What changed in this filing

/stocks — the workspaceLOADING

Item 9A. Controls and Procedures

2025-03-31 compared with 2024-03-28 · 494 added, 276 removed, 875 unchanged (47% of the section changed)

6 unchanged sentences

Our management is responsible for establishing and maintaining adequate internal control over financial reporting (as such term is defined in Rule 13a-15(f) of the Exchange Act).

Our internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.

Our internal control over financial reporting

is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with generally accepted accounting principles.

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).

38 unchanged sentences

10-Q 001-36395 08/12/2024 3.1

Certificate of Correction of the Certificate of Amendment of Restated Certificate of Incorporation dated June 21, 2024

06/27/2024 3.2

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

8 unchanged sentences

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

03/28/2024 4.4

4.5 Description of securities of the registrant

6 unchanged sentences

10-Q 001-36395

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.

44 unchanged sentences

10-K 001-36395 03/27/2020 10.16

10.9+ Grant Agreement between Daré Bioscience, Inc.

and the Bill & Melinda Gates Foundation effective as of June 30, 2021

10-Q 001-36395 08/12/2021 10.1

Cooperative Research and Development Agreement entered into as of July 8, 2021 between Daré Bioscience, Inc.

1 unchanged sentence

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

L icense Agreement dated as of August 12, 2023 b etween Douglas Pharmaceuticals Limited and Daré Bioscience, Inc.

Grant Agreement between Daré Bioscience, Inc.

and the Bill & Melinda Gates Foundation effective as of June 30, 2021 , as amended to date

Grant Agreement between Daré Bioscience, Inc.

and the Bill & Melinda Gates Foundation effective as of November 11, 2024 , as amended to date

Subaward Agreement between the Consortium Management Firm, National Collegiate Inventor s and Innovators Alliance, Inc.

d/b/a/ VentureWell and Daré Bioscience, I nc ., effective as of October 12, 2024

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

and United in Endeavor, LLC

03/28/2024 10.12

10.15 Purchase Agreement, dated October 21, 2024, by and between Daré Bioscience, Inc.

and Lincoln Park Capital Fund, LLC

10/21/2024 10.1

10.16 Registration Rights Agreement, dated October 21, 2024, by and between Daré Bioscience, Inc.

and Lincoln Park Capital Fund, LLC

10/21/2024 10.2

Traditional Royalty Purchase Agreement between Daré Bioscience, Inc.

and XOMA (US) LLC, dated as of April 29, 2024

08/12/2024 10.1

Synthetic Royalty Purchase Agreement between Daré Bioscience, Inc.

and XOMA (US) LLC, dated as of April 29, 2024

08/12/2024 10.2

MANAGEMENT CONTRACTS AND COMPENSATORY PLANS

12 unchanged sentences

2022 Stock Incentive Plan

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

001-36395 8/12/2024 10.7

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

9 unchanged sentences

S-1 333-194442 03/10/2014 10.16

10.18* Amended and Restated Non-Employee Director Compensation Policy (as amended through January 2022)

10.18* Amended and Restated Non-Employee Director Compensation Policy (as amended on April 2024)

10-Q 001-36395 8/12/2024 10.4

6 unchanged sentences

10-Q 001-36395 05/14/2020 10.13(b)

Amendment No.

2 to Employment Agreement between Daré Bioscience, Inc.

and Sabrina Martucci Johnson, dated as of May 20, 2024

08/12/2024 10.5

10.20(a)* Employment Agreement by and between Daré Bioscience, Inc.

6 unchanged sentences

Daré Bioscience, Inc.

Employment Offer Letter to John Fair, dated April 24, 2018

S-1 333-251599 01/05/2021 10.19

10.22* Daré Bioscience, Inc.

Change in Control Policy (effective October 15, 2019)

S-1 333-251599 01/05/2021 10.20

Change in Control Policy (as amended on April 29, 2024)

333-251599 08/12/2024 10.6

OTHER EXHIBITS

19.1 Daré Bioscience, Inc.

Amended and Restated I nsider Trading Policy (October 22, 2024)

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 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

1 unchanged sentence

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

D are Bios cience, Inc.

Dare Bioscience, Inc.

Policy on Recovery of Erroneously Awarded Compensation

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Rastetter, Ph.D.

/s/ CHERYL R.

BLANCHARD Director March 28, 2024

Blanchard, Ph.D.

/s/ JESSICA D.

4 unchanged sentences

MATZ Director March 31, 2025

/s/ SOPHIA ONONYE-ONYIA Director March 28, 2024

Sophia Ononye-Onyia, Ph.D.

/s/ ROBIN STEELE Director March 31, 2025

4 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, 2024 and 2023

7 unchanged sentences

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.

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

and Subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of operations and comprehensive loss, stockholders’ equity (deficit), and cash flows for each of the years in the two-year period ended December 31, 2024, 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, 2024 and 2023, and the consolidated results of its operations and its cash flows for each of the years in the two-year period ended December 31, 2024, 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.

As discussed in Note 2 to the consolidated financial statements, the Company has recurring losses 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.

3 unchanged sentences

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.

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

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.

We conducted our audits 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.

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.

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.

Our audits 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.

Our audits 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 audits provide 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.

Critical Audit Matter – Estimating the Allocation of Transaction Price in Other Income Recognition

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that:

(1) relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Description of the Critical Audit Matter

During the year ended December 31, 2024, the Company entered into a traditional royalty purchase agreement and a synthetic royalty purchase agreement with XOMA (US) LLC (“XOMA”).

The Company received $22.0 million from XOMA in connection with entering into the royalty purchase agreements, which was determined as the transaction price.

As described in Note 2 to the consolidated financial statements, the Company recognized other income in accordance with the principles outlined in ASC 610-20, Other Income – Gains and Losses from the Derecognition of Nonfinancial Assets, which requires the allocation of the transaction price to each performance obligation based on their relative standalone selling prices.

The observable standalone selling prices were not available, and therefore the Company estimated these prices using the adjusted market assessment approach.

This fair value approach requires management to make significant estimates and judgments, including the timing and amounts of projected net sales, probabilities of success in product development and regulatory approvals, and appropriate discount and royalty rates.

Estimating probabilities of success for early-stage assets is inherently uncertain.

We identified the estimation of the allocation of the transaction price to multiple performance obligations in the Company’s contract with XOMA as a critical audit matter due to the complexity involved in determining the standalone selling price of each performance obligation, which directly affects the amount of other income recognized in each period.

This in turn led to a high degree of auditor judgment, subjectivity, and effort in performing procedures to evaluate the reasonableness of management’s significant estimates and assumptions, several of which extend many years into the future.

How the Critical Audit Matter Was Addressed in the Audit

Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements.

We obtained an understanding of the marketing status of the underlying commercialized product and an understanding of the development status and development plan for the two underlying product candidates, which included estimated timelines and milestones.

We evaluated management’s development of the market assessment approach, which includes the identification of key inputs and assumptions to the fair value model.

We evaluated the sufficiency and appropriateness of the audit evidence supporting key inputs and assumptions to the fair value model.

We also evaluated the appropriateness of the discount rate used by management in the fair value model and evaluated the expected future royalty rates.

We performed independent mathematical accuracy tests of the Company’s fair value model.

We also performed substantive testing by recalculating the allocated transaction price using alternative assumptions, comparing the results to the Company’s estimates, and assessing whether the other income recognized was consistent with the performance obligations completed during the period.

/s/ Haskell & White LLP

3 unchanged sentences

March 31, 2025

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 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

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

As discussed in Note 2 to the financial statements, the Company had 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 financial statements.

The 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 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 audit.

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 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 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

We determined that there are no critical audit matters.

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

/s/ Mayer Hoffman McCann P.C.

March 30, 2023

San Diego, California

Daré Bioscience, Inc.

11 unchanged sentences

Total assets $ 22,101,131 $ 21,282,215

Liabilities and stockholders’ equity (deficit)

Liabilities and stockholders’ deficit

Current Liabilities

6 unchanged sentences

Liability related to the sale of future royalties, net 4,749,824 3,913,676

Lease liabilities long-term 935,743 90,346

Lease liabilities, non-current 754,383 935,743

Total liabilities 28,113,220 26,329,855

Commitments and contingencies (Note 14)

Stockholders' equity (deficit)

Stockholders' deficit

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

4 unchanged sentences

Accumulated deficit ( 175,289,630 ) ( 171,236,031 )

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

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

Total stockholders' deficit ( 6,012,089 ) ( 5,047,640 )

Total liabilities and stockholders' deficit $ 22,101,131 $ 21,282,215

See accompanying notes.

13 unchanged sentences

Loss from operations ( 23,451,485 ) ( 30,939,880 )

Other income 778,489 437,750

Other income (expense)

Sale of royalty and milestone rights, net of transaction costs (Note 13) 20,379,376 —

Other (expense) income ( 981,490 ) 778,489

Net loss $ ( 4,053,599 ) $ ( 30,161,391 )

14 unchanged sentences

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

Issuance of common stock from the exercise of warrants

112,793 11 1,299,365 — — 1,299,376

Issuance of common stock, net of issuance costs

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

1,149,578 115 9,346,541 — — 9,346,656

Issuance of common stock warrants, net of issuance costs

— — 834,510 — — 834,510

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

2 unchanged sentences

Stock-based compensation — — 2,203,257 — — 2,203,257

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

Issuance cost on equity line paid in common stock

137,614 14 500,213 — — 500,227

Issuance of common stock, net of issuance costs 109,655 11 453,568 — — 453,579

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

Reverse stock split adjustment

121,956 12 ( 12 ) —

Net loss — — — — ( 4,053,599 ) ( 4,053,599 )

8 unchanged sentences

Net loss $ ( 4,053,599 ) $ ( 30,161,391 )

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

Adjustments to reconcile net loss to net cash provided by (used in) operating activities:

Depreciation expense 42,325 38,363

Right of use asset - operating lease

471,003 ( 861,706 )

Stock-based compensation expense 2,203,256 2,530,684

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

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

Loss on disposal of property and equipment

Non-cash royalty revenue related to sale of future royalties 202 —

Non-cash interest expense on liability related to sale of future royalties 317,318 24,289

4 unchanged sentences

Other non-current assets ( 33,746 ) ( 10,300 )

Operating lease liability

( 459,763 ) 915,732

Accounts payable ( 1,929,717 ) 1,357,601

Accrued expenses 171,473 ( 8,272,201 )

Interest payable

Deferred grant funding 2,824,471 ( 4,566,413 )

Net cash used in operating activities ( 38,856,654 ) ( 18,088,429 )

Net cash provided by (used in) operating activities

5,394,247 ( 38,856,654 )

Cash flows from investing activities

3 unchanged sentences

Net proceeds from issuance of common stock 453,579 9,346,656

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

Repayment of liability on sale of future royalties

Issuance of note payable 561,663 601,174

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Operating right-of-use assets obtained in exchange for new operating lease liabilities $ 358,315 $ 1,291,425

Issuance cost on equity paid in common stock $ 500,227 $ —

Additions to property and equipment and reduction of deposits $ 749,036 $ —

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

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ORGANIZATION AND DESCRIPTION OF BUSINESS

Organization and business

Daré Bioscience, Inc.

is a biopharmaceutical company committed to advancing innovative products for women’s health.

is a biopharmaceutical company driven by a mission to challenge the status quo, making women's health a priority.

Daré Bioscience, Inc.

2 unchanged sentences

and its wholly-owned subsidiaries, unless otherwise stated or the context otherwise requires.

The Company began assembling its diverse portfolio in 2017 through acquisitions, exclusive in-licenses and other collaborations.

The Company's programs target unmet needs in women's health in the areas of contraception, vaginal health, reproductive health, menopause, sexual health, and fertility, and aim to expand treatment options, enhance outcomes and improve ease of use for women.

The Company began assembling its diverse portfolio of assets in 2017 through acquisitions, exclusive in-licenses and other collaborations.

The Company's programs target unmet needs in women's health, primarily in the areas of contraception, sexual health, pelvic pain, fertility, infectious disease, vaginal health and menopause, and aim to enhance outcomes and convenience.

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 drug and drug/device product candidates and potential product candidates in various stages of development.

The Company's portfolio of product candidates 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.

Food and Drug Administration (FDA)-approved product to emerge from the Company's portfolio 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.

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.

1 unchanged sentence

jurisdictions in the future).

In January 2024, Organon announced that XACIATO was available across the U.S.

As described below, to provide funding for the development of the product candidates in the Company's pipeline, in April 2024, the Company entered into an agreement with XOMA (US) LLC (“XOMA”) whereby the Company sold its rights to all royalty and potential milestone payments based on net sales of XACIATO under its agreement with Organon, net of the Company's obligations to certain third parties, until XOMA receives a specified return on its investment, after which the Company will share equally in the royalty and milestone payments earned on net sales of XACIATO from Organon.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

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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 seeks to potentially acquire, license and develop additional product candidates.

The Company has a history of losses from operations, net losses and negative cash flows from operations and expects significant losses from operations, net losses and negative cash flows from operations 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, 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.

Based on the Company's current operating plan estimates, the Company does not have sufficient cash to satisfy its working capital needs and other liquidity requirements over at least the next 12 months from the date of issuance of the accompanying financial statements.

The accompanying consolidated 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, 2024, the Company had an accumulated deficit of approximately $ 175.3 million, unrestricted cash and cash equivalents of approximately $ 15.7 million, and a working capital deficit of approximately $ 3.2 million.

The Company's unrestricted cash and cash equivalents at December 31, 2024 represented funds received under grant agreements that generally may be applied solely toward direct costs for carrying out the respective projects under those grant agreements.

See Note 15, Grant Awards.

For the year ended December 31, 2024, the Company incurred a net loss of $ 4.1 million and had positive cash flow from operations of approximately $ 5.4 million.

The Company's net loss and cash flow from operations for the year ended December 31, 2024 were positively impacted

by the approximately $ 20.4 million of net proceeds the Company received from the sale in April 2024 of its rights to future royalty and milestone payments and revenue.

See below and Note 13, Royalty Purchase Agreements.

The Company will need to raise substantial additional capital to continue to fund its operations and to successfully execute its current strategy.

3 unchanged sentences

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

Segment Information

Operating segments are defined as components of an enterprise about which discrete financial information is available for evaluation the Chief Operating Decision Maker, or CODM, or decision-making group in making decisions on how to allocate resources and assess performance.

The Company's CODM is the Chief Executive Officer, or CEO.

The CEO views the Company's operations and manages its business as one reportable and operating segment, Women's Health.

See Note 16, "Segment Information," for additional information.

Reverse Stock Split

The Company effected a 1-for-12 reverse split of its issued common stock on July 1, 2024.

At the effective time of the reverse stock split, every 12 shares of the Company’s common stock was automatically reclassified and combined into one share of common stock.

No fractional shares were issued as a result of the reverse stock split.

Stockholders who would have otherwise been entitled to receive a fractional share instead automatically had their fractional interests rounded up to the next whole share.

The reverse stock split did not change the number of authorized shares or the par value per share of the Company’s common stock.

See Note 9, Stockholders' Equity, for additional information regarding the reverse stock split.

All common stock share and per share data presented in the accompanying consolidated financial statements have been retroactively adjusted to reflect the impact of the reverse stock split for all periods presented, without giving effect to whole shares issued in lieu of fractional shares.

In addition, proportionate adjustments were made in accordance with the applicable terms of outstanding stock options and warrants, the Company’s stock incentive plans and an existing agreement to the (a) per share exercise prices of, and the number of shares underlying, the Company’s outstanding stock options, (b) number of shares available for the grant of awards under the Company’s stock incentive plans, and (c) per share exercise prices of, and the number of shares underlying, outstanding warrants to purchase shares of the Company’s common stock and warrants potentially issuable by the Company in its sole discretion pursuant to an existing agreement.

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, 2024 and 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 sheets.

Principles of Consolidation

3 unchanged sentences

The financial statements of the Company’s wholly-owned subsidiaries are recorded in their functional currency and translated into the reporting currency.

The cumulative effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency is reported in Accumulated Other Comprehensive Loss.

The cumulative effect of changes in exchange rates between the foreign entity’s functional currency and the reporting currency is

reported in Accumulated Other Comprehensive Loss.

All intercompany transactions and accounts have been eliminated in consolidation.

2 unchanged sentences

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

Property and Equipment

Property and equipment are stated at cost less accumulated depreciation.

Depreciation is calculated using the straight-line method over the estimated useful lives of the assets, generally five years .

Repair and maintenance costs are charged to expense as incurred.

Impairment of Long-Lived Assets

Long-lived assets consist primarily of property and equipment and right-of-use assets.

The Company reviews its long-lived assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable.

Recoverability is measured by comparison of the carrying amount to the future undiscounted net cash flows which the asset or asset group are expected to generate, including its eventual residual value.

If such assets are considered to be impaired, the impairment to be recognized is measured as the amount by which the carrying amount of the assets exceeds its fair value.

The Company did not recognize any impairment losses for either of the years ended December 31, 2024 or 2023.

The Company recorded a loss on the disposal of a fixed asset of $ 0.6 million for the year ended December 31, 2024.

No such losses were recorded during the year ended December 31, 2023.

Grant Funding

The Company receives certain research and development funding through grants issued by a division of the National Institutes of Health and the Bill & Melinda Gates Foundation, or the Foundation.

The Company receives certain research and development funding through grants issued by a division of the National Institutes of Health and the Gates Foundation, or the Foundation.

Under the Foundation grant, which the Company considers to be a research and development contract under FASB Accounting Standards Codification, or ASC, Topic 730 Research and Development , the Company granted the Foundation a Humanitarian License which gives the Foundation the right to make the funded developments accessible at an affordable price to people within developing countries.

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Use of Estimates

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

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 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.

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

Sale of Future Payments

On April 29, 2024, the Company entered into and closed a traditional royalty purchase agreement and a synthetic royalty purchase agreement with XOMA pursuant to which the Company sold its right, title and interest in the following to XOMA (i) all future net royalty and potential net milestone payments the Company would otherwise receive from Organon based on net sales of XACIATO, (ii) a portion of future net sales of Ovaprene and a portion of a potential future milestone payment the Company may receive under its license agreement with Bayer related to

Ovaprene, and (iii) a portion of future net sales of Sildenafil Cream.

The Company received $ 22.0 million from XOMA in connection with entering into the royalty purchase agreements.

Under the terms of the royalty purchase agreements, if XOMA receives total payments under the royalty purchase agreements equal to an amount that exceeds $ 88.0 million, XOMA will pay $ 11.0 million to the Company for each successive $ 22.0 million XOMA receives under the royalty purchase agreements.

If the Company earns any such payments, they will be accounted for as variable consideration under ASC 606, Revenue Recognition, and will be recorded as income when such payments are received.

See Note 13, Royalty Purchase Agreements, for additional information regarding the terms of the royalty purchase agreements.

The Company evaluated the expected cash flows to XOMA from royalties and milestone payments expected to be earned on XACIATO, Ovaprene and Sildenafil Cream over the period that the Company expects it will take for XOMA to receive total payments of $ 88.0 million under the royalty purchase agreements, and determined to allocate the $ 22.0 million it received from XOMA in connection with entering into the royalty purchase agreements, net of transaction costs of approximately $ 1.6 million, to the traditional royalty purchase agreement for XACIATO, and none of it to the synthetic royalty purchase agreement for Ovaprene and Sildenafil Cream.

The cash flows to XOMA from royalties and milestone payments expected to be earned on Ovaprene and Sildenafil Cream are expected to be de minimis over the period that the Company expects it will take for XOMA to receive total payments of $ 88.0 million under the royalty purchase agreements because, unlike XACIATO, Ovaprene and Sildenafil Cream are still in development stage and not commercial assets.

The Company determined that the traditional royalty purchase agreement represents a complete sale of a nonfinancial asset (the Company's right, title and interest in and to future payments related to commercial sales of XACIATO) for which XOMA bears all benefit and for which the Company has no obligations or involvement going forward, and therefore should be accounted for within the scope of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets .

The $ 22.0 million net of transaction costs of approximately $ 1.6 million, was recorded as other income on the Company's consolidated statements of operations and comprehensive loss.

Liability Related to the Sale of Future Royalties

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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.

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 Company's 2023 consolidated balance sheets as the warrants were deemed to be equity classified.

Risks and Uncertainties

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

If the Company is denied regulatory approval of its product candidates, or if approval is delayed, it may have a material adverse impact on the Company’s business, results of operations and its financial position.

The Company is subject to a number of risks similar to other life science companies, including, but not limited to, risks related to the ability to license product candidates, successfully develop product candidates, successfully commercialize approved products or enter into strategic relationships with third parties who are able to successfully commercialize approved products, raise additional capital, compete with other products, and protect proprietary technology.

commercialize approved products, raise additional capital, compete with other products, and protect proprietary technology.

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

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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.

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

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The following tables present the classification within the fair value hierarchy of financial assets and liabilities that are remeasured on a recurring basis as of December 31, 2024 and December 31, 2023.

There were no financial assets or liabilities that were remeasured using a quoted price in active markets for identical assets (Level 2) as of December 31, 2023 .

There were no financial assets or liabilities that were remeasured using a quoted price in active markets for identical assets (Level 2) or using unobservable inputs (Level 3) as of December 31, 2024 or December 31, 2023.

Fair Value Measurements

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(1) Represents cash held in money market funds.

Recently Adopted Accounting Pronouncements

In November 2023, the FASB issued Accounting Standard Update, or ASU, 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures, or ASU 2023-07, which requires all public entities, including public entities with a single reportable segment, to provide in interim and annual periods one or more measures of segment profit or loss used by the chief operating decision maker to allocate resources and assess performance.

Additionally, the standard requires disclosures of significant segment expenses and other segment items as well as incremental qualitative disclosures.

The guidance in this update is effective for fiscal years beginning after December 15, 2023, and interim periods after December 15, 2024.

The Company adopted ASU 2023-07 on December 31, 2024, which adoption only impacted the Company's segment reporting disclosures.

See Note 16, Segment Information, for disclosures related to the adoption of ASU 2023-07.

Recently Issued Accounting Pronouncements

In November 2024, the FASB issued ASU 2024-3, Disaggregation of Income Statement Expenses.

ASU 2024-3 requires new financial statement disclosures in tabular format, disaggregating information about prescribed categories underlying any relevant income statement expense captions.

Additionally, in January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03.

The standard provides guidance to expand disclosures related to the disaggregation of income statement expenses.

The standard requires, in the notes to the financial statements, disclosure of specified information about certain costs and expenses, which includes purchases of inventory, employee compensation, depreciation and intangible asset amortization included in each relevant expense caption.

This guidance is effective for fiscal years beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027, on a retrospective or prospective basis, with early adoption permitted.

The Company is assessing the guidance, noting the adoption impacts disclosure only.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

Improvements to Income Tax Disclosures, which requires companies to disclose, on an annual basis, specific categories in the effective tax rate reconciliation and provide additional information for reconciling items that meet a quantitative threshold.

In addition, ASU 2023-09 requires companies to disclose additional information about income taxes paid.

ASU 2023-09 will be effective for annual periods beginning January 1, 2025 and will be applied on a prospective basis with the option to apply the standard retrospectively.

The Company is evaluating the disclosure impact of ASU 2023-09 on its consolidated financial statements.

The Company does not believe other recently issued but not yet effective accounting standards, if currently adopted, would have a material effect on the consolidated financial statements.

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.

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.

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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.

The $ 1.0 million upfront payment is recorded as deferred license revenue in the Company's consolidated balance sheets at December 31, 2024 and 2023.

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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Lease expense for lease payments is recognized on a straight-line basis over the lease term (See Note 11, Leased Properties).

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision maker, or decision-making group, in making decisions on how to allocate resources and assess performance.

Its chief operating decision maker is the chief executive officer.

The Company has one operating segment, women’s health.

Australian Research and Development Tax Incentive Program

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The Company classifies its estimate for the Tax Incentive as other current assets on its consolidated balance sheets.

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, 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.

For the years ended December 31, 2024 and 2023, the Company recognized approximately $ 46,000 and approximately $ 0.6 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, 2024 and 2023, the Company recorded a receivable for the estimated Tax Incentive of approximately $ 46,000 and $ 0.6 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 883,334 and 788,569 shares of common stock outstanding at December 31, 2024 and 2023, respectively.

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.

There were warrants exercisable into 1,268,572 shares of common stock outstanding at each of the years ended December 31, 2024 and 2023.

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.

Stock-Based Compensation

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

Compensation expense is recognized in the consolidated statements of operations and comprehensive loss on a straight-line basis over the requisite service period of the award.

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.

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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.

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.

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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, 2023, the transaction price was updated to $ 11.0 million.

As a result of the $ 1.0 million payment in connection with the license agreement amendment and the $ 1.8 million milestone payment noted above, the transaction price was $ 12.8 million as of December 31, 2024.

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).

Refer to Note 13, Royalty Purchase Agreements, regarding the Company's sale to XOMA of all the Company's right, title and interest in and to, from and after April 1, 2024, all net royalty and potential net milestone payments from Organon based on net sales of XACIATO.

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.

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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.

In addition to customary termination rights for both parties, following the first anniversary of the effective date of the agreement, Organon may terminate the agreement in its entirety or on a country-by-country basis at any time in Organon's sole discretion on 120 days' advance written notice.

In addition to customary termination rights for both parties, Organon may terminate the agreement in its entirety or on a country-by-country basis at any time in Organon's sole discretion on 120 days' advance written notice.

Bayer HealthCare License Agreement

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As of December 31, 2024, 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 $ 1.0 million payment is recorded as non-current deferred license revenue in the Company's consolidated balance sheets at December 31, 2024 and 2023.

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.

on annual net sales of Ovaprene during a calendar year, subject to customary royalty reductions and offsets, and (c) a percentage of sublicense revenue.

Refer to Note 13, Royalty Purchase Agreements, regarding XOMA's rights to a portion of potential future payments from Bayer under the Company's license agreement with Bayer.

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

Theramex Co-Development and Licensing Agreement

In February 2025, the Company entered into a co-development and licensing agreement with Theramex for a potential first-in-category biodegradable contraceptive implant called Casea S recently acquired by Theramex.

Under the agreement, the Company received a royalty-free, exclusive, fully paid up, sublicensable license to the U.S.

patents Theramex recently acquired for Casea S.

Given that the product is in an ongoing Phase 1 study that is funded by a grant, there are no development costs for the Company or Theramex at this time.

If the Company determines that the results from the study are positive, it would be responsible for conducting a Phase II study in the U.S., and funding for such study and for a future Phase III study in the U.S.

will be shared by the Company and Theramex on terms to be agreed upon by the parties, taking into account the size of the opportunity for Casea S in the respective markets.

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.

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 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.

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

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

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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 program.

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 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.

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.

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In accordance with the terms of the merger agreement, the Company’s board of directors elected to pay a portion of these milestone payments in shares of the Company’s common stock, and in September 2021, the Company issued approximately 58,334 shares of its common stock to former stockholders of MBI and paid $ 75,000 in cash to the stockholders’ representative in satisfaction of the $ 1.25 million in milestone payments associated with milestones achieved in June 2021.

As of December 31, 2024, no additional payments have been made under this agreement.

TriLogic and MilanaPharm License Agreement / Hammock Assignment Agreement

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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, $ 850,000 of which has been paid as of December 31, 2023.

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 had been paid as of December 31, 2024.

Pear Tree Acquisition

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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.

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.

Portions of certain milestone payments made to Pear Tree's licensors may be creditable against royalty payments due to Pear Tree's licensors.

As of December 31, 2024, no payments have been made under this agreement.

Catalent JNP License Agreement

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.

As a result of this license agreement, the Company commenced its DARE-HRT1, DARE-FRT1 and DARE-PTB1 programs.

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 has been paid as of December 31, 2023;

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., 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).

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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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.

As of December 31, 2024, $ 1.0 million became payable under this agreement and was subsequently paid in February 2025.

ADVA-Tec License Agreement

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provided, however, that for sublicense revenue the Company receives prior to the first commercial sale of a licensed product that represents an upfront payment or license fee due on or around the effective date of the sublicense, ADVA-Tec is eligible to receive a single-digit percentage of that sublicense revenue.

As of December 31, 2024, only the $ 1.2 million in aggregate milestone payments noted above have been made.

PREPAID EXPENSES

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Total prepaid expenses $ 2,519,707 $ 6,118,272

PROPERTY AND EQUIPMENT, NET

Property and equipment, net, consist of the following:

As of December 31,

Assets under construction

$ 1,229,165 $ 600,000

37,239 51,978

Leasehold improvements

40,284 42,188

Lab equipment

204,938 107,511

$ 1,511,626 $ 801,677

Less– accumulated depreciation

( 175,894 ) ( 145,702 )

Property and equipment, net

$ 1,335,732 $ 655,975

Depreciation expense was $ 42,325 and $ 38,363 for the years ended December 31, 2024 and 2023, respectively.

ACCRUED EXPENSES

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Accrued royalties payable — 6,504

Accrued legal and professional — 239,348

Insurance financing payable 249,628 267,188

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VENDOR CONCENTRATION

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.

The Company continues to maintain its relationship with this vendor and anticipates incurring significant expenses with this vendor over the next 12 months.

The Company had two major vendors that accounted for approximately 15 % and 12 % of the Company's research and development expenditures for the year ended December 31, 2024, and 21 % and 3 % of the Company's research and development expenditures for the year ended December 31, 2023.

The same vendors accounted for 0 % of the Company's total accounts payable and accrued expenses as of each of December 31, 2024 and 2023.

The Company continues to maintain its relationship with these vendors and anticipates incurring significant expenses with these vendors over the next 12 months.

The components of loss from continuing operations before provision for income taxes consists of the following (in thousands):

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Loss before taxes $ 4,052 $ 30,159

The difference between the provision for income taxes (benefit) and the amount computed by applying the U.S.

The difference between the provision (benefit) for income taxes and the amount computed by applying the U.S.

federal income tax rate for the years ended December 31, 2024 and 2023 are as follows:

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Capitalized research and development costs 12,614 12,570

Other 41 1,468

Stock compensation 3,570 2,618

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When and if management determines that it is more likely than not that the Company will be able to utilize the deferred tax assets prior to their expiration, the valuation allowance may be reduced or eliminated.

The increase in valuation allowance of approximately $ 8.0 million and $ 4.5 million for the years ending December 31, 2023 and 2022, respectively, is primarily related to an increase in net operating losses generated during the year.

The increase in valuation allowance of approximately $ 2.4 million and $ 8.0 million for the years ended December 31, 2024 and 2023, respectively, is primarily related to an increase in net operating losses and R&D credits generated during the year and changes in state tax rates.

The Company has U.S.

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STOCKHOLDERS’ EQUITY

Increase in Authorized Shares of Common Stock

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.

Reverse Stock Split

On July 1, 2024, the Company effected a 1-for-12 reverse split of its issued common stock.

At the effective time of the r everse stock split , every 12 shares of the Company’s common stock was automatically reclassified and combined into one share of common stock.

No fractional shares were issued as a result of the reverse stock split.

Stockholders who would have otherwise been entitled to receive a fractional share instead automatically had their fractional interests rounded up to the next whole share.

The reverse stock split reduced the number of issued and outstanding shares of the Company’s common stock from approximately 101.1 million to approximately 8.5 million .

The reverse stock split did not change the number of authorized shares or the par value per share of the Company’s common stock.

On October 21, 2024, the Company entered into a purchase agreement and 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 has the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $ 15.0 million of the Company’s common stock.

Such sales of common stock by the Company, if any, will be subject to certain limitations, and may occur from time to time, at the Company’s sole discretion, over the 24-month period commencing on November 27, 2024.

In connection with entering into the purchase agreement, the Company issued 137,614 shares of its common stock to Lincoln Park in consideration for its commitment to purchase shares thereunder.

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.

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 833,334 shares of the Company's common stock and warrants to purchase additional 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.

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 9.

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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), 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.

In April 2024, the Company and Cantor mutually agreed to terminate the sales agreement with respect to Cantor.

Through and including May 10, 2024, shares of the Company's common stock sold under the sales agreement were offered and sold under the Company's shelf registration statement on Form S-3 (File No.

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, and the prospectus supplements thereto, the most recent of which was dated March 28, 2024 relating to the offering of up to $ 19.0 million of shares of the Company's common stock.

From and after May 11, 2024, shares of the Company's common stock sold under the sales agreement were and will be offered and sold under the Company's shelf registration statement on Form S-3 (File No.

333-278380), the base prospectus included therein, originally filed with the SEC on March 29, 2024 and declared effective by the SEC on May 10, 2024, the prospectus supplement thereto dated May 10, 2024 relating to the offering of up to $ 18.1 million of shares of the Company's common stock, and any subsequent prospectus supplement related to the offering of shares of the Company's common stock under the sales agreement.

During the years ended December 31, 2024 and 2023, the Company sold 109,655 and 316,244 shares of common stock, respectively, under the sales agreement for net proceeds of approximately $ 0.5 million and $ 2.3 million, respectively.

Common Stock Warrants

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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 warrant was allocated a value of $ 0.8 million using a Black-Scholes option pricing model based on the relative fair value method.

The Black-Scholes model used the following assumptions:

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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.

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

As of December 31, 2024, no portion of the warrant had been exercised.

September 2023 Warrants

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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.

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

As of December 31, 2024, none of the warrants have been exercised.

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In connection with an underwritten public offering in February 2018, the Company issued to the investors in that offering, warrants exercisable through February 2023 with an initial exercise price of $ 36.00 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 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.

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 issuance 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 $ 11.76 per share and $ 11.52 per share, respectively.

In January 2023, warrants to purchase 112,793 shares of common stock were exercised for gross proceeds of approximately $ 1.3 million and the remaining unexercised warrants expired in February 2023.

Summary of Warrant Activity

A summary of warrant activity during the years ended December 31, 2024 and 2023 is presented below:

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115,085 $ 12.03 0.23 $ —

Granted 1,268,030

Exercised ( 112,793 )

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1,268,572 $ 7.49 5.11 $ —

Granted 15,000,000 0.63

Exercised — —

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The issued and outstanding common stock of the Company consisted of 8,700,386 and 8,331,161 shares of common stock as of December 31, 2024 and 2023, respectively.

There were no shares of preferred stock outstanding as of December 31, 2023 or 2022.

There were no shares of preferred stock issued or outstanding as of December 31, 2024 or 2023.

Common Stock Reserved for Future Issuance

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2014 Employee Stock Purchase Plan

The Company’s 2014 Employee Stock Purchase Plan, or the ESPP, became effective in April 2014, but no offering period has been initiated thereunder since January 2017 and there was no stock-based compensation related to the ESPP for the years ended December 31, 2023 or December 31, 2022.

The Company’s 2014 Employee Stock Purchase Plan, or the ESPP, became effective in April 2014, but no offering period has been initiated thereunder since January 2017.

In June 2024, the Company's board of directors suspended the ESPP.

There was no stock-based compensation related to the ESPP for the years ended December 31, 2024 or December 31, 2023.

Amended and Restated 2014 Stock Incentive 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 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.

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 since June 23, 2022.

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

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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.

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.

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plus (b) up to 512,056 shares subject to awards granted under the Amended 2014 Plan or the 2007 Stock Incentive Plan that expire, terminate or are otherwise forfeited on or after June 23, 2022.

Options granted are exercisable at various dates as determined upon grant and will expire no more than ten years from their date of grant.

Stock options generally vest over a four-year term.

The exercise price of each option is determined by the Company's board of directors or its compensation committee based on the estimated fair value of the Company's stock on the date of grant.

Summary of Stock Option Activity

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Cancelled/forfeited ( 525 ) 14.07

Expired ( 29 ) 13.92

Outstanding at December 31, 2023 788,569 17.50

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Canceled/forfeited ( 79,148 ) 12.90

Expired ( 54,147 ) 21.16

Outstanding at December 31, 2024 883,334 $ 14.58 6.73 $ —

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Options vested and expected to vest at December 31, 2024 593,118 $ 16.96 5.81 $ —

*The aggregate intrinsic value is the sum of the amounts by which the quoted market price of the Company's common stock exceeded the exercise price of the stock options at December 31, 2024 for those stock options for which the quoted market price was in excess of the exercise price.

The weighted average grant-date fair value of stock options granted during at December 31, 2024 and 2023 was $ 4.10 and $ 11.28 , respectively.

Compensation Expense

Total stock-based compensation expense related to stock options granted to employees and directors recognized in the consolidated statements of operations is as follows:

Total stock-based compensation expense related to stock options granted to employees and directors recognized in the consolidated statements of operations and comprehensive loss is as follows:

Years Ended December 31,

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Total $ 2,203,256 $ 2,530,684

The assumptions used in the Black-Scholes option-pricing model for stock options granted to employees and to directors in respect of board services during the years ended December 31, 2023 and 2022 is as follows:

The assumptions used in the Black-Scholes option-pricing model for stock options granted to employees and to directors in respect of their service on the Company's board of directors during the years ended December 31, 2024 and 2023 is as follows:

Expected life in years 6.0 6.0

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Dividend yield 0.0 % 0.0 %

Weighted-average fair value of options granted $ 1.13 $ 1.30

LEASED PROPERTIES

Clean Room Space

On July 24, 2024, the Company entered into a scope of work (the "SOW") with an unrelated third party for a controlled clean room space in Burlington, Massachusetts.

The SOW became effective upon the execution of an associated License and Services Agreement, which governs the SOW.

The term of the SOW is 22 months and commenced on March 1, 2025.

Upon execution of the SOW, the Company made a payment of approximately $ 459,000 .

Fixed payments will be due at the beginning of each calendar quarter and variable amounts related to support services will be due monthly based on services provided during the preceding month.

The Company's total

obligation in respect of the fixed payments due under the SOW is approximately $ 3.5 million.

The SOW may be renewed each year and if renewed, the fixed payment amount may increase yearly by up to 5 %.

General Office Space

The Company's lease for its corporate headquarters ( 3,169 square feet of office space) commenced on July 1, 2018.

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.

In February 2022, the Company entered into an amendment to extend the term of the lease through August 31, 2024.

On March 8, 2024, the Company entered into another amendment to extend the term of the lease for three years such that the term now expires on October 31, 2027, which resulted in additional operating lease liabilities and ROU assets of approximately $ 0.4 million in March 2024.

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.

In February 2022, the Company entered into an amendment to extend the term of the lease for three years to December 31, 2025, subject to the landlord's right to terminate the lease on December 31, 2023.

The extension of the lease in February 2022 resulted in an increase in operating lease liabilities and ROU assets of approximately $ 1.0 million.

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 $ 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.

The lease commenced on November 1, 2023 for a term of three years , expiring on December 31, 2026, and resulted in an increase in operating lease liabilities and ROU assets of approximately $ 0.4 million.

Under the terms of each lease, the lessee pays base annual rent (subject to an annual fixed percentage increase), plus property taxes, and other normal and necessary expenses, such as utilities, repairs, and maintenance.

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Total operating lease costs were approximately $ 0.8 million and $ 0.6 million for the years ended December 31, 2024 and 2023, 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 $ 0.6 million and $ 0.4 million for the years ended December 31, 2024 and 2023, respectively, and these amounts are included in operating activities in the consolidated statements of cash flows.

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Total operating lease liabilities $ 1,303,000

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"):

ROYALTY INTEREST FINANCING

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

The Company received $ 5.0 million from UiE when the parties entered into the Royalty Interest Agreement (the "Initial Investment"), and between January 1, 2024 and December 31, 2026, the Company may, in its sole discretion, but subject to XOMA's prior written consent (see Note 13, Royalty Purchase Agreements),

elect to receive three additional payments (each a "Supplemental Investment") from UiE of up to an aggregate of $ 7.0 million, for a total of up to $ 12.0 million.

Under the Royalty Interest Agreement, the Company agreed to make the following payments to UiE, until such time when UiE 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.

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

In addition, if UiE 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 UiE quarterly payments evenly divided over a two-year term, such that UiE will have obtained the IRR, taking into account all other payments received by UiE from the Company under the Royalty Interest Agreement.

UiE’s right to receive payments will terminate when UiE has received payments in an amount equal to the Hard Cap.

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

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 %.

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

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

At execution of the Royalty Interest 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.

The Company will periodically assess the estimated amounts due and payable to UiE 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 UiE, 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;

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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;

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.

In connection with entering into the Royalty Interest Agreement, the Company issued to UiE a warrant (the “Initial Royalty Warrant”) to purchase up to 422,804 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 84,561 shares of common stock, for an aggregate of warrants to purchase up to 591,927 shares of common stock (collectively the “Additional Royalty Warrants,” and together with the Initial Royalty Warrant, the “Royalty Interest Agreement Warrants”).

The Royalty Interest 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 $ 4.10 per share, subject to customary anti-dilution adjustments.

The Royalty Interest 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 Interest Agreement Warrants, then in lieu of paying the exercise price in cash, the holders may elect to exercise on a cashless basis.

The Royalty Interest 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 9) and was recorded as a debt discount against the Initial Investment.

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Royalty payments ( 2,189 )

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

Non-cash interest expense and interest payable associated with the sale of future royalties 862,626

Liability related to the sale of future royalties $ 4,749,824

ROYALTY PURCHASE AGREEMENTS

On April 29, 2024, the Company entered into a traditional royalty purchase agreement (the "XACIATO RPA"), and a synthetic royalty purchase agreement, (the "Synthetic RPA and together with the XACIATO RPA, the “Royalty Purchase Agreements”) with XOMA pursuant to which XOMA paid $ 22.0 million to the Company.

In addition, if XOMA receives total payments under the Royalty Purchase Agreements (as described below) equal to an amount that exceeds $ 88.0 million, XOMA will pay $ 11.0 million to the Company for each successive $ 22.0 million XOMA receives under the Royalty Purchase Agreements (such $ 11.0 million payments to the Company, the “Contingent Purchase Price Payments”).

Under the Royalty Purchase Agreements, the Company sold, assigned, transferred and conveyed its right, title and interest in and to the following to XOMA:

(a) 100 % of the royalties and potential milestone payments the Company would otherwise have the right to receive from and after April 1, 2024 under the Company's exclusive license agreement with Organon, based on net sales of XACIATO, net of (i) all royalty and milestone payments due and payable and actually paid by or on behalf of the Company under its exclusive license agreement with third-party licensors TriLogic and MilanaPharm, and (ii) all payments due and payable and actually paid by or on behalf of the Company under the Royalty Interest Agreement between the Company and UiE (such net amount, the “Purchased Receivables”);

(b) 25 % of the potential future $ 20.0 million payment that the Company would otherwise have the right to receive under the Company's license agreement with Bayer, if Bayer, in its sole discretion, elects to make the license granted thereunder effective following completion of the pivotal clinical trial of Ovaprene;

(c) a synthetic royalty of 4.0 % of the Company's, its affiliates’ and its sublicensees’ future net sales of the Company's investigational product Ovaprene, and 2.0 % of the Company's, its affiliates’ and its sublicensees’ future net sales of the Company's investigational product Sildenafil Cream, 3.6 %;

provided, however , that, if XOMA receives total payments under the Royalty Purchase Agreements, net of any Contingent Purchase Price Payments made to the Company, equal to an amount that exceeds $ 110.0 million, the foregoing percentages will be reduced to 2.5 % and 1.25 %, respectively (such amounts described in the foregoing clauses (b) and (c), collectively, the “Revenue Participation Right”).

Pursuant to the XACIATO RPA, XOMA, at its sole cost and discretion, may repay in full and retire all of the Company's payment obligations to UiE under the Royalty Interest Agreement.

If XOMA does so, no further amounts in respect of the Royalty Interest Agreement will be deducted from the net royalties and net milestone payments that XOMA is entitled to receive under the XACIATO RPA.

As of April 29, 2024, the Company cannot elect to receive any additional funding from UiE under the Royalty Interest Agreement without XOMA’s prior written consent.

In connection with the synthetic royalty purchase agreement, the Company granted to XOMA a security interest in certain product assets related to Ovaprene and Sildenafil Cream.

The $ 22.0 million the Company received from XOMA, less transaction costs of approximately $ 1.6 million, was allocated to the XACIATO RPA and recorded as other income on the Company's consolidated statement of operations and comprehensive loss in the second quarter of 2024.

See Note 2, Basis of Presentation and Summary of Significant Accounting Policies, for additional information.

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.

In each of July 2024 and 2023, the Company obtained financing for certain director and officer and other insurance premiums.

The total premiums, taxes and fees financed each year 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 unconditionally promised to pay the lender the amount financed plus interest and other charges permitted under the agreements and the Company assigned to the lender a first priority lien on and a security interest in the financed insurance policies.

With respect to the financing obtained in July 2024, the Company will make monthly installment payments through April 20, 2025.

With respect to the financing obtained in July 2023, the Company made monthly installment payments 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.

As of December 31, 2024, the Company's remaining obligation for the financing obtained in July 2024 was approximately $ 0.2 million.

As of December 31, 2023, the Company's remaining obligation for the financing obtained in July 2023 was approximately $ 0.3 million.

The Company had no remaining obligations for the financing obtained in July 2023 as of December 31, 2024.

CRADA with NICHD for the Pivotal Phase 3 Study of Ovaprene

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Department of Health and Human Services, as represented by the Eunice Kennedy Shriver National Institute of Child Health and Human Development, or NICHD, for the conduct of a multi-center, non-comparative, pivotal Phase 3 clinical study of Ovaprene, or the Ovaprene Phase 3.

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 Ovaprene Phase 3 is being conducted within NICHD’s Contraceptive Clinical Trials 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 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 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.

The Company made aggregate payments of $ 5.5 million to NICHD, $ 0.5 million of which was paid in July 2024 and $ 5.0 million of which was paid in prior years.

The Company had no remaining obligation under the CRADA at December 31, 2024.

Legal Proceedings

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Employment Agreements

Certain executive officers of the Company are entitled to payments if their employment is terminated by the Company without cause, if they resign for good reason, if their employment agreements are not renewed, or if their employment is terminated by the Company without cause or if they resign for good reason, in each case, within three months prior to or 12 months following a change in control of the Company.

Upon termination by the Company without cause, if they resign for good reason, if their employment agreements are not renewed, such executives are entitled to receive a payment of an amount equal to either nine or twelve months of base salary and to receive continuing health benefits coverage for periods equal to either nine or twelve months following the termination of employment or until such officer is covered under a separate plan from another employer.

If their employment is terminated by the Company without cause or if they resign for good reason, in each case, within three months prior to or 12 months following a change in control of the Company, such executives will be entitled to receive a payment of an amount equal to either twelve or eighteen months of base salary and target bonus and to receive continuing health benefits coverage for periods ranging between twelve and eighteen months following the termination of employment.

In addition, upon a change in control of the Company, each officer’s outstanding unvested options will fully vest and accelerate subject to the conditions outlined in such officer’s employment agreement.

Certain employees of the Company are entitled to payments if their employment is terminated by the Company without cause, if they resign for good reason, if their employment agreements are not renewed, or if their employment is terminated by the Company without cause or if they resign for good reason, in each case, within three months prior to or 12 months following a change in control of the Company.

Upon termination by the Company without cause, if they resign for good reason, if their employment agreements are not renewed, such executives are entitled to receive a payment of an amount equal to either six or twelve months of base salary and to receive continuing health benefits coverage for periods equal to either six or twelve months following the termination of employment or until such officer is covered under a separate plan from another employer.

If their employment is terminated by the Company without cause or if they resign for good reason, in each case, within three months prior to or 12 months following a change in control of the Company, such executives will be entitled to receive a payment of an amount equal to either nine or eighteen months of base salary and target bonus and to receive continuing health benefits coverage for periods ranging between nine and eighteen months following the termination of employment.

upon a change in control of the Company, each officer’s outstanding unvested options will fully vest and accelerate subject to the conditions outlined in such officer’s employment agreement.

Related-Party Agreement

On January 26, 2024, the Company entered into a consulting agreement with its former Chief Financial Officer 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 paid its former Chief Financial Officer $ 31,667 per month and reimbursed her up to $ 500 per month for her health insurance premiums.

Employee Benefit – 401(k) Plan

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The 401(k) Plan allows each participant to contribute a portion of their base wages up to an amount not to exceed an annual statutory maximum.

The 401(k) Plan includes a Safe Harbor Plan that provides a Company match up to 4 % of salary.

The Company made matching contributions of approximately $ 213,000 and $ 200,000 during the years ended December 31, 2023 and 2022, respectively.

NICHD Non-Dilutive Grant Funding

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.

The 401(k) Plan includes a Safe Harbor Plan that provides a Company match up to 4 % of each participant's cash compensation.

The Company made matching contributions of approximately $ 0.2 million and $ 0.2 million during the years ended December 31, 2024 and 2023, respectively.

October 2024 Grant Award

In October 2024, the Company entered into a subaward agreement with National Collegiate Inventors and Innovators Alliance, Inc.

d/b/a VentureWell (the "CMF") under which the Company is entitled to receive funding of up to $ 10.0 million in milestone-based payments subject to the Company's achievement over an approximately 24-month period of specified research activities and objectives relating to the advancement of the Company's DARE-HPV development program, including commencement of a Phase 2 clinical study to evaluate the safety and preliminary efficacy of DARE-HPV for the clearance of high-risk HPV infection in women.

The subaward agreement was the result of the Company's selection by an agency within the U.S.

Department of Health and Human Services.

The CMF is a consortium management firm that received funding from the federal agency for the subaward agreement.

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

The Company is required to apply the funds it receives solely toward direct costs for the funded project, other than approximately 22 % of such funds, which it may apply toward general overhead and administrative expenses that support the entire operations of the Company.

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 Company must track expenses incurred under the award and submit a detailed accounting of such expenses.

Through December 31, 2024, the Company received one payment of $ 1.0 million under this award.

The Company recorded credits to research and development expense of approximately $ 0.4 million for costs related to this award for the year ended December 31, 2024.

As of December 31, 2024, the Company has recorded approximately $ 0.6 million of deferred grant funding liability in the Company's consolidated balance sheets.

NICHD and NIH Non-Dilutive Grant Funding

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

The NICHD and NIH issue 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.

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

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.

In December 2024, the Company received a notice of award from the National Institute of Allergy and Infectious Diseases (NIAID), a component of the NIH, that the Company was awarded a $ 1.0 million grant in support of non-clinical activities for the development of DARE-HPV for an initial project year of December 2024 through November 2025, and that an additional $ 1.0 million was recommended for the subsequent project year, subject to the availability of funds and satisfactory progress of the project, as determined by NIAID.

The Company recorded no credits to research and development expense for costs related to the NIH award for the year ended December 31, 2024 and recorded no receivable at December 31, 2024.

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

The award of approximately $ 0.3 million was used for what was referred to as the "Phase I" segment of the project outlined in the Company's grant application, which ended in July 2023.

The Company received aggregate reimbursements under the award of approximately $ 0.2 million 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.

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.

The Company recorded credits to research and development expense for costs related to the NICHD award of approximately $ 0.7 million for the year ended December 31, 2024.

The Company recorded a receivable of approximately $ 0.1 million at December 31, 2024 for expenses incurred through such date that it believes are eligible for reimbursement under the grant.

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

The award in the amount of approximately $ 0.3 million was used to explore device insertion and removal in nonclinical studies.

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

The Company received aggregate reimbursements under the NICHD award of approximately $ 0.3 million during the grant period, which ended in June 2023.

No further funds are available under this award.

DARE-204 and DARE-214

In May 2022, the Company received a notice of award of a grant from NICHD of approximately $ 249,000 to support end-user research to better understand women's preferences for a long-acting injectable contraceptive method.

In May 2022, the Company received a notice of award from NICHD of approximately $ 0.2 million to support end-user research to better understand women's preferences for a long-acting injectable contraceptive method.

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.

The Company recorded credits to research and development expense of approximately $ 0.1 million for costs related to the NICHD award for the year ended December 31, 2023.

The Company received aggregate reimbursements under the NICHD award of approximately $ 0.2 million 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.

In July 2023, the Company received a notice of award from NICHD of approximately $ 0.4 million 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.

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.

The Company recorded credits to research and development expense of approximately $ 0.3 million and $ 0.1 million for costs related to the NICHD award for the year ended December 31, 2024 and 2023, respectively.

The Company received aggregate reimbursements under the NICHD award of approximately $ 0.4 million during the grant period, which ended in July 2024.

No further funds are available under this award.

Other Non-Dilutive Grant Funding

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.

As described below, the Company has received substantial funding under grant agreements it entered into with the Gates Foundation, or the Foundation.

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 5 %- 15 % of such funds, which it may apply toward general overhead and administrative expenses that support the entire operations of

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

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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.

2024 Contraceptive Product Candidate Grant Agreement

In November 2024, the Company entered into a grant agreement with the Foundation under which the Company was awarded a new grant of up to approximately $ 10.7 million to support (i) expansion of the number of study sites in the ongoing Phase 3 clinical trial of Ovaprene, and (ii) activities that will aid in the identification and development of a novel non-hormonal intravaginal contraceptive candidate, suitable for and acceptable to women in low- and middle-income country settings who need or would prefer to use such a product to avoid an unplanned pregnancy.

An initial payment of approximately $ 5.4 million was made to the Company in November 2024.

Additional payments are contingent upon the Company's achievement of specified development and reporting milestones during the term of the grant agreement, which extends through October 2026.

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

The Company recorded credits to research and development expense of approximately $ 0.2 million for costs related to this award for the year ended December 31, 2024.

As of December 31, 2024, the Company has recorded approximately $ 5.2 million of deferred grant funding liability related to this award in the Company's consolidated balance sheets.

2024 Biotherapeutic Product Grant Agreement

In January 2024, the Company entered into an agreement with the Foundation under which the Company was awarded $ 750,000 to fund activities related to bacteria-based live biotherapeutic product development.

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

The Company recorded credits to research and development expense of approximately $ 0.7 million for costs related to this award for the year ended December 31, 2024.

As of December 31, 2024, the Company has recorded approximately $ 39,000 of deferred grant funding liability related to this award in the Company's consolidated balance sheets.

2021 DARE-LARC1 Grant Agreement

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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.

As of December 31, 2024, the Company has received a cumulative total of approximately $ 31.8 million in non-dilutive funding under the agreement, including $ 4.5 million during 2023 and $ 3.5 million during 2024.

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.

The Company recorded credits to research and development expense of approximately $ 6.2 million and $ 8.7 million for costs related to this award for the year ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company recorded approximately $ 10.8 million of deferred grant funding liability related to this award 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 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.

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

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.

The Company recorded credits to research and development expense of approximately $ 0.2 million and $ 0.3 million for costs related to this award for the year ended December 31, 2024 and 2023, respectively.

As of December 31, 2024, the Company had no deferred grant funding liability related to this award in the Company's consolidated balance sheets.

SEGMENT INFORMATION

Operating segments are defined as components of an enterprise about which separate discrete information is available for evaluation by the chief operating decision maker (“CODM”), in deciding how to allocate resources and in assessing performance.

The Company and the Company’s chief operating decision maker view the Company’s operations and manage its business in one operating segment, which is the business of identifying, developing and commercializing pharmaceutical products that target unmet needs in women's health.

The CODM, who is the chief executive officer (“CEO”), manages and allocates resources to the operations of the Company on a consolidated basis.

The Company’s measure of segment profit or loss is net loss.

Managing and allocating resources on a consolidated basis enables the CEO to assess the overall level of resources available and how to best deploy these resources across functions and research and development projects that are in line with the Company’s long-term company-wide strategic goals.

Consistent with this decision-making process, the CEO uses consolidated financial information for purposes of evaluating performance, forecasting future period financial results, allocating resources and setting incentive targets.

Operating expenses are used to monitor budget versus actual results.

The CODM does not review assets in evaluating the results of the Company, and therefore, such information is not presented.

In addition, substantially all of the Company's revenue was generated in the United States and substantially all of the Company's long-lived assets reside in the United States.

The following table summarizes the segment's financial information including the Company’s significant segment expenses:

Year Ended December 31,

License fee revenue

$ — $ 1,000,000

Milestone revenue

Royalty revenue

Total revenue

9,784 2,807,885

Segment operating expenses:

Research and development:

Direct program costs:

8,518,495 3,762,611

Sildenafil Cream, 3.6%

2,361,052 7,746,264

Other advanced clinical stage programs

1,321,888 3,498,955

Phase 1 and Phase 1-ready clinical stage programs

761,721 2,912,857

Preclinical stage programs

4,233,762 7,432,439

Other development programs

27,542 189,706

Contra-R&D expenses

( 7,685,533 ) ( 8,965,347 )

Total research and development direct program costs

9,538,927 16,577,485

Indirect costs:

Personnel-related (including stock compensation)

5,611,057 5,566,016

Other indirect costs

254,772 384,289

Contra R&D expenses

( 1,199,548 ) ( 989,716 )

Total research and development indirect costs

4,666,281 4,960,589

General and administrative

9,156,061 12,109,691

Other operating expenses

100,000 100,000

Total segment operating expenses

23,461,269 33,747,765

Loss from operations

( 23,451,485 ) ( 30,939,880 )

Sale of royalty and milestone rights, net

Interest expense

857,364 35,109

Interest income

( 539,743 ) ( 813,278 )

Other income (expense), net

663,869 ( 320 )

$ ( 4,053,599 ) $ ( 30,161,391 )

SUBSEQUENT EVENTS

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.

Noncompliance with Nasdaq’s Minimum Market Value of Listed Securities Requirement

On August 12, 2024, the Company received a letter from The Nasdaq Stock Market LLC (“Nasdaq”) notifying it that it did not meet the requirement in Nasdaq Listing Rule 5550(b)(2) for continued listing on The Nasdaq Capital Market.

Nasdaq Listing Rule 5550(b)(2) requires a company listed on Nasdaq to maintain a minimum market value of listed securities of $35.0 million (the “Minimum MVLS Rule”).

The Company was provided an initial period of 180 calendar days, or until February 10, 2025, to regain compliance with the Minimum MVLS Rule.

On February 13 , 2025, Nasdaq’s Listing Qualifications Department notified the Company that because it did not regain compliance with the Minimum MVLS Rule by February 10, 2025, its common stock is subject to delisting from Nasdaq unless the Company timely requests a hearing before the Nasdaq Hearing Panel (the “Panel”).

On February 20, 2025, the Company requested a hearing before the Panel, which request stayed the delisting of its common stock pending the decision of the Panel following the hearing and the expiration of any extension period that may be granted by the Panel.

The hearing occurred on March 25, 2025.

Pursuant to published Nasdaq guidance, the Panel typically issues it decision within 30 days of the hearing.

There can be no assurance that the Panel will grant the Company any extension period within which to regain compliance with the Minimum MVLS Rule, or if any extension period is granted, that the Company will regain compliance with the Minimum MVLS Rule within such extension period, or that the Company will be successful in otherwise maintaining the listing of our common stock on The Nasdaq Capital Market.

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