For the transition period

from                  to                 

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☐

If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐

Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐

Item 1.

Business.

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establishment registration and device listing;

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the Quality System Regulation, or QSR, which requires manufacturers, including third-party contract manufacturers, to follow stringent design, testing, control, documentation and other quality assurance procedures during all aspects of the manufacturing process;

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labeling regulations and the FDA prohibitions against the promotion of products for uncleared or unapproved uses (“off-label” uses) and other requirements related to promotional activities, including the advertising of restricted devices;

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medical device reporting regulations, which require that manufacturers report to the FDA if their device may have caused or contributed to a death or serious injury, or if their device malfunctioned and the device or a similar device marketed by the manufacturer would be likely to cause or contribute to a death or serious injury if the malfunction were to recur;

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corrections and removal reporting regulations, which require that manufacturers report to the FDA field corrections or removals if undertaken to reduce a risk to health posed by a device or to remedy a violation of the FDCA that may present a risk to health; and

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post market surveillance regulations, which apply to certain Class II or III devices when necessary to protect the public health or to provide additional safety and efficacy data for the device.

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warning or untitled letters, fines, injunctions, consent decrees and civil penalties; customer notifications, voluntary or mandatory recall or seizure of our products;

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operating restrictions, partial suspension or total shutdown of production;

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delay in processing submissions or applications for new products or modifications to existing products;

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withdrawing PMA approvals that have already been granted; and

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criminal prosecution.

Item 1A.

Risk Factors.

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The initiation, scope, rate of enrollment, progress, success, and cost of our current or future clinical trials;

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The cost of our research and development activities;

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Patient, healthcare practitioner and market acceptance of our intrauterine artificial insemination product and permanent birth control system women-specific medical product solutions;

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The cost of filing and prosecuting patent applications and defending and enforcing our patent or other intellectual property rights;

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The cost of defending, in litigation or otherwise, any claims that we infringe third-party patents or other intellectual property rights;

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The cost and timing of additional regulatory clearances, de novo grants or approvals;

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The cost and timing of establishing additional sales and marketing capabilities;

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Costs associated with any product recall that may occur;

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The effect of competing technological and market developments;

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The extent to which we acquire or invest in products, technologies and businesses, although we currently have no commitments or agreements relating to any of these types of transactions; and

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The costs of operating as a public company.

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We may need to use a substantial portion of our cash flow from operations to pay interest and principal on the convertible notes, which would reduce funds available to us for other purposes such as product development and operations;

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If we do not have sufficient cash to pay the principal on the convertible notes at maturity, we may be unable to refinance such indebtedness on terms favorable to us or at all;

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Our ability to pay interest in shares of our common stock, if so elected by us, and conversion of the convertible notes could result in significant dilution of our common stock, which could result in significant dilution to our existing stockholders and cause the market price of our common stock to decline.

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Patient and healthcare practitioner adoption of our FemBloc system, if approved to market;

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Patient and healthcare practitioner adoption of our FemaSeed product;

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Changes in coverage policies by third-party payors that affect the reimbursement of procedures using our products;

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Unanticipated pricing pressure;

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The hiring, retention and continued productivity of sales representatives;

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Our ability to expand the geographic reach of our sales and marketing efforts;

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Our ability to obtain regulatory clearance or approval for any products in development or for our current products for additional indications or in additional countries outside the United States;

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Results of clinical research and trials on our existing products and products in development;

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Delays in receipt of anticipated purchase orders;

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Delays in, or failure of, component and raw material deliveries by our suppliers; and

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Positive or negative coverage in the media or clinical publications of our products or products of our competitors or our industry.

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We may not be able to demonstrate to the FDA’s satisfaction that our product is safe and effective for its intended use;

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The FDA may disagree that our clinical data supports the label and use that we are seeking;

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The FDA may disagree that the data from our preclinical studies and clinical trials is sufficient to support marketing authorization; and

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The manufacturing process and facilities we use may not meet applicable requirements.

•	We are required to submit an IDE application to the FDA, which must become effective prior to commencing human clinical trials, and the FDA may reject our IDE application and notify us that we may not begin investigational trials;

•	Regulators and other comparable foreign regulatory authorities may disagree as to the design or implementation of our clinical trials;

•	Regulators and/or IRBs or other reviewing bodies may not authorize us or our investigators to commence a clinical trial, or to conduct or continue a clinical trial at a prospective or specific trial site;

•	We may not reach agreement on acceptable terms with prospective contract research organizations, or CROs, and clinical trial sites, the terms of which can be subject to extensive negotiation and may vary significantly among different CROs and trial sites;

•	Clinical trials may produce negative or inconclusive results, or we may not agree with regulatory authorities on the interpretation of our clinical trial results, and we may decide, or regulators may require us, to conduct additional clinical trials or abandon product development programs;

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The number of subjects or patients required for clinical trials may be larger than we anticipate, enrollment in these clinical trials may be insufficient or slower than we anticipate, and the number of clinical trials being conducted at any given time may be high and result in fewer available patients for any given clinical trial, or patients may drop out of these clinical trials at a higher rate than we anticipate;

•	Our third-party contractors, may fail to comply with regulatory requirements or meet their contractual obligations to us in a timely manner, or at all;

•	We might have to suspend or terminate clinical trials for various reasons, including a finding that the subjects are being exposed to unacceptable health risks;

•	We may have to amend clinical trial protocols or conduct additional studies to reflect changes in regulatory requirements or guidance, which we may be required to submit to an IRB and/or regulatory authorities for reexamination;

•	Regulators, IRBs, or other parties may require or recommend that we or our investigators suspend or terminate clinical research for various reasons, including safety signals or noncompliance with regulatory requirements;

•	The cost of clinical trials may be greater than we anticipate;

•	Clinical sites may not adhere to the clinical protocol or may drop out of a clinical trial;

•	We may be unable to recruit a sufficient number of clinical trial sites or trial subjects;

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Regulators, IRBs, or other reviewing bodies may fail to approve or subsequently find fault with our manufacturing processes for clinical and commercial supplies, the supply of devices or other materials necessary to conduct clinical trials may be insufficient, inadequate or not available at an acceptable cost, or we may experience interruptions in supply;

•	Approval policies or regulations of FDA or applicable foreign regulatory authorities may change in a manner rendering our clinical data insufficient for approval; and

•	Our current or future products may have undesirable side effects or other unexpected characteristics.

•	lack of availability of adequate third-party payor coverage or reimbursement;

•	lack of experience with our products and more familiarity with other widely adopted products, procedures or treatments as alternatives;

•	our inability to convince key opinion leaders to provide recommendations regarding our products, or to convince healthcare practitioners, patients and healthcare payors that our products are an attractive alternative to currently accepted alternatives;

•	perceived inadequacy of evidence supporting clinical benefits, safety or cost-effectiveness of our products existing alternatives;

•	liability risks generally associated with the use of new products and procedures; and

•	the training required to use new products.

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greater company, product and brand recognition;

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superior product safety, reliability and durability;

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better quality and larger volume of clinical data;

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more effective marketing to and education of patients and healthcare practitioners;

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more sales force experience and greater market access;

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better product support and service;

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more advanced technological innovation, product enhancements and speed of innovation;

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more effective pricing and revenue strategies;

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lower procedure costs to patients;

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more effective reimbursement teams and strategies;

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dedicated practice development; and

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more effective clinical training teams.

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properly identify and anticipate healthcare practitioner and patient needs;

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develop and introduce new products and product enhancements in a timely manner;

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avoid infringing upon the intellectual property rights of third-parties;

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demonstrate, if required, the safety and effectiveness of new products with data from preclinical studies and clinical trials;

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obtain the necessary regulatory clearances, grants or approvals for expanded indications, new products or product modifications;

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be fully FDA-compliant with marketing of new products or modified products;

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provide adequate training to potential users of our products;

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receive adequate coverage and reimbursement for procedures performed with our products; and

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develop an effective and dedicated sales and marketing team.

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difficulties in securing distribution partnerships and managing our international relationships;

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increased competition as a result of more products and procedures receiving regulatory approval or otherwise free to market in international markets;

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longer accounts receivable payment cycles and difficulties in collecting accounts receivable;

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reduced or varied protection for intellectual property rights in some countries;

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impact of tariffs;

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export restrictions, trade regulations, and foreign tax laws;

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fluctuations in currency exchange rates;

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foreign certification and regulatory clearance or approval requirements;

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customs clearance and shipping delays;

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political, social, and economic instability abroad, terrorist attacks, and security concerns in general;

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preference for locally produced products;

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potentially adverse tax consequences, including the complexities of foreign value-added tax systems;

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the burdens of complying with a wide variety of foreign laws and different legal standards; and

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increased financial accounting and reporting burdens and complexities.

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costs of litigation;

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distraction of management’s attention from our primary business;

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the inability to commercialize our current and future products;

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decreased demand for our current and future products;

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damage to our business reputation;

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product recalls or withdrawals from the market;

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withdrawal of clinical trial participants;

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substantial monetary awards to patients or other claimants; or

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loss of sales.

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identifying, recruiting, integrating, maintaining and motivating additional employees;

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managing our internal development efforts effectively, including the clinical and FDA application preparation for our product candidate, while complying with our contractual obligations to contractors and other third parties; and

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improving our operational, financial and management controls, reporting systems and procedures.

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our inability to demonstrate to the satisfaction of the FDA or the applicable regulatory entity or notified body that our products are safe or effective for their intended uses or, in the U.S. for a 510(k) device, that they are substantially equivalent to the predicate;

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the disagreement of the FDA or the applicable foreign regulatory body or notified body with the design or implementation of our clinical trials or the interpretation of data from preclinical studies or clinical trials;

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serious and unexpected adverse device effects experienced by participants in our clinical trials;

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the data from our preclinical studies and clinical trials may be insufficient to support U.S. FDA approval, de novo classification or clearance where required or approval of the applicable regulatory entity or notified body;

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our inability to demonstrate that the clinical and other benefits of the device outweigh the risks;

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the manufacturing process or facilities we use may not meet applicable requirements; and

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the potential for approval policies or regulations of the FDA or applicable foreign regulatory bodies or notified body to change significantly in a manner rendering our clinical data or regulatory filings insufficient to support a marketing authorization.

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untitled letters or warning letters;

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fines, injunctions, consent decrees and civil penalties;

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recalls, termination of distribution, administrative detention, or seizure of our products;

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customer notifications or repair, replacement or refunds;

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operating restrictions or partial suspension or total shutdown of production;

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delays in or refusal to grant our requests for future PMA approvals or foreign regulatory approvals of new products, new intended uses, or modifications to existing products;

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withdrawals or suspensions of our current PMA or foreign regulatory approvals, resulting in prohibitions on sales of our products;

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FDA refusal to issue certificates to foreign governments needed to export products for sale in other countries; and

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criminal prosecution.

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warning letters or untitled letters;

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fines, injunctions or civil penalties;

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suspension or withdrawal of approvals;

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seizures or recalls of our products;

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total or partial suspension of production or distribution;

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administrative or judicially imposed sanctions;

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the FDA’s refusal to grant pending or future approvals for our products;

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clinical holds; refusal to permit the import or export of our products; and

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criminal prosecution of us or our employees.

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strengthen the rules on placing devices on the market and reinforce surveillance once they are available;

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establish explicit provisions on manufacturers’ responsibilities for the follow-up of the quality, performance and safety of devices placed on the market;

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improve the traceability of medical devices throughout the supply chain to the end-user or patient through a unique identification number;

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set up a central database to provide patients, healthcare professionals and the public with comprehensive information on products available in the EU;

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strengthen rules for the assessment of certain high-risk devices, such as implants, which may have to undergo an additional check by experts before they are placed on the market.

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the federal Anti-Kickback Statute, which prohibits, among other things, persons and entities from knowingly and willfully soliciting, offering, receiving or providing remuneration, directly or indirectly, in cash or in kind, to induce either the referral of an individual or furnishing or arranging for a good or service, for which payment may be made, in whole or in part, under federal healthcare programs, such as Medicare and Medicaid. A person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation. The U.S. government has interpreted this law broadly to apply to the marketing and sales activities of manufacturers. Moreover, the government may assert that a claim including items or services resulting from a violation of the federal Anti-Kickback Statute constitutes a false or fraudulent claim for purposes of the federal civil False Claims Act. Violations of the federal Anti-Kickback Statute may result in civil monetary penalties. Civil penalties for such conduct can further be assessed under the federal False Claims Act. Violations can also result in criminal penalties. Similarly, violations can result in exclusion from participation in government healthcare programs, including Medicare and Medicaid. On November 20, 2020, the Department of Health and Human Services’ Office of the Inspector General, or OIG, finalized further modifications to the federal Anti-Kickback Statute. Under the final rules, the OIG added safe harbor protections under the Anti-Kickback Statute for certain coordinated care and value-based arrangements among clinicians, providers, and others. These rules (with exceptions) became effective January 19, 2021. We continue to evaluate these regulatory nuances in an attempt to maintain compliance with these evolving enforcement trends;

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the federal civil and criminal false claims laws and civil monetary penalties laws, including the federal civil False Claims Act, which prohibit, among other things, individuals or entities from knowingly presenting, or causing to be presented, claims for payment from Medicare, Medicaid or other federal healthcare programs that are false or fraudulent. These laws can apply to manufacturers who provide information on coverage, coding, and reimbursement of their products to persons who bill third-party payers. Private individuals can bring False Claims Act “qui tam” actions, on behalf of the government and such individuals, commonly known as “whistleblowers,” may share in amounts paid by the entity to the government in fines or settlement. When an entity is determined to have violated the federal civil False Claims Act, the government may impose civil fines and penalties, and exclude the entity from participation in Medicare, Medicaid and other federal healthcare programs;

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the federal Civil Monetary Penalties Law, which prohibits, among other things, offering or transferring remuneration to a federal healthcare beneficiary that a person knows or should know is likely to influence the beneficiary’s decision to order or receive items or services reimbursable by the government from a particular provider or supplier;

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the Health Insurance Portability and Accountability Act of 1996, or HIPAA, which created additional federal criminal statutes that prohibit, among other things, executing a scheme to defraud any healthcare benefit program and making false statements relating to healthcare matters. Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it to have committed a violation;

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the federal Physician Sunshine Act under the ACA, which require certain applicable manufacturers of drugs, devices, biologics and medical supplies for which payment is available under Medicare, Medicaid or the Children’s Health Insurance Program, or CHIP, to report annually to the DHHS Centers for Medicare and Medicaid Services (“CMS”), information related to payments and other transfers of value to physicians, which is defined broadly to include other healthcare providers and teaching hospitals, and applicable manufacturers and group purchasing organizations, to report annually ownership and investment interests held by physicians and their immediate family members. Applicable manufacturers are required to submit annual reports to CMS. Failure to submit required information may result in civil monetary penalties for all payments, transfers of value or ownership or investment interests that are not timely, accurately, and completely reported in an annual submission, and may result in liability under other federal laws or regulations. We have not, to date, submitted reports under the Physician Sunshine Act under the ACA;

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HIPAA, as amended by the HITECH Act, and their respective implementing regulations, which impose requirements on certain covered healthcare providers, health plans and healthcare clearinghouses as well as their business associates that perform services for them that involve individually identifiable health information, relating to the privacy, security and transmission of individually identifiable health information without appropriate authorization, including mandatory contractual terms as well as directly applicable privacy and security standards and requirements. Failure to comply with the HIPAA privacy and security standards can result in civil monetary penalties, and, in certain circumstances, criminal penalties. State attorneys general can also bring a civil action to enjoin a HIPAA violation or to obtain statutory damages on behalf of residents of his or her state;

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analogous state and foreign law equivalents of each of the above federal laws, such as anti-kickback and false claims laws which may apply to items or services reimbursed by any third-party payor, including commercial insurers or patients; state laws that require device companies to comply with the industry’s voluntary compliance guidelines and the applicable compliance guidance promulgated by the federal government or otherwise restrict payments that may be made to healthcare providers and other potential referral sources; state laws that require device manufacturers to report information related to payments and other transfers of value to physicians and other healthcare providers or marketing expenditures; consumer protection and unfair competition laws, which broadly regulate marketplace activities and activities that potentially harm customers, foreign and state laws, many of which differ from each other in significant ways and may not have the same effect, thus complicating compliance efforts; privacy and data protection laws, including the EU General Data Protection Regulation, governing the privacy and security of personal data, including health information; federal government price reporting laws, which may require calculations and reporting of complex pricing metrics in an accurate and timely manner to government programs; and state laws related to insurance fraud in the case of claims involving private insurers; and

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In addition, certain states have adopted new or modified privacy and security laws and regulations that may apply to our business. The California Consumer Privacy Act (“CCPA”) imposes obligations on businesses that process personal information of California residents. Among other things, the CCPA requires disclosures to such residents about the data collection, use and sharing practices of covered businesses; provides such individuals expanded rights to access and delete their personal information, and opt-out of certain sales or transfers of personal information; and provides such individuals with a private right of action and statutory damages for certain data breaches the California Privacy Rights Act (“CPRA”) significantly amends and expands existing CCPA requirements, includes, among other things, additional limitations on the sharing of personal information for cross-context behavioral advertising and on the use of “sensitive” personal information, the creation of a new correction right for California residents, and the establishment of a new agency to enforce California privacy laws. The enactment of the CCPA is prompting a wave of similar legislative developments in other states in the United States, which creates the potential for a patchwork of overlapping but different state laws. Many other states are currently reviewing or proposing the need for greater regulation of the collection, sharing, use and other processing of information related to individuals for marketing purposes or otherwise, and there remains increased interest at the federal level as well. Further, in order to comply with the varying state laws around data breaches, we must maintain adequate security measures, which require significant investments in resources and ongoing attention.

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imposed an annual excise tax of 2.3% on any entity that manufactures or imports medical devices offered for sale in the United States, with limited exceptions (described in more detail below), although the effective rate paid may be lower. Through a series of legislative amendments, the tax was suspended for 2016 through 2019. Absent further legislative action, the device excise tax was to be reinstated on medical device sales starting January 1, 2020. The Further Consolidated Appropriations Act, 2020 H.R. 1865 (Pub.L.116-94), signed into law on December 20, 2019, repealed the medical device excise tax previously imposed by Internal Revenue Code section 4191. Prior to the repeal, the tax was on a 4-year moratorium. As a result of the repeal and the prior moratorium, sales of taxable medical devices after December 31, 2015, are not subject to the tax. We are unsure whether similar taxes could be reinstated in the future;

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established the Patient-Centered Outcomes Research Institute to oversee and identify priorities in comparative clinical efficacy research in an effort to coordinate and develop such research;

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implemented payment system reforms including the Bundled Payments for Care Improvement (“BPCI”) initiative to encourage hospitals, physicians and other providers to improve the coordination, quality and efficiency of certain healthcare services through bundled payment models; and

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expanded the eligibility criteria for Medicaid programs (adoption varies by state).

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any of our patents, or any of our pending patent applications, if issued, will include claims having a scope sufficient to protect our FemBloc system and FemaSeed product;

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any of our pending patent applications will issue as patents;

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we will be able to successfully commercialize our products on a substantial scale, if approved, before our relevant patents we may have expire;

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we were the first to make the inventions covered by each of our patents and pending patent applications;

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we were the first to file patent applications for these inventions;

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others will not develop similar or alternative technologies that do not infringe our patents; any of our patents will be found to ultimately be valid and enforceable;

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any patents issued to us will provide a basis for an exclusive market for our commercially viable products, will provide us with any competitive advantages or will not be challenged by third parties;

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we will develop additional proprietary technologies or products that are separately patentable; or

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our commercial activities or products will not infringe upon the patents of others.

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stop making, selling or using products or technologies that allegedly infringe the asserted intellectual property;

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lose the opportunity to license our technology to others or to collect royalty payments based upon successful protection and assertion of our intellectual property rights against others; incur significant legal expenses;

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pay substantial damages or royalties to the party whose intellectual property rights we may be found to be infringing;

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pay the attorney’s fees and costs of litigation to the party whose intellectual property rights we may be found to be infringing;

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redesign those products that contain the allegedly infringing intellectual property, which could be costly, disruptive and infeasible; and

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attempt to obtain a license to the relevant intellectual property from third parties, which may not be available on reasonable terms or at all, or from third parties who may attempt to license rights that they do not have.

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being permitted to present only two years of audited financial statements and only two years of related management’s discussion and analysis of financial condition and results of operations;

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not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act;

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an exemption from compliance with any new requirements adopted by the Public Company Accounting Oversight Board regarding mandatory audit firm rotations;

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reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements; and

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exemptions from the requirement to hold a nonbinding advisory vote on executive compensation and to obtain stockholder approval of any golden parachute payments not previously approved.

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a prohibition on actions by our stockholders by written consent;

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advance notice requirements for election to our board of directors and for proposing matters that can be acted upon at stockholder meetings;

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a requirement that directors may only be removed “for cause”;

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a requirement that only the board of directors may change the number of directors and fill vacancies on the board;

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division of our board of directors into three classes, serving staggered terms of three years each; and

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the authority of the board of directors to issue preferred stock with such terms as the board of directors may determine.

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announcements of U.S. regulatory approval or disapproval of our FemBloc system or the FDA’s decision to grant or decline any future approvals or clearances for enhancements to our products;

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announcements of international regulatory approval or disapproval of our FemBloc system or the foreign regulatory body or notified body’s decision to grant or decline any future approvals for enhancements to our products;

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adverse results from or delays in clinical pivotal trial of our FemBloc system;

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unanticipated safety concerns related to the use of our FemBloc system;

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unanticipated safety concerns related to the use of our FemaSeed product or other products;

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FDA or other U.S. or foreign regulatory or legal actions or changes affecting us or our industry;

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our ability to develop, obtain regulatory clearance or approval for, and market new and enhanced medical products on a timely basis;

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any voluntary or mandated product recalls;

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adverse developments concerning our suppliers or any future strategic partnerships;

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the volume and timing of sales of our products;

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the introduction of new products or product enhancements by us or others in our industry;

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disputes or other developments with respect to our or others’ intellectual property rights;

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product liability claims or other litigation;

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quarterly variations in our results of operations or those of others in our industry;

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media exposure of our products or of those of others in our industry;

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changes in governmental regulations or in reimbursement;

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changes in earnings estimates or recommendations by securities analysts;

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changes in financial estimates or guidance, including our ability to meet our future revenue and operating profit or loss estimates or guidance;

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the public’s reaction to our earnings releases, other public announcements and filings with the SEC;

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sales of substantial amounts of our stock by directors, officers or significant stockholders, or the expectation that such sales might occur;

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operating and stock performance of other companies that investors deem comparable to us and overall performance of the equity markets;

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additions or departures of key personnel;

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changes in our capital structure, such as future issuances of securities and the incurrence of debt;

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general market conditions and other factors, including factors unrelated to our operating performance or the operating performance of our competitors; and

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other factors described in this “Risk Factors” section.

Item 1B.

Unresolved Staff Comments.

Risk Management and Strategy

We employ a cybersecurity program which we believe is appropriate for the potential of cybersecurity threats faced by us and is built upon a set of policies, procedures and standards supported by training and education. Our information systems employ local and cloud storage and recovery services from various third parties. We have established processes to assess, identify, and manage risks from cybersecurity threats as part of our broader enterprise-wide risk management system and processes and engaged third-party consultants to assess and gather threat intelligence and cyber risk trends and conduct assessments and testing of our cybersecurity procedures and protections, which is overseen by our Board of Directors through our Audit Committee, along with our executive management.

Total other (expense) income decreased by $1,286,850, or 484.5%, to $1,021,221 net expense in 2024 from $265,629 net income in 2023. The decrease relates to increased interest expense and non-cash discount amortization related to the convertible notes payable which were outstanding for the full year, partially offset by increased interest income.

Our policy is to recognize revenue when a customer obtains control of the promised goods under Accounting Standards Codification 606—Revenue from Contracts with Customers (Topic 606), which we adopted effective January 1, 2018. The amount of revenue recognized reflects the consideration to which we expect to be entitled to receive in exchange for these goods, and we have 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.

 

 

Report of Independent Registered Public Accounting Firm