Daré Bioscience(DARE) - 2025 Q1 - Quarterly Report

PART I. FINANCIAL INFORMATION Condensed Consolidated Financial Statements (Unaudited) This section presents Daré Bioscience's unaudited condensed consolidated financial statements, including balance sheets, statements of operations, stockholders' deficit, and cash flows, highlighting a going concern uncertainty, XACIATO royalty sale, and new 503B compounding strategy Condensed Consolidated Balance Sheet Data (Unaudited) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $10,329,967 | $15,698,174 | | Total current assets | $11,822,549 | $18,447,863 | | Total assets | $18,618,941 | $22,101,131 | | Total current liabilities | $21,188,074 | $21,609,013 | | Total liabilities | $28,182,642 | $28,113,220 | | Total stockholders' deficit | $(9,563,701) | $(6,012,089) | Condensed Consolidated Statements of Operations (Unaudited) | Account | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Total revenue | $25,427 | $9,302 | | Total operating expenses | $4,606,545 | $6,031,775 | | Loss from operations | $(4,581,118) | $(6,022,473) | | Net loss | $(4,378,307) | $(6,755,356) | | Loss per common share - basic and diluted | $(0.50) | $(0.81) | Condensed Consolidated Statements of Cash Flows (Unaudited) | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,470,543) | $(6,812,962) | | Net cash used in investing activities | $(157,331) | $(7,296) | | Net cash provided by financing activities | $246,577 | $14,032 | | Net change in cash, cash equivalents and restricted cash | $(5,368,207) | $(6,845,453) | - The company's financial statements were prepared on a going concern basis, but a history of losses, negative cash flows, and insufficient cash to fund operations for the next 12 months raise substantial doubt about its ability to continue as a going concern. As of March 31, 2025, the company had an accumulated deficit of approximately $179.7 million and a working capital deficit of $9.4 million[33][34][35] - In March 2025, the company expanded its business strategy to include Section 503B compounding as a dual-path approach to bring certain proprietary formulations to market more quickly while continuing to pursue FDA approval for its product candidates[28] - In April 2024, the company sold its rights to all royalty and potential milestone payments from net sales of XACIATO to XOMA (US) LLC. After XOMA receives a specified return, the company will share equally in subsequent payments from Organon[30][53] Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the company's women's health strategy, including a new 503B compounding approach, Q1 2025 financial results showing decreased net loss and operating expenses, and the critical need for additional capital due to going concern doubts and Nasdaq compliance efforts Business Overview and Recent Events The biopharmaceutical company focuses on women's health with a pipeline including Ovaprene and Sildenafil Cream, recently expanded its strategy to include 503B compounding, and faces challenges with Ovaprene study recruitment and Nasdaq listing compliance - The company expanded its business strategy in March 2025 to include Section 503B compounding, aiming to bring proprietary formulations like Sildenafil Cream and DARE-HRT1 to market faster while continuing to pursue FDA approval[148][156][157] - Enrollment in the pivotal Phase 3 study of Ovaprene is ongoing but has been paused at NICHD-affiliated sites due to administrative issues, though recruitment continues at five company-funded sites[153] - The company is preparing for a Phase 3 study of Sildenafil Cream for female sexual arousal disorder (FSAD) but does not plan to conduct the study until additional capital is secured[154] - The company received an extension from Nasdaq until August 12, 2025, to regain compliance with listing requirements, specifically the Stockholders' Equity Rule or the Minimum Market Value of Listed Securities Rule[161] Results of Operations For Q1 2025, the company reported a net loss of $4.4 million, a 35% decrease from Q1 2024, driven by a 24% reduction in total operating expenses, primarily from lower R&D and G&A costs Comparison of Operations for Three Months Ended March 31 | Item | 2025 | 2024 | Change ($) | Change (%) | | :--- | :--- | :--- | :--- | :--- | | Total revenue | $25,427 | $9,302 | $16,125 | 173% | | General and administrative | $2,309,164 | $2,670,581 | $(361,417) | (14)% | | Research and development | $2,297,381 | $3,353,520 | $(1,056,139) | (31)% | | Loss from operations | $(4,581,118) | $(6,022,473) | $1,441,355 | (24)% | | Net loss | $(4,378,307) | $(6,755,356) | $2,377,049 | (35)% | - General and administrative expenses decreased by approximately $0.4 million, mainly due to lower stock-based compensation, professional services, and personnel costs[181] - Research and development expenses decreased by approximately $1.1 million, primarily due to reduced manufacturing costs for Ovaprene and lower development activity costs for Sildenafil Cream and preclinical programs[185] Liquidity and Capital Resources As of March 31, 2025, the company had $10.3 million cash and a $9.4 million working capital deficit, raising substantial doubt about its going concern ability, necessitating additional capital, which it is actively pursuing through various options - The company has a history of losses and negative cash flows, leading to substantial doubt about its ability to continue as a going concern. Additional capital is required to fund operations into Q3 2025[188][189] - The company is pursuing capital through various means, including an equity line agreement with Lincoln Park, under which it sold 150,000 shares for net proceeds of approximately $0.4 million in Q1 2025[190][196] - If additional capital cannot be raised, the company may need to delay, scale back, or eliminate development programs, reduce expenses, or cease operations[191] Summary of Cash Flows | Cash Flow Activity | Three months ended March 31, 2025 | Three months ended March 31, 2024 | | :--- | :--- | :--- | | Net cash used in operating activities | $(5,470,543) | $(6,812,962) | | Net cash used in investing activities | $(157,331) | $(7,296) | | Net cash provided by financing activities | $246,577 | $14,032 | Quantitative and Qualitative Disclosures About Market Risk As a smaller reporting company, Daré Bioscience is not required to provide the information for this item - The company is a smaller reporting company and is not required to provide quantitative and qualitative disclosures about market risk[218] Controls and Procedures Management concluded the company's disclosure controls and procedures were effective as of March 31, 2025, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the principal executive and financial officer concluded that the company's disclosure controls and procedures were effective as of March 31, 2025[220] - No change in internal control over financial reporting occurred during the fiscal quarter that has materially affected, or is reasonably likely to materially affect, internal controls[221] PART II. OTHER INFORMATION Legal Proceedings As of the filing date, the company is not a party to any material pending legal proceedings, nor is management aware of any contemplated governmental proceedings - There are no material pending legal proceedings to which the company is a party[223] Risk Factors This section highlights the significant risk of the company's common stock being delisted from Nasdaq due to non-compliance with listing requirements, which could severely impair capital raising and negatively affect stock price - The company is not in compliance with Nasdaq's continued listing requirement for minimum market value of listed securities ($35.0 million)[225] - Nasdaq has granted an extension until August 12, 2025, for the company to regain compliance with either the market value rule or the stockholders' equity rule (at least $2.5 million)[228] - Failure to regain compliance could lead to the delisting of the company's common stock, which would substantially impair its ability to raise capital, harm investor confidence, and adversely affect the stock's market price and trading efficiency[232] Unregistered Sales of Equity Securities and Use of Proceeds This item is marked as "None" Defaults Upon Senior Securities The company reports no defaults upon senior securities - None[233] Mine Safety Disclosures This item is not applicable to the company - Not applicable[234] Other Information During the first quarter of 2025, none of the company's directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements - From January 1, 2025, to March 31, 2025, no directors or officers adopted or terminated any Rule 10b5-1 or non-Rule 10b5-1 trading arrangements[235] Exhibits This section lists the exhibits filed with the Form 10-Q, which include the Amended and Restated Non-Employee Director Compensation Policy, certifications by the Principal Executive Officer and Principal Financial Officer, and XBRL data files