dare-20210630

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)


☒			QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2021


☐			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to


	DARÉ BIOSCIENCE, INC. (Exact Name of Registrant as Specified in its Charter)
Delaware (State or Other Jurisdiction of Incorporation)	Commission File No. 001-36395	20-4139823 (IRS Employer Identification No.)

3655 Nobel Drive, Suite 260 San Diego, CA (Address of Principal Executive Offices)	(858) 926-7655 (Registrant’s telephone number, including area code)	92122 (Zip Code)

(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DARE	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company, or emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Act). Yes ☐ No x

As of August 9, 2021, 70,521,979 shares of the Registrant’s Common Stock, par value $0.0001, were issued and outstanding.

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q, in particular “Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations,” of Part I. Financial Information, and the information incorporated by reference herein contains forward-looking statements that involve substantial risks and uncertainties. All statements, other than statements of historical facts, contained in this report, including statements regarding our strategy, future operations, future financial position, projected costs, prospects, plans and objectives of management, are forward-looking statements. Forward-looking statements, in some cases, can be identified by terms such as “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,” “design,” “intend,” “expect,” “could,” “plan,” “potential,” “predict,” “seek,” “should,” “would,” “contemplate,” project,” “target,” “tend to,” or the negative version of these words and similar expressions.

Forward-looking statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including those factors described in Part II, Item 1A, "Risk Factors", in this report, and elsewhere in this report. Given these uncertainties, you should not place undue reliance on any forward-looking statement. The following factors are among those that may cause such differences:

•Inability to continue as a going concern;

•Inability to raise additional capital, under favorable terms or at all, including as a result of the effects of the COVID-19 pandemic;

•Inability to successfully attract partners and enter into collaborations relating to the development and/or commercialization of our product candidates on a timely basis or on acceptable terms, or at all;

•A decision by Bayer HealthCare LLC to discontinue its commercial interest in Ovaprene® and/or to terminate our license agreement;

•Inability or an increase in projected costs to timely develop, obtain regulatory approval for and commercialize our product candidates;

•Failure or delay in starting, conducting and completing clinical trials or obtaining United States Food and Drug Administration, or FDA, or foreign regulatory approval for our product candidates in a timely manner, including as a result of matters beyond our control such as the effects related to geopolitical actions, natural disasters, or public health emergencies or pandemics, such as the COVID-19 pandemic;

•A change in the FDA Center assigned primary oversight responsibility for our combination product candidates;

•A change in regulatory requirements for our product candidates, including the development pathway pursuant to Section 505(b)(2) of the Federal Food, Drug, and Cosmetic Act, or the FDA's 505(b)(2) pathway;

•Unsuccessful clinical trial outcomes stemming from clinical trial designs, failure to enroll a sufficient number of patients, higher than anticipated patient dropout rates, failure to meet established clinical endpoints, undesirable side effects and other safety concerns;

•Reaching a conclusion regarding the efficacy or safety of a product candidate following full evaluation of complete clinical study data that is materially different from topline study results we may report;

•Communication from the FDA or another regulatory authority that it does not accept or agree with our assumptions, estimates, calculations, conclusions or analyses of clinical or nonclinical study data regarding a product candidate, or that it interprets or weighs the importance of study data differently than we have in a manner that negatively impacts the candidate's prospects for regulatory approval in a timely manner, or at all;

•Negative publicity concerning the safety and efficacy of our product candidates, or of product candidates being developed by others that share characteristics similar to our candidates;

•Inability to demonstrate sufficient efficacy of our product candidates;

•Failure to select or capitalize on the most scientifically, clinically or commercially promising or profitable indications or therapeutic areas for our product candidates due to limited financial resources;

•Loss of our licensed rights to develop and commercialize a product candidate as a result of the termination of the underlying licensing agreement;

•Monetary obligations and other requirements in connection with our exclusive, in-license agreements covering the patents and related intellectual property related to our product candidates, or our merger or asset purchase agreements relating to the acquisition of our product candidates;

•Developments by our competitors that make our product candidates less competitive or obsolete;

•Dependence on third parties to conduct nonclinical studies and clinical trials of our product candidates;

•Dependence on third parties to supply and manufacture clinical trial materials and, if any of our candidates are approved, commercial product, including components of our products as well as the finished product, in accordance with current good manufacturing practices and in the quantities needed;

•Dependence on third parties to commercialize, or assist us in commercializing, our products, when and if any receive regulatory approval.

•Cyber-attacks, security breaches or similar events compromising our technology systems or the technology systems of third parties on which we rely;

•Interruptions in, or the complete shutdown of, the operations of third parties on which we rely, including clinical sites, manufacturers, suppliers, and other vendors, from matters beyond their control, such as the effects related to geopolitical actions, natural disasters, or public health emergencies or pandemics, such as the COVID-19 pandemic, and our lack of recourse against such third parties if their inability to perform is excused under the terms of our agreements with such parties;

•Failure of our product candidates, if approved, to gain market acceptance or obtain adequate coverage for third party reimbursement;

•A reduction in demand for contraceptives caused by an elimination of current requirements that health insurance plans cover and reimburse certain FDA-cleared or approved contraceptive products without cost sharing;

•Uncertainty as to whether health insurance plans will cover our product candidates even if we successfully develop and obtain regulatory approval for them;

•Unfavorable or inadequate reimbursement rates for our product candidates set by the United States government and other third-party payers even if they become covered products under health insurance plans;

•Difficulty in introducing branded products in a market made up of generic products;

•Inability to adequately protect or enforce our, or our licensor’s, intellectual property rights;

•Lack of patent protection for the active ingredients in certain of our product candidates which could expose those product candidates to competition from other formulations using the same active ingredients;

•Higher risk of failure associated with product candidates in pre-clinical stages of development that may lead investors to assign them little to no value and make these assets difficult to fund;

•Disputes or other developments concerning our intellectual property rights;

•Actual and anticipated fluctuations in our quarterly or annual operating results;

•Price and volume fluctuations in the stock market, and in our stock in particular, which could subject us to securities class-action litigation;

•Failure to maintain the listing of our common stock on the Nasdaq Capital Market or another nationally recognized exchange;

•Litigation or public concern about the safety of our potential products;

•Strict government regulations on our business, including various fraud and abuse laws, including, without limitation, the U.S. federal Anti-Kickback Statute, the U.S. federal False Claims Act and the U.S. Foreign Corrupt Practices Act;

•Regulations governing the production or marketing of our product candidates;

•Loss of, or inability to attract, key personnel; and

•Increased costs as a result of operating as a public company, and substantial time devoted by our management to compliance initiatives and corporate governance practices.

In addition, statements that “we believe” and similar statements reflect our beliefs and opinions on the relevant subject. These statements are based upon information available to us as of the date of this report, and while we believe such information forms a reasonable basis for such statements, such information may be limited or incomplete, and our statements should not be read to indicate that we have conducted an exhaustive inquiry into, or review of, all potentially available relevant information. These statements are inherently uncertain and investors are cautioned not to unduly rely upon these statements.

All forward-looking statements in this report are current only as of the date of this report. We do not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any statement is made or to reflect the occurrence of unanticipated events, except as required by law.

TABLE OF CONTENTS


		Page
PART I. FINANCIAL INFORMATION

Item 1.	Condensed Consolidated Financial Statements (Unaudited)	1

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40

Item 4.	Controls and Procedures	40


PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	41

Item 1A.	Risk Factors	41

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	47

Item 3.	Defaults Upon Senior Securities	47

Item 4.	Mine Safety Disclosures	47

Item 5.	Other Information	47

Item 6.	Exhibits	48

	SIGNATURES	49

PART I. FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements (Unaudited)

Daré Bioscience, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets


	June 30, 2021		December 31, 2020
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	9,111,741	$	4,669,467
Other receivables	2,955,425		460,168
Prepaid expenses	1,992,054		1,854,277

Total current assets	14,059,220		6,983,912
Property and equipment, net	24,907		37,930

Other non-current assets	738,283		528,870
Total assets	$	14,822,410	$	7,550,712
Liabilities and stockholders’ equity (deficit)
Current liabilities
Accounts payable	$	216,043	$	1,021,333
Accrued expenses	4,369,901		3,359,718
Deferred grant funding	—		1,564,553
Note payable	—		367,285
Contingent consideration	1,000,000		1,000,000
Current portion of lease liabilities	418,946		347,712
Total current liabilities	6,004,890		7,660,601
Deferred license revenue	1,000,000		1,000,000

Lease liabilities long-term	73,516		41,844
Total liabilities	7,078,406		8,702,445
Commitments and contingencies (Note 7)
Stockholders' equity (deficit)
Preferred stock, $0.01 par value, 5,000,000 shares authorized; None issued and outstanding	—		—
Common stock, $0.0001 par value; 120,000,000 shares authorized; 57,409,523 and 41,596,253 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	5,741		4,159
Accumulated other comprehensive loss	(107,109)		(91,388)
Additional paid-in capital	95,762,564		70,366,293
Accumulated deficit	(87,917,192)		(71,430,797)
Total stockholders' equity (deficit)	7,744,004		(1,151,733)
Total liabilities and stockholders' equity (deficit)	$	14,822,410	$	7,550,712

See accompanying notes.

Daré Bioscience, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations and Comprehensive Loss

(Unaudited)


	Three months ended June 30,				Six months ended June 30,
	2021		2020		2021		2020
Operating expenses
General and administrative	$	1,797,637	$	1,557,548	$	3,737,965	$	3,419,313
Research and development	7,340,289		5,547,450		13,068,495		7,927,254
License fees	25,000		20,833		50,000		33,333
Total operating expenses	9,162,926		7,125,831		16,856,460		11,379,900
Loss from operations	(9,162,926)		(7,125,831)		(16,856,460)		(11,379,900)
Other income	175		1,618		178		3,439
Gain on extinguishment of note payable	—		—		$	369,887	—
Net loss	$	(9,162,751)	$	(7,124,213)	$	(16,486,395)	$	(11,376,461)


Foreign currency translation adjustments	(8,880)		12,090		(15,721)		(10,854)
Comprehensive loss	$	(9,171,631)	$	(7,112,123)	$	(16,502,116)	$	(11,387,315)
Loss per common share - basic and diluted	$	(0.18)	$	(0.27)	$	(0.35)	$	(0.45)
Weighted average number of common shares outstanding:
Basic and diluted	50,436,593		26,710,750		47,485,980		25,255,073

See accompanying notes.

Daré Bioscience, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited)


Six Months Ended June 30, 2021
				Additional		Accumulated other				Total
	Common stock			paid-in		comprehensive		Accumulated		stockholders'
	Shares	Amount		capital		loss		deficit		equity (deficit)
Balance at December 31, 2020	41,596,253	$	4,159	$	70,366,293	$	(91,388)	$	(71,430,797)	$	(1,151,733)
Stock-based compensation	—	—		365,911		—		—		365,911
Issuance of common stock, net of issuance costs	5,664,069	567		11,323,573		—		—		11,324,140
Issuance of common stock from the exercise of warrants	52,500	5		50,395		—		—		50,400

Net loss	—	—		—		—		$	(7,323,644)	(7,323,644)
Foreign currency translation adjustments	—	—		—		(6,841)		—		(6,841)
Balance at March 31, 2021	47,312,822	$	4,731	$	82,106,172	$	(98,229)	$	(78,754,441)	$	3,258,233
Stock-based compensation	—	—		405,478		—		—		405,478
Issuance of common stock, net of issuance costs	10,096,701	1,010		13,250,914		—		—		13,251,924
Net loss	—	—		—		—		(9,162,751)		(9,162,751)
Foreign currency translation adjustments	—	—		—		(8,880)		—		(8,880)
Balance at June 30, 2021	57,409,523	$	5,741	$	95,762,564	$	(107,109)	$	(87,917,192)	$	7,744,004


Six Months Ended June 30, 2020
				Additional		Accumulated other				Total
	Common stock			paid-in		comprehensive		Accumulated		stockholders'
	Shares	Amount		capital		loss		deficit		equity
Balance at December 31, 2019	19,683,401	$	1,968	$	44,564,674	$	(102,625)	$	(44,023,191)	$	440,826
Stock-based compensation	—	—		160,841		—		—		160,841
Issuance of common stock, net of issuance costs	3,308,003	331		5,222,356		—		—		5,222,687
Issuance of common stock from the exercise of warrants	1,699,000	170		1,664,850		—		—		1,665,020
Stock option exercised	10,149	1		—		—		—		1
Net loss	—	—		—		—		(4,252,248)		(4,252,248)
Foreign currency translation adjustments	—	—		—		(22,944)		—		(22,944)
Balance at March 31, 2020	24,700,553	$	2,470	$	51,612,721	$	(125,569)	$	(48,275,439)	$	3,214,183
Stock-based compensation	—	—		186,859		—		—		186,859
Issuance of common stock, net of issuance costs	3,823,451	382		4,021,954		—		—		4,022,336
Net loss	—	—		—		—		(7,124,213)		(7,124,213)
Foreign currency translation adjustments	—	—		—		12,090		—		12,090
Balance at June 30, 2020	28,524,004	$	2,852	$	55,821,534	$	(113,479)	$	(55,399,652)	$	311,255

See accompanying notes.

Daré Bioscience, Inc. and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited)


	Six months ended June 30,
	2021		2020
Operating activities:
Net loss	$	(16,486,395)	$	(11,376,461)
Non-cash adjustments reconciling net loss to operating cash flows:
Depreciation	13,023		23,929
Stock-based compensation	771,389		347,700
Non-cash operating lease cost	(45,270)		(90,080)

Gain on extinguishment of notes payable and accrued interest	(369,887)		—
Changes in operating assets and liabilities:
Other receivables	(2,495,256)		378,077
Prepaid expenses	(137,777)		(1,144,246)

Other non-current assets	(61,237)		78,513
Accounts payable	(805,291)		630,899

Accrued expenses	1,012,785		(457,901)
Deferred grant funding	(1,564,553)		(74,894)
Deferred license revenue	—		1,000,000
Net cash used in operating activities	(20,168,469)		(10,684,464)
Investing activities:
Purchases of property and equipment	—		(15,246)
Net cash used in investing activities	—		(15,246)
Financing activities:
Net proceeds from issuance of common stock