EVOFEM BIOSCIENC(US:EVFM)2025-05-15 12:10PART I. FINANCIAL INFORMATION Item 1. Financial Statements (Unaudited) The unaudited condensed consolidated financial statements for Q1 2025 show a significant decrease in total assets to $12.9 million, a net income of $0.96 million, and substantial doubt about going concern Condensed Consolidated Balance Sheets As of March 31, 2025, total assets decreased to $12.9 million from $23.8 million, primarily due to a reduction in trade accounts receivable Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | March 31, 2025 | December 31, 2024 | | :--- | :--- | :--- | | Assets | | | | Cash and cash equivalents | $221 | $0 | | Trade accounts receivable, net | $1,149 | $9,832 | | Total current assets | $5,873 | $13,609 | | Intangible asset, net | $6,487 | $9,597 | | Total assets | $12,877 | $23,789 | | Liabilities & Stockholders' Deficit | | | | Accounts payable | $11,224 | $16,172 | | Notes - carried at fair value | $14,327 | $14,974 | | Convertible notes, net - Adjuvant | $31,346 | $30,769 | | Total current liabilities | $70,854 | $80,448 | | Total liabilities | $77,679 | $90,264 | | Total stockholders' deficit | ($69,587) | ($71,257) | Condensed Consolidated Statements of Operations Net product sales decreased by 77% to $0.85 million, while a $5.6 million gain from payables settlement led to a net income of $0.95 million Condensed Consolidated Statements of Operations (in thousands) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Product sales, net | $845 | $3,603 | | Cost of goods sold | $365 | $684 | | Research and development, net | ($5,035) | $594 | | Selling and marketing | $2,600 | $2,345 | | General and administrative | $2,365 | $2,824 | | Income (loss) from operations | $327 | ($2,844) | | Net income (loss) | $956 | ($4,809) | | Net income (loss) attributable to common stockholders | $953 | ($4,856) | | Basic EPS | $0.01 | ($0.16) | | Diluted EPS | $0.00 | ($0.16) | Condensed Consolidated Statements of Cash Flows Net cash provided by operating activities increased to $0.56 million, driven by a decrease in receivables and a gain on payables settlements Summary of Cash Flows (in thousands) | Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by operating activities | $560 | $123 | | Net cash used in investing activities | ($57) | ($14) | | Net cash used in financing activities | ($135) | $0 | | Net change in cash, cash equivalents and restricted cash | $368 | $109 | | Cash, cash equivalents and restricted cash, end of period | $1,109 | $689 | Notes to Unaudited Condensed Consolidated Financial Statements The notes detail the company's business, critical going concern doubt, complex debt structures, and subsequent delisting from OTCQB - The company's financial statements are prepared on a going concern basis, but management has concluded that circumstances raise substantial doubt about the company's ability to continue as a going concern. As of March 31, 2025, the company had a working capital deficit of $65.0 million and an accumulated deficit of $896.7 million394045 - On September 27, 2024, Future Pak, LLC, the holder of the Baker Notes, issued a Notice of Event of Default, claiming the company breached covenants and accelerated repayment. The company strongly disagrees with the claim and intends to vigorously contest it102106155 - The company settled a trademark dispute with TherapeuticsMD, which requires changing the name of PHEXXI. The company failed to meet the July 2024 deadline and has accrued $0.9 million for a probable settlement153 - The company's common stock was delisted from the OTCQB and began trading on the OTCPK on April 23, 2025, for failing to maintain a minimum bid price of $0.01 per share42181 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses the 77% sales decrease, a $5.6 million gain from payables settlement, and reiterates substantial doubt about going concern due to a $65.0 million working capital deficit - Management confirms that cash and cash equivalents as of March 31, 2025, are insufficient to fund operations for the next 12 months, raising substantial doubt about the company's ability to continue as a going concern246250 - The company is pursuing a merger with Aditxt, Inc., which has been amended multiple times. A condition of closing is the full repayment of the Baker Notes. Aditxt has provided several rounds of funding through preferred share purchases and convertible notes197208 - Key growth drivers for PHEXXI in 2025 include targeting women who use GLP-1 medications for weight loss (which can reduce oral contraceptive efficacy) and expanding pharmacy partnerships189212 Results of Operations Net product sales declined by 77% due to wholesaler purchasing, while R&D expenses showed a net benefit from a $5.6 million gain on settlements Comparison of Results for the Three Months Ended March 31 (in thousands) | Item | 2025 | 2024 | $ Change | % Change | | :--- | :--- | :--- | :--- | :--- | | Product sales, net | $845 | $3,603 | ($2,758) | (77)% | | Cost of goods sold | $365 | $684 | ($319) | (47)% | | Research and development | ($5,035) | $594 | ($5,629) | (948)% | | Selling and marketing | $2,600 | $2,345 | $255 | 11% | | General and administrative | $2,365 | $2,824 | ($459) | (16)% | - The decrease in net product sales was primarily due to significant wholesaler purchases of PHEXXI in December 2024 ahead of a January 2025 price increase, which reduced Q1 2025 sales volume239 - The significant negative R&D expense in Q1 2025 was the result of the company negotiating and settling a portion of its trade payables, leading to a $5.6 million gain recorded as a reduction in R&D expenses232241 Liquidity and Capital Resources The company faces substantial doubt about going concern with a $65.0 million working capital deficit and insufficient cash for the next 12 months - The company had a working capital deficit of $65.0 million and an accumulated deficit of $896.7 million as of March 31, 2025246 - Management's plans to meet cash flow needs include generating product revenue, restructuring payables, and obtaining additional funding through the Aditxt merger, non-dilutive financing, or other partnerships43249 - If additional funding is not secured, the company may be forced to make further spending reductions, liquidate assets, suspend or curtail planned operations, or cease operations entirely250 Item 3. Quantitative and Qualitative Disclosures About Market Risk This section is not applicable to the company for this reporting period - The company states that Quantitative and Qualitative Disclosures about Market Risk are not applicable263 Item 4. Controls and Procedures Management concluded that disclosure controls and procedures were not effective as of March 31, 2025, due to identified material weaknesses - As a result of material weaknesses identified in the 2024 Annual Report, the CEO and CFO have concluded that disclosure controls and procedures are not effective as of March 31, 2025265 - Management is continuing to implement its remediation plan for the identified material weaknesses, but cannot provide assurance as to when the remediation will be complete267 PART II. OTHER INFORMATION Item 1. Legal Proceedings The company refers to Note 7 for details on legal proceedings, including a trademark dispute and a contested default notice from a senior debt holder - For details on legal proceedings, the report directs readers to Note 7 - Commitments and Contingencies271 Item 1A. Risk Factors The company states there have been no material changes to the risk factors disclosed in its 2024 Form 10-K - There have been no material changes to the risk factors previously disclosed in the company's 2024 Form 10-K272 Item 2. Unregistered Sales of Equity Securities and Use of Proceeds The company reported no unregistered sales of equity securities during the period - None273 Item 3. Defaults Upon Senior Securities The company reports no defaults on senior securities as of the filing date, despite other notes detailing a contested default notice - The company reports no defaults on senior securities as of the filing date. However, Note 4 and Note 7 detail a Notice of Default from Future Pak, LLC, which the company is actively disputing274102155 Item 5. Other Information No directors or officers entered into, modified, or terminated a Rule 10b5-1 trading arrangement during the first quarter of 2025 - No directors or officers entered into, modified, or terminated a Rule 10b5-1 trading plan during the quarter276 Item 6. Exhibits This section provides an index of all exhibits filed with the Quarterly Report on Form 10-Q, including merger agreement amendments and certifications - The report includes an index listing all exhibits filed, such as amendments to the merger agreement and officer certifications277278