What changed in this filing

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Item 9A. Controls and Procedures

2024-03-28 compared with 2023-03-30 · 409 added, 267 removed, 742 unchanged (48% of the section changed)

1 unchanged sentence

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and financial officer, as appropriate, to allow timely decisions regarding required disclosure.

In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on an evaluation, performed under the supervision and with the participation of our management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective as of December 31, 2022 at the reasonable assurance level.

Based on an evaluation, performed under the supervision and with the participation of our management, including our principal executive and financial officer, of the effectiveness of our disclosure controls and procedures, our principal executive and financial officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective as of December 31, 2023 at the reasonable assurance level.

Management’s Report on Internal Control Over Financial Reporting

2 unchanged sentences

Because of its inherent limitations, internal controls over financial reporting may not prevent or detect misstatements.

In addition, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

In addition, projections of any

evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Our management conducted an assessment of the effectiveness of our internal control over financial reporting based on the criteria set forth in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework).

4 unchanged sentences

OTHER INFORMATION

(b) During the period from October 1, 2023 to December 31, 2023, none of our directors or officers (as defined in Rule 16a-1(f) under the Exchange Act) adopted or terminated any Rule 10b5-1 trading arrangement (as defined in Item 408(a)(1)(i) of Regulation S-K) or any non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K).

DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS

32 unchanged sentences

3.2 Third Amended and Restated By-Laws (as amended through January 24, 2023)

8-K 001-36395 1/27/2023 3.1

001-36395 8/10/2023 3.1

INSTRUMENTS DEFINING RIGHTS OF SECURITY HOLDERS

3 unchanged sentences

10-K 001-36395 03/31/2022 4.2

4.3(a) Form of Warrant to Purchase Shares of Common Stock (February 2018 Underwritten Offering)

4.3 Form of common stock purchase warrants issued on September 1, 2023

8-K 0001-36395 08/30/2023 4.1

4.3(b) Form of Amendment to Warrant to Purchase Common Stock entered into as of June 27, 2018

10-Q 001-36395-181175221 11/13/2018 4.1

4.4 Form of common stock purchase warrants issued on December 21, 2023

4.5 Description of securities of the registrant

1 unchanged sentence

COMMERCIAL AGREEMENTS

10.1+ Exclusive License Agreement dated March 31, 2022 between Organon International GmbH and Dare Bioscience, Inc., effective as of June 30, 2022

10.1(a)+ Exclusive License Agreement dated March 31, 2022 between Organon International GmbH and Dare Bioscience, Inc., effective as of June 30, 2022

10-Q 001-36395 05/12/2022 10.1

10.1(b)+ First Amendment to License Agreement by and between Organon International GmbH and Dare Bioscience, Inc.

entered into as of July 4, 2023

10-Q 0001-36395 11/09/2023 10.2

10.2+ Consent, Waiver and Stand-By License Agreement, dated March 30, 2022, by and among TriLogic Pharma, LLC, and MilanaPharm LLC, Dare Bioscience, Inc., and Organon International GmbH.

8 unchanged sentences

10-Q 001-36395 8/13/2018 10.1

10.6(a)Δ Amended and Restated Exclusive License Agreement for Atrophic Vaginitis Technology , effective as of July 14, 2006, dated August 15, 2007 , by and between Fred Mermelstein, Ph.D.

, and Janet Chollet, M.D., and Pear Tree Women’s Health Care, Inc.

10.6(a)Δ Amended and Restated Exclusive License Agreement for Atrophic Vaginitis Technology, effective as of July 14, 2006, dated August 15, 2007, by and between Fred Mermelstein, Ph.D., and Janet Chollet, M.D., and Pear Tree Women’s Health Care, Inc.

10-Q 001-36395 8/13/2018 10.5

10 unchanged sentences

and Bernadette Klamerus

10-K 001-36395 3/30/2023 10.6(d)

10.6(e)Δ Exclusive License Agreement, dated as of February 13, 2017, by and between GYN Holdings, Inc., a wholly-owned subsidiary of Pear Tree Pharmaceuticals, Inc.

26 unchanged sentences

10-Q 001-36395 11/10/2021 10.2

10.11 Form of Securities Purchase Agreement dated as of August 29, 2023, between Dare Bioscience, Inc.

and each purchaser identified on the signature pages thereto

8-K 0001-36395 08/30/2023 10.1

10.12 Royalty Interest Financing Agreement entered into as of December 21, 2023 between Dare Bioscience, Inc.

and United in Endeavor, LLC

MANAGEMENT CONTRACTS AND COMPENSATORY PLANS

10.11(a)* Daré Bioscience, Inc.

Daré Bioscience, Inc.

Amended and Restated 2014 Stock Incentive Plan

8-K 001-36395 7/12/2018 10.1

10.11(b)* Form of Incentive Stock Option Agreement for grants under the Daré Bioscience, Inc.

Form of Incentive Stock Option Agreement for grants under the Daré Bioscience, Inc.

Amended and Restated 2014 Stock Incentive Plan

10-Q 001-36395 8/13/2018 10.3

10.11(c)* Form of Nonstatutory Stock Option Agreement for grants under the Daré Bioscience, Inc.

Form of Nonstatutory Stock Option Agreement for grants under the Daré Bioscience, Inc.

Amended and Restated 2014 Stock Incentive Plan

2 unchanged sentences

S-1/A 333-194442 3/31/2014 10.26

10.13(a)* Dar é Bioscience, Inc.

Daré Bioscience, Inc.

2022 Stock Incentive Plan

8-K 001-36395 6/24/2022 10.1(a)

10.13(b)* Form of Incentive Stock Option Agreement for Grants under the Dar é Bioscience, Inc.

Form of Incentive Stock Option Agreement for Grants under the Daré Bioscience, Inc.

2022 Stock Incentive Plan

8-K 001-36395 6/24/2022 10.1(b)

10.13(c)* For of Nonstatutory Stock Option Agreement for Grants under the Dar é Bioscience, Inc.

Form of Nonstatutory Stock Option Agreement for Grants under the Daré Bioscience, Inc.

2022 Stock Incentive Plan

8-K 001-36395 6/24/2022 10.2(c)

10.14(a)* 2007 Stock Incentive Plan

S-1 333-194442 03/10/2014 10.1

10.14(b) Form of Incentive Stock Option Agreement under 2007 Stock Incentive Plan

S-1 333-194442 03/10/2014 10.2

10.14(c)* Form of Nonstatutory Stock Option Agreement under 2007 Stock Incentive Plan

S-1 333-194442 03/10/2014 10.3

10.14(d) Stock Option Agreement and Contingent Consideration Award Agreement, dated March 31, 2013, between Cerulean Pharma, Inc.

and Alan Crane

S-1 333-194442 03/10/2014 10.24

10.14(e) Amendment to the Stock Option Agreement and Termination of Contingent Consideration Award dated September 16, 2014, by and between Cerulean Pharma, Inc.

and Alan Crane

10-Q 001-36395 11/13/2014 10.4

10.16* Daré Bioscience, Inc.

Performance Bonus Plan

Performance Bonus Plan, as amended

10-Q 001-36395 11/9/2023 10.3

25 unchanged sentences

21.1 Subsidiaries of the registrant

23.1 Consent of Haskell & White LLP

23.2 Consent of Mayer Hoffman McCann P.C.

31.1 Certification of P rincipal E xecutive O fficer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

31.2 Certification of P rincipal F inancial O fficer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1# Certification of P rincipal E xecutive O fficer pursuant to 18 U.S.C.

§1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2# Certification of P rincipal F inancial O fficer pursuant to 18 U.S.C.

31.1 Certification of Principal Executive Officer and Principal Financial Officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

32.1# Certification of Principal Executive Officer and Principal Financial Officer pursuant to 18 U.S.C.

§1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

D are Bios cience, Inc.

Policy on Recovery of Erroneously Awarded Compensation

101.INS XBRL Instance Document X

21 unchanged sentences

/s/ SABRINA MARTUCCI JOHNSON President and Chief Executive Officer

(Principal Executive Officer) and Director

March 30, 2023

(Principal Executive Officer and Principal Financial Officer) and Director March 28, 2024

Sabrina Martucci Johnson

/s/ LISA WALTERS-HOFFERT Chief Financial Officer

(Principal Financial and Accounting Officer) March 30, 2023

Lisa Walters-Hoffert

/s/ MARDEE HARING-LAYTON Chief Accounting Officer

March 28, 2024

MarDee Haring-Layton (Principal Accounting Officer)

/s/ WILLIAM H.

18 unchanged sentences

Report of Independent Registered Public Accounting Firm (PCAOB ID 200 )

Report of Independent Registered Public Accounting Firm (PCAOB ID 199 )

Consolidated Balance Sheets as of December 31, 2023 and 2022

5 unchanged sentences

To the Board of Directors and Stockholders

Daré Bioscience, Inc.

Opinion on the Consolidated Financial Statements

We have audited the accompanying consolidated balance sheet of Daré Bioscience, Inc.

and Subsidiaries (the “Company”) as of December 31, 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for the year then ended December 31, 2023, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company as of December 31, 2023, and the consolidated results of its operations and its cash flows for the year then ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

The Company's Ability to Continue as a Going Concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern.

As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses from operations, negative cash flow from operations and is dependent on additional financing to fund operations.

These conditions raise substantial doubt about the Company’s ability to continue as a going concern.

Management’s plans in regard to these matters are also described in Note 2 to the consolidated financial statements.

The consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

Basis for Opinion

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s consolidated financial statements based on our audit.

We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audit, we are required to obtain an understanding of internal control over financial reporting, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audit included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Report of Independent Registered Public Accounting Firm (Continued)

Critical Audit Matter

Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments.

We determined that there are no critical audit matters.

/s/ Haskell & White LLP

HASKELL & WHITE LLP

We have served as the Company's auditor since 2023.

Irvine, California

March 28, 2024

Report of Independent Registered Public Accounting Firm

To the Board of Directors and Stockholders

of Daré Bioscience, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Daré Bioscience, Inc.

and Subsidiaries (“Company”) as of December 31, 2022 and 2021, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the two years in the period ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the two years in the period ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

We have audited the accompanying consolidated balance sheet of Daré Bioscience, Inc.

and Subsidiaries (“Company”) as of December 31, 2022, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity and cash flows for the year ended December 31, 2022, and the related notes (collectively referred to as the “financial statements”).

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2022, and the results of its operations and its cash flows for the year ended December 31, 2022, in conformity with accounting principles generally accepted in the United States of America.

The Company's Ability to Continue as a Going Concern

6 unchanged sentences

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

Our responsibility is to express an opinion on the Company’s financial statements based on our audit.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting.

As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting.

Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Our audit included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures

included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audit provides a reasonable basis for our opinion.

Critical Audit Matters

1 unchanged sentence

We determined that there are no critical audit matters.

We have served as the Company's auditor since 2017.

We served as the Company's auditor from 2017 to 2023.

/s/ Mayer Hoffman McCann P.C.

10 unchanged sentences

Property and equipment, net 655,975 64,908

Deposits 1,163,477 10,502

Operating lease right-of-use assets 1,319,630 457,925

Other non-current assets 599,594 254,295

Total assets $ 21,282,215 $ 43,826,383

Liabilities and stockholders’ equity

Liabilities and stockholders’ equity (deficit)

Current Liabilities

4 unchanged sentences

Total current liabilities 20,480,436 31,623,927

Deferred license revenue 1,000,000 1,000,000

Deferred revenue, non-current 1,000,000 1,000,000

Liability related to the sale of future royalties, net 3,913,676 —

Lease liabilities long-term 935,743 90,346

1 unchanged sentence

Commitments and contingencies (Note 12)

Stockholders' equity

Stockholders' equity (deficit)

Preferred stock, $ 0.01 par value, 5,000,000 shares authorized

None issued and outstanding

Common stock:

$ 0.0001 par value, 240,000,000 and 120,000,000 shares authorized, 84,825,481 and 83,944,119 shares issued and outstanding at December 31, 2022 and December 31, 2021, respectively

Accumulated other comprehensive loss ( 351,311 ) ( 154,973 )

Common stock, $ 0.0001 par value, 240,000,000 shares authorized, 99,973,932 and 84,825,481 shares issued and outstanding at December 31, 2023 and December 31, 2022, respectively

Additional paid-in capital 166,539,290 152,529,579

Accumulated other comprehensive loss ( 360,896 ) ( 351,311 )

Accumulated deficit ( 171,236,031 ) ( 141,074,640 )

Total stockholders' equity 11,112,110 38,754,321

Total liabilities and stockholders' equity $ 43,826,383 $ 55,807,177

Total stockholders' equity (deficit) ( 5,047,640 ) 11,112,110

Total liabilities and stockholders' equity (deficit) $ 21,282,215 $ 43,826,383

See accompanying notes.

4 unchanged sentences

License fee revenue $ 1,000,000 $ 10,000,000

Milestone revenue 1,800,000 —

Royalty revenue 7,885 —

Total revenue 2,807,885 10,000,000

6 unchanged sentences

Other income 778,489 437,750

Gain on extinguishment of note payable — 369,887

Net loss $ ( 30,161,391 ) $ ( 30,947,738 )

Net loss to common shareholders $ ( 30,947,738 ) $ ( 38,696,105 )

Net loss to common stockholders $ ( 30,161,391 ) $ ( 30,947,738 )

Foreign currency translation adjustments ( 9,585 ) ( 196,338 )

13 unchanged sentences

Issuance of common stock, net of issuance costs 751,040 75 1,218,675 — — 1,218,750

Issuance of common stock from the exercise of warrants 520,985 52 500,094 — — 500,146

Stock options exercised 130,322 13 124,591 — — 124,604

Issuance of common stock in connection with milestone payment 696,724 70 1,219,216 — — 1,219,286

Net loss — — — — ( 30,947,738 ) ( 30,947,738 )

2 unchanged sentences

Stock-based compensation — — 2,530,684 — — 2,530,684

Issuance of common stock from the exercise of warrants 1,353,515 136 1,299,240 — — 1,299,376

Issuance of common stock, net of issuance costs 13,794,936 1,379 9,345,277 — — 9,346,656

Stock options exercised 130,322 13 124,591 — — 124,604

Issuance of common stock warrants, net of issuance costs — — 834,510 — — 834,510

Net loss — — — — ( 30,161,391 ) ( 30,161,391 )

9 unchanged sentences

Adjustments to reconcile net loss to net cash used in operating activities:

Depreciation 24,202 26,413

Stock-based compensation 2,158,511 1,599,692

Depreciation expense 38,363 24,202

Stock-based compensation expense 2,530,684 2,158,511

Non-cash operating lease cost 54,027 23,415

Gain on early termination of lease — ( 46,477 )

Non-cash loss on settlement of contingent liability — 44,286

Gain on extinguishment of note payable and accrued interest — ( 369,887 )

Non-cash interest expense on liability related to sale of future royalties 24,289 —

Changes in operating assets and liabilities:

1 unchanged sentence

Prepaid expenses 547,714 ( 4,189,376 )

( 1,152,974 ) —

Other non-current assets ( 10,300 ) 3,650

8 unchanged sentences

Net proceeds from issuance of common stock 9,346,656 1,218,750

Proceeds from the exercise of common stock warrants — 500,146

Proceeds from the exercise of stock options — 124,604

Proceeds from the exercise of common stock warrants 1,299,376 —

Proceeds from the sale of future royalties, net

Issuance of note payable 601,174 —

Payments on note payable ( 333,985 ) —

Net cash provided by financing activities 15,637,120 1,343,354

Effect of exchange rate changes on cash and cash equivalents ( 196,338 ) ( 63,585 )

Net change in cash and cash equivalents ( 17,004,482 ) 47,004,620

Cash and cash equivalents, beginning of year 51,674,087 4,669,467

Cash and cash equivalents, end of year $ 34,669,605 $ 51,674,087

Effect of exchange rate changes on cash and cash equivalents and restricted cash

( 9,585 ) ( 196,338 )

Net change in cash, cash equivalents and restricted cash

( 23,858,549 ) ( 17,004,482 )

Cash, cash equivalents and restricted cash, beginning of year

34,669,605 51,674,087

Cash, cash equivalents and restricted cash, end of year

$ 10,811,056 $ 34,669,605

Reconciliation of cash, cash equivalents and restricted cash to amounts reported in the consolidated balance sheets:

Cash and cash equivalents $ 10,476,056 $ 34,669,605

Restricted cash included in other non-current assets 335,000 —

Total cash, cash equivalents and restricted cash $ 10,811,056 $ 34,669,605

Supplemental disclosure of non-cash investing and financing activities:

Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 1,291,425 $ 585,942

Settlement of contingent closing consideration liability with stock issuance in connection with acquisition of business $ — $ 925,000

Milestone payment paid in common stock $ — $ 250,000

Issuance cost recorded under additional-paid-in-capital $ 834,510 $ —

See accompanying notes.

13 unchanged sentences

The Company’s primary operations have consisted of, and are expected to continue to consist primarily of, research and development activities to advance its product candidates through clinical development and regulatory approval.

The Company's portfolio includes one FDA-approved product, drug and drug/device product candidates and potential product candidates in various stages of development.

The Company's first product, XACIATO™ (clindamycin phosphate vaginal gel, 2%), was approved by the FDA in December 2021, as a single-dose prescription medication for the treatment of bacterial vaginosis in female patients 12 years of age and older.

In March 2022, the Company entered into an exclusive global license agreement with an affiliate of Organon & Co., Organon International GmbH, or Organon, to commercialize XACIATO.

That agreement became effective on June 30, 2022, and in July 2022, the Company received the $ 10.0 million non-refundable and non-creditable payment due upon the effectiveness of the agreement.

The Company's portfolio includes drug and drug/device product candidates and potential product candidates in various stages of development.

The first U.S.

Food and Drug Administration (FDA)-approved product to emerge from the Company's portfolio of women's health product candidates is XACIATO™ (clindamycin phosphate) vaginal gel 2%, or XACIATO.

In March 2022, the Company entered into an exclusive global license agreement with an affiliate of Organon & Co., Organon International GmbH, or Organon, to commercialize XACIATO, which became fully effective in June 2022.

Under the license agreement, Organon (and/or its affiliates, agents or sublicensees) is solely responsible for the marketing, distribution and sale of XACIATO in the United States (and outside the U.S.

if approved in non-U.S.

jurisdictions in the future).

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

2 unchanged sentences

GAAP, as defined by the Financial Accounting Standards Board, or FASB.

Cash, Cash Equivalents and Restricted Cash

The Company considers cash and all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

The Company has an aggregate of approximately $ 0.3 million in restricted cash as of December 31, 2023, related to (i) letters of credit established under real property leases for the Company's wholly-owned subsidiary, Dare MB Inc., that serve as security for potential future default of lease payments, and (ii) collateralized cash for the Company's credit cards.

The restricted cash is unavailable for withdrawal or for general obligations and is included in other non-current assets on the Company's consolidated balance sheet.

Going Concern

The Company prepared its consolidated financial statements on a going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of business.

The Company has a history of losses from operations, expects negative cash flows from its operations to continue for the foreseeable future, and expects that its net losses will continue for at least the next several years as it develops and seeks to bring to market its existing product candidates and potentially acquire, license and develop additional product candidates.

The Company has a history of losses from operations, expects negative cash flows from its operations to continue for the foreseeable future, and expects that its net losses will continue for at least the next several years as it develops and seeks to bring to market its existing product candidates and seeks to potentially acquire, license and develop additional product candidates.

These circumstances raise substantial doubt about the Company's ability to continue as a going concern.

The accompanying financial statements do not include any adjustments to reflect the possible future effects on the recoverability and reclassification of assets or the amounts and classifications of liabilities that may result from the outcome of the uncertainty of the Company's ability to continue as a going concern.

At December 31, 2022, the Company had an accumulated deficit of approximately $ 141.1 million, cash and cash equivalents of approximately $ 34.7 million, a deferred grant funding liability of $ 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 working capital of approximately $ 11.4 million.

At December 31, 2023, the Company had an accumulated deficit of approximately $ 171.2 million, cash and cash equivalents of approximately $ 10.5 million, deferred grant funding liabilities under the Company's grant agreements related to DARE-LARC1 and DARE-LBT of approximately $ 13.7 million, and a working capital deficit of approximately $ 2.9 million.

The Company's cash and cash equivalents at December 31, 2023 represented grant funds received under such grant agreements that may be applied solely toward direct costs for the development of DARE-LARC1 and DARE-LBT, other than approximately 10% of such funds, which may be applied toward general overhead and administration expenses that support the entire operations of the Company.

For the year ended December 31, 2023, the Company incurred a net loss of $ 30.2 million and had negative cash flow from operations of approximately $ 38.9 million.

4 unchanged sentences

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

The Company's consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

The Company's consolidated financial statements do not include any adjustments that might result from the outcome of these uncertainties.

Principles of Consolidation

5 unchanged sentences

All intercompany transactions and accounts have been eliminated in consolidation.

Reclassification of Prior Year Presentation

Certain prior year amounts have been reclassified for consistency with the current year presentation.

These reclassifications had no effect on the reported results of operations.

Grant Funding

7 unchanged sentences

Use of Estimates

The preparation of the consolidated financial statements requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant estimates include the fair value of stock-based compensation.

liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

Significant estimates and assumptions reflected in these consolidated financial statements include, but are not limited to, management's judgments with respect to its revenue arrangement, liability related to the sale of future royalties, valuation of stock-based awards and the accrual of research and development expenses.

Estimates are periodically reviewed in light of changes in circumstances, facts and experience.

Actual results could differ from those estimates and could materially affect the reported amounts of assets, liabilities and future operating results.

Liability Related to the Sale of Future Royalties

In December 2023, the Company entered into a royalty interest financing agreement with United in Endeavor, or United, pursuant to which the Company sold to United an interest in royalty and milestone payments the Company receives based on net sales of XACIATO.

The Company received $ 5.0 million from United in connection with entering into the royalty interest financing agreement.

The Company evaluated the terms of the royalty interest financing agreement and concluded that its features were similar to those of a debt instrument.

The Company recognized the $ 5.0 million it received as a liability on its consolidated balance sheet because the Company agreed to make payments to United until such time that United has received aggregate payments equaling a 12 % internal rate of return on the $ 5.0 million.

Interest expense for the liability related to the sale of future royalties is recognized using the effective interest rate method over the expected term of the royalty interest financing agreement.

The liability related to the sale of future royalties and related interest expense are based on current estimates of future royalties, which estimates are based on forecasts of XACIATO net sales.

The Company periodically assesses the forecasted net sales and to the extent the amount or timing of estimated royalty payments are materially different than previous estimates, the Company will account for any such change by adjusting the liability related to the sale of future royalties and prospectively recognizing the related non-cash interest expense.

In connection with the royalty investment financing agreement the Company entered into, the Company issued a warrant to purchase up to an aggregate of 5.0 million shares of the Company's common stock.

The warrant was allocated a relative fair value of approximately $ 0.8 million using a Black-Scholes option pricing model.

The $ 0.8 million relative fair value of the warrant was recorded as a debt discount with an offset to additional paid in capital on the 2023 consolidated balance sheet as the warrants were deemed to be equity classified.

Risks and Uncertainties

The Company will require approvals from the U.S.

Food and Drug Administration, or FDA, or foreign regulatory agencies prior to being able to sell any products.

The Company received approval from the FDA for its first product, XACIATO™, in December 2021.

The Company will require approvals from the FDA, or foreign regulatory agencies prior to being able to sell any products.

The Company received approval from the FDA for XACIATO in December 2021.

There can be no assurance that the Company’s current or future product candidates will receive the necessary approvals.

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As a result of these and other factors and the related uncertainties, there can be no assurance of the Company’s future success.

Cash and Cash Equivalents

The Company considers cash and all highly liquid investments with an original maturity of three months or less to be cash and cash equivalents.

The Company’s wholly owned subsidiary, Dare MB Inc., has a $ 35,000 letter of credit related to the lease of real property that serves as security for future default of lease payments.

The letter of credit is collateralized by cash which is unavailable for withdrawal or for usage for general obligations and is included in cash and cash equivalents on the Company's consolidated balance sheets.

Concentration of Credit Risk

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Fair Value of Financial Instruments

GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the principal or most advantageous market in an orderly transaction between market participants on the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available.

observable inputs, where available.

The three-level hierarchy of valuation techniques established to measure fair value is defined as follows:

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(1) Represents cash held in money market funds.

The following table presents a reconciliation of contingent consideration, which was measured at fair value on a recurring basis using significant unobservable inputs (Level 3):

Year Ended December 31,

Balance at beginning of period $ — $ 1,000,000

Satisfaction of contingent consideration (1)

— ( 1,000,000 )

Balance at end of period $ — $ —

(1) In June 2021, the contingent consideration payable by the Company related to an acquisition completed in November 2019 became due.

In September 2021, the Company issued approximately 700,000 shares of its common stock in satisfaction of the milestone payments associated with milestones achieved, as described in Note 3.

Revenue Recognition

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License Fee Revenue.

If the license to the Company’s intellectual property is determined to be distinct from the other performance obligations identified in a contract, the Company recognizes revenues from non-refundable, upfront fees allocated to the license when the license is transferred to the customer and the customer is able to use and benefit from the license.

and benefit from the license.

For licenses bundled with other promises, the Company utilizes judgment to assess the nature of the combined performance obligation to determine whether the combined performance obligation is satisfied over time or at a point in time and, if over time, the appropriate method of measuring progress for purposes of recognizing revenue from non-refundable, upfront fees.

The Company evaluates the measure of progress each reporting period and, if necessary, adjusts the measure of performance and related revenue recognition.

To date, the Company has recognized $ 10.0 million in license fee revenue, all of which represents the upfront payment due under its license agreement for XACIATO.

To date, the Company has recognized $ 11.0 million in license fee revenue, $ 10.0 million of which represents the upfront payment under its license agreement for XACIATO and $ 1.0 million of which represents the payment required by the first amendment to such license agreement entered into in July 2023.

For arrangements that include sales-based royalties, including milestone payments based on the level of sales, and for which the license is deemed to be the predominant item to which the royalties relate, the Company recognizes revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

To date, the Company has not recognized any royalty revenue.

To date, the Company has recognized approximately $ 7,900 in royalty revenue.

Product Supply.

Arrangements that include a promise for future supply of product for commercial supply at the licensee’s discretion are generally considered as options.

The Company assesses if these options provide a

material right to the licensee and if so, they are accounted for as separate performance obligations.

The Company assesses if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations.

The Company evaluates whether it is the principal or agent in the arrangement.

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Revenues are recognized on a gross basis if the Company is in the capacity of principal and on a net basis if the Company is in the capacity of an agent.

To date, the Company has not recognized any revenue associated with product supply arrangements.

At the inception of each arrangement in which the Company is a licensor and that includes developmental, regulatory or commercial milestones, the Company evaluates whether achieving the milestones is considered probable and estimates the amount to be included in the transaction price using the most likely amount method.

If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

Milestone payments not within the Company's control, such as where achievement of the specified milestone depends on activities of a third party or regulatory approval, are not considered probable of being achieved until the specified milestone occurs.

To date, the Company has not recognized any milestone revenue.

To date, the Company has recognized approximately $ 205,000 in revenue along with $ 201,000 in other expense attributed to the cost of revenue associated with its product supply arrangement for XACIATO, which is recorded in other income in the Company's 2023 consolidated statement of operations and comprehensive loss.

That arrangement was terminated effective December 14, 2023 and the Company will not recognize product supply revenue associated with that agreement in the future.

Bayer License .

In January 2020, the Company entered into a license agreement with Bayer HealthCare LLC, or Bayer, regarding the further development and commercialization of Ovaprene in the U.S.

Upon execution of the agreement, the Company received a $ 1.0 million upfront non-refundable license fee payment from Bayer.

In 2020, the Company entered into a license agreement with Bayer Healthcare LLC, or Bayer, regarding the further development and commercialization of Ovaprene in the U.S.

and received a $ 1.0 million upfront non-refundable license fee payment from Bayer (See Note 3, Strategic Agreements).

The $ 1.0 million upfront payment is recorded as deferred license revenue in the Company's consolidated balance sheets at December 31, 2023 and December 31, 2022.

Bayer, in its sole discretion, has the right to make the license effective by paying the Company an additional $ 20.0 million.

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a distinct license to commercialize Ovaprene effective upon the receipt of the $ 20.0 million fee.

The $ 1.0 million upfront payment will be recorded as license revenue at the earlier of (1) the point in time the Company receives the $ 20.0 million fee, the license is transferred to Bayer and Bayer is able to use and benefit from the license and (2) the termination of the agreement.

As of December 31, 2022, neither of the foregoing had occurred.

The $ 1.0 million payment is recorded as deferred license revenue in the Company's consolidated balance sheets at December 31, 2022 and December 31, 2021.

The Company will also be entitled to receive (a) milestone payments totaling up to $ 310.0 million related to the commercial sales of Ovaprene, if all such milestones are achieved, (b) tiered royalties starting in the low double digits based on annual net sales of Ovaprene during a calendar year, subject to customary royalty reductions and offsets, and (c) a percentage of sublicense revenue.

The $ 1.0 million upfront payment will be recorded as license revenue at the earlier of (i) the point in time the Company receives the $ 20.0 million fee, the license is transferred to Bayer and Bayer is able to use and benefit from the license and (ii) the termination of the agreement.

To date, neither of the foregoing has occurred.

Under its license agreement with Bayer, the Company will also be entitled to receive (a) milestone payments totaling up to $ 310.0 million related to the commercial sales of Ovaprene, if all such milestones are achieved, (b) tiered royalties starting in the low double digits based on annual net sales of Ovaprene during a calendar year, subject to customary royalty reductions and offsets, and (c) a percentage of sublicense revenue.

Milestone Payments.

If it is probable that a significant revenue reversal would not occur, the associated milestone value is included in the transaction price.

Potential future milestone payments not within the Company's control, such as where achievement of the specified milestone depends on activities of a third party or regulatory approval, are not considered probable of being achieved until the specified milestone occurs.

As of December 31, 2023, the Company has recognized $ 1.8 million of milestone payment revenues.

Potential future payments for variable consideration, such as commercial milestones, will be recognized when it is probable that, if recorded, a significant reversal will not take place.

Potential future royalty payments will be recorded as revenue when the associated sales occur.

(See Note 3, Strategic Agreements.)

Potential future royalty payments will be recorded as revenue when the associated sales occur (See Note 3, Strategic Agreements).

The Company determines if an arrangement is a lease at inception.

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The Company's lease terms may include options to extend or terminate the lease and the related payments are only included in the lease liability when it is reasonably certain that the Company will exercise that option.

Lease expense for lease payments is recognized on a straight-line basis over the lease term.

(See Note 11, Leased Properties.)

Lease expense for lease payments is recognized on a straight-line basis over the lease term (See Note 10, Leased Properties).

Segment Reporting

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Australian Research and Development Tax Incentive Program

The Company is eligible under the Australian Research and Development Tax Incentive Program, or the Tax Incentive, to receive a cash refund from the Australian Taxation Office for eligible research and development

expenditures.

To be eligible, the Company must have revenue of less than AUD $ 20.0 million during the reimbursable period and cannot be controlled by income tax exempt entities.

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For the years ended December 31, 2023 and 2022, the Company recognized approximately $ 0.6 million and approximately $ 1.6 million, respectively, as a reduction to research and development expense for expenses incurred that it believes are eligible for the Tax Incentive.

At December 31, 2022, the Company recorded a receivable for the estimated Tax Incentive of approximately $ 1.6 million in other current assets on the accompanying consolidated balance sheets.

At December 31, 2023 and 2022, the Company recorded a receivable for the estimated Tax Incentive of approximately $ 0.6 million and $ 1.6 million, respectively, in other receivables on the accompanying consolidated balance sheets.

Research and Development Costs

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There were stock options exercisable into 9,463,556 and 6,612,554 shares of common stock outstanding at December 31, 2023 and 2022, respectively.

There were warrants exercisable into 1,381,015 shares of common stock outstanding at each December 31, 2022 and 2021.

There were warrants exercisable into 15,006,500 and 1,381,015 shares

of common stock outstanding at December 31, 2023 and 2022, respectively.

These securities were not included in the computation of diluted loss per share because they are antidilutive, but they could potentially dilute earnings (loss) per share in future years.

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The Company records compensation expense for all stock-based awards granted based on the fair value of the award at the time of grant.

The Company uses the Black-Scholes Pricing Model to determine the fair value of each of the awards which considers factors such as expected term, estimating the market price volatility of the Company's common stock, risk free interest rate, and dividend yield.

The Company uses the Black-Scholes Pricing Model to determine the fair value of each of the awards which considers factors such as expected term, the volatility of the Company's common stock, risk free interest rate, and dividend yield.

Due to the limited history of the Company, the simplified method was utilized in order to determine the expected term of the awards.

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The Company accounts for income taxes using the asset and liability method in accordance with FASB ASC 740, Income Taxes .

Under this method deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect

taxable income.

Under this method, deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.

Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

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The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments.

At December 31, 2022, the Company did not record any liabilities for uncertain tax positions.

At each of December 31, 2023 and 2022, the Company did not record any liabilities for uncertain tax positions.

During each of 2023 and 2022, the Company recorded no provision for income taxes.

Management evaluated the Company’s tax positions and, as of December 31, 2022, the Company had approximately $ 2.3 million of unrecognized benefits.

The tax years 2018 to 2022 remain open to examination by federal and state taxing authorities while the statute of limitations for U.S.

Management evaluated the Company’s tax positions and, as of December 31, 2023 and 2022, the Company had approximately $ 2.6 million and $ 2.3 million of unrecognized benefits, respectively.

The tax years 2020 to 2022 and 2019 to 2022 remain open to examination by federal and state taxing authorities, respectively, while the statute of limitations for U.S.

net operating losses generated remain open beginning in the year of utilization.

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STRATEGIC AGREEMENTS

Strategic Agreement for Product Commercialization

Strategic Agreements for Product Commercialization

Organon Exclusive License Agreement

In March 2022, the Company entered into an exclusive license agreement with Organon which became effective in June 2022, whereby Organon licensed exclusive worldwide rights to develop, manufacture and commercialize XACIATO and other future intravaginal or urological products for human use formulated with clindamycin that rely on intellectual property controlled by the Company.

In July 2022, the Company received the $ 10.0 million non-refundable and non-creditable payment, which is recorded as license fee revenue in the accompanying consolidated statement of operations.

Under the terms of the license agreement, the Company is entitled to receive tiered double-digit royalties based on net sales and up to $ 182.5 million in milestone payments as follows:

$ 2.5 million following the first commercial sale of a licensed product in the United States;

and up to $ 180.0 million in tiered commercial sales milestones and regulatory milestones.

In July 2022, the Company received a $ 10.0 million non-refundable and non-creditable payment from Organon, which was recorded as license fee revenue.

In July 2023, the Company received a $ 1.0 million payment from Organon in connection with the amendment to the license agreement the parties entered into, which was also recorded as license fee revenue.

In the fourth quarter of

2023, in connection with the first commercial sale in the U.S.

of XACIATO in accordance with the license agreement, as amended, the Company received the $ 1.8 million milestone payment from Organon.

Under the terms of the license agreement, as amended, the Company is entitled to receive tiered double-digit royalties based on net sales and up to $ 180.0 million in tiered commercial sales milestones and regulatory milestones.

Royalty payments will be subject to customary reductions and offsets.

The Company concluded at the inception of the agreement that the transaction price was $ 10.0 million and should not include the variable consideration related to unachieved development, regulatory, commercial milestones and future sales-based royalty payments.

At the inception of the license agreement, the Company concluded that the transaction price was $ 10.0 million and should not include the variable consideration related to unachieved development, regulatory, commercial milestones and future sales-based royalty payments.

This consideration was determined to be constrained as it is probable that the inclusion of such variable consideration could result in a significant reversal in cumulative revenue.

The Company re-evaluates the transaction price at each reporting period as uncertain events are resolved and other changes in circumstances occur.

For the year ended December 31, 2022, no adjustments were made to the transaction price.

For the year ended December 31, 2023, the transaction price was updated to $ 11.0 million.

The Company will recognize any consideration related to sales-based payments, including milestones and royalties which relate predominantly to the license granted, at the later of (i) when or as the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied).

The Company is responsible for regulatory interactions and for providing product supply on an interim basis until Organon assumes such responsibilities.

Until such time, Organon will purchase all of its product requirements of XACIATO from the Company at a transfer price equal to the Company's manufacturing costs plus a single-digit percentage markup.

The Company was responsible for regulatory interactions and for providing product supply on an interim basis until Organon assumed such responsibilities, which occurred in December 2023.

Prior to that time, Organon purchased all of its product requirements of XACIATO from the Company at a transfer price equal to the Company's manufacturing costs plus a single-digit percentage markup.

Unless terminated earlier, the agreement will expire on a product-by-product and country-by-country basis upon expiration of the applicable royalty period for each licensed product.

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a distinct license to commercialize Ovaprene effective upon the receipt of the $ 20.0 million fee.

The $ 1.0 million upfront payment will be recorded as license revenue at the earlier of either the point in time the Company receives the $ 20.0 million fee, the license is transferred to Bayer and Bayer is able to use and benefit from the license or the termination of the agreement.

As of December 31, 2023, neither of the foregoing had occurred.

The $ 1.0 million payment is recorded as long-term deferred license revenue in the Company's consolidated balance sheets at December 31, 2023 and 2022.

The Company is entitled to receive (a) a milestone payment in the low double-digit millions upon the first commercial sale of Ovaprene in the U.S.

If Bayer elects to make the license effective, the Company will be entitled to receive (a) a milestone payment in the low double-digit millions upon the first commercial sale of Ovaprene in the U.S.

and escalating milestone payments based on annual net sales of Ovaprene during a calendar year, totaling up to $ 310.0 million if all such milestones, including the first commercial sale, are achieved, (b) tiered royalties starting in the low double digits based on annual net sales of Ovaprene during a calendar year, subject to customary royalty reductions and offsets, and (c) a percentage of sublicense revenue.

The initial term of the agreement, which is subject to automatic renewal terms, continues until the later of the expiration of any valid claim covering the manufacture, use, sale or import of Ovaprene in the U.S.

or 15 years from the first commercial sale of Ovaprene in the U.S.

or 15 years from

the first commercial sale of Ovaprene in the U.S.

In addition to customary termination rights for both parties, Bayer may terminate the agreement at any time on 90 days' notice and the agreement will automatically terminate if the Company does not receive the $ 20.0 million fee if and when due.

Strategic Agreements for Pipeline Development

Douglas License Agreement / The University of Manchester Stand-by Direct License Arrangement

In August 2023, the Company entered into a license agreement with Douglas Pharmaceuticals Limited, or Douglas, under which the Company acquired the exclusive rights to develop and commercialize a lopinavir and ritonavir combination soft gel vaginal insert for the treatment of cervical intraepithelial neoplasia (CIN) and other HPV-related pathologies, and an agreement with The University of Manchester, pursuant to which The University of Manchester consented to Douglas' sublicense to the Company of certain rights it previously granted to Douglas and agreed to grant the Company a direct license to such rights if its license agreement with Douglas is terminated.

Under the Company's agreement with Douglas, it received an exclusive, royalty-bearing license to research, develop and commercialize the licensed intellectual property in the United States for the treatment or prevention of all indications for women in female reproductive health.

The Company is entitled to sublicense the rights granted to it under the agreement.

Under the terms of the Douglas agreement, the Company agreed to make potential future payments of up to $ 5.25 million in the aggregate upon achievement of certain development and regulatory milestones, and of up to $ 64.0 million in the aggregate upon achievement of certain commercial sales milestones for each product covered by the licenses granted under the agreement.

The development and regulatory milestones may be paid in shares of the Company’s common stock, in the Company's sole discretion subject to specified limitations.

Additionally, Douglas is eligible to receive tiered royalties in low single-digit to low double-digit percentages based on annual net sales of products and processes covered by the licenses granted under the agreement.

As of December 31, 2023, no payments had been made under the Douglas agreement.

Hennepin License Agreement

In August 2022, the Company entered into a license agreement with Hennepin Life Sciences LLC, or Hennepin, under which the Company acquired the exclusive global rights to develop and commercialize treatments delivering the novel antimicrobial glycerol monolaurate (GML) intravaginally for a variety of health conditions including bacterial, fungal, and viral infections.

As a result of this license, the Company commenced its DARE-GML.

Under the agreement, the Company received an exclusive, worldwide, royalty-bearing license to research, develop and commercialize the licensed technology.

The Company is entitled to sublicense the rights granted to it under the agreement.

Under the terms of the license agreement, the Company agreed to make potential future payments and sales milestone payments of up to $ 6.25 million in the aggregate upon achieving certain development and regulatory milestones, and of up to $ 45.0 million in the aggregate upon achieving certain commercial sales milestones for each product covered by the licenses granted under the agreement, which may be paid, in the Company’s sole discretion, in cash or shares of the Company’s common stock.

Under the terms of the license agreement, the Company agreed to make potential future payments of up to $ 6.25 million in the aggregate upon achievement of certain development and regulatory milestones, and up to $ 45.0 million in the aggregate upon achievement of certain commercial sales milestones for each product covered by the licenses granted under the agreement, which may be paid, in the Company’s sole discretion, in cash or shares of the Company’s common stock.

Additionally, Hennepin is eligible to receive tiered royalties in low single-digit to low double-digit percentages based on worldwide net sales of products and processes covered by the licenses granted under the agreement.

During the year ended December 31, 2022, no payments were made under this agreement.

As of December 31, 2023, no payments have been made under this agreement.

MBI Acquisition

In November 2019, the Company acquired Dare MB Inc.

(formerly, Microchips Biotech, Inc.), or MBI, to secure the rights to develop a long-acting reversible contraception method, that a woman can turn on or off herself, according to her own needs.

In November 2019, the Company acquired Dare MB Inc., or MBI, to secure the rights to develop a long-acting reversible contraception method, that a woman can turn on or off herself, according to her own needs.

This candidate is now known as DARE-LARC1.

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In March 2022, the Company entered into a consent, waiver and stand-By license Agreement with TriLogic, MilanaPharm and Organon, which further amended the License Agreement.

Under the terms of the License Agreement, the Company paid clinical and regulatory development milestones in the aggregate of $ 300,000 to MilanaPharm, the final payment of $ 250,000 was expensed in 2021.

The Company may also pay MilanaPharm up to $ 500,000 upon the first commercial sale in the United States of the first licensed product for each vaginal and urological use, and up to $ 250,000 upon the first commercial sale in the United States of each successive licensed products for each vaginal or urological use.

Under the terms of the License Agreement, the Company paid clinical and regulatory development milestones of $ 300,000 in the aggregate to MilanaPharm, the final payment of which was made in 2021, and $ 500,000 in connection with the first commercial sale in the United States of XACIATO in the fourth quarter of 2023.

Additionally, the Company may pay up to $ 250,000 upon the first commercial sale in the United States of successive licensed products for each vaginal or urological use.

In addition, upon achievement of $ 50.0 million in cumulative worldwide net sales of licensed products the Company must pay MilanaPharm $ 1.0 million.

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Hammock assigned and transferred to the Company all of its right, title and interest in and to the MilanaPharm license agreement and agreed to cooperate to transfer to the Company all of the data, materials and the licensed technology in its possession pursuant to a technology transfer plan.

Hammock is eligible to receive up to $ 1.1 million in the aggregate upon achievement of certain clinical and regulatory development milestones, $ 100,000 of which was paid in 2020 and $ 750,000 of which was paid in 2021.

Hammock is eligible to receive up to $ 1.1 million in the aggregate upon achievement of certain clinical and regulatory development milestones, $ 850,000 of which has been paid as of December 31, 2023.

Pear Tree Acquisition

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Under the terms of the merger agreement, the Company agreed to pay the former stockholders of Pear Tree:

(a) up to $ 15.5 million in the aggregate upon achieving certain clinical development and regulatory milestones by

licensed products, and (b) up to $ 47.0 million in the aggregate upon achieving certain commercial milestones by licensed products.

(a) up to $ 15.5 million in the aggregate upon achievement of certain clinical development and regulatory milestones by licensed products, and (b) up to $ 47.0 million in the aggregate upon achievement of certain commercial milestones by licensed products.

Additionally, the former stockholders of Pear Tree are eligible to receive tiered royalties based on single-digit to low double-digit percentages of annual net sales of licensed products by the Company or its affiliates, subject to customary reductions and offsets, and a portion of royalties the Company receives from sublicensees.

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Under the merger agreement, in addition to customary royalty reductions and offsets, royalty payments and payments based on income received from sublicensees of licensed products made by the Company to Pear Tree's licensors are creditable against all royalty and sublicense revenue share payments payable to the former stockholders of Pear Tree.

The Company agreed to pay licensors of Pear Tree (a) up to approximately $ 3.2 million in the aggregate upon achieving certain clinical development, regulatory and commercial milestones by each licensed product, and (b) semi-annual royalties based on a single-digit percentage of net sales of licensed products by the Company or its affiliates, subject to customary reductions and offsets, or a portion of any royalties the Company or its affiliates receives from sublicensees, and a low double-digit percentage of all sublicensing fees or other lump sum payments or compensation the Company receives from sublicensees, subject to customary exclusions.

The Company agreed to pay licensors of Pear Tree (a) up to approximately $ 3.2 million in the aggregate upon achievement of certain clinical development, regulatory and commercial milestones by each licensed product, and (b) semi-annual royalties based on a single-digit percentage of net sales of licensed products by the Company or

its affiliates, subject to customary reductions and offsets, or a portion of any royalties the Company or its affiliates receives from sublicensees, and a low double-digit percentage of all sublicensing fees or other lump sum payments or compensation the Company receives from sublicensees, subject to customary exclusions.

The milestone payments to the licensors of Pear Tree may be made, in the Company's sole discretion, in cash or in shares of its common stock in accordance with the terms of the license agreements.

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Catalent JNP License Agreement

In April 2018, the Company entered into an exclusive license agreement with Catalent JNP, Inc.

(formerly known as Juniper Pharmaceuticals, Inc., and which the Company refers to as Catalent), under which Catalent granted the Company (a) an exclusive, royalty-bearing worldwide license under certain patent rights, either owned by or exclusively licensed to Catalent, to make, have made, use, have used, sell, have sold, import and have imported products and processes, and (b) a non-exclusive, royalty-bearing worldwide license to use certain technological information owned by Catalent to make, have made, use, have used, sell, have sold, import and have imported products and processes.

In April 2018, the Company entered into an exclusive license agreement with Catalent JNP, Inc., or Catalent, under which Catalent granted the Company (a) an exclusive, royalty-bearing worldwide license under certain patent rights, either owned by or exclusively licensed to Catalent, to make, have made, use, have used, sell, have sold, import and have imported products and processes, and (b) a non-exclusive, royalty-bearing worldwide license to use certain technological information owned by Catalent to make, have made, use, have used, sell, have sold, import and have imported products and processes.

The Company is entitled to sublicense the rights granted to it under this agreement.

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The annual maintenance fee will be creditable against royalties and other payments due to Catalent in the same calendar year but may not be carried forward to any other year.

Catalent is eligible to receive up to (a) $ 13.5 million in the aggregate in payments based on the achievement of specified development and regulatory milestones, $ 1.0 million of which became payable in 2021 and was offset by the $ 100,000 annual maintenance fee, resulting in a net amount of $ 900,000 paid during the year ended December 31, 2021;

and (b) up to $ 30.3 million in the aggregate in payments based on the achievement of specified commercial sales milestones for each product or process covered by the licenses granted under the agreement.

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Adare Development and Option Agreement

In March 2018, the Company entered into an exclusive development and option agreement with Adare Pharmaceuticals USA, Inc.

(formerly known as Orbis Biosciences, Inc., and which the Company refers to as Adare), for the development and potential exclusive worldwide license of injectable formulations of etonogestrel for contraceptive protection over 6-month and 12-month periods (which the Company refers to as DARE-204 and DARE-214, respectively).

In March 2018, the Company entered into an exclusive development and option agreement with Adare Pharmaceuticals USA, Inc., or Adare, for the development and potential exclusive worldwide license of injectable formulations of etonogestrel for contraceptive protection over 6-month and 12-month periods (which the Company refers to as DARE-204 and DARE-214, respectively).

The agreement, as amended, provides the Company with an option to negotiate an exclusive, worldwide, royalty-bearing license, with rights to sublicense, for the programs if the Company funds the conduct of specified development work.

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SST License and Collaboration Agreement

formulation of Sildenafil Cream, 3.6% as it existed as of the effective date of the agreement, or any other topically applied pharmaceutical product containing sildenafil or a salt thereof as a pharmaceutically active ingredient, alone or with other active ingredients, but specifically excluding any product containing ibuprofen or any salt derivative of ibuprofen, or the Licensed Products.

SST will be eligible to receive payments of up to $ 18.0 million in the aggregate upon achieving certain clinical and regulatory milestones in the U.S.

and worldwide, and up to $ 100.0 million in the aggregate upon achieving certain commercial sales milestones.

In February 2018, the Company entered into a license and collaboration agreement with Strategic Science & Technologies-D LLC and Strategic Science & Technologies, LLC, referred to collectively as SST, under which the Company received an exclusive, royalty-bearing, sublicensable license to develop and commercialize, in all countries and geographic territories of the world, for all indications for women related to female sexual dysfunction and/or female reproductive health, including treatment of female sexual arousal disorder and/or female sexual interest/arousal disorder, or the Field of Use, SST’s topical formulation of Sildenafil Cream, 3.6% as it existed as of the effective date of the agreement, or any other topically applied pharmaceutical product containing sildenafil or a salt thereof as a pharmaceutically active ingredient, alone or with other active ingredients, but specifically excluding any product containing ibuprofen or any salt derivative of ibuprofen, or the Licensed Products.

SST will be eligible to receive payments of up to $ 18.0 million in the aggregate upon achievement of certain clinical and regulatory milestones in the U.S.

and worldwide, and up to $ 100.0 million in the aggregate upon achievement of certain commercial sales milestones.

If the Company enters into strategic development or distribution partnerships related to the Licensed Products, additional milestone payments would be due to SST.

Additionally, SST is eligible to receive tiered royalties based on percentages of annual net sales of licensed products in the single-digit to mid double-digits subject to customary royalty reductions and offsets, and a percentage of sublicense revenue.

Additionally, SST

is eligible to receive tiered royalties based on percentages of annual net sales of licensed products in the single-digit to mid double-digits subject to customary royalty reductions and offsets, and a percentage of sublicense revenue.

ADVA-Tec License Agreement

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Prepaid clinical expense $ 5,023,140 $ 5,702,657

Prepaid development expense 376,959 225,433

Prepaid insurance expense 472,922 502,981

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Total prepaid expenses $ 6,118,272 $ 6,665,988

OTHER NON-CURRENT ASSETS

Other non-current assets consisted of the following:

As of December 31,

Prepaid insurance, long-term portion $ — $ 87,891

Other non-current assets 115,092 —

Deferred financing costs 139,203 143,002

Deposits 10,502 37,554

Operating lease assets 457,925 216,673

Total other non-current assets $ 722,722 $ 485,120

ACCRUED EXPENSES

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Accrued development expense 547,490 2,102,310

Accrued royalties payable 6,504 —

Accrued legal and professional — 239,348

Insurance financing payable 267,188 —

Other accruals — 99,747

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VENDOR CONCENTRATION

The Company had a major vendor that accounted for approximately 10 % and 23 % of the Company's research and development expenditures for the years ended December 31, 2022 and 2021, respectively.

The Company had one major vendor that accounted for approximately 21 % and 10 % of the Company's research and development expenditures for the years ended December 31, 2023 and 2022, respectively.

The same vendor also accounted for approximately 0 % and 17 % of the Company's total accounts payable and accrued expenses as of December 31, 2023 and 2022, respectively.

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Current year - increases $ 347 $ 427

Prior year - additions (reductions) $ ( 20 ) $ 142

Prior year - reductions $ ( 46 ) $ ( 20 )

Ending uncertain tax benefits $ 2,617 $ 2,316

Included in the balance of uncertain tax benefits at December 31, 2022 are $ 2.3 million of tax benefits that, if recognized, would impact the effective tax rate.

Included in the balance of uncertain tax benefits at December 31, 2023 are $ 2.6 million of tax benefits that, if recognized, would result in a reduction of the gross deferred tax asset, offset fully by valuation allowance and have no net impact on the financial statements.

The Company anticipates that no material amounts of unrecognized tax benefits will be settled within 12 months of the reporting date.

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In July 2022, following the approval of the Company's stockholders at its annual meeting of stockholders, the Company amended its restated certificate of incorporation to increase the Company's authorized shares of common stock to 240.0 million.

October 2021 ATM Sales Agreement

In October 2021, the Company entered into a sales agreement with SVB Securities LLC (formerly known as SVB Leerink LLC) to sell shares of its common stock from time to time through an "at-the-market," or ATM, equity offering program under which SVB Securities acts as the Company's agent.

The Company agreed to pay a commission equal to 3 % of the gross proceeds of any common stock sold under the agreement, plus certain legal expenses.

September 2023 Registered Direct Offering

In August 2023, the Company entered into a securities purchase agreement with an institutional investor and an investor affiliated with Douglas for the purchase and sale of 10,000,000 shares of the Company's common stock and warrants to purchase an aggregate of 10,000,000 shares of the Company's common stock in a registered direct offering priced at-the-market under Nasdaq rules.

The offering closed on September 1, 2023.

Each warrant is exercisable for one share of the Company's common stock.

The terms of the warrants are further described below in this Note 8.

The offering price was $ 0.70 per share of common stock and accompanying warrant.

The aggregate gross proceeds to the Company from the offering were $ 7.0 million, and net proceeds were approximately $ 7.0 million.

The offering was made pursuant to the Company's registration statement on Form S-3 (File No.

333-254862), filed with the SEC on March 30, 2021, and declared effective by the SEC on April 7, 2021, and a prospectus supplement thereunder.

March 2023 ATM Sales Agreement

In March 2023, the Company entered into a sales agreement with Stifel, Nicolaus & Company, Incorporated, or Stifel, and Cantor Fitzgerald & Co., or Cantor, to sell shares of its common stock from time to time through an "at-the-market," or ATM, equity offering program under which Stifel and Cantor act as the Company's agents.

The Company agreed to pay a commission equal to 3 % of the gross proceeds of any common stock sold under the agreement or such lower amount as the Company and Stifel and Cantor agree, plus certain legal expenses.

Shares of the Company's common stock sold under the agreement will be issued pursuant to the Company's shelf registration statement on Form S-3 (File No.

333-254862) and the base prospectus included therein, originally filed with the SEC on March 30, 2021, and declared effective on April 7, 2021, and the prospectus supplement dated October 13, 2021 relating to the offering of up to $ 50.0 million in shares of the Company's common stock under the agreement, and any subsequent prospectus supplement filed with the SEC related to this ATM equity offering program.

During 2022, the Company sold approximately 751,000 shares of common stock under the agreement for gross proceeds of approximately $ 1.3 million and incurred offering expenses of approximately $ 42,000 .

During 2021, the Company sold approximately 7.1 million shares of common stock under the agreement for gross proceeds of approximately $ 16.3 million and incurred offering expenses of approximately $ 537,000 .

The Company terminated the agreement in March 2023.

(See Note 14, Subsequent Events.)

April 2021 ATM Sales Agreement

In April 2021, the Company entered into a sales agreement with SVB Securities to sell up to $ 50.0 million of shares of its common stock from time to time through an ATM equity offering program under which SVB Securities acts as the Company's agent.

The Company agreed to pay a commission equal to 3 % of the gross proceeds of any common stock sold under the agreement, plus certain legal expenses.

Any shares of the Company's common stock sold under the agreement will be issued pursuant to the Company's shelf registration statement on Form S-3 (File No.

During 2022, the Company sold no shares of common stock under the agreement.

During 2021, the Company sold approximately 26.0 million shares of common stock under the agreement for gross proceeds of approximately $ 46.9 million and incurred offering expenses of approximately $ 1.6 million.

333-254862), the base prospectus included therein, originally filed with the SEC on March 30, 2021 and declared effective by the SEC on April 7, 2021, the prospectus supplement dated March 31, 2023 relating to the offering of up to $ 50.0 million of shares of the Company's common stock under the sales agreement, and any subsequent prospectus supplement related to the offering of shares of the Company's common stock under the sales agreement.

During the year ended December 31, 2023, the Company sold 3,794,936 shares of common stock under this agreement and received aggregate gross proceeds of approximately $ 2.4 million and incurred sales agent commissions and fees of approximately $ 55,000 .

October 2021 ATM Sales Agreement

In October 2021, the Company entered into a sales agreement with SVB Securities LLC (formerly known as SVB Leerink LLC) to sell shares of its common stock from time to time through an ATM equity offering program under which SVB Securities acted as the Company's agent.

The Company sold no shares of its common stock under the agreement during year ended December 31, 2023.

During the year ended December 31, 2022, the Company sold 751,040 shares of its common stock under the agreement for gross proceeds of approximately $ 1.3 million and incurred offering expenses of approximately $ 42,000 .

The Company terminated the agreement in March 2023.

(See Note 14, Subsequent Events.)

2018 ATM Sales Agreement

In January 2018 the Company entered into a common stock sales agreement with H.C.

Wainwright & Co., LLC, or Wainwright, relating to the offering and sale of shares of its common stock from time to time in an ATM equity offering program through Wainwright, acting as sales agent.

Under the agreement, Wainwright was entitled to a commission at a fixed commission rate equal to 3 % of the gross proceeds per share sold under the agreement.

March 2021, the Company provided notice to Wainwright to terminate the agreement, and the agreement terminated in April 2021.

During 2021, the Company sold approximately 3.3 million shares of common stock under this agreement for gross proceeds of approximately $ 7.7 million and incurred offering expenses of approximately $ 245,000 .

In April 2020, the Company entered into a purchase agreement, or the Purchase Agreement, and a registration rights agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park.

Under the terms and subject to the conditions of the Purchase Agreement, the Company had the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park was obligated to purchase up to $ 15.0 million of the Company’s common stock.

The Company incurred legal, accounting, and other fees related to the Purchase Agreement of approximately $ 374,000 .

Those costs were amortized and expensed as shares were sold under the Purchase Agreement.

During 2021, the Company sold, and Lincoln Park purchased, approximately 4.8 million shares under the Purchase Agreement for gross proceeds to the Company of approximately $ 7.0 million and recognized offering expenses of approximately $ 175,000 .

As of December 31, 2021, the Company had sold and Lincoln Park had purchased a total of $ 15.0 million of the Company's common stock under the Purchase Agreement, there were no unamortized costs, and no more shares of common stock may be sold by the Company to Lincoln Park under the Purchase Agreement.

Common Stock Warrants

In February 2018, the Company closed an underwritten public offering in connection with which the Company issued to the investors in that offering warrants exercisable through February 2023 that initially had an exercise price of $ 3.00 per share.

The warrants include a price-based anti-dilution provision, which provides that, subject to certain limited exceptions, the exercise price of the warrants will be reduced each time the Company issues or sells (or is deemed to issue or sell) securities for a net consideration per share less than the exercise price of those warrants in effect immediately prior to such issuance or sale.

In addition, subject to certain exceptions, if the Company issues, sells or enters into any agreement to issue or sell securities at a price which varies or may vary with the market price of the shares of the Company’s common stock, the warrant holders have the right to substitute such variable price for the exercise price of the warrant then in effect.

These warrants are exercisable only for cash, unless a registration statement covering the shares issued upon exercise of the warrants is not effective, in which case the warrants may be exercised on a cashless basis.

A registration statement covering the shares issued upon exercise of the warrants is currently effective.

December 2023 Warrants

In connection with the royalty interest financing agreement the Company entered into in December 2023, the Company issued a warrant to purchase up to an aggregate of 5,000,000 shares of the Company's common stock.

The warrant has a term of five years from the date of issuance and an exercise price of $ 0.3467 per share, subject to customary adjustment for stock splits and similar transactions.

A holder (together with its affiliates) may not exercise any portion of the warrant to the extent that the holder would own more than 4.99 % (or, at the election of the holder 9.99 %) of the Company's outstanding common stock immediately after exercise.

The warrant includes certain rights in favor of the holder upon a “fundamental transaction” as described in the warrant, including the right of the holder to receive from the Company or the successor entity an amount of cash equal to the Black-Scholes value (as described in the warrants) of the unexercised portion of the warrant on the date of the consummation of such fundamental transaction.

The warrant was allocated a value of $ 0.8 million using a Black-Scholes option pricing model based on the relative fair value method as they were issued with common stock.

The Black-Scholes model used the following assumptions:

expected volatility:

risk-free interest rate:

expected dividend yield:

and expected term:

The warrant was deemed to be classified as equity and recorded within additional paid in capital on the 2023 consolidated balance sheet.

As of December 31, 2023, no portion of the warrant has been exercised.

September 2023 Warrants

In connection with the registered direct offering completed in September 2023, the Company issued warrants to purchase up to an aggregate of 10,000,000 shares of the Company's common stock.

The warrants became exercisable on March 1, 2024, expire March 1, 2029 and have an exercise price of $ 0.77 per share, subject to customary adjustment for stock splits and similar transactions.

A holder (together with its affiliates) may not exercise any portion of a warrant to the extent that the holder would own more than 4.99 % (or, at the election of the holder 9.99 %) of the Company's outstanding common stock immediately after exercise.

The warrants include certain rights in favor of the holders upon a “fundamental transaction” as described in the warrants, including the right of the holders to receive from the Company or the successor entity an amount of cash equal to the Black-Scholes value (as described in the warrants) of the unexercised portion of the warrants on the date of the consummation of such fundamental transaction.

The warrants were allocated a value of $ 2.9 million using a Black-Scholes option pricing model based on the relative fair value method as they were issued with common stock.

The Black-Scholes model used the following assumptions:

expected volatility:

risk-free interest rate:

expected dividend yield:

and expected term:

The warrants were deemed to be classified as equity and recorded within additional paid in capital on the 2023 consolidated balance sheet.

As of December 31, 2023, none of the warrants have been exercised.

February 2018 Warrants

In connection with an underwritten public offering in February 2018, the Company issued to the investors in that offering, warrants exercisable through February 15, 2023 with an initial exercise price of $ 3.00 per share.

The Company estimated the fair value of the warrants as of February 15, 2018 to be approximately $ 3.0 million which was recorded in equity as of the grant date.

The Company early adopted ASU 2017-11 as of January 1, 2018 and recorded the fair value of the warrants as equity.

In April 2019 and July 2020, in accordance with the price-based anti-dilution provision discussed above, the exercise price of these warrants was automatically reduced to $ 0.98 per share and to $ 0.96 per share, respectively, and as a result of the triggering of the anti-dilution provision, $ 0.8 million and $ 6,863 , respectively, was recorded to additional paid-in capital.

During 2022, no warrants were exercised.

During 2021, warrants to purchase an aggregate of 520,985 shares of common stock were exercised for gross proceeds of approximately $ 0.5 million.

As of December 31, 2022, the Company had the following warrants outstanding:

Shares Underlying

Outstanding Warrants

Exercise Price Expiration Date

The warrants included a price-based anti-dilution provision, which resulted in automatic reductions to the exercise price of the warrants in April 2019 and July 2020 to $ 0.98 per share and to $ 0.96 per share, respectively.

A summary of warrant activity during the years ended December 31, 2023 and 2022 is presented below:

Number of Shares Underlying Warrants Weighted Average Exercise Price Weighted Average Remaining Life in Years Intrinsic Value

Outstanding, December 31, 2021

1,381,015 $ 1.00

Exercised — —

Forfeited or expired — —

Outstanding, December 31, 2022

1,381,015 $ 1.00 0.23 $ —

Granted 15,000,000 0.63

Exercised ( 1,353,515 ) ( 0.96 )

Forfeited or expired ( 21,000 ) ( 0.96 )

Outstanding and exercisable, December 31, 2023

15,006,500 $ 0.63 5.11 $ —

The authorized capital of the Company consists of 240,000,000 shares of common stock with a par value of $ 0.0001 per share and 5,000,000 shares of preferred stock with a par value of $ 0.01 per share.

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Amended and Restated 2014 Stock Incentive Plan

The Company maintains the Amended and Restated 2014 Stock Incentive Plan, or the Amended 2014 Plan.

The Amended and Restated 2014 Stock Incentive Plan, or the Amended 2014 Plan, provided for the grant of stock-based awards to employees, directors, consultants and advisors.

There were 2,046,885 shares of common stock authorized for issuance under the Amended 2014 Plan when it was approved by the Company's stockholders in July 2018.

The number of authorized shares increases annually on the first day of each fiscal year until, and including, the fiscal year ending December 31, 2024 by the least of (i) 2,000,000 , (ii) 4 % of the number of outstanding shares of common stock on such date, or (iii) an amount determined by the Company’s board of directors.

On January 1, 2022, the number of authorized shares increased by 2,000,000 to 2,201,855 .

On June 23, 2022, the Amended 2014 Plan was superseded by the 2022 Plan (as defined below), and no further awards were or will be granted under the Amended 2014 Plan since that date.

Awards outstanding under the Amended 2014 Plan will continue to remain outstanding pursuant to their terms and conditions.

The number of authorized shares increased annually on the first day of each fiscal year by the least of (i) 2,000,000 , (ii) 4 % of the number of outstanding shares of common stock on such date, or (iii) an amount determined by the Company’s board of directors.

On January 1, 2022, the number of available shares increased by 2,000,000 to 2,201,855 .

As a result of the approval of the 2022 Plan (as defined below) by the Company's stockholders on June 23, 2022, no further awards have been or will be granted under the Amended 2014 Plan.

Outstanding awards previously granted under the Amended 2014 Plan continue to remain outstanding in accordance with their terms.

2022 Stock Incentive Plan

In April 2022, the Company's board of directors approved the Daré Bioscience, Inc.

2022 Stock Incentive Plan, or the 2022 Plan, which was subsequently approved by the Company's stockholders on June 23, 2022, and became effective as of that date.

The 2022 Plan provides for the grant of stock-based incentive awards to employees, consultants, advisors, and directors.

2022 Stock Incentive Plan, or the 2022 Plan, which was subsequently approved by the Company's stockholders on June 23, 2022, and

became effective as of that date.

The 2022 Plan provides for the grant of stock-based incentive awards to employees, directors, consultants, and advisors.

The number of shares of common stock authorized for issuance under the 2022 Plan is (a) 10,117,305 ;

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As of December 31, 2023, unamortized stock-based compensation expense of approximately $ 4.3 million will be amortized over the weighted average period of 2.1 years.

As of December 31, 2022, 9,576,581 shares of common stock were available for future award grants under the 2022 Plan.

The number of shares of common stock available for future awards granted under the 2022 Plan as of December 31, 2023 was 6,725,579 .

Outstanding at December 31, 2021 4,717,602 $ 1.65

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Exercised ( 130,322 ) 0.96

Canceled/forfeited ( 85,564 ) 1.82

Cancelled/forfeited ( 321,418 ) 1.94

Outstanding at December 31, 2022 6,612,554 1.60

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In February 2022, the Company entered into an amendment to extend the term of the lease for two years such that the term now expires on August 31, 2024.

MBI, a wholly owned subsidiary the Company acquired in November 2019, leases general office space in Lexington, Massachusetts.

MBI, a wholly-owned subsidiary the Company acquired in November 2019, leases general office and laboratory space in Lexington, Massachusetts.

The lease for that space commenced on July 1, 2013.

2 unchanged sentences

In September 2022, the landlord exercised its option to terminate the lease, resulting in the new lease term ending on December 31, 2023.

The termination of the lease resulted in a reduction of operating lease liabilities and ROU assets of approximately $ 504,000 and $ 458,000 , respectively, and a $ 46,000 gain on the modification of the lease which is included as a reduction to research and development expense for the year ended December 31, 2022.

The termination of the lease resulted in a reduction of operating lease liabilities and ROU assets of approximately $ 0.5 million and $ 0.5 million, respectively, and a $ 46,000 gain on the modification of the lease which was included as a reduction to research and development expense for the year ended December 31, 2022.

MBI entered into a new lease for general office space and laboratory space in June 2023 that commenced on November 1, 2023 for three years , expiring on December 31, 2026, and resulted in an increase in operating lease liabilities and ROU assets of approximately $ 1.3 million.

MBI previously leased warehouse space in Billerica, Massachusetts, under a lease that commenced on October 1, 2016 and terminated on March 31, 2022.

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The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment.

The Company uses an incremental borrowing rate consisting of the current prime rate plus 200 basis points for operating leases that commenced prior to January 2019 (and all of the Company's operating leases commenced prior to such date.

The Company uses an incremental borrowing rate consisting of the current prime rate plus 200 basis points for operating leases.

The depreciable lives of operating leases and leasehold improvements are limited by the expected lease term.

At December 31, 2022, the Company reported operating lease right of use assets of approximately $ 458,000 in other non-current assets, approximately $ 398,000 in current liabilities, and approximately $ 90,000 in long-term liabilities on the consolidated balance sheets.

Total operating lease costs were approximately $ 602,000 and $ 561,000 for the years ended December 31, 2022 and 2021, respectively.

At December 31, 2023, the Company reported operating lease ROU assets of approximately $ 1.3 million in other non-current assets, approximately $ 0.5 million in current portion of lease liabilities, and approximately $ 0.9 million in lease liabilities long-term in the consolidated balance sheets.

Total operating lease costs were approximately $ 0.6 million and $ 0.6 million for the years ended December 31, 2023 and 2022, respectively.

Operating lease costs consist of monthly lease payments expense, common area maintenance and other repair and maintenance costs and are included in general and administrative expenses in the consolidated statements of operations.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $ 346,000 and $ 462,000 for the years ended December 31, 2022 and 2021, respectively, and these amounts are included in operating activities in the consolidated statements of cash flows.

At December 31, 2022, operating leases had a weighted average remaining lease term of 1.33 years.

Cash paid for amounts included in the measurement of operating lease liabilities was approximately $ 0.4 million and $ 0.3 million for the years ended December 31, 2023 and 2022, respectively, and these amounts are included in operating activities in the consolidated statements of cash flows.

At December 31, 2023, operating leases had a weighted average remaining lease term of 1.83 years and a weighted average interest rate of 10.27 %.

At December 31, 2023, future minimum lease payments under the Company's operating leases are as follows:

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2024 $ 592,000

2024 $ 93,000

Total future minimum lease payments 1,634,000

1 unchanged sentence

Total operating lease liabilities $ 1,405,000

SALE OF FUTURE ROYALTIES

On December 21, 2023, the Company entered into a royalty interest financing agreement, or the Royalty Agreement, with United in Endeavour, LLC, or United, under which United acquired a portion of the Company's royalty interest in XACIATO.

The Company received $ 5.0 million from United when the parties entered into the Royalty Agreement (the "Initial Investment"), and between January 1, 2024 and December 31, 2026, the Company may, in its sole discretion, elect to receive three additional payments (each a "Supplemental Investment") from United of up to an aggregate of $ 7.0 million, for a total of up to $ 12.0 million.

Under the Royalty Agreement, the Company agreed to make the following payments to United, until such time when United has received aggregate payments equaling a 12 % internal rate of return (the “IRR”) on the Initial Investment and each Supplemental Investment, if any (the "Hard Cap"):

(i) from December 21, 2023 through December 31, 2025, 50 % of the amount of royalty payments remaining after all amounts that are due and payable and actually paid by the Company to any licensor or sublicensee on the royalty payments generated and received by the Company on net sales of XACIATO by Organon have been deducted (the “Net Royalty Payments”), (ii) from January 1, 2026 through December 31, 2029, 75 % of the Net Royalty Payments, and (iii) from December 21, 2023 through December 31, 2029, 10 % of the amount of milestone payments remaining after all amounts that are due and payable and actually paid by the Company to any licensor or sublicensee on the milestone payments generated and received by the Company on net sales of XACIATO by Organon have been deducted.

After December 31, 2029, the Company will be required to make certain additional payments to United to the extent United has not received payments equaling the Hard Cap by December 31, 2029, December 31, 2033, and December 31, 2034, respectively.

In addition, if United has not received payments equaling the Hard Cap by December 31, 2035 and the Company has other sources of assets or income besides XACIATO sufficient to complete such payments, the Company has agreed to pay United quarterly payments evenly divided over a two-year term, such that United will have obtained the IRR, taking into account all other payments received by United from the Company under the Royalty Agreement.

United’s right to receive payments will terminate when United has received the Hard Cap.

The Company evaluated the terms of the Royalty Agreement and concluded that the features of the Royalty Agreement were similar to those of a debt instrument.

As a result, the Company applied the debt recognition guidance under ASC 470, Debt, and recorded the Initial Investment as a liability related to the sale of future royalties (“Royalty Obligation”) on the Company's 2023 consolidated balance sheet, which will be amortized under the effective interest method over the estimated term of the Royalty Agreement.

If the Company elects to receive additional Supplemental Investments, such additional Supplemental Investments will also be recorded as a liability related to the sale of future royalties when they are received and amortized under the interest method over the estimated remaining term of the Royalty Agreement.

In addition, in accordance with ASC 470, Debt, the Company will account for any royalties received in the future as non-cash royalty revenue in the consolidated statements of operations as a reduction to the debt balance.

As royalties and milestone payments are received by the Company from Organon and the Company subsequently pays the amounts due to United in respect thereof in accordance with the Royalty Agreement, the Royalty Obligation will be effectively repaid during the term of the Royalty Agreement.

In order to determine the amortization of the Royalty Obligation, the Company is required to estimate the total amount of future payments to United during the term of the Royalty Agreement.

At execution of the Royalty Agreement, the Company’s estimate of this total interest expense resulted in an effective annual interest rate of approximately 22.48 %.

This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the royalty period.

The Company will periodically assess the estimated amounts due and payable to United and to the extent the amount or timing of such payments is materially different than the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense.

There are a number of factors that could materially affect XACIATO's commercial success, and therefore the amount and timing of the Company's payments to United, and correspondingly, the amount of interest expense recorded by the Company, most of which are not within the Company’s control.

Such factors include, but are not limited to, the capabilities of Organon and its commitment of sufficient resources to market, distribute and sell the product;

timely and adequate commercial supply of the finished product and its components;

perceived superiority of its cure rates compared to other available treatments;

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

price pressure given the high level of generic treatments and changes in health care laws and regulations;

adequate coverage, pricing and reimbursement from

third-party payors;

and approval of new entrants, including alternative, non-antibiotic treatment options.

These factors could result in increases or decreases to both royalty revenues and interest expense.

In connection with entering into the Royalty Agreement, the Company issued to United a warrant (the “Initial Royalty Warrant”) to purchase up to 5,000,000 shares of the Company’s common stock.

In addition, for every $ 1,000,000 of Supplemental Investment, the Company will issue a warrant to purchase 1,000,000 shares of common stock, for an aggregate of warrants to purchase up to 7,000,000 shares of common stock (collectively the “Additional Royalty Warrants,” and together with the Initial Royalty Warrant, the “Royalty Agreement Warrants”).

The Royalty Agreement Warrants are exercisable, in full or in part, at any time on or prior to the fifth anniversary of their issuance date at an exercise price of $ 0.3467 per share, subject to customary anti-dilution adjustments.

The Royalty Agreement Warrants may be exercised for cash, or if at the time of exercise there is no effective registration statement registering for resale the shares underlying the Royalty Agreement Warrants, then in lieu of paying the exercise price in cash, the holders may elect to exercise on a cashless basis.

The Royalty Agreement Warrants were deemed to be equity classified warrants and recorded under additional paid in capital.

The fair value of the Initial Royalty Warrant was determined to be $ 0.8 million (Note 8) and was recorded as a debt discount against the Initial Investment.

The following table shows the activity of the Royalty Obligation since the transaction inception through the period indicated:

December 31, 2023

Upfront payment from the sale of future royalties $ 5,000,000

Debt issuance cost ( 276,101 )

Relative fair value of Initial Royalty Warrant ( 834,512 )

Royalty payments —

Non-cash interest expense associated with the sale of future royalties 24,289

Liability related to the sale of future royalties $ 3,913,676

COMMITMENTS AND CONTINGENCIES

Insurance Financing

In July 2023, the Company obtained financing for director and officer and other insurance premiums.

The agreement for such financing assigns to the lender a first priority lien on and a security interest in the financed insurance policies and any additional premium required in the financed insurance policies including (a) all returned or unearned premiums, (b) all additional cash contributions or collateral amounts assessed by the insurance companies in relation to the financed insurance policies and financed by the lender, (c) any credits generated by the financed insurance policies, (d) dividend payments, and (e) loss payments which reduce unearned premiums.

If any circumstances exist in which premiums related to any financed insurance policy could become fully earned in the event of loss, the lender will be named a loss-payee with respect to such policy.

The total premiums, taxes and fees financed was approximately $ 0.6 million with an annual interest rate of approximately 8.0 %.

In consideration of the premium payment by the lender to the insurance companies or the agent or broker, the Company promised to pay the lender the amount financed plus interest and other charges permitted under the agreement.

The Company will make monthly installment payments on the financed amount through April 20, 2024.

The financed amount is recognized as an insurance financing cost included in other current assets and accrued expenses in the Company's consolidated balance sheets.

As of December 31, 2023, the Company's remaining obligation under the agreement was approximately $ 0.3 million.

CRADA with NICHD for the Pivotal Phase 3 Study of Ovaprene

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The Ovaprene Phase 3 will be conducted within NICHD’s Contraceptive Clinical Trial Network with NICHD's contract research organization providing clinical coordination and data collection and management services for the Ovaprene Phase 3.

The Company and NICHD will each provide medical oversight and final data review and analysis for the Ovaprene Phase 3 and will work together to prepare the final report of the results of the Ovaprene Phase 3.

The Company and NICHD will each provide medical oversight and final data review and analysis for the Ovaprene Phase 3 and will work

together to prepare the final report of the results of the Ovaprene Phase 3.

The Company is responsible for providing clinical supplies of Ovaprene, coordinating interactions with the FDA, preparing and submitting supportive regulatory documentation, and providing a total of $ 5.5 million in payments to NICHD to be applied toward the costs of conducting the Ovaprene Phase 3.

NICHD will be responsible for the other costs related to the conduct of the Ovaprene Phase 3.

In accordance with the payment schedule under the CRADA, the Company made aggregate

payments of $ 1.5 million to NICHD in 2021 and a payment of $ 3.5 million to NICHD in 2022.

NICHD is responsible for the other costs related to the conduct of the Ovaprene Phase 3.

In accordance with the payment schedule under the CRADA, the Company has made aggregate payments of $ 5.0 million to NICHD, $ 3.5 million of which was paid in 2022.

The Company's remaining obligation under the CRADA at December 31, 2023 is $ 0.5 million.

In April 2020, due to the economic uncertainty resulting from the impact of the COVID-19 pandemic on the Company's operations and to support its ongoing operations and retain all employees, the Company applied for and received a loan of $ 367,285 under the Paycheck Protection Program of the Coronavirus Aid, Relief, and Economic Security Act, or CARES Act, administered by the U.S.

Small Business Administration, or the SBA.

In January 2021, the Company was notified that the principal balance of the loan and all accrued interest, which together totaled $ 369,887 , were fully forgiven by the SBA.

The Company recorded a gain on extinguishment of note payable and debt forgiveness income with respect to such loan forgiveness in the first quarter of 2021.

Legal Proceedings

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NICHD Non-Dilutive Grant Funding

The Company has received notices of awards and non-dilutive grant funding from NICHD to support the development of Ovaprene, DARE-PTB1, DARE-LARC1 and DARE-204/214.

The Company has received notices of awards and non-dilutive grant funding from NICHD to support the development of several of its product candidates.

NICHD issues notices of awards to the Company for a specified amount, and the Company must incur and track expenses eligible for reimbursement under the award and submit a detailed accounting of such expenses to receive payment.

If the Company receives payments under the award, the amounts of such payments are recognized in the statements of operations as a reduction to research and development activities as the related costs are incurred to meet those obligations over the period.

From 2018 through 2021, the Company received approximately $ 1.9 million of non-dilutive grant funding from NICHD for clinical development efforts supporting Ovaprene.

All funds under notices of awards received by the Company had been disbursed as of December 31, 2021.

In August 2020, the Company received a notice of award of a grant from NICHD to support the development of DARE-PTB1.

The award in the amount of $ 300,000 was for what is referred to as the "Phase I" segment of the project outlined in the Company's grant application, which is ongoing.

Additional potential funding of up to approximately $ 2.0 million for the "Phase II" segment of the project outlined in the grant application is contingent upon satisfying specified requirements, including, assessment of the results of the Phase I segment, determination that the Phase I goals were achieved, and availability of funds.

There is no guarantee the Company will receive any Phase II award.

The Company recorded credits to research and development expense of approximately $ 20,000 and $ 65,000 for costs related to the NICHD award for the years ended December 31, 2022 and 2021, respectively.

The award of approximately $ 300,000 was to be used for what is referred to as the "Phase I" segment of the project outlined in the Company's grant application.

The Phase I segment ended in July 2023.

The Company recorded credits to research and development expense for costs related to the NICHD award of approximately $ 1,000 and $ 20,000 for the year ended December 31, 2023 and 2022.

The Company received aggregate reimbursements under the award of approximately $ 216,000 during the grant period which ended in July 2023.

No further funds are available under this award for the Phase I segment.

In December 2023, the Company received a notice of award of approximately $ 2.0 million for the "Phase II" segment of the project.

The Company recorded no credits to research and development expense for costs related to the NICHD award for the year ended December 31, 2023.

In September 2021, the Company received a notice of award of a grant from NICHD to support the development of DARE-LARC1.

The award in the amount of approximately $ 300,000 is to be used to explore device insertion and removal in nonclinical studies, which is ongoing.

The award in the amount of approximately $ 300,000 is to be used to explore device insertion and removal in nonclinical studies.

The Company recorded credits to research and development expense of approximately $ 32,000 and $ 239,000 for costs related to the NICHD award for the year ended December 31, 2023 and 2022, respectively.

The Company recorded receivables of approximately $ 0 and $ 33,000 for expenses incurred through such date that it believes is eligible for reimbursement under the grant at December 31, 2023 and 2022, respectively.

The Company received aggregate reimbursements under the NICHD award of approximately $ 278,000 during the grant period, which ended in June 2023.

No further funds are available under this award.

DARE-204 and DARE-214

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The findings from the research will inform the Company's target product profile and guide its development priorities for DARE-204 and DARE-214.

The Company recorded credits to research and development expense of approximately $ 134,000 and $ 116,000 for costs related to the NICHD award for the year ended December 31, 2023 and 2022.

The Company received aggregate reimbursements under the NICHD award of approximately $ 249,000 during the grant period, which ended in September 2023.

No further funds are available under this award.

In July 2023, the Company received a notice of award of a grant from NICHD of approximately $ 385,000 to support preclinical development of a potential new therapeutic for the prevention of idiopathic preterm birth.

The grant funds will support activities related to the conduct and completion of proof-of-concept target validation studies in collaboration with the University of South Florida, which are to occur over a 12-month period.

The Company recorded credits to research and development expense of approximately $ 100,000 for costs related to the NICHD award for the year ended December 31, 2023.

At December 31, 2022, the Company recorded a receivable of approximately $ 24,000 for expenses incurred through such date that it believes is eligible for reimbursement under the grant.

The Company recorded a receivable of approximately $ 100,000 at December 31, 2023 for expenses incurred through such date that it believes are eligible for reimbursement under the grant.

Other Non-Dilutive Grant Funding

MBI Grant Agreement for DARE-LARC1

The Company's wholly-owned subsidiary, MBI, was awarded $ 5.4 million to support the development of DARE-LARC1 under a grant agreement with the Bill & Melinda Gates Foundation, or the Foundation.

The funding period under this agreement ended on June 30, 2021.

Expenses eligible for funding were incurred, tracked and reported to the Foundation.

MBI received aggregate payments under this agreement of approximately $ 5.4 million.

At June 30, 2021, all payments under this agreement associated with research and development expenses for DARE-LARC1 had been incurred and reported to the Foundation and no future funding has been or will be received under this agreement.

The Company has received funding to support the preclinical development of DARE-LARC1 and DARE-LBT under grant agreements it entered into with the Foundation in June 2021 and November 2022, respectively.

The Company is required to apply the funds it receives under the agreements solely toward direct costs for the applicable funded projects, other than approximately 10% of such funds, which it may apply toward general overhead and administrative expenses that support the entire operations of the Company.

The Company receives funding in advance and tracks and reports eligible expenses incurred to the Foundation.

Funds received that have not been spent are recorded as cash and cash equivalents and as a deferred grant funding liability in the Company’s consolidated balance sheets.

The deferred grant funding liability also includes grant funds spent but not yet expensed in accordance with GAAP.

The grant agreements include the Foundation's standard discretionary termination provisions.

Any grant funds that have not been used or committed to the funded project must be returned promptly to the Foundation upon expiration or termination of the agreement.

2021 DARE-LARC1 Grant Agreement

In June 2021, the Company entered into an agreement with the Foundation under which the Company was awarded up to $ 49.0 million to support the development of DARE-LARC1.

The agreement supports technology development and preclinical activities over the period of June 30, 2021 to November 1, 2026, to advance DARE-LARC1 in nonclinical proof of principle studies.

Under the agreement, the Company receives funding in advance and tracks and reports eligible expenses incurred to the Foundation.

Any unspent funds are recorded as a deferred grant funding liability in the Company's consolidated balance sheets.

The Company received an initial payment of $ 11.5 million in July 2021, approximately $ 8.0 million in July 2022 and approximately $ 4.4 million in December 2022.

As of December 31, 2022, the Company has received an

aggregate of approximately $ 23.9 million in non-dilutive funding under the agreement and recorded approximately $ 17.7 million of deferred grant funding in the Company's consolidated balance sheets.

In June 2021, the Company entered into an agreement with the Foundation under which the Company was awarded up to approximately $ 49.0 million to support the development of DARE-LARC1.

The agreement supports technology development and preclinical activities over the period of June 30, 2021 to November 1, 2026, to advance DARE-LARC1 through nonclinical proof-of-principle studies and other IND-enabling work to allow for the submission of an IND application with the FDA, approval of which will be required to commence testing in humans.

As of December 31, 2023, the Company has received a cumulative total of approximately $ 28.4 million in non-dilutive funding under the agreement:

approximately $ 11.5 million in 2021, approximately $ 12.4 million in 2022,

and $ 4.5 million in 2023.

Additional payments are contingent upon the DARE-LARC1 program’s achievement of specified development and reporting milestones.

The Company recorded credits to research and development expense of approximately $ 8.7 million and $ 5.2 million for costs related to the Foundation award for the year ended December 31, 2023 and 2022.

As of December 31, 2023, the Company recorded a deferred grant funding liability of approximately $ 13.5 million in the Company's consolidated balance sheets.

2022 DARE-LBT Grant Agreement

In November 2022, the Company entered into an agreement with the Foundation under which the Company was awarded $ 585,000 to support the development of DARE-LBT.

In November 2022, the Company entered into an agreement with the Foundation under which the Company was awarded $ 585,000 to support the development of DARE-LBT over the period of November 11, 2022 to February 29, 2024.

Under the agreement, the Company receives funding in advance and tracks and reports eligible expenses incurred to the Foundation.

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The Company received the full amount of the award in November 2022.

The Company recorded credits to research and development expense of approximately $ 0.3 million and $ 12,000 for costs related to the Foundation award for the year ended December 31, 2023 and 2022.

As of December 31, 2023, the Company has recorded approximately $ 246,000 of deferred grant funding in the Company's consolidated balance sheets.

SUBSEQUENT EVENTS

Termination of ATM Sales Agreements

Effective March 30, 2023, the Company terminated its ATM equity offering program sales agreements with SVB Securities LLC (see Note 9).

Exercise of February 2018 Warrants

In January and February 2023, warrants to purchase an aggregate of 1,353,515 shares of common stock were exercised at an exercise price of $ 0.96 per share resulting in gross proceeds to the Company of approximately $ 1.3 million (see Note 9).

Leased Property

On March 8, 2024, the Company entered into an amendment to extend the term of the lease for its corporate headquarters in San Diego, California for three years .

The extended term begins September 1, 2024 and expires October 31, 2027.

2024 Biotherapeutic Product Grant Agreement

On January 17, 2024, the Company entered into an agreement with the Foundation under which the Company was awarded $ 750,000 to support the development of bacteria-based live biotherapeutic products designed to benefit women and newborns.

The Company received the full amount of the award in January 2024.

The Company will track and report eligible expenses incurred to the Foundation.

Funds received but not yet spent will be recorded as cash and cash equivalents and as a deferred grant funding liability in the Company's consolidated balance sheets.

Related Party Transaction

On January 26, 2024, the Company entered into a consulting agreement with its former Chief Financial Officer, Lisa Walters-Hoffert, to assist in transition matters subsequent to her retirement.

Pursuant to the agreement, for a nine month period commencing on January 26, 2024, the Company will pay Ms.

Walters-Hoffert $ 31,667 per month and up to $ 500 per month for her health insurance premiums.

During January 2024, the Company sold an aggregate of 607,968 shares of common stock under its ATM equity offering program and received aggregate gross proceeds of approximately $ 220,000 and incurred sales agent commissions and fees of approximately $ 5,000 .

For a discussion of the ATM program, see Note 8, Stockholders' Equity.

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 9A. Controls and Procedures