UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended September 30, 2017

2019

OR

☐

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

For the transition period from to

darebioinlinefullcolorrgb.jpg

DARÉ BIOSCIENCE, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware

001-36395

20-4139823

(State or other jurisdiction

Other Jurisdiction

of incorporation)

Incorporation)

(Commission

File Number)

No. 001-36395

20-4139823
(IRS Employer

Identification No.)

11119 North Torrey Pines Road,

3655 Nobel Drive, Suite 200

La Jolla,260

San Diego, CA 92037

(Address of Principal Executive Offices) (Zip
(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 classTrading Symbol(s)Name of each exchange on which registered
Common StockDARENasdaq Capital Market

Registrant’s telephone number, including area code

(858) 926-7655

(Former Name or Former Address, if Changed Since Last Report.)

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  Yes  ☒x    NO  ☐    No  

o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 and post 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”filer,” “smaller reporting company,” and “smaller reporting“emerging growth company” in Rule 12b-2 of the Exchange Act.

Large Accelerated Filer

☐

o

Accelerated filer

☐

o

Non-accelerated filer

☐  (Do not check if a smaller reporting company)

x

Smaller reporting company

☒

x

Emerging growth company

☒

x

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.☒x

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

As of November 6, 2017 a total of 6,047,16111, 2019, 16,683,411 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 Quarterly Report on Form 10-Q,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, include all statements that are not historical facts and, 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”“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”Factors,” in this report, and elsewhere in this report. Given these uncertainties, you should not place undue reliance on theseany forward-looking statements.

statement. The following factors are among those that may cause actual resultssuch differences:

Inability to differ materially from our forward-looking statements:

continue as a going concern;

Inability to raise additional capital, if needed;

under favorable terms or at all;
Inability to successfully attract partners and enter into collaborations on acceptable terms;

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;

Inability to develop and commercialize our product candidates;

Failure or delay in starting, conducting and completing clinical trials or obtaining United States Food and Drug Administration, (“FDA”)or FDA, or foreign regulatory approval for our product candidates in a timely manner;

A change in the FDA’s primary oversight responsibility;

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 trialstrial 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;

Negative publicity concerning the safety and efficacy of our products in development;

product candidates, or of product candidates being developed by others that share characteristics similar to our candidates;

Inability to demonstrate sufficient efficacy of product candidates;

Reliance on the success of our product candidates;

Delays in commencement or completion of clinical trials or suspension or termination of clinical trials;

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 agreementagreements covering the critical patents and related intellectual property related to our product candidate;

candidates;

Competitors may develop products renderingDevelopments by our competitors that make our product candidates obsolete and noncompetitive;

less competitive or obsolete;

Inability to successfully attract partners and enter into collaborations on acceptable terms;

Dependence on third parties to conduct clinical trials and to manufacture product candidates;

Dependence on third parties to marketsupply clinical supplies and distribute products;

raw materials, drugs and other materials required to produce a finished product and to produce the quantities needed;

OurFailure of our product candidates, if approved, may notto 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;

Lack of precedent to help assess whether health insurance plans will cover our product candidates;

The reimbursement environment relating to our product candidates at the time we obtain regulatory approval, if ever;

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

•

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

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 overall stock markets;

market, and in our stock in particular, which could subject us to securities class-action litigation;
Failure to maintain the listing of the Company’s 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;

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.

You

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 this Quarterly Report on Form 10-Q and the documentsto indicate that we have filedconducted 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.
The discussion regarding our contemplated acquisition of Microchips Biotech, Inc. discussed in this report also contains forward looking statements, including without limitation, statements relating to the completion of the acquisition, the expected timing thereof, Microchips’ anticipated cash at closing and after payment of its transaction-related expenses, and our expectations as exhibits to this Quarterly Report on Form 10-Q completelywhen and with the understanding that our actual futurehow much contingent consideration may become payable. Actual results could differ materially from those anticipated as a result of various factors, including: (1) Microchips may be materially different from what we expect. You should also read carefullyunable to obtain the factors described instockholder approval required for completion of the section “Risk Factors”transaction; (2) other conditions to the closing of this Quarterly Report on Form 10-Q and “Item 1A. Risk Factors” in our Quarterly Report on Form 10-Q for the quarter ended June 30, 2017 to better understandtransaction may not be satisfied; (3) the risks and uncertainties inherent intransaction may involve unexpected costs, liabilities or delays; (4) our business or stock price may suffer as a result of uncertainty surrounding the transaction; (5) the outcome of any legal proceedings related to the transaction; (6) we may be adversely affected by other economic, business, and/or competitive factors; (7) the occurrence of any event, change or other circumstances that could give rise to the termination of the merger agreement; (8) risks that the transaction disrupts current plans and underlying any forward-looking statements. You are advised, however,operations as a result of the transaction; and (9) other risks to consult any further disclosures we make on related subjects in our subsequent Current Reports on Form 8-K, press releases, and our website. Anyconsummation of the transaction, including the risk that the transaction will not be completed.


All forward-looking statements that we make in this Quarterly Report on Form 10-Q speakreport are current only as of the date of this Quarterly Report on Form 10-Q, and wereport. We do not undertake noany obligation to publicly update such statementsany forward-looking statement to reflect events or circumstances after the date of this Quarterly Report on Form 10-Qwhich any statement is made or to reflect the occurrence of unanticipated events.

events, except as required by law.




TABLE OF CONTENTS

Page

Page
PART I. FINANCIAL INFORMATION

Item 1.

Condensed Consolidated Financial Statements (Unaudited):

1

Condensed Consolidated Balance Sheets

1

Condensed Consolidated Statements of Operations and Comprehensive Loss

2

Condensed Consolidated Statements of Cash Flows

3

Notes to Condensed Consolidated Financial Statements

4

Item 2.

Management's Discussion and Analysis of Financial Condition and Results of Operations

16

22

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

23

33

Item 4.

Controls and Procedures

23

33

PART II. OTHER INFORMATION

Item 1.

Legal Proceedings

25

34

Item 1A.

Risk Factors

25

34

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

25

35

Item 3.

Defaults Upon Senior Securities

25

35

Item 4.

Mine Safety Disclosures

25

35

Item 5.

Other Information

25

35

Item 6.

Exhibits

25

36

SIGNATURES

28

37




PART I.FINANCIAL INFORMATION
PART I  ̶  FINANCIAL INFORMATION

Item 1. Condensed Consolidated Financial Statements.

Statements (Unaudited)


Daré Bioscience, Inc. and Subsidiaries

Condensed

Consolidated Balance Sheets

 

September 30,

2017

 

 

December 31,

2016

 

 

(unaudited)

 

 

 

 

 

Assets

 

 

 

 

 

 

 

Current Assets

 

 

 

 

 

 

 

Cash and cash equivalents

$

8,529,220

 

 

$

44,614

 

Other receivables

 

710,692

 

 

 

—

 

Prepaid expenses and other current assets

 

1,143,373

 

 

 

—

 

Total current assets

 

10,383,285

 

 

 

44,614

 

Goodwill

 

12,880,574

 

 

 

—

 

Other non-current assets

 

2,800

 

 

 

—

 

Total assets

$

23,266,659

 

 

$

44,614

 

Liabilities and Stockholders’ equity (deficit)

 

 

 

 

 

 

 

Current Liabilities

 

 

 

 

 

 

 

Accounts payable and accrued expenses

$

839,374

 

 

$

12,678

 

Convertible promissory notes

 

—

 

 

 

697,500

 

Interest payable

 

—

 

 

 

45,057

 

Total current liabilities

 

839,374

 

 

 

755,235

 

Deferred rent

 

157

 

 

 

—

 

Total liabilities

 

839,531

 

 

 

755,235

 

Commitments and contingencies (Note 6)

 

 

 

 

 

 

 

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, 6,047,161 shares issued and outstanding at September 30, 2017 and $0.001 par value, 10,000,000 shares authorized, 910,000 shares issued and outstanding at December 31, 2016

 

605

 

 

 

91

 

Accumulated other comprehensive loss

 

(9,774

)

 

 

—

 

Additional paid-in capital

 

25,535,872

 

 

 

17,123

 

Accumulated deficit

 

(3,099,575

)

 

 

(727,835

)

Total stockholders' equity (deficit)

 

22,427,128

 

 

 

(710,621

)

Total liabilities and stockholders' equity (deficit)

$

23,266,659

 

 

$

44,614

 

 September 30,
2019		 December 31,
2018
 (unaudited)  
Assets   
Current assets   
Cash and cash equivalents$2,435,120
 $6,805,889
Other receivables37,839
 31,037
Prepaid expenses770,506
 403,097
Total current assets3,243,465
 7,240,023
Property and equipment, net5,905
 9,396
Other non-current assets632,648
 577,968
Total assets$3,882,018
 $7,827,387
Liabilities and stockholders’ equity   
Current liabilities   
Accounts payable$352,243
 $459,705
Accrued expenses1,536,587
 631,351
Total current liabilities1,888,830
 1,091,056
Other liabilities183,196
 9,711
Total liabilities2,072,026
 1,100,767
Commitments and contingencies (Note 8)

 

Stockholders' equity   
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; 16,683,411 and 11,422,161 shares issued and outstanding, respectively1,668
 1,143
Accumulated other comprehensive loss(112,402) (96,728)
Additional paid-in capital42,077,455
 35,791,972
Accumulated deficit(40,156,729) (28,969,767)
Total stockholders' equity1,809,992
 6,726,620
Total liabilities and stockholders' equity$3,882,018
 $7,827,387
See Accompanying Notesaccompanying notes to Interim Condensed Consolidated Financial Statements.

The operations presented in the Interim Condensed Consolidated Financial Statements and Accompanying Notes for the three months ended September 30, 2017 represent the operations of the Company following the Stock Purchase Transaction. The Interim Condensed Consolidated Financial Statements and Accompanying Notes for the three months ended September 30, 2016 represent the operations of the Company when it was private, making a comparison between periods difficult.

interim consolidated financial statements.



Daré Bioscience, Inc. andSubsidiaries
ConsolidatedStatementsofOperationsandComprehensiveLoss
(Unaudited)
 Three months ended September 30, Nine months ended September 30,
 2019 2018 2019 2018
Operating expenses       
General and administrative$1,318,986
 $1,175,049
 $3,903,545
 $3,635,413
Research and development expenses1,966,230
 1,446,548
 6,172,192
 4,750,823
License expenses133,333
 —
 408,333
 350,000
Impairment of goodwill—
 —
 —
 5,187,519
Total operating expenses3,418,549
 2,621,597
 10,484,070
 13,923,755
Loss from operations(3,418,549) (2,621,597) (10,484,070) (13,923,755)
Other income25,471
 47,122
 86,703
 101,492
Net loss$(3,393,078) $(2,574,475) $(10,397,367) $(13,822,263)
Deemed dividend from trigger of down round provision feature—
 —
 (789,594) —
Net loss to common shareholders$(3,393,078) $(2,574,475) $(11,186,961) $(13,822,263)
Foreign currency translation adjustments$(15,378) $(18,721) $(15,674) $(59,952)
Comprehensive loss$(3,408,456) $(2,593,196) $(11,202,635) $(13,882,215)
Loss per common share - basic and diluted$(0.20) $(0.23) $(0.76) $(1.32)
Weighted average number of common shares outstanding:       
Basic and diluted16,683,411
 11,422,161
 14,756,213
 10,499,982
See accompanying notes to interim consolidated financial statements.



Daré Bioscience, Inc. and Subsidiaries

Condensed

Consolidated Statements of Operations and Comprehensive Loss

Stockholders’ Equity

(Unaudited)

 

 

Three months ended September 30,

 

 

Nine months ended September 30,

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

1,052,628

 

 

$

5,963

 

 

$

1,729,338

 

 

$

119,283

 

Research and development expenses

 

 

280,793

 

 

 

—

 

 

 

312,169

 

 

 

72,666

 

License expenses

 

 

—

 

 

 

—

 

 

 

—

 

 

 

250,000

 

Total operating expenses

 

 

1,333,421

 

 

 

5,963

 

 

 

2,041,507

 

 

 

441,949

 

Loss from operations

 

 

(1,333,421

)

 

 

(5,963

)

 

 

(2,041,507

)

 

 

(441,949

)

Interest income (expense)

 

 

(296,262

)

 

 

(10,142

)

 

 

(330,233

)

 

 

(30,205

)

Net loss

 

$

(1,629,683

)

 

$

(16,105

)

 

$

(2,371,740

)

 

$

(472,154

)

Other comprehensive loss, net of tax:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

$

(9,774

)

 

$

—

 

 

$

(9,774

)

 

$

—

 

Comprehensive loss

 

$

(1,639,457

)

 

$

(16,105

)

 

$

(2,381,514

)

 

$

(472,154

)

Loss per common share - basic and diluted

 

$

(0.33

)

 

$

(0.02

)

 

$

(1.04

)

 

$

(0.58

)

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basic

 

 

4,986,226

 

 

 

820,000

 

 

 

2,283,673

 

 

 

820,000

 

Diluted

 

 

5,638,153

 

 

 

830,519

 

 

 

2,935,600

 

 

 

830,519

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30, 2019
     Additional Accumulated
other		   Total
 Common stock paid-in comprehensive Accumulated stockholders'
 Shares Amount capital loss deficit equity
Balance at June 30, 201916,683,411
 $1,668
 $41,942,062
 $(97,024) $(36,763,651) $5,083,055
Stock-based compensation—
 —
 135,393
 —
 —
 135,393
Net loss—
 —
 —
 —
 (3,393,078) (3,393,078)
Foreign currency translation adjustments—
 —
 —
 (15,378) —
 (15,378)
Balance at September 30, 201916,683,411
 $1,668
 $42,077,455
 $(112,402) $(40,156,729) $1,809,992
            
Nine Months Ended September 30, 2019
     Additional Accumulated
other		   Total
 Common stock paid-in comprehensive Accumulated stockholders'
 Shares Amount capital loss deficit equity
Balance at December 31, 201811,422,161
 $1,143
 $35,791,972
 $(96,728) $(28,969,767) $6,726,620
Stock-based compensation—
 —
 344,712
 —
 —
 344,712
Issuance of common stock via public offering, net5,261,250
 525
 5,151,177
 —
 —
 5,151,702
Deemed dividend from trigger of down round provision—
 —
 789,594
 —
 (789,594) —
Net loss—
 —
 —
 —
 (10,397,367) (10,397,367)
Foreign currency translation adjustments—
 —
 —
 (15,674) —
 (15,674)
Balance at September 30, 201916,683,411
 $1,668
 $42,077,455
 $(112,402) $(40,156,729) $1,809,992
            
See Accompanying Notesaccompanying notes to Interim Condensed Consolidated Financial Statements.

The operations presented in the Interim Condensed Consolidated Financial Statements for the three months ended September 30, 2017 represent the operations of the Company following the Stock Purchase Transaction. The Interim Condensed Consolidated Financial Statements for the three months ended September 30, 2016 represent the operations of the Company when it was private, making a comparison between periods difficult.

interim consolidated financial statements.





Daré Bioscience, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity
(Unaudited)

Three Months Ended September 30, 2018
     Additional Accumulated
other		   Total
 Common stock paid-in comprehensive Accumulated stockholders'
 Shares Amount capital loss deficit equity
Balance at June 30, 201811,422,161
 $1,142
 $35,754,872
 $(59,311) $(23,478,740) $12,217,963
Public offering costs—
 —
 (77,737) —
 —
 (77,737)
Public offering costs—
 —
 (3,464) —
 —
 (3,464)
Stock-based compensation—
 —
 39,991
 —
 —
 39,991
Net loss—
 —
 —
 —
 (2,574,475) (2,574,475)
Foreign currency translation adjustments—
 —
 —
 (18,721) —
 (18,721)
Balance at September 30, 201811,422,161
 $1,142
 $35,713,662
 $(78,032) $(26,053,215) $9,583,557
            
Nine Months Ended September 30, 2018
     Additional Accumulated
other		   Total
 Common stock paid-in comprehensive Accumulated stockholders'
 Shares Amount capital loss deficit equity
Balance at December 31, 20176,047,161
 $605
 $25,541,210
 $(18,080) $(12,230,952) $13,292,783
Issuance of common stock375,000
 37
 736,698
 —
 —
 736,735
Net proceeds from issuance of common stock and warrants5,000,000
 500
 9,377,216
 —
 —
 9,377,716
Stock-based compensation—
 —
 58,538
 —
 —
 58,538
Net loss—
 —
 —
 —
 (13,822,263) (13,822,263)
Foreign currency translation adjustments—
 —
 —
 (59,952) —
 (59,952)
Balance at September 30, 201811,422,161
 $1,142
 $35,713,662
 $(78,032) $(26,053,215) $9,583,557
            
See accompanying notes to interim consolidated financial statements.

Condensed


Daré Bioscience, Inc. and Subsidiaries
Consolidated Statements of Cash Flows

(unaudited)

 

 

Nine months ended September 30,

 

 

 

2017

 

 

2016

 

Operating activities:

 

 

 

 

 

 

 

 

Net loss for period

 

$

(2,371,740

)

 

$

(472,154

)

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

 

 

 

 

 

 

 

 

Stock-based compensation

 

 

6,953

 

 

 

3

 

Non-cash interest

 

 

316,804

 

 

 

—

 

Changes in operating assets and liabilities, net impact of acquisition:

 

 

 

 

 

 

 

 

Other receivables

 

 

—

 

 

 

250,000

 

Prepaid expenses and other current assets

 

 

(224,433

)

 

 

—

 

Other assets

 

 

(2,800

)

 

 

—

 

Accounts payable and accrued expenses

 

 

659,223

 

 

 

(13,401

)

Interest payable

 

 

36,776

 

 

 

30,205

 

Deferred rent

 

 

157

 

 

 

—

 

Net cash used in operating activities

 

 

(1,579,060

)

 

 

(205,347

)

Investing activities:

 

 

 

 

 

 

 

 

Cash acquired through merger

 

 

9,918,440

 

 

 

—

 

Net cash provided by investing activities

 

 

9,918,440

 

 

 

—

 

Financing activities:

 

 

 

 

 

 

 

 

Proceeds from issuance of convertible promissory notes

 

 

155,000

 

 

 

—

 

Net cash provided by financing activities

 

 

155,000

 

 

 

—

 

Effect of exchange rate changes on cash and cash equivalents

 

 

(9,774

)

 

 

—

 

Net increase (decrease) in cash and cash equivalents

 

 

8,484,606

 

 

 

(205,347

)

Cash and cash equivalents, beginning of period

 

 

44,614

 

 

 

219,413

 

Cash and cash equivalents, end of period

 

$

8,529,220

 

 

$

14,066

 

(Unaudited)

 Nine months ended September 30,
 2019 2018
Operating activities:   
Net loss$(10,397,367) $(13,822,263)
Non-cash adjustments reconciling net loss to operating cash flows:   
Depreciation3,491
 1,263
Stock-based compensation344,712
 58,538
Non-cash lease expenses10,549
 —
Acquired in-process research and development—
 507,000
Impairment of goodwill—
 5,187,519
Changes in operating assets and liabilities:   
Other receivables(6,802) 203,928
Prepaid expenses(367,409) (238,378)
Other current assets—
 193,495
Other non-current assets138,719
 105,692
Accounts payable(107,463) (39,803)
Accrued expenses905,236
 276,062
Other liabilities(30,463) 8,900
Net cash used in operating activities(9,506,797) (7,558,047)
Investing activities:   
Purchases of property and equipment—
 (11,836)
Acquisition of Pear Tree and Hydra asset—
 (507,000)
Net cash used in investing activities—
 (518,836)
Financing activities:   
Net proceeds from issuance of common stock and warrants5,151,702
 10,114,452
Net cash provided by financing activities5,151,702
 10,114,452
Effect of exchange rate changes on cash and cash equivalents(15,674) (59,952)
Net change in cash and cash equivalents(4,370,769) 1,977,617
Cash and cash equivalents, beginning of period6,805,889
 7,559,846
Cash and cash equivalents, end of period$2,435,120
 $9,537,463
Supplemental disclosure of non-cash operating and financing activities:   
Operating right-of-use assets obtained in exchange for new operating lease liabilities$231,698
 —
Deemed dividend from trigger of down round provision$789,594
 —
    
See Accompanying Notesaccompanying notes to Interim Condensed Consolidated Financial Statements.

The operations presented in the Interim Condensed Consolidated Financial Statements for the three months ended September 30, 2017 represent the operations of the Company following the Stock Purchase Transaction. The Interim Condensed Consolidated Financial Statements for the three months ended September 30, 2016 represent the operations of the Company when it was private, making a comparison between periods difficult.

interim consolidated financial statements.



Daré Bioscience, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)

1. Description of Business and Basis of Presentation

Description of Business


1.ORGANIZATION AND DESCRIPTION OF THE BUSINESS
Daré Bioscience, Inc. (“Daré” or the “Company”), is a healthcareclinical-stage biopharmaceutical company committed to the development and commercializationacceleration of innovative products infor women’s reproductive health. Daré’s Bioscience, Inc. and its wholly owned subsidiaries operate in one segment. In this report, the “Company” refers collectively to Daré Bioscience, Inc. and its wholly owned subsidiaries, unless otherwise stated or the context otherwise requires.
The Company is driven by a mission to identify, acquire and develop a diverse portfolio of differentiated therapies that expand treatment options, improve outcomes and facilitate convenience for women, primarily in the areas of contraception, fertility, and sexual and vaginal health. The Company's business strategy is to licensein-license or otherwise acquire the rights to novel reproductive healthdifferentiated product candidates in the Company's areas of focus, some of which have existing clinical proof-of-concept data, and to take those candidates through advanced stages of clinical development.

Ondevelopment, and then out-license these products to companies with sales and distribution capabilities in women's health to leverage their commercial capabilities.

Since July 19, 2017, allthe Company has assembled a portfolio of clinical-stage and pre-clinical-stage candidates addressing unmet needs in women’s health. The Company’s portfolio includes three product candidates in advanced clinical development and three Phase 1-ready candidates:
DARE-BV1, a novel thermosetting bioadhesive hydrogel formulated with clindamycin phosphate 2% to be administered in a single vaginally delivered application as a first line treatment for bacterial vaginosis, or BV;
Ovaprene®, a hormone-free, monthly vaginal contraceptive;
Sildenafil Cream, 3.6%, a proprietary cream formulation of sildenafil for topical administration to the vulva and vagina for treatment of female sexual arousal disorder, or FSAD;
DARE-HRT1, a combination bio-identical estradiol and progesterone intravaginal ring for the treatment of vasomotor symptoms (VMS) as part of a hormone replacement therapy following menopause;
DARE-VVA1, a vaginally delivered formulation of tamoxifen to treat vulvar vaginal atrophy, or VVA, in patients with hormone-receptor positive breast cancer; and
DARE-FRT1, an intravaginal ring containing bio-identical progesterone for the prevention of preterm birth and for fertility support as part of an in vitro fertilization treatment plan.
The Company's portfolio also includes these pre-clinical stage product candidates:
ORB-204 and ORB-214, 6-month and 12-month formulations of injectable etonogestrel for contraception; and
DARE-RH1, a novel approach to non-hormonal contraception for both men and women by targeting the CatSper ion channel.
In addition, on November 10, 2019, the Company entered into a definitive agreement to acquire Microchips Biotech, Inc., or Microchips, a privately-held company developing a proprietary, microchip-based, implantable drug delivery system designed to store and precisely deliver hundreds of therapeutic doses over months and years, with potential utilization in multiple therapeutic indications, including women's contraception. The implant is intended to be operated by the patient to deliver medication on demand or on a pre-determined schedule that can be activated or deactivated wirelessly, as required. Microchips' lead product candidate is a pre-clinical stage contraceptive application of the outstanding sharestechnology, which, if successful, could provide women with unparalleled control over the management of their fertility. Utilizing the active pharmaceutical ingredient levonorgestrel, the device is intended to deliver all the benefits of a traditional long-acting, reversible contraceptive product and provide precise dosing and extended implant duration


with the ability to wirelessly control the duration of ovulatory suppression based on individual user needs. See Note 11, "Subsequent Events," herein.
The Company’s primary operations have consisted of, and are expected to continue to consist of, product research and development and advancing its portfolio of product candidates through clinical development and regulatory approval. We expect that the majority of our development expenses over the next two years will support the advancement of DARE-BV1, Ovaprene, and Sildenafil Cream, 3.6%.
To date, the Company has not obtained any regulatory approvals for any of its product candidates, commercialized any of its product candidates or generated any product revenue. The Company is subject to several risks common to clinical-stage biopharmaceutical companies, including dependence on key individuals, competition from other companies, the need to develop commercially viable products in a timely and cost-effective manner, and the need to obtain adequate additional capital to fund the development of product candidates. The Company is also subject to several risks common to other companies in the industry, including rapid technology change, regulatory approval of products, uncertainty of market acceptance of products, competition from substitute products and from larger companies with recognized brands, greater capital resources and higher levels of dedicated staff, and compliance with government regulations, protection of proprietary technology, dependence on third parties, and product liability.
2.GOING CONCERN
The Company has prepared its interim 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. However, as of September 30, 2019, the Company had an accumulated deficit of approximately $40.2 million and cash and cash equivalents of approximately $2.4 million. The Company also had negative cash flow from operations of approximately $9.5 million during the nine months ended September 30, 2019. The Company expects negative cash flows from operations will continue for the foreseeable future, and expects that its net losses will continue for at least the next several years as it develops its existing product candidates and seeks to acquire, license or develop additional product candidates. These circumstances raise substantial doubt about the Company's ability to continue as a going concern. The accompanying consolidated financial statements do not include any adjustments to reflect the possible future effects on the recoverability and classification 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.
Based on the Company's current operating plan estimates, the Company will 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 these interim consolidated financial statements unless the Company raises additional capital or substantially curtails its operations. The Company needs to raise additional capital in the near term in order to continue to fund its operations and to successfully execute its current operating plan, including to continue the planned development of DARE-BV1, Ovaprene, and Sildenafil Cream, 3.6%. The Company currently anticipates that it will receive approximately $5.7 million of additional working capital if the acquisition of Microchips closes as anticipated, but these funds will not be sufficient to support the current operating plan over the next 12 months, and there can be no assurance that the Microchips acquisition will close as anticipated.
Potential sources of capital stock of Daré Bioscience Operations, Inc., a private Delaware corporation, (“Private Daré”) were purchased by Cerulean Pharma Inc. (“Cerulean”) in accordance with the terms of a stock purchase agreement dated as of March 19, 2017 (the “Stock Purchase Agreement”), by and among Cerulean, Private Daré and the holders of capital stock and securities convertible into capital stock of Private Daré named therein (the “Private Daré Stockholders”). Pursuantinclude, but are not limited to, the Stock Purchase Agreement, each Private Daré Stockholder sold its sharessale of equity or equity-linked securities, monies awarded under grants, cash payments received in connection with corporate partnerships or collaborations on certain of the Company's portfolio assets, and business combinations with companies with current cash balances or committed sources of future payments or expense reimbursement. There is no guarantee that the Company will be able to raise capital on a timely basis, under attractive terms, or at all.
In April of 2019, the Company completed a sale of common stock raising net proceeds of approximately $5.2 million. See Note 6, "Stockholders' Equity," herein.
The Company is focused primarily on the development and commercialization of innovative products in Private Daréwomen’s health. The Company will continue to Cerulean in exchangeincur significant research and development and other expenses related to these activities. If the clinical trials for newly issued shares of Cerulean common stock. On July 19, 2017, Cerulean also completed the sale of its proprietary Dynamic Tumor Targeting™ Platform (the “Platform”) to Novartis Institutes for BioMedical Research, Inc. (“Novartis”) for $6.0 million.  

Following the closing of the transactions contemplated by the Stock Purchase Agreement (collectively, the “Stock Purchase Transaction”) and the sale of the Platform, Cerulean changed its name to Daré Bioscience, Inc.  As a result of the Stock Purchase Transaction, Private Daré became a wholly owned subsidiary of Daré Bioscience, Inc. and the Private Daré Stockholders became majority shareholders of Daré Bioscience, Inc. owning approximately 51% of the issued and outstanding sharesany of the Company’s shares of common stock.

On July 20, 2017,product candidates fail to produce successful results such that those product candidates do not advance in clinical development, then the Company’s business and prospects may suffer. Even if the product candidates advance in clinical development, they may fail to gain regulatory approval. Even if the product candidates are approved, they may fail to achieve market acceptance, and the Company effectedmay never become profitable. Even if the Company becomes profitable, it may not sustain profitability.

The Company is currently evaluating a 1-for-10 reverse stock splitvariety of capital raising options, including financings, government or other grant funding, collaborations and strategic alliances or other similar types of arrangements to cover its operating


expenses, including the development of its common stock (the “Reverse Stock Split”). All shareproduct candidates and per share amountsany future product candidates it may license or otherwise acquire. The amount and timing of common stock, options and warrants in this Quarterly Report on Form 10-Q, including those amounts included in the accompanying condensed consolidated financial statements,Company's capital needs have been restated for all periodsand will continue to give retroactive effectdepend highly on many factors, including the product development programs the Company chooses to pursue and the pace and results of its clinical development efforts. If the Company raises capital through collaborations, strategic alliances or other similar types of arrangements, it may have to relinquish, on terms that are not favorable to the Reverse Stock Split.

TheCompany, rights to some of its technologies or product candidates it would otherwise seek to develop or commercialize. There can be no assurance that capital will be available when needed or that, if available, it will be obtained on terms favorable to the Company and its stockholders. Additionally, equity or debt financings may have a dilutive effect on the holdings of the Company's existing stockholders. If the Company cannot raise capital when needed, on favorable terms or at all, the Company will not be able to continue development of its product candidates, will need to reevaluate its planned operations presented inand may need to delay, scale back or eliminate some or all of its development programs, reduce expenses, file for bankruptcy, reorganize, merge with another entity, or cease operations. If the accompanying condensedCompany becomes unable to continue as a going concern, the Company may have to liquidate its assets, and might realize significantly less than the values at which they are carried on its consolidated financial statements, and related notes forstockholders may lose all or part of their investment in the period ending September 30, 2017 represent the operations of the Company and give effect to the Stock Purchase Transaction, including stock-based compensation awards.Company's common stock. The condensedinterim consolidated financial statements and related notes for all periods priordo not include any adjustments that might result from the outcome of this uncertainty.


3.SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The Company’s significant accounting policies are described in Note 1 to the Stock Purchase Transaction representinterim consolidated financial statements included in the operationsCompany’s Annual Report on Form 10-K for the year ended December 31, 2018, filed with the Securities and Exchange Commission, or SEC on April 1, 2019. Since the date of Private Daré, making a comparison between historical and recent periods difficult.

Following the Stock Purchase Transaction, the Company began trading on the Nasdaq Capital Market under the symbol “DARE.” Priorthose consolidated financial statements, there have been no material changes to the Stock Purchase Transaction, the Company traded under the symbol “CERU.”

Company’s significant accounting policies, except as described below.

Basis of presentation

Presentation

The condensedaccompanying interim consolidated financial statements have been prepared in conformityaccordance with accounting principles generally accepted in the United States, (“U.S. GAAP”)or GAAP, as defined by the Financial Accounting Standards Board, (“FASB”). These condensedor FASB, for interim financial information and the instructions to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by GAAP for complete financial statements. In management’s opinion, the accompanying interim consolidated financial statements reflect all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the results of the interim periods presented.
Interim financial results are not necessarily indicative of results anticipated for any other interim period or for the full year. The accompanying interim consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2016 that were attached as Exhibit 99.1 to the Company’s Amendment No. 1 to the Current Report on Form 8-K filed with the Securities and Exchange Commission (“SEC”) on October 2, 2017.

2018.

Unaudited Interim Financial Information


Leases
The interim condensed consolidated financial statementsCompany determines if an arrangement is a lease at inception. Operating leases are included in this document are unaudited. The unaudited interim financial statements have been preparedright-of-use, or ROU, lease assets, current portion of lease obligations, and long-term lease obligations on the same basis asCompany's balance sheets.
ROU lease assets represent the annual financial statementsCompany's right to use an underlying asset for the lease term and reflect,lease obligations represent the Company's obligation to make lease payments arising from the lease. Operating ROU lease assets and obligations are recognized at the commencement date based on the present value of lease payments over the lease term. If the lease does not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at the commencement date in determining the present value of lease payments. The ROU lease asset also includes any lease payments made and excludes lease incentives. The Company's lease terms may include options to extend or terminate the lease and the related payments are only included in the opinion of management, all adjustments of a normal and recurring naturelease liability when it is reasonably certain that are necessary for a fair statement of the Company’s financial position as of September 30, 2017, and its results of operations for the three and nine months ended September 30, 2017 and 2016, and cash flows for the nine months ended September 30, 2017 and 2016. The results of operations for the three and nine months ended September 30, 2017 are not necessarily indicative of the results to be expected for the year ending December 31, 2017 or for any other future annual or interim period. The December 31, 2016 consolidated balance sheet was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP. These condensed consolidated financial statements should be read in conjunction with the audited financial statements and notes thereto for the year ended December 31, 2016.

2. Summary of Significant Accounting Policies

Liquidity

As of September 30, 2017, the Company had an accumulated deficit of approximately $3.10 million. The Company also had negative cash flow from operations of approximately $1.58 million during the nine months ended September 30, 2017. The Company had cash and cash equivalents of approximately $8.53 million as of September 30, 2017. The Company will need additional capital to further fund the development of, and seek regulatory approvals for, its current product candidate and any future candidates it may license as well as to commercialize any approved products.

The Company is currently focused primarily on the development and commercialization of innovative products in women’s reproductive health and believes such activities will result in the Company’s continued incurrence of significant research and development and other expenses related to those programs. If the clinical trials for any of the Company’s product candidates fail or produce unsuccessful results and those product candidates do not gain regulatory approval, or if any of the Company’s product candidates, if approved, fails to achieve market acceptance, the Company may never become profitable. Even if the Company achieves profitability in the future, it may not be able to sustain profitability in subsequent periods. The Company intends to cover its future operating expenses through cash and cash equivalents on hand and through a combination of equity offerings, debt financings, government or other grant funding, collaborations and strategic alliances. The Company cannot be sure that additional financing will be available when needed or that, if available, financing will be obtained on terms favorable to the Company or its stockholders.

If additional funding is not available on a timely basis or at adequate levels, the Company will need to reevaluate its operating plans. The condensed consolidated financial statements do not include any adjustmentsexercise that might result fromoption. Lease expense for lease payments is recognized on a straight-line basis over the outcome of this uncertainty.

Principles of Consolidation

The condensed consolidated financial statements of the Company are stated in U.S. dollars and are prepared using U.S. GAAP. These financial statements include the accounts of the Company and its wholly owned subsidiaries, Daré Bioscience Operations, Inc., and Daré Bioscience Australia PTY LTD. 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 Income. All intercompany transactions and accounts have been eliminated in consolidation.

lease term. (See Note 7, Leased Properties.)

Fair Value Measurements

Use of Estimates

The preparation of 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 include the

GAAP defines fair value of stock-based compensation, goodwill impairment and purchase accounting. Actual results could differ from those estimates and could materially affect the reported amounts of assets, liabilities and future operating results.

Risks and Uncertainties

The Company will require approvals from the U.S. Food and Drug Administration or foreign regulatory agencies prior to being able to sell any products. 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, raise additional capital, compete with other products, and protect proprietary technology. In the event the Company receives a regulatory approval for a product, the market’s acceptance of the product remains a risk. As a result of these and other factors and the related uncertainties, there can be no assurance of the Company’s future success.

For a more comprehensive list of risk factors, please refer to the Company’s interim report on Form 10-Q for the quarterly period ended June 30, 2017.

Cash and Cash Equivalents

The Company considers cash and all highly liquid debt instruments with an original maturity of three months or less to be cash and cash equivalents.

Concentration of Credit Risk

Financial instruments, which potentially subject the Company to concentrations of credit risk, consist principally of cash and cash equivalents. The Company places its cash and cash equivalents with a limited number of high quality financial institutions and at times may exceed the amount of insurance provided on such deposits. The Company has not experienced any loss on deposits of cash and cash equivalents.

Business Combinations

Assets acquired, and liabilities assumed as part of a business acquisition are recorded at their estimated fair value at the date of acquisition. The excess of the total purchase consideration over the fair value of assets acquired and liabilities assumed is recorded as goodwill. Determining fair value of identifiable assets, particularly intangibles, and liabilities acquired also requires management to make estimates, which are based on all available information and, in some cases, assumptions with respect to the timing and amount of future revenue and expenses associated with an asset.

Goodwill

Goodwill is not amortized but is tested annually for impairment or more frequently if impairment indicators exist. The Company adopted accounting guidance related to annual and interim goodwill impairment tests which allows the Company to first assess qualitative factors before performing a quantitative assessment of the fair value of a reporting unit. If it is determined on the basis of qualitative factors that the fair value of the reporting unit is more likely than not less than the carrying amount, a quantitative impairment test is required. The Company recorded goodwill of approximately $12.88 million related to the Stock Purchase Transaction, from the acquisition date, July 19, 2017. The Company assessed goodwill at September 30, 2017 and determined there was no impairment during the period.


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. Our chief operating decision maker is the chief executive officer. The Company has one operating segment, women’s reproductive health.

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value in accordance with Accounting Standards Codification (“ASC”) 820, Fair Value Measurement. Fair value is defined as the exchange price that would be received for an asset or the exit price that would be paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measuredate, and also establishes a fair value musthierarchy which requires an entity to maximize the use of observable inputs, and minimize the usewhere available. The three-level hierarchy of unobservable inputs. A fair value hierarchy is based on three levels of inputs which are usedvaluation techniques established to measure fair value of which the first two levelsis defined as follows:

Level 1: inputs are considered observable and the last is considered unobservable:

Level 1—Quotedunadjusted quoted prices in active markets for identical assets or liabilities.

Level 2—Observable2: inputs (otherother than Levellevel 1 quoted prices)that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets orand liabilities, quoted prices in markets that are not active for identical or similar assets or liabilities in markets that are not active, or other inputs that are observable or can be corroborated by observable market data.

data for substantially the full term of assets or liabilities.

Level 3—Unobservable3: unobservable inputs that are supported by little or no market activity and that are significant to determining the fair value of the assets or liabilities, including pricing models, discountedliabilities.

Cash and cash flow methodologiesequivalents of $2.4 million and similar techniques.

The Company’s instruments that$6.8 million are carriedmeasured at fair value as of September 30, 2019 and December 31, 2018, respectively, and are cash and cash equivalents, accounts payable and accrued interest. Theclassified within Level 1 of the fair value hierarchy. Other receivables are financial assets with carrying values of accounts payable and accrued interestthat approximate their fair value due to the short-term nature of these liabilities.

Net Loss Per Share

Basic net loss attributable to common stockholders per share is calculated by dividing the net loss by the weighted average number of shares of common stock outstanding during the period without consideration of common stock equivalents. Since the Company was in a loss position for all periods presented, diluted net loss per share is the same as basic net loss per share for all periods presented as the inclusion of all potential dilutive securities would have been antidilutive. All per share figures have been retroactively adjusted for the Reverse Stock Split.

Stock-Based Compensation

The Company records compensation expense for all stock-based awards granted based on theassets. Accounts payable and accrued expenses and other liabilities are financial liabilities with carrying values that approximate fair value of the award at the time of grant.  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, volatility, risk free interest rate and dividend yield.  Duedue to the limited historyshort-term nature of the Company, the simplified method was utilized in order to determine the expected term of the awards.  Additionally, the Company considered comparable companies in the industry which have available share price history to calculate the volatility.  The Company compared U.S. Treasury Bills in determining the risk-free interest rate appropriate given the expected term.  Finally, the Company has not established and has no plans to establish a dividend policy or declare any dividends in the foreseeable future and thus no dividend yield was determined necessary in the calculation of fair value.

these liabilities.

Income Taxes

The Company accounts for income taxes using the asset and liability method in accordance with ASC 740, Income taxes.  Under this method deferred income taxes are provided to reflect the tax consequences in future years of differences between the tax basis of assets and liabilities and their financial reporting amounts based on enacted tax laws and statutory tax rates applicable to the periods in which the differences are expected to affect taxable income.  Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized.

The Company follows the two-step approach to recognizing and measuring uncertain tax positions.  The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is more likely than not, that the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount, which is more than 50% likely of being realized upon ultimate settlement.  The Company considers many factors when evaluating and estimating the Company's tax positions and tax benefits, which may require periodic adjustments. At September 30, 2017, the Company did not record any liabilities for uncertain tax positions.

As the Company has significant operating losses, the Company does not expect to pay any income taxes for 2017 and as such no income tax provision has been made. Management evaluated the Company’s tax positions and concluded that the Company had taken no uncertain tax positions that require adjustment to the financial statements. The tax years 2015 to 2016 remain open to examination by federal and state taxing authorities.

RecentRecently Adopted Accounting Pronouncements

OnStandards

In May 28, 2014, the FASB issued Accounting Standards Update, (“ASU”)or ASU, 2014-09, Revenue Fromfrom Contracts Withwith Customers, which impacts the way in which some entities recognize revenue for certain types of transactions. The new standard will becomebecame effective beginning in 2018 for public companies. AsBecause the Company does not currently have any contracts with customers, we do not expect any impact fromthe Company’s adoption of this accounting standard.

standard did not impact the Company’s interim consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842), which sets out the principles for the recognition, measurement, presentation and disclosure of leases for both parties to a contract (i.e., lessees and lessors). The new standard requires lessees to apply a dual approach classifying leases as either finance or operating leases based on the principle of whether or not the lease is effectively a financed purchase by the lessee. This classification will determine whether lease expense is recognized based on an effective interest method or on a straight-line basis over the term of the lease. A lessee is also required to record a right-of-use asset and a lease liability for all leases with a term of greater than 12 months regardless of their classification. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases. The new standard requires lessors to account for leases using an approach that is substantially equivalent to existing guidance for sales-type leases, direct financing leases and operating leases. The new standard is effective for public companies for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company is currently assessing the potential impact of this accounting standard and the effect it might have on the financial statements.

In August 2016, the FASB issued ASU 2016-15, Statement of Cash Flows (Topic 230): Classification of Certain Cash Receipts and Cash Payments, which intended to add or clarify guidance on the classification of certain cash receipts and payments on the statement of cash flows. The new guidance addresses cash flows related to the following: debt prepayment or extinguishment costs, settlement of zero-coupon bonds, contingent consideration payments made after a business combination, proceeds from the settlement of insurance claims, proceeds from the settlement of corporate-owned life insurance policies and bank-owned life insurance policies, distributions received from equity method investees, beneficial interest in securitization transactions, and the application of predominance principle to separately identifiable cash flows. The standard is2016-02 became effective for the Company on January 1, 2019 and was adopted using a modified retrospective approach and the effective date is as of the initial application. Consequently, financial information was not updated, and the disclosures required under ASU 2016-02 are not provided for annualdates and periods beginning after December 15, 2017,prior to January 1, 2019. ASU 2016-02 provides a number of optional practical expedients and interim periods within those fiscal years with early adoption permitted. Daré is currently evaluating the effect of this new guidance on its financial statements.



accounting policy elections. The Company elected the package of practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the lease classification of any expired or existing leases, or initial direct costs for any existing leases. The Company recorded approximately $232,000 right-of-use assets and $241,000 lease liabilities related to its lease of office space as of the adoption date in the consolidated balance sheets. There are no changes to the statement of operations or cash flows as a result of the adoption.
In January 2017, the FASB issued ASU 2017-01, Business Combinations (Topic 805): Clarifying the Definition of a Business, which intended to clarify the definition of a business with the objective of adding guidance to assist entities with evaluating whether transactions should be accounted for as acquisitions (or disposals) of assets or businesses. The standard is effective for Daré for annual periods beginning after December 15, 2017. Daré’s early adoption of this standard did not have a material impact on the Company’s financial statements.

In January 2017, the FASB issued ASU 2017-04, Simplifying the Test for Goodwill Impairment (Topic 350). The guidance removes Step 2 of the goodwill impairment test, which requires a hypothetical purchase price allocation. A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. The guidance should be adopted on a prospective basis for the annual or any interim goodwill impairment tests beginning after December 15, 2019. Early adoption is permitted for interim or annual goodwill impairment tests performed on testing dates after January 1, 2017. Daré adoption of this standard on September 30, 2017 did not have a material impact on the Company’s financial statements.

In May 2017, the FASB issued ASU 2017-09, Compensation – Stock Compensation (Topic 718): Scope of Modification Accounting, which intended to provide clarity when to account for a change to the terms or conditions of a share-based payment award as a modification. Under the new guidance, modification accounting is required only if the fair value, the vesting conditions, or the classification of the award (as equity or liability) changes as a result of the change in terms or conditions. The standard isbecame effective for the Daré for annual periods beginningCompany on or after December 15, 2017 with early adoption permitted.January 1, 2018. The Company’s early adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In August 2018, the SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that were redundant, duplicative, overlapping, outdated or superseded. In addition, the amendments expanded the disclosure requirements relating to the analysis of stockholders' equity for interim financial statements. Under the amendments, an analysis of changes in each caption of stockholders' equity presented in the balance sheet must be provided in a note or separate statement. The analysis should present a reconciliation of the beginning balance to the ending balance of each period for which a statement of income is required to be filed. This final rule was effective November 5, 2018. In accordance with the new rule, the Company added a Consolidated Statement of Stockholders' Equity in this report and elected to present a reconciliation in a single statement that shows the changes in stockholders' equity for each interim period, as well as each comparable period.
4.ACQUISITIONS
Cerulean/Private Daré Stock Purchase Transaction
In July 2017, the FASB issued ASU 2017-11, Earnings Per Share (Topic 260)Company completed its business combination with Daré Bioscience Operations, Inc., Distinguishing Liabilities from Equity (Topic 480)a privately held Delaware corporation, or Private Daré, Derivatives and Hedging (Topic 815): (I) Accounting for Certain Financial Instruments with Down Round Features, (II) Replacement for the Indefinite Deferral for Mandatorily Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with a Scope Exception. This update was issued to provide additional clarity related to accounting for certain financial instruments that have characteristics of both liabilities and equity. In particular, this update addresses freestanding and embedded financial instruments with down round features and whether they should be treated as a liability or equity instrument. Part II simply replaces the indefinite deferral for certain mandatorily redeemable non-controlling interests and mandatorily redeemable financial instruments of nonpublic entities contained within the ASC Topic 480 with a scope exception and does not impact the accounting for these mandatorily redeemable instruments. For public business entities, the amendments in this Update are effective for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. The Company is currently evaluating the impact that the adoption of the standard may have on its consolidated financial statements.

3. Acquisitions

On July 19, 2017, which Private Daré completed the Stock Purchase Transaction with Cerulean as discussed in Note 1. For purposes of clarity, prior to the Stock Purchase Transaction, we sometimes referstockholders sold their shares to the Company in exchange for newly issued shares of the Company’s common stock, and as Cerulean. a result, Private Daré became a wholly owned subsidiary of the Company and the Private Daré stockholders became majority stockholders of the Company. In connection with the closing of that transaction, the Company changed its name from “Cerulean Pharma Inc.” to “Daré Bioscience, Inc.” In this report, that transaction is referred to as the Cerulean/Private Daré stock purchase transaction and “Cerulean” refers to Cerulean Pharma Inc. before that transaction closed.

The Stock Purchase TransactionCerulean/Private Daré stock purchase transaction was accounted for as a reverse merger under the acquisition method of accounting whereby Private Daré was considered to have acquired Cerulean for financial reporting purposes because immediately upon completion of the Stock Purchase Transaction, Private Daré stockholders held a majority of the voting interest of the combined company.purposes. Pursuant to business combination accounting, the Company applied the acquisition method, which requires the assets acquired and liabilities assumed be recorded at fair value with limited exceptions. The excess of the purchase price over the assets acquired and liabilities assumed represents goodwill. The goodwill iswas primarily attributable to the cash and cash equivalents at closing of the transaction of approximately $9.92$9.9 million and the impact of the unamortized fair value of Cerulean stock options granted by Cerulean that were outstanding immediately before the transaction closed of approximately $3.65$3.7 million.
The unamortizedCompany tests its goodwill for impairment at least annually as of December 31st and between annual tests if it becomes aware of an event or change in circumstance that would indicate the carrying value may be impaired. The Company tests goodwill for impairment at the entity level because it operates on the basis of a single reporting unit. A goodwill impairment is the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed the carrying amount of goodwill. When impaired, the carrying value of goodwill is written down to fair value. Any excess of the Cerulean stock options relates toreporting unit goodwill carrying value over the fair value is recognized as impairment loss.
The Company assessed goodwill at March 31, 2018, determined there was an option modification approvedimpairment and recognized an impairment charge of approximately $5.2 million in the interim consolidated statement of operations and comprehensive loss for the three months ended March 31, 2018. As of March 31, 2018, the goodwill carrying value on March 19, 2017 that provided forthe Company’s consolidated balance sheet was written off in its entirety.
Pear Tree Merger
On April 30, 2018, the Company entered into an accelerationAgreement and Plan of vesting uponMerger, or the PT Merger Agreement, with Pear Tree Pharmaceuticals, Inc., or Pear Tree, Daré Merger Sub, Inc., a change in control event. Such modification became effective upon the completionwholly owned subsidiary of the Stock Purchase Transaction. Hence,Company, or Merger Sub, and two individuals in their respective capacities as Pear Tree stockholders’ representatives. The transactions contemplated by the unamortized fair valuePT Merger Agreement closed on May 16, 2018, and as a result, Pear Tree became


the Company’s wholly owned subsidiary. The Company acquired Pear Tree to secure the rights to develop DARE-VVA1, a proprietary vaginal formulation of such options is deemed totamoxifen, as a potential treatment for vulvar and vaginal atrophy.
The Company determined that the acquisition of Pear Tree should be partaccounted for as an asset acquisition instead of total purchase consideration and goodwill. Transaction costs associated with the Stock Purchase Transactiona business combination because substantially all of $963,380 are included in general and administrative expense. The total purchase price consideration of approximately $24.28 million represents the fair value of the sharesgross assets acquired is concentrated in a single identifiable asset or group of Cerulean stock issued in connectionsimilar identifiable assets, and therefore, the asset is not considered a business. Transaction costs of approximately $452,000 associated with the Stock Purchase Transactionmerger were included in the Company’s research and development expense.
Under the unamortized fair valuePT Merger Agreement, certain former and continuing Pear Tree service providers and former holders of Cerulean options assumed on July 19, 2017 which was allocated as follows:


Purchase Consideration

 

(in thousands)

 

Fair value of shares issued

 

$

20,625

 

Unamortized fair value of Cerulean options

 

 

3,654

 

Fair value of total consideration

 

$

24,279

 

Assets acquired and liabilities assumed

 

 

 

 

Cash and cash equivalents

 

$

9,918

 

Prepaid expense and other current assets

 

 

1,689

 

Accounts payable

 

 

(209

)

Total assets acquired and liabilities assumed

 

 

11,398

 

Goodwill

 

$

12,881

 

The final allocation ofPear Tree’s capital stock, or the purchase price is dependentHolders, were eligible to receive a $75,000 payment due on the finalizationone-year anniversary of the valuation of the fair value of assets acquired and liabilities assumed and may differ from the amounts included in these financial statements. The Company expects to complete the final allocation as soon as practical but no later than one year from the acquisition date.

4. Convertible Promissory Notes

On December 4, 2015, Private Daré issued convertible promissory notes in the aggregate principal amount of $500,000. The convertible promissory notes accrue interest at a rate of 8% per annum, are convertible into Private Daré’s next preferred stock financing round and are payable following the delivery of a demand by the holders of a majority in interest of the outstanding principal (including the outstanding principal amount under the convertible promissory notes issued on or after November 18, 2016, as described further below) on or after December 4, 2017. In the event of a preferred stock financing, all outstanding principal and unpaid interest under the convertible promissory notes will convert into the shares of Private Daré’s preferred stock issued in such financing at the price per share paid by the purchasers of such shares and an additional number of shares equal to 15% to 25% of the outstanding principal and unpaid interest based on the amount of time that has passed between the issuance of the convertible promissory notes and the closing of such preferred stock financing.

During the weekmerger and are eligible to receive tiered royalties, subject to customary provisions permitting royalty reductions and offset, based on percentages of November 18, 2016, Private Daré’s issued additional convertible promissory notes, and amended the termsannual net sales of certain products subject to license agreements the Company assumed and a percentage of sublicense revenue. The Company must also make contingent payments to the Holders based on achieving certain clinical, regulatory and commercial milestones, which may be paid, in the Company’s sole discretion, in cash or shares of the outstanding convertible promissory notes held by persons who purchased additional convertible promissory notes on or after November 18, 2016. These convertible promissory notes (including the convertible promissory notes issued in December 2015 and amended in connection with the sale of additional convertible promissory notes in November 2016) accrue interest at a rate of 8% per annum, are convertible into Private Daré’s next preferred stock financing round and are payable following the delivery of a demand by the holders of a majority in interest of the outstanding principal (including the outstanding principal amount under the convertible promissory notes issued in December 2015) on or after December 4, 2017. Company’s common stock.

In the event of a preferred stock financing, all outstanding principal and unpaid interest under the convertible promissory notes (including the amended convertible promissory notes originally issued in December 2015) will convert into the shares of Private Daré’s preferred stock issued in such financing at the price per share paid by the purchasers of such shares and an additional number of shares equal to 40% of the outstanding principal and unpaid interest. In addition, in the event of a change of control in which the convertible promissory notes (including the amended convertible promissory notes originally issued in December 2015) are repaid, the holders of such notes are entitled to receive 2 to 5 times the amount of the principal based on the proceeds payable to Private Daré or its stockholders in connection with such change of control. During the week of November 18, 2016, Private Daré issued convertible promissory notes in the aggregate principal amount of $197,500 and amended the terms of prior notes in the aggregate principal amount of $275,000 to correspondaccordance with the terms of such additional convertible promissory notes. On February 17, 2017 the Company issued an additional convertible promissory note inPT Merger Agreement, because the principal amountNegative Consideration Amount (as defined below) exceeded the Positive Consideration Amount (as defined below), at the time of $100,000.


In connection with the Stock Purchase Transaction, described in further detail below, all outstanding convertible promissory notes issued prior to March 31, 2017 were further amended to provide that such notes will convert into shares of Private Daré common stock at a price per share of $0.18727 (subject to stock splits, combinations and similar events) effective as of immediately prior to the closing of the Stock Purchase Transaction and thatmerger, the Stock Purchase Transaction would not constitute a change of control, including for purposes ofexcess amount (approximately $132,000) offset the repayment premium described above.

On July 19, 2017, Private Daré amended the notes to provide that (i) the interest$75,000 payment due on the notes be subject to compounding on an annual basis asone-year anniversary of December 31 of each year and (ii) the number of shares of common stock issuable upon conversion of the convertible promissory notes issued prior to March 31, 2017 will be equal to the outstanding principal amount plus accrued interest through March 31, 2017 divided by $0.18727 (subject to stock splits, combinations and similar events) plus, in the case of the convertible promissory notes issued in December 2015, 25% of the principal amount plus accrued interest through March 31, 2017 divided by $0.18727 (subject to stock splits, combinations and similar events), and, in the case of the convertible promissory notes issued on or after November 18, 2016 (including certain of the amended convertible promissory notes originally issued in December 2015 the holders of which also participated in the November 2016 note offering), 40% of the principal amount plus accrued interest through March 31, 2017 divided by $0.18727 (subject to stock splits, combinations and similar events).

Between April 1, 2017 and June 6, 2017 Private Daré issued additional convertible promissory notes in the aggregate principal amount of $55,000 pursuant to a new note purchase agreement. One note in the principal amount of $20,000 was issued on May 31, 2017 and two notes in the aggregate principal amount of $35,000 were issued during the first week of June. The new note purchase agreement provides for one or more additional closings through the earlier to occur of September 28, 2017 and the date on which the Company’s stockholders approve the Stock Purchase Transaction, and limits the aggregate principal amount of the convertible promissory notes issued thereunder to $2.0 million. The convertible promissory notes issued pursuant to the May 31, 2017 note purchase agreement bear an annual interest rate of 8% and will automatically convert immediately prior to closing of the transaction into the number of shares of Private Daré common stock equal to 120% of the original principal amount of each such note divided by $0.38. The interest on such notes will not convert into shares of Private Daré’s common stock. In addition, the holders of such notes issued pursuant to the new note purchase agreement are entitled to convert the value of any then outstanding notes plus unpaid and accrued interest plus an additional 20% of the principal amount of their notes into Qualified and Non-Qualified Equity Financings (with such terms having the same meaning as in the December 2015 note purchase agreement) at the price paid by investors in the Qualified and Non-Qualified Equity Financings. Each purchaser of notes pursuant to the new note purchase agreement also executed and delivered a counterpart signature page to the Stock Purchase Agreement.

Immediately prior to the closing of the Stock Purchase Transaction, allmerger and the balance will offset future payments otherwise due under the PT Merger Agreement to the Holders. Positive Consideration Amount means the sum of $75,000, and the cash and cash equivalents held by Pear Tree at closing, and Negative Consideration Amount means the sum of (i) certain Pear Tree indebtedness and transaction expenses, (ii) transaction expenses of the convertible promissory notes of Private Daré, in aggregate principal of,stockholders’ representatives, and accrued interest on, were converted into shares of common stock of Private Daré(iii) amounts payable under Pear Tree’s management incentive plan.

5.STOCK-BASED COMPENSATION
The 2015 Employee, Director and all of the outstanding shares of common stock of Private Daré were exchanged for shares of common stock of the Company pursuant to the exchange ratio defined in the Stock Purchase Agreement. As a result of the conversion, the Company recognized an expense of $316,804 relating to the beneficial conversion feature present in each of the note agreements.

5. Stock-based Compensation

Consultant Equity Incentive Plan

Prior to the Stock Purchase Transaction,Cerulean/Private Daré stock purchase transaction, Private Daré maintained the 2015 Employee, Director and Consultant Equity Incentive Plan, ofor the 2015 Private Daré, (the “2015 Plan”) governed the issuance of incentive stock options, non-qualified stock options, stock grants and stock-based awards to individuals who were then employees, officers, non-employee directors or consultants of the Company. Plan. Upon closing of the Stock Purchase Transaction,Cerulean/Private Daré stock purchase transaction, the Company assumed the 2015 Private Daré Plan was assumed by the Company and each then outstanding option to acquire stockaward granted thereunder, which consisted of options and restricted stock. Based on the exchange ratio for the Cerulean/Private Daré that was not exercised priorstock purchase transaction and after giving effect to the reverse stock split effected in connection with the closing of that transaction, the Stock Purchase Transaction was assumed on the same termsoutstanding options and conditions as were applicablerestricted stock awards granted under the 2015 Private Daré Plan and became an optionwere replaced with options to acquire suchpurchase 10,149 shares of the Company’s common stock as was equal to the number of Private Daré shares subject to such unexercised option multiplied by the exchange ratio defined in the Stock Purchase Agreement, atwith a correspondingly adjusted exercise price.  


Stock Options Underprice, all of which were outstanding as of September 30, 2019, and 223,295 shares of the 2015 Plan of Private Daré (the 2015 Plan)

OptionsCompany’s common stock. Those options are fully vested and expire in December 2025.

No further awards may be granted under the 2015 Private Daré Plan have termsfollowing the closing of ten years from the date of grant unless earlier terminatedCerulean/Private Daré stock purchase transaction.
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 generally vest over a three-year period.  There werethere was no options granted understock-based compensation related to the 2015 Plan duringESPP for the nine months ended September 30, 2017 and effective as of July 19, 2017 following closing of the Stock Purchase Transaction, no further options may be granted under the 2015 Plan.

The exercise price of the 50,000 options granted for the year ended December 31, 2016 was equal to the estimated fair value of the common stock of Private Daré on the date of grant. On July 19, 2017, these options in Private Daré were assumed by the Company and 10,148 options were outstanding as of2019 or September 30, 2017 after adjustments for the Stock Purchase Transaction2018.

Amended and Reverse Stock Split.        

Stock Options Under the 2014 Plan (the Current Plan)

Options granted under the Company’sRestated 2014 Stock Incentive Plan (the “2014 Plan”

The Company maintains the Amended and Restated 2014 Plan, or “Current Plan”) have termsthe Amended 2014 Plan. There were 2,046,885 shares of no more than ten years fromcommon 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 increases annually on the first day of each fiscal year until, and including, the fiscal year ending December 31, 2024 by the least of (i) 2,000,000, (ii) 4% of the number of outstanding shares of common stock on such date, of grant unless earlier terminated.

Theor (iii) an amount determined by the Company’s board of directors approved two modificationsdirectors. On January 1, 2019, the number of authorized shares increased by 456,886 to the stock options issued under the 2014 Plan to participants who were providing services to the Company as of March 19, 2017.  The Company extended the exercise period for such stock options to two years beyond such participant’s termination date, unless the original option terms provided for a longer exercise period, and provided for the acceleration of vesting for such stock options upon a change in control event (such as the Stock Purchase Transaction). Modifications to the existing option terms resulted in unamortized fair value expense of approximately $3.7 million and was recorded as part2,503,771, which increase represented 4% of the total consideration in thenumber of outstanding shares of common stock on such date.



Summary of Stock Purchase Transaction and discussed in Note 3.

As part of the Stock Purchase Transaction, 544,040 Cerulean stock options were assumed by the Company and remain outstanding as of September 30, 2017. Together with the Private Daré options assumed in connection with the Stock Purchase Transaction, the Company had 554,040 options outstanding as of September 30, 2017.

A summary ofOption Activity

The table below summarizes stock option activity with regards tounder the 2015 Plan and the CurrentAmended 2014 Plan, and related information for the nine months ended September 30, 2017 is as follows:

 

 

Number of Shares

 

 

Weighted Average

Exercise Price

 

Outstanding at December 31, 2016

 

 

412,248

 

 

$

42.04

 

Granted

 

 

156,349

 

 

 

8.11

 

Exercised

 

 

—

 

 

 

—

 

Cancelled/expired

 

 

(14,557

)

 

 

51.38

 

Outstanding at September 30, 2017 (unaudited)

 

 

554,040

 

 

 

29.93

 

Exercisable at September 30, 2017 (unaudited)

 

 

545,640

 

 

$

32.62

 

Options outstanding and exercisable at September 30, 2017 had a weighted average contractual life2019. The exercise price of 8.15 years.  As of September 30, 2017, $44,460 represents unamortized stock-based compensation expense which will be amortized over the weighted average period of 1.79 years.

Compensation Expense

The Company has recorded stock-based compensation expense related to the issuance of stock option awards to employees of $6,947 for the three months ended September 30, 2017 with no comparable expense in the same period of the prior year, and $6,953 and $3 forall options granted during the nine months ended September 30, 2017 and 2016, respectively. There2019 was equal to the market value of the Company’s common stock on the date of the grant. As of September 30, 2019, unamortized stock-based compensation expense of $1,212,766 will be amortized over a weighted average period of 2.67 years. At September 30, 2019, 688,945 shares of common stock were noreserved for future issuance under the Amended 2014 Plan.

 Number of Shares 
Weighted Average
Exercise Price
Outstanding at December 31, 2018 (1)1,635,790
 $11.08
Granted698,000
 0.79
Exercised—
 —
Canceled/forfeited(508,745) 32.24
Expired(70) 59.48
Outstanding at September 30, 2019 (unaudited) (1)1,824,975
 $1.25
Exercisable at September 30, 2019 (unaudited)412,471
 $2.23
(1)Includes 10,149 shares subject to options granted under the 2015 Private Daré Plan assumed in connection with the Cerulean/Private Daré stock purchase transaction.
Compensation Expense
Total stock-based compensation expense related to stock options granted duringto employees and directors recognized in the three or nine months ended September 30, 2016.

consolidated statement of operations is as follows:

 Three Months Ended
September 30,		Nine Months Ended
September 30,
 2019 20182019 2018
Research and development$27,081
 $5,494
$78,780
 $5,994
General and administrative108,312
 34,497
265,932
 52,544
Total$135,393
 $39,991
$344,712
 $58,538
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 three and nine months ended September 30, 20172019 are as follows:

  Three Months Ended
September 30, 2019		 Nine Months Ended
September 30, 2019
Expected life in years 10.0 10.0
Risk-free interest rate 2.58% 2.58%
Expected volatility 121% 121%
Forfeiture rate 0.0% 0.0%
Dividend yield 0.0% 0.0%
Weighted-average fair value of options granted $0.75 $0.75


6.STOCKHOLDERS’ EQUITY

 

 

Three months ended

 

 

Nine months ended

 

 

 

September 30, 2017

 

 

September 30, 2017

 

Expected life in years

 

 

10.0

 

 

4.6-10

 

Risk-free interest rate

 

 

2.26%

 

 

1.7-2.4%

 

Expected volatility

 

 

127%

 

 

67%-127%

 

Forfeiture rate

 

 

23.6%

 

 

1.86%-29.9%

 

Dividend yield

 

 

0.0%

 

 

 

0.0%

 

Weighted-average fair value of options granted

 

$

6.30

 

 

$

4.49

 

ATM Sales Agreement

Restricted Stock After

In January 2018, the Stock Purchase Transaction

The 3.14Company entered into a common stock sales agreement under which the Company may sell up to an aggregate of $10 million in gross proceeds through the sale of shares of common stock issuedfrom time to time in connection with“at-the-market” equity offerings (as defined in Rule 415 promulgated under the Stock Purchase TransactionSecurities Act of 1933, as amended). The Company will pay a commission of up to 3% of the gross proceeds of any common stock sold under this agreement plus certain legal expenses. This agreement was amended in August 2018 to refer to the shareholdersCompany’s shelf registration statement on Form S-3 (File No. 333-227019) that was filed to replace the Company’s shelf registration statement on Form S-3 (File No. 333-206396) that expired on August 28, 2018.

The Company sold no shares under this agreement during either the three or nine months ended September 30, 2019 or the three months ended September 30, 2018. During the nine months ended September 30, 2018, the Company sold an aggregate of Private Daré have not been registered375,000 shares common stock under this agreement for gross proceeds of approximately $1.1 million and incurred issuance costs of $237,403.
February 2018 Underwritten Public Offering
In February 2018, the Company closed an underwritten public offering of 5.0 million shares of its common stock and warrants to purchase up to 3.5 million shares of its common stock. Each share of common stock was sold with a warrant to purchase up to 0.70 of a share of the SEC and may only be sold pursuantCompany’s common stock. The Company granted the underwriter a 30-day over-allotment option to purchase up to an exemptionadditional 750,000 shares of common stock and/or warrants to purchase up to 525,000 shares of common stock.  The underwriter exercised the option with respect to warrants to purchase 220,500 shares of common stock. The Company received gross proceeds of $10.3 million, including the proceeds from the SEC’s registration requirements. Some of these shares may become eligible for sale beginning six months after the date of the Stock Purchase Transaction pursuant to Rule 144.

warrants upon exercise of the underwriter’s over-allotment option, and net proceeds of approximately $9.4 million.

Common Stock Warrants

The warrants issued in the February 2018 underwritten offering initially had an exercise price of $3.00 per share andare exercisable through February 2023.The warrants include a price-based anti-dilution provision, which provides that, subject to certain limited exceptions, the exercise price of the warrants will be reduced each time the Company issues or sells securities for a consideration per share less than a price equal to the exercise price of those warrants in effect immediately prior to such issuance or sale. In addition, subject to certain exceptions, if the Company issues, sells or enters into any agreement to issue or sell securities at a price which varies or may vary with the market price of the shares of the Company’s common stock, the warrant holders have the right to substitute such variable price for the exercise price of the warrant then in effect. These warrants are exercisable only for cash, unless a registration statement covering the shares issued upon exercise of the warrants is not effective, in which case the warrants may be exercised on a cashless basis. A registration statement covering the shares issued upon exercise of the warrants is currently effective. The Company estimated the fair value of the warrants as of February 15, 2018 to be approximately $3.0 million which has been recorded in equity as of the grant date. The Company early adopted ASU 2017-11 as of January 1, 2018 and recorded the fair value of the warrants as equity.
On April 11, 2019, in accordance with the anti-dilution provision of these warrants and as a result of the sale of shares in the public offering that closed on that date and which is discussed below, the exercise price of these warrants was automatically reduced to $0.98 per share. For the nine months ended September 30, 2019 the Company recorded $0.8 million to additional paid-in capital as a result of the triggering of the anti-dilution provisions.
In addition to the warrants issued in the February 2018 underwritten offering, as of September 30, 2019, there are outstanding warrants to purchase 30,333 shares of the Company’s common stock, which are further described in the table below.


No warrants were exercised during the nine months ended September 30, 2017. The following table summarizes the outstanding warrants for the Company’s common stock as2019 or 2018. As of September 30, 2017:

2019, the Company had the following warrants outstanding:

Shares Underlying

Outstanding Warrants

 

 

Exercise Price

 

 

Expiration Date

 

169

 

 

$

17.70

 

 

August 8, 2018

 

2,906

 

 

$

12.04

 

 

December 1, 2021

 

3,737

 

 

$

12.04

 

 

December 6, 2021

 

17,190

 

 

$

6.05

 

 

January 8, 2020

 

6,500

 

 

$

1.00

 

 

April 4, 2026

 

30,502

 

 

 

 

 

 

 

6. Commitments

Shares Underlying
Outstanding Warrants
 Exercise Price Expiration Date
2,906 $120.40 December 1, 2021
3,737 $120.40 December 6, 2021
17,190 $60.50 January 8, 2020
6,500 $10.00 April 4, 2026
3,720,500 $0.98 February 15, 2023
3,750,833     
April 2019 Underwritten Public Offering
On April 11, 2019, the Company closed an underwritten public offering of 4,575,000 shares of its common stock at a public offering price of $1.10 per share. The Company granted the underwriters a 30-day over-allotment option to purchase up to an additional 686,250 shares which was exercised in full on April 12, 2019. Including the over-allotment shares, the Company issued a total of 5,261,250 shares in the underwritten public offering and Contingencies

received gross proceeds of approximately $5.8 million and net proceeds of approximately $5.2 million after deducting underwriting discounts and offering expenses.

7.LEASED PROPERTIES
Effective January 1, 2019, the Company adopted ASC 842, which requires recognition of a right-of-use asset and lease liability for all leases at the commencement date based on the present value of lease payments over the lease term. Additional qualitative and quantitative disclosures regarding the Company's leasing arrangements are also required. The Company adopted ASC 842 prospectively and elected the package of transition practical expedients that does not require reassessment of: (1) whether any existing or expired contracts are or contain leases, (2) lease classification and (3) initial direct costs. In addition, the Company has elected other available practical expedients to not separate lease and nonlease components, which consist principally of common area maintenance charges, for all classes of underlying assets and to exclude leases with an initial term of 12 months or less.
The Company's lease for its corporate headquarters (3,169 square feet of office space) commenced on July 1, 2018, has term of 37 months, and terminates on July 31, 2021. The Company has the option to extend the term of the lease for one year at the Company's discretion. The gross monthly base rent is $8,873, which increases approximately 4% per year, subject to certain future adjustments. The base rent was abated during the second month of the lease. The Company evaluates renewal options at lease inception and on an ongoing basis and includes renewal options that it is reasonably certain to exercise in its expected lease terms when classifying leases and measuring lease liabilities. The lease does not require material variable lease payments, a residual value guarantee or restrictive covenants. This is the Company’s only lease.
The lease does not provide an implicit rate, and therefore the Company uses its incremental borrowing rate as the discount rate when measuring operating lease liabilities. The incremental borrowing rate represents an estimate of the interest rate the Company would incur at lease commencement to borrow an amount equal to the lease payments on a collateralized basis over the term of the lease within a particular currency environment. The Company used an incremental borrowing rate of 7% as of January 1, 2019 for the operating lease that commenced prior to that date. The depreciable lives of operating lease assets and leasehold improvements are limited by the expected lease term.
As of September 30, 2019, the Company recorded a right of use asset of $173,274 in other non-current assets, and $92,242 and $90,954, respectively, in current and non-current other liabilities on the consolidated balance sheet.


As of September 30, 2019, future minimum lease payments for the Company's corporate headquarters are:
Years ending December 31: 
Remainder of 2019$27,665
2020112,943
202167,595
Total future minimum lease payments208,203
Less: Difference between future minimum lease payments and discounted operating lease liabilities25,007
Total operating lease liabilities$183,196

Operating Leases

Thelease costs were $27,038 and $81,115 for the three and nine months ended September 30, 2019, respectively. Operating lease costs are included in general and administrative expenses in the condensed consolidated statement of operations.

Cash paid for amounts included in the measurement of operating lease liabilities was $27,665 and $80,905 for the three and nine months ended September 30, 2019, respectively, and these amounts are included in operating activities in the condensed consolidated statements of cash flows.
8.COMMITMENTS AND CONTINGENCIES
License and Research Agreements
ADVA-Tec License Agreement
In March 2017, the Company entered into a leaselicense agreement, that commenced on January 1, 2017 and provided for termination by either party upon 30 days’ notice. In July 2017,or the ADVA-Tec License Agreement, with ADVA-Tec, Inc., or ADVA-Tec, under which the Company provided notice of termination of this lease agreement.

The Company entered into a new sublease agreement on July 27, 2017 which provides facilities space as well as other administrative services for a monthly fee of $5,651 that increases 3% annually. The sublease agreement commenced on August 1, 2017 and expires on June 30, 2019. The parties have agreed to negotiate in good faith for an extension of this sublease agreement under similar terms. The Company may terminate the sublease by providing 30 days’ written notice.

Other Legal Contingencies

From time to time, the Company may be involved in various claims arising in the normal course of business. Management is not aware of any material claims, disputes or unsettled matters that would have a material adverse effect on the Company’s results of operations, liquidity or financial position that the Company has not adequately provided for in the accompanying financial statements.


Risk Management

The Company maintains various forms of insurance that the Company’s management believes are adequate to reduce the exposure to these risks to an acceptable level.

Employment Agreements

Certain executive officers are entitled to payments if they are terminated without cause or as a result of a change in control of the Company. Upon termination without cause, and not as a result of death or disability, each officer is entitled to receive a payment of an amount equal to six to twelve months of base salary and to receive continuing health benefits coverage for periods ranging between six to twelve months following the termination of employment or until such officer is covered under a separate plan from another employer. Upon termination other than for cause or for good reason within three months prior or twelve months following a change in control of the Company, each officer will be entitled to receive a payment of an amount equal to nine to eighteen months of base salary and target bonus and to receive continuing health benefits coverage for periods ranging between nine to eighteen months following the termination of employment. In addition, upon a change in control of the Company, each officer’s outstanding unvested options shall fully vest and accelerate subject to the conditions outlined in such officer’s employment agreement.

License and Royalty Agreements

The Company signed an agreement to obtain a license from ADVA-Tec (the “ADVA-Tec Agreement”) forwas granted the exclusive right to develop and commercialize Ovaprene for human contraceptive use worldwide that became effective once the initial funding called for by the ADVA-Tec Agreement was secured.worldwide. ADVA-Tec and its affiliates own issued patents or patent applications covering Ovaprene and control proprietary trade secrets covering the manufacture of Ovaprene. As of the date of these financial statements,this report, this patent portfolio includes 12nine issued U.S. patents worldwide, along with 8and one pending U.S. patent application, and 59 granted patents and four pending patent applications in other major markets, all of which are exclusively licensed to the Company in accordance withfor the human contraceptive use of Ovaprene as a human contraceptive device. Under the terms of the ADVA-Tec Agreement. TheAgreement, the Company also has a right of first refusal to license these patents and patent applications for purposesadditional indications.

The following is a summary of additional indications for Ovaprene. Underother terms of the ADVA-Tec Agreement, License Agreement:
Research and Development.ADVA-Tec will conduct certain research and development work as necessary to allow the Company to seek a Premarket Approval, (“PMA”)or PMA, from the United States Food and Drug Administration, (“FDA”),or the FDA, and will supply the Company with its requirements of Ovaprene for clinical and commercial use on commercially reasonable terms.

Under the ADVA-Tec Agreement, the Company is required to make payments of up to $14.6 million in the aggregate to ADVA-Tec based on the achievement of specified development and regulatory milestones, which include the completion of a successful Postcoital Clinical Trial (“PCT”) Study (as defined in the ADVA-Tec Agreement); approval by the FDA to commence the Phase 3 pivotal human clinical trial; successful completion of the Phase 3 pivotal human clinical trial; the FDA’s acceptance of the filing of a PMA for Ovaprene; the FDA’s approval of the PMA for Ovaprene; Conformite Europeene (“CE”) Marking of Ovaprene in at least three designated European countries; obtaining regulatory approval in at least three designated European countries; and obtaining regulatory approval in Japan.  In addition, after the commercial launch of Ovaprene, the Company is also required to make royalty payments to ADVA-Tec based on aggregate annual net sales of Ovaprene in specified regions, which percentage royalty rate will vary between 1% and 10% and will increase based on various net sales thresholds.  Finally, the Company is also required to make up to $20.0 million in the aggregate in commercial milestone payments to ADVA-Tec upon reaching certain worldwide net sales milestones. 

The Company is obligated tomust use commercially reasonable efforts to develop and commercialize Ovaprene, and must meet certain minimum spending amounts per year, such amounts totaling $5.0 million in the aggregate over the first three years, to cover such activities until a final PMA is filed, or until the first commercial sale of Ovaprene, whichever occurs first.

Milestone Payments.The Company will pay ADVA-Tec: (1) up to $14.6 million in the aggregate based on the achievement of specified development and regulatory milestones; and (2) up to $20 million in the aggregate based on the achievement of certain worldwide net sales milestones. The development and regulatory milestones include: the completion of a successful postcoital clinical study, which is required before the Company can commence a Phase 3 pivotal human clinical trial; approval by the FDA to commence such Phase 3 pivotal human clinical trial; successful completion of such Phase 3 pivotal human clinical trial; the FDA’s acceptance of a PMA filing for Ovaprene; the FDA’s approval of the PMA for Ovaprene; obtaining Conformité Européenne Marking of Ovaprene in at least three designated European countries; obtaining regulatory approval in at least three designated European countries; and obtaining regulatory approval in Japan. Because these milestone payments depend upon the successful progress of the Company’s product development programs, the Company cannot estimate with certainty when these payments will occur, if ever.
For products currently in development, future potential milestone payments based on product development are approximately $14.6 million as of September 30, 2019. Future potential milestone payments related to commercialization totaled $20 million at September 30, 2019. The Company is unable to estimate with certainty the


timing on when these milestone payments will occur as these payments depend on the Company's product development programs.
Royalty Payments.After the commercial launch of Ovaprene, the Company will pay to ADVA-Tec royalties based on aggregate annual net sales of Ovaprene in specified regions, at a royalty rate that will vary between 1% and 10% and will increase based on various net sales thresholds. The Company is unable to estimate with certainty the timing on when these royalty payments will occur as these payments depend on the Company's product development programs.
Termination Rights.Unless earlier terminated, the license the Company received under the ADVA-Tec licenseLicense Agreement continues on a country-by-country basis until the later of the life of the licensed patents or the Company’sCompany's last commercial sale of Ovaprene, and the ADVA-Tec Agreement includesOvaprene. In addition to customary termination rights for both parties, and providesparties: (A) the Company may terminate the right to terminateagreement with or without cause in whole or on a country-by-country basis upon 60 days prior written notice. In addition,notice; and (B) ADVA-Tec may terminate the ADVA-Tec Agreementagreement if the Company develops or commercializes any non-hormonal ring-based vaginal contraceptive device competitive to Ovaprene or if the Company fails to do anyto: (1) in certain limited circumstances, commercialize Ovaprene in certain designated countries within three years of the following: (i)first commercial sale of Ovaprene, (2) satisfy the annual spending obligation described above, (ii) fail to(3) use commercially reasonable efforts to complete all necessary pre-clinical and clinical studies required to support and submit a PMA, (iii) fail to(4) conduct clinical trials as set forth in the development plan that is agreed by Daréthe Company and ADVA-Tec, and as may be modified by a joint research committee, whereunless such failure is not caused by events outside of the Company’s reasonable control, or (iv) fail to(5) enroll a patient in the first non-significant risk medical device study or clinical trial as allowed by an institutional review board within six months of the production and release of Ovaprene, where non-enrollmentunless such failure is not caused by events outside of the its reasonable control.
SST License and Collaboration Agreement
In addition, ADVA-Tec may terminate the ADVA-Tec Agreement ifFebruary 2018, the Company developsentered into a license and collaboration agreement, or commercializes any non-hormonal ring-based vaginal contraceptive device which is deemed competitivethe SST License Agreement, with Strategic Science & Technologies-D, LLC and Strategic Science & Technologies, LLC, referred to Ovaprene or, in certain limited circumstances, ifcollectively as SST. The SST License Agreement provides the Company failswith an exclusive, royalty-bearing, sublicensable license to develop and commercialize, in all countries and geographic territories of the world, for all indications for women related to female sexual dysfunction and/or female reproductive health, including treatment of female sexual arousal disorder, or the Field of Use, SST’s topical formulation of Sildenafil Cream, 3.6% as it exists as of the effective date of the SST License Agreement, or any other topically applied pharmaceutical product containing sildenafil or a salt thereof as a pharmaceutically active ingredient, alone or with other active ingredients, but specifically excluding any product containing ibuprofen or any salt derivative of ibuprofen, or the Licensed Products.
The following is a summary of other terms of the SST License Agreement:
Invention Ownership.The Company retains rights to inventions made by its employees, SST retains rights to inventions made by its employees, and each party shall own a 50% undivided interest in all joint inventions.
Joint Development Committee. The parties will collaborate through a joint development committee that will determine the strategic objectives for, and generally oversee, the development efforts of both parties under the SST License Agreement.
Development.The Company must use commercially reasonable efforts to develop the Licensed Products in the Field of Use in accordance with a development plan in the SST License Agreement, and to commercialize Ovaprenethe Licensed Products in the Field of Use. The Company is responsible for all reasonable internal and external costs and expenses incurred by SST in its performance of the development activities it must perform under the SST License Agreement.
Royalty Payments.SST will be eligible to receive (1) tiered royalties based on percentages of annual net sales of Licensed Products in the single digits to the mid double digits, subject to customary royalty reductions and offsets, and (2) a percentage of sublicense revenue.
Milestone Payments.SST will be eligible to receive payments (1) ranging from $0.5 million to $18.0 million in the aggregate on achieving certain designated countries within threeclinical and regulatory milestones in the U.S. and worldwide, and (2) between $10.0 million and $100 million in the aggregate upon achieving certain commercial sales milestones. If the Company enters into strategic development or distribution partnerships related to the Licensed Products, additional milestone payments would be due to SST.
License Term.The Company’s license received under the SST License Agreement continues on a country-by-country basis until the later of 10 years from the date of the first commercial sale of Ovaprene.such Licensed Product or the expiration of the last valid claim of patent rights covering the Licensed Product in the Field of Use. Upon expiration



(but not termination) of the SST License Agreement in a particular country, the Company will have a fully paid-up license under the licensed intellectual property to develop and commercialize the applicable Licensed Products in the applicable country on a non-exclusive basis.
Termination.In addition to customary termination rights for both parties: (1) prior to receipt of approval by a regulatory authority necessary for commercialization of a Licensed Product in the corresponding jurisdiction, including New Drug Application Approval, or NDA Approval, the Company may terminate the SST License Agreement without cause upon 90 days prior written notice to SST; (2) following receipt of approval by a regulatory authority necessary for commercialization of a Licensed Product in the corresponding jurisdiction, including NDA Approval, the Company may terminate the SST License Agreement without cause upon 180 days prior written notice; and (3) SST may terminate the SST License Agreement with respect to the applicable Licensed Product(s) in the applicable country(ies) upon 30 days’ notice to the Company if the Company fails to use commercially reasonable efforts to perform development activities in substantial accordance with the development plan and does not cure such failure within 60 days of receipt of SST’s notice thereof.
Orbis Development and Option Agreement
In March 2018, the Company entered into an exclusive development and option agreement, or the Orbis Agreement, with Orbis Biosciences, or Orbis, for the development of long-acting injectable etonogestrel contraceptive with 6- and 12-month durations (ORB-204 and ORB-214, respectively). Under the Orbis Agreement, the Company paid Orbis $300,000 to conduct the first stage of development work, Stage 1, as follows: $150,000 upon signing the Orbis Agreement, $75,000 at the 50% completion point, not later than 6 months following the date the Orbis Agreement was signed (which the Company paid in September 2018), and $75,000 upon delivery by Orbis of the 6-month batch, not later than 11 months following the date the Orbis Agreement was signed (which the Company paid in January 2019). Upon Orbis successfully completing Stage 1 of the development program and achieving the predetermined target milestones for Stage 1, the Company will have 90 days to instruct Orbis whether to commence the second stage of development work, Stage 2. Should the Company execute its option to proceed to Stage 2, it will have to provide additional funding to Orbis for such activities.
Pre-clinical studies for the 6- and 12-month formulations have been completed, including establishing pharmacokinetics and pharmacodynamics profiles. The collaboration with Orbis will continue to advance the program through formulation optimization with the goal of achieving sustained release over the target time period.
The Orbis Agreement provides the Company with an option to enter into a license agreement for ORB-204 and ORB-214 should development efforts be successful.
Juniper Pharmaceuticals - License Agreement
In April 2018, the Company entered into an Exclusive License Agreement, or the Juniper License Agreement, with Juniper Pharmaceuticals, Inc., or Juniper, under which Juniper granted the Company (a) an exclusive, royalty-bearing worldwide license under certain patent rights, either owned by or exclusively licensed to Juniper, 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 Juniper to make, have made, use, have used, sell, have sold, import and have imported products and processes. The Company is entitled to sublicense the rights granted to it under the Juniper License Agreement.
The following is a summary of certain terms of the Juniper License Agreement:
Upfront Fee.The Company paid a $250,000 non-creditable upfront license fee to Juniper in connection with the execution of the Juniper License Agreement.
Annual Maintenance Fee. The Company will pay an annual license maintenance fee to Juniper on each anniversary of the date of the Juniper License Agreement, the amount of which will be $50,000 for the first two years and $100,000 thereafter, and which will be creditable against royalties and other payments due to Juniper in the same calendar year but may not be carried forward to any other year.
Milestone Payments.The Company must make potential future development and sales milestone payments of (1) up to $13.5 million in the aggregate upon achieving certain clinical and regulatory milestones, and (2) up to $30.3 million in the aggregate upon achieving certain commercial sales milestones for each product or process covered by the licenses granted under the Juniper License Agreement.
Royalty Payments. During the royalty term, the Company will pay Juniper mid-single-digit to low double-digit royalties based on worldwide net sales of products and processes covered by the licenses granted under the JuniperLicenseAgreement. In lieu of such royalty payments, the Company will pay Juniper a low double-digit percentage of


all sublicense income the Company receives for the sublicense of rights under the Juniper License Agreement to a third party. The royalty term, which is determined on a country-by-country basis and product-by-product basis (or process-by-process basis), begins with the first commercial sale of a product or process in a country and terminates on the latest of (1) the expiration date of the last valid claim within the licensed patent rights with respect to such product or process in such country, (2) 10 years following the first commercial sale of such product or process in such country, and (3) when one or more generic products for such product or process are commercially available in such country, except that if there is no such generic product by the 10th year following the first commercial sale in such country, then the royalty term will terminate on the 10-year anniversary of the first commercial sale in such country.
Efforts. The Company must use commercially reasonable efforts to develop and make at least one product or process available to the public, which efforts include achieving specific diligence requirements by specific dates specified in the Juniper License Agreement.
Term. Unless earlier terminated, the term of the Juniper License Agreement will continue on a country-by-country basis until the later of (1) the expiration date of the last valid claim within such country, or (2) 10 years from the date of first commercial sale of a product or process in such country. Upon expiration (but not early termination) of the Juniper License Agreement, the licenses granted thereunder will convert automatically to fully-paid irrevocable licenses. Juniper may terminate the Juniper License Agreement (1) upon 30 days’ notice for the Company’s uncured breach of any payment obligation under the Juniper License Agreement, (2) if the Company fails to maintain required insurance, (3) immediately upon the Company’s insolvency or the making of an assignment for the benefit of the Company’s creditors or if a bankruptcy petition is filed for or against the Company, which petition is not dismissed within 90 days, or (4) upon 60 days’ notice for any uncured material breach by the Company of any of its other obligations under the Juniper License Agreement. The Company may terminate the Juniper License Agreement on a country-by-country basis for any reason by giving 180 days’ notice (or 90 days’ notice if such termination occurs prior to receipt of marketing approval in the United States). If Juniper terminates the Juniper License Agreement for the reason described in clause (4) above or if the Company terminates the Juniper License Agreement, Juniper will have full access including the right to use and reference all product data generated during the term of the Juniper License Agreement that is owned by the Company.
Pear Tree Acquisition
The Company may be required to make certain royalty and milestone payments under the PT Merger Agreement (see Note 4).
Hammock/MilanaPharm Assignment and License Agreement
On December 5, 2018, the Company entered into (a) an Assignment Agreement with Hammock Pharmaceuticals, Inc., or the Assignment Agreement, and (b) a First Amendment to License Agreement with TriLogic Pharma, LLC and MilanaPharm LLC, or the License Amendment. Both agreements relate to the Exclusive License Agreement among Hammock, TriLogic and MilanaPharm dated as of January 9, 2017, or the MilanaPharm License Agreement. Under the Assignment Agreement and the MilanaPharm License Agreement, as amended by the License Amendment, the Company acquired an exclusive, worldwide license under certain intellectual property to, among other things, develop and commercialize products for the diagnosis, treatment and prevention of human diseases or conditions in or through any intravaginal or urological applications. The licensed intellectual property relates to the hydrogel drug delivery platform of TriLogic and MilanaPharm known as TRI-726. In DARE-BV1, this proprietary technology is formulated with clindamycin, an antibiotic used to treat certain bacterial infections, including BV, and has been engineered to produce a dual release pattern after vaginal application, providing maximum duration of exposure to clindamycin at the site of infection.
The following is a summary of other terms of the License Amendment:
License Fees. The Company paid $25,000 to MilanaPharm in connection with the execution of the License Amendment and must pay $200,000 to MilanaPharm (in the Company's discretion, either in cash or with shares of the Company's common stock) within 15 days of the first to occur of December 5, 2019 or the closing of an equity financing in which the Company raises aggregate proceeds of at least $10.0 million.
Milestone Payments. The Company will pay to MilanaPharm (1) up to $300,000 in the aggregate upon achievement of certain development milestones; and (2) up to $1.75 million in the aggregate upon achieving certain commercial sales milestones.
Foreign Sublicense Income. The Company will pay MilanaPharm a low double-digit percentage of all income received by the Company or its affiliates in connection with any sublicense granted to a third party for use outside of the United States, subject to certain exclusions.


Royalty Payments. During the royalty term, the Company will pay MilanaPharm high single-digit to low double-digit royalties based on annual worldwide net sales of licensed products and processes. The royalty term, which is determined on a country-by-country basis and licensed product-by-product basis (or process-by-process basis), begins with the first commercial sale of a licensed product or process in a country and terminates on the latest of (a) the expiration date of the last valid claim of the licensed patent rights that cover the method of use of such product or process in such country, or (b) 10 years following the first commercial sale of such product or process in such country. Royalty payments are subject to reduction in certain circumstances, including as a result of generic competition, patent prosecution expenses incurred by the Company, or payments to third parties for rights or know-how that are required for the Company to exercise the licenses granted to it under the MilanaPharm License Agreement or that are strategically important or could add value to a licensed product or process in a manner expected to materially generate or increase sales.
Efforts. The Company must use commercially reasonable efforts and resources to (1) develop and commercialize at least one licensed product or process in the United States and at least one licensed product or process in at least one of Canada, the United Kingdom, France, Germany, Italy or Spain, and (2) continue to commercialize that product or process following the first commercial sale of a licensed product or process in the applicable jurisdiction.
Term. Unless earlier terminated, the term of the MilanaPharm License Agreement will continue until (1) on a licensed product-by-product (or process-by-process basis) and country-by-country basis, the date of expiration of the royalty term with respect to such licensed product in such country, and (2) the expiration of all applicable royalty terms under the MilanaPharm License Agreement with respect to all licensed products and processes in all countries. Upon expiration of the term with respect to any licensed product or process in a country (but not upon earlier termination of the MilanaPharm License Agreement), the licenses granted to the Company under the MilanaPharm License Agreement will convert automatically to an exclusive, fully paid-up, royalty-free, perpetual, non-terminable and irrevocable right and license under the licensed intellectual property.
In addition to customary termination rights for all parties, MilanaPharm may terminate the license granted to the Company solely with respect to a licensed product or process in a country if, after having launched such product or process in such country, (1) the Company, or its affiliates or sublicensees, discontinue the sale of such product or process in such country and MilanaPharm notifies the Company of such termination within 60 days of having first been notified by the Company of such discontinuation, or (2) the Company, or its affiliates or sublicensees, (A) discontinues all commercially reasonable marketing efforts to sell, and discontinues all sales of, such product or process in such country for nine months or more, (B) fails to resume such commercially reasonable marketing efforts within 120 days of having been notified of such failure by MilanaPharm, (C) fails to reasonably demonstrate a strategic justification for the discontinuation and failure to resume to MilanaPharm, and (D) MilanaPharm gives 90 days’ notice to the Company.
The following is a summary of other terms of the Assignment Agreement with Hammock:
Assignment; Technology Transfer. 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 to be agreed upon by the parties, with a goal for the Company to independently practice the licensed intellectual property as soon as commercially practical in order to develop and commercialize the licensed products and processes.
Fees. The Company paid $250,000 to Hammock in connection with the execution of the Assignment Agreement and must pay $250,000 to Hammock (in the Company's discretion either in cash or with shares of the Company's common stock) within 15 days of the first to occur of December 5, 2019 or the closing of an equity financing in which the Company raises aggregate proceeds of at least $10.0 million.
Milestone Payments. The Company will pay Hammock up to $1.1 million in the aggregate upon achievement of certain clinical and regulatory development milestones.
Term. The Assignment Agreement will terminate upon the later of (1) completion of the parties’ technology transfer plan, and (2) payment to Hammock of the last of the payments described above, including the milestone payments.
9.GRANT AWARD
In April 2018, the Company received a Notice of Award for the first $224,665 of the anticipated $1.9 million in grant funding from the Eunice Kennedy Shriver National Institute of Child Health and Human Development, a division of the National Institutes of Health, or the NIH. 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 Company received all


$224,665 of the award payments under this Notice of Award. Such payments were applied to clinical development efforts supporting Ovaprene and were recognized in the statement of operations as a reduction to research and development activities as the related costs were incurred to meet those obligations over the period.
On March 11, 2019, the Company received a second Notice of Award for an additional $982,851 of the anticipated $1.9 million in grant funding from the Eunice Kennedy Shriver National Institute of Child Health and Human Development. The second award followed the NIH's review of an interim data analysis and other results of the first phase of the research supporting Ovaprene. Award payments under this second notice of award ($886,667 received through September 30, 2019) are being applied to clinical development efforts supporting Ovaprene. At September 30, 2019, the Company recorded a receivable of $32,888 for expenses incurred through such date that are eligible for reimbursement under this second notice of award.
The remaining portion of the award under the grant, $730,722, is contingent upon, among other matters, assessment that the results of the ongoing Ovaprene study satisfy specified requirements set out in the award notice, and the availability of funds.
10.NET LOSS PER SHARE
The Company computes basic net loss per share using the weighted average number of common shares outstanding during the period. Diluted net income per share is based upon the weighted average number of common shares and potentially dilutive securities (common share equivalents) outstanding during the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of shares that may be issued under outstanding options and warrants to purchase shares of the Company’s common stock. Common share equivalents are excluded from the diluted net loss per share calculation if their effect is anti-dilutive.
The following potentially dilutive outstanding securities were excluded from diluted net loss per common share for the period indicated because of their anti-dilutive effect:
Potentially dilutive securities Three Months Ended
September 30,		 Nine Months Ended
September 30,
  2019 2018 2019 2018
Stock options 1,824,975
 1,605,790
 1,824,975
 1,605,790
Warrants 3,750,833
 3,750,833
 3,750,833
 3,750,833
Total 5,575,808
 5,356,623
 5,575,808
 5,356,623
11.SUBSEQUENT EVENTS

On November 10, 2019, the Company entered into an Agreement and Plan of Merger, or the Microchips Merger Agreement, with, among others, Microchips Biotech, Inc., or Microchips, pursuant to which, if the transactions contemplated thereby are consummated, the Company will acquire Microchips via a reverse triangular merger in which Microchips will become a wholly owned subsidiary of the Company. The merger is expected to close on or before November 22, 2019.
The following is a summary of certain material terms of the Microchips Merger Agreement.
At the closing of the merger, the Company will issue an aggregate of 3,000,000 shares of its common stock to the holders of shares of Microchips’ capital stock outstanding immediately prior to the effective time of the merger (other than holders of dissenting shares, if any), or the Effective Time Holders. Such shares are in consideration of Microchips' cash and cash equivalents, less liabilities, at closing. Microchips' cash and cash equivalents at closing are anticipated to total approximately $6.9 million, and approximately $5.7 million after payment of transaction-related expenses.
The Company also agreed to pay the following contingent consideration to the Effective Time Holders, in consideration of all of the other assets of Microchips: (1) up to $46.5 million contingent upon the achievement of specified funding, product development and regulatory milestones, up to $2.3 million of which the Company may elect to pay in shares of its common stock, subject to approval of the Company's stockholders to the extent necessary to comply with Nasdaq Listing Rule 5635; (2) up to $55.0 million contingent upon the achievement of specified amounts of aggregate net sales of products incorporating the intellectual property acquired by the Company in the merger; (3) tiered royalty payments ranging from low single-digit to low double-digit percentages of annual net sales of such products, subject to customary provisions permitting royalty reductions and offset; and (4) a percentage of sublicense


revenue related to such products. The Company expects that less than $1.3 million of the contingent consideration may become payable through 2021.
The Company agreed to register the shares issuable under the Microchips Merger Agreement for resale by the Effective Time Holders under the Securities Act of 1933, as amended.
The Microchips Merger Agreement may be terminated under specified circumstances, including by mutual consent of the parties, by the Company if Microchips experiences a material adverse effect, by either party if representations and warranties of the other party are not true or if the other party has failed to perform any covenant, or if the transactions contemplated by the Microchips Merger Agreement have not been consummated by November 22, 2019 (which date may be extended by mutual written consent of the parties).
The Microchips acquisition, if consummated, will be concentrated primarily to one group of similar identifiable assets and thus, for accounting purposes, the Company concluded that the acquired assets will not meet the accounting definition of a business. Transaction costs of approximately $300,000 associated with the merger will be included as a component of research and development expense for the year ended December 31, 2019.



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

The following discussion and analysis of financial condition and results of operations should be read in conjunction with the condensed consolidated financial statements of Daré Bioscience, Inc. and accompanying notes appearing elsewhere in this report. For additional context with which to understand our financial condition and results of operations, see the discussion and analysis included in the discussion and analysis included in our Current Report on Amendment No. 1 to Form 8-K filed with the SEC on October 2, 2017, and the unaudited condensedinterim consolidated financial statements and accompanying notes contained therein. In addition to historical information,thereto included in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto for the year ended December 31, 2018 included in our Annual Report on Form 10-K for the year ended December 31, 2018, or our 2018 10-K, filed with the Securities and Exchange Commission, or SEC, on April 1, 2019. Past operating results are not necessarily indicative of results that may occur in future periods.
The following discussion includes forward-looking statements. See “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS,” above. Forward-looking statements are not guarantees of future performance and analysis contains forward-looking statements that involve risks, uncertainties, and assumptions. Ourour actual results may differ materially from those currently anticipated in these forward-looking statements asand from historical results depending upon a resultvariety of various factors, including, but not limited to, those identified under “Forward Looking Statements” below, those discussed in Part I, Item 1A1A. Risk Factors ofin our 2018 10-K and in our subsequent filings with the SEC, including any discussed in Part II, Item 1A of this report under the heading “Risk Factors,” which are incorporated herein by reference.
In this report, “we,” “us,” “our,” “Daré” or the “Company” refer collectively to Daré Bioscience, Inc. and includedits wholly owned subsidiaries, unless otherwise stated or the context otherwise requires. All information presented in “Item 1A. Risk Factors” inthis report is based on our Quarterly Report on Form 10-Q forfiscal year. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years ending December 31 and the quarter ended June 30, 2017. Ovaprene™associated quarters, months and periods of those fiscal years.
Daré Bioscience® is a registered trademark of Daré Bioscience, Inc. Ovaprene® is a registered trademark licensed by our company.to Daré Bioscience, Inc. All other trademarks, service marks or trade names appearing in this report are the property of their respective owners. Use or display by us of other parties’ trademarks, service marks or trade names is not intended to and does not imply a relationship with, or endorsements or sponsorship of, us by the trademark, service mark or trade name owners.

Business Overview

Daré Bioscience, Inc. (“Daré,” “we,” “us,” “our,” and “our Company”),

We are a Delaware corporation, was formed on November 28, 2005. The Company and its wholly owned subsidiaries, Daré Bioscience Operations, Inc. and Daré Bioscience Australia Pty LTD, operate in one segment with its principal office in San Diego, California. The Company is a healthcareclinical-stage biopharmaceutical company committed to the development and commercializationacceleration of innovative products infor women’s reproductive health. The Company seeks product candidatesWe are driven by a mission to identify, acquire and develop a diverse portfolio of differentiated therapies that expand treatment options, improve outcomes and are easyfacilitate convenience for women, primarily in the areas of contraception, fertility, and sexual and vaginal health. Our business strategy is to use.in-license or otherwise acquire the rights to differentiated product candidates in our areas of focus, some of which have existing clinical proof-of-concept data, and to take those candidates through advanced stages of clinical development, and then out-license these products to companies with sales and distribution capabilities in women's health to leverage their commercial capabilities. We and our wholly owned subsidiaries operate in one business segment.
Since July 2017, we have assembled a portfolio of clinical-stage and pre-clinical stage candidates addressing unmet needs in women's health. Our portfolio includes three product candidates in advanced clinical development and three Phase 1-ready candidates:
DARE-BV1, a novel thermosetting bioadhesive hydrogel formulated with clindamycin phosphate 2% to be administered in a single vaginally delivered application, as a first line treatment for bacterial vaginosis, or BV;
Ovaprene®, a hormone-free, monthly vaginal contraceptive;
Sildenafil Cream, 3.6%, a proprietary cream formulation of sildenafil for topical administration to the vulva and vagina for treatment of female sexual arousal disorder, or FSAD;
DARE-HRT1, a combination bio-identical estradiol and progesterone intravaginal ring for the treatment of vasomotor symptoms (VMS) as part of a hormone replacement therapy, or HRT, following menopause;
DARE-VVA1, a vaginally delivered formulation of tamoxifen to treat vulvar vaginal atrophy, or VVA, in patients with hormone-receptor positive breast cancer; and
DARE-FRT1, an intravaginal ring containing bio-identical progesterone for the prevention of preterm birth and for fertility support as part of an in vitro fertilization treatment plan.
Our portfolio also includes these pre-clinical stage product candidates:


ORB-204 and ORB-214, 6-month and 12-month formulations of injectable etonogestrel for contraception; and
DARE-RH1, a novel approach to non-hormonal contraception for both men and women by targeting the CatSper ion channel.
In addition, as discussed further below, on November 10, 2019, we entered into a merger agreement with Microchips Biotech, Inc., a privately-held company developing a proprietary, microchip-based, implantable drug delivery system designed to store and precisely deliver hundreds of therapeutic doses over months and years, with potential utilization in multiple therapeutic indications, including women's contraception. The Company’s firstimplant is intended to be operated by the patient to deliver medication on demand or on a pre-determined schedule that can be activated or deactivated wirelessly, as required. Microchips' lead product candidate is Ovaprene, a non-hormonalpre-clinical stage contraceptive intravaginal ringapplication of the technology, which, if successful, could provide women with unparalleled control over the management of their fertility. Utilizing the active pharmaceutical ingredient levonorgestrel, the device is intended to deliver all the benefits of a traditional long-acting, reversible contraceptive product and provide precise dosing and extended implant duration with the ability to wirelessly control the duration of ovulatory suppression based on individual user needs.
Our primary operations have consisted of, and are expected to continue to consist of, product research and development and advancing our portfolio of product candidates through clinical development and regulatory approval. We expect that the majority of our development expenses over the next two years will support the advancement of DARE-BV1, Ovaprene and Sildenafil Cream, 3.6%.
To date, we have not obtained any regulatory approvals for any of our product candidates, commercialized any of our product candidates or generated any revenue. We are subject to several risks common to clinical-stage biopharmaceutical companies, including dependence on key individuals, competition from other companies, the need to develop commercially viable products in a timely and cost-effective manner, and the need to obtain adequate additional capital to fund the development of product candidates. We are also subject to several risks common to other companies in the industry, including rapid technology change, regulatory approval of products, uncertainty of market acceptance of products, competition from substitute products and larger companies, compliance with government regulations, protection over multiple weeks of use, requiring no interventionproprietary technology, dependence on third parties, and product liability.
Clinical Stage Product Candidates
The following provides a brief overview of the clinical stage product candidates on which we are primarily focusing our development efforts at this time.
DARE-BV1
DARE-BV1 is a novel thermosetting bioadhesive hydrogel formulated with 2% clindamycin, an antibiotic used to treat certain bacterial infections, including BV. DARE-BV1 is designed to be administered in a convenient, single vaginally delivered application. The bioadhesive properties of DARE-BV1 are believed to prolong the duration of exposure of clindamycin relative to currently marketed creams potentially improving the rate of clinical effectiveness compared to existing FDA-approved therapies. Current FDA-approved therapies for BV have clinical cure rates ranging from 37-68%. In an investigator initiated proof-of-concept study that enrolled 30 women, DARE-BV1 demonstrated an 86% clinical cure rate in evaluable subjects (n=26) at the timetest-of-cure visit (Day 7-14) after one administration. We plan to utilize the FDA's 505(b)(2) pathway to obtain marketing approval of intercourse.

Since our inception, we have devoted significant resources to licenseDARE-BV1 for BV in the U.S.

In August 2019, the FDA granted DARE-BV1 Qualified Infectious Disease Product (QIDP) designation for the treatment of BV in women. QIPD designation is available under Title VIII of the FDA Safety and prepareInnovation Act, titled General Antibiotic Incentive Now (GAIN), which creates incentives for the development of antibacterial and antifungal drug products that treat serious or life-threatening infections. The primary incentive is a five-year exclusivity extension added to any exclusivity for which a QIDP qualifies upon FDA approval. Additionally, DARE BV-1's QIDP designation makes it eligible for Fast Track designation and Priority Review.
We are currently working on regulatory and start-up activities that are necessary to commence a Phase 3 multicenter, randomized, double-blind, placebo-controlled study in the U.S. of DARE-BV1 for the treatment of BV, or the DARE-BV1-001 study, and expect to initiate the study in early 2020. We plan to enroll approximately 219 postmenarchal women, ages 12 and above, at approximately 20 sites in the United States. The primary efficacy endpoint of the study will be clinical cure at the evaluation visit to occur 21 to 30 days after enrollment in the study, or the Day 21-30 visit, with clinical cure defined as meeting three criteria (derived from the Amsel criteria): resolution of abnormal vaginal discharge


associated with BV as confirmed by the investigator; a negative 10% potassium hydroxide (KOH) “whiff test”; and the presence of clue cells at less than 20% of total epithelial cells in a saline wet mount. Based on our pre-investigational new drug (IND) communications with the FDA, in parallel with the DARE-BV1-001 study and to support the new drug application, or NDA, for DARE-BV1, we will conduct nonclinical studies of certain excipients in DARE-BV1 and the clinical formulation of DARE-BV1, including reproductive toxicology studies. If DARE-BV1-001 and the nonclinical studies are successful, we expect to be in a position to file an NDA with the FDA in late 2020 or early 2021. We anticipate that the aggregate costs of DARE-BV1-001, planned nonclinical studies, manufacturing activities for the program through filing of the NDA, and the NDA filing will be less than $9.0 million.
To provide additional data and support DARE-BV1’s value proposition, we also plan to conduct an extension study of DARE-BV1-001, or the DARE-BV1-002 study. DARE-BV1-002 is expected to enroll up to approximately 219 subjects who complete DARE-BV1-001. In DARE-BV1-002, subjects will receive no additional treatment and will be evaluated 30 and 60 days following enrollment in DARE-BV1-002 to evaluate the duration of response (sustained clinical cure) of DARE-BV1 as compared to treatment with metronidazole vaginal gel, which is the treatment that subjects in DARE-BV1-001 will receive if their BV symptoms are not otherwise resolved. We anticipate that the cost of DARE-BV1-002 will be less than $2.0 million.
Ovaprene
Ovaprene is a novel hormone-free monthly vaginal contraceptive for pregnancy prevention, designed to offer both the convenience of once-a-month use and "typical use" effectiveness in the same range as traditional hormonal contraceptive methods (pills, patches, vaginal rings). If approved, Ovaprene may represent a new category of birth control. Ovaprene does not contain hormones and is designed to be worn conveniently over multiple weeks (i.e. one menstrual cycle) similar to other vaginal ring contraceptive products, including Merck's NuvaRing®.
Ovaprene is a combination product and, following a request for designation process, the FDA designated Center for Devices and Radiological Health, or CDRH, as the lead FDA program center for premarket review and product regulation. CDRH has determined that a PMA will be required to market Ovaprene in the U.S.
On November 12, 2019, we announced positive topline results of our postcoital test, or PCT, clinical trial of Ovaprene. We designed the PCT clinical trial to assess general safety and effectiveness in preventing progressively motile sperm from reaching the cervical canal following intercourse and acceptability of the product to the patient. The study evaluated 23 women over the course of five menstrual cycles, with each woman assessed over approximately 21 visits. Each woman’s cervical mucus was measured at several points during the study, including a baseline measurement at menstrual cycle 1 that excluded the use of any product. Subsequent cycles and visits included the use of a diaphragm during intercourse (menstrual cycle 2) and Ovaprene (menstrual cycles 3, 4 and 5). The primary endpoint of the study was to evaluate changes from baseline in PCT results due to device use, as represented by the proportion of women and cycles with an average of fewer than five progressively motile sperm (PMS) per high power field (HPF) in midcycle cervical mucus collected two to three hours after intercourse with Ovaprene in place.
The PCT clinical study met its primary endpoint— Ovaprene prevented the requisite number of sperm from reaching the cervix across all women and all cycles evaluated. Specifically, in 100% of women and cycles, an average of less than five PMS per HPF were present in the midcycle cervical mucus collected two to three hours after intercourse with Ovaprene in place. To calculate the average number of PMS, PMS were counted across each of nine HPFs and averaged. Women enrolled in the study who completed at least one Ovaprene PCT (N=26) had a mean of 27.21 PMS/HPF in their baseline cycle, a mean of 0.22 PMS/HPF in their diaphragm cycle, which was anticipated based on published studies, and a mean of 0.48 PMS/HPF in their Ovaprene PCT cycles, with a median of zero PMS. No serious or severe adverse events were reported or observed.
PCT clinical trials have been used as a surrogate marker for contraceptive effectiveness. Infertility research suggests that higher rates of pregnancy are associated with PMS per HPF of from greater than one to greater than 20 sperm, and less than five PMS per HPF is considered indicative of contraceptive effectiveness.
Based on the positive results of our PCT clinical trial, we currently intend to file an Investigational Device Exemption (IDE) with the FDA during the first half of 2020, and, pending FDA review and clearance of the IDE, to initiate a pivotal contraceptive effectiveness and safety study of Ovaprene in the second half of 2020. If successful, we expect that study to support marketing approvals of Ovaprene in the United States, Europe and other countries worldwide.
Sildenafil Cream, 3.6%
Sildenafil Cream, 3.6%, which incorporates sildenafil, the same active ingredient in the male erectile dysfunction drug Viagra®, if approved, could be the first FDA-approved FSAD treatment option for women. FSAD is a condition characterized primarily by a persistent or recurrent inability to attain or maintain sufficient genital arousal during sexual activity, frequently resulting in distress or interpersonal difficulty. As with erectile dysfunction in men, FSAD in women is associated with insufficient blood flow to the genitalia. Sildenafil Cream, 3.6% is designed to increase genital blood flow and provide improvements in the female genital arousal response, while avoiding systemic side effects observed with oral formulations of sildenafil.
We plan to leverage the existing data and established safety profile of sildenafil and the Viagra® brand to utilize the FDA’s 505(b)(2) pathway to obtain marketing approval of Sildenafil Cream, 3.6% in the U.S. During the third quarter of 2018, we had a Type C meeting with the FDA regarding the design of our Phase 2b clinical trial for Sildenafil Cream, 3.6% and the overall development program for this product candidate. Based on the FDA guidance we received from that meeting, we conducted a non-interventional study intended to support the content validity of specific patient reported outcome, or PRO, measures for subsequent clinical studies of Sildenafil Cream, 3.6%. The PRO content validity study, which was completed in the third quarter of 2019, was designed to identify and document the genital arousal symptoms that will be assessed in our Phase 2b trial, in which subjects will use Sildenafil Cream, 3.6% and placebo cream in their home setting, as well as our Phase 3 studies, and to demonstrate that those symptoms are the most important and relevant to our target population and are also acceptable endpoints for the FDA. The timing of initiation of the Phase 2b clinical trial will be influenced by additional FDA guidance, which we expect to receive prior to the end of 2019. In anticipation of that FDA guidance, we are conducting start-up activities for the Phase 2b trial. In addition, we have performed, and will continue to perform, additional clinical and non-clinical work that might be valuable or required to support the overall program.
DARE-HRT1
DARE-HRT1 is an intravaginal ring, or IVR, containing bio-identical estradiol and bio-identical progesterone to treat the vasomotor symptoms (VMS) associated with menopause as part of a hormone replacement therapy regimen. There are currently no FDA-approved IVRs that deliver bio-identical progesterone in combination with bio-identical estradiol. The IVR technology used in DARE-HRT1 was developed by Dr. Robert Langer from the Massachusetts Institute of Technology and Dr. William Crowley from Massachusetts General Hospital and Harvard Medical School. We plan to utilize the FDA's 505(b)(2) pathway to obtain marketing approval of DARE-HRT1 in the U.S. We intend to initiate a Phase 1 clinical study to evaluate the pharmacokinetics and safety of DARE-HRT1 in healthy post-menopausal women in the first quarter of 2020 and to report topline results in 2020. DARE-HRT1 has the potential to be a first-in-category product.
Recent Events
Underwritten Public Offering
On April 11, 2019, we closed an underwritten public offering of 4,575,000 shares of our common stock at a public offering price of $1.10 per share. We granted the underwriters a 30-day over-allotment option to purchase up to an additional 686,250 shares, which was exercised in full on April 12, 2019. Including the over-allotment shares, we issued a total of 5,261,250 shares, and received gross proceeds of approximately $5.8 million and net proceeds of approximately $5.2 million after deducting underwriting discounts and offering expenses.
As a result of the sale of shares of our common stock in the offering described above, per the terms of the warrants we issued in February 2018, their exercise price was automatically reduced from $3.00 to $0.98 per share on April 11, 2019. For additional information, see Note 6 to our unaudited interim consolidated financial statements contained in this report.
Merger Agreement with Microchips Biotech, Inc.
On November 10, 2019, we entered into an Agreement and Plan of Merger, or the Microchips Merger Agreement, with, among others, Microchips Biotech, Inc., or Microchips, pursuant to which, if the transactions contemplated thereby are consummated, we will acquire Microchips via a reverse triangular merger, in which Microchips will become our wholly owned subsidiary. The following is a summary of certain material terms of the Microchips Merger Agreement.


At the closing of the merger, we will issue an aggregate of 3,000,000 shares of our common stock to the holders of shares of Microchips’ capital stock outstanding immediately prior to the effective time of the merger (other than holders of dissenting shares, if any), or the Effective Time Holders. Such shares are in consideration of Microchips' cash and cash equivalents, less liabilities, at closing. Microchips' cash and cash equivalents at closing are anticipated to total approximately $6.9 million, and approximately $5.7 million after payment of transaction-related expenses.
We agreed to pay the following contingent consideration to the Effective Time Holders in consideration of all of the other assets of Microchips: (1) up to $46.5 million contingent upon the achievement of specified funding, product development and regulatory milestones; up to $2.3 million of which we may elect to pay in shares of our common stock, subject to approval of our stockholders to the extent necessary to comply with Nasdaq Listing Rule 5635; (2) up to $55.0 million contingent upon the achievement of specified amounts of aggregate net sales of products incorporating the intellectual property we acquired in the merger; (3) tiered royalty payments ranging from low single-digit to low double-digit percentages of annual net sales of such products, subject to customary provisions permitting royalty reductions and offset; and (4) a percentage of sublicense revenue related to such products. We expect that less than $1.3 million of the contingent consideration may become payable through 2021.
We agreed to register the shares issuable under the Microchips Merger Agreement for resale by the Effective Time Holders under the Securities Act of 1933, as amended.
The Microchips Merger Agreement may be terminated under specified circumstances, including by mutual consent of the parties, by us if Microchips experiences a material adverse effect, by either party if representations and warranties of the other party are not true or if the other party has failed to perform any covenant, or if the transactions contemplated by the Microchips Merger Agreement have not been consummated by November 22, 2019 (which date may be extended by mutual written consent of the parties).



Financial Overview
We incurred a loss of approximately $10.4 million for the nine months ended September 30, 2019. As of September 30, 2017, Daré2019, we had cash(a) an accumulated deficit of approximately $8.53$40.2 million and (b) cash and cash equivalents of approximately $2.4 million. We will continue to require additional capital to continue our clinical development activities, expand our product portfolio and if successful, to commercialize approved products. Accordingly, wealso had negative cash flow from operations of approximately $9.5 million during the nine months ended September 30, 2019. We will need to raise substantial additional capital to continue to fund our operations.operations and to successfully execute our current operating plan, including the development of our current product candidates. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of our clinical development efforts. Failure toIf we do not raise capital as and when needed, on favorable termswe will not be able to continue development of our product candidates or atwe will be required to delay, scale back or eliminate some or all would have a negative impact onof our financial condition anddevelopment programs or cease operations. For additional information regarding our ability to advance Ovaprenecontinue as a going concern, see Note 2 to our unaudited interim consolidated financial statements contained in this report and “Liquidity and Capital Resources and Financial Condition,” below.
Financial Operations Overview
Revenue
To date we have not generated any revenue and do not expect to acquire orgenerate any revenue for the foreseeable future. In the future, we may generate revenue from product sales, license fees, milestone and research and development payments in connection with strategic partnerships, and royalties resulting from the rightssales of products developed under licenses of intellectual property. Our ability to other potentialgenerate product candidates.

Recent Events

On July 19, 2017, allrevenue will depend on the successful clinical development of the outstanding shares of capital stock of Daré Bioscience Operations, Inc., a private Delaware corporation (“Private Daré”), were purchased by the Company in accordance with the terms of a stock purchase agreement dated as of March 19, 2017 (the “Stock Purchase Agreement”), by and among the Company, Private Daréour product candidates, receiving regulatory approvals to market such products and the holderseventual successful commercialization of capital stockproduct candidates. If we fail to complete the development of products candidates in a timely manner, or to receive regulatory approval for such product candidates, our ability to generate future revenue and securities convertible into capital stock of Private Daré named therein (the “Private Daré Stockholders”). Pursuant to the Stock Purchase Agreement, each Private Daré Stockholder sold its shares of common stock in Private Daré to the Company in exchange for newly issued shares of the Company’s common stock.

On July 19, 2017, the Company also completed the sale of its proprietary Dynamic Tumor Targeting™ Platform (the “Platform”) to Novartis Institutes for BioMedical Research, Inc. (“Novartis”) for $6.0 million.  

Following the closing of the transactions contemplated by the Stock Purchase Agreement (collectively, the “Stock Purchase Transaction”) and the sale of the Platform, the Company changed its name to Daré Bioscience, Inc.  As a result of the Stock Purchase Transaction, Private Daré became a wholly owned subsidiary of Daré Bioscience, Inc. and the Private Daré Stockholders became majority shareholders of Daré Bioscience, Inc. owning approximately 51% of the issued and outstanding shares of the Company’s shares of common stock.


Immediately prior to the closing of the Stock Purchase Transaction, all the convertible promissory notes, principal and accrued interest of Private Daré were converted into shares of common stock of Private Daré at conversion prices of $0.18 and $0.36 per share in accordance with their respective note agreements.  

In addition, the holders of the convertible promissory notes received additional common shares of Private Daré ranging from 20% to 40% of total outstanding principal and accrued interest as of the date of conversion. All outstanding shares of common stock of Private Daré were exchanged for newly-issued shares of common stock of the Company and outstanding stock options of Private Daré were assumed by the Company pursuant to the terms of the Stock Purchase Transaction. For purposes of clarity, we sometimes refer to our business as “Private Daré” when discussing the results of operations and financial condition when we were a private company prior to the Stock Purchase Transaction.

Immediately after the Stock Purchase Transaction, the Company implemented a reverse stock split (“Reverse Stock Split”) at a ratio of one new share for every ten shares of its common stock outstanding. No fractional shares were issued and instead, shareholders received cash for the value of their fractional shares. Following the closing of the Stock Purchase Transaction, the previous Cerulean equity holders of the Company immediately prior to the closing of the Stock Purchase Transaction owned approximately 49% and equity holders of Private Daré owned approximately 51% of the shares of the Company.

Financial Operations Overview

would be materially adversely affected.

Research and Development Expenses

Research and development expenses represent costs incurred to conductinclude research and development of Daré’scosts for our product candidates.candidates and transaction costs related to our acquisitions. We recognize all research and development costsexpenses as they are incurred. Research and development expenses consist primarily of the following:

of:

expenses incurred under agreements with consultants and clinical trial sites that conduct research and development activities on our behalf;

laboratory and vendor expenses related to the execution of nonclinical studies and clinical trials;

contract manufacturing expenses, primarily for the production of clinical supplies;

transaction costs related to the acquisition of technologies and

related intellectual property; and

internal costs that are associated with activities performed by our research and development organization and generally benefit multiple programs.

Daré expects

We expect research and development expenses willto increase in the future as we advance Ovaprene orinvest in the development of our clinical-stage product candidates and as any other potential product candidates we may develop are advanced into and through clinical trials and as we pursuein the pursuit of regulatory approvals, whichapprovals. Such activities will require a significant increasedincrease in investment in regulatory support, and contract manufacturing andclinical supplies, inventory build-up related costs.costs, and the payment of success-based milestones. In addition, Daré continueswe continue to evaluate opportunities to acquire or in-license other product candidates and technologies, which may result in higher research and development expenses due to, among other factors, license fee and/or milestone payments.

The process of conducting

Conducting clinical trials necessary to obtain regulatory approval is costly and time consuming. We may never succeed in timely developing and achievingnot obtain regulatory approval for ourany product candidates.candidate on a timely and cost-effective basis or at all. The probability of success of Daré’sour product candidates may be affected by numerous factors, including clinical results and data, competition, intellectual property rights, manufacturing capability and commercial viability. As a result, we are unable tocannot accurately determine the duration and completion costs of development projects or when and to what extent we will generate revenue from the commercialization of any of our product candidates.



General and Administrative Expense

General and administrative expenses consist of personnel costs, facility expenses, expenses for outside professional services, including legal, audit and accounting services. Personnel costs consist of salaries, benefits and stock-based compensation. Facility expenses consist of rent and other related costs. Daré expects to incur additional expenses as a result of increased costs associated with being a public company, including expenses related to compliance with the rules and regulations of the SEC and Nasdaq, additional insurance, investor relations, and other administrative expenses and professional services.


Critical Accounting Policies and Significant Judgments and Estimates

Management’s discussion and analysis of financial condition and results of operations is based on our condensedinterim consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. The preparation ofPreparing these financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses. On an ongoing basis, Daré evaluateswe evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions that Daré believeswe believe to be reasonable under the circumstances. These estimates and assumptions form the basis for making judgments about the carrying values of assets and liabilities and the recording of expenses that are not readily apparent from other sources. Actual results may differ materially from these estimates. Daré believes that theFor a description of critical accounting policies discussed below are critical to understandingthat affect our historical and future performance, as these policies relate to the more significant areas involving management’s judgments and estimates.

estimates used in the preparation of our unaudited consolidated interim financial statements, refer to Item 7 in Management’s Discussion and Analysis of Financial Condition and Results of Operations — and Note 1 to our financial statements contained in our 2018 10-K and Note 3 to our unaudited interim consolidated financial statements contained in this report.

Results of Operations
Comparison of Three Months Ended September 30, 20172019 and 2016

The operations presented in the interim condensed consolidated financial statements and accompanying notes for the three months ended September 30, 2017 represent the operations of the Company following the Stock Purchase Transaction. The interim condensed consolidated financial statements and accompanying notes for the three months ended September 30, 2016 represent the operations of Private Daré, making a comparison between periods difficult.

2018 (Unaudited)

The following table summarizes Daré’s consolidatedour results for the three months ended September 30, 2017 and 2016,periods indicated, together with the changes in those items in dollars:

 

 

Three months ended September 30,

 

 

Change

 

 

 

2017

 

 

2016

 

 

Dollars

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

1,052,628

 

 

$

5,963

 

 

 

1,046,665

 

Research and development expenses

 

 

280,793

 

 

 

—

 

 

 

280,793

 

Total operating expenses

 

 

1,333,421

 

 

 

5,963

 

 

 

1,327,458

 

Loss from operations

 

 

(1,333,421

)

 

 

(5,963

)

 

 

(1,327,458

)

Interest income (expense)

 

 

(296,262

)

 

 

(10,142

)

 

 

(286,120

)

Net Loss

 

$

(1,629,683

)

 

$

(16,105

)

 

 

(1,613,578

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

$

(9,774

)

 

$

—

 

 

 

(9,774

)

Comprehensive loss

 

$

(1,639,457

)

 

$

(16,105

)

 

 

(1,623,352

)

General and administrative

 Three Months Ended September 30, Dollar
 2019 2018 Change
Operating expenses:     
General and administrative expense$1,318,986
 $1,175,049
 $143,937
Research and development expenses1,966,230
 1,446,548
 519,682
License expenses133,333
 —
 133,333
Total operating expenses3,418,549
 2,621,597
 796,952
Loss from operations(3,418,549) (2,621,597) (796,952)
Other income25,471
 47,122
 (21,651)
Net loss(3,393,078) (2,574,475) (818,603)
Deemed dividend from trigger of down round provision feature—
 —
 —
Net loss to common shareholders(3,393,078) (2,574,475) (818,603)
Other comprehensive loss:    

Foreign currency translation adjustments(15,378) (18,721) 3,343
Comprehensive loss$(3,408,456) $(2,593,196) $(815,260)
Revenues
We did not recognize any revenues for either of the three months ended September 30, 2019 or 2018.
General and administrative expenses increased by $1,046,665 to $1,052,628
The increase of $143,937 in general and administrative expenses for the three months ended September 30, 2017 from $5,963 for2019 as compared to the three months ended September 30, 2016. The increase2018 was primarily dueattributable to $535,003 of legal expense, accounting expense and other expenses incurred(i) an increase in connection with the Stock Purchase Transaction. Daré personnel costs increased $319,197 due to salaries expenseof approximately $67,000 reflecting the hiring of additional employees which resulted in higher salary, benefit and bonus expenses in the current period, including bonuses, with no comparableand (ii) an increase in stock-based compensation expense in the same period of the prior year. Following the Stock Purchase Transaction, and based upon the market data presented and recommendation of Radford, the Company’s compensation consultant, and upon approval of the Compensation Committee of the Company’s Board of Directors, the Company began paying its newly appointed executives compensation at a level in line with market rates for executive officers of early stage, pre-commercial biopharmaceutical public companies.

$73,815.



Research and development

Research expenses

The increase of $519,682 in research and development expenses for the three months ended September 30, 20172019 as compared to the three months ended September 30, 2018 was primarily attributable to (i) an increase in costs related to development activities of approximately $777,000 for DARE-BV1 and Ovaprene, and to a lesser extent DARE-VVA1, (ii) an increase in personnel costs of approximately $149,000 reflecting the hiring of additional employees which resulted in higher salary, benefit and bonus expenses, and (iii) an increase in stock-based compensation expense of $21,587. Those increases were $280,793partially offset by (x) a decrease in costs related to development activities of approximately $140,000 for Sildenafil Cream, 3.6%, DARE-HRT1, and DARE-FRT1, (y) an increase in grant funding recorded as a reduction to research and development expense related to Ovaprene of approximately $231,000, and (z) a decrease in costs related to pre-clinical development activities of approximately $103,000.
License expenses
The license expenses of $133,333 for the three months ended September 30, 2019 related to (i) the accrual of deferred license fees due under the Assignment Agreement with Hammock Pharmaceuticals, Inc. and the First Amendment to License Agreement with TriLogic Pharma, LLC and MilanaPharm LLC, and (ii) the accrual of the annual license maintenance fee due under the Juniper License Agreement. During the quarter, we accrued (x) $20,833 of the $50,000 annual license maintenance fee payable in the second quarter of 2020 under the Juniper License Agreement (y) $62,500 of the $250,000 of license fees payable under the Assignment Agreement and (z) $50,000 of the $200,000 of license fees payable under the First Amendment to License Agreement. Both of these license fees are due in December 2019, and in our discretion, may be paid either in cash or with shares of our common stock.
There were no relatedlicense expenses for the three months ended September 30, 2016. 2018.
For further discussion of these license fees, see Note 8 to our unaudited interim consolidated financial statements contained in this report.
Other income
The expenses are all related to Ovaprene development costsdecrease of $21,651 in the current period.


Interestother income (expense)

Interest expense increased by $286,120 to $296,262 for the three months ended September 30, 2017 from $10,142 for2019 as compared to the three months ended September 30, 2016. The increase2018 was primarily due to $316,804 expense associated witha decrease in interest earned on cash balances in the beneficial conversion of the Convertible Promissory Notes.

Results of Operations — current period.

Comparison of Nine Months Ended September 30, 20172019 and 2016

The operations presented in the interim condensed consolidated financial statements and accompanying notes for the nine months ended September 30, 2017 represent the operations of the Company and give effect to the Stock Purchase Transaction. The interim condensed consolidated financial statements and accompanying notes for the nine months ended September 30, 2016 represent the operations of Private Daré, making a comparison between periods difficult.

2018 (Unaudited)

The following table summarizes Daré’s consolidatedour results for the nine months ended September 30, 2017 and 2016,periods indicated, together with the changes in those items in dollars:

 

 

Nine months ended September 30,

 

 

Change

 

 

 

2017

 

 

2016

 

 

Dollars

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

General and administrative

 

$

1,729,338

 

 

$

119,283

 

 

 

1,610,055

 

Research and development expenses

 

 

312,169

 

 

 

72,666

 

 

 

239,503

 

License expenses

 

 

—

 

 

 

250,000

 

 

 

(250,000

)

Total operating expenses

 

 

2,041,507

 

 

 

441,949

 

 

 

1,599,558

 

Loss from operations

 

 

(2,041,507

)

 

 

(441,949

)

 

 

(1,599,558

)

Interest income (expense)

 

 

(330,233

)

 

 

(30,205

)

 

 

(300,028

)

Net Loss

 

$

(2,371,740

)

 

$

(472,154

)

 

 

(1,899,586

)

Other comprehensive loss:

 

 

 

 

 

 

 

 

 

 

 

 

Foreign currency translation adjustments

 

$

(9,774

)

 

$

—

 

 

 

(9,774

)

Comprehensive loss

 

$

(2,381,514

)

 

$

(472,154

)

 

 

(1,909,360

)

General and administrative

 Nine Months Ended September 30, Dollar
 2019 2018 Change
Operating expenses:     
General and administrative expense$3,903,545
 $3,635,413
 $268,132
Research and development expenses6,172,192
 4,750,823
 $1,421,369
License expenses408,333
 350,000
 $58,333
Impairment of goodwill—
 5,187,519
 $(5,187,519)
Total operating expenses10,484,070
 13,923,755
 $(3,439,685)
Loss from operations(10,484,070)
 (13,923,755)
 (3,439,685)
Other income86,703
 101,492
 $(14,789)
Net loss(10,397,367)
 (13,822,263)
 $3,424,896
Deemed dividend from trigger of down round provision feature(789,594) —
 789,594
Net loss to common shareholders(11,186,961) (13,822,263) (2,635,302)
Other comprehensive loss:     
Foreign currency translation adjustments(15,674)
 (59,952)
 $44,278
Comprehensive loss$(11,202,635) $(13,882,215) $2,679,580


Revenues
We did not recognize any revenues for either of the nine months ended September 30, 2019 or 2018.
General and administrative expenses increased by $1,610,055 to $1,729,338
The increase of $268,132 in general and administrative expenses for the nine months ended September 30, 2017 from $119,2832019 as compared to the nine months ended September 30, 2018 was primarily attributable to (i) an increase in personnel costs of approximately $409,000 reflecting the hiring of additional employees which resulted in higher salary, benefit and bonus expenses in the current period, (ii) an increase in stock-based compensation expense of $213,388, and (iii) an increase in insurance costs of approximately $56,000. Those increases were partially offset by a decrease of approximately $436,000 in expenses for accounting, legal, and professional services.
Research and development expenses
The increase of $1,421,369 in research and development expenses for the nine months ended September 30, 2016. The increase2019 as compared to the nine months ended September 30, 2018 was primarily attributable to (i) an increase in costs related to development activities of approximately $2,015,000 for DARE-BV1, Ovaprene and Sildenafil Cream, 3.6%, DARE-HRT1 and DARE-FRT1, (ii) an increase in personnel costs of approximately $755,000 due to $963,380 of legal expense, accounting expenseincreased salary, benefit and otherbonus expenses incurred in connection with the Stock Purchase Transaction. Daré personnel costs increased $326,349 due to salariesstaff additions, and (iii) an increase in stock-based compensation expense including bonuses,of $72,786. Those increases were partially offset by (x) an increase in the current period with no comparable expense in the same period of the prior year. Following the Stock Purchase Transaction, and based upon the market data presented and recommendation of Radford, the Company’s compensation consultant, and upon approval of the Compensation Committee of the Company’s Board of Directors, the Company began paying its newly appointed executives compensation atgrant funding recorded as a level in line with market rates for executive officers of early stage, pre-commercial biopharmaceutical public companies.

Research and development

Researchreduction to research and development expense related to Ovaprene of approximately $849,000, (y) a decrease in costs related to development activities of approximately $346,000 for DARE-VVA1, (z) a decrease in costs related to pre-clinical development activities of approximately $188,000.

License expenses
The license expenses increased by $239,503 to $312,169of $408,333 for the nine months ended September 30, 2017 from $72,6662019 related to (i) the accrual of deferred license fees due under the Assignment Agreement with Hammock Pharmaceuticals, Inc. and the First Amendment to License Agreement with TriLogic Pharma, LLC and MilanaPharm LLC; and (ii) the $50,000 annual license maintenance fee due under the Juniper License Agreement, paid in the second quarter of 2019, and the accrual of the annual license maintenance fee due in the second quarter of 2020 under the Juniper License Agreement. During the nine months ended September 30, 2019, we accrued (x) $20,833 of the $50,000 annual license maintenance fee due under the Juniper License Agreement, (y) $187,500 of the $250,000 of license fees payable under the Assignment Agreement and (z) $150,000 of the $200,000 of license fees payable under the First Amendment to License Agreement. Both of these license fees are due in December 2019, and in our discretion, may be paid either in cash or with shares of our common stock.
The license expenses of $350,000 for the nine months ended September 30, 2016. The expenses are primarily due2018 was related to directthe $250,000 non-creditable upfront license fee payment to Juniper in connection with the execution of the Juniper License Agreement and indirect Ovaprene development costs.

Licenseto the $100,000 in license fees paid to SST.

For further discussion of these license fees, see Note 8 to our unaudited interim consolidated financial statements contained in this report.
Goodwill impairment expense

The license expense

We incurred an impairment loss of $250,000$5,187,519 for the nine months ended September 30, 2016 related2018 due to fees paid to ADVA-Tec for exclusive option related toour determination that the Ovaprene technology.carrying amount of our goodwill exceeded its estimated fair value at September 30, 2018. For furthera discussion of the ADVA-Tec Agreement,our goodwill analysis, see Note 64 to our unaudited interim consolidated financial statements contained in this report.
Other income
The decrease of Notes to the Condensed Consolidated Financial Statements.


Interest$14,789 in other income (expense)

Interest expense increased by $300,028 to $330,233 for the nine months ended September 30, 2017 from $30,205 for2019 as compared to the nine months ended September 30, 2016. The increase2018 was primarily due to a decrease in interest earned on cash balances in the $316,804 expense associated with the beneficial conversion of Convertible Promissory Notes.

current period.




Liquidity and Capital Resources

As and Financial Condition

We prepared the accompanying consolidated financial statements on a going concern basis, which assumes that we will realize our assets and satisfy our liabilities in the normal course of September 30, 2017, Daré had $8.53 million inbusiness. In addition, we have a history of losses from operations, we expect negative cash flows from our operations to continue for the foreseeable future, and cash equivalents and an accumulated deficit of $3.1 million. Daré expectswe expect that over time, its general and administrative and research and development expenses will increase. As a result, Daré anticipates that itour net losses will continue for at least the next several years as we develop our existing product candidates and seek to incur increasing losses in the foreseeable future. Therefore, Daré willacquire, license or develop additional product candidates. We need to raise additional capital in the near term to fund itsour operations.
At September 30, 2019, our accumulated deficit was approximately $40.2 million, our cash and cash equivalents were approximately $2.4 million, our working capital was approximately $1.4 million, and we had incurred a net loss from operations whichof $10.5 million. We had negative cash flow from operations of approximately $9.5 million during the nine months ended September 30, 2019. We received gross proceeds of approximately $5.8 million, and net proceeds of approximately $5.2 million after deducting underwriting discounts and offering expenses, from our underwritten public offering that closed in April 2019. Considering our current cash resources, we do not believe our existing resources will be sufficient to fund planned operations through November 2020. For the foreseeable future, our ability to continue our operations will depend upon our ability to obtain additional capital. On November 11, 2019, we announced that we entered into a merger agreement to acquire Microchips. We expect the transaction to close on or before November 22, 2019, and if it does, we expect that Microchips cash and cash equivalents, after deducting change of control payments and other deal-related expenses, will be approximately $5.7 million at the time of closing. See "—Recent Events," above.
These circumstances raise substantial doubt about our ability to continue as a going concern. The accompanying interim 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 includeresult from the issuanceoutcome of public and private equity and debt financings, as well as government grants and strategic alliances.


the uncertainty of our ability to remain a going concern.

Plan of Operations and Future Funding Requirements

Our primary uses of capital are, and we expect will continue to be, staff-related expenses, the cost of clinical trialtrials and regulatory activities related to our product candidates, costs associated with contract manufacturing services and third-party clinical research and development services, payments due under license agreements upon the successful achievement of milestones of our product candidates, legal andexpenses, other regulatory expenses and general overhead costs.

Following

We expect our expenses to increase during the closing on July 19, 2017rest of 2019 and significantly through 2020 as we continue the Stock Purchase Transaction and the saledevelopment of our right, titleproduct candidates, in particular as we conduct activities in preparation for and interest incommence and conduct our planned Phase 3 clinical study of DARE-BV1, Phase 2b clinical study of Sildenafil Cream, 3.6%, pivotal contraceptive effectiveness and safety study of Ovaprene, and a Phase 1 clinical study of DARE-HRT1, as discussed above.
To date, we have not obtained any regulatory approvals for any of our product candidates, commercialized any of our product candidates or generated any product revenue, and we cannot anticipate if, and when we will generate any revenue. We have devoted significant resources to acquiring our portfolio of product candidates and to research and development activities for our product candidates. We must obtain regulatory approvals to sell any of our products in the patent rights, know-howfuture. We will need to generate sufficient safety and third-partyefficacy data on our product candidates for them to be attractive assets for potential strategic partners to license agreements relatingor for pharmaceutical companies to the Platformacquire, and for us to Novartis for $6.0 million, we believe that our existing resources will be sufficientgenerate cash and other license fees related to fund our planned operations for approximately two years. such product candidates.
Based on our current plansoperating plan estimates, we will not have sufficient cash to satisfy our working capital needs and existing cash balances,other liquidity requirements over at least the next 12 months from the date of issuance of the accompanying interim consolidated financial statements unless we believeraise additional capital or significantly curtail our operations. We currently anticipate that our availablewe will receive approximately $5.7 million of additional working capital if the acquisition of Microchips closes as anticipated, but these funds will not be sufficient for us to commencesupport the current operating plan over the next 12 months, and complete a postcoital clinical trial of our lead clinical candidate, Ovaprene during this period. We have based this estimate on assumptionsthere can be no assurance that may prove to be wrong, and we could deplete our available cash resources sooner than we currently expect. the Microchips acquisition will close as anticipated.
We will need to raise substantial additional financingcapital to continue to fund our operations and to successfully execute our current operating plan, including the clinical development of Ovaprene, including a pivotal contraceptive study, and to support new licenses or other rights related to future portfolioour current product candidates. We intend to cover future operating expenses through cash and cash equivalents on hand and throughare currently evaluating a combinationvariety of equity offerings, debtcapital raising options, including financings, government or other grant funding, collaborations and strategic alliances. Adequate additional financingalliances or other similar types of arrangements to cover our operating expenses, including the development of our product candidates and any future product candidates we may license or otherwise acquire. The amount and timing of


our capital needs have been and will continue to depend highly on many factors, including the product development programs we choose to pursue and the pace and results of our clinical development efforts. If we raise capital through collaborations, strategic alliances or other similar types of arrangements, we may have to relinquish, on terms that are not favorable to us, rights to some of our technologies or product candidates we would otherwise seek to develop or commercialize. There can be no assurance that capital will be available when needed or that, if available, it will be obtained on terms favorable to us and our stockholders. In addition, equity or debt financings may have a dilutive effect on acceptablethe holdings of our existing stockholders. If we cannot raise capital when needed, on favorable terms or at all. We can make no assurances thatall, we will not be able to raise the cash needed to fund thecontinue development of Ovaprene, potential otherour product candidates, will need to reevaluate our planned operations and may need to delay, scale back or eliminate some or all of our operating expenses.

development programs, reduce expenses, file for bankruptcy, reorganize, merge with another entity, or cease operations. If we become unable to continue as a going concern, we may have to liquidate our assets, and might realize significantly less than the values at which they are carried on our financial statements, and stockholders may lose all or part of their investment in our common stock. See “ITEM 1A. RISK FACTORS—Risks Related to Our Business—We will need to raise additional capital to continue our operations,” in our 2018 10-K.

Cash Flows

The following table summarizes Daré’sshows a summary of our cash flows for the periods indicated:

 

 

Nine months ended September 30,

 

 

 

2017

 

 

2016

 

Net cash used in operating activities

 

$

(1,579,060

)

 

$

(205,347

)

Net cash provided by investing activities

 

 

9,918,440

 

 

 

—

 

Net cash provided by financing activities

 

 

155,000

 

 

 

—

 

Effect of exchange rate changes on cash and cash equivalent

 

 

(9,774

)

 

 

—

 

Net increase (decrease) in cash

 

$

8,484,606

 

 

$

(205,347

)

 Nine Months Ended September 30,
 2019 2018
Net cash used in operating activities(9,506,797) (7,558,047)
Net cash used in investing activities—
 (518,836)
Net cash provided by financing activities5,151,702
 10,114,452
Effect of exchange rate changes on cash and cash equivalents(15,674) (59,952)
Net increase (decrease) in cash$(4,370,769) $1,977,617
Net cash used in operating activities

Cash used in operating activities for the nine months ended September 30, 2017 was $1,579,060. Cash used in operating activities2019 included the net loss of $2,371,740,$10.4 million, decreased by noncash chargesnon-cash stock-based compensation expense of $6,953 and non-cash interest of $$316,804.$344,712. A major component reducing operating cash was a $224,433$367,409 increase ofin prepaid expenses and other current assets, offset by a $659,223 increase$107,463 decrease in accounts payable reduced operating cash in this period. A $905,236 increase in accrued expenses and accrued expenses.

a $138,719 increase in other non-current assets and deferred charges provided operating cash in this period.

Cash used in operating activities for the nine months ended September 30, 2016 was $205,347. Cash used in operating activities2018 included the net loss of $472,154,$13.8 million, decreased by noncash chargesnon-cash impairment of $3.goodwill of $5.2 million, acquired in-process research and development expense of approximately $507,000, and non-cash stock-based compensation expense of $58,538. A major component reducing operating cash was a $13,401 decrease in$236,259 increase of accounts payable and accrued expenses, offset by a $250,000$203,928 decrease in other receivables.

receivables, a $105,692 decrease in other non-current assets and deferred charges, and a $193,495 decrease in other current assets provided operating cash in this period. A $238,378 increase in prepaid expenses reduced operating cash in this period.

Net cash used in investing activities
No cash was provided by investing activities

Cash provided byor used in investing activities for the nine months ended September 30, 2017 was $9.9 million, consisting of cash acquired through the Stock Purchase Transaction. No cash was provided by2019.

Cash used in investing activities for the nine months ended September 30, 2016.

2018 consisted of approximately $452,000 of transaction costs associated with our acquisition of Pear Tree, $55,000 of costs associated with our acquisition of certain assets from Hydra, and $11,836 related to the purchase of property and equipment.

Net cash provided by financing activities

Cash provided by financing activities for the nine months ended September 30, 2017 was $155,000, consisting2019 consisted of proceeds from issuance of Convertible Promissory Notes.

the underwritten public offering completed in April 2019.

No cash was


Cash provided by financing activities for the nine months ended September 30, 2016.

Future Funding Requirements

We have not generated any revenue to date,2018 consisted of $10.1 million of proceeds from the underwritten public offering completed in February 2018 and we cannot anticipate if,sales under the common stock sales agreement completed in January and when we will generate any revenue. Future product revenue will require us to obtain regulatory approvals in order to sell any products. Revenue from potential strategic partnerships will also require us to advance clinical candidates to meaningful development milestones. At the same time, we expect our expenses to increase in connection with the postcoital clinical study of Ovaprene and any other development activities we may undertake in the future.  We also expect to incur additional costs given the requirements of operating as a public company.

As of September 30, 2017, we had cash of approximately $8.53 million. We will continue to require additional capital to continue to fund our operations, our clinical development activities, expand our product portfolio and if successful, to commercialize any approved products. The amount and timing of our future funding requirements will depend on many factors, including the pace and results of clinical development efforts. Failure to raise capital as and when needed, on favorable terms or at all, would have a negative impact on our financial condition.

We intend to cover our future operating expenses through cash and cash equivalents on hand and through a combination of equity offerings, debt financings, government or other grant funding, collaborations and strategic alliances. To the extent that we raise additional capital through the issuance of additional equity or convertible debt securities, the ownership interest of our current stockholders will be diluted.

February 2018.

License and Royalty Agreements

We signed an agreementhave to obtain amake various royalty and milestone payments under the product license from ADVA-Tec (the “ADVA-Tec Agreement”) for the exclusive rightand development agreements related to develop and commercialize Ovaprene for human contraceptive use worldwide that became effective once the initial funding called for by the ADVA-Tec Agreement was secured. ADVA-Tec and its affiliates own issued patents or patent applications coveringDARE-BV1, Ovaprene, and control proprietary trade secrets coveringSildenafil Cream, 3.6%, and under the manufacture of Ovaprene. As of the dateother agreements related to our other clinical and preclinical candidates. For further discussion of these potential payments, see Note 8 to our unaudited interim consolidated financial statements contained in this patent portfolio includes 12 issued patents worldwide, along with eight patent applications, all of which in accordance with the terms of the ADVA-Tec Agreement are exclusively licensed to the Company. We also have a right of first refusal to license these patents and patent applications for purposes of additional indications for Ovaprene. Under the ADVA-Tec Agreement, ADVA-Tec will conduct certain research and development work as necessary to allow us to seek a Premarket Approval (“PMA”) from the FDA, and will supply us with our requirements of Ovaprene for clinical and commercial use on commercially reasonable terms. 

Under the ADVA-Tec Agreement, we are required to make payments of up to $14.6 million in the aggregate to ADVA-Tec based on the achievement of specified development and regulatory milestones, which include the completion of a successful Postcoital Clinical Trial Study (as defined in the ADVA-Tec Agreement); approval by the FDA to commence the Phase 3 pivotal human clinical trial; successful completion of the Phase 3 pivotal human clinical trial; the FDA’s acceptance of the filing of a PMA for Ovaprene; the FDA’s approval of the PMA for Ovaprene; Conformite Europeene Marking of Ovaprene in at least three designated European countries; obtaining regulatory approval in at least three designated European countries; and obtaining regulatory approval in Japan. In addition, after the commercial launch of Ovaprene, we are also required to make royalty payments to ADVA-Tec based on aggregate annual net sales of Ovaprene in specified regions, which percentage royalty rate will vary between 1% and 10% and will increase based on various net sales thresholds.  Finally, we are also required to make up to $20.0 million in the aggregate in commercial milestone payments to ADVA-Tec upon reaching certain worldwide net sales milestones. 

We are obligated to use commercially reasonable efforts to develop and commercialize Ovaprene, and must meet certain minimum spending amounts per year, such amounts totaling $5.0 million in the aggregate over the first three years, to cover such activities until a final PMA is filed, or until the first commercial sale of Ovaprene, whichever occurs first. 

report.

The ADVA-Tec license continues on a country-by-country basis until the later of the life of the licensed patents or the Company’s last commercial sale of Ovaprene, and the ADVA-Tec Agreement includes customary termination rights for both parties, and provides us the right to terminate with or without cause in whole or on a country-by-country basis upon 60 days prior written notice. In addition, ADVA-Tec may terminate the ADVA-Tec Agreement if we fail to do any of the following: (i) satisfy the annual spending obligation described above, (ii) fail to use commercially reasonable efforts to complete all necessary pre-clinical and clinical studies required to support and submit a PMA, (iii) fail to conduct clinical trials as set forth in the development plan that is agreed by Daré and ADVA-Tec, and as may be modified by a joint research committee, where such failure is not caused by events outside of our reasonable control, or (iv) fail to enroll a patient in the first non-significant risk medical device study or clinical trial as allowed by an institutional review board within six months of the production and release of Ovaprene, where non-enrollment is not caused by events outside of the our reasonable control. In addition, ADVA-Tec may terminate the ADVA-Tec Agreement if we develop or commercialize any non-hormonal ring-based vaginal contraceptive device which is deemed competitive to Ovaprene or, in certain limited circumstances, if we fail to commercialize Ovaprene in certain designated countries within three years of the first commercial sale of Ovaprene. The above description of the ADVA-Tec Agreement is qualified in its entirety by the full text of the agreement, a copy of which is filed as Exhibit 10.1 to this Quarterly Report on Form 10-Q.

Other Contracts

We enter into contracts in the normal course of business with various third parties for research studies, clinical trials, testing and other services. These contracts generally provide for termination upon notice, and therefore Daré believeswe do not believe that our non-cancelable obligations under these agreements are not material.

Off-Balance Sheet Arrangements

We did not have during the periods presented, and we do not entered intocurrently have, any off-balance sheet arrangements, and do not have any holdings in variable interest entities.

as defined under applicable SEC rules.


Item 3. Quantitative and Qualitative Disclosures About Market Risk

We

Under SEC rules and regulations, as a smaller reporting company we are exposednot required to market risk related to changes in interest rates. As of September 30, 2017, Daré had cash on hand of approximately $8.53 million, consisting primarily of investments in money market funds and certificates of deposit. Our primary exposure to market risk is interest rate sensitivity, which is affectedprovide the information required by changes in the general level of United States interest rates, particularly because our investments are in cash and cash equivalents. Due to the short-term duration of our investment portfolio and the low risk profile of our investments, an immediate 10% change in interest rates would not have a material effect on the fair market value of our investment portfolio.

this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Our management, under the supervision and with the participation of our principal executive officer and principal financial officer, has evaluated the effectiveness of our

We maintain disclosure controls and procedures as(as defined in Rule 13a-15(e) of the end of the period covered by this Quarterly Report on Form 10-Q.  The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a companyAct) that are designed to ensureprovide reasonable assurance that information required to be disclosed by a company in the reports that it files or submits under theour Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’sSEC’s rules and forms. Disclosure controlsforms, and procedures include, without limitation, controls and procedures designed to ensure that such information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the Company’sour management, including its principal executiveour Chief Executive Officer and principal financial officers,Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosures.

Management recognizesdisclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any disclosure controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives. Our disclosure controls and procedures have been designed to provide reasonable assurance of achieving their objectives. the desired control objectives, and in reaching a reasonable level of assurance, management necessarily was required to apply its judgment in evaluating the cost-benefit relationship of possible controls and procedures.

Based on suchan evaluation, under the supervision and with the participation of our principal executive officermanagement, including our Chief Executive Officer and principal financial officerChief Financial Officer, of the effectiveness of our disclosure controls and procedures, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) were effective as of September 30, 2019 at the reasonable assurance level as of September 30, 2017.

level.

Changes in Internal Control over Financial Reporting

No

There was no change in our internal control over financial reporting (as definedidentified in connection with the evaluation required by Rules 13a-15(f)13a-15(d) and 15d-15(f) under15d-15(d) of the Exchange Act)Act that occurred during the nine months ended September 30, 2017,fiscal quarter to which this report relates that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.



PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in various claims and legal proceedings. Regardless of outcome, litigation and other legal and administrative proceedings can have an adverse impact on us because of defense and settlement costs, diversion of management resources and other factors. WeThere are not currently party to anyno material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or other material legal proceeding.

of which any of our property is in the subject.

Item 1A. Risk Factors

An investment in shares of our common stock involves a high degree of risk. You should carefully consider the risks and uncertainties described in our 2018 10-K, in addition to other information in this report, before investing in our common stock. The occurrence of any of these risks could have a material adverse effect on our business, financial condition, results of operations and growth prospects. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment. There have been no material changes infrom the risk factors from those disclosed in Part II,I, Item IA.1A. Risk Factors in our interim report2018 10-K other than as described below:
There is no assurance that we will continue to satisfy the listing requirements of the Nasdaq Capital Market.
Our common stock is listed on Form 10-Qthe Nasdaq Capital Market. As previously reported, on June 21, 2019, we received a letter from the Listing Qualifications Department (the “Nasdaq Staff”) of the Nasdaq Stock Market (“Nasdaq”) notifying us that, for the quarterlylast 30 consecutive business days, the closing bid price for our common stock was below the minimum $1.00 per share requirement for continued listing on The Nasdaq Capital Market as set forth in Nasdaq Listing Rule 5550(a)(2) (the “Minimum Bid Price Requirement”), and that we have until December 18, 2019 to regain compliance. We will regain compliance if the closing bid price of our common stock is at least $1.00 for a minimum of 10 consecutive business days at any time between June 21, 2019 and December 18, 2019, unless the Nasdaq Staff exercises its discretion to extend such 10-day period. From June 21, 2019 through November 11, 2019, the closing bid price of our common stock has been less than $1.00.
If we have not regained compliance by December 18, 2019, we may be eligible for an additional 180-day compliance period. To qualify for this additional compliance period, ended Junewe would be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, other than the Minimum Bid Price Requirement, including having stockholders’ equity of at least $5 million. In addition, we would also be required to notify Nasdaq of our intent to cure the minimum bid price deficiency during the additional compliance period, which may include, if necessary, implementing a reverse stock split. Our stockholders' equity at September 30, 2017.

2019 was $1.8 million, and, as such, we will need to raise additional equity capital between now and December 18, 2019 to be eligible for the additional compliance period. If our stockholders' equity increases to at least $5.0 million after September 30, 2019 and before December 18, 2019, we understand that the Nasdaq Staff has discretion whether to consider such increase for purposes of determining our eligibility for the additional compliance period. Even if our acquisition of Microchips closes before December 18, 2019, we do not expect our pro forma stockholders' equity to increase to $5.0 million. If we are not granted the additional compliance period for any reason, the Nasdaq Staff will provide written notice to us that our common stock will be subject to delisting. If we are not granted the additional compliance period, we may, and would intend to, appeal the Nasdaq Staff’s delisting determination to a Nasdaq Hearing Panel.
There can be no assurance we will regain compliance with the Minimum Bid Price Requirement or continue to satisfy the other continued listing requirements of The Nasdaq Capital Market.For example, because our stockholders' equity at September 30, 2019 was $1.8 million, we expect that we may receive a separate letter of non-compliance from the Nasdaq Staff for not having stockholders’ equity of at least $2.5 million. The delisting of our common stock for whatever reason could, among other things, substantially impair our ability to raise additional capital; result in the loss of interest from institutional investors, the loss of confidence in our company by investors and employees, and in fewer financing, strategic and business development opportunities; and could result in potential breaches of agreements under which we made representations or covenants relating to our compliance with applicable listing requirements. Claims related to any such breaches, with or without merit, could result in costly litigation, significant liabilities and diversion of our management’s time and attention and could have a material adverse effect on our financial condition, business and results of operations. In addition, the delisting of our common stock for whatever reason may materially impair our stockholders’ ability to buy and sell shares of our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.


The pendency of our agreement to acquire Microchips could adversely affect our business and the acquisition may not occur when anticipated or at all.
On November 10, 2019, we entered into the Microchips Merger Agreement, pursuant to which, if the transactions contemplated thereby are consummated, we will acquire Microchips. We expect the acquisition to close on or before November 22, 2019. Between now and closing, the attention of our management and employees may be directed toward transaction-related considerations and may be diverted from the day-to-day operations of our business. We currently anticipate that we will receive approximately $5.7 million of additional working capital if the acquisition of Microchips closes as anticipated, which funds will help support our current operating plan. There can be no assurance that the Microchips acquisition will close as anticipated or at all, or that if it does close, that the amount of additional working capital we will receive will be what we currently anticipate. In addition, the transaction may involve unexpected costs, liabilities or delays, our business or stock price may suffer as a result of uncertainty surrounding the transaction, and the transaction may disrupt our current plans and operations.

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

(a)

NONE

(b)

NONE

(a)None.

(c)

NONE

(b)None.
(c)None.

Item 3. Defaults Upon Senior Securities

NONE

None.

Item 4. Mine Safety Disclosures

NONE

Not applicable.

Item 5. Other Information

(a)     NONE

None.

(b)     NONE

None.


Item 6. Exhibits

The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index immediately below.

 

 

 

Incorporated by Reference

 

 

 

 

Exhibit

Number

 

Description of Exhibit

 

Form

 

File 

Number

 

Date of 

Filing

 

Exhibit
Number

 

Filed
Herewith

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.1

 

Amended and Restated Certificate of Incorporation of the Company, as amended by Certificate of Amendment dated July 19, 2017 to effect the Reverse Stock Split effective July 20, 2017, and by Certificate of Amendment dated July 19, 2017 stating the name change effective July 20, 2017

 

10-Q

 

001-36395

 

08/14/2017

 

3.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

3.2

 

Second Amended and Restated By-laws, effective July 20, 2017

 

8-K

 

001-36395

 

07/20/2017

 

3.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 


 

 

 

Incorporated by Reference

 

 

 

 

Exhibit

Number

 

Description of Exhibit

 

Form

 

File 

Number

 

Date of 

Filing

 

Exhibit
Number

 

Filed
Herewith

10.1

 

License Agreement dated March 19, 2017, between Daré Bioscience Operations, Inc. and ADVA-Tec, Inc. Δ

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

10.2

 

Employment Offer Letter by and between Daré Bioscience Operations, Inc. and Sabrina Martucci Johnson dated as of May 31, 2017

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

10.3

 

Employment Offer Letter by and between Daré Bioscience Operations, Inc. and Lisa Walters-Hoffert dated as of May 31, 2017

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

10.4

 

Employment Offer Letter by and between Daré Bioscience Operations, Inc. and Mark Walters dated as of May 31, 2017

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

10.5

 

Employment Agreement by and between Daré Bioscience, Inc. and Sabrina Martucci Johnson dated as of August 15, 2017

 

8-K

 

001-36395

 

08/18/2017

 

10.1

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.6

 

Employment Agreement by and between Daré Bioscience, Inc. and Lisa Walters-Hoffert dated as of August 15, 2017

 

8-K

 

001-36395

 

08/18/2017

 

10.2

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

10.7

 

Employment Agreement by and between Daré Bioscience, Inc. and Mark Walters dated as of August 15, 2017

 

8-K

 

001-36395

 

08/18/2017

 

10.3

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

31.1

 

Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

31.2

 

Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

32.1

 

Certification of principal executive officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

32.2

 

Certification of principal financial officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 

101.INS

 

XBRL Instance Document

 

 

 

 

 

 

 

 

 

X

 

 

 

 

 

 

 

 

 

 

 

 

 


Incorporated by Reference

Exhibit

Number

Description of Exhibit

Form

File

Number

No.

Filing Date of 

Filing

Exhibit
Number

No.

Filed
Herewith

101.SCH

10.1*
Daré Bioscience, Inc. Performance Bonus Plan
X
31.1
Certification of principal executive officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
X
31.2
Certification of principal financial officer pursuant to Rule 13a-14(a)/15d-14(a) of the Securities Exchange Act of 1934, as amended
X
32.1
Certification of principal executive officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
#
32.2
Certification of principal financial officer pursuant to 18 U.S.C. §1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
#
101.INSXBRL Instance DocumentX
101.SCHXBRL Taxonomy Extension Schema Document

X

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

X

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

X

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

X

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

X

Δ Portions

* Indicates a management contract or any compensatory plan, contract or arrangement.
# Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. § 1350, and is not being filed for purposes of this document are subjectSection 18 of the Securities Exchange Act of 1934, as amended, and is not to a confidential treatment request submitted tobe incorporated herein by reference into any filing of the SEC

registrant whether made before or after the date hereof, regardless of any general incorporation in such filing.

Signatures


Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Daré Bioscience, Inc.

Date: November 13, 2017

12, 2019

By:

/s/ Sabrina Martucci Johnson

Sabrina Martucci Johnson

President and Chief Executive Officer

(Principal Executive Officer)

Date: November 13, 2017

12, 2019

By:

/s/ Lisa Walters-Hoffert

Lisa Walters-Hoffert

Chief Financial Officer

(Principal Financial and Accounting Officer)

28


37