting the net loss of the Company for the cumulative dividends, if any, on the convertible preferred stock.

Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to

common stockholders since the effect of potentially dilutive securities is anti-dilutive given the net loss of the Company.

Basic net loss per share attributable to common stockholders is calculated by dividing the net loss

attributable to common stockholders by the weighted average number of shares of common stock outstanding during the period, without consideration of common stock equivalents.

The net loss attributable to common stockholders is calculated by

adjusting the net loss of the Company for the cumulative dividends, if any.

Diluted net loss per share attributable to common stockholders is the same as basic net loss per share attributable to common stockholders since the effect of potentially

dilutive securities is anti-dilutive given the net loss of the Company.

Recently Issued Accounting Pronouncements – Recently Adopted

In June 2016, the FASB issued ASU 2016-13, Financial Instruments – Credit Losses:

Measurement of Credit Losses on Financial Instruments , which requires a financial asset (or a group of financial assets) measured at amortized cost to be presented at the net amount expected to be collected.

The ASU is intended to improve financial reporting by

requiring earlier recognition of credit losses on certain financial assets including trade and financing receivables.

The ASU replaces the current incurred loss impairment model that recognizes losses when a probable threshold is met with a

requirement to recognize lifetime expected credit losses immediately when a financial asset is originated or purchased.

Additionally, from 2016 through 2023, the FASB issued additional related ASUs that provide further guidance and clarification

and become effective for the Company upon the adoption of ASU 2016-13.

The Company adopted ASU 2016-13 and its related ASUs (collectively referred to as Topic 326) effective January 1, 2023 using a modified retrospective transition approach.

result, the Company was not required to adjust its comparative period financial information for effects of the standard or make the new required credit loss allowance disclosures for periods before the date of adoption.

Prior period amounts

continue to be presented in accordance with previously applicable GAAP.

The Company’s adoption of this new guidance did not have a material impact on the Company’s financial statements and

footnote disclosures.

In August 2020, the FASB issued ASU 2020-06, Debt—Debt

with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40):

Accounting for

Convertible Instruments and Contracts in an Entity’s Own Equity .

ASU 2020-06 reduces the number of accounting models for convertible instruments and allows more contracts to qualify for equity classification.

ASU 2020-06 is effective for

the Company’s annual reporting periods beginning after December 15, 2023.

Adoption is either with a modified retrospective method or a fully retrospective method of transition.

Early adoption is permitted, but no earlier than annual periods

beginning after December 15, 2020.

The Company adopted the standard on January 1, 2023 with a fully retrospective transition approach.

Recently Issued Accounting Pronouncements – Not Yet Adopted

In November 2023, the FASB issued ASU No.

1 unchanged sentence

Improvements to Reportable Segment Disclosures .

The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses.

The ASU improves financial reporting by

requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses.

The amendments in this update are effective for fiscal years

beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

The ASU improves reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment

The ASU improves financial reporting by requiring disclosure of incremental segment information on an annual and interim basis for all public entities to enable investors to develop more decision-useful financial analyses.

amendments in this update are effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024.

Early adoption is permitted.

Management is currently assessing the impact of this standard on the Company’s financial statements and

will adopt the ASU on January 1, 2024.

Management adopted the ASU on January 1, 2024 (see

Note 14 for disclosure information).

Recently Issued Accounting Pronouncements – Not Yet Adopted

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures .

The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income taxes paid disaggregated by

jurisdiction.

The ASU requires the annual financial statements to include consistent categories and greater disaggregation of information in the rate reconciliation, and income

taxes paid disaggregated by jurisdiction.

ASU 2023-09 is effective for the Company’s annual reporting periods beginning after December 15, 2024.

Adoption is either with a prospective method or a fully retrospective method of transition.

Early adoption is permitted.

Company is currently evaluating the effect that adoption of ASU 2023-09 will have on its financial statements and expects to adopt the ASU on January 1, 2025.

No other new accounting pronouncements not yet effective are expected to have a material impact on the Company’s financial

adoption is permitted.

The Company is currently evaluating the effect that adoption of ASU 2023-09 will have on its financial statements and expects to adopt the ASU on January 1, 2025.

No other new accounting pronouncements not yet effective are expected to have a material impact on the Company’s financial statements.

The Company applies a fair value hierarchy that requires the use of observable

market data, when available, and prioritizes the inputs to valuation techniques used to measure fair value in the following categories:

Level 1 – Valuation is based upon quoted

prices for identical instruments traded in active markets.

Level 2 – Valuation is based upon quoted

prices for similar instruments in active markets, quoted prices for Identical or similar instruments in markets that are not active, and model‑based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from

model‑based techniques that use significant assumptions not observable in the market.

– Valuation is based upon quoted prices for identical instruments traded in active markets.

Level 2 – Valuation is based upon quoted prices for similar instruments in active

markets, quoted prices for identical or similar instruments in markets that are not active, and model‑based valuation techniques for which all significant assumptions are observable in the market.

Level 3 – Valuation is generated from model‑based techniques that use significant

assumptions not observable in the market.

These unobservable assumptions reflect the Company’s own estimates of assumptions market participants would use in pricing the asset or liability.

The Company’s options on common stock and warrants are classified as equity

instruments and are measured at fair value at issue date.

The Company values the options based on the Black‑Scholes option pricing model.

The Company uses unobservable inputs for the model’s assumptions, including management’s assumptions of the

Company’s volatility and price of the underlying stock.

The Company’s convertible notes are measured at fair value at each reporting period.

See Notes 7, 9 and 10 for additional information.

Cash and Cash Equivalents

3 unchanged sentences

Operating Leases

As of December 31, 2023, the Company has the right of use for

its facilities located in Suwanee, GA under a long-term operating lease agreement, as amended (Lease Agreement), which expires April 2029 .

The Company has the option (Extension Option) to extend the term for one consecutive term of five years each at the greater of the then current prevailing rental rate or current base rent rate, as agreed by both parties, and upon certain terms and conditions.

As of December 31, 2024, the Company has the right of use for its facilities

located in Suwanee, GA under a long-term operating lease agreement, as amended (Lease Agreement), which expires in April 2029 .

Company has the option (Extension Option) to extend the term for one consecutive term of five years each at the greater of the then current prevailing rental rate or current base rent rate, as agreed by both parties, and upon certain terms and conditions.

Company must provide written notice of its intent to exercise this extension option at between nine and 12 months prior to the expiration date of April 2029 .

6 unchanged sentences

Lease liabilities – long-term portion

As of December 31, 2023 and 2022, the weighted average discount rate for all operating leases with initial terms of more than one year was approximately 10 % and the weighted average remaining term for operating leases was 5.3 years and 1.1 years, respectively.

The operating lease agreement for the Company’s

facility includes non-lease costs, such as common area maintenance, which are recorded as variable lease costs.

Operating lease expenses are included in general and administrative expenses in the Company’s statements of comprehensive loss and are summarized as follows for the years ending December 31:

As of December 31, 2024 and 2023, the weighted average

discount rate for all operating leases with initial terms of more than one year was approximately 10 % and the weighted average

remaining term for operating leases was 4.3 years and 5.3 years, respectively.

The operating lease agreement for the Company’s facility includes non-lease

costs, such as common area maintenance, which are recorded as variable lease costs.

Operating lease expenses are included in general and administrative expenses in the Company’s statements of comprehensive loss and are summarized as follows for the years

ending December 31:

Operating lease cost

1 unchanged sentence

Variable lease cost

The following table summarizes the Company’s undiscounted

cash payment obligations for its operating lease liabilities with initial terms of more than twelve months as of December 31, 2023:

The following table summarizes the Company’s undiscounted cash payment

obligations for its operating lease liabilities with initial terms of more than twelve months as of December 31, 2024:

Operating leases:

4 unchanged sentences

Lease liability, less current portion

Financing Leases

As of December 31, 2022, the Company had the right of use for certain leasehold improvements and office equipment at its facility located in Suwanee, GA.

Lease expense was

recognized as payment of financing lease, depreciation expense and interest expense.

The financing leases ended during 2023 .

Financing right-of-use assets and lease liabilities consist of

the following as of December 31, 2022:

Lease right-of-use assets

Accumulated depreciation

Lease liabilities:

Lease liabilities – current portion

Lease liabilities – long-term portion

As of December 31, 2022, the weighted average discount rate for

all financing leases with initial terms of more than one year was approximately 10 %, and the weighted average remaining term for

financing leases was 0.7 years.

During 2023, the finance leases reached the end of their lease terms.

Depreciation expense associated

with the Company’s financing leases was $ 11,796 and $ 18,283 for the years ended December 31, 2023 and 2022, respectively.

Interest expense associated with the financing leases was $ 599 and $ 2,892 for the years ended December 31, 2023 and 2022, respectively.

Clinical Trial Agreements (CTAs)

As part of the regulatory approval process for taking its products to market or conducting post-market clinical studies to support marketing efforts for products

with regulatory clearance, the Company enters into a CTA to compensate each participating medical institution and physician.

Generally, upon executing a CTA with a participating medical institution or physician, the Company pays a fee for review

board approval that usually requires annual renewals and one time site startup costs.

As individual patients are enrolled in the clinical trial by the participating medical institution or physician, the Company pays certain per patient fees

according to the CTA for the duration of the trial.

Expenses incurred in connection with these CTA activities are expensed as services are provided and are included in research and development expenses on the accompanying statements of

comprehensive loss.

Occasionally, the Company may be a party to legal claims or proceedings of which the outcomes are subject to significant uncertainty.

As part of the regulatory approval process for taking

its products to market or conducting post-market clinical studies to support marketing efforts for products with regulatory clearance, the Company enters into a CTA to compensate each participating medical institution and investigator.

upon executing a CTA with a participating medical institution or investigator, the Company pays a fee for institutional review board (IRB) approval that usually requires annual renewals and one-time site startup costs.

As individual participants

are enrolled in the clinical trial by the participating medical institution or investigator, the Company pays certain per subject fees according to the CTA for the duration of the trial.

Expenses incurred in connection with these CTA activities

are expensed as services are provided and are included in research and development expenses on the accompanying statements of comprehensive loss.

Occasionally, the Company may be a party to legal

claims or proceedings of which the outcomes are subject to significant uncertainty.

In accordance with ASC 450, Contingencies , the Company will assess the likelihood of an adverse judgment for any outstanding claim as well as ranges of probable losses.

When it has been determined that a

loss is probable and the amount can be reasonably estimated, the Company will record a liability.

When it has been determined that a loss is probable and the amount can be reasonably estimated, the Company

will record a liability.

For the years ended December 31, 2024 and 2023, there were no material legal contingencies requiring accrual or disclosure.

The Company, as permitted under Delaware law and in accordance

with its bylaws, indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director who is or was serving at the Company’s request in such capacity.

The Company entered into employment

agreements with its officers, which provides for indemnification protection in the executive’s capacity as an officer for actions taken within the scope of employment.

The Company, as permitted under Delaware law and in accordance with its bylaws,

indemnifies its officers and directors for certain events or occurrences, subject to certain limits, while the officer or director who is or was serving at the Company’s request in such capacity.

The Company entered into employment agreements with

its officers, which provides for indemnification protection in the executive’s capacity as an officer for actions taken within the scope of employment.

The maximum amount of potential future indemnification is unlimited;

the Company has obtained director and officer insurance that limits its exposure.

however, the Company has

obtained director and officer insurance that limits its exposure.

The Company believes the fair value for these indemnification obligations is minimal.

Accordingly, the Company has not recognized any liabilities relating to these

obligations as of December 31, 2023 and 2022.

Accordingly, the Company has not recognized any liabilities relating to these obligations as of

December 31, 2024 and 2023.

Notes Payable

AFCO Credit Corporation (AFCO)

In June 2022, the Company executed a Promissory Note with AFCO

to finance certain insurance premiums totaling $ 465,380 , requiring the Company to pay $ 47,539 in a down payment and make monthly installment payments.

The annual interest rate was 5.7 % and the monthly installment payment was $ 47,539 , which represents principal and interest.

In June 2022, the Company executed a Promissory Note with AFCO to finance certain

insurance premiums totaling $ 465,380 , requiring the Company to pay $ 47,539 in a down payment and make monthly installment payments.

The annual interest rate was 5.7 %

and the monthly installment payment was $ 47,539 ,

which represents principal and interest.

The final installment payment was paid in March of 2023 .

In July 2023, the Company executed another Promissory Note with

AFCO to finance certain insurance premiums totaling $ 469,042 , requiring the Company to pay $ 48,423 in a down payment and make monthly installment payments.

In July 2023, the Company executed another Promissory Note with AFCO to finance

certain insurance premiums totaling $ 469,042 , requiring the Company to pay $ 48,423 in a down payment and make monthly installment payments.

The annual interest rate was 8.6 % and the monthly installment payment was $ 48,423 , which represents principal and interest.

The Promissory Note was paid in full without penalty during November 2023 .

As of December 31, 2023 and December 31, 2022, the principal

balance on the AFCO note was $ 0 and $ 141,298 ,

respectively and is included in Note payable in the accompanying balance sheets.

Interest expense in connection with the AFCO Promissory Notes was $ 12,304

and $ 10,572 for the years ended December 31, 2023 and 2022, respectively.

The Promissory Note was paid in full without penalty in November 2023 .

As of December 31, 2024 and December 31, 2023, the principal balance on the AFCO

note was $ 0 .

Interest expense in connection with the AFCO Promissory Note was $ 12,304 for the year ended December 31, 2023.

Convertible Notes with Warrants (November 2023 Financing)

4 unchanged sentences

The financing resulted in aggregate gross proceeds of $ 6,850,000 , before $ 525,144 of transaction

The Company intends to use the net proceeds from the offering for general corporate purposes.

The Notes accrue interest at a rate of 6.0 % per annum, payable annually, in cash or shares of common stock at the Company’s option, and mature on November 21, 2025 , unless earlier converted or redeemed.

In November 2024, the Company paid $ 111,000

of accrued interest in cash and $ 300,000 accrued interest in common stock of 315,790 shares.

The Notes are convertible into shares of common stock at the election of the holder

8 unchanged sentences

The conversion feature did not meet the requirements for separate accounting and is not accounted for as a derivative instrument.

As of December 31, 2024, the Convertible Notes have not been

converted into shares of common stock.

The Series A Warrants are exercisable immediately and expire five years from the date of issuance.

2 unchanged sentences

per day during the same period and certain equity conditions are satisfied.

The Series B Warrants are exercisable immediately, together with the Series A Warrant

Shares, and expire one year from the date of issuance.

The Company has the right to call the exercise of the Series B Warrants if the

closing price of the common stock exceeds 200 % of the Series B exercise price for 10 consecutive trading days and the daily dollar trading volume of the common stock exceeds $ 1,000,000

per day during the same period and certain equity conditions are satisfied.

There is no established public trading market for the warrants and the Company does not intend to list the Warrants on any national securities exchange or nationally

recognized trading system.

The Series B Warrants were exercisable immediately, together with the Series A

Warrant Shares, and expired one year from the date of issuance.

The Company had the right to call the exercise of the Series B Warrants if

the closing price of the common stock exceeded 200 % of the Series B exercise price for 10 consecutive trading days and the daily dollar trading volume of the common stock exceeded $ 1,000,000 per day during the same period, and certain equity conditions were satisfied.

There is no established public trading market for the warrants and the Company does not intend to list

the Warrants on any national securities exchange or nationally recognized trading system.

The Series B Warrants expired in November 2024 .

The Series A Warrants and Series B Warrants are classified as a component of

13 unchanged sentences

and is recorded as a component of stockholders’ equity, and a total debt discount of $ 2,744,309 .

The convertible notes are recorded as a

long-term liability, net of discount and issuance costs.

For the convertible notes for the year ended December 31, 2023, the Company

recognized total interest expense of $ 152,488 , including coupon interest expense of $ 44,525 amortization of debt discount and issuance costs of $ 107,963 .

For the year ended December 31, 2024, the Company recognized total interest expense on the convertible notes of $ 1,603,575 , including coupon interest expense of $ 411,001

amortization of debt discount and issuance costs of $ 1,192,574 .

The effective interest rate for the discount amortization was 32.3 %.

The Notes and accrued interest, net of unamortized discount

costs was $ 4,258,179 as of December 31, 2023.

The fair value of the convertible notes at December 31, 2023, calculated using a discounted

cash flow analysis, was $ 6,126,151 .

There were no convertible notes as of December 31,2022.

The Notes and accrued interest, net of unamortized discount costs was $ 5,406,228 and $ 4,258,179 as of December 31, 2024 and 2023,

respectively.

The fair value of the convertible notes at December 31, 2024 and 2023, calculated using a discounted cash flow analysis using Level 3 inputs, was $ 6,493,720 and $ 6,126,151 , respectively.

Stated Interest Rate

1 unchanged sentence

Accrued and unpaid interest

Less unamortized discount and debt

issuance costs

Less unamortized discount and debt issuance costs

Total Convertible Notes Payable

Future principal payments under the Notes if the conversion feature is not exercised,

net of unamortized debt discounts, are as follows:

Subtotal of future principal payments

Accrued and unpaid interest

Less unamortized discount and debt issuance costs

net of unamortized debt discounts, are $ 6,850,000 payable in November 2025.

The current tax provisions and deferred tax provisions, as

reflected in the financial statements is as follows as of December 31:

reflected in the financial statements are as follows as of December 31:

Current federal taxes

19 unchanged sentences

Net operating loss carry forwards

Accrued expenses (vacation)

Accrued expenses (compensation)

Property and equipment

28 unchanged sentences

Company’s current tax obligations.

As of December 31, 2023 and 2022,

respectively, the Company has $ 90,380,015 and $ 82,500,567 of federal net operating loss carry forwards and $ 3,231,910 and $ 2,838,559 of federal research and experimentation tax credits, respectively, and state net operating loss carry forwards of $ 12,425,590 and $ 9,522,312 , respectively.

The utilization of such net operating loss carryforwards and the realization of tax benefits in future years depend predominately upon having taxable income.

Under the provisions of the Internal Revenue Code, certain substantial changes in the

Company’s ownership may result in a limitation on the amount of net operating loss carry forwards and tax credit carry forwards that may be used in future years.

As of December 31, 2024 and 2023 , respectively, the

Company has $ 104,880,492 and $ 90,380,015

of federal net operating loss carry forwards and $ 3,723,817 and $ 3,231,910 of federal research and experimentation tax credits, respectively, and state net operating loss carry forwards of $ 17,675,024 and $ 12,425,590 , respectively.

The utilization of such

net operating loss carryforwards and the realization of tax benefits in future years depend predominately upon having taxable income.

Under the provisions of the Internal Revenue Code, certain substantial changes in the Company’s ownership may

result in a limitation on the amount of net operating loss carry forwards and tax credit carry forwards that may be used in future years.

The Company’s net operating losses may be

5 unchanged sentences

limitations that Section 382 will have on the Company’s net operating loss carryforwards and research credits.

In general, the annual use limitation equals the aggregate value of the Company’s stock at the time of the ownership change multiplied

by a specified tax-exempt interest rate.

In general, the annual use limitation equals the aggregate value of the Company’s stock at the time of the ownership change multiplied by

a specified tax-exempt interest rate.

The following schedule indicates the expiration year, as of December 31, for the Company’s federal net

8 unchanged sentences

Stockholders’ Equity

The Company’s Board of Directors approved in January 2017 the

Tenth Amended and Restated Certificate of Incorporation authorizing the Company to issue for all classes of stock 169,000,000 shares at $ 0.001 par value per share, of which 95,853,558

The Company’s Board of Directors approved in January 2017 the Tenth Amended and

Restated Certificate of Incorporation authorizing the Company to issue for all classes of stock 169,000,000 shares at $ 0.001 par value per share, of which 95,853,558

shares were designated common stock and 73,146,442 shares were designated Preferred Stock.

1 unchanged sentence

Net proceeds to the Company, after deducting underwriting discounts, commissions, and legal expenses, was $ 31,613,500 .

Offering costs incurred by the company were $ 2,016,143 ,

which include legal expenses incurred and paid by the underwriters of $ 425,000 .

Immediately prior to the closing of the IPO, all of the

convertible Series A preferred stock and redeemable convertible Series B and Series C preferred stock automatically converted into 8,116,343

shares of common stock.

The Company filed an Eleventh Amended and Restated Certificate of

Incorporation (the “Amended and Restated Certificate”) with the Secretary of State of the State of Delaware in connection with the completion of the IPO on June 22, 2021.

The Amended and Restated Certificate amends and restates the Company’s existing

certificate of incorporation in its entirety to, among other things:

Offering costs incurred by the Company were $ 2,016,143 , which include

legal expenses incurred and paid by the underwriters of $ 425,000 .

Immediately prior to the closing of the IPO, all of the convertible

Series A preferred stock and redeemable convertible Series B and Series C preferred stock automatically converted into 8,116,343 shares of

common stock.

The Company filed an Eleventh Amended and Restated Certificate of Incorporation (the

“Amended and Restated Certificate”) with the Secretary of State of the State of Delaware in connection with the completion of the IPO on June 22, 2021.

The Amended and Restated Certificate amends and restates the Company’s existing certificate of

incorporation in its entirety to, among other things:

(i) authorize 200,000,000 shares of common stock;

(ii) eliminate all

references to the previously-existing series of preferred stock (Series A, B and C);

and (iii) authorize 10,000,000 shares of undesignated

preferred stock that may be issued from time to time by the Board in one or more series.

On July 1, 2022, we filed a prospectus including an offering to sell up to $ 150 million in common and preferred stock, debt securities and warrants.

Additionally, we entered into an Equity Distribution Agreement (the “Equity

Distribution Agreement”) with Piper Sandler & Co.

(“Piper Sandler” or the “Sales Agent”) and filed a related prospectus establishing an “at-the-market” facility, pursuant to which we may offer and sell shares of our common stock from time to

time through the Sales Agent.

In October 2023, the Sales Agent was authorized to sell shares for aggregate proceeds up to $ 16.7 million

at current market prices until all shares are sold.

As of December 31, 2023, 3.3 million shares of common stock have been sold for

aggregate proceeds of $ 7.7 million under the Equity Distribution Agreement pursuant to the prospectus.

(ii) eliminate all references to

the previously-existing series of preferred stock (Series A, B and C);

and (iii) authorize 10,000,000 shares of undesignated preferred

stock that may be issued from time to time by the Board in one or more series.

On July 1, 2022, we filed a shelf registration statement to sell up to $ 150 million in common and preferred stock, debt securities and warrants.

Additionally, we entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”)

with Piper Sandler & Co.

In October 2023, the Sales Agent was authorized to sell shares for aggregate proceeds up to $ 16.7 million at current market prices

until all shares are sold.

During the year ended December

31, 2024, we sold approximately 1.3 million shares of common stock for aggregate proceeds of $ 2 million, and as of December 31, 2024, approximately $ 7.0

million remains available for sale pursuant to the prospectus.

As of December 31, 2024, the amount we are authorized to sell is subject to baby-shelf limitations.

The Company may only offer one-third of the public float during and trailing

twelve-month period.

Based on our public float, as of the date of the filing of this Annual Report on Form 10-K, we are only permitted to utilize a shelf registration statement, including the registration statement under which our at the market

offering is operated, subject to Instruction I.B.6 to Form S-3, which is referred to as the “baby shelf” rule.

For so long as our public float is less than $75.0 million, we may not sell more than the equivalent of one-third of our public float

during any 12 consecutive months pursuant to the baby shelf rules .

In April 2023, the Company sold an aggregate of (i) 1,318,000 shares of common stock and (ii) pre-funded warrants to purchase up to 1,878,722

6 unchanged sentences

offering were $ 3,899,813 , less placement agent fees and offering expenses of $ 547,764 .

The Company intends to use the net proceeds from the offering for general corporate purposes.

The holders of the common stock shall have the exclusive right to

vote for the election of directors and on all other matters requiring stockholder action, each outstanding share entitling the holder thereof to one

The holders of the common stock shall have the exclusive right to vote for the

election of directors and on all other matters requiring stockholder action, each outstanding share entitling the holder thereof to one

vote on each matter properly submitted to the stockholders of the Company for their vote;

3 unchanged sentences

designations of any series of preferred stock).

Dividends may be declared and paid or set apart for payment upon

the common stock out of any assets or funds of the Company legally available for the payment of dividends, but only when and as declared by the Board of Directors or any authorized committee thereof.

In the event of our liquidation or dissolution, the holders of

common stock are entitled to receive proportionately the Company’s net assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.

of common stock have no preemptive, subscription, redemption, or conversion rights.

Dividends may be declared and paid or set apart for payment upon the common stock

out of any assets or funds of the Company legally available for the payment of dividends, but only when and as declared by the Board of Directors or any authorized committee thereof.

In the event of our liquidation or dissolution, the holders of common stock are

entitled to receive proportionately the Company’s net assets available for distribution to stockholders after the payment of all debts and other liabilities and subject to the prior rights of any outstanding preferred stock.

Holders of common stock

have no preemptive, subscription, redemption, or conversion rights.

Convertible Preferred Stock

As of December 31, 2023, no shares of convertible preferred stock have been issued and/or outstanding, and no dividends have been declared or paid since inception.

As of December 31, 2024, no shares of convertible preferred stock have been issued and/or outstanding, and no

dividends have been declared or paid since inception.

Redeemable Convertible Preferred Stock

As of December 31, 2023, no shares of redeemable convertible preferred stock have been issued and/or outstanding, and no dividends have been declared or paid since inception.

As of December 31, 2024, no shares of redeemable convertible preferred stock have been issued and/or outstanding, and no

dividends have been declared or paid since inception.

Preferred Stock

Under the terms of the Amended and Restated Certificate, the

Company’s Board of Directors is authorized to direct the Company to issue shares of preferred stock in one or more series without stockholder approval.

The Board of Directors has the discretion to determine the rights, preferences, privileges and

restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing the Board of Directors to issue

preferred stock and determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances.

The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future

financings, and other corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from seeking to acquire, a majority of the outstanding voting stock.

As of December 31, 2023

and 2022, no shares of preferred stock are outstanding.

Under the terms of the Amended and Restated Certificate, the Company’s Board of

Directors is authorized to direct the Company to issue shares of preferred stock in one or more series without stockholder approval.

The Board of Directors has the discretion to determine the rights, preferences, privileges and restrictions,

including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock.

The purpose of authorizing the Board of Directors to issue preferred stock and

determine its rights and preferences is to eliminate delays associated with a stockholder vote on specific issuances.

The issuance of preferred stock, while providing flexibility in connection with possible acquisitions, future financings, and other

corporate purposes, could have the effect of making it more difficult for a third-party to acquire, or could discourage a third-party from seeking to acquire, a majority of the outstanding voting stock.

As of December 31, 2024 and 2023, no shares of preferred stock are outstanding.

April 2023 Financing

On April 20, 2023, the Company entered into a securities

purchase agreement pursuant to which the Company sold (i) 1,318,000 shares of common stock, (ii) pre-funded warrants to purchase 1,878,722 shares of common stock, (iii) common warrants to purchase 3,196,722 shares of common stock.

Additionally, common warrants to purchase 191,803

shares of common stock were issued to the placement agent compensation for services performed.

The pre-funded warrants, common warrants and placement agent

warrants were exercisable immediately following the closing date of the offering.

The pre-funded warrants have an unlimited term and an exercise price of $ 0.0001 per share.

The common warrants have a 5.5 year term and an exercise

price of $ 1.095 per share.

The placement agent warrants have a 5 year term and exercise price of $ 1.525 per share.

The offering resulted in

aggregate gross proceeds of $ 3,899,813 , before $ 547,764 of transaction costs.

The pre-funded warrants and common warrants are freestanding

financial instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and

permit the holders to receive a fixed number of shares of common stock upon exercise.

On April 20, 2023, the Company entered into a securities purchase agreement

pursuant to which the Company sold (i) 1,318,000 shares of common stock, (ii) pre-funded warrants to purchase 1,878,722 shares of common stock, (iii) common warrants to purchase 3,196,722 shares of common stock.

Additionally, common warrants to purchase 191,803 shares of common

stock were issued to the placement agent as compensation for services performed.

The pre-funded warrants, common warrants and placement agent warrants were

exercisable immediately following the closing date of the offering.

The pre-funded warrants have an unlimited term and an exercise price of $ 0.0001

The common warrants have a 5.5 -year term and an exercise price of $ 1.095 per share.

The placement agent warrants have a 5-year

term and exercise price of $ 1.525 per share.

The offering resulted in aggregate gross proceeds of $ 3,899,813 , before $ 547,764 of

transaction costs.

The pre-funded warrants and common warrants are freestanding financial

instruments that are legally detachable and separately exercisable from the shares of common stock with which they were issued, are immediately exercisable, do not embody an obligation for the Company to repurchase its shares, and permit the

holders to receive a fixed number of shares of common stock upon exercise.

The common stock was valued at $ 1,133,480 , based on the Company’s stock price.

14 unchanged sentences

placement agent warrants were exercised for cash proceeds of $ 3,687,976 .

As of December 31, 2023, 68,809 placement agent warrants remain outstanding.

As of December 31, 2023, the Company has warrants outstanding to purchase

shares of common stock, which are all exercisable in whole or in part, with expiration dates as follows:

As of December 31, 2024 and 2023, 68,809 placement agent warrants remain outstanding.

As of December 31, 2024, the Company has warrants outstanding to purchase shares of common stock, which

are all exercisable in whole or in part, with expiration dates as follows:

Expiration date

2 unchanged sentences

November 2028

In May 2022, a warrant to purchase 11,112 shares of common stock expired.

I n March, April and November 2024, warrants to purchase shares of common stock for 31,882 , 4,762 and 5,805,083 expired, respectively .

As of December 31, 2024, no dividends have been declared or paid since inception.

13 unchanged sentences

Stock Option Plans – Post the IPO

In June 2021, in connection with the IPO, the 2021 Equity Incentive Plan (2021 Plan) became effective, which was adopted by the Board

of Directors in February 2021 and the stockholders approved the 2021 Plan in March 2021.

In June 2021, in connection with the IPO, the 2021 Equity Incentive Plan (2021 Plan) became effective, which was adopted by the Board of Directors in February 2021 and the

stockholders approved the 2021 Plan in March 2021.

The 2021 Plan is administered by our compensation committee.

Under the 2021 Plan, the Company may grant awards in respect of

shares of common stock to employees, consultants, and non-employee directors pursuant to option awards, stock appreciation right, or SAR, awards, restricted stock awards, restricted stock unit, or RSU, awards, performance stock awards, performance

stock unit, or PSU, awards, and other stock-based awards.

The total number of shares of common stock available for awards

under the 2021 Plan is 1,111,111 , provided that such number shall be automatically increased on each January 1, beginning on January 1,

2022, by 4 % of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares

as determined by the Board of Directors.

The aggregate number of shares of our common stock that will be available for issuance under awards granted pursuant to the 2021 Plan shall also be increased by the number of shares underlying the portion

of an award granted under the 2015 Plan that is cancelled, terminated or forfeited or lapses after the effective date of the 2021 Plan.

Under the 2021 Plan, the Company may grant awards in respect of shares of common

stock to employees, consultants, and non-employee directors pursuant to option awards, stock appreciation right, or SAR, awards, restricted stock awards, restricted stock unit, or RSU, awards, performance stock awards, performance stock unit, or

PSU, awards, and other stock-based awards.

The total number of shares of common stock available for awards under the 2021

Plan is 1,111,111 , provided that such number shall be automatically increased on each January 1, beginning on January 1, 2022, by 4 % of the outstanding number of shares of common stock on the immediately preceding December 31 or such lesser number of shares as determined by the

Board of Directors.

under the 2015 Plan that is cancelled, terminated or forfeited or lapses after the effective date of the 2021 Plan.

No more than 1,111,111

9 unchanged sentences

year of such non-employee director’s service as a non-employee director.

Options granted under the 2021 Plan may be either ISOs or

nonqualified stock options.

The price at which shares of common stock may be purchased upon exercise shall be determined by the compensation committee but shall not be less than the fair market value of one share of common stock on the date of

grant, or, in the case of an ISO granted to a ten-percent stockholder, less than 110 % of the fair market value of a share of common stock on the date of grant.

Options granted under the 2021 Plan may be either ISOs or nonqualified stock

of an ISO granted to a ten-percent stockholder, less than 110 % of the fair market value of a share of common stock on the date of grant.

The compensation committee may grant options that have a term of up to 10 years, or, in the case of an ISO granted to a ten-percent

3 unchanged sentences

Unless otherwise provided in an award agreement or an effective employment, consulting, severance or similar agreement with us or a subsidiary, upon a participant’s

termination of service for any reason, the unvested portion of each award of options granted generally will be forfeited with no compensation due the participant.

Activity under the stock option plans was as follows:

termination of service for any reason, the unvested portion of each award of options granted generally will be forfeited with no compensation due to the participant.

Activity under the stock option plans was as

Intrinsic Value

Outstanding at December 31, 2022

2 unchanged sentences

Vested and exercisable at December 31, 2024

options granted under the 2021 Plan for the years ended December 31 2023 and 2022 were as follows:

The Black-Scholes weighted average assumptions for all stock

option awards granted during 2023 and 2022 were as follows:

The intrinsic value represents the amount by which the

market price of the underlying stock at December 31, 2024 exceeds the exercise price of an option.

Stock options granted under the 2021 Plan for the years ended December 31

2024 and 2023 were as follows:

The Black-Scholes weighted average

assumptions for all stock option awards granted during 2024 and 2023 were as follows:

Fair Value of Awards

3 unchanged sentences

Expected volatility

The intrinsic value of options exercised during the year ended

December 31, 2022 was $ 3,306 .

The intrinsic values represent the dollar value of the exercised stock options whereby the fair market

value of the underlying common stock exceeded the exercise price of the stock option as of the exercise date.

There were no options exercised during 2023.

The options outstanding and vested and currently

exercisable by exercise prices as of December 31, 2023 were as follows:

The intrinsic values represent the dollar value of the exercised stock options

whereby the fair market value of the underlying common stock exceeded the exercise price of the stock option as of the exercise date.

There were no options exercised

during 2023 and 2024 .

The options outstanding and vested and currently exercisable by exercise

prices as of December 31, 2024 were as follows:

Options outstanding

Options vested and exercisable

December 31, 2023, the total number of shares of common stock reserved for future awards under the 2021 Plan is 629,555 .

As of December 31, 2024, the total

number of shares of common stock reserved for future awards under the 2021 Plan is 623,661 .

Inducement Grants

For the year ended December 31, 2022, the Company awarded,

outside the 2021 Plan, two stock option grants for the right to purchase a total of 150,000 shares of common stock (inducement grants), which were approved by the Compensation Committee.

The weighted average exercise price was $ 2.42 .

The inducement grants will vest in equal installments over four years provided the employee remains employed by the Company on the vesting date.

As of December 31, 2023, awards to purchase 150,000 options are outstanding, 37,500 are exercisable, and the weighted

average remaining life is 8.4 years.

There were no

inducement grants awarded in 2023.

The Company uses the Black‑Scholes option pricing model to

determine the fair value of stock awards granted to employees and non-employees.

The determination of the fair value of share‑based payment awards granted using a pricing model is affected by the Company’s stock price as well as the assumptions

regarding a number of complex and subjective variables as follows:

For the year ended December 31, 2022, the Company awarded, outside the 2021 Plan,

two stock option grants for the right to purchase a total of 150,000 shares of common stock (inducement grants).

For the year ended December 31, 2024, the Company awarded, outside the 2021 Plan, one stock option inducement grant for the right to purchase a total of 100,000

shares of common stock.

The grants were approved by the Compensation Committee, and vest in equal installments over four years

provided the employee remains employed by the Company on the vesting date .

The inducement grants are summarized as follows:

Outstanding at December 31, 2023

Outstanding at December 31, 2024

Vested and exercisable at December 31, 2024

The Company uses the Black‑Scholes option pricing model to determine the fair

value of stock awards granted to employees and non-employees.

The determination of the fair value of share‑based payment awards granted using a pricing model is affected by the Company’s stock price as well as the assumptions regarding a number of

complex and subjective variables as follows:

Expected Term

The expected term of stock options represents the period the

stock options are expected to remain outstanding.

The expected term of stock options represents the period where the stock options

are expected to remain outstanding.

The Company’s historical share option exercise experience does not provide a reasonable basis upon which to estimate an expected term because of a lack of sufficient data.

Therefore, the Company

estimates the expected term for all options granted by using the simplified method provided by the ASC 718, which calculates the expected term as the average of the time-to-vesting and the contractual life of the options.

The contractual term for

options awarded since inception is 10 years for employees and non-employees.

Therefore, the Company estimates the

expected term for all options granted by using the simplified method provided by the ASC 718, which calculates the expected term as the average of the time-to-vesting and the contractual life of the options.

The contractual term for options awarded

since inception is 10 years for employees and non-employees.

Risk‑Free Interest Rate

The risk‑free interest rate is based on U.S.

zero‑coupon issues with remaining terms similar to the expected term on the options.

Treasury zero‑coupon issues with

remaining terms similar to the expected term on the options.

Dividend Yield

The Company has not declared or paid any cash dividends from

inception through December 31, 2023 and does not plan to pay any cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model.

The Company has not declared or paid any cash dividends from inception through

December 31, 2024 and does not plan to pay any cash dividends in the foreseeable future, and, therefore, used an expected dividend yield of zero in the valuation model.

Expected Volatility

Expected volatility measures the amount that a stock price

has fluctuated or is expected to fluctuate during a period.

Expected volatility measures the amount that a stock price has fluctuated or is

expected to fluctuate during a period.

The Company determines volatility based on an analysis of comparable companies.

1 unchanged sentence

Employee Stock Purchase Plan (ESPP)

In June 2021, in connection with the IPO, the ESPP became

effective upon adoption by the Board of Directors in February 2021 and the stockholders approved the 2021 ESPP Plan in March 2021.

In June 2021, in connection with the IPO,

the ESPP became effective upon adoption by the Board of Directors in February 2021 and the stockholders approved the 2021 ESPP Plan in March 2021.

The ESPP is administered by the compensation committee.

The total number of shares of common stock available for

purchase under the ESPP is 166,666 , provided that such number is automatically increased on January 1 of each calendar year, from

January 1, 2022 through January 1, 2031 by the least of (i) 1.0 % of the total number of shares of common stock outstanding on December

31 of the immediately preceding calendar year, (ii) 222,222 shares of common stock or (iii) a number determined by the board of

The total number of shares of common stock

available for purchase under the ESPP is 166,666 , provided that such number is automatically increased on January 1 of each calendar

year, from January 1, 2022 through January 1, 2031 by the least of (i) 1.0 % of the total number of shares of common stock outstanding on

December 31 of the immediately preceding calendar year, (ii) 222,222 shares of common stock or (iii) a number determined by the board of

directors that is less than the foregoing clauses (i) and (ii).

Under the ESPP, the Company may specify offerings with

durations of not more than 27 months and may specify shorter purchase periods within each offering.

Each offering will have one or more purchase dates on which shares of common stock will be purchased for employees participating in the offering.

An offering may be terminated

under certain circumstances.

No employee may purchase more than 12,254 shares of common stock under the ESPP during any offering period.

Under the ESPP, the Company may specify

offerings with durations of not more than 27 months and may specify shorter purchase periods within each offering.

Each offering will

have one or more purchase dates on which shares of common stock will be purchased for employees participating in the offering.

offering may be terminated under certain circumstances.

No employee may purchase more than 12,254 shares of common stock under the ESPP

during any offering period.

Unless otherwise determined by the board of directors, shares of common stock will be purchased for accounts of employees participating in the ESPP at a price per share equal to the lower of (i) 85 % of the fair market value of a share of common stock on the last date of an offering period or (ii) 85 % of the fair market value of a share of common stock on the first day of such offering period.

2 unchanged sentences

Stock‑Based Compensation Expense

Stock‑based compensation expense

recognized is based on the value of the portion of stock option awards that is ultimately expected to vest on a straight-line basis.

Stock‑based compensation expense recognized in the Company’s statements of comprehensive loss during the years

ended December 31, 2023, and 2022 includes compensation expense for stock‑based awards based on the fair value estimated in accordance with the provisions of ASC 718.

The following table shows the stock-based compensation expense related to vested stock option grants to employees and non-employees awarded

under the stock plans and inducement grants by financial statement line item on the accompanying statements of comprehensive loss:

Stock‑based compensation

expense recognized is based on the value of the portion of stock option awards that is ultimately expected to vest on a straight-line basis.

Stock‑based compensation expense recognized in the Company’s statements of comprehensive loss during the

years ended December 31, 2024, and 2023 includes compensation expense for stock‑based awards based on the fair value estimated in accordance with the provisions of ASC 718.

The following table shows the stock-based compensation expense related to vested stock option grants to employees and non-employees awarded under the stock plans and inducement grants by

financial statement line item on the accompanying statements of comprehensive loss:

Research and development

2 unchanged sentences

Total share-based compensation expense

As of December 31, 2023, the remaining amount of stock‑based

compensation expense that is expected to be recognized in future periods for employees and non-employees is $ 849,834 which includes $ 155,222 of compensation expense to be recognized upon achieving a certain performance condition.

As of December 31, 2024, the remaining amount

of stock‑based compensation expense that is expected to be recognized in future periods for employees and non-employees is $ 1,311,784

which includes $ 155,222 of compensation expense to be recognized upon achieving a certain performance condition.

The $ 1,156,562 of unrecognized expense is expected to be recognized over a weighted average period of 2.8 years.

1 unchanged sentence

The Company has a 401(k) defined contribution

plan covering substantially all full‑time employees, meeting certain eligibility requirements.

plan covering substantially all employees, meeting certain eligibility requirements.

The Company has no required matching or other contribution requirements.

For the year end December 31, 2023 and 2022, the company contributed $ 75,202 and $ 73,947 of voluntary employer

For the years ended December 31, 2024 and 2023, the Company contributed $ 97,876 and $ 75,202 of voluntary employer

matching contributions.

5 unchanged sentences

The interim CEO, President and Director of PharmaCyte Biotech, Inc., Joshua Silverman, serves on the Company’s board of directors.

During 2023, a family member of the CEO

earned total cash compensation of $ 138,000 .

During the year ended December 31, 2022,

there were no related-party transactions.

The Series B Warrants expired

in November 2024 .

In November 2024 the Company paid PharmaCyte accrued interest on the convertible note of $ 300,000 in equity of 315,790 common

During the years ended December 31, 2024 and

2023, a family member of the CEO earned total cash compensation of $ 168,000 and $ 138,000 , respectively.

Net Loss per Share Attributable to Common Stockholders

11 unchanged sentences

Total potential shares

Segment Reporting

In accordance with FASB ASC Topic 280, Segment Reporting , the Company has determined that

it operates as a single business segment, which is the development and commercialization of therapeutic and diagnostic products that

service women’s reproductive health needs (infertility and permanent birth control).

The determination of a single

business segment is consistent with the financial information regularly provided to the Company’s chief operating decision maker (“CODM”).

reportable segment entity, the Company’s segment performance measure is net loss attributable to shareholders.

The measurement of segment assets is reported on the balance sheet as total assets.

The Company’s CODM is its Chief Executive Officer and

Chief Financial Officer, who together review and evaluate net income for purposes of assessing performance, making operating decisions, allocating resources, and planning and forecasting for

future periods.

Significant segment expenses, as

provided to the CODM are as follows:

Cost of sales (excluding depreciation expense)

Research and development expense

Other research and development expenses 1

Total research and development expense

Sales and marketing expense

General and administrative expense

Depreciation and amortization expense

Total Operating expenses

Total other (expense) income

Loss before income taxes

Income tax expense

Other research and development expenses include clinical affairs, regulatory, manufacturing and quality assurance expenses.

Subsequent Events

In March 2024, the Company sold 441,966 shares under the at-the-market facility, resulting in gross cash proceeds of $ 778,175 .

From January through the date the financial statements are issued, the Company sold 3,722,012 shares under the at-the-market facility, resulting in gross cash proceeds of approximately $ 5.4 million.

In February 2025, $ 85,000 of Convertible Notes were converted into 72,033 shares of common stock.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

1 unchanged sentence

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk