FEMY

FEMASYS INC. - 10-Q Summary (Period Ended June 30, 2026)

Business Context and Reporting Period

This Quarterly Report on Form 10-Q covers the three and six months ended June 30, 2026. Femasys Inc. is a biomedical innovator developing fertility and non-surgical permanent birth control solutions. Key products include FemaSeed (intratubal insemination) and FemVue (diagnostic), while FemBloc (permanent birth control) is in pivotal clinical trials in the U.S. and has received regulatory approvals in Europe, the UK, and New Zealand. The company is classified as a non-accelerated filer, smaller reporting company, and emerging growth company.

Key Financial Metrics

Note: Gross margins are not explicitly stated as a percentage in the filing text, but Cost of Sales was $301,042 for the six months ended June 30, 2026.

Material Changes vs. Prior Period

• Revenue: Sales increased slightly by 0.8% ($6,184) year-over-year, driven primarily by FemaSeed sales, offset by lower international sales of FemVue.
• Net Loss: Net loss improved significantly by 65.4% (from $10.5M to $3.6M). This improvement was largely due to non-cash gains of approximately $5.96M related to the change in fair value of conversion option and warrant liabilities, which were reclassified to equity in April 2026 following shareholder approval.
• Operating Expenses: Total operating expenses remained relatively flat (-0.4%). Research and Development (R&D) expenses decreased by 25.7% due to lower compensation and regulatory fees, while Sales and Marketing expenses increased by 37.8% due to higher compensation and travel costs.
• Liquidity: Cash and cash equivalents decreased by approximately $7.8 million during the period, primarily due to operating cash outflows. However, the company completed a private placement subsequent to the period end (August 2026) raising approximately $30 million.
• Capital Structure: A 1-for-20 reverse stock split was effected on June 5, 2026. All share data in this report is retroactively adjusted.

Guidance, Outlook, and Risks

• Outlook: Management expects to continue incurring operating losses as it invests in the commercialization of FemaSeed and the clinical development of FemBloc. The company believes its current cash position, combined with the $30 million raised in August 2026, is sufficient to fund operations for at least the next 12 months.
• Key Milestones: Enrollment has begun for the final phase of the pivotal clinical trial for FemBloc in the U.S. The company also announced the commercial launch of FemaSeed Complete and regained compliance with Nasdaq listing requirements.
• Risks: Significant risks include the ability to obtain additional financing, the success of the FemBloc clinical trial and subsequent FDA approval, and the ability to grow sales of FemaSeed. The company operates with an accumulated deficit of approximately $149.4 million.
• Unusual Items: The financial results for the six months ended June 30, 2026, include a significant non-cash gain ($5.96M) from the reclassification of derivative liabilities (conversion options and warrants) to equity. This reclassification occurred after shareholders approved the issuance of shares exceeding the 19.99% limitation, removing the accounting impediment to equity classification.

Investor Verification Checklist

• Verify the status and enrollment progress of the FemBloc pivotal clinical trial (NCT05977751) and the timeline for FDA submission.
• Confirm the utilization of the $30 million raised in the August 2026 private placement and the terms of the accompanying warrants.
• Monitor the company's cash burn rate against the stated 12-month runway, given the continued operating losses.
• Review the impact of the 1-for-20 reverse stock split on liquidity and trading volume of the common stock.
• Assess the sustainability of the 37.8% increase in Sales and Marketing expenses and its correlation with future revenue growth.