FEMASYS INC 10-K

Item 7A. Quantitative and Qualitative Disclosures About Market Risk. Emerging Growth Company Status We are an emerging growth company, as defined in the JOBS Act. Under the JOBS Act, emerging growth companies can delay adopting new or revised accounting standards issued subsequent to the enactment of the JOBS Act until such time as those standards apply to private companies. We have elected not to take advantage of such extended transition period, which means that we will adopt a new standard when a standard is issued or revised. 84 Table of Contents Item 8. Financial Statements. Financial Statements Table of Contents Page Report of Independent Registered Public Accounting Firm ( KPMG LLP , PCAOB 185 ) 86 Balance Sheets at December 31, 2024 and 2023 87-88 Statements of Comprehensive Loss for the Years Ended December 31, 2024 and 2023 89 Statements of Stockholders’ Equity for the Years Ended December 31, 2024 and 2023 90 Statements of Cash Flows for the Years Ended December 31, 2024 and 2023 91 Notes to Financial Statements 92-115 85 Table of Contents KPMG LLP Suite 2000 303 Peachtree Street, N.E. Atlanta, GA 30308-3210 Report of Independent Registered Public Accounting Firm To the Stockholders and Board of Directors Femasys Inc.: Opinion on the Financial Statements We have audited the accompanying balance sheets of Femasys Inc. (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 These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. We have served as the Company’s auditor since 2016 . Atlanta, Georgia March 27, 2025 86 Table of Contents FEMASYS INC. Balance Sheets Assets December 31, 2024 December 31, 2023 Current assets: Cash and cash equivalents $ 3,451,761 21,716,077 Accounts receivable, net 488,373 98,906 Inventory 3,046,323 667,118 Prepaid and other current assets 1,035,993 695,879 Total current assets 8,022,450 23,177,980 Property and equipment, at cost: Leasehold improvements 1,238,886 1,212,417 Office equipment 60,921 47,308 Furniture and fixtures 417,876 414,303 Machinery and equipment 2,856,740 2,559,356 Construction in progress 762,445 423,077 5,336,868 4,656,461 Less accumulated depreciation ( 3,740,769 ) ( 3,545,422 ) Net property and equipment 1,596,099 1,111,039 Long-term assets: Lease right-of-use assets, net 1,805,543 2,380,225 Intangible assets, net of accumulated amortization 65,918 — Other long-term assets 954,992 1,086,581 Total long-term assets 2,826,453 3,466,806 Total assets $ 12,445,002 27,755,825 ( continued ) 87 Table of Contents FEMASYS INC. Balance Sheets Liabilities and Stockholders’ Equity December 31, 2024 December 31, 2023 Current liabilities: Accounts payable $ 1,419,044 1,137,823 Accrued expenses 1,151,049 1,444,296 Convertible notes payable, net (including related parties) 5,406,228 — Clinical holdback – current portion 88,581 65,300 Operating lease liabilities – current portion 517,967 406,636 Total current liabilities 8,582,869 3,054,055 Long-term liabilities: Clinical holdback – long-term portion 39,611 54,935 Convertible notes payable, net (including related parties) — 4,258,179 Operating lease liabilities – long-term portion 1,518,100 2,036,067 Total long-term liabilities 1,557,711 6,349,181 Total liabilities 10,140,580 9,403,236 Commitments and contingencies Stockholders’ equity: Common stock, $ 0.001 par, 200,000,000 authorized, 23,473,149 shares issued and 23,355,926 outstanding as of December 31, 2024 ; and 21,774,604 shares issued and 21,657,381 outstanding as of December 31, 2023 23,473 21,775 Treasury stock, 117,223 common shares ( 60,000 ) ( 60,000 ) Warrants 1,860,008 2,787,137 Additional paid-in-capital 127,679,198 123,985,306 Accumulated deficit ( 127,198,257 ) ( 108,381,629 ) Total stockholders’ equity 2,304,422 18,352,589 Total liabilities and stockholders’ equity $ 12,445,002 27,755,825 See accompanying notes to financial statements. 88 Table of Contents FEMASYS INC. Statements of Comprehensive Loss Years ended December 31, 2024 and 2023 December 31, 2024 December 31, 2023 Sales $ 1,629,108 1,071,970 Cost of sales (excluding depreciation expense) 544,903 380,069 Operating expenses: Research and development 8,216,543 7,208,701 Sales and marketing 4,030,150 650,126 General and administrative 6,325,999 6,858,008 Depreciation and amortization 297,318 483,481 Total operating expenses 18,870,010 15,200,316 Loss from operations ( 17,785,805 ) ( 14,508,415 ) Other (expense) income: Interest income 582,354 431,019 Interest expense ( 1,603,575 ) ( 165,390 ) Total other (expense) income ( 1,021,221 ) 265,629 Loss before income taxes ( 18,807,026 ) ( 14,242,786 ) Income tax expense 9,602 4,338 Net loss $ ( 18,816,628 ) ( 14,247,124 ) Net loss attributable to common stockholders, basic and diluted $ ( 18,816,628 ) ( 14,247,124 ) Net loss per share attributable to common stockholders, basic and diluted $ ( 0.85 ) ( 0.93 ) Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted 22,267,695 15,384,376 See accompanying notes to financial statements. 89 Table of Contents FEMASYS INC. Statements of Stockholders’ Equity Accumulated other Total Common stock Treasury common stock Preferred stock Additional comprehensive Accumulated stockholders’ Shares Amount Shares Amount Shares Amount Warrants paid-in capital loss, net of tax deficit equity Balance at December 31, 2022 11,869,704 11,987 117,223 ( 60,000 ) — — 567,972 108,857,065 — ( 94,134,505 ) 15,242,519 Issuance of common stock and warrants in connection with April 2023 Financing, net of offering costs 1,318,000 1,318 — — — — 2,526,664 818,014 — — 3,345,996 Issuance of common stock in connection with at-the-market offering, net of issuance costs 3,259,623 3,260 — — — — — 7,419,954 — — 7,423,214 Issuance of warrants in connection with convertible notes, including related parties — — — — — — 2,219,165 — — — 2,219,165 Issuance of common stock in connection with Employee Stock Purchase Plan 11,616 12 — — — — — 4,943 — — 4,955 Exercise of pre-funded warrants 1,878,722 1,879 — — — — ( 1,176,533 ) 1,174,842 — — 188 Exercise of common warrants 3,319,716 3,319 — — — — ( 1,350,131 ) 5,034,788 — — 3,687,976 Share-based compensation expense — — — — — — — 675,700 — — 675,700 Net loss — — — — — — — — — ( 14,247,124 ) ( 14,247,124 ) Balance at December 31, 2023 21,657,381 21,775 117,223 ( 60,000 ) — — 2,787,137 123,985,306 — ( 108,381,629 ) 18,352,589 Issuance of common stock in connection with at-the-market offering, net of issuance costs 1,314,593 1,314 — — — — — 1,959,894 — — 1,961,208 Issuance of common shares in payment of convertible note interest, including related parties 315,790 316 — — — — — 299,684 — — 300,000 Issuance of common stock in connection with Employee Stock Purchase Plan 68,162 68 — — — — — 63,038 — — 63,106 Share-based compensation expense — — — — — — — 444,147 — — 444,147 Expiration of warrant — — — — — — ( 927,129 ) 927,129 — — — Net loss — — — — — — — — — ( 18,816,628 ) ( 18,816,628 ) Balance at December 31, 2024 23,355,926 $ 23,473 117,223 $ ( 60,000 ) — $ — $ 1,860,008 $ 127,679,198 $ — $ ( 127,198,257 ) $ 2,304,422 See accompanying notes to financial statements. 90 Table of Contents FEMASYS INC. Statements of Cash Flows Years ended December 31, 2024 and 2023 Years ended December 31 2024 2023 Cash flows from operating activities: Net loss $ ( 18,816,628 ) ( 14,247,124 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation 277,178 480,187 Amortization 20,140 3,294 Amortization of right-of-use assets 574,682 424,504 Accounts receivable reserve 8,000 — Loss on fixed asset dispositions 676 47,538 Share-based compensation expense 444,147 675,700 Amortization of debt issuance costs and discount 1,192,574 107,963 Changes in operating assets and liabilities: Accounts receivable ( 397,467 ) ( 21,436 ) Inventory ( 2,379,205 ) ( 230,395 ) Prepaid and other assets ( 139,136 ) 282,169 Accounts payable 207,481 627,065 Accrued expenses 6,753 987,582 Lease liabilities ( 406,636 ) ( 440,489 ) Other liabilities ( 36,568 ) 22,896 Net cash used in operating activities ( 19,444,009 ) ( 11,280,546 ) Cash flows from investing activities: Acquisition of patents ( 86,058 ) — Purchases of property and equipment ( 761,706 ) ( 143,917 ) Net cash used in investing activities ( 847,764 ) ( 143,917 ) Cash flows from financing activities: Proceeds from the issuance of common stock and warrants in April 2023 Financing — 3,899,813 Equity issuance costs for April 2023 Financing — ( 547,764 ) Proceeds from convertible notes, including related parties — 6,850,000 Issuance costs for convertible notes, including related parties — ( 525,144 ) Proceeds from exercise of pre-funded warrants — 188 Proceeds from exercise of common warrants — 3,687,976 Proceeds from common stock issued through ESPP 63,106 4,955 Proceeds from at-the-market sales of common stock 2,025,104 7,665,066 Issuance costs for at-the-market sales of common stock ( 60,753 ) ( 229,953 ) Repayment of note payable — ( 610,340 ) Payments under lease obligations — ( 16,193 ) Net cash provided by financing activities 2,027,457 20,178,604 Net change in cash and cash equivalents ( 18,264,316 ) 8,754,141 Cash and cash equivalents: Beginning of period 21,716,077 12,961,936 End of period $ 3,451,761 21,716,077 Supplemental cash flow information Cash paid for: Interest $ 111,000 9,903 Income taxes $ 5,708 4,550 Non-cash investing and financing activities: Right-of-use asset obtained in exchange for a lease liability $ — 2,496,968 Property and equipment costs included in accounts payable $ 73,740 — Fair value of warrants issued in connection with convertible notes $ — 2,219,165 Payment of convertible note interest in common stock $ 300,000 — Deferred offering costs reclassified to additional paid-in-capital $ 3,143 17,952 See accompanying notes to financial statements. 91 Table of Contents (1) Organization, Nature of Business, and Liquidity Organization and Nature of Business Femasys Inc. (the Company or Femasys) was incorporated in Delaware on February 19, 2004 and is headquartered in Suwanee, Georgia. 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 safety. 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. approval. 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 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). Liquidity 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 impacted. 92 Table of Contents 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 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. (2) Summary of Significant Accounting Policies (a) 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 . Actual results could differ from those estimates. (b) 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 Israel. 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. 93 Table of Contents 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 underestimates its requirements, it may not have an adequate supply, which could interrupt the manufacturing of its products. (c) Fair Value of Financial Instruments 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. (d) Cash and Cash Equivalents The Company considers all highly liquid investments with an initial maturity of three months or less when purchased to be cash equivalents. Cash equivalents consist of amounts invested in money market mutual funds and are stated at fair valu e. See Note 2( s ) for information on concentration of credit risk. (e) 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. 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. As of December 31, 2024 and 2023, the Company’s reserves for uncollectible accounts were $ 10,000 and $ 2,000 , respectively. Trade 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 flows. (f) Inventories Inventories are stated at the lower of cost or net realizable value. 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. Inventory stated at cost, consisted of the following as of December 31: 2024 2023 Materials $ 1,308,863 367,934 Work in progress 982,630 128,993 Finished goods 754,830 170,191 Inventory $ 3,046,323 667,118 (g) Other Assets 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: 2024 2023 Prepaid and other current assets $ 315,897 224,000 Other long-term assets 714,912 704,234 Research tax credits available to the Company $ 1,030,809 928,234 94 Table of Contents (h) 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. Gains and losses on the retirement or disposal of individual assets are included in the results of operations. Depreciation and amortization are computed using the straight‑line method over estimated useful lives of assets as follows: Leasehold improvements Shorter of lease term(s) or useful life Office equipment 5 years Furniture and fixtures 7 years Machinery and equipment 5 to 7 years Depreciation expense for the years ended 2024 and 2023 was $ 277,178 and $ 468,391 , respectively. In 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. (i) 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. 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. (j) Leases 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-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. 95 Table of Contents (k) 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. 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. Intangible assets consist of the following as of December 31: 2024 2023 Cost $ 1,755,009 1,668,951 Accumulated amortization ( 1,689,091 ) ( 1,668,951 ) Net book value $ 65,918 — Amortization expense for intangible assets for the years ended December 31, 2024 and 2023 was $ 20,140 and $ 3,294 , respectively. (l) Deferred Offering 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. These 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, 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. (m) 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. As actual costs become known, the Company adjusts its accrual. Other accrued expenses include director fees, taxes and other miscellaneous accrued expenses. Accrued expenses consisted of the following as of December 31: 2024 2023 Incentive and other compensation costs $ 650,768 1,082,606 Clinical trial costs 354,762 276,141 Director fees 70,000 60,210 Franchise taxes — 12,160 Other 75,519 13,179 Accrued expenses $ 1,151,049 1,444,296 (n) 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 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. 96 Table of Contents The following table shows the activity within the clinical holdback liability accounts for the year ended December 31, 2024: Balance at December 31, 2023 $ 120,235 Clinical holdback retained 19,452 Clinical holdback paid ( 11,495 ) Balance at December 31, 2024 $ 128,192 Less: clinical holdback - current portion ( 88,581 ) Clinical holdback - long-term portion $ 39,611 The following table shows the activity within the clinical holdback liability accounts for the year ended December 31, 2023: Balance at December 31, 2022 $ 141,864 Clinical holdback retained 5,900 Clinical holdback paid ( 27,529 ) Balance at December 31, 2023 $ 120,235 Less: clinical holdback - current portion ( 65,300 ) Clinical holdback - long-term portion $ 54,935 (o) 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 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 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 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 be recognized immediately as interest expense in the statements of comprehensive loss. See Note 7 for additional information on the November 2023 Financing. 97 Table of Contents (p) Common Stock Warrants 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. (q) 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. 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. 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, 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. 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. As of December 31, 2024, the Company has not had a history of significant returns. The following table summarizes the Company’s sales by geographic region for the years ending December 31: Primary geographical markets 2024 2023 U.S. $ 1,073,508 1,013,925 International 555,600 58,045 Total $ 1,629,108 1,071,970 (r) 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. (s) Concentration of Credit Risk The Company generates revenue from sales directly to U.S. customers and to the Company’s international distributors with all prices in U.S. dollars. 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. For the 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 %. 98 Table of Contents (t) Research and Development 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; and activities conducted by third-party service providers, which include the conducting of preclinical studies and clinical trials. (u) 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 and travel. (v) General and Administrative 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. (w) Advertising Expense Advertising costs are expensed as incurred. Advertising costs were $ 360,958 and $ 18,738 for the years ended December 31, 2024 and 2023, respectively. They are reflected in sales and marketing expenses in the statements of comprehensive loss. (x) Stock-Based Compensation 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. (y) Income Taxes 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, 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. 99 Table of Contents (z) 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. 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. (aa) Recently Issued Accounting Pronouncements – Recently Adopted In November 2023, the FASB issued ASU No. 2023-07, Segment Reporting (Topic 28): 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. Early adoption is permitted. Management adopted the ASU on January 1, 2024 (see Note 14 for disclosure information). (ab) 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. 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. 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. (3) Fair Value 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. These unobservable assumptions reflect the Company’s own estimates of assumptions market participants would use in pricing the asset or liability. 100 Table of Contents (4) Cash and Cash Equivalents As of December 31, 2024 and 2023, money market funds included in cash and cash equivalents on the balance sheets were $ 3,451,761 and $ 21,278,895 , respectively, which represent Level 1 within the fair value hierarchy (see Note 3). (5) Commitments and Contingencies (a) Operating Leases 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 . 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. The 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 . Under the terms of the lease agreement, the Company’s monthly rent is subject to increases on an annual basis. As of December 31, 2024, the Company’s monthly rent payment was $ 50,590 . Operating right-of-use assets and lease liabilities consist of the following as of December 31: 2024 2023 Lease right-of-use assets $ 1,805,543 2,380,225 Lease liabilities: 2024 2023 Lease liabilities – current portion $ 517,967 406,636 Lease liabilities – long-term portion 1,518,100 2,036,067 Total $ 2,036,067 2,442,703 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: Lease cost: 2024 2023 Operating lease cost $ 619,796 469,995 Short-term lease cost 7,765 6,917 Variable lease cost 148,109 78,367 Total $ 775,670 555,279 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: 2025 $ 629,340 2026 654,514 2027 680,694 2028 707,922 2029 243,835 Total undiscounted lease payments -operating leases 2,916,305 Less: imputed interest ( 880,238 ) Lease liability 2,036,067 Less: current portion of lease liability ( 517,967 ) Lease liability, less current portion $ 1,518,100 101 Table of Contents (b) 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 investigator. Generally, 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. (c) Legal Claims 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. 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 maximum amount of potential future indemnification is unlimited; 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, 2024 and 2023. (6) 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. 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. 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 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. (7) Convertible Notes with Warrants (November 2023 Financing) On November 21, 2023, the Company issued (i) senior unsecured convertible notes in an aggregate principal amount of $ 6,850,000 , convertible into shares of common stock at a conversion price of $ 1.18 per share, (ii) Series A Warrants to purchase up to an aggregate of 5,805,083 shares of common stock at an exercise price of $ 1.18 per share, and (iii) Series B Warrants, together with the Series A Warrants, and, together with the convertible notes, to purchase up to an aggregate of 5,805,083 shares of common stock at an exercise price of $ 1.475 per share. The financing resulted in aggregate gross proceeds of $ 6,850,000 , before $ 525,144 of transaction costs. 102 Table of Contents 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 at any time at an initial conversion price of $ 1.18 . The Company has agreed not to issue or sell any equity securities of the Company at a price below the then-current conversion price for a period of 18 months after closing, subject to certain exceptions. Beginning six months after issuance, the Company may require holders to convert their Notes into conversion shares if the closing price of the common stock exceeds $ 2.36 per share 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 described in the Notes are satisfied. The Notes provide for certain events of default, whereby each holder of Notes will be able to require the Company to redeem in cash any or all of the holder’s Notes at a premium of 115 %. 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 Warrants The Series A Warrants are exercisable immediately and expire five years from the date of issuance. The Company has the right to call the exercise of the Series A Warrants if the closing price of the common stock exceeds 200 % of the Series A 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. 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 permanent equity because they are freestanding financial instruments that are legally detachable and separately exercisable from the shares of common stock from which they are 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. 103 Table of Contents The Series A and Series B Warrants were valued using the relative fair value method and the following Black-Scholes assumptions: Series A Warrants Series B Warrants Expected term (in years) 5 1 Risk‑free interest rate 4.55 % 5.24 % Dividend yield — % — % Expected volatility 104.89 % 113.84 % Exercise price $ 1.18 $ 1.48 Stock price $ 0.95 $ 0.95 Black-Scholes value $ 0.55 $ 0.28 The November 2023 Financing proceeds of $ 6,850,000 net of $ 525,144 in transaction costs were allocated to the convertible notes and Series A and Series B Warrants using the relative fair value method. The valuation of the warrants was $ 2,219,165 and is recorded as a component of stockholders’ equity, and a total debt discount of $ 2,744,309 . 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 $ 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 2024 2023 Convertible Notes 6 % $ 6,850,000 $ 6,850,000 Accrued and unpaid interest — 44,525 Less unamortized discount and debt issuance costs ( 1,443,772 ) ( 2,636,346 ) Total Convertible Notes Payable $ 5,406,228 $ 4,258,179 Future principal payments under the Notes if the conversion feature is not exercised, net of unamortized debt discounts, are $ 6,850,000 payable in November 2025. (8) Income Taxes The current tax provisions and deferred tax provisions, as reflected in the financial statements are as follows as of December 31: 2024 2023 Current federal taxes $ — — Current state taxes 9,602 4,338 Current tax provision 9,602 4,338 Deferred federal taxes ( 4,433,940 ) ( 3,326,982 ) Deferred state taxes ( 342,310 ) ( 70,586 ) Valuation allowance change 4,776,250 3,397,568 Deferred tax provision — — Total income tax expense provision $ 9,602 4,338 104 Table of Contents A reconciliation of income tax expense at the statutory federal income tax rate and income taxes as reflected in the financial statements is as follows as of December 31: 2024 2023 Federal income tax at statutory federal rate 21.00 % 21.00 % Permanent differences — — Research and development credit 3.00 2.00 Other deferred adjustments — — State income tax expense (net of federal benefit) 2.00 1.00 Valuation allowance ( 26.00 ) ( 24.00 ) Effective tax rate — % — % Deferred tax assets (liabilities) consisted of the following as of December 31: 2024 2023 Deferred tax asset arising from: Net operating loss carry forwards $ 23,030,273 19,675,117 Accrued expenses (compensation) 138,806 13,172 Intangibles 93,426 86,603 Property and equipment 80,313 77,447 Research and development expense capitalization 3,326,621 2,613,867 Research and development tax credits 3,839,058 3,390,709 Share-based compensation expense 257,891 176,065 Lease liabilities 471,733 536,430 Other 5,210 1,479 Deferred tax asset 31,243,331 26,570,889 Deferred tax liability arising from: UNICAP ( 11,092 ) ( 10,513 ) Right-of-use assets ( 418,323 ) ( 522,710 ) Property and equipment — — Deferred tax liability ( 429,415 ) ( 533,223 ) Valuation allowance $ 30,813,916 26,037,666 Net deferred tax asset $ — — Deferred income taxes reflect the net tax effects of temporary differences between the carrying amount of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes, and the Company is required to reduce its deferred tax assets by a valuation allowance if it is more likely than not that some or all of its deferred tax assets will not be realized. Management must use judgment in assessing the potential need for a valuation allowance, which requires an evaluation of both negative and positive evidence. The weight given to the potential effect of negative and positive evidence should be commensurate with the extent to which it can be objectively verified. In determining the need for and amount of the valuation allowance, if any, the Company assesses the likelihood that it will be able to recover its deferred tax assets using historical levels of income, estimates of future income and tax planning strategies. As a result of historical cumulative losses, the Company determined that, based on all available evidence, there was substantial uncertainty as to whether it will recover recorded net deferred taxes in future periods. Accordingly, the Company recorded a valuation allowance against all of its net deferred tax assets as of December 31, 2024 and 2023. The change in valuation allowance was $ 4,776,250 and $ 3,397,568 for the years ended December 31, 2024 and 2023, respectively. Beginning on January 1, 2022, the Tax Cuts and Jobs Act, enacted in December 2017, eliminated the option to deduct research and development expenditures in the current period and requires taxpayers to capitalize and amortize U.S.-based and non-U.S. based research and development expenditures over five and fifteen years, respectively. This legislation does not impact the Company’s current tax obligations. 105 Table of Contents 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 subject to Section 382 of the Internal Revenue Code which provide for a limitation on the annual use of net operating losses following certain ownership changes that could limit the Company’s ability to utilize these carryforwards. The Company has completed an analysis covering the period February 19, 2004 through December 31, 2018, to determine if such ownership changes have occurred and concluded it was more likely than not that there were changes in ownership during the period, with the most recent change of ownership occurring on December 16, 2016. Further analyses will be performed prior to recognizing the benefits of any losses or credits in the financial statements, and the Company is in the process of determining the 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. The following schedule indicates the expiration year, as of December 31, for the Company’s federal net operating loss carryforwards available to future years without taking into account any Section 382 limitations as of December 31, 2024: 2025 $ 865,274 2026 1,213,130 2027 2,082,043 2028 2,536,605 2029 2,235,045 2030 4,132,949 2031 3,160,709 2032 3,533,521 2033 2,987,848 2034 2,516,728 2035 4,777,558 2036 4,503,474 2037 6,869,819 Indefinitely 63,465,789 Total $ 104,880,492 The FASB issued authoritative guidance on accounting for uncertainty in income taxes, which clarifies the accounting for income taxes, by prescribing a minimum recognition threshold that a tax position is required to meet before recognition in the financial statements. The guidance also provides direction on recognition, measurement, classification, interest, and penalties, accounting in interim periods, disclosure, and transition. Management has determined there are no uncertain tax positions. Accordingly, these financial statements do not include any adjustments or disclosures related to uncertain tax positions. (9) 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 shares were designated common stock and 73,146,442 shares were designated Preferred Stock. In June 2021, the Company issued 2,650,000 shares of common stock in connection with the Company’s IPO of its common stock at $ 13.00 per share. 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. 106 Table of Contents 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 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. (“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. 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 shares of common stock in a registered direct offering (“pre-funded warrants”) and, in a concurrent private placement, warrants to purchase up to 3,196,722 shares of common stock (“common warrants”). Additionally, common warrants were issued to the placement agent to purchase up to 191,803 shares of common stock as compensation for services (“placement agent warrants”), collectively the (“April 2023 Financing”). The purchase price per share for the common stock, prefunded warrants was $ 1.22 and $ 1.2199 , respectively. The gross proceeds from the offering were $ 3,899,813 , less placement agent fees and offering expenses of $ 547,764 . (a) Common Stock 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; provided, however, that, except as otherwise required by law, holders of common stock, as such, shall not be entitled to vote on any amendment to the Amended and Restated Certificate (or on any amendment to a certificate of designations of any series of preferred stock) that alters or changes the powers, preferences, rights or other terms of one or more outstanding series of preferred stock if the holders of such affected series of preferred stock are entitled to vote, either separately or together with the holders of one or more other such series, on such amendment pursuant to this Amended and Restated Certificate (or pursuant to a certificate of 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. Holders of common stock have no preemptive, subscription, redemption, or conversion rights. 107 Table of Contents (b) Convertible Preferred Stock 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. (c) Redeemable Convertible Preferred Stock 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. (d) 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, 2024 and 2023, no shares of preferred stock are outstanding. (e) 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 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 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. The common stock was valued at $ 1,133,480 , based on the Company’s stock price. The pre-funded warrants and common warrants were valued at $ 1,615,701 and $ 1,854,099 , respectively, using the following Black-Scholes assumptions: Pre-funded warrants Common warrants Expected term (in years) 4 4 Risk‑free interest rate 3.83 % 3.83 % Dividend yield — % — % Expected volatility 100.25 % 100.25 % Exercise price $ 0.0001 $ 1.095 Stock price $ 0.86 $ 0.86 Black-Scholes value $ 0.86 $ 0.58 108 Table of Contents The net proceeds of $ 3,352,049 were allocated to the common stock, pre-funded warrants and common warrants using the relative fair value method and recorded to stockholders’ equity. In June 2023, all pre-funded warrants were exercised for shares of common stock. In September and October 2023, all common warrants and 122,994 placement agent warrants were exercised for cash proceeds of $ 3,687,976 . As of December 31, 2024 and 2023, 68,809 placement agent warrants remain outstanding. (f) Warrants 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: 2024 2023 Number of Number of warrants Exercise warrants Exercise Expiration date outstanding price outstanding price March 2024 — — 31,882 $ 31.50 April 2024 — — 4,762 $ 31.50 November 2024 — — 5,805,083 $ 1.48 April 2025 55,177 $ 7.25 55,177 $ 7.25 December 2026 128,934 $ 9.45 128,934 $ 9.45 January 2027 12,705 $ 9.45 12,705 $ 9.45 April 2028 68,809 $ 1.53 68,809 $ 1.53 November 2028 5,805,083 $ 1.18 5,805,083 $ 1.18 Total 6,070,708 11,912,435 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 . (g) Dividends As of December 31, 2024, no dividends have been declared or paid since inception. (10) Equity Incentive Plans (a) Stock Option Plans – Prior to the IPO Prior to the IPO in June 2021, the Company maintained two equity incentive plans, the 2004 Stock Incentive Plan, as amended, or 2004 Plan, and the 2015 Stock-Based Incentive Compensation Plan, or 2015 Plan, which provided the Company’s employees, non-employee directors, consultants and independent contractors the opportunity to participate in the equity appreciation of the business through the receipt of stock options to purchase shares of common stock. New grants ceased being made under the 2004 Plan upon the adoption of the 2015 Plan; however, outstanding stock options under the 2004 Plan may continue to be exercised in accordance with their terms. The Company adopted the 2015 Plan in April 2015, which contains substantially similar terms and conditions as the 2004 Plan. The 2015 Plan initially had 1,176,681 shares of common stock reserved for issuance under the 2015 Plan and was administered by the compensation committee of the Board of Directors. Upon the closing of the IPO, no further awards will be made under the 2015 Plan; however, outstanding stock options under the 2015 Plan may continue to be exercised in accordance with their terms. (b) 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. The 2021 Plan is administered by our compensation committee. 109 Table of Contents 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. No more than 1,111,111 shares of common stock issued under the 2021 Plan may be issued pursuant to the exercise of incentive stock options (ISO), provided that such number shall be automatically increased on each January 1, beginning on January 1, 2022, by the lesser of 4 % of the outstanding number of shares of common stock on the immediately preceding December 31 or 555,555 shares of common stock. Shares of common stock issued by us in connection with the assumption or substitution of outstanding grants or under certain stockholder approved plans from an acquired company shall not reduce the number of shares of common stock available for awards under the 2021 Plan. Shares of common stock underlying the portion of an award that is forfeited or otherwise terminated for any reason whatsoever, in any case, without the issuance of shares of common stock, will be added back to the number of shares of common stock available for grant under the 2021 Plan. No non-employee director may be granted awards under the 2021 Plan in any one calendar year covering a number of shares of common stock that have a fair market value on the grant date in excess of $ 350,000 in the first calendar year of such non-employee director’s initial service as a non-employee director and $ 200,000 in any other calendar 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. 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 stockholder, five years . The award agreement shall specify the exercise price, term, vesting requirements, including any performance goals, and any other terms and conditions applicable to the granted option. 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 to the participant. 110 Table of Contents Activity under the stock option plans was as follows: Number of options Weighted average exercise price Aggregate Intrinsic Value Outstanding at December 31, 2022 931,550 $ 3.97 Granted 1,301,200 0.59 Forfeited ( 130,720 ) 1.97 Outstanding at December 31, 2023 2,102,030 $ 2.00 Granted 1,359,821 1.07 Forfeited ( 487,632 ) 1.84 Outstanding at December 31, 2024 2,974,219 $ 1.60 847,758 Vested and exercisable at December 31, 2024 1,308,379 $ 2.35 453,514 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: 2024 2023 Employee 1,286,921 1,211,200 Nonemployee 72,900 90,000 Total 1,359,821 1,301,200 The Black-Scholes weighted average assumptions for all stock option awards granted during 2024 and 2023 were as follows: 2024 2023 2021 Plan Inducement Grants 2021 Plan Fair Value of Awards $ 0.91 0.94 0.48 Grant Price $ 1.07 1.1 0.59 Expected term (in years) 6.20 6.25 5.63 Risk‑free interest rate 4.04 % 4.10 % 4.09 % Dividend yield — % — % — % Expected volatility 109.61 % 109.64 % 105.33 % 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 . 111 Table of Contents 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 Weighted Weighted Weighted average Number of average average Exercise Outstanding remaining options Exercise remaining price (in shares) life years vested price life years $ 0.47 - 0.49 1,063,600 8.50 716,950 $ 0.49 8.50 0.50 - 0.80 565,321 9.05 22,867 0.59 8.47 0.81 - 1.33 564,450 9.40 20,325 0.88 8.42 1.34 - 1.74 210,846 2.26 85,335 1.67 2.45 1.75 - 3.14 164,325 7.70 57,225 2.64 7.53 3.15 - 3.60 237,614 2.49 237,614 3.24 2.49 3.61 - 13.00 168,063 5.75 168,063 9.68 5.74 2,974,219 7.65 1,308,379 2.35 6.62 As of December 31, 2024, the total number of shares of common stock reserved for future awards under the 2021 Plan is 623,661 . (c) 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). 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: Weighted Weighted average average Number of exercise remaining options price life years Outstanding at December 31, 2023 150,000 $ 2.42 8.40 Granted 100,000 1.10 9.12 Outstanding at December 31, 2024 250,000 $ 1.89 8.07 Vested and exercisable at December 31, 2024 75,000 $ 2.42 7.36 (d) Valuation 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: (i) Expected Term 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. (ii) Risk‑Free Interest Rate The risk‑free interest rate is based on U.S. Treasury zero‑coupon issues with remaining terms similar to the expected term on the options. 112 Table of Contents (iii) Dividend Yield 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. (iv) Expected Volatility 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. (v) Forfeitures The Company accounts for forfeitures as they occur. (e) 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. 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 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. 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. As of December 31, 2024, 84,621 shares of common stock have been purchased under the ESPP to date, and the total number of shares of common stock reserved for future awards under the ESPP is 535,356 . (f) 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, 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: 2024 2023 Research and development $ 179,911 159,816 Sales and marketing 48,379 ( 948 ) General and administrative 215,857 516,832 Total share-based compensation expense $ 444,147 675,700 113 Table of Contents 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. (11) Retirement Plan The Company has a 401(k) defined contribution plan covering substantially all employees, meeting certain eligibility requirements. The Company has no required matching or other contribution requirements. For the years ended December 31, 2024 and 2023, the Company contributed $ 97,876 and $ 75,202 of voluntary employer matching contributions. (12) Related‑Party Transactions In November 2023, the Company issued unsecured convertible notes and accompanying Series A and Series B Warrants (see Note 7). The transaction included issuance of a $ 5 million convertible note and Series A and Series B Warrants to PharmaCyte Biotech, Inc. The interim CEO, President and Director of PharmaCyte Biotech, Inc., Joshua Silverman, serves on the Company’s board of directors. 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 shares. 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. (13) Net Loss per Share Attributable to Common Stockholders The following table sets forth the computation of the basic and diluted net loss per share for the years ended December 31: 2024 2023 Net loss attributable to common stockholders, basic & diluted $ ( 18,816,628 ) ( 14,247,124 ) Weighted average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted 22,267,695 15,384,376 Net loss per share attributable to common stockholders, basic and diluted $ ( 0.85 ) ( 0.93 ) The following potentially dilutive securities have been excluded from the computations of diluted weighted average shares outstanding because they would be anti-dilutive for the years ended December 31: 2024 2023 Options to purchase common stock 3,224,219 2,252,030 Warrants to purchase common stock, in connection with April 2023 financing 68,809 68,809 Warrants to purchase common stock, in connection with November 2023 financing 5,805,083 11,610,166 Warrants to purchase common stock 196,816 233,460 Total potential shares 9,294,927 14,164,465 (14) 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). 114 Table of Contents The determination of a single business segment is consistent with the financial information regularly provided to the Company’s chief operating decision maker (“CODM”). As a single 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: 2024 2023 Sales $ 1,629,108 1,071,970 Cost of sales (excluding depreciation expense) 544,903 380,069 Research and development expense 2,217,610 2,051,902 Other research and development expenses 1 5,998,933 5,156,799 Total research and development expense 8,216,543 7,208,701 Sales and marketing expense 4,030,150 650,126 General and administrative expense 6,325,999 6,858,008 Depreciation and amortization expense 297,318 483,481 Total Operating expenses 18,870,010 15,200,316 Total other (expense) income ( 1,021,221 ) 265,629 Loss before income taxes ( 18,807,026 ) ( 14,242,786 ) Income tax expense 9,602 4,338 Net loss $ ( 18,816,628 ) ( 14,247,124 ) 1 Other research and development expenses include clinical affairs, regulatory, manufacturing and quality assurance expenses. (15) Subsequent Events 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. 115 Table of Contents Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure. Not applicable.