|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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|
||
(Exact Name of Registrant as Specified in its Charter)
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|
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(State or other jurisdiction of incorporation or organization)
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(IRS Employer Identification No.)
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||
|
||
(Address of principal executive offices)
|
(Zip Code)
|
|
(
|
||
(Registrant’s telephone number, including area code)
|
||
N/A |
||
(Former name, former address and former fiscal year, if changed since last report)
|
Title of each class
|
Trading symbol
|
Name of each exchange on which
registered
|
|||
|
|
|
Large accelerated filer ☐ | Accelerated filer ☐ |
Smaller reporting company |
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Emerging growth company |
TABLE OF CONTENTS
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Page
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Part I. Financial Information
|
||
Item 1
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5
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6
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||
7
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||
8
|
||
9
|
||
10
|
||
Item 2
|
18
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Item 3
|
22
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Item 4
|
22
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Part II. Other Information
|
||
Item 1
|
22
|
|
Item 1A
|
23
|
|
Item 2
|
23
|
|
Item 3
|
23
|
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Item 4
|
23
|
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Item 5
|
23
|
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Item 6
|
23
|
|
24
|
• |
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;
|
• |
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 successfully initiate and grow the commercial launch of FemaSeed®;
|
• |
our ability to obtain additional financing to fund the clinical development and commercialization of our product candidate and products and fund our operations;
|
• |
estimates regarding the total addressable market for our products and product candidate;
|
• |
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 establish and expand sales of our
women-specific medical products and develop and commercialize additional products;
|
• |
our ability to obtain regulatory approvals for and commercialize our product candidate, or the effect of delays in obtaining regulatory authorizations and
commercialize;
|
• |
our business model and strategic plans for our products, product candidate, technologies and business, including our implementation thereof;
|
• |
commercial success and market acceptance of our products and product candidate;
|
• |
our ability to achieve and maintain adequate levels of coverage or reimbursement for FemaSeed, FemBloc® or any future product candidates, and our 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;
|
• |
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 artificial insemination product, permanent birth
control system, and women-specific medical product solutions in markets in and outside of the United States;
|
• |
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 United States 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.
|
ITEM I. |
Financial Statements
|
Assets
|
March 31,
2024
|
December 31,
2023
|
||||||
Current assets:
|
||||||||
Cash and cash equivalents
|
$
|
|
|
|||||
Accounts receivable, net
|
|
|
||||||
Inventory, net
|
|
|
||||||
Prepaid and other current assets
|
|
|
||||||
Total current assets
|
|
|
||||||
Property and equipment, at cost:
|
||||||||
Leasehold improvements
|
|
|
||||||
Office equipment
|
|
|
||||||
Furniture and fixtures
|
|
|
||||||
Machinery and equipment
|
|
|
||||||
Construction in progress
|
|
|
||||||
|
|
|||||||
Less accumulated depreciation
|
(
|
)
|
(
|
)
|
||||
Net property and equipment
|
|
|
||||||
Long-term assets:
|
||||||||
Lease right-of-use assets, net
|
|
|
||||||
Intangible assets, net of accumulated amortization
|
|
|
||||||
Other long-term assets
|
|
|
||||||
Total long-term assets
|
|
|
||||||
Total assets
|
$
|
|
|
Liabilities and Stockholders’ Equity |
March 31,
2024
|
December 31,
2023
|
||||||
Current liabilities:
|
||||||||
Accounts payable
|
$
|
|
|
|||||
Accrued expenses
|
|
|
||||||
Clinical holdback – current portion
|
|
|
||||||
Lease liabilities – current portion
|
|
|
||||||
Total current liabilities
|
|
|
||||||
Long-term liabilities:
|
||||||||
Clinical holdback – long-term portion
|
|
|
||||||
Convertible notes payable, net (including related parties)
|
||||||||
Lease liabilities – long-term portion
|
|
|
||||||
Total long-term liabilities
|
|
|
||||||
Total liabilities
|
|
|
||||||
Commitments and contingencies
|
||||||||
Stockholders’ equity:
|
||||||||
Common stock, $
|
|
|
||||||
Treasury stock,
|
(
|
)
|
(
|
)
|
||||
Warrants
|
|
|
||||||
Additional paid-in-capital
|
|
|
||||||
Accumulated deficit
|
(
|
)
|
(
|
)
|
||||
Total stockholders’ equity
|
|
|
||||||
Total liabilities and stockholders’ equity
|
$
|
|
|
Three Months Ended March 31,
|
||||||||
2024
|
2023
|
|||||||
Sales
|
$
|
|
|
|||||
Cost of sales (excluding depreciation expense)
|
|
|
||||||
Operating expenses:
|
||||||||
Research and development
|
|
|
||||||
Sales and marketing
|
|
|
||||||
General and administrative
|
|
|
||||||
Depreciation and amortization
|
|
|
||||||
Total operating expenses
|
|
|
||||||
Loss from operations
|
(
|
)
|
(
|
)
|
||||
Other income (expense):
|
||||||||
Interest income
|
|
|
||||||
Interest expense
|
( |
) | ( |
) | ||||
Total other income (expense)
|
( |
) | ||||||
|
||||||||
Net loss
|
$
|
(
|
)
|
(
|
)
|
|||
Net loss attributable to common stockholders, basic and diluted
|
$
|
(
|
)
|
(
|
)
|
|||
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(
|
)
|
(
|
)
|
|||
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
|
|
Total
|
||||||||||||||||||||||||||||||||
Common stock
|
Treasury common stock
|
Additional
|
Accumulated
|
stockholders’
|
||||||||||||||||||||||||||||
Shares
|
Amount
|
Shares
|
Amount
|
Warrants
|
paid-in capital
|
deficit
|
equity
|
|||||||||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2024
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2023
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Share-based compensation expense
|
—
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||
Issuance of common stock in connection with at-the-market offering, net of issuance costs
|
||||||||||||||||||||||||||||||||
Expiration of warrant
|
( |
) | ||||||||||||||||||||||||||||||
Net loss
|
— | — | ( |
) | ( |
) | ||||||||||||||||||||||||||
Balance at March 31, 2024
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
THREE MONTHS ENDED MARCH 31, 2023
|
||||||||||||||||||||||||||||||||
Balance at December 31, 2022
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$ | ( |
) |
$
|
|
||||||||||||||||
|
||||||||||||||||||||||||||||||||
Issuance of common stock in connection with at-the-market offering, net of issuance costs
|
||||||||||||||||||||||||||||||||
Share-based compensation expense
|
—
|
|
—
|
|
|
|
|
|
||||||||||||||||||||||||
Net loss
|
—
|
|
—
|
|
|
|
(
|
)
|
(
|
)
|
||||||||||||||||||||||
Balance at March 31, 2023
|
|
$
|
|
|
$
|
(
|
)
|
$
|
|
$
|
|
$
|
(
|
)
|
$
|
|
Three Months ended March 31,
|
||||||||
2024
|
2023
|
|||||||
Cash flows from operating activities:
|
||||||||
Net loss
|
$
|
(
|
)
|
(
|
)
|
|||
Adjustments to reconcile net loss to net cash used in operating activities:
|
||||||||
Depreciation
|
|
|
||||||
Amortization
|
|
|
||||||
Amortization of right-of-use assets
|
||||||||
Provision for bad debts
|
|
|
||||||
Inventory reserve write-off
|
||||||||
Share-based compensation expense
|
|
|
||||||
Amortization of debt issuance costs and discount
|
||||||||
Changes in operating assets and liabilities:
|
||||||||
Accounts receivable
|
(
|
)
|
(
|
)
|
||||
Inventory
|
(
|
)
|
(
|
)
|
||||
Prepaid and other assets
|
(
|
)
|
|
|||||
Accounts payable
|
(
|
)
|
|
|||||
Accrued expenses
|
(
|
)
|
|
|||||
Lease liabilities
|
(
|
)
|
(
|
)
|
||||
Other liabilities
|
(
|
)
|
|
|||||
Net cash used in operating activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from investing activities:
|
||||||||
Acquisition of patents
|
( |
) | ||||||
Purchases of property and equipment
|
(
|
)
|
(
|
)
|
||||
Net cash used in investing activities
|
(
|
)
|
(
|
)
|
||||
Cash flows from financing activities:
|
||||||||
Proceeds from at-the-market sales of common stock
|
||||||||
Issuance costs for at-the-market sales of common stock
|
( |
) | ||||||
Repayment of note payable
|
|
(
|
)
|
|||||
Payments under lease obligations
|
|
(
|
)
|
|||||
Net cash provided by (used in) financing activities
|
|
(
|
)
|
|||||
|
||||||||
Net change in cash and cash equivalents
|
(
|
)
|
(
|
)
|
||||
Cash and cash equivalents:
|
||||||||
Beginning of period
|
|
|
||||||
End of period
|
$
|
|
|
|||||
Supplemental cash flow information | ||||||||
Cash paid for: | ||||||||
Interest
|
$ | |||||||
Non-cash investing and financing activities: | ||||||||
Property and equipment costs included in accounts payable and accrued expense
|
$ | |||||||
Acquisition of patents included in accounts payable
|
$ |
|||||||
Commissions costs relating to certain proceeds from issuance of common stock
|
$ | |||||||
Deferred offering costs reclassified to additional paid-in-capital
|
$ |
(1)
|
Organization, Nature of Business, and Liquidity
|
(2)
|
Fair Value
|
(3)
|
Cash and Cash Equivalents
|
(4)
|
Inventories
|
March 31, | December 31, | |||||||
2024
|
2023 |
|||||||
Materials
|
$
|
|
|
|||||
Work in progress
|
|
|
||||||
Finished goods
|
|
|
||||||
Inventory, net
|
$
|
|
|
(5)
|
Accrued Expenses
|
March 31, | December 31, | |||||||
2024 |
2023 |
|||||||
Clinical trial costs
|
$
|
|
|
|||||
Accrued interest |
||||||||
Incentive and other compensation costs |
||||||||
Director fees | ||||||||
Franchise taxes |
||||||||
Other
|
|
|
||||||
Accrued expenses
|
$
|
|
|
(6)
|
Clinical Holdback
|
Balance at December 31, 2023
|
$
|
|
||
Clinical holdback retained
|
|
|||
Clinical holdback paid
|
|
|||
Balance at March 31, 2024
|
$
|
|
||
Less: clinical holdback - current portion
|
(
|
)
|
||
Clinical holdback - long-term portion
|
$
|
|
(7)
|
Revenue Recognition
|
Three Months Ended March 31,
|
||||||||
Primary geographical markets |
2024
|
2023
|
||||||
U.S.
|
$
|
|
|
|||||
International
|
|
|
||||||
Total
|
$
|
|
|
|
(8)
|
Commitments and Contingencies
|
(9)
|
Notes Payable
|
(10)
|
Convertible Notes with Warrants (November 2023 Financing)
|
Series A
Warrants
|
Series B
Warrants
|
|||||||
Expected term (in years)
|
|
|
||||||
Risk‑free interest rate
|
|
%
|
|
%
|
||||
Dividend yield
|
|
% |
|
% | ||||
Expected volatility
|
|
%
|
|
%
|
||||
Exercise price
|
$
|
|
$
|
|
||||
Stock price
|
$
|
|
$
|
|
||||
|
||||||||
Black-Scholes value
|
$
|
|
$
|
|
(11)
|
Stockholders’ Equity
|
(12)
|
Equity Incentive Plans and Warrants
|
(a) |
Stock Option Plans
|
Number of
options
|
Weighted
average
exercise
price
|
|||||||
Outstanding at December 31, 2023 | $ | |||||||
Granted | ||||||||
Forfeited | ( |
) | ||||||
Outstanding at March 31, 2024 | $ | |||||||
Vested and exercisable at March 31, 2024 | $ |
Employee |
Nonemployee | |||||||
Expected term (in years)
|
|
|||||||
Risk‑free interest rate
|
|
%
|
% | |||||
Dividend yield
|
|
%
|
% |
|||||
Expected volatility
|
|
%
|
% |
(b) |
Inducement Grants
|
Inducement |
||||
Expected term (in years)
|
|
|||
Risk‑free interest rate
|
|
%
|
||
Dividend yield
|
|
%
|
||
Expected volatility
|
|
%
|
(c) | Share-Based Compensation Expense |
Three Months Ended March 31, | ||||||||
2024
|
2023
|
|||||||
Research and development
|
$
|
|
|
|||||
Sales and marketing
|
|
(
|
)
|
|||||
General and administrative
|
|
|
||||||
Total share-based compensation expense
|
$
|
|
|
(d) |
Employee Stock Purchase Plan (ESPP)
|
(e) |
April 2023 Financing
|
Pre-funded
warrants
|
Common
warrants
|
|||||||
Expected term (in years)
|
|
|
||||||
Risk‑free interest rate
|
|
%
|
|
%
|
||||
Dividend yield
|
|
% |
|
% | ||||
Expected volatility
|
|
%
|
|
%
|
||||
Exercise price
|
$
|
|
$
|
|
||||
Stock price
|
$
|
|
$
|
|
||||
Black-Scholes value |
$ | $ |
(13)
|
Related‑Party Transactions
|
(14)
|
Net Loss per Share Attributable to Common Stockholders
|
Three Months Ended March 31,
|
||||||||
2024
|
2023
|
|||||||
Net loss attributable to common stockholders, basic & diluted
|
$
|
(
|
)
|
(
|
)
|
|||
|
||||||||
Weighted average number of shares used in computing net loss per share attributable to common stockholders, basic and diluted
|
|
|
||||||
Net loss per share attributable to common stockholders, basic and diluted
|
$
|
(
|
)
|
(
|
)
|
March 31,
2024
|
March 31,
2023
|
|||||||
Options to purchase common stock
|
|
|
||||||
Warrants to purchase common stock, in connection with April 2023 financing | ||||||||
Warrants to purchase common stock, in connection with November 2023 financing |
||||||||
Warrants to purchase common stock
|
|
|
||||||
Total potential shares
|
|
|
(15)
|
Income Taxes
|
(16)
|
Subsequent Events
|
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
|
Three Months Ended March 31,
|
|||||||||||||||
|
2024
|
2023
|
Change
|
% Change
|
||||||||||||
Sales
|
$
|
271,140
|
293,984
|
(22,844
|
)
|
-7.8
|
%
|
|||||||||
Cost of sales (excluding depreciation expense)
|
88,532
|
105,120
|
(16,588
|
)
|
-15.8
|
%
|
||||||||||
|
||||||||||||||||
Operating expenses:
|
||||||||||||||||
Research and development
|
1,770,731
|
1,537,439
|
233,292
|
15.2
|
%
|
|||||||||||
Sales and marketing
|
300,487
|
244,896
|
55,591
|
22.7
|
%
|
|||||||||||
General and administrative
|
1,502,804
|
1,315,137
|
187,667
|
14.3
|
%
|
|||||||||||
Depreciation and amortization
|
71,228
|
133,066
|
(61,838
|
)
|
-46.5
|
%
|
||||||||||
Total operating expenses
|
3,645,250
|
3,230,538
|
414,712
|
12.8
|
%
|
|||||||||||
Loss from operations
|
(3,462,642
|
)
|
(3,041,674
|
)
|
(420,968
|
)
|
13.8
|
%
|
||||||||
Other income (expense):
|
||||||||||||||||
Interest income
|
224,684
|
97,089
|
127,595
|
131.4
|
%
|
|||||||||||
Interest expense
|
(361,552
|
)
|
(1,672
|
)
|
(359,880
|
)
|
21523.9
|
%
|
||||||||
Other income (expense)
|
(136,868
|
)
|
95,417
|
(232,285
|
)
|
-243.4
|
%
|
|||||||||
Net loss
|
$
|
(3,599,510
|
)
|
(2,946,257
|
)
|
(653,253
|
)
|
22.2
|
%
|
|
Three Months Ended March 31,
|
|||||||
|
2024
|
2023
|
||||||
Compensation and related personnel costs
|
$
|
989,057
|
900,288
|
|||||
Clinical-related costs
|
438,775
|
366,360
|
||||||
Material and development costs
|
143,699
|
167,161
|
||||||
Professional and outside consultant costs
|
168,182
|
91,935
|
||||||
Other costs
|
31,018
|
11,695
|
||||||
Total research and development expenses
|
$
|
1,770,731
|
1,537,439
|
|
Three Months Ended March 31,
|
|||||||
|
2024
|
2023
|
||||||
Net cash used in operating activities
|
$
|
(4,568,124
|
)
|
(2,647,637
|
)
|
|||
Net cash used in investing activities
|
(90,160
|
)
|
(8,901
|
)
|
||||
Net cash provided by (used in) financing activities
|
778,175
|
(144,060
|
)
|
|||||
Net change in cash and cash equivalents
|
$
|
(3,880,109
|
)
|
(2,800,598
|
)
|
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk
|
Item 4. |
Controls and Procedures
|
Item 1A. |
Risk Factors
|
Item 2. |
Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities
|
Item 3. |
Defaults Upon Senior Securities
|
Item 4. |
Mine Safety Disclosures
|
Item 5. |
Other Information
|
Incorporated by Reference
|
|||||
Exhibit
|
File
|
||||
Number
|
Description of Document |
Schedule/Form
|
Number
|
Exhibit
|
Filing Date
|
Eleventh Amended and Restated Certificate of Incorporation of Femasys Inc. |
Form 8-K
|
001-40492
|
3.1
|
June 22, 2021
|
|
Amended and Restated Bylaws of Femasys Inc. |
Form 8-K
|
001-40492
|
3.2
|
June 22, 2021
|
|
First Amendment to the Amended and Restated Bylaws of Femasys Inc. |
Form 8-K
|
001-40492
|
3.1
|
March 30, 2023
|
|
Certification of Principal Executive Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
Certification of Principal Financial Officer Pursuant to Securities Exchange Act Rules 13a-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |||||
Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |||||
|
Certification of Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | ||||
101.INS* | Inline XBRL Instance Document (the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document) | ||||
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | ||||
101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase Document | ||||
101.DEF* | Inline XBRL Taxonomy Definition Linkbase Document | ||||
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | ||||
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | ||||
104* | Cover Page Interactive Data File (formatted as inline XBRL and contained in Exhibit 101) |
Dated: May 9, 2024
|
By: /s/ Kathy Lee-Sepsick
|
|
Kathy Lee-Sepsick
|
||
Chief Executive Officer and President
|
Dated: May 9, 2024
|
||
By: /s/ Dov Elefant
|
||
Dov Elefant
|
||
Chief Financial Officer
|