Femasys Inc. — Q1 2024 Form 10-Q
Reporting period: Three months ended March 31, 2024; balance-sheet comparisons are with December 31, 2023. Femasys develops and commercializes women’s reproductive-health products, including FDA-cleared FemaSeed and FemVue, and is conducting a pivotal trial of FemBloc, a permanent birth-control candidate.
Financial results and liquidity
- Revenue: $271,140, down 7.8% from $293,984. Sales were entirely U.S.-based and primarily from FemVue; management attributed the decline to 5.1% fewer units sold, with average selling price consistent.
- Gross profit and margin: $182,608 gross profit; approximately 67.4% margin, calculated from sales less cost of sales (excluding depreciation). The comparable 2023 margin was approximately 64.2%.
- Operating expenses: $3.65 million, up 12.8%. R&D rose 15.2% to $1.77 million; sales and marketing rose 22.7% to $300,487; general and administrative rose 14.3% to $1.50 million.
- Loss: Operating loss was $3.46 million versus $3.04 million. Net loss was $3.60 million, up 22.2% from $2.95 million; basic and diluted loss per share was $0.17 versus $0.25, with weighted-average shares increasing to 21.78 million from 11.87 million.
- Cash flow: Operating cash use was $4.57 million versus $2.65 million; investing cash use was $90,160. Financing provided $778,175, principally from ATM share sales. Cash declined $3.88 million during the quarter.
- Liquidity: Cash and cash equivalents were $17.84 million, down from $21.72 million. Current assets were $19.88 million and current liabilities $2.36 million. Accumulated deficit was $111.98 million.
- Debt: Convertible-note principal was $6.85 million, with a $4.47 million net carrying value at quarter-end. The notes bear 6% interest and mature November 21, 2025; Q1 interest expense was $361,552, including $258,802 of noncash discount and issuance-cost amortization. Notes had not converted.
Changes, outlook, and notable developments
- Compared with Q1 2023, revenue declined while operating costs and net loss increased. R&D and commercial hiring contributed to higher expenses; interest and noncash debt-discount amortization drove the swing from other income to other expense.
- Management estimates existing cash will fund operations into the second half of 2025 and says cash on hand, including cash received after quarter-end, should cover at least 12 months from filing. These are estimates based on assumptions; the company expects losses to increase as FemBloc advances and says additional capital will be needed to complete development and commercialization.
- In March, Femasys reported the first commercial FemaSeed procedure and positive topline pivotal-trial results: 24% of women with male-factor infertility became pregnant after FemaSeed, compared with a cited historical IUI control rate of 6.7% per cycle. The filing reports no new safety concerns through seven-week follow-up; these trial results do not assure broader commercial acceptance or future outcomes.
- FemBloc’s pivotal FINALE trial had six sites enrolling. Its primary pregnancy-rate analysis is planned after 401 women have used FemBloc for one year; an interim analysis is planned after 300 have done so, with annual follow-up for five years post-market.
- In April 2024, the company sold 121,371 shares through its ATM facility for $219,752 gross proceeds. Financing access is uncertain and ATM capacity is subject to baby-shelf limitations. November financing warrants could generate up to $15.4 million if exercised for cash, but exercise is not assured.
- Potential dilution is significant: 14.88 million potentially dilutive shares were excluded from diluted loss per share as anti-dilutive, including 11.61 million warrants tied to the November 2023 financing. The company also disclosed a related-party note investment: $5 million of the November notes was issued to PharmaCyte Biotech, whose interim CEO, president, and director serves on Femasys’s board.
- No material legal contingencies requiring accrual or disclosure were reported. Management concluded disclosure controls were effective at a reasonable-assurance level; no material changes to internal control were reported.
Key facts for investors to verify
- Cash burn, actual spending versus plan, and whether the stated runway into the second half of 2025 remains achievable.
- FemaSeed’s commercial adoption, revenue contribution, and whether reported trial results are confirmed and sustained in broader use.
- FemBloc enrollment and timing of the planned interim and primary analyses, as well as regulatory and funding requirements.
- Potential dilution and financing terms, including ATM availability, convertible-note obligations, and warrant exercise likelihood.
- Revenue growth and product-level sales detail; the filing reports total sales primarily from FemVue but does not provide a clear product-by-product revenue breakdown.