FEMASYS INC

Previous wording

We are a leading biomedical company focused on addressing significant unmet needs for women worldwide with a broad portfolio of in-office, accessible, and innovative therapeutic and diagnostic solutions, including a lead revolutionary product candidate and FDA-cleared, and Canadian and European Union approved products. Our mission is to provide women with superior minimally-invasive, non-surgical product technologies, accessible in the office, improving patient care and overall health economics focused on servicing the reproductive health needs for those seeking solutions for infertility issues (FemaSeed and FemVue) or permanent birth control (FemBloc). We are a woman-founded and led company with an expansive, internally created intellectual property portfolio with over 180 patents globally, in- house chemistry, manufacturing, and controls (CMC) and device manufacturing capabilities and proven ability to develop and commercialize products. Our suite of products and product candidates address what we believe are multi-billion dollar global market segments in which there has been little advancement for many years, helping women avoid pharmaceutical solutions, implants and surgery that can be expensive and expose women to harm.

Current wording

We are a leading biomedical company focused on addressing significant unmet needs for women worldwide with a broad portfolio of in-office, accessible, and innovative therapeutic and diagnostic solutions, including a lead revolutionary product candidate and FDA-cleared, and Canadian and European Union approved products. Our mission is to provide women with superior minimally-invasive, non-surgical product technologies, accessible in the office, improving patient care and overall health economics focused on servicing the reproductive health needs for those seeking solutions for infertility issues (FemaSeed and FemVue) or permanent birth control (FemBloc). We are a woman-founded and led company with an expansive, internally created intellectual property portfolio with over 200 patents globally, in-house chemistry, manufacturing, and controls (CMC) and device manufacturing capabilities and proven ability to develop and commercialize products. Our suite of products and product candidate address what we believe are multi-billion dollar global market segments in which there has been little advancement for many years, helping women avoid pharmaceutical solutions, implants and surgery that can be expensive and expose women to harm.

Previous wording

FemaSeed – Our Intratubal Artificial Insemination Solution. In September 2023 we announced 510(k) clearance from the FDA for FemaSeed for intratubal insemination. The clinical trial was still ongoing at the time of receiving U.S. regulatory clearance from the FDA, however, the study was concluded with enrollment completed in November 2023. Topline results of the clinical trial were announced in March 2024. The trial demonstrated that 24% of women became pregnant after FemaSeed with male factor infertility (1 million to 20 million total motile sperm count (TMSC)). In contrast, the historical control indicated a 6.7% pregnancy rate by cycle for intrauterine insemination (IUI) with male factor infertility (greater than 1 million TMSC). Although subjects were permitted to have multiple FemaSeed attempts, the majority of women who became pregnant did so after the first FemaSeed procedure. The majority of adverse events were reported as mild (n=127 subjects, 216 cycles). No new safety concerns were observed through the seven-week follow-up. All adverse events were consistent with those known for IUI. The approved labeling includes women or couples wishing to become pregnant by way of intratubal insemination. The recruitment of the commercial team began with the hire of the Chief Commercial Officer in February 2024. In March 2024, the first commercial use of FemaSeed at a former investigative site was announced. Build-out of our initial commercial team in the United States, the focus of our primary market efforts was completed in June 2024. In June 2024, we received EU MDR and CE Mark certification for FemaSeed and concurrently are exploring potential strategic partners for distribution in Europe and internationally.

Current wording

FemaSeed – Our Intratubal Artificial Insemination Solution. In September 2023 we received 510(k) clearance from the FDA for FemaSeed intratubal insemination. The pivotal clinical trial was still ongoing at the time of receiving U.S. regulatory clearance from the FDA, as a result, the study was concluded with enrollment completed in November 2023. Topline results of the clinical trial were announced in March 2024. The trial demonstrated pregnancy rate was 26.3% by subject (n=38) and 17.5% by cycle (n=57) after FemaSeed. In contrast, a 6.7% pregnancy rate by cycle was described in the literature for intrauterine insemination (IUI) with male factor infertility (greater than 1 million total motile sperm count). Although subjects were permitted to have multiple FemaSeed attempts, the majority of women who became pregnant did so after the first FemaSeed procedure. The majority of adverse events were reported as mild (n=133 subjects, 222 cycles). No new safety concerns were observed through the seven-week follow-up. All adverse events were consistent with those known for IUI. The approved labeling includes women or couples wishing to become pregnant by way of insemination. The recruitment of the commercial team began with the hire of the Chief Commercial Officer in February 2024. In March 2024, the first commercial use of FemaSeed at a former investigative site was announced. Build-out of our initial commercial team in the United States was completed in June 2024. In June 2024, we received EU MDR and CE Mark certification for FemaSeed and in September 2024, we announced strategic distribution partnerships for CE-marked products, including FemaSeed and FemVue in Spain which are anticipated to generate over $1.3 million over the next year. Concurrently with direct commercial efforts in North America (U.S. and Canada), we are exploring other potential strategic partners for distribution in Europe and internationally.

Previous wording

FemBloc – Our Permanent Birth Control Solution. In June 2023 we received FDA approval of our IDE to evaluate the safety and efficacy of FemBloc, our non-surgical, non-implant, in-office solution for permanent birth control in a pivotal clinical trial. In August 2023 we announced the initiation of enrollment in the FINALE [Prospective Multi-Center Trial for FemBloc INtratubal Occlusion for TranscervicAL PErmanent Birth Control] pivotal trial designed to evaluate the safety and efficacy of FemBloc. This prospective, multi-center, open-label, single-arm study design includes pregnancy rate as the primary endpoint, which will be analyzed once 401 women have used FemBloc for one year for permanent birth control. In addition, the study is designed as a roll-in beginning with enrollment of 50 women for a clinical readout primarily of preliminary safety data prior to enrolling the remaining subjects. An interim analysis of clinical data endpoints is planned once 300 women have used FemBloc for permanent birth control for one year. Follow-up will continue annually for five years post-market. All six sites permitted in the initial stage of the trial were announced as actively enrolling subjects in January 2024.

Current wording

FemBloc – Our Permanent Birth Control Solution. In June 2023 we received FDA approval of our IDE to conduct a pivotal trial to evaluate the safety and efficacy of FemBloc, our non-surgical, non-implant, in-office solution for permanent birth control. In August 2023 we announced the initiation of enrollment in the FINALE [Prospective Multi-Center Trial for FemBloc INtratubal Occlusion for TranscervicAL PErmanent Birth Control] pivotal trial designed to evaluate the safety and efficacy of FemBloc. This prospective, multi-center, open-label, single-arm study design includes pregnancy rate as the primary endpoint, which will be analyzed once 401 women have used FemBloc for one year for permanent birth control. In addition, the study is designed as a roll-in beginning with enrollment of 50 women for a clinical readout primarily of preliminary safety data prior to enrolling the remaining subjects. An interim analysis of clinical data endpoints is planned once 300 women have used FemBloc for permanent birth control for one year. Follow-up will continue annually for five years post-market. All six sites permitted in the initial stage of the trial were announced as actively enrolling subjects in January 2024. In September 2024, we announced receipt of 510(k) clearance from FDA for FemChec, an innovative diagnostic solution for fallopian tube check. FemChec is part of the confirmation test utilized to confirm FemBloc success. FemChec received CE Mark approval in September 2024 and previously received regulatory approval in Canada.

Previous wording

R&D expenses increased by $448,703 or 29.4%, to 1,975,875 for the three months ended June 30, 2024 from $1,527,172 for the three months ended June 30, 2023. The increase relates primarily to increased material and development costs, clinical- related costs and compensation.

Current wording

R&D expenses increased by $230,411 or 11.1%, to $2,303,241 for the three months ended September 30, 2024 from $2,072,830 for the three months ended September 30, 2023. The increase relates primarily to increased compensation costs and professional and outside consultant costs.

Previous wording

Sales and marketing expenses increased by $846,291 or 656.6%, to $975,190 for the three months ended June 30, 2024 from $128,899 for the three months ended June 30, 2023. The increase is largely due to increased compensation costs and sales expenses as we recruited and hired commercial team members in connection with the initiation of commercialization of FemaSeed.

Current wording

Sales and marketing expenses increased by $1,501,306 or 2,118.0%, to $1,572,189 for the three months ended September 30, 2024 from $70,883 for the three months ended September 30, 2023. The increase is largely due to increased compensation costs and sales and marketing expenses as we recruited and hired commercial team members in connection with the initiation of commercialization of FemaSeed in the U.S.

Previous wording

Depreciation and amortization expenses decreased by $65,671, or 49.3%, to $67,628 for the three months ended June 30, 2024 from $133,299 for the three months ended June 30, 2023. The decrease is due to a reduction of depreciation expense associated with our fixed assets.

Current wording

Depreciation and amortization expenses decreased by $49,030, or 39.1%, to $76,288 for the three months ended September 30, 2024 from $125,318 for the three months ended September 30, 2023. The decrease is due to a reduction of depreciation expense associated with our fixed assets.

Previous wording

Other income (expense), net decreased by $246,627, or 580.9%, to $204,173 of expense for the three months ended June 30, 2024 from $42,454 of income for the three months ended June 30, 2023. The decrease relates to interest expense and non-cash discount amortization related to the convertible notes payable, partially offset by an increase in interest income.

Current wording

Other income (expense), net decreased by $373,621, or 442.9%, to $289,262 of expense for the three months ended September 30, 2024 from $84,359 of income for the three months ended September 30, 2023. The decrease relates to an increase in interest expense and non-cash discount amortization related to the convertible notes payable, partially offset by an increase in interest income.

Previous wording

The following table shows our results of operations for the six months ended June 30, 2024 and 2023:

Current wording

The following table shows our results of operations for the nine months ended September 30, 2024 and 2023:

Previous wording

R&D expenses increased by $681,995 or 22.3%, to $3,746,606 for the six months ended June 30, 2024 from $3,064,611 for the six months ended June 30, 2023. The increase relates primarily to increased material and development costs, clinical-related costs, compensation costs and professional and outside consultant costs.

Current wording

R&D expenses increased by $912,406 or 17.8%, to $6,049,847 for the nine months ended September 30, 2024 from $5,137,441 for the nine months ended September 30, 2023. The increase relates primarily to increased compensation costs, professional and outside consultant costs and clinical-related costs.

Previous wording

Sales and marketing expenses increased by $901,882 or 241.3%, to $1,275,677 for the six months ended June 30, 2024 from $373,795 for the six months ended June 30, 2023. The increase is largely due to increased compensation costs and sales expenses as we recruited and hired commercial team members in connection with the initiation of commercialization of FemaSeed.

Current wording

Sales and marketing expenses increased by $2,403,188 or 540.4%, to $2,847,866 for the nine months ended September 30, 2024 from $444,678 for the nine months ended September 30, 2023. The increase is largely due to increased compensation costs and sales and marketing expenses as we recruited and hired commercial team members in connection with the initiation of commercialization of FemaSeed in the U.S.

Previous wording

General and administrative expenses increased by $255,180, or 18.8%, to $1,611,817 for the three months ended June 30, 2024 from $1,356,637 for the three months ended June 30, 2023. The increase was largely due to increased facility, overhead and compensation costs.

Current wording

General and administrative expenses increased by $3,230, or 0.1%, to $4,645,412 for the nine months ended September 30, 2024 from $4,642,182 for the nine months ended September 30, 2023. The slight increase is attributed to increased facility costs, offset by decreased professional fees and compensation costs.

Previous wording

Depreciation and amortization expenses decreased by $127,509, or 47.9%, to $138,856 for the six months ended June 30, 2024 from $266,365 for the six months ended June 30, 2023. The decrease is due to a reduction of depreciation expense associated with our fixed assets.

Current wording

Depreciation and amortization expenses decreased by $176,539, or 45.1%, to $215,144 for the nine months ended September 30, 2024 from $391,683 for the nine months ended September 30, 2023. The decrease is due to a reduction of depreciation expense associated with our fixed assets.

Previous wording

Other income (expense), net decreased by $478,912, or 347.4%, to $341,041 of expense for the six months ended June 30, 2024 from $137,871 of income for the six months ended June 30, 2023. The decrease relates to interest expense and non-cash discount amortization related to the convertible notes payable, partially offset by an increase in interest income.

Current wording

Other income (expense), net decreased by $852,533, or 383.6%, to $630,303 of expense for the nine months ended September 30, 2024 from $222,230 of income for the nine months ended September 30, 2023. The decrease relates to interest expense and non-cash discount amortization related to the convertible notes payable, partially offset by an increase in interest income.

Previous wording

Since our inception through June 30, 2024, our operations have been financed primarily by net proceeds from the sale of our common stock and convertible preferred stock, indebtedness and, to a lesser extent, product revenue. As of June 30, 2024, we had $13,525,898 of cash and cash equivalents and an accumulated deficit of $116,665,713.

Current wording

Since our inception through September 30, 2024, our operations have been financed primarily by net proceeds from the sale of our common stock and convertible preferred stock, indebtedness and, to a lesser extent, product revenue. As of September 30, 2024, we had $7,611,210 of cash and cash equivalents and an accumulated deficit of $122,074,573.

Previous wording

On July 1, 2022, we entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Piper Sandler & Co. (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 of common stock for an aggregate price up to $16.7 million pursuant to the prospectus. As of June 30, 2024, approximately 3.9 million shares of common stock have been sold for aggregate proceeds of approximately $8.7 million under the Equity Distribution Agreement pursuant to the prospectus. As of June 30, 2024, the amount we are authorized to sell is subject to baby-shelf limitations.

Current wording

On July 1, 2022, we entered into an Equity Distribution Agreement (the “Equity Distribution Agreement”) with Piper Sandler & Co. (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 of common stock for an aggregate price up to $16.7 million pursuant to the prospectus. As of September 30, 2024, approximately 3.9 million shares of common stock have been sold for aggregate proceeds of approximately $8.7 million under the Equity Distribution Agreement pursuant to the prospectus. As of September 30, 2024, the amount we are authorized to sell is subject to baby-shelf limitations. In October 2024, the Company sold 665,669 shares under this facility, resulting in gross cash proceeds of $900,317.

Previous wording

The following table summarizes our cash flows for the six months ended June 30, 2024 and 2023:

Current wording

The following table summarizes our cash flows for the nine months ended September 30, 2024 and 2023:

Previous wording

For the six months ended June 30, 2024, cash used in operating activities was $8,894,780, attributable to a net loss of $8,284,084 and a net change in our net operating assets and liabilities of $1,777,514, partially offset by non-cash charges of $1,166,618. Non-cash charges primarily consisted of $544,363 in amortization of the discount on convertible notes, $299,171 in right-of-use amortization, $181,598 in share-based compensation and $138,856 in depreciation and amortization. The change in our net operating assets and liabilities was primarily due to decreases in accounts payable and accrued expenses of $781,626, lease liabilities of $137,482 and increases in inventory of $651,292 and prepaid and other assets of $173,828.

Current wording

For the nine months ended September 30, 2024, cash used in operating activities was $14,369,440, attributable to a net loss of $13,692,944 and a net change in our net operating assets and liabilities of $2,503,977, partially offset by non-cash charges of $1,827,481. Non-cash charges primarily consisted of $854,902 in amortization of the discount on convertible notes, $438,601 in right-of-use asset amortization, $310,004 in share-based compensation and $215,144 in depreciation and amortization. The change in our net operating assets and liabilities was primarily due to decreases in accounts payable and accrued expenses of $368,450, lease liabilities of $273,734 and increases in inventory of $1,273,382, prepaid and other assets of $266,518 and accounts receivable of $285,384.

Previous wording

For the six months ended June 30, 2023, cash used in operating activities was $5,388,824, attributable to a net loss of $5,839,765 and a net change in our net operating assets and liabilities of $132,443, partially offset by non-cash charges of $583,384. Non-cash charges largely consisted of $266,365 in depreciation and amortization, $148,541 in right-of-use amortization, $122,170 in stock-based compensation and $44,538 for loss on disposal of assets. The change in our net operating assets and liabilities was primarily due to decreases of $181,065 in lease liabilities and increases of $146,521 in inventory and $78,276 in accounts receivable, partially offset by decreases in prepaid and other assets of $154,065 and increases of $116,235 in accounts payable and accrued expenses.

Current wording

For the nine months ended September 30, 2023, cash used in operating activities was $8,244,566, attributable to a net loss of $9,836,670, partially offset by non-cash charges of $1,341,880 and a net change in our net operating assets and liabilities of $250,224. Non-cash charges largely consisted of $626,529 in stock-based compensation, $391,683 in depreciation and amortization, $274,158 in right-of-use asset amortization and $44,538 for loss on disposal of assets. The change in our net operating assets and liabilities was primarily due to a decrease in prepaid and other assets of $313,154 and an increase in accounts payable and accrued expenses of $453,847, which were offset partially by increases in inventory of $170,917, accounts receivable of $26,086 and a decrease in lease and other liabilities of $319,774.

Previous wording

For the six months ended June 30, 2024, cash used in investing activities for the purchase of property and equipment and acquisition of patents was $297,123.

Current wording

For the nine months ended September 30, 2024, cash used in investing activities for the purchase of property and equipment and acquisition of patents was $737,151.

Previous wording

For the six months ended June 30, 2023, cash used in investing activities for the purchase of property and equipment was $71,849.

Current wording

For the nine months ended September 30, 2023, cash used in investing activities for the purchase of property and equipment was $99,018.

Previous wording

For the six months ended June 30, 2024, cash provided by financing activities was $1,001,724, attributable to proceeds from sales under the at-the-market facility, net of issuance costs and proceeds from the issuance of shares under the ESPP plan.

Current wording

For the nine months ended September 30, 2024, cash provided by financing activities was $1,001,724, attributable to proceeds from sales under the at-the-market facility, net of issuance costs and proceeds from the issuance of shares under the ESPP plan.

Previous wording

For the six months ended June 30, 2023, cash used in financing activities was $3,203,754, attributable to proceeds from the issuance of common stock and warrants of $3,905,071, partially offset by financing offering costs of $547,764, repayments on notes payable of $141,298 and payments under lease obligations of $12,255.

Current wording

For the nine months ended September 30, 2023, cash provided by financing activities was $4,074,083, primarily attributable to proceeds from the issuance of common stock and warrants of $4,965,046, offset by financing offering costs of $547,764, repayments on notes payable of $327,006 and payments under lease obligations of $16,193.