Form 10-Q FEMASYS INC For: Jun 30

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

For the quarterly period ended June 30, 2022

OR

 

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.

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:

The Registrant had 11,813,610 shares of common stock, $0.001 par value, outstanding as of August 5, 2022.

 

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SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS

•	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;

•	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.

FEMASYS INC.

Statements of Stockholders’ Equity (Deficit)

(unaudited)

 

		Series B and Series C Redeemable Convertible																																												Total
		Preferred stock								Common stock								Treasury stock								Preferred stock												Additional				Accumulated				stockholders’
		Shares				Amount				Shares				Amount				Shares				Amount				Shares				Amount				Warrants				paid-in capital				deficit				Equity (Deficit)
THREE MONTHS ENDED JUNE 30, 2021
Balance at March 31, 2021			55,835,833			$	55,343,686				1,112,431			$	1,112				117,223			$	(60,000	)			17,210,609			$	17,211			$	702,492			$	22,808,487			$	(77,032,722	)		$	(53,563,420	)
Issuance of common stock for cash upon exercise of options			—				—				38,169				38				—				—				—				—				—				102,057				—				102,095
Issuance of common stock in connection with IPO, net			—				—				2,650,000				2,650				—				—				—				—				—				30,019,707				—				30,022,357
Automatic conversion of preferred stock in connection with IPO			(55,835,833	)			(55,343,686	)			8,116,343				8,116				—				—				(17,210,609	)			(17,211	)			—				55,352,781				—				55,343,686
Share-based compensation expense			—				—				—				—				—				—				—				—				—				58,046				—				58,046
Net loss			—				—				—				—				—				—				—				—				—				—				(1,083,059	)			(1,083,059	)
Balance at June 30, 2021			—			$	—				11,916,943			$	11,916				117,223			$	(60,000	)			—			$	—			$	702,492			$	108,341,078			$	(78,115,781	)		$	30,879,705
SIX MONTHS ENDED JUNE 30, 2021
Balance at December 31, 2020			55,835,833			$	55,343,686				1,110,347			$	1,110				117,223			$	(60,000	)			17,210,609			$	17,211			$	702,492			$	22,725,949			$	(75,202,490	)		$	(51,815,728	)
Issuance of common stock for cash upon exercise of options			—				—				40,253				40				—				—				—				—				—				112,105				—				112,145
Issuance of common stock in connection with IPO, net			—				—				2,650,000				2,650				—				—				—				—				—				30,019,707				—				30,022,357
Automatic conversion of preferred stock in connection with IPO			(55,835,833	)			(55,343,686	)			8,116,343				8,116				—				—				(17,210,609	)			(17,211	)			—				55,352,781				—				55,343,686
Share-based compensation expense			—				—				—				—				—				—				—				—				—				130,536				—				130,536
Net loss			—				—				—				—				—				—				—				—				—				—				(2,913,291	)			(2,913,291	)
Balance at June 30, 2021			—			$	—				11,916,943			$	11,916				117,223			$	(60,000	)			—			$	—			$	702,492			$	108,341,078			$	(78,115,781	)		$	30,879,705

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

The majority of products sold directly to U.S customers are shipped via common carrier, and the customer pays for shipping and handling and assumes control Free on Board (FOB) shipping point. Products shipped to our international distributors are in accordance with their respective agreements; however, the shipping terms are generally EX-Works, reflecting that control is assumed by the distributor at the shipping point. Returns are only accepted with prior authorization from the Company. Items to be returned must be in original unopened cartons and are subject to a 30% restocking fee. Throughout the periods presented, the Company has not had a history of significant returns.