Femasys Inc. Announces Financial Results for the Third Quarter of 2021

-- Up to 792-patient, pivotal LOCAL trial progressing for FemaSeed^® after receipt of investigational device exemption (IDE) submission approval --

-- Femasys added to the Russell Microcap^® Index in Q3 --

ATLANTA, Nov. 10, 2021 (GLOBE NEWSWIRE) -- Femasys Inc. (NASDAQ: FEMY), a biomedical company aiming to meet women's needs worldwide by developing a suite of product candidates that include minimally invasive, in-office technologies for reproductive health, today announced financial results for the third quarter and nine months ended September 30, 2021 and provided a corporate update on the Company’s business and clinical programs.

“Since becoming public approximately five months ago, we’ve gained substantial traction for our product candidates that have the opportunity to provide women access to superior technologies and revolutionize their options related to reproductive care,” stated Kathy Lee-Sepsick, president, chief executive officer and founder of Femasys. “Our pipeline progress has been driven by the advancement of FemaSeed, our novel product candidate that delivers sperm directly to a selected fallopian tube where conception occurs, with enrollment progressing for our LOCAL trial that commenced in July, enrolling qualified women seeking conception at centers across the U.S. with additional centers being added.”

Ms. Lee-Sepsick, further commented, “We are now gearing up for the pivotal trial planned for next year associated with our planned IDE submission for FemBloc^®, our permanent birth control product candidate. We are eager to address the existing limitations of infertility and birth control options– both vast and underserved markets within women’s reproductive health worldwide – with non-surgical solutions that are driven by safety and affordability.”

Recent Corporate Developments

• On September 20, 2021, Femasys announced that the Company was added to the Russell Microcap^® Index. The Russell Microcap Index is widely used by investment managers and institutional investors for index funds and as benchmarks for active investment strategies. Approximately $10.6 trillion in assets are benchmarked against Russell's US indexes. Russell indexes are part of FTSE Russell, a leading global index provider.
  
• On September 1, 2021, Femasys announced the appointment of Edward G. Evantash, M.D., as chief medical officer. Dr. Evantash brings over two decades of industry experience in medical and clinical affairs to Femasys, having previously served as chief medical officer of Alydia Health and vice president of medical affairs at Hologic, Inc., both medical technology companies focused on women’s healthcare. He will be responsible for providing leadership and direction for Femasys’ pipeline of clinical development programs.
  

Q3 Developments Related to Clinical Programs

• On July 20, 2021, Femasys announced the initiation of and first patient treated with FemaSeed in the LOCAL trial. The trial is being conducted across centers in the United States and is expected to enroll up to 792 patients who are diagnosed as infertile. The primary endpoints of the study are to determine the effectiveness (clinical pregnancy rate) and safety over a period of 7 weeks. Enrollment in this trial is ongoing.
  

Third Quarter (Three-Months) 2021 Financial Results:

• Research and Development expenses increased by $144,957, or 14.6%, to $1,140,577 for the third quarter of 2021 compared the third quarter of 2020. The increase was primarily due to an increase in research and development project spending and consulting costs to support the company’s clinical trials.
  
• General and Administrative expenses increased by $490,585, or 82.2%, to $1,087,363 for the third quarter of 2021 compared to the third quarter of 2020. The increase was largely due to an increase of $309,749 in professional costs associated with being a public company.
  
• Sales of the Company’s FemVue^® product, decreased by $43,627, or 13.9%, to $269,581 from $313,208 for the third quarter of 2021. The sales decrease was attributable to a 19.9% decline in units sold, largely due to a rebound of sales in the third quarter of 2020 from the heavily impacted second quarter of 2020 due to the COVID-19 pandemic. International sales were $58,045 for the three months ended September 30, 2021 and 2020.
  
• Primarily reflecting the factors noted above, net loss was $(2,259,701), or $(0.19) per basic and diluted share attributable to common stockholders, for the third quarter of 2021, compared to $(1,568,295), or $(1.64) per basic and diluted share attributable to common stockholders, for the third quarter of 2020.
  
• The cash and cash equivalents balance as of September 30, 2021 was $27,280,309. The Company expects, based on its current operating plan, that its existing cash and cash equivalents will be sufficient to fund its operations at least through 2022.
  

Year to Date 2021 (Nine-Months) Financial Results:

• Research and Development expenses decreased by $204,555, or 6.3%, to $3,030,467 for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The decrease was primarily due to the decrease of $161,555 in compensation and related personnel costs due to the reduction in staff in March 2020 and a decrease in clinical-related trial costs and material and development costs due to deferring certain R&D projects in the first half of 2021 to preserve cash, which was partially offset by an increase in other costs related to support of our clinical trials.
  
• General and Administrative expenses increased by $1,240,154, or 69.3%, to $3,030,749 for the nine months ended September 30, 2021, compared to the nine months ended September 30, 2020. The increase was largely due to an increase of $1,050,483 in professional costs largely associated with our financing transactions and additional costs associated with being a public company.
  
• Sales of the Company’s FemVue^® product increased by $168,408, or 22.2%, to $925,362 from $756,954 for the nine months ended September 30, 2020. The increase was attributable to a $112,613 increase in U.S. sales and a $55,795 increase in international sales. The increase in sales was largely attributable to the decrease in sales for the nine months ended September 30, 2020, primarily due to the impacts of the COVID-19 pandemic.
  
• Primarily reflecting the factors noted above, net loss decreased to $(5,172,992), or $(1.04) per basic and diluted share attributable to common stockholders, for the nine months ended September 30, 2021, as compared to a net loss of $(5,255,473), or $(5.50) per basic and diluted share attributable to common stockholders, for the nine months ended September 30, 2020.
  

About Femasys

Femasys Inc. is a biomedical company aiming to meet women's needs worldwide by developing a suite of product candidates that include minimally invasive, in-office technologies for reproductive health. Its two lead product candidates are FemBloc^® permanent birth control and FemaSeed^® localized directional insemination for infertility. The Company’s product for fallopian tube assessment by ultrasound, FemVue^®, is currently marketed in the United States. Femasys is also advancing FemCerv^®, a technology platform for tissue sampling intended to be marketed alongside its other women-specific medical products in the physician’s office setting.

Forward-Looking Statements

This press release contains forward-looking statements that are subject to substantial risks and uncertainties. Forward-looking statements can be identified by terms such as “may,” “will,” “should,” “expect,” “plan,” “anticipate,” “could,” “intend,” “believe,” “potential” or “continue” or the negative of these terms or other similar expressions, although not all forward-looking statements contain these words. Forward-looking statements are based on our current expectations and are subject to inherent uncertainties, risks and assumptions, many of which are beyond our control, difficult to predict and could cause actual results to differ materially from what we expect. Further, certain forward-looking statements are based on assumptions as to future events that may not prove to be accurate. Factors that could cause actual results to differ include, among others: 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 business model and strategic plans for our products, technologies and business, including our implementation thereof; and those other risks and uncertainties described in the section titled "Risk Factors" in our Quarterly Report on Form 10-Q filed with the Securities and Exchange Commission (the “SEC”) on August 11, 2021, and other reports as filed with the SEC. Forward-looking statements contained in this press release are made as of this date, and Femasys undertakes no duty to update such information except as required under applicable law.

Contacts:

Investors
Chuck Padala
LifeSci Advisors, LLC
+1-917-741-7792
chuck@lifesciadvisors.com

Media
Sky Striar
LifeSci Communications
sstriar@lifescicomms.com

Femasys Inc.
Investor Contact:
IR@femasys.com

Media Contact:
Media@femasys.com

FEMASYS INC.
Balance Sheets
(unaudited)
Assets								September 30, 2021			December 31, 2020
Current assets:
	Cash and cash equivalents						$	27,280,309			3,322,226
	Accounts receivable, net							143,459			125,790
	Inventory, net							150,336			131,378
	Other current assets							759,453			284,115
					Total current assets			28,333,557			3,863,509
Property and equipment, at cost:
	Leasehold improvements							1,155,332			1,155,332
	Office equipment							99,344			64,145
	Furniture and fixtures							424,947			424,947
	Machinery and equipment							2,262,908			2,242,088
	Construction in progress							268,226			139,150
								4,210,757			4,025,662
Less accumulated depreciation								(2,600,787	)		(2,197,868	)
					Net property and equipment			1,609,970			1,827,794
Long-term assets:
	Lease right-of-use assets, net							759,018			1,057,506
	Intangible assets, net of accumulated amortization							33,046			65,069
	Other long-term assets							428,933			792,440
					Total long-term assets			1,220,997			1,915,015
					Total assets		$	31,164,524			7,606,318
(continued)

FEMASYS INC.
Balance Sheets
(unaudited)
Liabilities, Redeemable Preferred Stock and Stockholders' Equity (Deficit)								September 30, 2021			December 31, 2020
Current liabilities:
	Accounts payable						$	436,890			674,333
	Accrued expenses							597,856			1,117,601
	Clinical holdback – current portion							18,947			—
	Notes payable – current portion							320,866			630,010
	Lease liabilities – current portion							412,911			434,072
	Other – current							32,895			32,895
					Total current liabilities			1,820,365			2,888,911
Long-term liabilities:
	Clinical holdback – long-term portion							155,960			164,972
	Note payable – long-term portion							—			182,490
	Lease liabilities – long-term portion							501,912			809,092
	Other – long-term							32,895			32,895
					Total long-term liabilities			690,767			1,189,449
					Total liabilities			2,511,132			4,078,360
Commitments and contingencies
Redeemable convertible preferred stock:
	Preferred stock, Series B, $.001 par, none authorized, issued
		and outstanding as of September 30, 2021; 13,344,349 shares
		authorized, issued and outstanding as of December 31, 2020						—			10,748,873
	Preferred stock, Series C, $.001 par, none authorized, issued
		and outstanding as of September 30, 2021; 42,491,484 shares
		authorized, issued and outstanding as of December 31, 2020						—			44,594,813
Stockholders' equity (deficit):
	Common stock, $.001 par, 200,000,000 authorized,
		11,916,943 shares issued and 11,799,720 outstanding as of
		September 30, 2021; and 95,583,558 authorized, 1,110,347 shares
		issued and 993,124 outstanding as of December 31, 2020						11,916			1,110
	Treasury stock, 117,223 shares							(60,000	)		(60,000	)
	Preferred stock, Series A, $.001 par, none authorized, issued
		and outstanding as of September 30, 2021; 17,310,609 shares
		authorized, and 17,210,609 shares issued and outstanding
		as of December 31, 2020						—			17,211
	Warrants							702,492			702,492
	Additional paid-in-capital							108,374,466			22,725,949
	Accumulated deficit							(80,375,482	)		(75,202,490	)
					Total stockholders' equity (deficit)			28,653,392			(51,815,728	)
					Total liabilities, redeemable convertible preferred stock
						and stockholders' equity (deficit)	$	31,164,524			7,606,318

FEMASYS INC.
Statements of Comprehensive Loss
(unaudited)
								Three Months Ended September 30,						Nine Months Ended September 30,
								2021			2020			2021			2020
Sales							$	269,581			313,208			925,362			756,954
Cost of sales								105,403			90,435			306,072			218,898
					Gross margin			164,178			222,773			619,290			538,056
Operating expenses:
	Research and development							1,140,577			995,620			3,030,467			3,235,022
	Sales and marketing							43,284			31,010			87,931			281,583
	General and administrative							1,087,363			596,778			3,030,749			1,790,595
	Depreciation and amortization							144,399			164,242			449,211			499,534
					Total operating expenses			2,415,623			1,787,650			6,598,358			5,806,734
					Loss from operations			(2,251,445	)		(1,564,877	)		(5,979,068	)		(5,268,678	)
Other income (expense):
	Interest income, net							1,649			342			1,957			22,298
	Other income							—			—			821,515			—
	Interest expense							(7,055	)		(3,760	)		(14,546	)		(9,093	)
	Other expense							(2,850	)		—			(2,850	)		—
					Total other income (expense)			(8,256	)		(3,418	)		806,076			13,205
					Loss before income taxes			(2,259,701	)		(1,568,295	)		(5,172,992	)		(5,255,473	)
Income tax expense								—			—			—			—
					Net loss		$	(2,259,701	)		(1,568,295	)		(5,172,992	)		(5,255,473	)
Comprehensive loss:
					Net loss		$	(2,259,701	)		(1,568,295	)		(5,172,992	)		(5,255,473	)
					Change in fair value of available for sale investments			—			—			—			(20	)
					Total comprehensive loss		$	(2,259,701	)		(1,568,295	)		(5,172,992	)		(5,255,493	)
Net loss attributable to common stockholders, basic and diluted							$	(2,259,701	)		(1,568,295	)		(5,172,992	)		(5,255,473	)
Net loss per share attributable to common stockholders, basic and diluted							$	(0.19	)		(1.64	)		(1.04	)		(5.50	)
Weighted-average shares used in computing net loss per share attributable to common stockholders, basic and diluted								11,799,720			955,649			4,996,680			955,402