Femasys Inc. announced that it has entered into a Securities Purchase Agreement with new lead investor PharmaCyte Biotech, Inc. to issue 6% senior unsecured convertible notes for the gross proceeds of $6,850,000 on November 14, 2023. The notes are convertible into common shares at a fixed conversion price of $1.18 per share and bears 6% coupon rate and matures two years after the date of issuance. The company also issues Series A Warrants to purchase up to an aggregate of 5,805,083 shares of Common Stock at an exercise price of $1.18 per share, and Series B Warrants to purchase up to an aggregate of 5,805,083 shares of Common Stock at an exercise price of $1.475 per share.

The closing of the Private Placement is expected to occur on November 17, 2023 subject to the satisfaction of customary closing conditions. The aggregate gross proceeds from the Private Placement are expected to be $6,850,000. The Notes are senior unsecured obligations of the Company and accrue interest at a rate of 6.00% per annum, payable annually, in cash or shares of Common Stock at the Company?s option, and mature two years after the date of issuance.

The Notes are convertible into shares of Common Stock (the ?Conversion Shares?) at the election of the holder at any time at an initial conversion price of $1.18. The Conversion Price is subject to customary adjustments for stock dividends, stock splits, reclassifications and similar corporate events. The Company has agreed in the Purchase Agreement and the Notes not to issue or sell any equity securities of the Company at a price below the then-current Conversion Price for a period of 18 months after Closing, subject to certain exceptions. The Series A Warrants are exercisable for shares of Common Stock immediately, at an exercise price of $1.18 per share and expire five years from the date of issuance.

The Company has the right to call the exercise of the Series A Warrants if the closing price of the Common Stock exceeds 200% of the Series A Exercise Price for 10 consecutive trading days and the daily dollar trading volume of the Common Stock exceeds $1,000,000 per day during the same period and certain equity conditions are satisfied. The Series B Warrants are exercisable for shares of Common Stock immediately, at an exercise price of $1.475 per share and expire one year from the date of issuance. The Company has the right to call the exercise of the Series B Warrants if the closing price of the Common Stock exceeds 200% of the Series B Exercise Price for 10 consecutive trading days and the daily dollar trading volume of the Common Stock exceeds $1,000,000 per day during the same period and certain equity conditions are satisfied.

There is no established public trading market for the Warrants and the Company does not intend to list the Warrants on any national securities exchange or nationally recognized trading system. The Private Placement is exempt from the registration requirements of the Securities Act pursuant to the exemption for transactions by an issuer not involving any public offering under Section 4(a)(2) of the Securities Act of 1933, as amended (the ?Securities Act?) and Rule 506 of Regulation D of the Securities Act and in reliance on similar exemptions under applicable state laws.