femasys(FEMY) - 2024 Q4 - Annual Report

Financial Performance - Total assets decreased from $27,755,825 in 2023 to $12,445,002 in 2024, representing a decline of approximately 55.1%[463] - Cash and cash equivalents dropped significantly from $21,716,077 in 2023 to $3,451,761 in 2024, a decrease of about 84.1%[463] - The company reported a net accumulated deficit of $127,198,257 as of December 31, 2024, up from $108,381,629 in 2023, indicating an increase in losses[465] - Sales for the year ended December 31, 2024, reached $1,629,108, an increase of 51.9% compared to $1,071,970 in 2023[467] - Net loss for 2024 was $18,816,628, compared to a net loss of $14,247,124 in 2023, representing a 32.5% increase in losses[467] - Total revenue for the year ended December 31, 2024, was $1,629,108, a significant increase from $1,071,970 in 2023, representing a growth of approximately 52%[509] - U.S. revenue for 2024 was $1,073,508, up from $1,013,925 in 2023, while international revenue surged to $555,600 from $58,045[509] Operating Expenses - Total operating expenses increased to $18,870,010 in 2024, up 24.1% from $15,200,316 in 2023[467] - Research and development expenses rose to $8,216,543 in 2024, up 14.0% from $7,208,701 in 2023[467] - Sales and marketing expenses surged to $4,030,150 in 2024, a significant increase from $650,126 in 2023[467] - Interest expense rose significantly to $(1,603,575) in 2024 from $(165,390) in 2023, indicating a substantial increase in borrowing costs[467] - The company incurred depreciation expenses of $277,178 in 2024, a decrease from $480,187 in 2023[473] - The company’s operating lease cost for the year ending December 31, 2024, was $619,796, an increase from $469,995 in 2023[533] Cash Flow and Liquidity - Net cash used in operating activities for 2024 was $19,444,009, compared to $11,280,546 in 2023, indicating a significant increase in cash outflow[473] - The company has a substantial reliance on the FDA's approval for its FemBloc system, which is currently in late-stage development[18] - The company plans to finance operations through existing cash, additional equity, and anticipated revenue from product sales, primarily focusing on FemaSeed and FemVue[478] - The company faces substantial doubt about its ability to continue as a going concern due to recurring losses and negative cash flows[457] Debt and Financing - The company’s convertible notes mature in November 2025, raising concerns about future funding[457] - The Company recognized total interest expense on the convertible notes of $1,603,575 for the year ended December 31, 2024, including coupon interest expense of $411,001 and amortization of debt discount of $1,192,574[547] - The Company issued senior unsecured convertible notes totaling $6,850,000 on November 21, 2023, convertible at a price of $1.18 per share[540] - The effective interest rate for the discount amortization of the convertible notes was 32.3%[547] - As of December 31, 2024, the fair value of the convertible notes was $6,493,720, calculated using a discounted cash flow analysis[547] Regulatory and Market Position - The company has received global regulatory approvals for its product portfolio, including FemaSeed, FemVue, and FemBloc, with ongoing commercialization efforts[476] - The pivotal clinical trial for FemBloc is currently enrolling participants for U.S. approval, with CE mark certification expected in mid-2025[476] - The company has limited experience in marketing and selling its women-specific medical product solutions[24] - The company plans to rely on distribution partners outside of North America to market its women-specific medical products[22] Stock and Equity - The company sold approximately 1.3 million shares of common stock for aggregate proceeds of $2 million during the year ended December 31, 2024[559] - The company completed an April 2023 financing that resulted in gross proceeds of $3,899,813, after deducting $547,764 in transaction costs[560] - The company is authorized to sell up to $150 million in common and preferred stock, debt securities, and warrants under a shelf registration statement filed in July 2022[559] - As of December 31, 2024, the total stock-based compensation expense recognized was $444,147, a decrease from $675,700 in 2023[598] Tax and Valuation - As of December 31, 2024, the company has federal net operating loss carryforwards of $104,880,492, an increase from $90,380,015 in 2023[553] - The company recorded a valuation allowance change of $4,776,250 for the year ended December 31, 2024, compared to $3,397,568 for 2023[550] - The company has federal research and experimentation tax credits of $3,723,817 as of December 31, 2024, up from $3,231,910 in 2023[553] - The effective tax rate for the company is influenced by a valuation allowance of $(26.00)% in 2024 and $(24.00)% in 2023[550] Employee Compensation and Stock Options - The company contributed $97,876 and $75,202 in voluntary employer matching contributions to its 401(k) plan for the years ended December 31, 2024 and 2023, respectively[600] - As of December 31, 2024, 84,621 shares of common stock have been purchased under the Employee Stock Purchase Plan (ESPP), with 535,356 shares reserved for future awards[596] - The total number of shares of common stock available for awards under the 2021 Equity Incentive Plan is 1,111,111, with automatic increases based on outstanding shares[579] - As of December 31, 2024, the company had 2,974,219 stock options outstanding, with a weighted average exercise price of $1.60[582]