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Item 1A. Risk Factors

2023-03-30 compared with 2022-03-31 · 521 added, 389 removed, 844 unchanged (52% of the section changed)

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We urge investors to carefully review and consider the additional discussion of the risks summarized in this risk factor summary, and other risks that we face, which can be found below under the heading “Risk Factors,” together with other information in this report, before making investment decisions regarding our securities.

• We will need to raise additional capital to continue our operations, execute our business strategy and remain a going concern, and our ability to do so may be limited.

If we fail to obtain additional capital, we may be unable to complete development or obtain regulatory approval to commercialize for our product candidates.

• We will need to raise substantial additional capital to continue our operations, execute our business strategy and remain a going concern, and we may not be able to raise adequate capital on a timely basis, on favorable terms, or at all.

Raising additional capital may cause substantial dilution to our stockholders, restrict our operations or require us to relinquish rights in our technologies or product candidates and their future revenue streams.

• We have a limited operating history, have incurred significant losses since our inception and expect to continue to incur losses for the foreseeable future, which, together with our limited financial resources and substantial capital requirements, make it difficult to assess our prospects.

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• Clinical development is a lengthy and expensive process with an inherently uncertain outcome.

Failure to successfully complete clinical trials and nonclinical activities and obtain regulatory approval to market and sell our product candidates on our anticipated timelines at reasonable costs to us, or at all, particularly Ovaprene and Sildenafil Cream, 3.6%, could have a material adverse effect on our business, operating results and financial condition.

Failure to successfully complete clinical trials and nonclinical activities and obtain regulatory approval to market and sell our product candidates on our anticipated timelines at reasonable costs to us, or at all, particularly Ovaprene, Sildenafil Cream, 3.6%, and DARE-HRT1, could have a material adverse effect on our business, operating results and financial condition.

• The regulatory approval processes of the FDA and comparable foreign authorities are expensive, lengthy, time-consuming, and inherently unpredictable.

If we are not able to obtain regulatory approvals for our product candidates, our ability to generate product revenue will be materially impaired.

• Drug products and drug/device combination products are complex to manufacture.

Manufacturing and supply delays and disruptions may significantly delay our clinical studies, disrupt commercial supply of any approved product, and be expensive for us to resolve.

• Drug products and drug/device combination products are complex to manufacture and we face significant challenges in scaling up manufacturing of our product candidates for larger clinical trials and commercial production.

Manufacturing and supply delays and disruptions could postpone the initiation of or interrupt our clinical studies, extend the timeframe and cost of development of our product candidates, delay potential regulatory approvals and adversely impact the commercialization of any approved products.

• Strategic collaborations are a key part of our strategy and our existing strategic collaborations are important to our business.

If we are unable to establish and maintain strategic collaborations, or if they are not successful, we may require substantial additional capital to develop and commercialize our products and product candidates and our business and prospects may be materially harmed.

If we are unable to maintain existing strategic collaborations or establish new ones, or if they are not successful, we may require substantial additional capital to develop and commercialize our products and product candidates and our business and prospects may be materially harmed.

• Unless and until another product candidate receives regulatory approval, royalties based on net sales of XACIATO will represent our only potential source of ongoing revenue and the amount of those net sales is largely outside of our control.

• We have no manufacturing, sales, marketing or distribution infrastructure.

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• The loss or impairment of our rights under our license agreements for XACIATO or any of our product candidates could prevent us from developing or commercializing them, which could have a material adverse effect on our business prospects, operations and viability.

• The commercial success of XACIATO will depend on Organon’s efforts and capabilities, as well as a variety of factors, many of which currently are unknown or uncertain, and if commercialization of XACIATO is not successful, our business and prospects may suffer.

• XACIATO and any future products will face intense competition, including from generic products, and our business, operating results and financial condition will suffer if we, or our commercial collaborators, fail to compete effectively.

• XACIATO and any future products may fail to achieve the degree of market acceptance by physicians, patients, third-party payors or others in the medical community necessary for commercial success, which would negatively impact our business.

• Failure to successfully obtain coverage and reimbursement for XACIATO and any future products from government health care programs and private commercial health insurance companies, or the availability of coverage only at limited levels, would diminish our ability, or that of a commercial collaborator, to generate net product revenue.

• The commercial success of XACIATO will depend on Organon’s efforts and capabilities, the performance of our contract manufacturer for the product, and a variety of factors, many of which currently are unknown or uncertain, and if commercialization of XACIATO is not successful, our business and prospects may suffer.

• XACIATO and any future products will face intense competition, including from generic products, and may fail to achieve the degree of market acceptance necessary for commercial success.

Our business, operating results and financial condition will suffer if we, or our commercial collaborators, fail to compete effectively and fail to achieve market acceptance.

• Failure to successfully obtain coverage and adequate reimbursement for XACIATO and any future products from government health care programs and other third-party payors would diminish our ability, or that of a commercial collaborator, to generate net product revenue or net sales.

If out-of-pocket costs for our products are deemed by women to be unaffordable, a commercial market may never develop.

• We have a relatively small number of employees, and if we fail to attract and retain key personnel or experience significant increases in our compensation costs to attract and retain key personnel, our business may materially suffer.

• We have a relatively small number of employees, and if we fail to attract and retain key personnel or effectively manage our personnel costs, our business may materially suffer.

• We may not be successful in our efforts to identify and acquire or in-license additional product candidates or technologies, which may limit our growth potential.

• Our failure to adequately protect or enforce our intellectual property rights, and those of our licensors, could materially harm our proprietary position in the marketplace or prevent or impede the commercialization of XACIATO and any future products.

• Lack of patent protection for the active ingredients in certain of our products and product candidates, including XACIATO and Sildenafil Cream, 3.6%, may limit the commercial opportunity for those products if competitors are able to develop and commercialize safe and effective alternative formulations or methods of delivery of the active ingredients.

• The COVID-19 pandemic, escalating geopolitical events and macroeconomic factors may negatively impact our business, financial condition and results and our stock price, including by increasing the cost and timelines for our clinical development programs or negatively impacting our ability to raise additional capital.

• Product liability lawsuits against us could cause us to incur substantial liabilities.

• Lack of patent protection for the active ingredients in certain of our products and product candidates, including XACIATO, Sildenafil Cream, 3.6%, and DARE-HRT1 may limit the commercial opportunity for those products if competitors are able to develop and commercialize safe and effective alternative formulations or methods of delivery of the active ingredients.

• Volatility in the financial markets, geopolitical conflicts and events, public health emergencies such as the COVID-19 pandemic and other macroeconomic factors may negatively impact our business, financial condition and results and our stock price, including by increasing the cost and timelines for our clinical development programs or making it more difficult or costly to raise additional capital when needed.

• Product liability lawsuits against us could cause us to incur substantial liabilities and divert management attention from our business.

• The price of our common stock has been and may continue to be highly volatile and such volatility may be related or unrelated to our performance and operating results.

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• There is no assurance that we will continue satisfying the listing requirements of the Nasdaq Capital Market, and failure to do so could result in the suspension or delisting of our common stock, which could, among other things, limit demand for our common stock, substantially impair our ability to raise additional capital and have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.

• Future dilution to our existing stockholders from sales and issuances of our common stock through at-the-market, or ATM, offerings, other types of public or private offerings of our equity securities and upon the exercise of stock options and warrants, or the expectation that such sales of equity may occur, could adversely affect the market price of our common stock, even if our business is doing well.

• Cyber-attacks, security breaches, loss of data and other disruptions to our information technology systems or those of our strategic collaborators or third-party service providers could compromise sensitive information related to our business, delay or prevent us from accessing critical information or expose us to liability, any of which could adversely affect our business and our reputation.

• Future dilution to our existing stockholders from sales and issuances of our common stock through at-the-market, or ATM, offerings, other types of public or private offerings of equity or equity-linked securities and upon the exercise of stock options, or the market's expectation that such sales could adversely affect our stock price, even if our business is doing well.

• We have been subject to a cyber-related crime and our controls and security measures may not be successful in preventing other cybersecurity incidents in the future.

Cyber-attacks, security breaches, loss of data and other disruptions to our information technology systems or those of our strategic collaborators or third-party service providers could compromise sensitive information related to our business, delay or prevent us from accessing critical information, subject us to significant financial loss, or expose us to liability, any of which could adversely affect our business and our reputation.

Investment in our securities involves a high degree of risk and uncertainty.

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Risks Related to Our Financial Position and Capital Needs

We will need to raise additional capital to continue our operations and execute our business strategy.

We expect that our net losses will continue for the foreseeable future as we develop and seek to bring to market our existing product candidates and any product candidates we may add to our portfolio in the future.

Advancing our investigational women’s health products through clinical development and pursuing regulatory approval will require substantial additional investment.

We currently do not have the capital necessary to advance all of our product candidates through research and clinical development and regulatory approval.

XACIATO is our first and only product approved for marketing and sale and we do not anticipate the potential upfront, milestone and royalty payments to us under our exclusive license agreement for XACIATO will be sufficient to cover all of our operating expenses.

Accordingly, our ability to continue as a going concern and execute our business strategy depends on our ability to raise additional capital through equity, debt or structured financings, government or other grant funding, collaborations and strategic alliances or other similar types of arrangements.

This report includes disclosures and an opinion from our independent registered public accounting firm stating that our recurring losses and negative cash flows from operations raise substantial doubt about our ability to continue as a going concern.

We will need to raise substantial additional capital to continue our operations and execute our business strategy, and we may not be able to raise adequate capital on a timely basis, on favorable terms, or at all.

We have a history of losses from operations, we expect negative cash flows from our operations to continue for the foreseeable future, and we expect that our net losses will continue for the foreseeable future as we develop and seek to bring to market our existing product candidates and as we seek to potentially acquire or license and develop additional product candidates.

These circumstances raise substantial doubt about our ability to continue as a going concern.

Our financial statements as of December 31, 2022 were prepared under the assumption that we will continue as a going concern and do not include any adjustments that might result from the outcome of this uncertainty.

At December 31, 2022, our accumulated deficit was approximately $141.1 million, our cash and cash equivalents were approximately $34.7 million, our deferred grant funding liability under our grant agreements related to DARE-LARC1 and DARE-LBT was approximately $18.3 million (representing grant funds received that may be applied solely toward direct costs and a portion of indirect costs for the development of DARE-LARC1 and DARE-LBT and which are included in cash and cash equivalents), and our working capital was approximately $11.4 million.

Advancing our investigational women's health products through clinical development and pursuing regulatory approval and commercialization will require substantial additional investment.

Based on our current operating plan estimates, we do not have sufficient cash to satisfy our working capital needs and other liquidity requirements over the next 12 months from the date of this report.

We will need to raise substantial additional capital to continue to fund our operations and execute our current business strategy.

The amount and timing of our capital needs have and will continue to depend highly on many factors, as discussed further below as well as under "ITEM 7.

MANAGEMENT'S DISCUSSION OF AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS—Liquidity and Capital Resources—Plan of Operations and Future Funding Requirements." We closely monitor our cash resources and, if all of our clinical development programs proceed on currently anticipated timelines, we will need additional capital by the middle of this year to fund operations and the continued development of all such programs on such timelines.

Our capital needs have depended on, and will continue to depend on, many factors that are highly variable and difficult to predict, including:

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• the cost and pace of preclinical and clinical development;

• clinical trial results;

• the cost and timing of obtaining clinical and commercial supplies of products and product candidates;

• the cost and timing of regulatory submissions and decisions by the FDA and other regulatory authorities on our applications to commence clinical development and market our product candidates;

• the costs involved in acquiring or in-licensing product candidates or technologies;

• our commercialization plans and the timing and terms of our agreements with third parties relating to commercialization of any approved product.

• the results of preclinical activities and clinical trials;

• the cost and timing of obtaining clinical supplies of product candidates and commercial supplies of products;

• the cost and timing of regulatory submissions and decisions by the FDA and other regulatory authorities on our applications to commence and advance clinical development of and to market our product candidates;

• the amount and timing of payments to third parties required under acquisition, in-license and other agreements relating our rights to develop and commercialize our product and product candidates;

• the cost and timing of commercialization activities we undertake or engage third parties to undertake for any approved product;

• the amount and timing of future royalty, milestone or other payments, if any, we receive under our commercial collaboration agreements for XACIATO and Ovaprene;

• our ability to maintain, and establish new, strategic collaborations relating to the development and/or commercialization of our product and product candidates;

• the extent to which we acquire, in-license, or otherwise invest in new product candidates or technologies and the terms of any such transaction;

• the cost and timing of preparing, filing, and prosecuting patent applications, maintaining and enforcing our intellectual property rights, and defending any intellectual property-related claims, including any claims by third parties that we are infringing upon their intellectual property rights.

Should we add product candidates to our portfolio, should our existing product candidates require testing or other capital-intensive development activities that we do not anticipate, should the duration of our clinical trials be longer than anticipated, should manufacturing and supply be disrupted, or should regulatory approvals be delayed, our cash resources will be further strained.

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In addition, the terms of any collaboration agreements for development and/or commercialization of our product and product candidates may significantly impact our need for additional capital.

At December 31, 2021, our cash and cash equivalents were approximately $51.7 million and our accumulated deficit was approximately $110.1 million.

We incurred a net loss of approximately $38.7 million for the year ended December 31, 2021.

We may never become profitable.

We expect negative cash flows from our operations to continue for the foreseeable future.

We will need to raise additional capital or significantly curtail our planned operations to remain a going concern.

Additional capital may not be available to us, or even if it is, the cost of such capital may be high.

We may be forced to obtain additional capital before reaching clinical, regulatory and/or sales milestones, when our stock price or trading volume or both are low, or when the general market for life sciences companies is weak.

Raising capital under any of these or similar scenarios, if we can raise any at all, may lead to significant dilution to our existing stockholders.

See also "Our ability to raise capital may be limited by laws and regulations," and “We are heavily reliant on our ability to raise capital through capital market transactions.

A low trading volume, price and market capitalization together with our lack of revenue, net losses, limited operating history and limited amount of unissued authorized common stock may make it difficult and expensive for us to raise additional capital” below.

If we raise capital through collaborations, strategic alliances or other similar types of arrangements, we may be required to relinquish, on terms that are not favorable to us, rights to some of our technologies or product candidates that we would otherwise seek to develop or commercialize.

In addition, our current and future commercial license agreements may not provide a level of funding sufficient to satisfy our working capital needs or liquidity requirements, thus requiring that we continue to seek to raise additional capital to fund product development through other means.

See also “If a commercial counterparty terminates its exclusive license agreement with us or fails to perform as expected, our need for additional capital may significantly increase,” below.

Further, operational disruptions, resource constraints or shifts in business strategy of potential collaborators as a result of the COVID-19 pandemic, macroeconomic factors or escalating geopolitical events may adversely affect collaboration terms and opportunities for our product candidates.

See also “Risks Related to Our Business Operations and Industry- The COVID-19 pandemic has negatively impacted our business and, in the future, may materially and adversely affect our business, financial condition and results and stock price, including by increasing the cost and timelines for our clinical development programs,” and “- Our business may be adversely affected by unfavorable or unanticipated macroeconomic conditions and geopolitical events,” below.

There can be no assurance that we can raise capital when needed or on terms favorable to us and our stockholders.

The COVID-19 pandemic, macroeconomic conditions, and heightened global uncertainties may adversely affect general commercial activity and the U.S.

and global economies and financial markets, which increases uncertainty around our ability to access the capital markets when needed and on acceptable terms.

If we cannot raise capital when needed on acceptable terms, or at all, we will not be able to advance our product candidates as currently planned or grow our product portfolio, we will need to reevaluate our planned operations, we may relinquish rights under our license agreements with third parties relating to our product candidates, and we may need to delay, scale back or eliminate some or all of our development programs, reduce expenses or cease operations, any of which would have a significant negative impact on our prospects and financial condition, as well as the trading price of our common stock.

Moreover, if we are unable to obtain additional funds on a timely basis, there will be an increased risk of insolvency and up to a total loss of investment by our stockholders.

Because of these uncertainties and the other risks and uncertainties discussed in this “Risk Factors” section, we cannot reasonably estimate the amount funding necessary to successfully complete development of and seek regulatory approval for our product candidates or to commercialize any approved products.

In addition, we may seek additional capital due to favorable market conditions or strategic considerations even if we believe we have sufficient funds for our planned operations.

We may seek to raise additional capital through a variety of means, including equity, equity-linked or debt securities offerings, government or other grant funding, strategic collaborations or alliances, debt, royalty monetization or other structured financings, or other similar types of arrangements.

Our past success in raising capital through equity offerings, grant funding and collaboration agreements should not be viewed as an indication we will be successful in raising capital through those or any other means in the future.

We expect that our ability to raise additional capital and the amount of capital available to us will depend not only on progress we and our collaborators make toward successfully developing, obtaining regulatory approval for and commercializing our product and product candidates, but also on factors outside of our control, such as macroeconomic and financial market conditions.

To the extent we seek to obtain additional capital before achieving clinical, regulatory and/or sales milestones or when our stock price or trading volume or both are low, or when the general market for biopharmaceutical or women’s health companies is weak, additional capital may not be available to us on favorable terms, or at all.

Unstable and unfavorable market and economic conditions may harm our ability to raise additional capital.

An economic downturn, recession or recessionary concerns, delay or failure of the U.S.

government to raise the federal debt ceiling, increased inflation, rising interest rates, adverse developments affecting financial institutions or the financial services industry, or the occurrence or continued occurrence of events similar to those in recent years, such as the COVID-19 pandemic or other public health emergencies, geopolitical conflict (such as the war in Ukraine), natural/environmental disasters, supply-chain disruptions, terrorist attacks, strained relations between the U.S.

and a number of other countries, social and political discord and unrest in the U.S.

and other countries, and government shutdowns, among others, increase market volatility and have long-term adverse effects on the U.S.

and global economies and financial markets.

Volatility and deterioration in the financial markets and liquidity constraints or other adverse developments affecting financial institutions may make equity or debt financings more difficult, more costly or more dilutive and may increase competition for, or limit the availability of, funding from other third-party sources, such as from strategic collaborations and government and other grants.

Our management may devote significant time and we may incur substantial costs in pursuing, evaluating and negotiating potential capital-raising transactions and those efforts may not prove successful on a timely basis, or at all.

If we cannot raise adequate additional capital when needed, we may be forced to delay, scale back or eliminate one or more of our product development programs;

delay, limit or terminate activities in support of our third-party collaborator’s commercialization of XACIATO in the U.S.;

relinquish rights under our license agreements with third parties relating to our product and product candidates;

forgo opportunities to expand our product portfolio;

take other measures to reduce our expenses;

reorganize or merge with another entity;

or file for bankruptcy or cease operations.

If we become unable to continue as a going concern, we may have to liquidate our assets, and might realize significantly less than the values at which they are carried on our financial statements, and our stockholders may lose all or part of their investment in our common stock.

As discussed above, we may seek to raise additional capital through a variety of means.

Raising capital through the issuance of shares of our common stock, or securities convertible into or exercisable for our common stock, may depress our stock price and substantially dilute our existing stockholders.

The terms of securities issued may include liquidation or other preferences that may materially adversely affect the rights of our existing stockholders.

Debt and other structured financings, if available, would increase our fixed payment obligations and may involve covenants requiring us to maintain specified financial ratios or a specified cash balance, or limiting or restricting our ability to take specific actions, such as incurring additional debt, acquiring, selling or licensing intellectual property rights, and making capital expenditures, or impose other operating restrictions that could adversely impact our ability to operate our business and pursue our strategic objectives.

We could also be required to meet certain milestones in connection with a debt financing and the failure to achieve such milestones by certain dates may force us to relinquish rights to some of our technologies, product candidates or products, or otherwise agree to terms unfavorable to us.

In addition, we may be required to relinquish valuable rights to future revenue streams.

Moreover, the lower our cash balance when we seek to raise additional capital, the more difficult, costly or dilutive to our existing stockholders it may be for us to raise additional capital.

We may be required to seek additional capital through arrangements with collaborators at an earlier stage of development or commercialization of our technologies, product candidates or products than otherwise would be desirable, in which case we may grant rights to our technologies, product candidates or products on terms that may not be as favorable to us or grant rights that we would otherwise prefer to retain.

If we raise capital through new collaborations, strategic alliances or other similar types of arrangements, we may relinquish valuable rights to future revenue streams.

Licensing agreements likely would significantly reduce our control over the development or commercialization of the licensed technology, product candidates or products, and our collaborators may become unable or unwilling to devote adequate resources to realize their full potential value.

If we obtain funding through grants from governmental entities or private organizations, such parties may impose restrictions on our rights to technologies, product candidates or products developed with such funding, obtain rights to license such technologies, product candidates or products to third parties (e.g., if we are unable or unwilling to commercialize a product or make it available to certain patient populations in a timely manner), or require future royalty or other payments if such technologies, product candidates or products are commercialized.

We have a limited operating history, have incurred significant losses since our inception and expect to continue to incur losses for the foreseeable future, which, together with our limited financial resources and substantial capital requirements, make it difficult to assess our prospects.

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The development of drug and drug/device combination products in order to obtain regulatory approval is a highly speculative, lengthy and expensive undertaking and involves substantial risk.

We cannot accurately determine the duration and completion costs of our development programs, or if, when and to what extent we will generate revenue from the commercialization of any of our product candidates.

Other than XACIATO, which received FDA approval in December 2021 and has not yet been commercially launched, we have not obtained any regulatory approvals for any of our product candidates, commercialized any of our product candidates or generated any product revenue.

We do not expect the potential milestone and royalty payments to us under our exclusive license agreement for XACIATO will be sufficient to cover our operating expenses.

We have not been profitable since we commenced operations and may never achieve profitability.

We have devoted significant resources to acquiring XACIATO and our product candidates and to research and development, or R&D, activities for them.

We have devoted significant resources to licensing or otherwise acquiring the rights to XACIATO and our product candidates and to research and development, or R&D, activities for them.

Since inception, we have incurred significant operating losses.

As discussed above, we must raise additional capital to finance our operations and remain a going concern.

If a commercial counterparty terminates its exclusive license agreement with us or fails to perform as expected, our need for additional capital may significantly increase.

As discussed above, we must raise additional capital to finance our operations and remain a going concern and adequate additional capital may not be available to us on a timely basis, or at all.

If one of our commercial collaborators terminates its exclusive license agreement with us, our need for additional capital may significantly increase.

We have entered into an exclusive license agreement with Organon for the commercialization of XACIATO and an exclusive license agreement with Bayer for the commercialization of Ovaprene, if approved.

Each of these license agreements may be terminated by the licensee for convenience upon the completion of a specified notice period, subject to limited restrictions.

Furthermore, under our agreement with Organon, we will not receive any payments unless the agreement becomes fully effective, and the effective date of the agreement is subject to the satisfaction of closing conditions, including antitrust law clearance which is outside of our control.

Moreover, under our agreement with Bayer, Bayer has no future payment obligations to us, unless, after reviewing the results of our pivotal clinical trial of Ovaprene, it elects, in its sole discretion, to make the license grant under our agreement effective by making a $20.0 million payment to us.

Furthermore, under our agreement with Bayer, Bayer has no payment obligations to us, unless, after reviewing the results of our pivotal clinical trial of Ovaprene, it elects, in its sole discretion, to make the license grant under our agreement effective by making a $20.0 million payment to us.

If we do not successfully complete a pivotal clinical trial of Ovaprene in a timely manner, the license grant may never become effective, and we may not receive any additional payments from Bayer.

Bayer may elect not to make the license grant effective regardless of the outcome of the pivotal clinical trial.

If an exclusive license agreement is terminated early or does not become fully effective, we may realize none or only a small fraction of the potential value of the agreement to us, and we may need to raise significant additional capital to pursue further development and commercialization of XACIATO or Ovaprene, as applicable.

If these license agreements are not terminated and the license grants become effective, we expect XACIATO’s and Ovaprene’s value to us to be generated primarily through royalties based on net sales and achievement of commercial milestones.

The successful or timely achievement of these milestones is largely outside of our control because the relevant activities will be conducted by the licensee.

Accordingly, if the licensee is not successful or has limited commercialization success, our ability to monetize XACIATO and, if approved, Ovaprene, may be significantly impaired and our need for additional capital could significantly increase.

In the future, we may depend to a large degree on payments from third-party licensees to fund our operations, and failure to receive such payments may cause us to, among other things:

If an exclusive license agreement is terminated early, or in Ovaprene's case, does not become fully effective, we may realize only a small fraction of the potential value of the

agreement to us, and we would need to raise significant additional capital to pursue further development and commercialization of XACIATO or Ovaprene, as applicable, or establish another commercial collaboration, which we may not be able to do on a timely basis, on favorable terms, or at all.

The royalties we may receive under our license agreements with our commercial collaborators are based on net sales, which will be largely outside of our control.

We expect XACIATO’s and Ovaprene’s value to us under our license agreements with Organon and Bayer, assuming the license grant to Bayer becomes effective, to be generated primarily through royalties and potential commercial milestone payments, in each case, based on net sales.

The amount of net sales our products may generate, if any, is largely outside of our control because marketing and sales activities will be conducted by the licensee and the product pricing will be determined by the licensee.

Gross sales can be greatly reduced by sales discounts and allowances, which will also be determined by the licensee (or mandated by governmental entities) and outside of our control.

Sales discounts may be particularly substantial for new products compared to established products to incentivize purchases and promote customer loyalty.

These factors would serve to reduce our royalties and delay potential achievement of commercial milestones.

If a commercial collaborator has no or limited commercialization success, or net sales are otherwise minimal due to pricing and discount structures, our operating results would be negatively impacted and our need for additional capital could significantly increase or be accelerated.

In the future, we may rely on revenues received from third-party licensees to fund our operations, and failure to receive such revenues, or receipt of only minimal revenue, may cause us to, among other things:

• pursue raising additional funds through equity or debt financings that could be dilutive to our stockholders or involve restrictive covenants, operational restrictions and security interests in our assets;

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• forgo opportunities to expand our product portfolio;

• consider strategic transactions with a third party.

Our ability to raise capital may be limited by laws and regulations.

During the year ended December 31, 2021 and through March 30, 2022, we raised approximately $70.9 million in gross proceeds through the sale of equity securities under a Form S-3 “shelf” registration statement.

Using a shelf registration statement to raise capital generally takes less time and is less expensive than other means, such as conducting an offering under a Form S-1 registration statement.

We currently have a shelf registration statement effective, however, our ability to raise capital under this registration statement was in the past, and may again be in the future, limited by, among other things, current and future SEC rules and regulations impacting the eligibility of smaller companies to use Form S-3 for primary offerings of securities.

For example, in fiscal year 2020, we were subject to the "baby shelf rule" because the market value of our outstanding shares of common stock held by non-affiliates, or public float, was less than $75.0 million at the time we filed our shelf registration statement on Form S-3 and remained below $75.0 million during the year.

As a result, that we were able to use our shelf registration statement to raise additional funds only to the extent that the aggregate market value of securities sold by us or on our behalf pursuant to Instruction I.B.6.

• take other measures to reduce our expenses, pursue strategic transactions, such as a merger or other business combination or sale of assets, file for bankruptcy, or cease operations.

We have historically relied heavily on sales of our common stock to fund our operations, and our future ability to obtain additional capital through stock sales or other securities offerings may be more costly or dilutive to our stockholders than in the past, or may not be available to us at all.

Our ability to raise additional capital may be limited by a low trading volume, stock price and market capitalization, as well as by laws, regulations and market conditions.

We have relied heavily on our ability to raise capital by selling shares of our common stock.

For example, we raised an aggregate of approximately $79.1 million in gross proceeds in fiscal years 2021 and 2022 through the sale of shares of our common stock in offerings made under a Form S-3 “shelf” registration statement.

Our ability to raise additional capital through sales of our common stock or other securities offerings will depend on several factors, many of which may not be in our favor, including the trading volume and volatile trading price of our common stock, our relatively low public float and market capitalization, our potential inability to continue to satisfy the listing requirements of the Nasdaq Capital Market, unfavorable financial market conditions, and the other risks and uncertainties described in this “Risk Factors” section.

If we are unable to raise additional capital through the offering and sale of shares of our common stock, or securities convertible into or exercisable for our common stock, on a timely basis or acceptable terms, or at all, we may seek additional capital through other third-party sources that require us to relinquish valuable rights in our intellectual property, technologies, product candidates or future revenue streams, or that subject us to restrictive covenants, operational restrictions or security interests in our assets, or we may need to delay, scale back or eliminate some or all of our development programs, reduce other expenses, file for bankruptcy, reorganize, merge with another entity, or cease operations.

Using a shelf registration statement to conduct an equity offering to raise capital generally takes less time and is less expensive than other means, such as conducting an offering under a Form S-1 registration statement.

We currently have a shelf registration statement effective, however, our ability to raise capital under a shelf registration statement was in the past, and may again be in the future, limited by, among other things, current and future SEC rules and regulations impacting the eligibility of smaller companies to use Form S-3 for primary offerings of securities.

For example, in fiscal year 2020, we were subject to the "baby shelf rule" because the market value of our outstanding

shares of common stock held by non-affiliates, or public float, was less than $75.0 million at the time we filed our shelf registration statement on Form S-3 and remained below $75.0 million during the year.

As a result, we were able to use our shelf registration statement to raise additional funds only to the extent that the aggregate market value of securities sold by us or on our behalf pursuant to Instruction I.B.6.

of Form S-3 during the 12 calendar months immediately prior to, and including, any intended sale did not exceed one-third of the aggregate market value of our public float, calculated in accordance with the instructions to Form S-3.

In the future, if our public float were to decline below $75.0 million at the time we file our next annual report on Form 10-K, which will be due in March of 2024, we could again become subject to the baby shelf rule.

If our ability to offer securities under an effective shelf registration statement is limited, including by the baby shelf rule, we may choose to conduct an offering of our securities under an exemption from registration under the

Securities Act or under a Form S-1 registration statement.

We would expect either of these alternatives to take more time and be a more expensive method of raising additional capital relative to using our shelf registration statement.

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Accordingly, our existing investors may suffer greater dilution if we seek to raise additional capital through such a public offering of our securities.

Furthermore, our ability to raise capital through the issuance and sale of equity securities is limited by the number of shares of our common stock that we are authorized to issue, and increasing the number of authorized shares of our common stock requires stockholder approval.

Currently, we are authorized to issue up to 120,000,000 shares of our common stock and, as of March 30, 2022, 92,244,591 shares of our common stock were outstanding or reserved for issuance upon exercise of outstanding warrants or stock options or for future equity awards under our stock incentive plan, which leaves only 27,755,409 shares of our authorized common stock unreserved and available for issuance.

Obtaining stockholder approval is a costly and time-consuming process.

If we must obtain stockholder approval to increase the amount of common stock we are authorized to issue or for a potential transaction, we would expect to spend substantial additional money and resources.

In addition, seeking stockholder approval would delay our receipt of otherwise available capital, which may materially and adversely affect our ability to execute our business plan, and there is no guarantee our stockholders ultimately would approve a proposed increase in our authorized common stock or a proposed transaction.

We are heavily reliant on our ability to raise capital through capital market transactions.

We are heavily reliant on our ability to raise additional capital by selling shares of our common stock or securities linked to our common stock.

Our ability to raise capital through capital market transactions will depend on several factors, many of which may not be in our favor, including the trading volume and volatile trading price of our common stock, our relatively low public float and market capitalization, our potential inability to continue to satisfy the listing requirements of the Nasdaq Capital Market, unfavorable market conditions or other market factors outside of our control, and the risk factors described elsewhere in this report.

In addition, our ability to raise additional capital by selling shares of our common stock or securities linked to our common stock is limited by the amount of our unissued authorized common stock.

See also “Our ability to raise capital may be limited by laws and regulations,” above, and the risk factors under “Risks Related to Ownership of Our Common Stock,” below.

Even if we are able to raise additional capital, it will likely be dilutive to existing stockholders and the cost of such capital may be substantial and may be more expensive than the cost of capital for larger public companies.

The terms of any funding we obtain may not be favorable to us and may be highly dilutive to our stockholders, and debt financing, if available, may involve restrictive covenants, operational restrictions and security interests in our assets

that may have negative consequences for us, including, among other things, by increasing our vulnerability to adverse economic and industry conditions, limiting our ability to obtain additional funding and enter into partnership and other strategic agreements, and requiring the dedication of a portion of our cash flow to service our indebtedness.

There can be no assurance that we can raise additional capital when needed.

Failing to raise additional capital when needed would have a material adverse effect on our business.

If we must obtain stockholder approval for a potential transaction, we would expect to spend substantial additional money and resources.

Due in part to our limited financial resources, we may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable indications or therapeutic areas for our product candidates, we may be unable to pursue and complete the clinical trials we would like to pursue and complete, and we may be unable to commence or complete clinical trials and pursue regulatory approvals in accordance with our current timeline expectations.

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We may make determinations with regard to the indications and clinical trials on which to focus our resources that result in our realization of less than the full potential value of a product candidate.

The decisions to allocate our research, management and financial resources toward particular indications may not lead to positive clinical milestones or to the development of viable commercial products and may divert resources from better opportunities.

The decisions to allocate our research, management, personnel and financial resources toward particular indications may not lead to positive clinical milestones or to the development of viable commercial products and may divert resources from better opportunities.

Similarly, our decisions to delay or terminate development programs may also cause us to miss valuable opportunities, including the potential for some of our product candidates to be first-in-category products.

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See also “Risks Related to Product Research & Development, and Regulatory Approval – Delays in the commencement or completion of clinical testing of product candidates we are developing or may develop in the future may occur due to any of a number of factors and could result in significantly increased costs and longer timelines and could impact our ability to ever become profitable” below.

Our cash could be adversely impacted if a financial institution with which we have deposit or other accounts fails.

Our cash and cash equivalents we use to satisfy our working capital and operating expense needs are held in accounts at various financial institutions.

The balance held in deposit accounts often exceeds the Federal Deposit Insurance Corporation (“FDIC”) deposit insurance limit or similar government deposit insurance schemes.

Our cash and cash equivalents could be adversely impacted, including the loss of uninsured deposits and other uninsured financial assets, if one or more of the financial institutions in which we hold our cash or cash equivalents fails or is subject to other adverse conditions in the financial or credit markets.

For example, on March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation and taken into receivership by the FDIC.

At that time, substantially all of our cash and cash equivalents were held in accounts with Silicon Valley Bank and we could not access such accounts.

While we were afforded full access to our accounts on March 13, 2023 as a result of action taken by the U.S.

Department of the Treasury, the Federal Reserve and the FDIC under the systemic risk exception, there is no guarantee that the systemic risk exception will be relied upon to provide access to uninsured deposits and other assets in the future in the event of the closure of a financial institution, or that such access would be afforded in a timely fashion.

Any loss of our cash or cash equivalents or any delay in our access thereto could, among other risks, adversely impact our ability to pay our operating expenses, result in breaches of our contractual obligations, or result in violations of federal or state wage and hour laws if we are unable to pay our employees on a timely basis.

Women’s health has historically been an underfunded sector.

Recently, a number of public companies focused in women’s health have failed to achieve expected commercial success and struggled to access sufficient capital.

We are solely focused in women’s health and may be unfavorably impacted by weak investor sentiment and a lack of interest in the category.

Our ability to access capital and to advance our candidates could be adversely impacted.

We are solely focused in women’s health, and primarily in the areas of contraception, vaginal health, reproductive health, menopause, sexual health and fertility.

The sector has historically been underfunded, with only about one percent of healthcare research and innovation in the U.S.

invested in female-specific conditions beyond oncology according to market research.

The failure of the women’s health sector to receive consistent and committed investment fuels investor sentiment that market opportunities for new products in women’s health are limited.

Our stock price and our ability to access additional capital on acceptable terms when needed may be adversely impacted by unfavorable investor perception of market opportunities for women’s health products, and our business, operating results, financial condition and prospects could suffer.

Risks Related to Product Research & Development and Regulatory Approval

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Each of our development programs is unique and subject to substantial uncertainty of success inherent in pharmaceutical and biopharmaceutical development.

Except for XACIATO, which was approved by the FDA for U.S.

marketing in December 2021 but has not yet been commercially launched, our pipeline consists entirely of investigational products, which we also refer to as product candidates, which means that they must successfully complete one or more clinical studies to be considered for marketing approval by the FDA, or similar regulatory authorities for jurisdictions outside of the U.S., and will require submission of an application to and approval of that application by the FDA to be marketed in the U.S., and will need to undergo a submission, review and approval process with other regulatory authorities to be marketed outside of the U.S.

Except for XACIATO, our pipeline consists entirely of investigational products, which we also refer to as product candidates, which means that they must successfully complete one or more clinical studies to be considered for marketing approval and undergo a submission and review process with the FDA to obtain approval to be marketed in the U.S., or a similar process with comparable regulatory authorities in other jurisdictions to be marketed anywhere outside of the U.S.

FDA or other regulatory authority approval may never be obtained.

XACIATO has not been approved for marketing anywhere outside of the U.S., and cannot be marketed outside of the U.S.

unless and until marketing applications for other jurisdictions are submitted and approved by the applicable regulatory authorities, which may require additional clinical and nonclinical development, and may never occur.

XACIATO has not been

approved for marketing anywhere outside of the U.S., and any marketing application for another jurisdiction will need to be submitted and approved by the applicable foreign regulatory authority, which may require additional clinical and nonclinical development, and may never occur.

If we are unable to successfully complete development of and obtain regulatory approvals for our product candidates, our business may fail and you could lose all or part of your investment.

We depend heavily on the successful development of our lead product candidates, Ovaprene and Sildenafil Cream, 3.6%.

Clinical development is a lengthy and expensive process with an inherently uncertain outcome.

Failure to successfully develop and obtain regulatory approval to market and sell either of these product candidates would likely adversely affect our business.

Our business depends on the successful clinical development and regulatory approval of our lead product candidates, which may never occur.

Failure to successfully develop and obtain regulatory approval to market and sell our product candidates, and in particular, Ovaprene, Sildenafil Cream, 3.6% and DARE-HRT1, would likely adversely affect our business.

Our business depends on the successful clinical development and regulatory approval of our product candidates, and in particular, our lead product candidates, which may never occur.

The product candidates we develop require substantial clinical testing to demonstrate that they are safe and effective for their proposed uses.

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Accordingly, while some of our product candidates have undergone clinical trials and demonstrated positive results, including Ovaprene and Sildenafil Cream, 3.6%, there is no guarantee of successful outcomes in future clinical studies of these product candidates or of obtaining marketing approval for any of them.

The fact that the active pharmaceutical ingredients in certain of our product candidates, including Sildenafil Cream, 3.6%, have received regulatory approval in other formulations and/or for other indications does not guarantee successful development of our product candidates for their proposed intended uses.

The fact that the active pharmaceutical ingredients in certain of our product candidates, including Sildenafil Cream, 3.6%, and DARE-HRT1, received regulatory approval in other formulations and/or for other indications does not guarantee successful development of our product candidates for their proposed intended uses.

Clinical trials may never demonstrate sufficient safety and effectiveness to obtain the requisite regulatory approvals for our product candidates.

Even if we conduct and complete clinical trials for our product candidates, we may not obtain regulatory approval to market and sell any of them on the timelines we anticipate, or at all, which would have a material adverse effect on our business and operations.

Outcomes of our clinical trials, particularly later-stage clinical trials, may significantly impact our stock price.

If the results of our exploratory Phase 2b RESPOND clinical study of Sildenafil Cream, 3.6% are not positive, our stock price could decline and our business and prospects may be adversely affected.

Sildenafil Cream, 3.6% is one of our lead product candidates.

If the results of our exploratory Phase 2b RESPOND clinical study of Sildenafil Cream, 3.6% are not positive or are perceived by third parties, including financial market participants, as not positive, our business, prospects and stock price could suffer significantly.

Failure of the exploratory Phase 2b RESPOND study to demonstrate adequate safety or potential effectiveness of Sildenafil Cream, 3.6% to treat FSAD or the study’s failure to identify appropriate endpoints for subsequent Phase 3 clinical studies would require us to re-evaluate the program’s clinical and regulatory development path, which we would expect to be more expensive and to take longer than if the exploratory Phase 2b RESPOND study results were positive.

Based on the exploratory Phase 2b RESPOND study results, we may determine to delay, scale back or terminate the program, and we may not realize any return on our investment in the program.

In addition, if we, the investment community, potential collaborators or the FDA view the topline or complete results of the study as not positive, our stock price could decline significantly, our reputation may suffer, and our ability to raise additional capital to continue to operate as a going concern and execute our business strategy could be adversely impacted.

Delays in the commencement or completion of clinical testing of our product candidates may occur due to any of a number of factors and could result in significantly increased costs and longer timelines and could impact our ability to ever become profitable.

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• inability to obtain sufficient quantities of clinical product supplies from our contract manufacturers and suppliers.

Once a clinical trial has begun, it may be delayed, suspended or terminated by us, an IRB, the FDA or other regulatory authorities as a result of the occurrence of any of a number of events or circumstances, including the following:

For example, our pivotal contraceptive efficacy study of Ovaprene will begin later than we anticipated because we are incorporating study design considerations provided by the FDA in its IDE approval letter that we received in October 2022 and because obtaining clinical trial supplies for the study from the third-party manufacturer took longer than anticipated.

• lack of adequate capital and the need to obtain additional funding;

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• failure of our CROs or other third-party service providers to meet their contractual obligations to us in a timely manner, or at all;

• delays quality control/quality assurance procedures necessary for study database lock and analysis of unblinded data.

• delays in quality control/quality assurance procedures necessary for study database lock and analysis of unblinded data.

Unexpected serious adverse events or other undesirable side effects could arise during clinical development and interrupt, delay, or cause the termination of clinical trials, and require us to conduct additional clinical and nonclinical studies that were not part of our development plan, which could significantly increase the development costs and timeline for a program and adversely impact its value and our ability to continue product development.

These events may also cause our reputation to suffer and subject us to lawsuits.

The COVID-19 pandemic and recent geopolitical events are evolving and uncertain additional risks to our development timelines, having the potential to cause or contribute to significant delays in commencement and completion of our clinical trials.

Global supply chain disruptions may adversely affect the ability of contract manufacturers to manufacture and supply our clinical trial material.

Our prospective or contracted clinical trial sites may temporarily suspend activities at their sites for the safety of their employees or to adhere to government recommendations or orders related to social distancing and limiting public gatherings, or they may experience resource constraints, including staffing shortages, stemming from the pandemic and become unable to allocate adequate resources to reach agreements necessary to commence our clinical trials at their facilities or, even if agreements are in place, to conduct our clinical trials.

For clinical trials that we are able to initiate, we may experience lower than anticipated subject enrollment and completion rates, including because individuals may avoid medical settings due to concerns of contracting COVID-19 or may become subject to governmental orders or adhere to governmental guidelines intended to reduce the spread of COVID-19, or, during periods when COVID-19 case rates are low, prospective participants may be less inclined to participate in or complete clinical studies that require multiple clinic visits when they have more freedom to travel and participate in other activities that were not available or considered too risky during other stages of the pandemic.

In addition, increased rates of employee absences due to worker or family member illness and work-from-home and restricted travel policies implemented in response to the COVID-19 pandemic may delay any regulatory authority and/or IRB approvals necessary for our clinical trials and/or prevent our CROs and other third-party contractors who are necessary for the conduct of our clinical trials from meeting their contractual obligations to us in a timely manner, any of which could delay commencement and completion of our clinical trials.

Significant clinical trial delays could adversely impact on financial condition and results of operations by substantially increasing the costs of our development programs.

Significant clinical trial delays also could jeopardize our ability to meet obligations under agreements under which we license our rights to our product candidates, allow other companies to bring competitive products to market before we do, shorten any period of market exclusivity we may otherwise have under our patent rights, and weaken our negotiating position in discussions with potential collaborators, any of which could impair our ability to successfully commercialize our product candidates, if ultimately approved.

The effects of the COVID-19 pandemic and significant geopolitical conflicts are evolving and uncertain and these and other macroeconomic events have the potential to cause or contribute to significant delays in commencement and completion of our clinical trials.

Global supply chain disruptions and the subsequent effects thereof may adversely affect the ability of contract manufacturers to manufacture and supply our clinical trial material.

Our prospective or contracted clinical trial sites may experience resource constraints, including staffing shortages, stemming from the COVID-19 pandemic and become unable to allocate adequate resources to reach agreements necessary to commence our clinical trials at their facilities or, even if agreements are in place, to conduct our clinical trials.

For clinical trials that we are able to initiate, we may experience lower than anticipated subject enrollment and completion rates, including because clinical trial sites may temporarily close or reallocate resources in response to surges in COVID-19 patients, or study participants may withdraw prior to receiving study treatment or discontinue their treatment or follow up visits to avoid medical settings due to concerns of contracting COVID-19 or because they become sick or must care for a sick family member.

Significant clinical trial delays could have a material adverse impact on our financial condition and results of operations by substantially increasing the costs of our development programs.

exclusivity we may otherwise have under our patent rights, and weaken our negotiating position in discussions with potential collaborators, any of which could impair our ability to successfully complete development of or commercialize our product candidates, if ultimately approved.

Any significant delays in commencement or completion of clinical trials of our product candidates, or the suspension or termination of a clinical trial, could materially harm our business, financial condition and results of operations.

Manufacturing and supply delays and disruptions may significantly delay our clinical studies and be expensive for us to resolve.

Our product and product candidates are complex to manufacture and we rely on single source contract manufacturers and suppliers.

Manufacturing disruptions may occur that may be difficult and expensive to resolve and may cause substantial delays in development of our product candidates.

To date, our clinical-stage product candidates have been tested only in a relatively small number of clinical study participants.

A significant scale-up of manufacturing by our contract manufacturers and suppliers may be necessary to meet our supply requirements for Phase 2 or Phase 3 clinical studies, which may take longer and be more expensive than anticipated, potentially resulting in a significant negative impact our development timelines and costs.

For example, the pivotal clinical study of Ovaprene will require far more clinical product supplies than were manufactured for prior clinical and nonclinical studies combined, and the quantity of Ovaprene clinical supplies needed to support the pivotal clinical study has not yet been produced.

A substantial scale up in production is necessary to meet the study’s requirements, which may not occur on projected timelines and may be more expensive for us than anticipated.

Manufacturing disruptions may delay commencement of the pivotal clinical study or disrupt the conduct of the study after commencement.

Under our agreement with ADVA-Tec, we are dependent on ADVA-Tec and its contract manufacturers for all Ovaprene clinical and commercial product supplies and we have limited ability to influence or control the efforts and resources they expend to meet our supply requirements.

Delays in the manufacture of our clinical and commercial supplies as well as other supply chain disruptions could postpone the initiation of or interrupt clinical studies, extend the timeframe and cost of development of our product candidates, delay potential regulatory approvals and impact the commercialization of any approved products.

The manufacture of our product and product candidates is complex and subject to compliance with extensive regulatory requirements, and in most cases we rely on single source contract manufacturers and suppliers.

As a result, we face significant risks of manufacturing and supply delays and disruptions that may be difficult and expensive to resolve and may cause substantial delays in the development and regulatory approval of our product candidates or the commercialization of any approved product.

To date, our clinical-stage product candidates have been tested in a relatively small number of clinical study participants.

Significant scale-up of manufacturing will be required to provide adequate supplies of our product candidates for larger Phase 2 and Phase 3 clinical trials and may take longer and be more expensive than anticipated, potentially having a significant negative impact on our development costs and timelines.

We have, and we expect we will continue to, face multiple challenges as our contract manufacturers scale their processes to provide supplies for larger clinical trials or commercial production including, among others, potential difficulties with process scale-up, process reproducibility, stability and purity issues, compliance with cGMP, lot consistency, and timely availability of acceptable raw materials.

For example, the pivotal clinical study of Ovaprene will require far more clinical product supplies than were manufactured for prior clinical and nonclinical studies combined, and a substantial scale up in production is necessary to meet the study’s requirements, which may not occur on projected timelines and may be more expensive for us than anticipated.

Manufacturing disruptions may delay commencement of the pivotal clinical study or disrupt the conduct of the study after it has started.

Under our agreement with ADVA-Tec, we are dependent on ADVA-Tec and its contract manufacturer, Poly-Med, Inc., for all Ovaprene clinical and commercial product supplies, and we do not control these third parties and have limited influence the efforts and resources they expend to meet our supply requirements.

Furthermore, some of the key raw materials and components of Ovaprene have only a single source of supply.

Global supply chain disruptions related to the COVID-19 pandemic or recent geopolitical events may contribute to delays in and increased costs for the manufacture and supply of sufficient quantities of Ovaprene to meet the pivotal clinical study’s requirements.

See also “Risks Related to Our Dependence on Third Parties- We rely on third-party suppliers and manufacturers for clinical and commercial supplies of XACIATO and our product candidates, including multiple single source suppliers and manufacturers, and we currently have no plans to build or acquire our own manufacturing capabilities.

If these third parties do not perform as we expect, do not maintain their regulatory approvals or become subject to negative circumstances, it could delay, prevent or impair our product development or commercialization efforts, or those of our collaborators,” and “- In some cases, we may be contractually required to obtain clinical or commercial product supplies from specific third parties or there may be a limited number of third-party suppliers of raw materials and other components of our product and product candidates, which may heighten our dependence on those third parties and the risk of manufacturing disruptions” below.

Ovaprene is a drug/device combination and the process for obtaining regulatory approval in the United States will require compliance with complex procedures because concordance between two centers of the FDA (CDRH and CDER) is necessary for approval of this combination product.

A change in the FDA’s prior determination that CDER would lead the review of a marketing application for Ovaprene would adversely impact Ovaprene’s development timeline and significantly raise our costs to complete clinical development and obtain regulatory approval for Ovaprene.

Global supply chain disruptions related to the COVID-19 pandemic or recent geopolitical events may result in delays in and increased costs for the manufacture and supply of sufficient quantities of Ovaprene to meet the pivotal clinical study’s requirements.

The manufacture of our product and product candidates is subject to extensive regulation.

The finished products (and their APIs) used in clinical trials or approved for commercial sale must be manufactured in accordance with cGMP requirements in the U.S.

that are enforced by the FDA and must comply with applicable requirements of foreign regulatory authorities for sales outside of the U.S.

These regulations govern manufacturing processes and procedures, including record keeping and the implementation and operation of quality systems to control and assure the quality of investigational products and products approved for sale.

Poor control of production processes can lead to the introduction of contaminants or to inadvertent changes in the properties or stability of a product that may result in closure of the manufacturing facility for an extended period of time to investigate and remedy the contamination or inadvertent change.

In addition, deviations anywhere in the manufacturing process could cause our product or product candidates to perform differently and affect the results of clinical trials.

Further, even minor deviations in the manufacturing process, including filling labeling, packaging, storage and shipping, and quality control and testing, may result in shipment delays, lot failures, recalls or spoilage, and delay or disrupt our clinical studies or commercial supply of any approved product.

If our contract manufacturers are unable to produce sufficient quantities of our product or product candidates (or their APIs) for clinical trials or for commercialization at acceptable quality levels, our development and commercialization efforts would be impaired, which could have a material adverse effect on our business, financial condition and results of operations.

As product candidates progress through the development process, it is not uncommon that manufacturing methods are altered along the way in an effort to optimize yield, manufacturing batch size, minimize costs, achieve consistent quality and results, or to comply with regulatory authority requirements.

Any such changes carry risk that they will not achieve the intended objectives.

If and when changes are made to the manufacturing process of our product or product candidate (or their APIs), we may be required by the FDA or foreign regulatory authorities to conduct bridging clinical or nonclinical studies or repeat one or more clinical trials to demonstrate comparable identity, strength, quality and purity of the product or product candidate before and after such changes, which could significantly increase development costs and delay regulatory approval or disrupt commercial supply.

In addition, our cost of goods for our product candidates is at an early stage of development.

The cost to manufacture our product candidates at commercial scale is difficult to predict currently.

We may need to alter the materials, equipment or processes for making our product candidates in order to yield commercially viable products.

As discussed above, manufacturing changes could increase development costs and timing and may not achieve the intended objectives.

Manufacturing costs may negatively impact the commercial viability of our product candidates, if approved.

See also “Risks Related to Our Dependence on Third Parties- We do not have, and we do not have plans to establish, our own manufacturing capabilities.

We rely on third-party suppliers and manufacturers for clinical study and commercial materials, including multiple single source suppliers and manufacturers.

If these third parties do not perform as we expect, do not maintain their regulatory approvals or become subject to negative circumstances, it could delay, prevent or impair our product development or commercialization efforts, or those of our collaborators, and harm our business,” and “- In some cases, we may be contractually required to obtain clinical or commercial product supplies from specific third parties or there may be a limited number of third-party suppliers of raw materials and other components of our product and product candidates, which may heighten our dependence on those third parties and the risk of manufacturing disruptions” below.

Many of our product candidates, including Ovaprene, will or may be considered combination products by the FDA and other regulatory authorities, which could increase the complexity, cost and timeline for their development and regulatory approvals.

A change in the FDA’s prior determination that CDRH would lead the review of a marketing application for Ovaprene would adversely impact Ovaprene’s development timeline and significantly raise our costs to complete clinical development and obtain regulatory approval for Ovaprene.

To the extent our product candidates meet the FDA’s or any other regulatory authority’s definition of a combination product, the regulatory approval requirements can be more complex and costly because in addition to the individual regulatory requirements for each component, e.g.

a drug and a medical device, additional combination product regulatory requirements may apply.

The cost and timeline for development of product candidates determined to be combination products may be substantially greater than product candidates that are not considered combination products.

See also ITEM 1.

"BUSINESS–Government Regulation–U.S.

Government Regulation–FDA Review and Approval Process for Combination Products,” above.

Ovaprene is composed of both device and drug components and is considered a combination product by the FDA.

The process for obtaining FDA approval of Ovaprene will require compliance with complex procedures because concordance between two centers of the FDA (CDRH and CDER) is necessary.

Ovaprene previously underwent a request for designation, or RFD, process with the FDA that determined that CDRH would lead the review of a PMA for potential marketing approval of this product candidate.

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However, the FDA may determine that the results of the study are not sufficiently robust or convincing and require additional clinical and/or nonclinical studies prior to approval of Ovaprene.

In addition, our ability to commence the pivotal clinical study of Ovaprene is subject to the FDA’s review and approval of an IDE, the timing of which will be later than we anticipated when we initiated the process based feedback from the FDA, and could delay or contribute to a delay in the commencement of the pivotal clinical study.

Because Ovaprene is one of our lead product candidates, the impact of either a change in the lead FDA review center or the imposition of additional, currently unplanned requirements for approval could be significant to us and have a material adverse effect on the prospects for developing Ovaprene, as well as on our business and our financial condition.

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The factors contributing to female sexual dysfunction disorders, including FSAD, are complex and there is limited clinical trial precedent from which to draw experience, making the design and execution of a clinical trial that demonstrates effectiveness of Sildenafil Cream, 3.6% in treating FSAD more inherently challenging and uncertain compared with investigational products for many other conditions.

There are currently no FDA-approved treatments for female sexual arousal disorder, or FSAD, and there is no precedent program to reference in the design of our clinical trials for Sildenafil Cream, 3.6%.

There are currently no FDA-approved pharmacologic treatments for female sexual arousal disorder, or FSAD, and there is no precedent program to reference in the design of our clinical trials for Sildenafil Cream, 3.6%.

Female sexual dysfunction disorders in women vary in nature and may be the result of a variety of physiological and psychological factors.

Given the variability of factors contributing to the underlying condition, and the product candidates' attributes, clinical studies to evaluate effectiveness in any subset of the condition under the umbrella of Sexual Dysfunction, such as FSAD, are complex.

While we worked with experts to develop novel patient reported outcome, or PRO, instruments for our ongoing Phase 2b study of Sildenafil Cream, 3.6%, tested the proposed PRO instruments in a

content validity study, reviewed the results of that study with the FDA and aligned with the FDA on the Phase 2b study design, the Phase 2b study may nevertheless prove difficult to enroll on the anticipated timeline or fail to demonstrate effectiveness of Sildenafil Cream, 3.6% in treating FSAD.

For example, Sildenafil Cream, 3.6% is designed to work primarily by increasing blood flow to the genital tissue.

Therefore, it will be critical for us to identify and enroll patients in our clinical trials of Sildenafil Cream, 3.6% for whom inadequate blood flow to the genital tissue is the primary contributor to their arousal disorder.

If we fail to screen properly, and instead enroll patients with different contributing factors, the results of our clinical trials are unlikely to demonstrate effectiveness of Sildenafil Cream, 3.6%.

While we worked with experts to develop novel patient reported

outcome (PRO) instruments for our exploratory Phase 2b RESPOND study of Sildenafil Cream, 3.6%, tested the potential PRO instruments in a content validity study, reviewed the results of that study with the FDA and aligned with the FDA on the Phase 2b study design, the Phase 2b RESPOND study proved more difficult to enroll than anticipated given the enrollment criteria for the study, and it may fail to demonstrate potential effectiveness of Sildenafil Cream, 3.6% in treating FSAD and fail to identify the appropriate efficacy endpoints for Phase 3 studies.

Sildenafil Cream, 3.6% is designed to work primarily by increasing blood flow to the genital tissue.

Therefore, identifying and enrolling patients in our clinical trials of Sildenafil Cream, 3.6% for whom inadequate blood flow to the genital tissue is the primary contributor to their arousal disorder is critical.

If we fail to screen properly, and instead enroll patients with different contributing factors, the results of our clinical trials, including the exploratory Phase 2b RESPOND study, are unlikely to demonstrate effectiveness of Sildenafil Cream, 3.6%.

Conversely, trying to screen out patients with different contributing factors may slow enrollment in a study, delay its completion and increase its costs.

The pace of enrollment of participants in the study during 2021 was slower than expected.

We identified a number of contributing factors and implemented mitigation strategies to increase study subject recruitment, however, the initial slower pace of enrollment lengthened our original estimated timeline for the study.

We may experience additional delays in enrollment relative to what we currently anticipate, which may further lengthen the study timeline and increase its overall cost.

Even if we can identify and enroll a sufficient number of women for whom inadequate blood flow to the genital tissue is the primary contributing factor to their arousal disorder, there is no guaranty that the use of Sildenafil Cream, 3.6% will improve their general feelings of arousal or that the PRO instruments we utilize to measure the effectiveness of Sildenafil Cream, 3.6% in the study will adequately capture their genital arousal response.

Given the factors contributing to arousal disorders, we may be required to conduct clinical trials in large patient populations, extending the timeline and increasing the cost of development for Sildenafil Cream, 3.6%.

For example, the total number of participants that the Phase 2b study will seek to randomize has not yet been determined and the high end of the range is almost 200 more participants than the low end.

The final size of the study will be determined by a single interim analysis for unblinded sample size re-estimation, which analysis has not yet occurred.

If the study requires a number of randomized participants on the high end of the range, then the study could take significantly longer and be significantly more expensive to complete than if the final size of the study need only be on the low end of the range.

If we are unable to efficiently and successfully complete our Phase 2b clinical trial of Sildenafil Cream, 3.6%, product development costs for the program would increase significantly, and such failure could negatively impact the perception of the program’s potential for future clinical and regulatory success, either of which could have a material adverse effect on our business, results of operations and financial condition, as well as our stock price.

In our exploratory Phase 2b RESPOND study, we experienced a slower than anticipated pace of enrollment given the enrollment criteria for the study, which lengthened our original estimated timeline for the study.

We may experience delays in future clinical studies of Sildenafil Cream, 3.6% relative to our communicated expectations due to the novel nature of the studies and the complexities of the condition it is intended to treat, which may significantly lengthen clinical study timelines and increase overall costs.

With respect to any clinical study of Sildenafil Cream, 3.6%, even if we can identify and enroll a sufficient number of women for whom inadequate blood flow to the genital tissue is the primary contributing factor to their arousal disorder, there is no guaranty that the use of Sildenafil Cream, 3.6% will improve their general feelings of arousal or that the PRO instruments we utilize to measure the effectiveness of Sildenafil Cream, 3.6% in the study will adequately capture their genital arousal response.

Given the multiple factors contributing to arousal disorders and the novelty of the clinical endpoints that may be utilized to measure effectiveness of Sildenafil Cream, 3.6% in treating FSAD, we may be required to conduct multiple clinical trials in large patient populations, extending the timeline and increasing the cost of development for Sildenafil Cream, 3.6%, without any guarantee of positive results.

If we are unable to efficiently and successfully advance Sildenafil Cream, 3.6% through clinical development, our business, operating results and financial conditional, as well as our stock price, could suffer.

Interim, topline and preliminary data from our clinical trials that we announce or publish from time to time may change as more patient data become available and are subject to audit and verification procedures that could result in material changes in the final data, and others, including regulatory authorities, may not agree with our interpretation of study data.

From time to time, we may publicly disclose interim, preliminary or topline data from our clinical studies, which is based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.

From time to time, we may publicly disclose interim, preliminary or topline data from our clinical studies, which are based on a preliminary analysis of then-available data, and the results and related findings and conclusions are subject to change following a more comprehensive review of the data related to the particular study or trial.

We also make assumptions, estimations, calculations and conclusions as part of our analysis of data, and we may not have received or had the opportunity to fully and carefully evaluate all data.

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There can be no guarantee that a favorable interim analysis will result in a favorable final result at the completion of the clinical trial.

For example, in regard to our exploratory Phase 2b RESPOND study of Sildenafil Cream, 3.6%, based on a planned interim analysis to evaluate the relative magnitude of the treatment effect, the number of individuals planned to be enrolled in the study was significantly reduced.

However, the reduction in the number of study subjects should not be viewed as indicative of the magnitude of the treatment effect, and the relative magnitude of the treatment effect seen in the interim analysis should not be viewed as predictive that topline data will show Sildenafil Cream, 3.6% achieved the efficacy endpoints of the exploratory Phase 2b RESPOND study.

Further, others, including regulatory authorities, may not accept or agree with our assumptions, estimates, calculations, conclusions or analyses or may interpret or weigh the importance of study data differently than we do, which could impact the value of the particular program, the approvability or commercialization of the particular product candidate or product and our company in general.

In addition, the information we choose to publicly disclose regarding a particular study or clinical trial is based on what is typically an extensive set of data and analyses, and investors and others may disagree with the information we determine is the material or otherwise appropriate information to include in our public disclosure.

Information we determine not to publicly disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular product candidate, product or our business.

Information we determine not to publicly disclose may ultimately be deemed significant with respect to future decisions, conclusions, views, activities or otherwise regarding a particular

product candidate, product or our business.

If the topline data that we report differ from actual results, or if others, including regulatory authorities, disagree with the conclusions reached, our ability to obtain approval for, and commercialize, our product candidates may be harmed, which could harm our business, operating results, prospects or financial condition.

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This could significantly lengthen our development timelines and cost.

The FDA and comparable regulatory authorities in other countries have substantial discretion in the approval process and may refuse to accept any application or may decide that the data are insufficient for approval and require additional clinical or nonclinical studies or changes in the manufacturing process or facilities, even if we had previously aligned with the FDA on such data and other requirements.

We cannot assure you that we will obtain any additional marketing approvals for our product or product candidates in any jurisdiction.

The announcement of new requirements by the FDA, the failure of a competitive product to receive regulatory approval, or the receipt of a complete response letter from the FDA by another company pursuing the FDA's 505(b)(2) pathway that may have implications for our proposed regulatory approval pathway could impact how investors and potential strategic collaborators view the development risks associated with our product candidates.

The announcement of new requirements by the FDA, the failure of a competitive product to receive regulatory approval, or the receipt of a complete response letter from the FDA by another company pursuing the FDA's 505(b)(2) pathway, any of which may have implications for our proposed regulatory authorization pathways, could impact how investors and potential strategic collaborators view the development risks associated with our product candidates.

Changing testing or manufacturing requirements for our product candidates or for product candidates deemed to be comparable to ours may adversely impact our financial resources, our development timelines and may harm the perception held by others of our business.

We expect to utilize the FDA’s Section 505(b)(2) pathway for most of our current product candidates and if that pathway is not available, the development of our product candidates will likely take significantly longer, cost significantly more and entail significantly greater complexity and risk than currently anticipated, and, in any case, may not be successful.

We intend to develop and seek approval for many of our product candidates, including Sildenafil Cream, 3.6%, DARE-HRT1, DARE-VVA1, DARE-FRT1, DARE-PTB1, DARE-LARC1 and other candidates we may develop, including ADARE-204 and ADARE-214, pursuant to the FDA’s 505(b)(2) pathway.

We intend to develop and seek approval for many of our product candidates, including Sildenafil Cream, 3.6%, DARE-HRT1, DARE-VVA1, DARE-PDM1, DARE-FRT1/PTB1, DARE-204/214, and DARE-LARC1, pursuant to the FDA’s 505(b)(2) pathway.

If the FDA determines that we may not use this regulatory pathway, then we would need to seek regulatory approval via a “full” or “stand-alone” NDA under Section 505(b)(1) of the FDCA.

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Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies and information that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference.

Section 505(b)(2), if applicable to us under the FDCA, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the

development programs for Sildenafil Cream, 3.6%, our current IVR product candidates, DARE-VVA1, DARE-LARC1, ADARE-204 and ADARE-214.

Notwithstanding the approval of an increasing number of products by the FDA under Section 505(b)(2) over the last few years, certain brand-name pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2).

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Additionally, past receipt of grant funding may not be predictive of our ability to secure additional grants to fund further development of a program.

If DARE-VVA1, DARE-LARC1, DARE-FRT1, DARE-PTB1, DARE-RH1 or the injectable etonogestrel product candidates we may license from Adare fail to be valued, our stock price may be adversely affected.

Our portfolio includes several pre-clinical stage programs and if they fail to be adequately valued by investors or potential strategic collaborators, our business, financial condition and stock price may be adversely affected.

Several of our product candidates are in pre-clinical stages of development and may never advance to clinical development.

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Even if the results from our pre-clinical studies are favorable, we still may not be able to advance the candidates into clinical trials.

If pre-clinical studies of product candidates do not generate strong data, our pre-clinical stage programs may never progress to clinical development and may prove to be worthless.

The grants supporting the DARE-LARC1 program do not guarantee that its pre-clinical development will be successful or that we will be able to fund its clinical development in the future.

The grants supporting pre-clinical development of DARE-LARC1, including the grant agreement under which we were awarded up to $48.95 million in non-dilutive funding for pre-clinical development of DARE-LARC1, do not guarantee that its pre-clinical development will be successful, or, even if we are successful with all specified pre-clinical activities, that we will be able to fund its future clinical development.

Further, while we received an initial

payment of $11.45 million under the grant agreement in 2021, additional payments are contingent upon the DARE-LARC1 program’s achievement of specified development and reporting milestones during the grant period and our compliance with other obligations under the agreement, and there is no assurance those milestones will be achieved or that we will receive additional payments or the full potential amount of the grant.

If pre-clinical studies of product candidates do

not generate strong data, our pre-clinical stage programs may never progress to clinical development and may prove to be worthless.

The grants supporting the DARE-LARC1 and DARE-LBT programs do not guarantee that pre-clinical development will be successful or that we will be able to fund their clinical development in the future.

The grants supporting pre-clinical development of DARE-LARC1 and DARE-LBT, including the grant agreement under which we were awarded up to $48.95 million in non-dilutive funding for pre-clinical development of DARE-LARC1, do not guarantee that pre-clinical development will be successful, or, even if we are successful with all specified pre-clinical activities, that we will be able to fund their future clinical development.

Further, while we received aggregate payments of approximately $23.85 million under the 2021 DARE-LARC1 grant agreement as of December 31, 2022, additional payments are contingent upon the DARE-LARC1 program’s achievement of specified development and reporting milestones during the grant period and our compliance with other obligations under the agreement, and there is no assurance those milestones will be achieved or that we will receive additional payments or the full potential amount of the grant.

Risks Related to Our Dependence on Third Parties

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In addition, in the case of commercial collaborations, our product revenues, may be lower than if we were to sell and distribute products that we develop ourselves.

Our existing collaborations, and any future strategic collaborations we establish, may involve a number of significant risks to the success of the product, including that:

Our existing collaborations, and any future strategic collaborations we establish, involve significant risks to the success of the product, including that:

• collaborators may have significant discretion in determining the efforts and resources that they will apply to these collaborations;

• collaborators may not perform their obligations as expected;

• collaborators may not pursue development or commercialization of a product or product candidate or elect not to continue or renew a collaboration based on clinical or nonclinical study results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition or a pandemic, that divert its resources or create competing priorities;

• collaborators may not pursue development or commercialization of a product or product candidate or elect not to continue or renew a collaboration based on clinical or nonclinical study results, changes in the collaborators' strategic focus or available funding, or external factors, such as an acquisition, a public health emergency, or macroeconomic events or conditions, that cause them to divert resources to other initiatives or create competing priorities;

• collaborators may refuse to perform clinical studies or other development work required for approval in a particular jurisdiction outside the United States;

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For example, our out-license agreements for XACIATO and Ovaprene and the CRADA with NICHD may be terminated by the counterparty for convenience upon the completion of a specified notice period, subject to limited restrictions.

If one of our collaborators terminates its agreement with us or our strategic collaborations otherwise do not result in the successful development of our product candidates and/or commercialization of any approved products, we may not receive any future payments under the collaboration, our development programs may not be funded as we expect, and our ability to establish another collaboration for the applicable product or product candidate may be negatively impacted.

If a collaborator terminates its agreement with us or if a collaboration does not result in the successful development of any product candidates and/or commercialization of any approved products, we may not receive any future royalty revenue, commercial milestones or other revenues under the collaboration, our development programs may not be funded as we expect, and our ability to establish another collaboration for the applicable product or product candidate may be negatively impacted.

We may be unable to replace any commercial collaborator with an alternate third party on a timely or commercially reasonable basis, or at all.

See also, “Risks Related to Our Financial Position and Capital Needs- If a commercial counterparty terminates its exclusive license agreement with us or fails to perform as expected, our need for additional capital may significantly increase,” above and “We rely on, and intend to continue to rely on, third parties for the execution of significant aspects of our product development programs.

See also, “Risks Related to Our Financial Position and Capital Needs- If one of our commercial collaborators terminates its exclusive license agreement with us or fails to perform as expected, our need for additional capital may significantly increase,” above and “We rely on, and intend to continue to rely on, third parties for the execution of significant aspects of our product development programs.

Failure of these third parties to successfully carry out their contractual duties, comply with regulatory requirements and applicable law, or meet expected deadlines may cause significant delays in our development timelines and/or failure of our programs,” below.

Moreover, the risks relating to product development, regulatory approval and commercialization and compliance with health care related laws and regulations described in this report also apply to the activities of our collaborators.

Except to the extent of any license fees or milestone payments under our current and any future collaboration agreements, because we currently have only one FDA-approved product, our ability to generate revenue over the next several years will largely be dependent on royalties and other net sales-based payments under our exclusive license agreement with Organon.

Except to the extent of any license fees or milestone payments under our current and any future collaboration agreements, because we currently have only one FDA-approved product, our ability to generate revenue over the next several years will largely be dependent on royalties and net sales-based milestones under our exclusive license agreement with Organon.

Accordingly, our revenues may be dependent on Organon’s ability to successfully market, sell and distribute XACIATO and to perform its contractual obligations.

There is no assurance that the commercial launch of XACIATO will occur when expected or be successful and the timing and amount of potential payments to us under the license agreement is uncertain.

There is no assurance that the commercial launch of XACIATO will occur when expected or that the launch will be successful.

The timing and amount of potential revenues to us under the license agreement is uncertain.

Apart from Organon’s diligence obligation under our license agreement, we have no control over the efforts and resources Organon devotes to the marketing and sale of XACIATO.

In addition, the effective date of the license agreement is subject to the satisfaction of closing conditions, including antitrust law clearance which is outside of our control.

The occurrence of any of the risks described above could negatively impact the commercial success of XACIATO and have a material adverse effect on our business, financial condition and results of operations.

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If we terminate the CRADA before the completion of any active study protocol, we generally will be responsible for providing sufficient clinical supplies of Ovaprene to NICHD in order to complete the study.

NICHD may retain and use payments we make under the CRADA for up to one year after expiration or termination to cover costs associated with the conduct of activities described under the research plan in the CRADA that were initiated prior to expiration or termination.

If we fail to make any scheduled payment to NICHD under the CRADA, the final one of which is due in the second quarter of 2023, NICHD is not obligated to carry out research and development activities until it receives the funds.

Suspension by NICHD of activities under the CRADA or termination by NICHD or by us of the CRADA could have a material adverse effect on the Phase 3 study of Ovaprene and on our business, results of operations and financial condition, and may cause the market price of our common stock to decline.

NICHD may retain and use the cash payments we have made under the CRADA for up to one year after expiration or termination to cover costs associated with the conduct of activities described under the research plan in the CRADA that were initiated prior to expiration or termination.

If we fail to make any scheduled payment to NICHD under the CRADA, NICHD is not obligated to carry out R&D activities until it receives the funds.

We have paid the NICHD $5.0 million under the CRADA to date and a final payment of $500,000 is due in the second quarter of 2023.

Suspension by NICHD of activities under the CRADA or termination by NICHD or by us of the CRADA could have a

material adverse effect on the Phase 3 study of Ovaprene and on our business, results of operations and financial condition, and may cause the market price of our common stock to decline.

We face significant competition in seeking strategic collaborations.

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If we are unable to reach agreements with suitable collaborators on a timely basis, on acceptable terms, or at all, we may have to curtail the development of a product or product candidate, reduce or delay one or more of our other development programs, delay or reduce the scope of any commercial readiness activities, delay commercialization, or increase our expenditures and undertake development or commercialization activities at our own expense.

Our success in entering into a definitive agreement for any

collaboration will depend upon, among other things, our assessment of the prospective collaborator’s resources and expertise, the terms of the proposed collaboration and the proposed collaborator’s evaluation of several factors.

Our success in entering into a definitive agreement for any collaboration will depend upon, among other things, our assessment of the prospective collaborator’s resources and expertise, the terms of the proposed collaboration and the proposed collaborator’s evaluation of several factors.

Those factors may include the design and outcomes of our clinical studies, the likelihood of approval by regulatory authorities, the potential market for the product, the costs and complexities of manufacturing and delivering such product to customers, the potential of competing products, the strength of the intellectual property and other potential sources of market exclusivity for such product, the market performance of other products we developed, and industry and market conditions generally.

The prospective collaborator may also have opportunities to collaborate with third parties on products or technologies that would compete with our products or product candidates and will evaluate whether those opportunities are more attractive than a collaboration with us.

We also face competition in our search for collaborators from other biotechnology and pharmaceutical companies worldwide, many of which are larger and able to offer more attractive deals in terms of financial commitments, contribution of human resources, or development, manufacturing, regulatory or commercial expertise and support.

We face competition in our search for collaborators from other biotechnology and pharmaceutical companies worldwide, many of which are larger and able to offer more attractive deals in terms of financial commitments, contribution of human resources, or development, manufacturing, regulatory or commercial expertise and support.

Inadequate capitalization of our company, or the perception thereof, could negatively affect our negotiating leverage in transactions.

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In such event, our ability to generate revenues from such products and achieve or sustain profitability would be significantly hindered which would materially harm our business and financial condition.

We rely on third-party suppliers and manufacturers for clinical and commercial supplies of XACIATO and our product candidates, including multiple single source suppliers and manufacturers, and we currently have no plans to build or acquire our own manufacturing capabilities.

XACIATO and our product candidates (including their respective components) must be manufactured, packaged, tested, and labeled in conformity with cGMP and other applicable regulatory requirements.

We do not own or operate, nor do we expect to own or operate, facilities for manufacturing, storage and distribution, or testing of our product or product candidates.

We rely on third parties to supply and manufacture our product candidates and other materials necessary to commence and complete pre-clinical testing, clinical trials and other activities required for regulatory approval of our product candidates, and expect to continue to do so in the future.

In addition, we expect to rely on third parties to manufacture the commercial supplies of XACIATO and any future products.

This reliance on contract manufacturers and suppliers subjects us to inherent uncertainties related to product safety, availability, security and cost.

Holders of NDAs, or other forms of FDA approvals, or those distributing a regulated product under their own name, are ultimately responsible for compliance with manufacturing obligations even if the manufacturing is conducted by a third party.

Because we currently rely, and expect to continue to rely, on third parties to supply and manufacture our product and product candidates and their respective components (including the active pharmaceutical ingredients), we do not expect to control the manufacturing processes for their production, all of which must be made in accordance with relevant regulations, which include, among other things, quality control, quality assurance, compliance with cGMP and the maintenance of records and documentation.

Continuous compliance with cGMP and other applicable requirements, requires significant expenditure of time, money and effort to meet requirements relating to personnel, facilities, equipment, production and process, labeling and packaging, quality control, recordkeeping and other requirements.

In the future, it is possible that we or our third-party suppliers or manufacturers, or those of our commercial partners, may fail to comply with cGMP requirements, other applicable FDA regulations, the requirements of other regulatory bodies or our own requirements, any of which could result in suspension or prevention of commercialization and/or manufacturing of our products or product candidates, delay or suspension of ongoing research, including clinical trials, disqualification of data or other enforcement actions such as product recall, injunctions, civil penalties or criminal prosecutions against us.

Furthermore, we or a commercial collaborator, as applicable, may be unable to replace any third-party supplier or manufacturer with an alternate supplier or manufacturer on a commercially reasonable or timely basis, or at all.

Inability to obtain product quantities needed for

our clinical trials and to meet commercial demand, as applicable, could have a material adverse effect on our business, financial condition and results of operations.

If we were to experience an unexpected loss of supply, or if any supplier or manufacturer were unable to meet our demand for our products or product candidates, including due to geopolitical events, natural disasters or public health emergencies or pandemics, such as the COVID-19 pandemic, we could experience delays in research, planned or ongoing clinical trials or commercialization.

We might not find alternative suppliers or manufacturers with FDA approval, of acceptable quality, or able to provide the appropriate volumes and at an acceptable cost.

The long transition periods that may be necessary to switch manufacturers and suppliers could significantly increase our development costs and result in delays in clinical trials, regulatory submissions and approvals, and, if approved, commercial launch, and, for commercial products, could result in significant loss of sales and associated revenue.

Third-party suppliers, manufacturers, distributors or regulatory service providers may not perform as agreed or may terminate their agreements with us, including due to the effects related to geopolitical events, natural disasters, public health emergencies or pandemics, such as the COVID-19 pandemic, or force majeure events that affect their facilities or ability to perform.

Any significant problem that our suppliers, manufacturers, distributors or regulatory service providers experience could delay or interrupt supply of materials necessary to produce our products and product candidates or the finished product, as applicable, until the supplier, manufacturer, distributor or regulatory service provider cures the problem, until the event that resulted in the delay or interruption is adequately addressed, or until we locate, negotiate for, validate and receive FDA approval for an alternative provider (when necessary), if one is available, and we may not have recourse against the party who did not perform or terminated their agreement with us if such non-performance or termination is excused under our agreements with such party.

Failure to obtain the needed quantities of products and product candidates could have a material and adverse effect on our business, financial condition, results of operations and prospects.

We do not have, and we do not have plans to establish, our own manufacturing capabilities and instead rely on third-party suppliers and manufacturers for our clinical study and commercial supplies, including multiple single source suppliers and manufacturers.

If these third parties do not perform as we expect, fail to maintain their regulatory approvals or become subject to negative circumstances, it could delay, prevent or impair our product development or commercialization efforts, or those of our collaborators, and harm our business.

We do not own or operate, and we currently have no plans to establish, facilities for manufacturing, storage and distribution, or testing of our product or product candidates.

We rely and expect to continue to rely on third parties to supply and manufacture our product candidates and other materials necessary to commence and complete pre-clinical testing, clinical trials and other activities required for regulatory approval of our product candidates, including qualification of equipment, developing and validating methods, defining critical process parameters, releasing component materials, and conducting stability testing.

In addition, we rely and expect to continue to rely on third parties for commercial production and supplies of XACIATO and any future products.

This reliance on third-party manufacturers and suppliers subjects us to inherent uncertainties related to product safety, availability, quality and cost.

XACIATO and our product candidates (including their component materials) must be manufactured, packaged, tested, and labeled in accordance with our specifications and in conformity with cGMP and other applicable regulatory requirements, which requires dedication of substantial resources to specialized personnel, facilities and equipment and sophisticated quality assurance, quality control, recordkeeping procedures.

While our employees and consultants monitor and audit our CMOs’ manufacturing processes and systems, we have limited control over our CMOs and they may fail to perform as expected.

The facilities and quality systems of CMOs who produce our product and product candidates and their APIs must pass a pre-approval inspection for compliance with applicable regulations as a condition of FDA approval.

Failure to pass inspections, or to timely remediate any compliance issues identified by the FDA, could substantially delay marketing approval.

As long as we are the product candidate sponsor or the holder of the product approval or manufacturer of record with the FDA or other regulatory authority, we are ultimately

responsible for compliance with regulatory requirements for manufacturing and distribution of our product and product candidates regardless of our lack of control over our third-party manufacturers and suppliers.

Failure of those third parties to comply with cGMP and other applicable regulatory requirements may result in fines and civil penalties on us, suspension of production, delay or failure to obtain product approval, product seizure or recall, or withdrawal of product approval.

Our CMOs and component suppliers may experience delays in producing and supplying, or may become unable or unwilling to produce and supply, our clinical trial material or commercial supply material due to financial or personnel constraints, their obligations to, or their decision to prioritize the production and supply of products for, other customers, partial or full loss of their facilities, or supply chain disruptions, including as a result of geopolitical conflicts, macroeconomic events or conditions, natural or man-made disasters, or public health emergencies such as the COVID-19 pandemic.

Our single source CMOs for XACIATO and Ovaprene are located in states in the U.S.

that are vulnerable to tropical storms, hurricanes, flooding and tornadoes, which have potential to render their facilities inoperative for protracted periods.

Their failure to perform may occur at a time that is costly or inconvenient for us.

We may not have adequate or any recourse against a CMO or supplier who does not perform or terminates its agreement with us if such non-performance or termination is excused under the applicable agreement.

We do not have long-term supply agreements with any of our CMOs other than our CMO for XACIATO.

We generally enter into manufacturing agreements on a project-by-project basis based on our development needs, which may heighten the risk of timely availability of sufficient quantities of our product candidates at acceptable costs for clinical trials.

As we advance development of our product candidates, we will need to negotiate agreements for commercial supply and we may not be able to reach agreement on a timely basis or acceptable terms, or at all.

In addition, the FDA or regulatory authorities outside of the U.S.

may require that we have an alternate manufacturer of a product before approving it for marketing and sale in the U.S.

or other jurisdiction, and securing such alternate manufacturer before approval of a marketing application could result in considerable additional time and cost prior to product approval.

Currently, we do not have alternative CMOs or API suppliers to back up our primary vendors of clinical trial material or commercial supply material.

Identification of and discussions with other vendors may be protracted and/or unsuccessful, or new vendors may not be successful in producing the same results as our current vendors on a timely basis at the appropriate volumes, at an acceptable cost, or at all.

Therefore, if the current vendors become unable or unwilling to perform their required activities, we could experience protracted delays or interruptions in the supply of clinical trial material or product for commercial sale, which could materially and adversely affect our development programs, commercial activities, operating results, and financial condition.

Any new CMO or API supplier would be required to qualify under applicable regulatory requirements.

In some cases, the technical skills or technology required to manufacture our clinical trial material or commercial material may be unique or proprietary to the original CMO or supplier and we may have difficulty, or there may be contractual restrictions prohibiting us from, transferring such skills or technology to another third party and a feasible alternative may not exist.

These factors would increase our reliance on such CMOs and suppliers or require us to obtain a license from them in order to have another third party manufacture our product or product candidates.

If we are required to change manufacturers for any reason, we will be required to verify that the new manufacturer maintains facilities and procedures that comply with quality standards and with all applicable regulations and guidelines.

In some cases, the FDA or a foreign regulatory authority may require us to conduct additional clinical or nonclinical studies, collect additional stability data, and provide additional information concerning any new CMO or supplier, or change in a validated manufacturing process, including scaling-up production, before we could distribute products from that manufacturer or supplier or revised process.

The process of identifying, verifying and transitioning to a new CMO or supplier could significantly delay development or regulatory approval of our product candidates or delay or disrupt commercialization of any approved product and substantially increase costs or result in significant loss of product sales and associated revenue.

If our CMOs encounter difficulties or otherwise fail to comply with their contractual obligations or there are delays entering commercial supply agreements, we may have insufficient quantities of material to support ongoing or planned clinical trials or to meet commercial demand for any approved product.

In addition, any delay or interruption in the supply of materials necessary or useful to manufacture our product candidates could delay the completion of our clinical trials, increase the costs associated with our development programs, and depending upon the period of delay, require us to terminate the clinical trials completely and commence new clinical trials at significant additional expense.

Delays or interruptions in the supply of commercial product could result in increased cost of goods sold and lost sales.

Manufacturing or quality control problems may arise in connection with the manufacture of our clinical trial material or commercial product and CMOs may not be able to maintain the necessary governmental licenses and approvals to continue manufacturing our clinical trial material or commercial product.

In addition, with respect to any finished product or key components manufactured outside the U.S., such as the respective APIs for XACIATO and Sildenafil Cream, 3.6%, we may experience interruptions in supply due to shipping or customs difficulties or regional instability.

Furthermore, changes in currency fluctuations, shipping costs, or import tariffs could adversely affect cost of goods

Any of the above factors could cause us to delay or suspend anticipated or ongoing clinical trials, regulatory submissions or commercialization of a product candidate, entail higher costs, or result in being unable to effectively commercialize an approved product.

Our dependence on third parties for the manufacture of our product candidates or products may adversely affect our future profit margins and our ability to commercialize any products that receive marketing approval on a timely and competitive basis.

In some cases, we may be contractually required to obtain clinical or commercial product supplies from specific third parties or there may be a limited number of third-party suppliers of raw materials and other components of our product and product candidates, which may heighten our dependence on those third parties and the risk of manufacturing disruptions.

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As a result, XACIATO’s commercial success will depend in part on the CMO's ability to manufacture and deliver adequate commercial quantities of the product on agreed upon timelines in accordance with our specifications and in compliance with cGMP and other applicable requirements.

Commercial launch of XACIATO, which was expected in the fourth quarter of 2022, was delayed due to delays in validation of the manufacturing process at the CMO, which is ongoing.

In addition, the CMO relies on other third parties, for supply of raw materials required to produce XACIATO and those supplies may become more difficult and costly to obtain.

For example, the current single source supplier of clindamycin is located in China.

Should this supplier slow production, shut down its factory or increase its prices for any reason, including due to factors related to the COVID-19 pandemic, recent geopolitical events, poor political relations between the U.S.

Should this supplier slow production, shut down its factory or increase its prices for any reason, including due to factors related to the COVID-19 pandemic, macroeconomic factors, geopolitical conflicts or events, poor political relations between the U.S.

and China and increased taxes or imposition of sanctions, our CMO may not be able to obtain adequate supplies of clindamycin to manufacture sufficient commercial quantities of XACIATO, which could impede XACIATO’s commercial success.

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Furthermore, for some key raw materials and components of Ovaprene, there currently is only a single source of supply, and alternate sources of supply may not be readily available.

Under the terms of the SST license agreement, SST will be responsible for obtaining supplies of Sildenafil Cream, 3.6% for Phase 2 clinical trials expected to be conducted in the United States, which includes the ongoing Phase 2b clinical study.

Thereafter, we will be responsible for obtaining pre-clinical, clinical and commercial supplies of Sildenafil Cream, 3.6%.

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For example, the current supplier of sildenafil is located in India.

Should this supplier slow production, shut down its factory or increase its prices for any reason, including due to factors related to the COVID-19 pandemic and recent geopolitical events, we may not be able to obtain adequate supplies of sildenafil to satisfy our clinical supply requirements.

Should this supplier slow production, shut down its factory or increase its prices for any reason, including due to factors related to the COVID-19 pandemic, macroeconomic factors and geopolitical conflicts or events, we may not be able to obtain adequate supplies of sildenafil to satisfy our clinical supply requirements.

We rely on, and intend to continue to rely on, third parties for the execution of significant aspects of our product development programs.

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We rely on these third parties to conduct our clinical trials and perform related activities, including quality assurance, clinical monitoring and clinical data management, as well as to assist us in preparing, submitting and supporting the applications necessary to gain marketing approvals for our product candidates.

For example, we engaged CROs to run all aspects of the pivotal Phase 3 clinical trial of XACIATO and the PCT clinical trial for Ovaprene.

For example, we engaged CROs to run all aspects of the pivotal Phase 3 clinical trial of XACIATO, the exploratory Phase 2b RESPOND clinical trial of Sildenafil Cream, 3.6%, and the PCT clinical trial for Ovaprene.

Our pivotal Phase 3 clinical trial of Ovaprene will also be conducted by third parties under our CRADA with NICHD.

We similarly expect to rely on CROs and other third parties to perform all clinical and nonclinical testing and many other important development and regulatory affairs activities needed to support applications for regulatory approvals of all product candidates we develop.

We do not control these third parties and they may not devote sufficient time and resources to our projects, or their performance may be substandard, resulting in clinical trial delays or suspensions, delays in submission of our marketing applications or failure of a regulatory authority to accept our applications for filing.

There is no assurance that the third parties we engage will be able to provide the functions, tests, activities or services as agreed upon, or provide them at the agreed upon price and timeline or to our requisite quality standards, including due to geopolitical events, natural disasters, public health emergencies or pandemics, such as the COVID-19 pandemic, or poor workforce relations or human capital management.

There is no assurance that the third parties we or our strategic collaborators engage will be able to provide the functions, tests, activities or services as agreed upon, or provide them at the agreed upon price and timeline or to our requisite quality standards, including due to macroeconomic factors, geopolitical conflicts or events, natural or manmade disasters, public health emergencies or pandemics or poor workforce relations or human capital management.

We rely on the efforts of these third parties and if they fail to perform as expected, we could suffer significant delays and additional costs in, and potentially failure of, the development of one or more of our product candidates.

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In particular, as a result of the CRADA, we are highly dependent on NICHD and the third parties it engages for the commencement, conduct and completion of our pivotal Phase 3 clinical trial of Ovaprene.

Pursuant to the terms of the CRADA, the study will be conducted within NICHD’s Contraceptive Clinical Trial Network, or the CCTN, with NICHD contractor Health Decisions Inc.

providing clinical coordination and data collection and management services for the study.

NICHD is responsible for selecting participating clinical sites from the pool of CCTN sites and, together with Health Decisions Inc., overseeing the clinical investigators in the conduct of the study, providing clinical site monitoring and quality assurance along with establishing the electronic data capture database for the study and performing data analysis, which are key factors to the successful completion of a clinical trial.

Pursuant to the terms of the CRADA, the study will be conducted within NICHD’s Contraceptive Clinical Trial Network, or the CCTN, with NICHD's selected CRO providing clinical coordination and data collection and management services for the study.

NICHD is responsible for selecting participating clinical sites from the pool of CCTN sites and, together with its selected CRO, overseeing the clinical investigators in the conduct of the study, providing clinical site monitoring and quality assurance along with establishing the electronic data capture database for the study and performing data analysis, which are key factors to the successful completion of a clinical trial.

We do not control these third parties and, accordingly, our control over the commencement, conduct and completion of the study is limited.

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The loss or impairment of our rights under any of these agreements could have a material adverse effect on our business prospects, operations and viability.

Our rights to XACIATO and our product candidates arise from license agreements between us and third-party licensors.

The loss or impairment of our licensed rights to develop and commercialize XACIATO or our product candidates, including as a result of our inability or other failure (or that of our licensors, in the case of sublicenses) to meet our obligations under any one of such license agreements, including, without limitation, our payment obligations, could have a substantial negative effect on our company’s prospects.

In December 2018, we entered into definitive agreements with Hammock Pharmaceuticals, Inc., TriLogic Pharma LLC and MilanaPharm LLC under which we acquired exclusive global rights to XACIATO for the treatment of bacterial vaginosis, as well as the rights to utilize the underlying proprietary hydrogel drug delivery technology for any vaginal or urological application in humans.

We have rights to develop and commercialize XACIATO and our product candidates under license agreements between us and third-party licensors.

The loss or impairment of these rights, including as a result of our inability or other failure (or that of our licensors, in the case of sublicenses) to meet our obligations under any one of such license agreements, including, without limitation, our payment obligations, could have a substantial negative effect on our business and prospects.

bacterial vaginosis, as well as the rights to utilize the underlying proprietary hydrogel drug delivery technology for any vaginal or urological application in humans.

Under the license agreement with TriLogic Pharma and MilanaPharm, we must use commercially reasonable efforts and resources consistent with those we undertake in pursuing development and commercialization of other pharmaceutical products, taking into account program-specific factors, (a) to develop and commercialize at least one licensed product or process in the United States and at least one licensed product or process in at least one of Canada, the United Kingdom, France, Germany, Italy or Spain, and (b) following the first commercial sale of a licensed product or process in any jurisdiction, to continue to commercialize that product or process in that jurisdiction.

MilanaPharm may terminate our license if, after having launched such product or process in such country, we, or our affiliates or sublicensees, as applicable, discontinue the sale of, or commercially reasonable marketing efforts to sell, such product or process in such country, and fail to resume such efforts or to reasonably demonstrate a strategic justification for the discontinuation and failure.

In addition to customary termination rights, MilanaPharm may terminate our license with respect to a licensed product or process in a country if, after having launched such product or process in such country, we, or our affiliates or sublicensees, as applicable, discontinue the sale of, or commercially reasonable marketing efforts to sell, such product or process in such country, and fail to resume such efforts or to reasonably demonstrate a strategic justification for the discontinuation and failure.

"BUSINESS-Strategic Agreements for Pipeline Development-Hammock/MilanaPharm Assignment and License Agreement,” above.

We entered into a license agreement with ADVA-Tec for the exclusive worldwide rights to develop and commercialize Ovaprene that became effective in July 2017.

In addition to standard termination rights, ADVA-Tec may terminate the license agreement if we (1) fail to make significant scheduled investments in product development activities over the course of the agreement, (2) fail to commercialize Ovaprene within six months of obtaining a pre-market approval from the FDA, (3) with respect to the license in any particular country, fail to commercialize Ovaprene in that particular country within three years of the first commercial sale, (4) develop or commercialize a non-hormonal ring-based vaginal contraceptive device other than Ovaprene, (5) fail to conduct certain clinical trials, or (6) fail to make certain milestone, sublicense and/or royalty payments to ADVA-Tec, including a milestone payment due upon the FDA's approval to commence a pivotal human clinical trial of Ovaprene.

"BUSINESS-Strategic Agreements for Pipeline Development-ADVA-Tec License Agreement," above.

In February 2018, we entered into a world-wide license and collaboration agreement with SST for the exclusive worldwide rights to develop and commercialize Sildenafil Cream, 3.6% for all indications for women related to female sexual dysfunction and/or female reproductive health, including treatment of the female sexual arousal disorder, or FSAD.

The SST license agreement provides that each party will have customary rights to terminate the agreement in the event of material uncured breach by the other party and under certain other circumstances.

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"BUSINESS-Strategic Agreements for Pipeline Development-SST License and Collaboration Agreement,” above.

In April 2018, we entered into the Catalent license agreement under which we acquired exclusive global rights to Catalent's IVR technology platform, including the product candidates we now call DARE-HRT1, DARE-FRT1, DARE-PTB1 and DARE-OAB1.

Under this agreement, we must use commercially reasonable efforts to develop and make at least one product or process available to the public, which efforts include achieving specific diligence requirements by specific dates specified in the agreement, and Catalent may terminate the agreement upon 60 days’ notice for any uncured material breach by us of any of our other obligations under the agreement.

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Furthermore, we cannot guarantee that any license agreement will be enforceable.

The termination of these license agreements or our inability to enforce our rights under these license agreements could result in the loss of our ability to develop, manufacture,

market or sell XACIATO or the product candidate covered by the agreement, as well as our ability to grant rights to other third parties to collaborate with us in the development and commercialization of our product or product candidate, which could have a material adverse effect on our business prospects and operations.

The termination of these license agreements or our inability to enforce our rights under these license agreements could result in the loss of our ability to develop, manufacture, market or sell XACIATO or the product candidate covered by the agreement, as well as our ability to grant rights to other third parties to collaborate with us in the development and commercialization of our product or product candidate, which could have a material adverse effect on our business prospects and operations.

Disputes may arise regarding intellectual property subject to, and any of our rights and obligations under, any license or other strategic agreement, including:

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• patient satisfaction and willingness to use it again and refer it to others;

• price pressure given the high level of generic treatments;

• price pressure given the high level of generic treatments and changes in health care laws and regulations, including the Inflation Reduction Act of 2022;

• adequate coverage, pricing and reimbursement from third-party payors;

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will occur when expected.

There is no assurance that Organon’s efforts with respect to XACIATO will be successful or that product sales will be able to generate revenue at the levels or within the timing we expect or at the levels or within the timing necessary to support our goals.

For example, commercial launch was expected in the fourth quarter of 2022 and delayed due to delays in validation of the manufacturing process at the CMO, which is ongoing.

There is no assurance that Organon’s efforts with respect to XACIATO will be successful or that product sales will be able to generate revenue to us at the levels or within the

timing we expect or at the levels or within the timing necessary to support our goals.

See also the risks and uncertainties described under “Risks Related to Our Dependence on Third Parties,” above.

If we are unable to establish or maintain commercial collaborations on favorable terms, on a timely basis, or at all, we may need to establish a commercial infrastructure, which would be costly, could delay product launch, and may not be successful.

We have no internal sales, marketing or distribution capabilities.

We currently do not intend to directly sell or distribute our products into the market and instead intend to enter into agreements with third parties to market, sell and distribute and provide related support services for our product candidates that receive regulatory approval.

If we are unable to establish and maintain commercial collaborations on favorable terms, on a timely basis, or at all, to generate revenue from our products, we would need to establish a sales organization.

If we are unable to establish those capabilities on our own or through third parties, we will be unable to successfully commercialize our product candidates, if approved, or generate product sales revenue.

We do not have a product marketing, sales or distribution infrastructure.

In order to commercialize any of our product candidates if approved for commercial sale, we must either establish a sales and marketing organization with technical expertise and supporting distribution capabilities or collaborate with third-parties that have sales and marketing experience.

As we move our product candidates through development toward, and in some cases, through regulatory approval, we evaluate several options for each product candidate's commercialization strategy.

These options include building our own sales force and other commercial infrastructure, entering into strategic marketing partnerships with third parties, including commercial sales organizations or other pharmaceutical or biotechnology companies, out-licensing the product to other pharmaceutical or biotechnology companies, and combinations of these strategies.

We currently have no commercialization agreements with third parties other than our license agreements with Organon for XACIATO and Bayer for Ovaprene.

We may not be able to maintain our existing commercial collaborations or establish and maintain other commercial collaborations on favorable terms, on a timely basis, or at all.

To generate revenue from our product candidates, if approved, we may need to establish a commercial infrastructure.

There are significant risks involved with establishing our own commercial infrastructure.

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We are aware of products currently under development intended for the same indications as our product candidates.

These competitive product candidates may prove safer, more tolerable and more effective and may be less expensive, introduced to market earlier, or produced, marketed and sold more effectively or on a more cost-effective basis, than our product candidates.

The success of competitive products may render potential application of our product candidates noncompetitive or obsolete, even prior to completion of their development.

These competitive product candidates may prove safer, more tolerable, more effective, and less expensive, and may be introduced to market earlier, or produced, marketed and sold more effectively or on a more cost-effective basis, than our product candidates.

The success of competitive products may render our product candidates noncompetitive or obsolete, even prior to completion of their development.

With respect to XACIATO, there are many FDA-approved products for treating bacterial vaginosis, and many are generic.

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XACIATO and any future products may fail to gain sufficient market acceptance by physicians, patients, third-party payors and others in the medical community.

If our products do not achieve an adequate level of market acceptance, they may not generate significant net product revenues, we may not become profitable and we may suffer reputational harm.

If XACIATO and any future products do not achieve an adequate level of market acceptance, they may not generate significant net product revenue or net sales, we may suffer reputational harm and we may never become profitable.

The degree of market acceptance of XACIATO and any future products will depend on several factors, including:

• the timing of our receipt of any marketing approvals;

• the terms of any approvals and the countries in which marketing approvals are obtained, such as any restrictions on the use of our products together with other medications;

• the indications for which the products are approved;

• the timing of our receipt of any marketing approvals and the jurisdictions in which marketing approvals are obtained;

• the terms of any approvals, such as any restrictions on the use of our product together with other medications;

• the indications for which the product is approved;

• demonstrated evidence of efficacy and safety;

• availability of alternative treatments and products;

• the approval of other products for the same indications as our products;

• the approval and availability of alternative treatments and products for the same indications as our product;

• the prevalence and severity of any adverse side effects associated with our product;

• convenience and ease of administration for patients compared to alternative treatments and products, or other potential advantages and disadvantages compared to the alternatives;

• adverse publicity about our products or favorable publicity about competing products;

• our ability to offer our products for sale at competitive prices;

• the willingness of the target patient population to try new therapies and of physicians to prescribe these therapies;

• the success of any physician education programs that we or our commercial collaborators may create for the products;

• the availability of third-party coverage and adequate reimbursement, including patient cost-sharing programs such as co-pays and deductibles;

• adverse publicity about our product or favorable publicity about competing products;

• our ability to offer our product for sale at competitive prices;

• the willingness of the target patient population to try a new product and of physicians to prescribe a new product;

• the success of any physician education programs for our product;

• the availability and extent of third-party coverage and reimbursement for our product and amount of out-of-pocket cost to patients;

• the willingness of uninsured patients to pay for the product;

• the willingness of pharmacy chains to stock the products;

• the willingness of pharmacy chains to stock the product;

• effectiveness of our or our collaborators’ sales and marketing strategy and efforts.

• the prevalence and severity of any adverse side effects associated with the product.

If XACIATO or any future product does not achieve an adequate level of market acceptance, it could have a material and adverse effect on our business, financial condition, results of operation and prospects.

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Clinical testing will also need to demonstrate that the product can be safely worn for multiple weeks.

If we receive regulatory approval to market Ovaprene, its commercial success, or the success of any other future contraceptive product candidate we may seek to develop, including our current pre-clinical candidates, will depend upon the contraceptive market and market acceptance of an alternative method.

If we receive regulatory approval to market Ovaprene, its commercial success, or the success of any other future contraceptive product candidate we may seek to develop, including our current pre-clinical stage candidates, will depend upon the contraceptive market and market acceptance of an alternative method.

Risks related to market acceptance include:

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• perceived safety differences of hormonal and/or non-hormonal contraceptive options;

• changes in health care laws and regulations, including the ACA, and its effect on pharmaceutical coverage, reimbursement and pricing, and the birth control mandate;

• competition from new lower dose hormonal contraceptives with more favorable side effect profiles;

• new generic contraceptive options including a generic version of the hormone-containing intravaginal product NuvaRing®;

• the effects of changes in health care laws and regulations on third-party payor coverage (including the birth control coverage mandate) and reimbursement and out-of-pocket costs to patients;

• the availability and extent of third-party coverage and reimbursement for our product, the amount of out-of-pocket cost to patients and the effects of any changes in health care laws and regulations, including the birth control mandate, on product pricing and coverage and out-of-pocket costs to patients.

If one or more of these risks occur, it could reduce the market potential for Ovaprene, or any future contraceptive product we may seek to develop, and place pressure on our business, financial condition, results of operations and prospects.

Under our license agreement with Bayer, provided the license grant becomes effective, Bayer will have exclusive rights to market and sell Ovaprene in the U.S.

Accordingly, the potential value of Ovaprene to our company is highly dependent on the efforts and activities of Bayer.

Accordingly, the potential value of Ovaprene to our company

is highly dependent on the efforts and activities of Bayer.

Should Ovaprene fail to generate compelling clinical safety and efficacy data, the license grant under our agreement with Bayer may never become effective.

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Should Sildenafil Cream, 3.6% show increased risk of adverse reactions, or signs thereof, in older or elderly women during clinical development, the potential market for Sildenafil Cream, 3.6% could be significantly limited, which could have a material adverse impact on the value of this program.

If we receive marketing approval in the future, our commercial success with Sildenafil Cream, 3.6% will depend, in large part, on the ability of the product candidate to demonstrate safety and effectiveness in treating FSAD in clinical trials, as well as our ability to educate doctors and women about the need to diagnose and treat FSAD and the potential benefits of using of Sildenafil Cream, 3.6%, at which we or any third party with which we may collaborate to commercialize Sildenafil Cream, 3.6% may not prove successful.

If we receive marketing approval in the future, our commercial success with Sildenafil Cream, 3.6% will depend, in large part, on the ability of the product candidate to demonstrate safety and effectiveness in treating FSAD in clinical trials, as well as our ability, or that of a commercial collaborator, to educate doctors and women about the need to diagnose and treat FSAD and the potential benefits of using of Sildenafil Cream, 3.6%, which may not prove successful.

Sexual arousal can be influenced by many emotional and physiological factors.

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• positive or negative news and research regarding bio-identicals;

• preference for an FDA-approved product by women and health care providers over treatments prepared in compounding pharmacies;

• the success or failure of Bijuva®, the first FDA-approved bio-identical product;

• new information supportive or against the use of hormones in menopause;

• availability of insurance reimbursement for DARE-HRT1.

• availability and extent of third-party payor coverage and reimbursement for DARE-HRT1 and out-of-pocket cost for patients.

Depending upon the direction of the factors above, a commercial market for DARE-HRT1 may develop more slowly than expected, or not at all, and our business, financial condition, results of operation and prospects could be hurt as a result.

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Unexpected safety, efficacy or quality concerns relating to XACIATO could develop, which could have significant negative consequences for us.

XACIATO was approved by the FDA based on prior findings of safety or effectiveness of previously approved clindamycin products and on clinical data from the Phase 3 DARE-BVFREE clinical trial, in which 307 patients were randomized.

Following its commercial launch, XACIATO will be used by larger numbers of patients, potentially for longer periods of time.

New data may emerge from market surveillance or clinical trials of XACIATO that we or a third party may conduct in the future that give rise to safety, efficacy or quality concerns and result in negative consequences, including:

Following its commercial launch, XACIATO will be used by larger numbers of patients, and some patients may use multiple regimens over the course of a year.

New data may emerge from market surveillance or future clinical trials of XACIATO that give rise to safety, efficacy or quality concerns and result in negative consequences, including:

• modification to the product’s prescribing information, such as the addition of boxed or other warnings, contraindications, or limitations of use;

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• suspension or withdrawal of marketing approvals;

• withdrawal of the product from the market;

• suspension or termination of ongoing clinical trials, if any;

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• product liability claims and lawsuits.

Furthermore, the discovery of significant problems with another intravaginally administered or clindamycin-containing product that implicates XACIATO, or is perceived to implicate XACIATO, could have an adverse impact on commercialization of XACIATO and our business, including as a result of occurrence of the events described above.

Furthermore, the discovery of significant problems with another intravaginally administered or clindamycin-containing product perceived as comparable to XACIATO, could have an adverse impact on commercialization of XACIATO and our business, including as a result of occurrence of the events described above.

For example, XACIATO has not been studied in pregnant or breastfeeding women.

Should increased risk of miscarriage or other adverse effects on maternal or fetal outcomes or breastfed infants be observed in future data from market surveillance or clinical trials of XACIATO, or products that implicate or are perceived to implicate XACIATO, XACIATO’s commercial potential may be limited and we could become subject to product liability claims and lawsuits.

Should increased risk of miscarriage or other adverse effects on maternal or fetal outcomes or breastfed infants be observed in future data from market surveillance or clinical trials of XACIATO or other clindamycin products, XACIATO’s commercial potential may be limited and we could become subject to product liability claims and lawsuits.

The occurrence of any of the circumstances described above could reduce XACIATO’s market acceptance, inhibit or delay its commercialization within or outside of the U.S.

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Any marketing approvals we receive for our other product candidates in the future may be subject to limitations on the approved indicated uses for which the product may be marketed or to the conditions of approval, or contain requirements for potentially costly post-marketing testing, including Phase 4 clinical trials, and surveillance to monitor the safety and efficacy of the product.

In addition, we will be required to report adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities (when products are approved in foreign markets).

In addition, we will be required to report adverse reactions and production problems, if any, to the FDA and comparable foreign regulatory authorities (when products are approved in

foreign markets).

Any new legislation addressing drug safety issues could result in delays in product development or commercialization, or increased costs to assure compliance.

If a regulatory agency discovers previously unknown problems with XACIATO or a future product, such as problems with the facility where the product is manufactured, or it disagrees with the promotion, marketing or labeling of a product, the regulatory agency may impose restrictions on that product or on us or our commercial collaborator,

including requiring withdrawal of the product from the market.

If we are unable to comply with applicable regulatory requirements, a regulatory agency or enforcement authority may, among other things:

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Any inability to comply with ongoing regulatory requirements may significantly and adversely affect our ability to develop and commercialize our products and the value of our business, and our operating results would be adversely affected.

Failure to successfully obtain coverage and reimbursement for XACIATO and any future products in the United States, or the availability of coverage only at limited levels, would diminish our ability, or that of a commercial collaborator, to generate net product revenue.

Coverage from government health care programs and private commercial health insurance companies is critical to the commercial success of XACIATO and any future products.

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A payor’s decision to provide coverage for a product does not imply that an adequate reimbursement rate will be approved.

Managed care organizations and other private

insurers frequently adopt their own payment or reimbursement reductions.

Managed care organizations and other private insurers frequently adopt their own payment or reimbursement reductions.

Consolidation among managed care organizations has increased the negotiating power of these entities.

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Our inability, or that of our commercial collaborator, to obtain coverage and profitable payment rates from both government-funded and private payors for XACIATO or any future product could have a material adverse effect on our operating results, our ability to raise capital needed to execute our business strategy and our overall financial condition.

Additionally, the containment of health care costs has become a priority of federal and state governments and the prices of drug products have been a focus of this effort.

Failure by us or a commercial collaborator to obtain timely and adequate coverage and pricing for XACIATO and any future products, or obtaining such coverage and pricing at unfavorable levels, could materially adversely affect our business, financial condition, results of operations and prospects.

Legislation and legislative and regulatory proposals intended to contain health care costs may adversely affect our business.

The containment of health care costs has become a priority of federal and state governments and the prices of drug products have been a focus of this effort.

For example, there have been several recent U.S.

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Supreme Court held unanimously that federal law does not preempt the states’ ability to regulate pharmaceutical benefit managers and other members of the health care and pharmaceutical supply chain, an important decision that may lead to further and more aggressive efforts by states in this area.

The Biden Administration has also indicated that lowering prescription drug prices is a priority, and the Department of Health and Human Services, or DHHS, released a drug pricing plan in September 2021 that indicates the Administration supports aggressive actions such as allowing DHHS to negotiate the cost of Medicare Part B and D drugs.

Such significant changes will require either new legislation to be passed by Congress or time-consuming administrative actions.

The Biden Administration has also indicated that lowering prescription drug prices is a priority, and on August 16, 2022, President Biden signed into the law the Inflation Reduction Act of 2022, or the IRA.

Among other things, the IRA has multiple provisions that may impact the prices of drug products that are both sold into the Medicare program and throughout the United States.

Starting in 2023, a manufacturer of drugs or biological products covered by Medicare Parts B or D must pay a rebate to the federal government if their drug product’s price increases faster than the rate of inflation.

This calculation is made on a drug product by drug product basis and the amount of the rebate owed to the federal government is directly dependent on the volume of a drug product that is paid for by Medicare Parts B or D.

Additionally, starting for payment year 2026, the Centers for Medicare and Medicaid Services, or CMS, will negotiate drug prices annually for a select number of single source Part D drugs without generic or biosimilar competition.

CMS will also negotiate drug prices for a select number of Part B drugs starting for payment year 2028.

a drug product is selected by CMS for negotiation, it is expected that the revenue generated from such drug will decrease.

CMS has begun to implement these new authorities but it remains unclear how these forthcoming changes may impact coverage or reimbursement decisions across the biopharmaceutical industry as a whole.

It is uncertain whether and how future legislation or regulatory changes could affect prospects for XACIATO or our product candidates or what actions third-party payors may take in response to any such health care reform proposals or legislation.

Adoption of price controls and cost-containment measures, and adoption of more restrictive policies in jurisdictions with existing controls and measures reforms, may prevent or limit our ability, or the ability of a commercial collaborator, to commercialize XACIATO or any future products as well as our ability to generate revenue and attain profitability.

Even seemingly small copayments or other cost-sharing requirements could dramatically reduce the market potential for XACIATO and our product candidates.

If the out-of-pocket costs for XACIATO or any of our product candidates, if approved, are deemed by women to be unaffordable, a commercial market may never develop or the market potential for that product may be significantly reduced, which could have a material adverse effect on our business, financial condition, and prospects.

If the out-of-pocket costs for XACIATO or any of our product candidates, if approved, are deemed by women to be unaffordable, or if less expensive alternatives exist, a commercial market may never develop or the market potential for that product may be significantly reduced, which could have a material adverse effect on our business, financial condition, and prospects.

With regard to contraceptive products, the ACA and subsequent regulations enacted by DHHS, require health plans to provide coverage for women’s preventive care, including all forms of FDA-cleared or approved contraception, without imposing any cost sharing on the plan beneficiary.

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This failure could have a material adverse effect on our business, financial condition, results of operations and prospects.

Drug products and drug/device combination products are complex to manufacture, and manufacturing disruptions may occur that could cause significant delays and disruption in the supply of XACIATO and any future product.

Our product and product candidates are complex to manufacture and we are dependent on, and expect to continue to rely on, contract manufacturers and other third parties to supply our products and their components.

The manufacture of our product and product candidates is complex, subject to compliance with extensive regulatory requirements and we are dependent on, and expect to continue to rely on, contract manufacturers and other third parties to supply our products and their components.

Manufacturing disruptions may occur, including as a result of scaling up production to meet commercial requirements or due to global supply chain disruptions.

Such problems may prevent the production of lots that meet the specifications required for sale of our product and may be difficult and expensive to resolve.

In particular because we rely on single source contract manufacturers and suppliers, if disruptions occur in the operations of one those third parties, we may experience immediate shortages of our products.

Because we rely on single source contract manufacturers and suppliers, if disruptions occur in the operations of one those third parties, we may experience immediate shortages of our products.

If any such issues were to arise with respect to XACIATO or future products, we could lose sales and associated revenue, incur additional costs, delay commercial launch of new products or suffer harm to our reputation.

See also ““Risks Related to Our Dependence on Third Parties- We rely on third-party suppliers and manufacturers for clinical and commercial supplies of XACIATO and our product candidates, including multiple single source suppliers and manufacturers, and we currently have no plans to build or acquire our own manufacturing capabilities.

commercial product supplies from specific third parties or there may be a limited number of third-party suppliers of raw materials and other components of our product and product candidates, which may heighten our dependence on those third parties and the risk of manufacturing disruptions” above.

“Risks Related to Product Research & Development and Regulatory Approval- Delays in the manufacture of our clinical and commercial supplies as well as other supply chain disruptions could postpone the initiation of or interrupt clinical studies, extend the timeframe and cost of development of our product candidates, delay potential regulatory approvals and impact the commercialization of any approved products.”;

“Risks Related to Our Dependence on Third Parties- We do not have, and we do not have plans to establish, our own manufacturing capabilities.

We rely on third-party suppliers and manufacturers for clinical study and commercial materials, including multiple single source suppliers and manufacturers.

If these third parties do not perform as we expect, do not maintain their regulatory approvals or become subject to negative circumstances, it could delay, prevent or impair our product development or commercialization efforts, or those of our collaborators, and harm our business;” and “Risks Related to Our Dependence on Third Parties- In some cases, we may be contractually required to obtain clinical or commercial product supplies from specific third parties or there may be a limited number of third-party suppliers of raw materials and other components of our product and product candidates, which may heighten our dependence on those third parties and the risk of manufacturing disruptions.”

If competitors obtain approval for generic versions of XACIATO or any future products, our business may suffer.

Although XACIATO is FDA-approved for commercialization in the United States, it and any future product may face direct competition from generic products earlier or more aggressively than anticipated, depending upon how well such approved products perform in the United States prescription drug market.

XACIATO and any future product may face direct competition from generic products earlier or more aggressively than anticipated, depending upon the product's success in the market.

In addition to creating the 505(b)(2) NDA pathway, the Hatch-Waxman Act amendments to the FDCA authorized the FDA to approve generic drugs that are the same as drugs previously approved for marketing under the NDA provisions of the statute pursuant to abbreviated new drug applications, or ANDAs.

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If a third party is able to demonstrate bioequivalence without infringing our patents, that third party may then be able to introduce a competing generic product onto the market.

The FDA granted XACIATO for the treatment of bacterial vaginosis in female patients 12 years of age and older three years of data exclusivity, which was extended by five years under the GAIN Act, such that the period is set to expire on December 7, 2029.

The FDA granted XACIATO three years of data exclusivity for the treatment of bacterial vaginosis in female patients 12 years of age and older, which was extended by five years under the GAIN Act, such that the period is set to expire on December 7, 2029.

XACIATO has also been designated as an RLD by the FDA for purposes of future generic drug development.

Accordingly, the data exclusivity period should block the FDA from approving either a subsequent ANDA or 505(b)(2) NDA that relies in whole or in part on our protected clinical data.

We cannot predict the interest of potential follow-on competitors in the future XACIATO market, whether a third party will attempt to invalidate our period of exclusivity or otherwise force the FDA to take other actions, or how quickly others may seek to come to market with competing products after the FDA-granted data exclusivity period ends.

We cannot predict the interest of potential follow-on competitors in the future XACIATO market, whether a third party will attempt to invalidate our period of data exclusivity or challenge the patent listed for XACIATO in the FDA's Orange Book or otherwise force the FDA to take other actions, or how quickly others may seek to come to market with competing products after the FDA-granted data exclusivity period ends.

Other products candidates we develop, if approved, may also receive marketing exclusivity under the FDCA that may similarly be subject to challenge or uncertainty.

Reduction or loss of periods of market exclusivity for our products could negatively affect our business, operating results and financial condition.

We will need to obtain FDA approval of any proposed prescription medical product name, and any failure or delay associated with such approval may adversely affect our business.

Any name we intend to use for our current or future product candidates will require approval from the FDA regardless of whether we have secured a formal trademark registration from the United States Patent and Trademark Office, or USPTO.

The FDA typically conducts a review of proposed new prescription medical product names, including an evaluation of the potential for confusion with other product names.

The FDA typically conducts a review of proposed new prescription medical product names,

including an evaluation of the potential for confusion with other product names.

The FDA may also object to a proposed product name if it believes the name inappropriately implies medical claims or contributes to an overstatement of efficacy.

If the FDA objects to any of our proposed product names, we may be required to adopt alternative names for our product candidates.

If we adopt alternative names, we would lose any goodwill or brand recognition developed for previously used names and marks as well as the benefit of any existing trademark applications for such product candidate and may be required to expend significant additional resources in an effort to identify a suitable product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA.

If we adopt alternative names, we would lose any goodwill or brand recognition developed for previously used names and marks, such as Ovaprene, as well as the benefit of any existing trademark applications for such product candidate and may be required to expend significant additional resources in an effort to identify a suitable product name that would qualify under applicable trademark laws, not infringe the existing rights of third parties, and be acceptable to the FDA.

We or a commercial collaborator may be unable to build a successful brand identity for a new trademark in a timely manner or at all, which would limit our or our collaborator’s ability to commercialize our product candidates.

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The marketing approval process in other countries may include all of the risks associated with obtaining FDA approval in the United States, as well as other risks.

Further, for approval in foreign jurisdictions, we may not have rights to reference the necessary clinical and nonclinical data that we do not own or have licensed rights to use, as we anticipate doing under the 505(b)(2) regulatory pathway in the United States, and we, or our commercial collaborator,

may have to develop our own additional data to seek approvals in other jurisdictions.

In addition, in many countries outside the United States, a new product must receive pricing and reimbursement approval prior to commercialization.

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In addition, we may be subject to fines, suspension or withdrawal of marketing approvals, product recalls, seizure of products, operating restrictions and criminal prosecution if we, or our commercial collaborator, fail to comply with applicable foreign regulatory requirements.

In such an event, our ability, or our commercial collaborator’s ability, to market to the full target market for our products will be reduced and our ability to realize the full market potential of our products will be harmed, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

In such an event, our ability, or our commercial collaborator’s ability, to market to the full target market for our products will be reduced and the full market potential of our products may not be realized, which could have a material adverse effect on our business, financial condition, results of operations and prospects.

Risks Related to Employee Matters and Managing Our Growth

We have a relatively small number of employees to manage and operate our business.

As of March 30, 2022, we had 28 employees, of which 20 were full-time and eight were part-time.

As of March 29, 2023, we had 30 employees, of which 25 were full-time and five were part-time.

Our focus on limiting cash utilization requires us to manage and operate our business in a highly efficient manner, relying on consultants and other third-party service providers for product development and operational expertise we require, and to limit full-time personnel resources.

With a small number of employees, our ability to supervise the service providers we engage may be constrained, which may impact the timing and quality of services we receive.

With a small number of employees, our ability to supervise the service providers we engage, including our CMOs and CROs, may be constrained, which may impact the timing and quality of services we receive.

No assurance can be given that we will be able to run our operations or accomplish all of the objectives we otherwise would seek to accomplish with the limited personnel resources we currently have.

In response to the COVID-19 pandemic, in March 2020, we implemented work-from-home and restricted travel policies.

Since March 2020, the governors of California and Massachusetts, states in which we have operations, have issued, rescinded and reinstated statewide or regional stay-at-home orders and individual isolation and quarantine requirements to help combat the spread of COVID-19 that have impacted our ability to require or allow our employees to work in our facilities.

In addition, many, if not all, of our consultants, collaborators and vendors on which we rely heavily have implemented similar policies, are or may be subject to similar orders, and/or may re-allocate resources otherwise intended for our activities to activities intended to address the COVID-19 pandemic.

We have modified, and we may further modify, our work-from-home and restricted travel policies during the course of the pandemic.

When and if we and our collaborators and service providers revert to pre-pandemic policies is indeterminable currently.

Prolonged and indefinite remote working arrangements and travel restrictions may adversely affect our ability to effectively manage and operate our business, materially increase our expenses and may result in delays in our anticipated development program timelines.

In addition, we and our collaborators and service providers may be adversely affected by worker shortages directly or indirectly related to the COVID-19 pandemic that are difficult to predict, plan for or mitigate.

For example, in late 2021, companies across many industries began experiencing severe staffing shortages reportedly caused by work absences due to a surge in COVID-19 cases and an economic trend known as the Great Resignation in which employees are voluntarily quitting their jobs in large numbers.

Due to our small workforce, if multiple employees become unable to work or were to resign at roughly the same time, our ability to effectively manage and operate our business could become significantly impaired and our expenses could increase materially, including as a result of expenditures related to recruiting, hiring and training qualified new employees and engaging additional consultants and service providers to perform the job responsibilities of the employees on leave or who resign.

We generally allow for a hybrid work model.

We instituted remote work policies in March 2020 in response to the COVID-19 pandemic and resulting government stay-at-home orders, which have evolved into our current policies generally permitting a hybrid work schedule.

In addition, many consultants, collaborators and other third-party service providers on which we rely currently have a remote or hybrid workforce model.

The long-term impact of less frequent in-person meetings on our productivity and creativity is difficult to assess.

Remote working arrangements for our personnel and that of third parties on which we rely may weaken our ability to effectively manage and operate our business and lead to delays in our anticipated development program timelines.

In addition, due to our small workforce, if multiple employees were to become unable to work for a protracted period for any reason, or if they were to resign at roughly the same time, our business could suffer.

Our ability to effectively manage and operate our business could become significantly impaired and our expenses could increase materially, including as a result of expenditures related to recruiting, hiring and training qualified new employees and engaging additional consultants and service providers to perform the job responsibilities of the employees on leave or

If we or our collaborators or service providers experience staffing shortages, it may result in significant delays in our anticipated development program timelines.

If we fail to attract and retain management and other key personnel, we may not successfully complete development of, obtain regulatory approval for or commercialize our product candidates, or otherwise implement our business plan.

Our ability to compete in the highly competitive pharmaceutical, biotechnology and medical device industries depends upon our ability to attract and retain highly qualified managerial and key personnel.

Our ability to compete in the highly competitive biopharmaceutical industry depends upon our ability to attract and retain highly qualified managerial and key personnel.

We depend highly on our senior management.

Losing the services of our senior management could impede, delay or prevent the development and commercialization of our product candidates, hurt our ability to raise additional funds and negatively impact our ability to implement our business plan.

Losing the services of our senior management, and our chief executive officer in particular, could impede, delay or prevent the development and commercialization of our product candidates, harm our ability to raise additional funds and negatively impact our ability to implement our business plan.

If we lose the services of any of our senior management team, we might not find suitable replacements on a timely basis or at all, and our business could be materially harmed.

We do not maintain “key man” insurance policies on the lives of any of our senior management employees.

We might not attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biopharmaceutical and biotechnology companies and other life sciences R&D organizations, particularly in the San Diego area where we are headquartered.

We might not attract or retain qualified management and other key personnel in the future due to the intense competition for qualified personnel among biopharmaceutical companies and other life sciences R&D organizations, particularly in the San Diego area where we are headquartered.

In addition, our limited personnel and financial resources may result in greater workloads for our employees compared to those at companies with which we compete for personnel, which may lead to higher levels of employee burnout and turnover.

As a result, we may have to expend significant financial resources in our employee recruitment and retention efforts.

Many of the other companies within the women’s health products industry with whom we compete for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than we do.

Many of the other companies with whom we compete for qualified personnel have greater financial and other resources, different risk profiles and longer histories in the industry than we do.

They also may provide more diverse opportunities and better opportunities for career advancement.

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We may engage in strategic transactions that could cause us to incur additional liabilities, commitments or significant expense.

These efforts may not be successful, including for reasons discussed in elsewhere in these risk factors and also:

These efforts may not be successful, including for reasons discussed in elsewhere in this Risk Factors section and also:

• we may fail to appropriately evaluate the potential risks and uncertainties associated with a transaction;

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• we may not effectively integrate the acquired or in-licensed assets, businesses, personnel, intellectual property or business relationships;

• we may underestimate the development costs, timelines, regulatory approval challenges and overestimate the market opportunity for the potential product candidates and technologies;

• the acquired or in-licensed product candidates may prove during development to be unsafe or not effective in their targeted indications.

• we may underestimate the development and regulatory approval challenges, costs and timelines and overestimate the market opportunity for the potential product candidates and technologies;

• during development, the acquired or in-licensed product candidates may not prove to be safe or effective in their targeted indications.

We may fail to realize the anticipated value of any strategic transaction and the costs of a transaction may outweigh the benefits we realize from it.

Any strategic transaction we pursue may not produce the outcomes and benefits we originally anticipated and may adversely impact our financial condition and be detrimental to our company in general.

In addition, we have used shares of our common stock as consideration in strategic transactions and we may do so in the future, which may result in significant dilution to our stockholders.

Any strategic transaction we pursue may not produce the outcomes and benefits we originally anticipated and may adversely impact our operating results and financial condition and be detrimental to our company in general.

Risks Related to Our Intellectual Property

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As a result, the validity and enforceability of patents cannot be predicted with certainty.

In addition, we do not know whether we or our licensors were the first to make the inventions covered

by each of our issued patents and pending patent applications.

In addition, we do not know whether we or our licensors were the first to make the inventions covered by each of our issued patents and pending patent applications.

We or our licensors may not have been the first to file patent applications for these inventions.

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We will be able to protect our proprietary rights from unauthorized use by third parties only to the extent that our proprietary technologies, products and product candidates are covered by valid and enforceable patents or are effectively maintained as trade secrets.

Our patent strategy for protecting Ovaprene includes in-licensing a patent family from ADVA-Tec, whose last claim expires in August 2028, but which could be extended to August 2033 in the United States and Europe.

Our patent strategy for protecting Ovaprene includes in-licensing several patent families from ADVA-Tec.

Patent prosecution for the intellectual property incorporated into Ovaprene is entirely controlled by ADVA-Tec and we have little, if any, influence or control over such patent prosecution.

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With respect to patent rights related to our IVR product candidates, including DARE-HRT1 and DARE-FRT1, The General Hospital Corporation (also known as Massachusetts General Hospital or MGH) has the sole right to prosecute and maintain its patent rights, and we have the right to prosecute and maintain Catalent's patent rights.

will be responsible for the costs incurred by MGH to maintain and prosecute such patents and we will be kept informed of all strategies.

We will be responsible for the costs incurred by MGH to maintain and prosecute such patents and we will be kept informed of all strategies.

However, we will have little, if any, influence or control over MGH’s implementation of the patent strategy.

With respect to patents related to DARE-VVA1, we have the right and obligation, at our expense, to prosecute and maintain the in-licensed patent rights in certain major markets, if possible.

With respect to patents rights related to our DARE-GML program, the University of Minnesota (UMN) has the sole right to prosecute and maintain its patent rights, and we have the right to prosecute and maintain patents licensed from Hennepin Life Sciences.

We will be responsible for the costs incurred by UMN to maintain and prosecute such patents and we will be kept informed of all strategies.

However, we will have little, if any, influence or control over UMN's implementation of the patent strategy.

There is a substantial backlog of patent applications at the USPTO that may lead to delays in having patent applications examined by the USPTO.

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Many companies have encountered difficulties in protecting and defending their intellectual property rights in foreign jurisdictions.

If we encounter such difficulties or are otherwise precluded from effectively protecting our intellectual property rights in either the United States or foreign jurisdictions, our business prospects could be substantially harmed.

If we encounter such difficulties or are otherwise precluded from effectively protecting our

intellectual property rights in either the United States or foreign jurisdictions, our business prospects could be substantially harmed.

In addition, because of funding limitations and our limited cash resources, we may not be able to devote the resources that we might otherwise desire to prepare or pursue patent applications, either at all or in all jurisdictions in which we might desire to obtain patents, or to maintain already-issued patents.

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If a competitor infringes upon our patent or other intellectual property rights, including any rights licensed by us, enforcing those rights may be costly, difficult and time-consuming.

Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and time-consuming and could divert our management’s attention.

Even if successful, litigation to enforce our

intellectual property rights or to defend our patents against challenge could be expensive and time-consuming and could divert our management’s attention.

We may not have sufficient resources to enforce our intellectual property rights or to defend our patent or other intellectual property rights against a challenge.

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While our license agreement would require MilanaPharm to indemnify us for certain losses arising from these third-party claims, this indemnification may not be sufficient to adequately compensate us for any related losses or the potential loss of our ability to manufacture and sell XACIATO.

Additionally, our license agreement with Organon requires that we indemnify Organon from and against all liabilities, damages, expenses, fines, penalties and losses as a result of any third-party claim arising out of or relating to the development, manufacture, commercialization or other exploitation of XACIATO or any licensed product by or on behalf of us or any affiliate or licensee of ours, except for in limited circumstances.

As a result of our indemnification obligations to Organon and limitations on TriLogic's and MilanaPharm's obligations to indemnify us, any patent infringement litigation relating to XACIATO could subject us to significant liabilities that may have a material adverse effect on our business, results of operations and financial condition.

With respect to Ovaprene, ADVA-Tec has the right, in certain instances, to control the defense against any infringement litigation arising from the manufacture or development (but not the sale) of Ovaprene.

While our license agreement with ADVA-Tec requires ADVA-Tec to indemnify us for certain losses arising from these claims, this indemnification may not be sufficient to adequately compensate us for any related losses or the potential loss of our ability to manufacture and develop Ovaprene.

Additionally, our license agreement with Bayer requires that we indemnify Bayer from and against all liabilities, damages, losses and expenses arising from or occurring as a result of development, manufacture, use or commercialization of Ovaprene by us or any licensee of ours, including without

limitation, product liability claims, except in limited circumstances.

As a result of our indemnification obligations to Bayer and limitations on ADVA-Tec’s obligations to indemnify us, any patent infringement litigation relating to Ovaprene could subject us to significant liabilities that may have a material adverse effect on our business, results of operations and financial condition.

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Additionally, pending patent applications that have been published can, subject to certain limitations, be later amended in a manner that could cover our product candidates or the use of our product candidates.

The scope of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history.

of a patent claim is determined by an interpretation of the law, the written disclosure in a patent and the patent’s prosecution history.

Our or our licensors’ interpretation of the relevance or the scope of a patent or a pending application may be incorrect, which may negatively impact our ability to market our product candidates.

We our licensors may incorrectly determine that our product candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope.

We or our licensors may incorrectly determine that our product candidates are not covered by a third-party patent or may incorrectly predict whether a third party’s pending application will issue with claims of relevant scope.

Our or our licensors’ determination of the expiration date of any patent in the United States, the EU or elsewhere that we consider relevant may be incorrect, which may negatively impact our ability to develop and market our product candidates.

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We also rely upon trade secrets to protect our technology, product and product candidates, and trade secrets can be difficult to maintain and enforce.

In addition to patent and trademark protection, we also rely on trade secrets, including unpatented know-how, technology and other proprietary information, to derive a competitive advantage for products we develop, especially

where we believe patent protection is not appropriate or obtainable.

However, trade secrets are difficult to maintain.

While we use reasonable efforts to protect our trade secrets, monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective.

Monitoring unauthorized uses and disclosures of our intellectual property is difficult, and we do not know whether the steps we have taken to protect our intellectual property will be effective.

Moreover, we or any of our collaborators’ employees, consultants, contractors or scientific and other advisors may unintentionally or willfully disclose our proprietary information to competitors and we may not have adequate remedies in respect of that disclosure.

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Confidentiality agreements with employees and others may not adequately prevent disclosure of our know-how, trade secrets and other proprietary information and may not adequately protect our intellectual property, which could limit our ability to compete.

We enter into confidentiality, nondisclosure, and intellectual property assignment agreements with our employees, consultants, collaborators, sponsored researchers, and scientific and other advisors.

We enter into confidentiality and nondisclosure agreements with our employees, CROs, CMOs, consultants, collaborators, sponsored researchers, and scientific and other advisors.

These agreements generally require that the other party keep confidential and not disclose to third parties all confidential information developed by the party on our behalf or made known to the party by us during the course of the party’s relationship with us.

These agreements also generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property.

However, these agreements may not be honored and may not effectively assign intellectual property rights to us.

We also have not entered into any non-compete agreements with any of our employees.

We also enter into intellectual property assignment agreements with our employees, consultants and certain other service providers, which generally provide that inventions conceived by the party in the course of rendering services to us will be our exclusive property.

However, these agreements may not be honored or may not effectively assign intellectual property rights to us.

We have not entered into any non-compete agreements with any of our employees.

We cannot guarantee that the confidential nature of our proprietary information will be maintained by our employees and others in the course of their future employment with or provision of services to a competitor.

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Certain of our product development activities have been funded, are being funded and may in the future be funded, by the U.S.

government and not-for-profit organizations.

government or not-for-profit organizations.

Our agreements for these sources of funding include, and may in the future include, terms and conditions that affect our intellectual property rights.

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In connection with the Global Access Commitment, under the agreement, we also granted the foundation that awarded the grant a nonexclusive, perpetual, irrevocable, worldwide, royalty-free, fully paid up, sublicensable license to make, use, sell, offer to sell, import, distribute, copy, create derivative works, publicly perform, and display Funded Developments and essential background technology (referred to as the Humanitarian License).

We are required to ensure that the Humanitarian License survives the assignment or transfer of Funded

Developments and essential background technology.

Our obligations under the Global Access Commitment and the Humanitarian License may limit the value of our rights in DARE-LARC1 and other Funded Developments.

We are required to ensure that the Humanitarian License survives the assignment or transfer of Funded Developments and essential background technology.

Our obligations under the Global Access Commitment and the Humanitarian License may limit the value to us of DARE-LARC1 and other Funded Developments.

Risks Related to Our Business Operations and Industry

The COVID-19 pandemic has negatively impacted our business and, in the future, may materially and adversely affect our business, financial condition and results and stock price, including by increasing the cost and timelines for our clinical development programs.

The ultimate impact of the COVID-19 pandemic on our operations and, financial condition is unknown and will depend on future developments that are highly uncertain, beyond our control and cannot be predicted with confidence, including, but not limited to, the duration and severity of the pandemic, governmental and individual organization actions and policies implemented to reduce transmission of the disease, governmental actions and programs implemented to mitigate and alleviate the economic impact of the pandemic, and the speed with which and degree to which normal economic and operating conditions resume.

The longer the pandemic persists, the greater the potential for significant adverse impact to our business operations and those of the CROs, CMOs, commercial collaborators, and other third-party service providers and vendors on which we depend to, among other things, conduct our clinical and nonclinical studies, supply our clinical trial materials, assist with regulatory affairs necessary to advance and seek regulatory approval for our programs, and market, sell and distribute our products, if approved.

Employee and family member illness, increased childcare and elder care responsibilities, and quarantines, travel restrictions, prohibitions on non-essential gatherings, shelter-in-place orders and other similar directives and policies intended to reduce the spread of the disease, may reduce our productivity and that of the third parties on which we rely and may disrupt and delay many aspects of our business, including R&D activities, production and supply of clinical trial materials and commercial product, and regulatory affairs activities.

As a result of resource constraints, third parties on which we rely may not meet their contractual obligations to us or may allocate constrained resources to projects other than ours, any of which could significantly increase the cost and timelines for our development programs.

In addition, the significant amount of personnel continuing to work remotely, both ours and those of the third parties on which we rely, could increase our cybersecurity risk, create data accessibility concerns, and make us more susceptible to communication disruptions, any of which could significantly adversely impact our business operations or significantly delay necessary interactions with the FDA and other regulatory agencies, our CROs and CMOs, clinical trial sites, current and potential collaborators, and other third parties.

Conversely, as more personnel return to work, travel and non-essential gatherings, there is increased risk of transmission of the disease and other communicable illnesses, potentially leading to resource constraints while personnel are unable to work due to illness and caring for family members who become ill.

In addition, vaccination mandates may lead to human resource constraints at our strategic collaborators, CROs, CMOs and other third parties on which we rely if substantial proportions of their workforce quit or are terminated for refusing to comply with vaccine mandates.

The COVID-19 pandemic could cause delays in the current timelines for our ongoing and planned clinical studies, our regulatory submissions, potential marketing approvals and, ultimately, commercial launch of any approved product, including XACIATO.

The clinical and regulatory milestones we are targeting to occur in 2022 and 2023 may be delayed or otherwise adversely impacted as a result of the pandemic.

For example, clinical trial site initiation and/or patient enrollment may be significantly delayed or suspended as a result of personnel and other resource constraints of health care providers, as well as adherence to governmental orders and internal policies intended to reduce the spread of COVID-19.

In addition, we may experience lower than anticipated subject enrollment and completion rates, including because individuals may avoid medical settings, particularly for non-critical conditions, due to concerns of contracting COVID-19 or due to shelter-in-place and social distancing orders, or conversely, as pandemic-related restrictions ease and there are increased opportunities to travel and participate in other activities again, individuals may be less inclined to participate in or complete clinical trials such as ours that require multiple clinic visits.

Commencement and completion of our clinical trials may also be significantly delayed by disruptions to production by our contract manufacturers of clinical supplies needed for those studies.

The COVID-19 pandemic contributed to a slower than anticipated pace of enrollment of participants in our Phase 2b clinical study of Sildenafil Cream, 3.6% as a result of operational restrictions or closure of certain study sites due to their adherence to governmental guidelines intended to reduce the spread of COVID-19.

The commencement of clinical trials and nonclinical testing for our programs may be delayed due to the failure to obtain clinical and other supplies on a timely basis as a result of supply chain disruptions and human resources constraints.

In addition, the pandemic has resulted in disruption and volatility in the global capital markets, and while the longer-term economic impact is difficult to assess and predict at this time, it could negatively impact our ability to access additional capital when needed or on terms favorable to us and our stockholders.

If we cannot raise capital when needed on acceptable terms, or at all, we may not be able to continue development of our product candidates

as currently planned or at all, will need to reevaluate our planned operations and may need to delay, scale back or eliminate some or all of our development programs, reduce expenses or cease operations, any of which could have a significant negative impact on our prospects and financial condition, as well as the trading price of our common stock.

A key aspect of our business strategy is to seek collaborations with third parties, such as large pharmaceutical companies, that are willing to conduct later-stage clinical trials and further develop and commercialize our product candidates.

As a result of the pandemic, potential and current collaborators may experience operational disruptions and financial and other resource constraints and implement new strategic plans that delay or reduce their efforts in the women’s health in general or in our programs in particular, which could adversely affect our ability to enter into or maintain collaborations, strategic alliances or other similar types of arrangements and may result in or contribute to disruption and delays in later-stage clinical development and, if approved, commercial launch of our product candidates.

The plans we implement to help mitigate negative impacts on our business from the COVID-19 pandemic, including those designed to protect the safety, health and well-being of our employees while maintaining employee productivity, may not be effective.

The extent to which the pandemic, efforts to reduce the spread of COVID-19 and efforts to return to pre-pandemic economic conditions impact our business, financial condition and results of operations is uncertain and cannot be predicted with reasonable accuracy at this time and will depend on future developments that are also uncertain and cannot be predicted with reasonable accuracy at this time including emergence of new and more contagious or deadly variants of the virus that causes COVID-19, new information regarding the long-term health impacts of COVID-19, the rate and efficacy of vaccinations against COVID-19, the effect of actions taken in the United States and other countries to contain and treat COVID-19 and to address the pandemic's impact on economic health, and further actions implemented to contain and treat the disease and its impact, among others.

The COVID-19 pandemic may also have the effect of heightening many of the other risks and uncertainties described in this “Risk Factors” section.

Business interruptions resulting from the COVID-19 pandemic or future public health crises, natural disasters or telecommunication and electrical failures may materially and adversely affect our business, operating results and financial condition.

In March 2020, the COVID-19 pandemic began to impact the global economy.

Because of its size and breadth and the continued emergence of new variants, all of the direct and indirect consequences of the COVID-19 pandemic are not yet known and may not emerge for some time.

The COVID-19 pandemic has disrupted our product development activities and may disrupt our business in the future, or the business of third parties on which we rely.

The COVID-19 pandemic contributed to a slower than anticipated pace of enrollment of participants in our exploratory Phase 2b RESPOND clinical study of Sildenafil Cream, 3.6% as a result of operational restrictions or closure of certain study sites due to their adherence to governmental guidelines intended to reduce the spread of COVID-19.

The COVID-19 pandemic also caused us to prioritize advancement of certain of our development programs over others, or certain development activities within a program over others, due to anticipated or actual difficulties and delays in recruiting clinical study sites and participants and obtaining clinical trial materials and supplies.

The effects of

the COVID-19 pandemic may materially and adversely affect our product development and XACIATO commercialization activities in the future, including as a result of:

• difficulties and delays in clinical study site initiation, including due to diversion of healthcare resources away from conducting clinical studies;

• difficulties and delays in recruiting and enrolling clinical study participants and conducting follow-up visits;

• interruption of key clinical study activities, such as study site and data monitoring, due to limitations on travel or in-person gatherings;

• staff disruptions and turnover internally or at our CMOs, CROs, clinical study sites, collaborators or other third parties on which we rely, either directly or indirectly as a result of reallocation of resources, illness, vaccine mandates or other changes in terms of employment;

• delays in receiving approval from regulatory authorities or IRBs to initiate our clinical studies;

• difficulties and delays in production of clinical trial materials and commercial product, including due to supply chain disruptions or resource constraints or reallocation on the part of our CMOs and raw materials suppliers;

• interruptions in U.S.

or global shipping that may affect the transport and delivery of raw materials, clinical study materials and commercial product;

• changes in local regulations in response to surges in COVID-19 cases that may require changes in the ways our clinical studies are conducted, require us to discontinue a clinical study, or make it more difficult for commercial and medical affairs field teams to call on or otherwise access healthcare providers;

• patient delays in seeking or receiving treatment, either due to fear of infection or inaccessibility of healthcare providers;

• delays in interactions with the FDA or a foreign regulatory authority necessary to advance clinical development of our product candidates, or delays in their review process and timing of potential approval of our product candidates, including delays in pre-approval manufacturing or clinical study site inspections;

• difficulties and delays in establishing or maintaining strategic commercial or development collaborations due to the reallocation of resources or shifting business strategies of collaborators or potential collaborators away from the women’s health market in general or our areas of focus within women’s health in particular;

• disruption and volatility in the financial markets which negatively impacts our access to additional capital or stock price.

The strategies we implement designed to mitigate the effects or potential effects of the COVID-19 pandemic on our business may not be effective.

The COVID-19 pandemic could cause significant delays in the current timelines for our ongoing and planned clinical studies, our regulatory submissions or potential marketing approvals and substantially increase our development costs.

It may delay or contribute to delays in the commercial launch of any approved product, including XACIATO, or market acceptance of the product.

The ultimate impact of the COVID-19 pandemic on our business, operating results and financial condition is unknown and will depend on future developments that are highly uncertain, beyond our control and cannot be predicted with confidence, including, but not limited to, the duration and severity of the pandemic and governmental and individual organization actions and policies implemented in response to the pandemic or the effects of the pandemic.

The longer the pandemic persists, the greater the potential for significant adverse impacts to our business operations and those of the CROs, CMOs, commercial collaborators, and other third-party service providers and vendors on which we depend to, among other things, conduct our clinical and nonclinical studies, supply our clinical trial materials, assist with regulatory affairs necessary to advance and seek regulatory approval for our programs, and market, sell and distribute our products, if approved.

We may also experience similar and significant business disruptions as a result of any future public health emergency, natural or manmade disaster, act of terrorism, war, or telecommunications or electrical failure that impacts our facilities or employees, or those of the third parties on which we rely for key business activities.

The COVID-19 pandemic, other public health emergencies, natural or manmade disasters, acts of terrorism, war or telecommunications or electrical failures may also have the effect of heightening many of the other risks and uncertainties described in this “Risk Factors” section.

Product liability lawsuits against us could cause us to incur substantial liabilities.

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We may have to pay any amounts awarded by a court or negotiated in a settlement that exceed our coverage limitations or that are not covered by our insurance, and we may not have, or be able to obtain, sufficient capital to pay such amounts.

Our current or future employees, clinical investigators, consultants and commercial collaborators may engage in misconduct or other improper activities, including non-compliance with regulatory standards.

We may become exposed to the risk of employees, independent contractors, clinical investigators, consultants, suppliers, commercial collaborators or vendors engaging in fraud or other misconduct.

Misconduct by employees, independent contractors, clinical investigators, consultants, suppliers, commercial collaborators and vendors could include intentional failures, such as failures to:

(1) comply with FDA or other regulators’ requirements, (2) provide accurate information to such regulators, (3) comply with clinical and nonclinical research standards and manufacturing standards established by us and/or required by law, or (4) comply with SEC rules and regulations.

Our current or future employees, clinical investigators, commercial collaborators or service providers may engage in misconduct or other improper activities, including non-compliance with regulatory standards.

We may become exposed to the risk of employees, clinical investigators, commercial collaborators, CMOs, CROs, consultants or other vendors engaging in fraud or other misconduct.

Misconduct by our employees or third parties on which we rely for the development and commercialization of our products and product candidates could include intentional failures, such as failures to:

In particular, sales, marketing and business arrangements in the health care industry are subject to extensive laws, regulations and industry guidance intended to prevent fraud, misconduct, kickbacks, self-dealing and other abusive practices.

These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs and other business arrangements.

Misconduct by current or future employees, independent contractors, clinical investigators, consultants, suppliers, commercial collaborators and vendors could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory or civil sanctions and serious harm to our reputation.

It is not always possible to identify and deter misconduct by employees, independent contractors, clinical investigators, consultants, suppliers, commercial collaborators and vendors, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.

Misconduct by current or future employees, clinical investigators, commercial collaborators, CROs, consultants or other vendors could also involve the improper use of information obtained in the course of clinical trials, which could result in regulatory or civil sanctions and serious harm to our reputation.

It is not always possible to identify and deter misconduct by these parties, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses, or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to comply with such laws or regulations.

If any such actions are instituted against us, and we are not successful in defending or asserting our rights, those actions could have a significant adverse effect on our business, including the imposition of significant fines or other sanctions, and our reputation.

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Health care providers and third-party payors play a primary role in the recommendation and prescription of drug products and medical devices that are granted marketing approval.

Our arrangements with health care providers, commercial collaborators, principal investigators, consultants, third-party payors, customers and other organizations may expose us to broadly applicable fraud and abuse and other health care laws and regulations in the United States.

Our arrangements with health care providers, commercial collaborators, principal investigators, consultants, third-party payors, customers and other organizations

may expose us to broadly applicable fraud and abuse and other health care laws and regulations in the United States.

Health care fraud and abuse regulations are complex, and even minor irregularities can give rise to claims that a statute or prohibition has been violated.

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The federal government uses these laws, and the accompanying threat of significant liability, in its investigation and prosecution of pharmaceutical and biotechnology companies throughout the U.S., for example, in connection with the promotion of products for unapproved uses and other allegedly unlawful sales and marketing practices;

• federal, civil and criminal statues created under HIPAA (and similar state laws), which prohibit, among other actions, knowingly and willfully executing, or attempting to execute, a scheme to defraud any health care benefit program, including private third-party payors, knowingly and willfully embezzling or stealing from a health care benefit program, willfully obstructing a criminal investigation of a health care offense, and knowingly and willfully falsifying, concealing or covering up a material fact or making any materially

false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services.

Similar to the federal Anti-Kickback Statute, a person or entity does not need to have actual knowledge of the statute or specific intent to violate it in order to have committed a violation;

• the Physician Payments Sunshine Act, enacted as part of the ACA, which, among other things, imposes reporting requirements on manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report to CMS, on an annual basis, information related to payments and other transfers of value to physicians (defined broadly to include doctors, dentists, optometrists, podiatrists, chiropractors, and certain advanced non-physician health care practitioners) and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members in such manufacturers;

• HIPAA, as amended by HITECH, and their respective implementing regulations, which impose specified requirements relating to the privacy, security and transmission of individually identifiable health information.

Among other things, HITECH makes HIPAA’s privacy and security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities, which include certain health care providers, health plans, and health care clearinghouses, that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and possibly other persons, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions;

• the Physician Payments Sunshine Act, enacted as part of the ACA, which, among other things, imposes reporting requirements on manufacturers of FDA-approved drugs, devices, biologics and medical supplies covered by Medicare or Medicaid to report to CMS, on an annual basis, information related to payments and other transfers of value to physicians (defined broadly to include doctors, dentists, optometrists, podiatrists, and chiropractors), certain advanced non-physician health care practitioners, and teaching hospitals, as well as ownership and investment interests held by physicians and their immediate family members in such manufacturers;

• HIPAA, as amended by HITECH, and their respective implementing regulations, which impose specified requirements relating to the privacy, security and electronic exchange of individually identifiable health information, or "protected health information" when subject to HIPAA.

Among other things, HITECH makes some of HIPAA’s privacy and all of HIPAA's security standards directly applicable to “business associates,” defined as independent contractors or agents of covered entities, that create, receive, maintain or transmit protected health information in connection with providing a service for or on behalf of a covered entity.

"Covered entity" or entities that must comply with HIPAA, include certain health care providers, health plans, and health care clearinghouses.

HITECH also increased the civil and criminal penalties that may be imposed against covered entities, business associates and third parties unlawfully in possession of protected health information, and gave state attorneys general new authority to file civil actions for damages or injunctions in federal courts to enforce HIPAA and seek attorney’s fees and costs associated with pursuing federal civil actions;

Foreign Corrupt Practices Act, which prohibits U.S.

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Any investigation of us or the third parties with whom we contract, including a commercial collaborator, regardless of the outcome, would be costly and time consuming, and may negatively affect our results of operations and financial condition.

Cyber-attacks, security breaches, loss of data and other disruptions to our information technology systems or those of our collaborators and third-party service providers could compromise sensitive information related to our business, delay or prevent us from accessing critical information or expose us to liability, any of which could adversely affect our business and our reputation.

We utilize information technology systems and networks to process, transmit and store electronic information in connection with our business activities.

As the use of digital technologies has increased, cyber incidents, including deliberate attacks, the deployment of harmful malware or ransomware, denial of service, and attempts to gain unauthorized access to computer systems and networks, have increased in frequency and sophistication.

These threats pose a risk to the security of our systems and networks and those of our collaborators and third-party service providers, and could compromise the confidentiality, availability and integrity of our data, confidential information, or other intellectual property, all of which are vital to our operations and business strategy.

Organizations and governmental bodies with far greater resources than ours dedicated to cyber security have proven vulnerable to cyber-attacks.

There can be no assurance we will succeed in preventing cyber security breaches or successfully mitigate their effects.

Despite implementing security measures, any of the computer systems belonging to us or our collaborators and third-party service providers are vulnerable to damage from computer viruses, unauthorized access, natural disasters, terrorism, war, and telecommunication and electrical failure.

Moreover, the prevalent use of mobile devices that access confidential information increases the risk of data security breaches.

Any system failure, accident, security breach or data breach that causes interruptions in our own or in third-party service vendors’ operations could result in a material disruption of our product development programs.

For example, losing clinical study data from future clinical studies could result in delays in our or our collaborators’ regulatory approval efforts and significantly increase our costs in order to recover or reproduce the lost data.

In addition, a security breach or privacy violation that leads to disclosure of personally identifiable information or protected health information could harm our reputation, compel us to comply with federal and/or state breach notification laws and foreign law equivalents, subject us to mandatory corrective action, require us to verify the correctness of database contents and subject us to litigation or other liability under laws and regulations that protect personal data.

Cyber-attacks, security breaches, loss of data and other disruptions to our information technology systems or those of our collaborators or third-party service providers could compromise sensitive information related to our business, delay or prevent us from accessing critical information, subject us to significant financial loss, and expose us to liability, any of which could adversely affect our business and our reputation.

We utilize information technology systems and networks in the ordinary course of our business to process, transmit and store sensitive data, including confidential information, intellectual property, and personally identifiable information of our employees, consultants and others.

As the use of digital technologies has increased, cyber incidents, including deliberate attacks (such as the deployment of harmful malware and other malicious code, ransomware, denial of service, social engineering, and other attempts to gain unauthorized access to computer systems and networks), have increased in frequency and sophistication, and have become increasingly difficult to detect.

These threats pose a risk to the security of our systems and networks and those of our collaborators and third-party service providers, which store sensitive data of ours, and could compromise the confidentiality, availability and integrity of information stored there which is vital to our operations and business strategy.

A successful cyber-attack could cause serious negative consequences for us, including, without limitation, the disruption of our operations, the misappropriation or destruction of our confidential information and sensitive data, including corporate strategic plans and financial information, and the misappropriation of other assets, including our cash.

Organizations and governmental bodies with far greater resources than ours dedicated to cybersecurity have proven vulnerable to cyber-attacks.

There can be no assurance we will succeed in preventing cybersecurity breaches or successfully mitigate their effects.

In March 2023, we became aware that we had been subject to a criminal fraud commonly referred to as “business email compromise fraud.” The incident involved unauthorized access to an employee’s email account by a third-party impersonator and resulted in an electronic payment of approximately $0.4 million intended for a vendor being fraudulently misdirected to unknown parties.

We retained a third party to assist in our investigation of the incident and implementation of remedial measures, including enhancements to our controls relating to electronic payments to third parties.

We anticipate that approximately $0.2 million of the fraud loss will be covered by insurance.

We do not believe this incident had or will have a material impact on our business, financial condition or results of operations.

However, cyber-related criminal activities continue to evolve and increase in frequency and sophistication and our security measures and controls may not be successful in preventing further cyber-related crimes.

Despite implementing security measures, any of the information technology systems belonging to us or our collaborators and third-party service providers and the sensitive and confidential information contained within them are vulnerable to damage or interruption from computer viruses and other malware, unauthorized access, including as a result of employee error (e.g., phishing or spoofing scams) or malfeasance, service interruptions, system

malfunctions, natural disasters, terrorism, war, and telecommunication and electrical failure.

We rely on third-party service providers and technologies for our data processing-related activities, including without limitation third-party providers of cloud-based infrastructure, encryption and authentication technology, employee email, and other functions.

Our ability to monitor these third parties' cybersecurity practices is limited, and these third parties may not have adequate information security measures in place.

In addition, we do not have our own information technology department or personnel and rely on third-party consultants and other service providers to establish and maintain our information technology infrastructure and systems, and they may fail to perform as expected.

Moreover, the shift to remote working arrangements and the prevalent use of mobile devices that access sensitive or confidential information increases the risk of data security breaches.

Technology security systems and other security measures in employees’ homes or other places they may work may not be as robust and more vulnerable to cybersecurity attacks.

Any system failure, accident, security breach or data breach that causes interruptions in our own or in third-party collaborators’ or service providers’ operations could result in unauthorized, unlawful, or accidental acquisition, modification, destruction, loss, alteration, encryption, disclosure of, or access to our sensitive or confidential information.

A security incident or other interruption could disrupt our ability (or that of third parties upon which we rely) to conduct our business operations and could divert significant resources to remedy or mitigate the damage caused.

For example, if clinical or nonclinical study data is lost or becomes compromised, it could result in delays in our product development and regulatory approval efforts and significantly increase our costs due to additional time and resources necessary to recover and verify, or potentially reproduce, the data.

In addition, a security breach or privacy violation that leads to disclosure of personally identifiable information or protected health information could require us to make notifications to the public as well as regulatory authorities, harm our reputation, subject us to audit, investigation, steep fines and administrative penalties and mandatory corrective action.

A data breach could also require us to verify the correctness of database contents and subject us to litigation, including class action lawsuits, or other liability under laws and regulations that protect personal data, consumer protection and other laws.

Further, our information technology and other internal infrastructure systems, including firewalls, servers, leased lines and connection to the internet, face the risk of systemic failure, which could disrupt our operations.

If any disruption or security breach results in a loss or damage to our data or applications, or inappropriate disclosure of confidential or proprietary information, we may incur resulting liability, our product development programs and competitive position may be adversely affected, the further development of our product candidates may be delayed, and the manufacture and sale of any approved products may be impaired.

Furthermore, we may incur additional costs to remedy the damage caused by these disruptions or security breaches.

The costs related to significant security breaches or disruptions could be material, and, as was the case with the fraud discovered in March 2023, our insurance coverage may not cover all the losses arising from any such disruption in, or failure or security breach of, our systems or third-party systems where information important to our business operations and product development is stored or processed.

In addition, such insurance may not be available to us in the future on economically reasonable terms, or at all.

Further, our insurance may not cover all claims made against us and could have high deductibles in any event, and defending a suit, regardless of its merit, could be costly and divert management attention.

Moreover, if the information technology systems of our third-party collaborators, service providers or vendors become subject to disruptions or security breaches, we may have insufficient recourse against such third parties and we may have to expend significant resources to mitigate the impact of such an event.

Our business may be adversely affected by unfavorable or unanticipated macroeconomic conditions and geopolitical events.

Various macroeconomic factors could adversely affect our business, our results of operations and financial condition, including changes in inflation, interest rates and overall economic conditions and uncertainties, including those resulting from geopolitical events, international economic sanctions or a global health emergency.

Interest rates and the ability to access credit markets could also adversely affect the ability of patients, payors and distributors to purchase, pay for and effectively distribute our products, if and when approved.

Similarly, these macroeconomic factors could affect the ability of our current or potential future third-party manufacturers, sole source or single source suppliers, licensors or licensees to remain in business, or otherwise manufacture or supply our clinical trial material and products or commercialize our products, if and when approved.

Failure by any of them to remain in business could have a material adverse effect on our ability to develop and obtain regulatory approvals for our product candidates, and, if approved, market and sell our products or provide sufficient quantities of our products to meet market demand.

We expect to continue to incur increased costs as a result of operating as a public company, and our management will have to devote substantial time to compliance initiatives and corporate governance practices.

Various macroeconomic factors could adversely affect our business, our results of operations and financial condition, including a delay or failure of the U.S.

government to raise the federal debt ceiling, increased inflation, rising interest rates, adverse developments affecting financial institutions or the financial services industry, recessionary concerns and overall unfavorable economic conditions and uncertainties, including those resulting from geopolitical events, including the war in Ukraine and strained relations between the U.S.

and a number of foreign countries;

international economic sanctions, including those imposed on Russia;

climate change concerns;

or public health emergencies, including the COVID-19 pandemic.

government actions to reduce the federal deficit, or its delay or failure to raise the federal debt ceiling, may result in reduced funding for government-funded or subsidized health programs or require the federal government to stop or delay making payments on its obligations under such programs, which could impact sales of our products covered under such programs, if any, and negatively affect our operating results.

Interest rates and the ability to access credit markets could adversely affect the ability of patients, payors and distributors to purchase, pay for and effectively distribute our products, if and when approved.

Similarly, unfavorable or uncertain macroeconomic factors could affect the ability of our current or potential future collaborators, third-party service providers or suppliers, including sole source or single source manufacturers or suppliers, licensors or licensees to remain in business, or otherwise manufacture or supply our clinical trial material and products or commercialize our products, if and when approved.

Failure by any of them to remain in business or allocate adequate

resources to our products and product candidates could have a material adverse effect on our efforts to develop and obtain regulatory approvals for our product candidates and generate revenue from any approved products.

We expect to continue to incur substantial costs and demands on management time to comply with laws and regulations affecting public companies.

We incur and expect to continue to incur significant legal, accounting and other expenses as a public reporting company.

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Generally, we will become an accelerated filer if our public float as of the last business day of June is $75 million or more and we reported annual revenues of $100 million or more for our most recently completed fiscal year.

Even while we have non-accelerated filer status, our management and other personnel will need to continue to devote substantial time towards maintaining compliance with the requirements of being a public company.

The Sarbanes-Oxley Act of 2002 and rules and regulations subsequently implemented by the SEC and Nasdaq imposed various requirements on public companies, including establishment and maintenance of effective disclosure and financial controls and corporate governance

Our management and other personnel, of whom we have a small number, devote substantial time to these compliance initiatives.

Moreover, if and when we become an accelerated filer, our compliance costs will increase.

Regardless of whether we become an accelerated filer, we may need to hire additional accounting, finance and other personnel in connection with our continuing efforts to comply with the corporate governance, disclosure and other reporting requirements of being a public company, and our management and other personnel, of whom we have a small number, will need to continue to devote substantial time towards compliance matters and initiatives.

For example, pursuant to Section 404 of the Sarbanes-Oxley Act of 2002, we must furnish a report annually by our management on the effectiveness of our internal control over financial reporting, and performing the system and process documentation and evaluation necessary to issue that report requires us to incur substantial expense and expend significant management time.

If and when we are an accelerated filer, we will also have to obtain an attestation report on our internal control over financial reporting by our independent registered public accounting firm, which may substantially increase compliance costs.

Recent SEC rules and rulemaking initiatives, such as the new pay versus performance disclosure requirements and proposed rules on climate-related disclosures, may result in significant additional time and expense devoted to compliance initiatives.

We are a smaller reporting company and a non-accelerated filer and the reduced disclosure requirements available to us may make our common stock less attractive to investors.

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If some investors find our common stock less attractive as a result, there may be a less active trading market for our common stock and the price of our common stock may be more volatile.

Our ability to use net operating loss carryforwards and other tax attributes to offset taxable income may be limited.

We have incurred substantial losses during our history, do not expect to become profitable in the near future and may never achieve profitability.

To the extent that we continue to generate taxable losses, unused losses will carry

forward to offset future taxable income, if any, until such unused losses expire, if at all.

At December 31, 2022, we had substantial federal and state net operating loss, or NOL, carryforwards.

However, our federal NOL carryforwards and other tax attributes may not be available to offset future taxable income because of restrictions under U.S.

tax law, and similar limitations may apply under state tax laws.

We have recorded a full valuation allowance related to our NOL carryforwards and other deferred tax assets due to the uncertainty of the ultimate realization of the future benefits of those assets.

See Note 8 “Income Taxes” to the accompanying consolidated financial statements for more information about limitations on our ability to use our NOL carryforwards and other tax attributes.

Such limitations could result in increased future income tax liability to us and our future cash flows could be adversely affected.

Inflation could negatively impact our business, financial condition and results of operations.

Inflation in the U.S.

and other countries has risen beyond levels experienced in recent decades.

Inflation in the prices for components of our clinical trial material, costs of CROs, CMOs and other third-party service providers and vendors on which we rely, and rising salaries could negatively impact our business by increasing our operating expenses.

Risks Related to Ownership of Our Common Stock

The price of our common stock may rise and fall rapidly, substantial price fluctuations may occur regardless of developments in our business or our operating performance, and you could lose all or part of your investment as a result.

The stock market in general, and the market for biopharmaceutical companies in particular, have experienced volatility that has often been unrelated to the operating performance of particular companies.

The stocks of small cap and microcap companies in the life sciences sector like ours tend to be highly volatile.

The stock market in general, and the market for biopharmaceutical companies in particular, have experienced significant volatility, which has often been unrelated to the operating performance of particular companies.

The stocks of small cap and microcap biopharmaceutical companies like ours tend to be highly volatile.

Our common stock has experienced extreme trading price and volume fluctuations in the past, including fluctuations that have been unrelated or disproportionate to developments in our business and our operating performance, and we expect that our stock price will continue to experience high volatility.

The market price for our common stock may be influenced by a variety of factors, some of which are beyond our control or are related in complex ways, including:

• failure or discontinuation of any of our product development programs;

• actual or anticipated changes to our product development and approval timelines, results from any clinical trial, and communications or decisions from regulatory authorities relating to a review of or decisions on applications we submit for our product candidates, in each case particularly those related to our clinical-stage product candidates;

• significant developments with our product development programs, such as actual or anticipated changes to development and approval timelines, results from any clinical trial, unanticipated serious safety concerns, suspension or discontinuation of a program, initiation of new programs and communications or decisions from the FDA or other regulatory authorities relating to applications we submit for clinical trials or marketing approval of our product candidates, in each case particularly those related to our clinical-stage product candidates;

• announcements of capital raising transactions, including sales of our common stock or securities convertible into or exercisable for shares of our common stock by us, or expectation of additional financing efforts;

• the amount of our unrestricted cash;

• the level of expenses related to development of product candidates we develop, and in particular our clinical-stage development programs;

• commencement or termination of any collaboration or licensing arrangement;

• the results of our efforts to discover, develop, acquire or in-license product candidates or products, if any;

• the level of actual or anticipated expenses related to development of our product candidates, and in particular our clinical-stage development programs;

• announcements relating to strategic collaborations or alliances or significant licenses, acquisitions or dispositions of assets by us or companies perceived to be comparable to us;

• disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technologies;

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• additions or departures of key management or scientific personnel;

• variations in our financial results or those of companies perceived to be similar to us;

• new products, product candidates or new uses for existing products introduced or announced by our competitors, and the timing of these introductions or announcements;

• results of clinical trials of product candidates of our competitors;

• general economic and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies and effects from geopolitical events, including military conflicts, war, terrorism and economic conflicts, or natural disasters such as earthquakes, typhoons, floods and fires or public health emergencies or pandemics, such as the COVID-19 pandemic;

• significant developments with third-party products or product development programs perceived as competitive to ours, such as results of clinical trials, unanticipated serious safety concerns, suspension or discontinuation of a program, significant communications or decisions from the FDA or other regulatory authorities, introduction of new product candidates or new uses for existing products, commercial launch and product sales;

• significant business disruptions, including as a result of cybersecurity incidents, geopolitical events, including military conflicts, war, terrorism or economic conflicts, or natural disasters such as earthquakes, typhoons, floods and fires or public health emergencies such as the COVID-19 pandemic;

• events or conditions that affect the financial markets or U.S.

or global economy in general, including geopolitical conflicts, potential or actual failure of the U.S.

government to raise the federal debt ceiling, economic slowdown or recession, increased inflation, and rising interest rates;

• regulatory or legal developments in the United States and other countries;

• changes in the structure of health care payment systems;

• conditions or trends in the biotechnology and biopharmaceutical industries;

• developments or trends in the biopharmaceutical or women's health care industries;

• period to period fluctuations in our financial results;

• recommendations or reports issued by securities research analysts;

• sales of common stock by our stockholders, as well as the overall trading volume of our common stock;

• increased selling by our stockholders, as well as the overall trading volume of our common stock;

• the other factors described in this “Risk Factors” section.

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There can be no assurance we will continue to satisfy applicable continued listing requirements.

For example, in 2018 and 2019, we were not in compliance with the minimum bid price rule and the stockholders' equity rule.

We subsequently regained compliance with both rules, but there can be no assurance that we will continue to satisfy these or other continued listing standards and maintain the listing of our common stock with Nasdaq.

For example, beginning in December 2022 until late January 2023, we were not in compliance with the minimum bid price rule, and in 2018 and 2019, we were not in compliance with the minimum bid price rule and the stockholders' equity rule.

We subsequently regained compliance in each instance, but there can be no assurance that we will continue to satisfy these or other continued listing standards and maintain the listing of our common stock with Nasdaq.

The suspension or delisting of our common stock, or the commencement of delisting proceedings, for whatever reason could, among other things, substantially impair our ability to raise additional capital;

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Claims related to any such breaches, with or without merit, could result in costly litigation, significant liabilities and diversion of our management’s time and attention and could have a material adverse effect on our financial condition, business and results of operations.

In addition, the suspension or delisting of our common stock, or the

commencement of delisting proceedings, for whatever reason may materially impair our stockholders’ ability to buy and sell shares of our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.

A significant portion of our total outstanding shares of common stock may be sold into the public market at any point, which could cause the market price of our common stock to drop significantly, even if our business is doing well.

Sales of a substantial number of shares of our common stock in the public market could occur at any time, either by us or our stockholders.

For example, in 2021, we sold an aggregate of 41.1 million shares of our common stock in at-the-market, or ATM offerings and under our equity line arrangement.

Actual sales of our common stock, or the perception in the market that we or holders of a large number of shares intend to sell shares, could reduce the market price of our common stock.

Our outstanding shares of common stock may be freely sold in the public market at any time to the extent permitted by Rules 144 and 701 under the Securities Act or to the extent such shares have already been registered under the Securities Act and are held by non-affiliates.

As of December 31, 2021, there were 4.7 million shares of our common stock subject to outstanding options, almost all of which have been registered under the Securities Act on Form S-8.

The shares so registered can be freely sold in the public market after being issued to the option holder upon exercise, except to the extent they are held by an affiliate of ours, in which case such shares will become eligible for sale in the public market as permitted by Rule 144 under the Securities Act.

Furthermore, as of March 30, 2022, there were approximately 1.4 million shares of our common stock subject to outstanding warrants to purchase common stock, virtually all of which currently have an exercise price of $0.96 per share.

To the extent these warrants are exercised, the shares underlying these warrants may be immediately sold in the public market.

In addition, the suspension or delisting of our common stock, or the commencement of delisting proceedings, for whatever reason may materially impair our stockholders’ ability to buy and sell shares of our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.

The sale of our common stock in ATM offerings may cause substantial dilution to our existing stockholders, and such sales, or the anticipation of such sales, may cause the price of our common stock to decline.

Since 2020, we have used ATM offerings to fund a significant portion of our operations, and we may continue to use ATM offerings to fund our operations in the future.

We have used at-the-market, or ATM, offerings to fund a significant portion of our operations in recent years, and we may continue to use ATM offerings to raise additional capital in the future.

For example, in 2021, we sold an aggregate of approximately 41.1 million shares of our common stock in ATM offerings.

We sold substantially fewer shares in ATM offerings in 2022, however, we may sell significant amounts of shares in ATM offerings again in the future.

While sales of shares of our common stock in ATM offerings may enable us to raise capital at a lower cost compared with other types of equity financing transactions;

such sales may result in substantial dilution to our existing stockholders, and such sales, or the anticipation of such sales, may cause the trading price of our common stock to decline.

The exercise of our outstanding options and warrants may result in significant dilution to our stockholders.

As of December 31, 2021, we had outstanding options to purchase up to 4.7 million shares of our common stock and, and as of March 30, 2022, we had outstanding warrants to purchase up to approximately 1.4 million shares of our common stock.

The exercise of a significant portion of our outstanding options and warrants may result in significant dilution to our stockholders.

The exercise of our outstanding options as well as the issuance of shares pursuant to future equity awards under our stock incentive plan may result in significant dilution to our stockholders.

As of December 31, 2022, we had outstanding options to purchase up to approximately 6.6 million shares of our common stock at a weighted average exercise price of $1.60 per share and approximately 9.6 million shares of our common stock remained available for future issuance under our stock incentive plan.

The exercise of a significant

portion of our outstanding options and the issuance of shares of our common stock pursuant to future equity awards under our stock incentive plan may result in significant dilution to our stockholders.

We may issue preferred stock with terms that could dilute the voting power or reduce the value of our common stock.

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We have never declared or paid cash dividends on any shares of our capital stock.

We currently plan to retain all of our future earnings, if any, and all cash received from the sale of securities, the sale of assets or a strategic

transaction to finance the growth and development of our business.

We currently plan to retain all of our future earnings, if any, and all cash received from the sale of securities, the sale of assets or a strategic transaction to finance the growth and development of our business.

Accordingly, capital appreciation, if any, of our common stock will be the sole source of gain for our common stockholders for the foreseeable future.

Provisions in our certificate of incorporation, our by-laws or Delaware law might discourage, delay or prevent a change in control of our company or changes in our management and, therefore, depress the trading price of our common stock.

Provisions in our Restated Certificate of Incorporation, as amended, our Second Amended and Restated By-Laws, as amended, or Delaware law may discourage, delay or prevent a merger, acquisition or other change in control that our stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for their shares.

Provisions in our Restated Certificate of Incorporation, as amended, our Third Amended and Restated By-Laws or Delaware law may discourage, delay or prevent a merger, acquisition or other change in control that our stockholders may consider favorable, including transactions in which our stockholders might otherwise receive a premium for their shares.

These provisions could also limit the price that investors might be willing to pay in the future for shares of our common stock, thereby depressing the market price of our common stock.

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• authorize the board to issue preferred stock without stockholder approval, which could be used to institute a “poison pill” that would work to dilute the stock ownership of a potential hostile acquirer, effectively preventing acquisitions that have not been approved by the board;

• require the approval of the holders of at least 75% of the votes that all stockholders would be entitled to cast to amend or repeal certain provisions of the charter or bylaws.

• require the approval of the holders of at least 75% of the votes that all stockholders would be entitled to cast in any annual election of directors or class of directors to amend or repeal our by-laws or certain provisions of our charter.

In addition, we are governed by Section 203 of the Delaware General Corporate Law, which prohibits a publicly-held Delaware corporation from engaging in a business combination with an interested stockholder, generally a person which together with its affiliates owns, or within the last three years has owned, 15% of its voting stock, for a period of three years after the date of the transaction in which the person became an interested stockholder, unless the business combination is approved in a prescribed manner.

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Provisions in our by-laws could limit our stockholders’ ability to obtain a favorable judicial forum for disputes with us or our directors, officers or employees.

Our Second Amended and Restated By-Laws, as amended, provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for most legal actions involving actions brought against us by stockholders;

Our Third Amended and Restated By-Laws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the Court of Chancery of the State of Delaware will be the sole and exclusive forum for most legal actions involving actions brought against us by stockholders;

provided that, the exclusive forum provision will not apply to actions or suits brought to enforce any liability or duty created by the Securities Act, the Exchange Act, or any other claim for which the federal courts have exclusive jurisdiction.

If any action that is required under our by-laws to be brought against us in Delaware is filed by a stockholder in a court other than a court located within Delaware, the stockholder shall be deemed to have consented to (i) the personal jurisdiction of the state and federal courts located within Delaware in connection with any action brought in any such court to enforce our Delaware forum selection provision and (ii) having service of process made upon the stockholder in any such enforcement action by service upon that stockholder's counsel, as agent for the stockholder.

In addition, our by-laws provide that, unless we consent in writing to the selection of an alternative forum, to the fullest extent permitted by law, the federal district courts of the United States of America shall be the sole and exclusive forum for the resolution of any complaint asserting a cause of action arising under the Securities Act.

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Under the Securities Act, federal and state courts have concurrent jurisdiction over all suits brought to enforce any duty or liability created by the Securities Act.

There is uncertainty as to whether a court (other than state courts in the State of Delaware, where the Supreme Court of the State of Delaware recently decided that exclusive forum provisions for causes of action arising under the Securities Act are facially valid under Delaware law) would enforce forum selection provisions and whether investors can waive compliance with the federal securities laws and the rules and regulations thereunder.

We believe the forum selection provisions in our by-laws may benefit us by providing increased consistency in the application of Delaware law and federal securities laws by chancellors and judges, as applicable, particularly experienced in resolving corporate disputes, efficient administration of cases on a more expedited schedule relative to other forums and protection against the burdens of multi-forum litigation.

these provisions may have the effect of discouraging lawsuits against us and/or our directors, officers and employees as it may limit any stockholder’s ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with us or our directors, officers or employees.

However, these provisions may have the effect of discouraging lawsuits against us and/or our directors, officers and employees as it may limit any stockholder’s ability to bring a claim in a judicial forum that such stockholder finds favorable for disputes with us or our directors, officers or employees.

The enforceability of similar choice of forum provisions in other companies’ charter documents has been challenged in legal proceedings, and it is possible that, in connection with any applicable action brought against us, a future court could find the choice of forum provisions contained in our by-laws to be inapplicable or unenforceable in such action.

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UNRESOLVED STAFF COMMENTS

We lease real property to support our business.

The office space for our corporate headquarters, which is in good operating condition, is in San Diego, California.

We believe that the real property we lease meets our current needs and that we will be able to renew our lease when needed on acceptable terms or find alternative facilities.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1A. Risk Factors