UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☑	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ____________to____________

Commission file number: 001-40492

	Femasys Inc.
	(Exact Name of Registrant as Specified in its Charter)

Delaware		11-3713499
(State or other jurisdiction of incorporation or organization)		(IRS Employer Identification No.)

3950 Johns Creek Court, Suite 100
Suwanee, GA 30024		(770) 500-3910
(Address of principal executive offices, including zip code)		(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☑	Smaller reporting company ☑
Emerging growth company ☑

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☑

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

Securities registered pursuant to Section 12(b) of the Act:

	Title of each class		Trading symbol		Name of each exchange on which registered
	Common stock, $0.001 par value		FEMY		The Nasdaq Capital Market

The Registrant had 11,813,610 shares of common stock, $0.001 par value, outstanding as of November 8, 2022.

TABLE OF CONENTS

		Page

Part I. Financial Information
Item 1	Financial Statements	4
	Balance Sheets as of September 30, 2022 and December 31, 2021 (unaudited)	4
	Statements of Comprehensive Loss for the Three Months and Nine Months Ended September 30, 2022 and 2021 (unaudited)	6
	Statements of Stockholders’ Equity for the Three Months and Nine Months Ended September 30, 2022 (unaudited)	7
	Statements of Stockholders’ Equity (Deficit) for the Three Months and Nine Months Ended September 30, 2021 (unaudited)	8
	Statements of Cash Flows for the Nine Months Ended September 30, 2022 and 2021 (unaudited)	9
	Notes to Financial Statements (unaudited)	10
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations	16
Item 3	Quantitative and Qualitative Disclosures About Market Risk	20
Item 4	Controls and Procedures	20

Part II. Other Information
Item 1	Legal Proceedings	21
Item 1A	Risk Factors	21
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	21
Item 3	Defaults Upon Senior Securities	21
Item 4	Mine Safety Disclosures	21
Item 5	Other Information	21
Item 6	Exhibits	22
SIGNATURES		23

Table of Contents

SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q contains forward-looking statements. All statements other than statements of historical facts contained in this Quarterly Report on Form 10-Q are forward-looking statements. In some cases, you can identify forward-looking statements by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “target,” “project,” “contemplate,” “believe,” “estimate,” “predict,” “potential,” “hope” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements include, but are not limited to, statements concerning:

•

our ability to develop and advance our current product candidates and programs into, and successfully initiate and complete, clinical trials;

•

the ability of our clinical trials to demonstrate safety and effectiveness of our product candidates and other positive results;

•

estimates regarding the total addressable market for our product candidates;

•

our ability to enroll subjects in the clinical trials for our product candidates in order to advance the development thereof on a timely basis;

•

our ability to obtain additional financing to fund the clinical development of our products and fund operations;

•

competitive companies and technologies in our industry;

•

our ability to obtain U.S Food and Drug Administration (FDA) approval for our permanent birth control system, ability to gain FDA grant of a de novo classification request for our intrauterine insemination system, expand sales of our women-specific medical products and develop and commercialize additional products;

•

our ability to commercialize or obtain regulatory approvals, grants of de novo classification requests or 510(k) clearance for our product candidates, or the effect of delays in commercializing or obtaining regulatory authorizations;

•

our business model and strategic plans for our products, technologies and business, including our implementation thereof;

•

commercial success and market acceptance of our product candidates;

•

our ability to achieve and maintain adequate levels of coverage or reimbursement for our FemBloc system or any future products we may seek to commercialize;

•

our ability to manufacture our products and product candidates in compliance with applicable laws, regulations and requirements and to oversee third-party suppliers, service providers and vendors in the performance of any contracted activities in accordance with applicable laws, regulations and requirements;

•

the impact of the COVID-19 pandemic on our business, financial condition, results of operations, and prospects;

•

our ability to accurately forecast customer demand for our product candidates, and manage our inventory;

•

our ability to build, manage and maintain our direct sales and marketing organization, and to market and sell our permanent birth control system, artificial insemination system and women-specific medical products in markets in and outside of the United States (U.S.);

•

our ability to hire and retain our senior management and other highly qualified personnel;

•

FDA or other U.S. or foreign regulatory actions affecting us or the healthcare industry generally, including healthcare reform measures in the U.S. and international markets;

•

the timing or likelihood of regulatory filings and approvals or clearances;

•

our ability to establish and maintain intellectual property protection for our product candidates and our ability to avoid claims of infringement;

•

the volatility of the trading price of our common stock; and

•

our expectations about market trends.

The forward-looking statements in this Quarterly Report on Form 10-Q are only predictions and are based largely on our current expectations and projections about future events and financial trends that we believe may affect our business, financial condition and results of operations. These forward-looking statements speak only as of the date of this Quarterly Report on Form 10-Q and are subject to a number of known and unknown risks, uncertainties and assumptions, including those described under the sections in this Quarterly Report on Form 10-Q entitled “Risk Factors” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and elsewhere in this Quarterly Report on 10-Q. Because forward-looking statements are inherently subject to risks and uncertainties, some of which cannot be predicted or quantified and some of which are beyond our control, you should not rely on these forward-looking statements as predictions of future events. The events and circumstances reflected in our forward-looking statements may not be achieved or occur and actual results could differ materially from those projected in the forward-looking statements. Moreover, we operate in an evolving environment. New risk factors and uncertainties may emerge from time to time, and it is not possible for management to predict all risk factors and uncertainties. You should read this Quarterly Report on Form 10-Q and the documents that we reference in this Quarterly Report on Form 10-Q and have filed with the Securities and Exchange Commission as exhibits hereto completely and with the understanding that our actual future results may be materially different from any future results expressed or implied by these forward-looking statements. Except as required by applicable law, we do not plan to publicly update or revise any forward-looking statements contained herein, whether as a result of any new information, future events, changed circumstances or otherwise. The forward-looking statements contained in this Quarterly Report on 10-Q are excluded from the safe harbor protection provided by the Private Securities Litigation Reform Act of 1995 and Section 27A of the Securities Act of 1933, as amended.

Table of Contents

PART I. FINANCIAL INFORMATION

ITEM I.

Financial Statements

FEMASYS INC.

Balance Sheets

(unaudited)

Assets	September 30, 2022			December 31, 2021
Current assets:
Cash and cash equivalents	$	16,005,650			24,783,029
Accounts receivable, net		183,130			84,258
Inventory, net		343,136			208,270
Other current assets		760,573			555,853
Total current assets		17,292,489			25,631,410
Property and equipment, at cost:
Leasehold improvements		1,195,637			1,155,332
Office equipment		99,344			99,344
Furniture and fixtures		424,947			424,947
Machinery and equipment		2,434,524			2,261,793
Construction in progress		503,312			379,713
		4,657,764			4,321,129
Less accumulated depreciation		(3,115,551	)		(2,722,117	)
Net property and equipment		1,542,213			1,599,012
Long-term assets:
Lease right-of-use assets, net		402,063			665,747
Intangible assets, net of accumulated amortization		5,759			25,093
Other long-term assets		789,616			655,418
Total long-term assets		1,197,438			1,346,258

Total assets	$	20,032,140			28,576,680

(continued)

Table of Contents

FEMASYS INC.

Balance Sheets

(unaudited)

Liabilities and Stockholders’ Equity	September 30, 2022			December 31, 2021
Current liabilities:
Accounts payable	$	419,110			445,522
Accrued expenses		649,615			603,787
Clinical holdback - current portion		36,238			18,947
Note payable		280,577			181,123
Lease liabilities – current portion		386,139			406,674
Other		36,037			36,037
Total current liabilities		1,807,716			1,692,090
Long-term liabilities:
Clinical holdback - long-term portion		101,804			149,791
Lease liabilities – long-term portion		115,773			402,417
Total long-term liabilities		217,577			552,208
Total liabilities		2,025,293			2,244,298
Commitments and contingencies
Stockholders’ equity:
Common stock, $0.001 par, 200,000,000 authorized, 11,930,833 shares issued and 11,813,610 outstanding as of September 30,2022; and 11,921,388 shares issued 11,804,165 outstanding as of December 31, 2021		11,931			11,921
Treasury stock, 117,223 shares		(60,000	)		(60,000	)
Warrants		567,972			702,492
Additional paid-in-capital		108,727,253			108,418,304
Accumulated deficit		(91,240,309	)		(82,740,335	)
Total stockholders’ equity		18,006,847			26,332,382

Total liabilities and stockholders’ equity	$	20,032,140			28,576,680

The accompanying notes are an integral part of these unaudited financial statements.

Table of Contents

FEMASYS INC.

Statements of Comprehensive Loss

(unaudited)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2022			2021			2022			2021
Sales	$	347,456			269,581			971,974			925,362
Cost of sales		131,451			105,403			356,479			306,072
Gross margin		216,005			164,178			615,495			619,290
Operating expenses:
Research and development		1,648,160			1,140,577			4,542,147			3,030,467
Sales and marketing		90,374			43,284			222,414			87,931
General and administrative		1,395,063			1,087,363			4,024,356			3,030,749
Depreciation and amortization		139,597			144,399			426,480			449,211
Total operating expenses		3,273,194			2,415,623			9,215,397			6,598,358
Loss from operations		(3,057,189	)		(2,251,445	)		(8,599,902	)		(5,979,068	)
Other income (expense):

SEC Form 10-Q filed by Femasys Inc.