Financial Performance - As of June 30, 2024, total assets decreased to $8.551 billion from $10.554 billion as of December 31, 2023, reflecting a decline of approximately 18.9%[19] - Current liabilities increased to $73.178 billion from $72.463 billion, representing a rise of about 1%[19] - The accumulated deficit as of June 30, 2024, was $892.251 million, up from $888.699 million at the end of 2023, indicating a worsening of approximately 0.6%[19] - Product sales for Q2 2024 reached $4,160 million, a significant increase from $2,458 million in Q2 2023, representing a growth of 69.2% year-over-year[21] - Total operating expenses for Q2 2024 were $5,549 million, down from $9,794 million in Q2 2023, a reduction of 43.0%[21] - The net income for Q2 2024 was $1,351 million, compared to a net loss of $8,558 million in Q2 2023, marking a turnaround of $9,909 million[24] - The company experienced a comprehensive income of $1,095 million in Q2 2024, compared to a loss of $190 million in Q2 2023[24] - The net income attributable to common stockholders for Q2 2024 was $1,304 million, a significant recovery from a loss of $8,558 million in Q2 2023[21] - The basic net income per share attributable to common stockholders was $0.02 in Q2 2024, compared to a loss of $5.43 in Q2 2023[21] - For the six months ended June 30, 2024, the net loss was $3.458 million, a significant improvement compared to a net loss of $10.912 million in the same period of 2023[31] Product Development and Market Expansion - Phexxi has shown net sales growth every year since its launch in September 2020, with key growth drivers expected from expanded use among women taking oral birth control pills alongside GLP-1 medications[13] - The company plans to re-launch SOLOSEC in the second half of 2024 after acquiring global rights to the product, which is aimed at treating bacterial vaginosis and trichomoniasis[15] - Phexxi was approved in Nigeria as Femidence™ on October 6, 2022, and is currently under review for approval in Mexico, Ethiopia, and Ghana[14] - The company has licensed commercial rights to Phexxi in the Middle East to Pharma 1 Drug Store, LLC, which plans to file for regulatory approval in the UAE in the second half of 2024[14] - The company aims to improve access to innovative options that impact women's daily lives through its product offerings[15] Operational Challenges and Financial Stability - The company anticipates continuing to incur net losses for the foreseeable future, with liquidity resources as of June 30, 2024, deemed insufficient to meet cash flow needs for the next twelve months[45] - The company has incurred operating losses and negative cash flows from operating activities since inception, raising substantial doubt about its ability to continue as a going concern[46] - As of June 30, 2024, the company had a working capital deficit of $66.0 million and an accumulated deficit of $892.3 million[42] - The company reported a net cash used in operating activities of $1.018 million for the six months ended June 30, 2024, compared to $6.434 million for the same period in 2023[31] - The three largest customers accounted for approximately 75% and 79% of gross product sales for the three and six months ended June 30, 2024, respectively[55] Debt and Financing Activities - The company entered into a merger agreement with Aditxt, Inc., expected to close in late 2024, which may impact future operations and financial stability[35] - The total potentially dilutive securities increased significantly from 191 million in 2023 to approximately 5.67 billion in 2024, primarily due to an increase in purchase rights and convertible debt[60] - The Company entered into eight Securities Purchase Agreements (SPAs) from December 2022 to September 2023, resulting in net proceeds of approximately $10.985 million[115] - The Company entered into the Fourth Amendment to the Baker Bros. Purchase Agreement on September 8, 2023, which allows for quarterly cash payments based on global net product revenue from Phexxi, starting in Q4 2023[94] - The cash payment structure is as follows: 3% on revenue ≤ $5 million, 4% on revenue > $5 million and ≤ $7 million, and 5% on revenue > $7 million[96] Inventory and Asset Management - As of June 30, 2024, total inventories were valued at $1.06 million, down from $1.70 million as of December 31, 2023[123] - The Company recorded a combined estimated reserve on obsolescence and excess inventory of $0.3 million as of both June 30, 2024, and December 31, 2023[123] - Total prepaid and other current assets decreased from $1,195,000 as of December 31, 2023, to $845,000 as of June 30, 2024, representing a decline of approximately 29.3%[124] - Net property and equipment decreased slightly from $1,203,000 as of December 31, 2023, to $1,187,000 as of June 30, 2024, a decrease of about 1.3%[125] Lease and Operating Expenses - For the three months ended June 30, 2024, total operating lease expenses amounted to $46,000, a decrease of 81.4% compared to $250,000 for the same period in 2023[146] - Cash paid for operating lease liabilities was $140,000 for the six months ended June 30, 2024, compared to $1,427,000 for the same period in 2023, indicating a substantial decrease of 90.2%[148] - The weighted average remaining lease term increased to 0.92 years as of June 30, 2024, compared to 0.75 years as of December 31, 2023[146] Shareholder and Stockholder Matters - The Company authorized 95,000 Series F-1 Convertible Preferred Shares with a conversion price of $0.0635 per share, which was later adjusted to $0.0154[162] - The Company recorded stock-based compensation expenses of $219,000 for the three months ended June 30, 2024, compared to $268,000 for the same period in 2023[172] - The Company will file a proxy statement with the U.S. SEC to recommend the adoption of the A&R Merger Agreement[193] - All outstanding stock options will be cancelled without any consideration at the Effective Time of the Merger[194]
EVOFEM BIOSCIENC(EVFM) - 2024 Q2 - Quarterly Report