UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

FORM 10-Q

(Mark One)

☒

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

For the quarterly period ended March 31, ~~2018~~

2019

☐

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

For the transition period from to



	DARÉ BIOSCIENCE, INC. (Exact Name of Registrant as Specified in its Charter)

Delaware	~~Commission File No. 001-36395~~	~~20-4139823~~
(State or Other Jurisdiction of Incorporation)	Commission File 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 (Address of Principal Executive Offices)	(858) 926-7655 (Registrant’s telephone number, including area code)	~~92037~~ 92122 (Zip Code)

(Former name, former address and former fiscal year, 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

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

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.

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

Securities registered pursuant to Section 12(b) of the Act:



Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	DARE	Nasdaq Capital Market

As of May ~~7, 2018 a total of 11,422,161~~13, 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 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,” “contemplate,” project,” “target,” “tend ~~to”,~~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~~“Risk Factors,,” in this report, and elsewhere in this report. Given these uncertainties, you should not place undue reliance on any forward-looking statement. The following factors are among those that may cause such differences:

Inability to continue as a going concern;

Inability to raise additional capital, ~~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 ~~the FDA’s~~ Section 505(b)(2);

of the Federal Food, Drug, and Cosmetic Act, or the FDA's 505(b)(2) pathway;

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

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

Inability to demonstrate sufficient efficacy of our product candidates;

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 ~~agreement~~agreements covering the ~~critical~~ patents and related intellectual property related to our product ~~candidate;~~

candidates;

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

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

Dependence on third parties to supply ~~market~~clinical supplies and ~~distribute products;~~

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

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

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

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

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 products in a market made up of generic products;

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

~~A limitation of our market opportunity caused by the lack~~Lack of patent protection for the active ingredients in certain of our product candidates ~~and~~which could expose those product candidates to competition from other formulations ~~and delivery technology and systems that may be developed by competitors;~~

using the same active ingredients;

Higher risk of failure associated with product candidates in ~~preclinical~~pre-clinical stages of development ~~which~~that may ~~not be valued by~~lead investors to assign them little to no value and ~~may be~~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;

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

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

Regulations governing the production or marketing of our product candidates;

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

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

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

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

TABLE OF CONTENTS

			~~Page~~

	Page
PART I. FINANCIAL INFORMATION

Item 1.	Consolidated Financial Statements (Unaudited)	1

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	18 21

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28 29

Item 4.	Controls and Procedures	28 29

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	29 30

Item 1A.	Risk Factors	29 30

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39 30

Item 3.	Defaults Upon Senior Securities	39 30

Item 4.	Mine Safety Disclosures	39 30

Item 5.	Other Information	39 30

Item 6.	Exhibits	39 31

	SIGNATURES	41 32


PART I.	FINANCIAL INFORMATION

~~PART I ̶ FINANCIAL INFORMATION~~

Item 1. Consolidated Financial ~~Statements.~~

Statements (Unaudited)

Daré Bioscience, Inc. and Subsidiaries

Consolidated Balance Sheets

March 31,
2018

December 31,
2017

(unaudited)

Assets

Current Assets

Cash and cash equivalents
$
15,625,026

$
7,559,846

Other receivables

28,888

284,206

Prepaid expenses

290,877

311,571

Other current assets

—

193,495

Total current assets

15,944,791

8,349,118

Goodwill

—

5,187,519

Other non-current assets

686,060

723,191

Total assets
$
16,630,851

$
14,259,828

Liabilities and Stockholders’ equity

Current Liabilities

Accounts payable and accrued expenses
$
807,607

$
966,653

Total current liabilities

807,607

966,653

Deferred rent

2,888

392

Total liabilities

810,495

967,045

Commitments and contingencies (Note 8)

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, 11,422,161 and 6,047,161 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively

1,142

605

Accumulated other comprehensive loss

(31,826
)

(18,080
)
Additional paid-in capital

35,747,609

25,541,210

Accumulated deficit

(19,896,569
)

(12,230,952
)
Total stockholders' equity

15,820,356

13,292,783

Total liabilities and stockholders' equity
$
16,630,851

$
14,259,828



	March 31, 2019			December 31, 2018
	(unaudited)
Assets
Current assets
Cash and cash equivalents	$	3,505,026		$	6,805,889
Other receivables	166,713			31,037
Prepaid expenses	588,524			403,097
Total current assets	4,260,263			7,240,023
Property and equipment, net	8,245			9,396
Other non-current assets	751,347			577,968
Total assets	$	5,019,855		$	7,827,387
Liabilities and stockholders’ equity
Current liabilities
Accounts payable	$	325,618		$	459,705
Accrued expenses	690,829			631,351
Total current liabilities	1,016,447			1,091,056
Other liabilities	223,039			9,711
Total liabilities	1,239,486			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; 11,422,161 shares issued and outstanding each period	1,143			1,143
Accumulated other comprehensive loss	(89,107		)	(96,728		)
Additional paid-in capital	35,889,940			35,791,972
Accumulated deficit	(32,021,607		)	(28,969,767		)
Total stockholders' equity	3,780,369			6,726,620
Total liabilities and stockholders' equity	$	5,019,855		$	7,827,387

See accompanying notes to interim consolidated financial statements.

Daré Bioscience ~~Inc.~~ , Inc. andSubsidiaries

ConsolidatedStatementsofOperationsandComprehensiveLoss

~~(Unaudited)~~

Three months ended March 31,

2018

2017

Operating expenses:

General and administrative

$
1,303,189

$
200,663

Research and development expenses

1,086,653

27,800

License expenses

100,000

—

Impairment of goodwill

5,187,519

—

Total operating expenses

7,677,361

228,463

Loss from operations

(7,677,361
)

(228,463
)
Other income (expense)

11,744

(15,400
)
Net loss

$
(7,665,617
)

$
(243,863
)
Foreign currency translation adjustments

$
(13,746
)

$
—

Comprehensive loss

$
(7,679,363
)

$
(243,863
)
Loss per common share - basic and diluted

$
(0.88
)

$
(0.27
)
Weighted average number of common shares outstanding:

Basic

8,684,550

910,000

(Unaudited)



	Three months ended March 31,
	2019			2018
Operating expenses
General and administrative	$	1,277,180		$	1,303,189
Research and development expenses	1,693,391			1,086,653
License expenses	112,500			100,000
Impairment of goodwill	—			5,187,519
Total operating expenses	3,083,071			7,677,361
Loss from operations	(3,083,071		)	(7,677,361		)
Other income	31,231			11,744
Net loss	$	(3,051,840	)	$	(7,665,617	)
Foreign currency translation adjustments	$	7,621		$	(13,746	)
Comprehensive loss	$	(3,044,219	)	$	(7,679,363	)
Loss per common share - basic and diluted	$	(0.27	)	$	(0.88	)
Weighted average number of common shares outstanding:
Basic and diluted	11,422,161			8,684,550

See accompanying notes to interim consolidated financial statements.

~~The operations presented in the interim consolidated financial statements and accompanying notes for the three months ended March 31, 2018 represent the operations of the Company following the~~ ~~Cerulean/Private Daré stock purchase transaction,~~ and for the three months ended March 31, 2017 represent the operations of the Company when it was private, making a comparison between periods difficult. See Note 1, “Organization of the Business,” of the Notes to the Interim Consolidated Financial Statements (Unaudited) appearing in this report for a discussion of the Cerulean/Private Daré stock purchase transaction.

Daré Bioscience, Inc. and Subsidiaries

Consolidated Statements of ~~Cash Flows~~

Stockholders’ Equity

(Unaudited)

Three months ended March 31,

2018

2017

Operating activities:

Net loss

$
(7,665,617
)

$
(243,863
)
Adjustments to reconcile net loss to net cash used in operating activities:

Stock-based compensation

9,124

3

Impairment of goodwill

5,187,519

—

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

Other receivables

255,318

—

Prepaid expenses

20,694

—

Other current assets

193,495

(2,800
)
Other assets and deferred charges

37,131

Accounts payable and accrued expenses

(159,047
)

180,660

Interest payable

—

15,405

Deferred rent

2,496

—

Net cash used in operating activities

(2,118,887
)

(50,595
)
Financing activities:

Net proceeds from issuance of common stock and warrants

10,197,813

—

Proceeds from issuance of convertible promissory notes

—

100,000

Net cash provided by financing activities

10,197,813

100,000

Effect of exchange rate changes on cash and cash equivalents

(13,746
)

—

Net change in cash and cash equivalents

8,065,180

49,405

Cash and cash equivalents, beginning of period

7,559,846

44,614

Cash and cash equivalents, end of period

$
15,625,026

$
94,019



Three Months Ended March 31, 2019
				Additional		Accumulated other						Total
	Common stock			paid-in		comprehensive			Accumulated			stockholders'
	Shares	Amount		capital		loss			deficit			equity
Balance at December 31, 2018	11,422,161	$	1,143	$	35,791,972	$	(96,728	)	$	(28,969,767	)	$	6,726,620
Stock-based compensation	—	—		97,968		—			—			97,968
Net loss	—	—		—		—			(3,051,840		)	(3,051,840		)
Foreign currency translation adjustments	—	—		—		7,621			—			7,621
Balance at March 31, 2019	11,422,161	$	1,143	$	35,889,940	$	(89,107	)	$	(32,021,607	)	$	3,780,369

Three Months Ended March 31, 2018
				Additional		Accumulated other						Total
	Common stock			paid-in		comprehensive			Accumulated			stockholders'
	Shares	Amount		capital		loss			deficit			equity
Balance at December 31, 2017	6,047,161	$	605	$	25,541,210	$	(18,080	)	$	(12,230,952	)	$	13,292,783
Stock-based compensation	—	—		9,124		—			—			9,124
Net proceeds from issuance of common stock and warrants	375,000	37		1,037,727		—			—			1,037,764
Issuance of common stock via public offering, net	5,000,000	500		9,159,548		—			—			9,160,048
Net loss	—	—		—		—			(7,665,617		)	(7,665,617		)
Foreign currency translation adjustments	—	—		—		(13,746		)	—			(13,746		)
Balance at March 31, 2018	11,422,161	$	1,142	$	35,747,609	$	(31,826	)	$	(19,896,569	)	$	15,820,356

See accompanying notes to interim consolidated financial statements.

Daré Bioscience, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



	Three months ended March 31,
	2019			2018
Operating activities:
Net loss	$	(3,051,840	)	$	(7,665,617	)
Non-cash adjustments reconciling net loss to operating cash flows:
Depreciation	1,150			—
Stock-based compensation	97,968			9,124
Non-cash lease expenses	10,130			—
Impairment of goodwill	—			5,187,519
Changes in operating assets and liabilities:
Other receivables	(135,676		)	255,318
Prepaid expenses	(201,129		)	20,694
Other current assets	—			193,495
Other non-current assets and deferred charges	55,233			37,131
Accounts payable	(134,087		)	(40,340		)
Accrued expenses	59,478			(118,707		)
Other liabilities	(9,711		)	2,496
Net cash used in operating activities	(3,308,484		)	(2,118,887		)
Financing activities:
Net proceeds from issuance of common stock and warrants	—			10,197,813
Net cash provided by financing activities	—			10,197,813
Effect of exchange rate changes on cash and cash equivalents	7,621			(13,746		)
Net change in cash and cash equivalents	(3,300,863		)	8,065,180
Cash and cash equivalents, beginning of period	6,805,889			7,559,846
Cash and cash equivalents, end of period	$	3,505,026		$	15,625,026
Supplemental disclosure of non-cash operating activities:
Operating right-of-use assets obtained in exchange for new operating lease liabilities	$	231,698		$	—

See accompanying notes to interim consolidated financial statements.

Daré Bioscience, Inc. and Subsidiaries

Notes to Consolidated Financial Statements (Unaudited)

~~1. Organization and Description of the Business~~


1.	ORGANIZATION AND DESCRIPTION OF THE BUSINESS

Daré Bioscience, Inc., is a ~~Delaware corporation, was formed on November 28, 2005.~~clinical-stage biopharmaceutical company committed to the advancement of innovative products for women’s health. Daré Bioscience, Inc. and its wholly owned subsidiaries ~~Daré Bioscience Operations, Inc. and Daré Bioscience Australia Pty LTD,~~ operate in one segment. ~~The term~~In this report, the “Company” ~~as used herein~~ refers collectively to Daré Bioscience, Inc. and its wholly owned subsidiaries, unless otherwise stated or the context otherwise requires.

~~The Company is~~ ~~a clinical-stage biopharmaceutical company committed to the advancement of innovative products for women’s reproductive health.~~

The Company is driven by a mission to identify, develop and bring to market a diverse portfolio of differentiated therapies that expand treatment options, improve outcomes and facilitate convenience for women, primarily in the areas of contraception, vaginal health, sexual health and fertility. The ~~Company’s~~Company's business strategy is to license or otherwise acquire the rights to differentiated ~~reproductive health~~ product candidates ~~primarily~~ in ~~the areas of contraception, vaginal~~women's health, ~~sexual health and fertility,~~ some of which have existing clinical proof-of-concept data, and to ~~take~~advance those candidates through ~~advanced stages of~~ clinical ~~development.~~

~~Over the last twelve months, the~~development and regulatory approval alone or in collaboration with strategic partners.

The Company has assembled a portfolio of ~~two~~ clinical-stage ~~assets through product license~~ and ~~development agreements.~~pre-clinical-stage candidates addressing unmet needs in women’s health. The ~~first, Ovaprene®, is~~Company’s portfolio includes these four clinical-stage candidates:

DARE-BV1, a unique hydrogel formulation of clindamycin phosphate 2% to treat bacterial vaginosis, or BV;

Ovaprene, a non-hormonal monthly contraceptive ~~candidate that was licensed~~intravaginal ring;

Sildenafil Cream, 3.6%, a novel cream formulation of sildenafil to treat female sexual arousal disorder, or FSAD; and

DARE-HRT1, a combination bio-identical estradiol and progesterone intravaginal ring for hormone replacement therapy following menopause.

The Company's portfolio also includes these pre-clinical stage product candidates:

DARE-VVA1, a vaginally delivered formulation of tamoxifen to treat vulvar vaginal atrophy, or VVA, in ~~July~~patients with hormone-receptor positive breast cancer;

DARE-RH1, a novel approach to non-hormonal contraception for both men and women by targeting the CatSper ion channel;

ORB-204 and ORB-214, 6-month and 12-month formulations of ~~2017;~~injectable etonogestrel for contraception;

DARE-FRT1, an intravaginal ring containing bio-identical progesterone for the prevention of preterm birth and ~~the second, Topical Sildenafil cream, also known~~for fertility support as ~~SST-6007, is a potential~~part of an in vitro fertilization, or IVF, treatment ~~for Female Sexual Arousal Disorder~~plan; and was licensed in February of 2018. In addition, if the merger contemplated by the agreement and plan of merger the Company entered into with Pear Tree Pharmaceuticals, Inc. and certain other parties in April of 2018 is consummated, the Company will acquire a third clinical-stage asset—a proprietary vaginal tamoxifen tablet

DARE-OAB1, an intravaginal ring containing oxybutynin for the treatment of vulvar and vaginal atrophy. During the same period, the Company obtained rights to a portfolio of preclinical candidates. In March of 2018, the Company entered into a collaboration and option agreement covering a new injectable contraceptive product candidate, and in April of 2018, the Company licensed the worldwide rights to a portfolio of preclinical intravaginal rings from Juniper Pharmaceuticals, Inc.

On July 19, 2017, the Company completed its business combination with Daré Bioscience Operations, Inc., a privately held Delaware corporation, or Private Daré, in accordance with the terms of the Stock Purchase Agreement dated as of March 19, 2017, or the Daré Stock Purchase Agreement, by and among the Company, Private Daré and the holders of capital stock and securities convertible into capital stock of Private Daré named therein, or the Private Daré Stockholders. Pursuant to the Daré Stock Purchase Agreement, each Private Daré Stockholder sold their shares of capital stock in Private Daré to the Company in exchange for newly issued shares of theoveractive bladder.

The Company’s common stock, and as a result, Private Daré became a wholly owned subsidiary of the Company and the Private Daré Stockholders became majority shareholders of the Company. That transaction is referred to as the Cerulean/Private Daré stock purchase transaction. In accordance with the terms of the Daré Stock Purchase Agreement, the Company changed its name from “Cerulean Pharma Inc.” to “Daré Bioscience, Inc.” References in this Quarterly Report on Form 10-Q to “Cerulean” refer to Cerulean Pharma Inc. prior to the closing of the Cerulean/Private Daré stock purchase transaction.

The operations presented in the accompanying interim consolidated financial statements and in these notes for the three months ended March 31, 2018 represent the operations of the Company after giving effect to the Cerulean/Private Daré stock purchase transaction. The interim consolidated financial statements and accompanying notes for all periods prior to the Cerulean/Private Daré stock purchase transaction represent the operations of Private Daré, making a comparison between periods difficult.

~~The Company’s~~primary operations have consisted ~~primarily~~ of, ~~raising capital,~~and are expected to continue to consist of, product research and development and ~~initial market development.~~

advancing its portfolio of product candidates through clinical development and regulatory approval.

~~The~~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 ~~revenue related to its primary business purpose to date and~~product revenue. The Company is subject to ~~a number of~~several risks common to ~~other~~ clinical-stage biopharmaceutical companies, including dependence on key individuals, competition from other companies, the need ~~for development of~~to develop commercially viable products in a timely and cost-effective manner, and the need to obtain adequate additional ~~financing~~capital to fund the development of product candidates. The Company is also subject to ~~a number of~~several risks ~~similar~~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 of proprietary technology, dependence on third parties, and product liability.

2.~~Liquidity~~


2.	GOING CONCERN

The Company has prepared its consolidated financial statements on a ~~history~~going concern basis, which assumes that the Company will realize its assets and satisfy its liabilities in the normal course of ~~losses from operations and anticipates that it will continue to incur losses for at least the next several years. For the three months ended~~business. However, as of March 31, ~~2018, the Company incurred a net loss of $7.7 million. At March 31, 2018,~~2019, the Company had an accumulated deficit of approximately ~~$19.9~~$32.0 million and had cash and cash equivalents of approximately ~~$15.6~~$3.5 million. The Company also had negative cash flow from operations of approximately ~~$2.1~~$3.3 million during the three months ended March 31, ~~2018.~~

~~On January 4, 2018,~~2019.

In March of 2019, the Company ~~entered into~~announced that it received a Notice of Award for an ~~at-the-market issuance~~additional $982,851 of the anticipated $1.9 million from the Eunice Kennedy Shriver National Institute of Child Health and Human Development, or the NIH Grant, which will be applied to the clinical development efforts supporting Ovaprene. As of March 31, 2019, the Company recorded a receivable in the amount of $161,007 for expenses eligible for reimbursement under the NIH Grant that were incurred through March 31, 2019. See Note 9, "Grant Award," herein. In April of 2019, the Company completed a sale of common stock sales agreement, under which the Company may sell stock from time to time up to an aggregate of $10.0 million in gross proceeds. During the three months ended March 31, 2018, the Company generated gross proceeds of approximately $1.1 million, resulting inraising net proceeds of approximately ~~$835,000~~$5.2 million. See Note 11, "Subsequent Events," herein. The Company still needs to raise additional capital to continue to fund its operations and to successfully execute its current operating plan, including the development of its current product candidates.

The Company has a history of losses from operations, expects negative cash flows from its 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 ~~sales~~the recoverability and classification of ~~375,000 shares~~assets or the amounts and classifications of ~~common stock under this agreement. In February 2018,~~liabilities that may result from the outcome of the uncertainty of the Company's ability to continue as a going concern.

The Company is focused primarily on the development and commercialization of innovative products in women’s health. The Company will continue to incur significant research and development and other expenses related to these activities. If the clinical trials for any of the Company’s 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 ~~also generated gross proceeds of approximately $10.3 million, resulting in net proceeds of $9.4 million from an underwritten offering of 5.0 million shares of common stock and warrants~~may never become profitable. Even if the Company becomes profitable, it may not sustain profitability.

The Company believes that its current available current cash resources will be sufficient to ~~purchase up to 3.5 million shares of common stock. All of the financing transactions completed during~~fund planned operations into the first quarter of ~~2018 were registered pursuant~~2020. For the foreseeable future, the Company's ability to ~~the Company’s effective shelf registration statement~~continue its operations will depend on Form S-3 (File No. 333-206396), or the Registration Statement, and the related base prospectus included in the Registration Statement, as supplemented by the prospectus supplements dated January 4, 2018 and February 14, 2018.

its ability to obtain additional capital.

The Company ~~will need additional~~is currently evaluating a variety of capital ~~over time~~raising options, including financings, government or other grant funding, collaborations and strategic alliances or other similar types of arrangements to ~~further fund~~cover its operating expenses, including the development of ~~and seek regulatory approvals for,~~ its ~~current~~ product candidates and any future product candidates it may license ~~as well as~~or otherwise acquire. The amount and timing of the Company's capital needs have been and will continue to ~~commercialize any approved products.~~depend 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 ~~additional funding is~~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 Company, 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 ~~timely basis~~dilutive effect on the holdings of the Company's existing stockholders. If the Company cannot raise capital when needed, on favorable terms or at ~~adequate levels,~~all, the Company will not be able to continue development of its product candidates, will need to reevaluate its ~~operating plans.~~planned operations and 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 Company 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 stockholders may lose all or part of their investment in the Company's common stock. The interim consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

~~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 the Company’s product candidates, if approved, fail 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.

As of the date of this report and based on current business plan estimates, the Company believes it has sufficient cash to fund its operating expenses over at least the next twelve months. In the event the Company acquires, licenses or develops any new products or product candidates that have not been contemplated in the current business plan, the amount required to fund future operations could increase, possibly materially. In order to acquire or develop additional products and product candidates, the Company will require additional capital over time.

The Company expects that its net losses will continue for at least the next several years as it seeks to acquire, license or develop additional products and product candidates. Such losses may fluctuate, the fluctuations may be substantial, and the Company may never become profitable.

3. ~~Significant Accounting Policies~~


3.	SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in Note 1 to the interim consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, ~~2017,~~2018, filed with the Securities and Exchange Commission, or SEC on ~~March 28, 2018.~~April 1, 2019. Since the date of those consolidated financial statements, there have been no material changes to the Company’s significant accounting ~~policies.~~

policies, except as described below.

Basis of Presentation

The accompanying interim consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP, as defined by the Financial Accounting Standards Board, or 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, ~~2017.~~

~~Reverse Stock Split~~

~~On July 20, 2017,~~2018.

Leases

The Company determines if an arrangement is a lease at inception. Operating leases are included in right-of-use, or ROU, lease assets, current portion of lease obligations, and long-term lease obligations on the Company's balance sheets.

ROU lease assets represent the Company's right to use an underlying asset for the lease term and 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 ~~effected~~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 when it is reasonably certain that the Company will exercise that option. Lease expense for lease payments is recognized on a ~~1-for-10 reverse stock split~~ ~~of its common stock.~~ ~~All share and per share amounts of common stock, options and warrants in these notes and those amounts included~~straight-line basis over the lease term. (See Note 7, Leased Properties.)

Fair Value Measurements

GAAP defines fair value as the price that would be received for an asset or the exit price that would be paid to transfer a liability in the ~~accompanying interim consolidated financial statements, have been restated~~principal or most advantageous market in an orderly transaction between market participants on the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three-level hierarchy of valuation techniques established to measure fair value is defined as follows:

Level 1: inputs are unadjusted quoted prices in active markets for ~~all periods to give retroactive effect to the reverse stock split.~~

~~Use of Estimates~~

~~The preparation of financial statements requires management to make estimates and assumptions~~identical assets or liabilities.

Level 2: inputs other than level 1 that ~~affect the reported amounts of~~are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices 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 for substantially the full term of assets or liabilities.

Level 3: unobservable inputs that are supported by little or no market activity 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 includethat are significant to the fair value of ~~stock-based compensation, goodwill impairment~~the assets or liabilities.

Cash and ~~purchase accounting. Actual results could differ from those estimates~~cash equivalents of $3.5 million and ~~could materially affect the reported amounts~~$6.8 million measured at fair value as of ~~assets, liabilities~~March 31, 2019 and ~~future operating results.~~

~~Principles of Consolidation~~

~~The interim consolidated financial statements~~December 31, 2018, respectively, are classified within Level 1 of the ~~Company~~fair value hierarchy. Other receivables are ~~stated in U.S. dollars~~financial assets with carrying values that approximate fair value due to the short-term nature of these assets. Accounts payable and accrued expenses and other liabilities are ~~prepared using GAAP. These~~ financial ~~statements include~~liabilities with carrying values that approximate fair value due to the ~~accounts~~short-term nature 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 loss in the interim consolidated balance sheets. All significant intercompany transactions and accounts have been eliminated in consolidation.

~~Recent~~these liabilities.

Recently Adopted Accounting ~~Pronouncements Not Yet Adopted~~

OnStandards

In May ~~28,~~ 2014, FASB issued Accounting Standards Update, or ASU, 2014-09, Revenue from Contracts with Customers, which impacts the way in which some entities recognize revenue for certain types of transactions. The new standard became effective beginning in 2018 for public companies. AsBecause the Company does not currently have any contracts with customers, ~~it does not experience any impact from~~the Company’s adoption of this accounting ~~standard.~~

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

In February 2016, 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. ASU 2016-02 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 dates and periods prior to January 1, 2019. ASU 2016-02 provides a number of optional practical expedients and accounting policy elections. The Company ~~is currently assessing~~elected the ~~potential impact~~package of ~~this accounting standard and~~practical expedients requiring no reassessment of whether any expired or existing contracts are or contain leases, the ~~effect it might have on the financial statements.~~

~~Recently Adopted Accounting Standards~~

~~In August 2016, 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~~lease classification of ~~certain cash receipts~~any expired or existing leases, or initial direct costs for any existing leases. The Company recorded approximately $232,000 right-of-use assets and ~~payments on~~$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 ~~cash flows. The new guidance addresses~~operations or cash flows ~~related to~~as a result of 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 became effective on January 1, 2018. The Company’s adoption of this standard on January 1, 2018 did not have a material impact on the Company’s interim consolidated financial statements.

adoption.

In January 2017, 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 became effective for the Company on 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 January 2017, 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. The Company’s adoption of this standard on September 30, 2017 did not have a material impact on the Company’s consolidated financial statements.

~~In May 2017, 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 became effective for the Company on January 1, 2018. The Company’s adoption of this standard did not have a material impact on the Company’s consolidated financial statements.

In July 2017, FASB issued ASU 2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480), 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~~Accounting Standards Committee 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 has early adopted ASU 2017-11. As a result, the Company has not recognized the fair value of the warrants containing down round features that were issued in the underwritten offering in February 2018 (see Note 7)6) as liabilities.

~~Fair Value Measurements~~

~~U.S. generally accepted accounting principles define fair value as~~

In August 2018, the ~~price~~SEC adopted the final rule under SEC Release No. 33-10532, Disclosure Update and Simplification, amending certain disclosure requirements that ~~would be received~~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 ~~asset or the exit price that would be paid to transfer a liability~~analysis of changes in each caption of stockholders' equity presented in the ~~principal~~balance sheet must be provided in a note or ~~most advantageous market in an orderly transaction between market participants on~~separate statement. The analysis should present a reconciliation of the measurement date, and also establishes a fair value hierarchy which requires an entity to maximize the use of observable inputs, where available. The three-level hierarchy of valuation techniques established to measure fair value is defined as follows:

~~Level 1: inputs are unadjusted quoted prices in active markets for identical assets or liabilities.~~

Level 2: inputs other than level 1 that are observable, either directly or indirectly, such as quoted prices in active markets for similar assets and liabilities, quoted prices 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 for substantially the full term of assets or liabilities.

~~Level 3: unobservable inputs that are supported by little or no market activity and that are significant~~beginning balance to the ~~fair value~~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

~~Cash and cash equivalents of $15.6 million and $7.6 million measured at fair value~~Stock Purchase Agreement dated as of March ~~31, 2018~~19, 2017, or the Daré Stock Purchase Agreement, by and ~~December 31, 2017, respectively, are classified within Level 1~~among the Company, Private Daré and the holders of capital stock and securities convertible into capital stock of Private Daré named therein, or the Private Daré Stockholders. Pursuant to the Daré Stock Purchase Agreement, each Private Daré Stockholder sold their shares of capital stock in Private Daré to the Company in exchange for newly issued shares of the ~~fair value hierarchy. Other receivables are financial assets~~Company’s common stock, and as 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 ~~carrying values~~the closing of that ~~approximate fair value due~~transaction, the Company changed its name from “Cerulean Pharma Inc.” to ~~the short-term nature of these assets. Accounts payable and accrued expenses and other liabilities are financial liabilities with carrying values~~“Daré Bioscience, Inc.” In this report, that ~~approximate fair value due~~transaction is referred to ~~the short-term nature of these liabilities.~~

4. ~~Acquisitions~~

~~As further discussed in Note 1, on July 19, 2017,~~as the Cerulean/Private Daré stock purchase transaction and “Cerulean” refers to Cerulean Pharma Inc. before that transaction closed.

The Cerulean/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 transaction, Private Daré stockholders held a majority of the voting interest of the combined company. 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 is primarily attributable to the cash and cash equivalents at closing of the transaction of approximately $9.9 million and the impact of the unamortized fair value of stock options ~~that were~~ granted by Cerulean ~~and~~that were outstanding ~~prior to~~immediately before the ~~closing of the~~ transaction closed of approximately $3.7 million. The unamortized fair value of such stock options relates to an option modification approved on March 19, 2017 that provided for an acceleration of vesting of such options upon a change in control event. Such modification became effective upon the closing of the Cerulean/Private Daré stock purchase transaction. Hence, the unamortized fair value of such stock options is deemed to be part of total purchase consideration and goodwill. Transaction costs associated with the Cerulean/Private Daré stock purchase transaction of $0.96 million are included in general and administrative expense. The total purchase price consideration of approximately ~~$24.28~~$24.3 million represents the fair value of the shares of Cerulean stock issued in connection with the Cerulean/Private Daré stock purchase transaction and the unamortized fair value of the stock options ~~that were granted by Cerulean and outstanding prior to the closing of the transaction that were assumed on July 19, 2017 in connection with the closing of the transaction,~~described above, 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	1,915
Accounts payable	(233		)
Total assets acquired and liabilities assumed	11,600
Goodwill	$	12,679

The final allocation of the purchase price ~~was dependent~~depended on ~~the finalization of~~finalizing the valuation of the fair value of assets acquired and liabilities ~~assumed and may have differed from the amounts included in the interim consolidated financial statements.~~assumed. The Company retrospectively recorded purchase price adjustments at the acquisition date to increase current liabilities and current assets by $23,609 and ~~increase current assets by~~ $225,778, ~~resulting in a $202,169 reduction to~~respectively, which reduced the original goodwill amount of ~~approximately~~ $12.9 ~~million.~~

million by $202,169.

The Company tests its goodwill for impairment at least annually as of December 31 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 ~~tested~~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 reporting unit goodwill carrying value over the fair value is recognized as impairment loss.

The Company assessed goodwill at December 31, ~~2017,~~2017. The Company determined there was an impairment and recognized an impairment charge of approximately $7.5 million in the consolidated statement of

operations and comprehensive loss for the year ended December 31, ~~2017. Further, it~~2017 and reduced the goodwill carrying value ~~of goodwill~~ from approximately $12.7 million to $5.2 million on its consolidated balance sheet as of December 31, 2017.

The Company assessed goodwill at March 31, 2018, determined ~~that~~ there was an impairment 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 the Company’s consolidated balance sheet was written off in its entirety.

Pear Tree Merger

~~5. Convertible Promissory Notes~~

~~Prior~~

On April 30, 2018, the Company entered into an Agreement and Plan of Merger, the Merger Agreement, with Pear Tree Pharmaceuticals, Inc., or Pear Tree, Daré Merger Sub, Inc., a wholly-owned subsidiary of the Company, or Merger Sub, and two individuals in their respective capacities as Pear Tree stockholders’ representatives. The transactions contemplated by the 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 ~~Cerulean/Private Daré stock purchase transaction, Private Daré financed its operations through~~rights to develop DARE-VVA1, a proprietary vaginal formulation of tamoxifen, as a potential treatment for vulvar and vaginal atrophy.

The Company determined that the ~~sale~~acquisition of ~~convertible promissory notes that entitled the holder to accrued interest at~~Pear Tree should be accounted for as an ~~annual rate of 8% and were convertible into Private Daré’s next preferred stock financing round. In the event~~asset acquisition instead of a ~~preferred stock financing,~~business combination because substantially all ~~outstanding principal~~of the fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar identifiable assets, and ~~unpaid interest under~~therefore, the ~~convertible promissory notes would have converted into~~asset is not considered a business. Transaction costs of approximately $452,000 associated with the ~~shares~~merger are included in the Company’s research and development expense.

In accordance with the terms of ~~Private Daré’s preferred stock issued in such financing~~the Merger Agreement, because the Negative Consideration Amount (as defined below) exceeded the Positive Consideration Amount (as defined below), at the ~~price per share paid by the purchasers of such shares and an additional number of shares equal to, depending on the~~ time of purchase, 20% to 40% of the outstanding principal and unpaid interest, or the conversion benefit. Private Daré issued a convertible promissory note in the principal amount of $100,000 in February 2017, and between April 1, 2017 and June 6, 2017, Private Daré issued additional convertible promissory notes in the aggregate principal amount of $55,000.

In connection with the Cerulean/Private Daré stock purchase transaction, all outstanding convertible promissory notes were amended such that the principal amount of each note plus accrued interest thereon, and taking into account the conversion benefit of such note, would convert into shares of common stock of Private Daré immediately prior to consummation of the stock purchase transaction. The number of shares of Private Daré common stock issued upon conversion of the convertible promissory notes for notes issued prior to March 31, 2017 was equal to (i) the outstanding principal amount plus accrued interest through March 31, 2017 multiplied by the respective conversion benefit, which ranged from 125% to 140%, divided by (ii) $0.18727. The number of shares of Private Daré common stock issued upon conversion of the convertible promissory notes for notes issued after March 31, 2017 was equal to (i) 120% of the outstanding principal amount, divided by (ii) $0.38.

~~Immediately prior to~~ the closing of the ~~Cerulean/Private Daré~~merger, the excess amount (approximately $132,000) will be offset against future payments otherwise due under the Merger Agreement to certain former and continuing Pear Tree service providers and former holders of Pear Tree’s capital stock, ~~purchase~~or the Holders, including the potential $75,000 payment due on the one-year anniversary of the closing of the merger. 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 ~~all~~expenses, (ii) transaction expenses of the ~~outstanding convertible promissory notes were converted into~~stockholders’ representatives, and (iii) amounts payable under Pear Tree’s management incentive plan.

Under the Merger Agreement, the Holders will be eligible to receive, subject to certain offsets, tiered royalties, including customary provisions permitting royalty reductions and offset, based on percentages of annual 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 that are 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 Company’s common stock of Private Daré, and in connection with such closing, all of the outstanding shares of common stock of Private Daré were exchanged for shares of common stock of the Company at the exchange ratio specified in the Daré Stock Purchase Agreement.

~~The Company recognized an expense of $0 and $15,405 at March 31, 2018 and March 31, 2017, respectively, relating to outstanding convertible debt.~~

~~6. Stock-based Compensation~~

stock.


5.	STOCK-BASED COMPENSATION

The 2015 Employee, Director and Consultant Equity Incentive Plan

Prior to the Cerulean/Private Daré stock purchase transaction, the 2015 Employee, Director and Consultant Equity Incentive Plan of Private Daré, or the 2015 Private Daré Plan, governed the issuance of ~~incentive stock options, non-qualified stock options, stock grants and other stock-based~~equity awards to ~~individuals who were then~~Private Daré employees, officers, non-employee directors ~~or consultants of Private Daré.~~and consultants. Options granted under the 2015 Private Daré Plan have terms of ten years from the date of grant unless earlier terminated and generally vest over a three-year period. Upon closing of the Cerulean/Private Daré stock purchase transaction, the Company assumed the 2015 Private Daré Plan ~~was assumed by the Company~~ and each outstanding option to acquire ~~stock of~~ Private Daré stock that was not exercised prior to ~~such closing was~~the closing. Options to purchase 50,000 shares of Private Daré stock were assumed. Such options were assumed on the same terms ~~and conditions~~ as were applicable to them under the 2015 Private Daré Plan and became an option to ~~acquire~~purchase such number of 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 specified in the Daré Stock Purchase Agreement, at a correspondingly adjusted exercise price. There were outstanding unexercised options to purchase 50,000 shares of Private Daré stock that were assumed in connection with the closing of the Cerulean/Private Daré stock purchase transaction, and which, basedBased on the exchange ratio and after giving effect to the reverse stock split effected in connection with the closing of the Cerulean/Private Daré stock purchase transaction, such options were replaced with options to purchase 10,149 shares of the Company’s common stock, all of which were outstanding as of March 31, ~~2018.~~

2019.

Private Daré issued 900,000 and 200,000 shares of fully vested restricted stock to non-employees under the 2015 Private Daré Plan during 2015 and 2016, respectively. In connection with the ~~years ended December 31, 2016 and December 31, 2015, respectively. On July 19, 2017,~~closing of the Cerulean/Private Daré stock purchase transaction, the Company assumed these shares ~~were assumed by the Company~~ and ~~were~~ replaced them with 223,295 restricted shares of the Company’s common stock (after giving effect to the reverse stock split effected in connection with the closing of the Cerulean/Private Daré stock purchase transaction)~~, all of which were outstanding as of March 31, 2018.~~

~~There were no options or restricted stock~~.

No further awards may be granted under the 2015 Private Daré Plan ~~during the three months ended March 31, 2017 and effective as of July 19, 2017~~ following the closing of the Cerulean/Private Daré stock purchase ~~transaction, no further awards may be granted under the 2015 Plan.~~

transaction.

2014 Employee Stock Purchase Plan

In March 2014, the Company’s board of directors adopted, and its stockholders approved the 2014 Employee Stock Purchase Plan, or the ESPP, which became effective in April 2014. The ESPP permits eligible employees to enroll in a six-month offering period whereby participants may purchase shares of the Company’s common stock, through payroll deductions, at a price equal to 85% of the closing price of the common stock on the first day of the offering period or on the last day of the offering period, whichever is lower. Purchase dates under the ESPP occur on or about June 30 and December 31 each year. The Company’s board of directors decided ~~against initiating~~not to initiate a new offering period beginning January 1, ~~2017.~~2017 and no offering period has been initiated since then. There was no stock-based compensation related to the ESPP for the three months ended March 31, ~~2018~~2019 or March 31, ~~2017.~~

2018.

Amended and Restated 2014 Stock Incentive Plan

~~Options granted under~~

The Company maintains the Amended and Restated 2014 Plan, or the Amended 2014 Plan, which was approved by the Company’s stockholders on July 10, 2018. The Amended 2014 Plan was an amendment and restatement of the Company’s 2014 Stock Incentive Plan, or the 2014 ~~Plan, have terms of no more than ten years from the date of grant unless earlier terminated. A total of 240,000~~Plan.

When adopted, there were 2,046,885 shares of common stock ~~were initially reserved~~authorized for issuance under the Amended 2014 Plan. ~~In addition, “returning shares” that may become available from time to time are added back to~~The number of authorized shares increases annually on the ~~plan. “Returning shares” are shares that are subject to~~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 awards granted under the 2014 Plan that expire or terminate prior to exercise or settlement, are forfeited because of failure to vest, are repurchased, or are withheld to satisfy tax withholding or purchase price obligations in connection with such awards. At March 31, 2018, 142,979 shares of common stock ~~were reserved for future issuance under~~on such date, or (iii) an amount determined by the ~~2014 Plan.~~

~~The~~Company’s board of directors. On January 1, 2019, the number of authorized shares increased by 456,886 to 2,503,771, which increase represented 4% of the number of outstanding shares of common stock on such date.

In March 2017, the Company’s board of directors approved two modifications to ~~the~~outstanding stock options ~~issued~~granted under the 2014 Plan to participants ~~who were~~ providing services to the Company as of ~~March 19, 2017. The Company~~that date. One modification extended the exercise period ~~for~~of such stock options to two years ~~beyond~~after such participant’s termination date, unless the ~~original option terms~~exercise period absent such modification would be longer. The other modification provided for ~~a longer exercise period, and provided for the acceleration~~accelerated vesting of ~~vesting for~~ such stock options upon a change in control event. ~~Modifications to the existing option terms~~These modifications resulted in unamortized fair value expense of approximately $3.7 million and was recorded as part of the total consideration in the Cerulean/Private Daré stock purchase transaction ~~and discussed~~(see Note 4). The two modifications resulted in ~~Note 4.~~

~~As of~~certain options remaining outstanding that would have otherwise expired.

At March 31, ~~2018, there~~2019, 323,560 shares of common stock were ~~stock~~reserved for future issuance under the Amended 2014 Plan, and options ~~outstanding~~ to purchase ~~up to 533,247~~2,190,360 shares of the Company’s common stock ~~that were~~ granted under the Amended 2014 ~~Plan.~~

~~A summary~~Plan were outstanding.

Summary of Stock Option Activity

The table below summarizes stock option activity ~~with regard to~~under the ~~2015 Plan and the~~Amended 2014 Plan, and related information for the three months ended March 31, ~~2018 is set forth in the table below.~~2019. The exercise price of all options granted during the three months ended March 31, ~~2018 and 2017~~2019 was equal to the market value of the Company’s common stock on the date of the grant. As of March 31, ~~2018, $40,103 represents~~2019, unamortized stock-based compensation expense ~~which~~of $1,343,624 will be amortized over ~~the~~a weighted average period of ~~2.13~~3.3 years.

Number of Shares

Weighted Average
Exercise Price

Outstanding at December 31, 2017 ⁽¹⁾

539,896

$
31.40

Granted

3,500

2.37

Exercised

—

—

Cancelled/expired

—

—

Outstanding at March 31, 2018 (unaudited)

543,396

$
31.21

Exercisable at March 31, 2018 (unaudited)

526,338

$
32.10

~~(1)~~

~~Includes 10,149 shares subject to options granted by Private Daré that were assumed in connection with the Cerulean/Private Daré stock purchase transaction.~~



	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2018 (1)	1,635,790		$	11.08
Granted	563,000		0.76
Exercised	—		—
Canceled/forfeited	(8,360	)	17.81
Expired	(70	)	59.48
Outstanding at March 31, 2019 (unaudited) (1)	2,190,360		$	8.40
Exercisable at March 31, 2019 (unaudited)	650,151		$	25.97

(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

~~The Company has recorded~~

Total stock-based compensation expense related to ~~the issuance of stock option awards to employees of $9,124 and $3 for the three months ended March 31, 2018 and March 31, 2017, respectively.~~

~~There were no~~ stock options granted ~~during~~to employees and directors recognized in the ~~three months ended March 31, 2017.~~ consolidated statement of operations is as follows:



	Three Months Ended March 31,
	2019		2018
Research and development	$	24,703	$	—
General and administrative	73,265		9,124
Total	$	97,968	$	9,124

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 months ended March 31, ~~2018~~2019 are as follows:

Three months ended

March 31, 2018

Expected life in years

10.0

Risk-free interest rate

2.52%

Expected volatility

122%

Forfeiture rate

0.0%

Dividend yield

0.0%

Weighted-average fair value of options granted

$
2.26



		Three Months Ended March 31, 2019
Expected life in years		10.0
Risk-free interest rate		2.70%
Expected volatility		120%
Forfeiture rate		0.0%
Dividend yield		0.0%
Weighted-average fair value of options granted		$0.72

Restricted Stock After the Cerulean/Private Daré Stock Purchase Transaction

The 3.14 million shares of common stock issued in connection with the Cerulean/Private Daré stock purchase transaction to the ~~shareholders of~~ Private Daré ~~have~~stockholders were not ~~been~~ registered with the SEC and may only be sold if registered under the Securities Act of 1933, as amended, or pursuant to an exemption from the ~~SEC’s~~ registration ~~requirements. These~~requirements thereunder. The shares held by non-affiliates became eligible for sale ~~pursuant to~~under Rule 144 beginningsix months after the closing ~~date~~ of the Cerulean/Private Daré stock purchase transaction.

7.~~Stockholders’ Equity~~

~~At-The-Market Issuance~~


6.	STOCKHOLDERS’ EQUITY

ATM Sales Agreement

In January 4, 2018, the Company entered into ~~an at-the-market issuance~~a common stock sales agreement ~~pursuant to~~under which the Company may sell up to an aggregate of $10 million in gross proceeds through the sale of shares of common stock from time to time in “at-the-market” equity offerings (as defined in Rule 415 promulgated under the Securities Act of 1933, as amended), including in sales made directly on the Nasdaq Capital Market, or Nasdaq, to or through a market maker or, subject to ~~our~~the Company's prior approval, in negotiated transactions. The Company agreed to pay a commission of up to 3% of the gross proceeds of any common stock sold under this agreement plus certain legal expenses.

The common stock sales agreement was amended in August 2018 to refer to the Company’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.

During the three months ended March 31, 2019, the Company issued and sold no shares under the common stock sales agreement. During the three months ended March 31, 2018, the Company generated gross proceeds of approximately $1.1 million and incurred issuance costs of $237,403 under this agreement on sales of an aggregate of 375,000 shares of the ~~Company’s~~Company's common stock.

Underwritten Public Offering

In February ~~15,~~ 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 ~~together~~ with a warrant to purchase up to 0.70 of a share of the Company’s common stock. The Company granted the underwriter a 30-day over-allotment option to purchase up to an additional 750,000 shares of common stock atand/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 sale of the 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 have an exercise price of $3.00 per ~~share. The offering, including shares issued upon exercise of the underwriter’s overallotment option, generated gross proceeds of $10.3 million,~~share and ~~after the payment of expenses, the Company received net proceeds of approximately $9.4 million. The warrants~~ are exercisable immediately and for ~~a period of~~ five years from ~~the date of~~ issuance.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 adjusted downward if the Company issues or sells (or is deemed to issue or sell) securities at a price that is less than the exercise price in effect immediately prior to such issuance or sale (or deemed issuance or sale)~~, before the expiration of the warrant term.~~. In that case, the ~~new~~ exercise price of the warrants ~~would~~will be adjusted to equal the price at which the new securities are issued or sold (or are deemed to have been issued or sold). 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 ~~of the warrants shall~~ have the right to substitute such variable price for the exercise price of the warrant then in effect. The warrants are exercisable only for cash, unless ~~the~~a registration statement covering the shares issued upon exercise of ~~which~~ the ~~prospectus registering the offering was part~~warrants is not effective, ~~for the issuance of the shares underlying the warrants,~~ 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~~ granted the underwriters a 30-day option to purchase up to an additional 750,000 shares of its common stock and warrants to purchase up to 525,000 shares of its common stock directly from the Company at aexercise price of ~~$2.05~~these warrants was automatically reduced to $0.98 per ~~common~~ share ~~and accompanying warrant.~~ in connection with the initial closing of the Company's underwritten public offering in April 2019. See Note 11, "Subsequent Events," herein.

The Company ~~received an overallotment notice from the underwriter for warrants to purchase up to 220,500 shares of its common stock, which were issued on February 15, 2018.~~

~~The Company has~~ 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. ~~As described above at Note 3, Recently Adopted Accounting Standards, the~~The Company early adopted ASU 2017-11 and as a result has recorded the fair value of the warrants as ~~equity.~~

~~Common Stock Warrants~~

equity (see Note 3).

No warrants were exercised during the three months ended March 31, ~~2018~~2019 or ~~2017.~~2018. As of March 31, ~~2018,~~2019, the Company had ~~the following~~these 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

3,720,500

$
3.00

February 15, 2023

3,751,002

~~8. 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	$	3.00	February 15, 2023
3,750,833


7.	LEASED PROPERTIES

Effective January 1, 2019, the Company adopted ASC 842, which requires recognition of a right-of-use asset and ~~Contingencies~~

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 has one lease for its corporate headquarters that commenced on July 1, 2018 for 3,169 square feet of office space. The term of the lease is 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 will increase 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.

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 March 31, 2019, the Company recorded a right of use asset of $212,909 within its other non-current assets and $83,751 and $139,288, respectively within current and non-current other liabilities on its consolidated balance sheet.

As of March 31, 2019, future minimum lease payments for the Company's corporate headquarters are:



Years ending December 31:
Remainder of 2019	$	81,950
2020	112,943
2021	67,595
Total future minimum lease payments	262,488
Less: Difference between future minimum lease payments and discounted operating lease liabilities	39,449
Total operating lease liabilities	$	223,039

Operating lease costs were $27,038 for the three months ended March 31, 2019. 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 were $26,620 for the three months ended March 31, 2019, and this amount is 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 ~~19,~~ 2017, the Company entered into a license agreement, or the ADVA-Tec License Agreement, with ADVA-Tec, Inc., or ADVA-Tec, under which itthe Company was granted the exclusive right to develop and commercialize Ovaprene for human contraceptive use worldwide. ~~The ADVA-Tec Agreement became effective once the Company secured the initial funding required in accordance with its terms.~~ 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 interim consolidated financial statements,~~this report, this patent portfolio includes 12nine issued U.S. patents ~~worldwide, along with 8~~and one pending U.S. patent application, and 59 granted patents and four pending patent applications in other major markets, all of which ~~in accordance with the terms of the ADVA-Tec Agreement~~ are exclusively licensed to the Company for the human contraceptive use of Ovaprene as a human contraceptive device. The 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. ~~The~~Under the terms of the ADVA-Tec Agreement, the Company ~~also~~ has a right of first refusal to license these patents and patent applications for ~~purposes~~additional indications.

The following is a summary of ~~additional indications for Ovaprene. Under~~other 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, or PMA, from the United States Food and Drug Administration, 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 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; 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. 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 million in the aggregate in commercial milestone payments to ADVA-Tec upon reaching certain worldwide net sales milestones.~~

The Company ~~is obligated to~~must 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.

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.

Termination Rights.Unless earlier terminated, the license the Company received under the ADVA-Tec License Agreement continues on a country-by-country basis until the later of the life of the licensed patents or the ~~Company’s~~Company's last commercial sale of Ovaprene. ~~The ADVA-Tec Agreement includes~~In addition to customary termination rights for both ~~parties and provides~~parties: (A) the Company may terminate the ~~right to terminate~~agreement 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 Agreement~~agreement if the Company develops or commercializes any non-hormonal ring-based vaginal contraceptive device competitive to Ovaprene or if the Company fails ~~to do any~~to: (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)~~(3) use commercially reasonable efforts to complete all necessary pre-clinical and clinical studies required to support and submit a PMA, ~~(iii)~~(4) conduct clinical trials as set forth in the development plan that is agreed by the Company and ADVA-Tec, and as may be modified by a joint research committee, ~~where~~unless such failure is ~~not~~ caused by events outside of the Company’s reasonable control, or ~~(iv)~~(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-enrollment~~unless such failure is ~~not~~ caused by events outside of its reasonable control. In addition, ADVA-Tec may terminate the ADVA-Tec Agreement if the Company develops or commercializes any non-hormonal ring-based vaginal contraceptive device that is deemed competitive to Ovaprene or, in certain limited circumstances, if the Company fails to commercialize Ovaprene in certain designated countries within three years of the first commercial sale of Ovaprene.

For products currently in development, future potential milestone payments based on product development are approximately $14.6 million as of March 31, ~~2018.~~2019. Future potential milestone payments related to commercialization totaled $20 million at March 31, ~~2018.~~2019. There are 1-10% royalties ~~ranging from 1-10%~~ required under the ~~ADVA-Tec Agreement.~~license agreement. The Company is unable to estimate with certainty the timing ofon when these milestone payments will occur as these payments are dependent upon the ~~progress of the Company’s~~Company's product development programs.

SST License and Collaboration Agreement

In February ~~11,~~ 2018, the Company entered into a license and collaboration agreement, or the SST License Agreement, with Strategic Science & Technologies-D, LLC and Strategic Science & Technologies, LLC, referred to collectively as SST, pursuant to which the Company was required to secure an investment of at least $10.0 million by March 31, 2018. The Company announced that it had met this funding requirement on February 15, 2018.SST. The SST License Agreement provides the Company with 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 citrate~~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.

~~Under the~~

The following is a summary of other terms of the SST License ~~Agreement, the~~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 ~~fifty percent (50%)~~50% undivided interest in all joint inventions. ~~Each party has agreed to~~

Joint Development Committee. The parties will collaborate through a ~~Joint Development Committee, or JDC, which shall be responsible for determining~~joint development committee that will determine the strategic objectives for, and generally ~~overseeing,~~oversee, the development efforts of both parties under the SST License Agreement. ~~Further, the~~

Development.The Company ~~has agreed to~~must use commercially reasonable efforts to develop the Licensed Products in the Field of Use in accordance with a development plan ~~contained~~ in the SST License Agreement, and to commercialize the 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 provides that, in consideration of the rights to be granted to the Company,~~ Agreement.

Royalty Payments.SST will be eligible to receive tiered royalties based on percentages of annual net sales of Licensed Products in the single digits to the mid double digits, ~~including~~subject to customary ~~provisions permitting~~ royalty reductions and ~~offset,~~offsets, and a percentage of sublicense revenue. ~~The Company is also responsible for all reasonable internal and external costs and expenses incurred by~~

Milestone Payments.SST ~~in its performance of the development activities it is required~~will be eligible to ~~perform under the SST~~

~~License Agreement. Further, the SST License Agreement provides that the Company shall make milestone~~receive payments ~~to SST~~(1) ranging from $0.5 million to $18.0 million in the aggregate on achieving certain clinical and regulatory milestones in the U.S. and worldwide, and ~~an additional~~(2)

between $10.0 million to $100 million in the aggregate upon achieving certain commercial sales milestones. ~~Should~~If the Company ~~enter~~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 ~~ten~~10 years from the date of the first commercial sale of such Licensed Product or the expiration of the last valid claim of patent rights covering the Licensed Product in the Field of Use. ~~The SST License Agreement provides that each party will have customary rights to terminate~~Upon expiration (but not termination) of the SST License Agreement in a particular country, the ~~event of material uncured breach by~~Company will have a fully paid-up license under the ~~other party,~~licensed intellectual property to develop and ~~(i)~~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 ~~will have the right to~~may terminate the SST License Agreement without cause upon ~~ninety (90)~~90 days prior written notice to ~~SST, and (ii)~~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 ~~will have a right to~~may terminate the SST License Agreement without cause upon ~~one hundred eighty (180)~~180 days prior written ~~notice. In addition, the~~notice; and (3) SST ~~License Agreement provides SST with the right to~~may terminate the SST License Agreement with respect to the applicable Licensed Product(s) in the applicable country(ies) upon ~~thirty (30)~~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 ~~sixty (60)~~60 days of receipt of SST’s notice thereof.

Upon expiration (but not termination) of the SST License Agreement in a particular country, the Company shall 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.

Orbis Development and Option Agreement

In March ~~12,~~ 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). ~~The~~Under the Orbis Agreement, the Company ~~has agreed to pay~~paid Orbis $300,000 to conduct the first stage of development work, Stage ~~One,~~1, as follows: $150,000 upon signing the ~~Development and Option~~Orbis Agreement, $75,000 at the ~~fifty percent (50%)~~50% completion point, not later than ~~six (6)~~6 months following ~~signing of Development and Option~~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 ~~eleven (11)~~11 months following ~~signing of Development and Option Agreement.~~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 ~~ninety (90)~~90 days to instruct Orbis ~~in writing~~ whether ~~or not~~ to commence the second stage of development work, Stage 2. Should the Company execute its option to proceed to Stage 2, it will ~~be obligated~~have to provide additional funding to Orbis for such activities.

The initial development on Orbis’s long-acting injectable contraceptive program was carried out under a subcontract funded by Family Health International, through a grant from the Bill and Melinda Gates Foundation.

An injectable contraceptive is designed to provide discreet, non-implanted, protection over several months. Limitations of the currently marketed injectable contraceptive is that it provides contraceptive protection for only three months and can delay the ability to get pregnant for up to ten months after receiving the injection. The target product profiles of ORB-204 and ORB-214 include prolonged duration (six to 12 months), improved ease of use, with an improved side effect profile and predictable return to fertility.

Pre-clinical studies for the 6- and 12-month formulations have been completed, ~~to date,~~ 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 ~~terms of the agreement with~~ Orbis ~~provide~~Agreement provides the Company with an option to enter into a license agreement for ORB-204 and ORB-214 should ~~upcoming~~ development efforts be successful.

9. ~~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:~~

Three months ended March 31,

2018

2017

Stock options

543,396

10,149

Warrants

3,751,002

—

Total

4,294,398

10,149

~~10.Subsequent Events~~

Juniper Pharmaceuticals - License Agreement

In April ~~24,~~ 2018, the Company entered into an Exclusive License Agreement, or the Juniper License Agreement, with Juniper Pharmaceuticals, Inc., or Juniper, ~~pursuant to~~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 ~~the material~~certain terms of the Juniper License Agreement:

•

Upfront ~~Fee~~Fee.. The Company paid a ~~$250,000~~$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~~ $50,000 for the first two years and ~~$100,000~~$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~~. Payments.The Company ~~is required to~~must make potential future development and sales milestone payments of (1) up to ~~$43.75 million (up to $13.50~~$13.5 million in ~~development~~the aggregate upon achieving certain clinical and regulatory milestones, and (2)

up to ~~$30.25~~$30.3 million in the aggregate upon achieving certain commercial sales ~~milestones)~~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 ~~that~~ 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 ~~is required to~~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~~T.erm. 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.

~~Funding Award from~~

Pear Tree Acquisition

The Company may be required to make certain royalty and milestone payments under the ~~National Institutes of Health~~

Merger Agreement (see Note 4).

Hammock/MilanaPharm Assignment and License Agreement

On ~~April 30,~~December 5, 2018, the Company ~~announced~~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.~~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 subsequently received award payments totaling $224,665. The award ~~will be~~payments were applied to ~~important~~ clinical development efforts supporting Ovaprene and were recognized in the ~~Company’s lead product candidate Ovaprene. The balance~~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 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 ~~is contingent upon, among~~followed the NIH's review of an interim data analysis and other ~~matters, assessment of the~~ results of the first phase of the research supporting Ovaprene. The award will be applied to clinical development efforts supporting Ovaprene. 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.

~~Pear Tree Pharmaceuticals Acquisition~~

~~On April 30, 2018,~~ At March 31, 2019, the Company ~~entered into an Agreement~~recorded a receivable of approximately $161,007 for expenses eligible for reimbursement incurred through March 31, 2019.


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 ~~Plan~~potentially dilutive securities (common share equivalents) outstanding during the period. Common share equivalents outstanding, determined using the treasury stock method, are comprised of ~~Merger, or the Merger Agreement, with~~ Pear Tree Pharmaceuticals, Inc., or Pear Tree, Daré Merger Sub, Inc., the Company’s wholly-owned subsidiary, or Merger Sub, and Fred Mermelstein and Stephen C. Rocamboli, in their respective capacities as stockholders’ representatives. If the transactions contemplated by the Merger Agreement are consummated, then at such time Merger Sub will merge with and into Pear Tree with Pear Tree surviving the merger as a wholly owned subsidiary of the Company.

Upon the potential closing of the Merger Agreement, certain former and continuing Pear Tree service providers and former holders of Pear Tree’s capital stock, or the Holders, will be entitled to receive an amount of cash equal to the sum of $75,000, and the cash and cash equivalents held by Pear Tree at closing, or the Positive Consideration Amount, less (i) certain indebtedness and transaction expenses of Pear Tree, (ii) transaction expenses of the stockholders’ representatives and (iii) amounts payable under Pear Tree’s management incentive plan, collectively referred to as the Negative Consideration Amount. In accordance with the Merger Agreement, if the Negative Consideration Amount is greater than the Positive Consideration Amount, then the Company will be allowed to offset such difference from future paymentsshares that would otherwise be due to the Holders, including the potential payment of $75,000 due on the one-year anniversary of the closing. The Merger Agreement also provides that the Holders will be eligible to receive, subject to certain offsets, tiered royalties, including customary provisions permitting royalty reductions and offset, based on percentages of annual net sales of certain products subject to license agreements assumed by the Company, and a percentage of sublicense revenue. Further, the Merger Agreement provides that the Company shall make milestone payments to the Holders, with such payments contingent on achieving certain clinical, regulatory and commercial milestones, which payments may be ~~paid, in the Company’s sole discretion, in cash or~~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 March 31,
	2019	2018
Stock options	2,190,360	543,396
Warrants	3,750,833	3,751,002
Total	5,941,193	4,294,398


11.	SUBSEQUENT EVENTS

Capital Raising

On April 11, 2019, the Company closed an underwritten public offering of 4,575,000 shares of its common stock ~~as more fully set forth~~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 ~~Merger Agreement.~~underwritten public offering, and received gross proceeds of approximately $5.8 million and net proceeds of approximately $5.2 million after deducting underwriting discounts and offering expenses.

February 2018 Warrant Exercise Price Reduced

As discussed in Note 6 above, the outstanding warrants to purchase up to an aggregate of 3,720,500 shares of the Company's common that were issued and sold in February 2018 include price-based anti-dilution provisions. Under the terms of those warrants, subject to certain limited exceptions, their exercise price will be reduced each time the Company issues or sells any 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. If the Company issues shares of

common stock for cash, the consideration received therefor will be deemed to be the net amount of consideration the Company received therefor. As of immediately prior to the initial closing of the April 2019 underwritten public offering, the exercise price of the warrants was $3.00 per share. The ~~parties have made customary representations, warranties,~~net amount of consideration the Company received for shares issued and ~~covenants~~sold at the initial closing was $0.98 per share. On April 11, 2019, in accordance with the ~~Merger Agreement, including provisions regarding indemnification.~~

anti-dilution provision of the warrants and as a result of the sale of such shares, the exercise price of the warrants was automatically reduced to $0.98 per share.

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 our interim consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and our audited financial statements and notes thereto for the year ended December 31, ~~2017~~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 ~~March 28, 2018.~~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~~.statements. See “CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS,” above. Forward-looking statements are not guarantees of future performance and our actual results may differ materially from those currently anticipated and from historical results depending upon a variety of factors, including, but not limited to, those discussed in Part I, Item 1A. Risk Factors in 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.

~~References in~~

In this ~~Quarterly Report on Form 10-Q:~~report: (a) to “Cerulean” ~~refer~~refers to Cerulean Pharma, Inc. ~~prior to the closing of~~before the Cerulean/Private Daré stock purchase transaction closed (as described in the “2017 Business Combination and Related Transactions” section below); and (b) to “we,” “us,” “our,” “Daré” or the “Company” refer collectively to Daré Bioscience, Inc. and its wholly owned subsidiaries, unless otherwise stated or the context otherwise requires. All information presented in this report is based on our fiscal year. Unless otherwise stated, references to particular years, quarters, months or periods refer to our fiscal years ending December 31 and the associated quarters, months and periods of those fiscal years.

Daré ~~Bioscience®~~Bioscience® is a registered trademark of Daré Bioscience, Inc. ~~Ovaprene®~~Ovaprene® is a registered trademark licensed 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.

~~Overview~~

Business Overview

We are a clinical-stage biopharmaceutical company committed to the advancement of innovative products for women’s ~~reproductive~~ health. We are driven by a mission to identify, develop and bring to market a diverse portfolio of differentiated therapies that expand treatment options, improve outcomes and facilitate convenience for women, primarily in the areas of contraception, vaginal health, sexual health and ~~fertility~~.fertility. Our business strategy is to license or otherwise acquire the rights to differentiated product candidates in ~~such~~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.

~~Over the last twelve months,~~ We and our wholly owned subsidiaries operate in one business segment.

Since July 2017, we have assembled a portfolio of ~~two~~ clinical-stage ~~assets through~~and pre-clinical stage candidates addressing unmet needs in women's health. Our portfolio includes these four clinical-stage product ~~license and development agreements. The first, Ovaprene, is~~candidates:

DARE-BV1, a unique hydrogel formulation of clindamycin phosphate 2% for bacterial vaginosis, or BV;

Ovaprene®, a non-hormonal monthly contraceptive ~~candidate that was licensed~~intravaginal ring;

Sildenafil Cream, 3.6%, a novel cream formulation of sildenafil for female sexual arousal disorder, or FSAD; and

DARE-HRT1, a combination bio-identical estradiol and progesterone intravaginal ring for hormone replacement therapy, or HRT, following menopause.

Our portfolio also includes these pre-clinical stage product candidates:

DARE-VVA1, a vaginally delivered formulation of tamoxifen to treat vulvar vaginal atrophy, or VVA, in ~~July~~patients with hormone-receptor positive breast cancer;

DARE-RH1, a novel approach to non-hormonal contraception for both men and women by targeting the CatSper ion channel;

ORB-204 and ORB-214, 6-month and 12-month formulations of ~~2017;~~injectable etonogestrel for contraception;

DARE-FRT1, an intravaginal ring containing bio-identical progesterone for the prevention of preterm birth and ~~the second, Topical Sildenafil cream, also known~~for fertility support as ~~SST-6007, is a potential~~part of an IVF treatment ~~for Female Sexual Arousal Disorder~~plan; and was licensed in February of 2018. During the same period, we obtained rights to a portfolio of preclinical candidates. In March of 2018, we entered into a collaboration and option agreement covering new injectable contraceptive product candidates, and in April 2018, we licensed the worldwide rights to a portfolio of preclinical

DARE-OAB1, an intravaginal rings from Juniper Pharmaceuticals, Inc. In addition, if the merger contemplated by the merger agreement entered into between us and with Pear Tree Pharmaceuticals, Inc. in April of 2018 are consummated, or the Pear Tree Merger, then we will acquire a third clinical-stage asset—a proprietary vaginal tamoxifen tabletring containing oxybutynin for the treatment of ~~vulvar and vaginal atrophy.~~

Since 2015, we have devoted significant resources to license and prepare for the development of Ovaprene, a non-hormonal contraceptive intravaginal ring intended to provide protection over multiple weeks of use, requiring no intervention at the time of intercourse. We acquired the worldwide rights to SST-6007, a potential treatment for FSAD, in February 2018. overactive bladder.

We expect that the bulk of our development expenses over the next two years will support the advancement of ~~these two~~our four clinical-stage product candidates. ~~However,~~In addition, we recently obtained rights to certain preclinical stage assets and, if the Pear Tree Merger is consummated, will obtain rights to an additional clinical stage asset that will require us to spend cash resourcesintend to fund ~~their development.~~a portion of the development expenses of our pre-clinical stage product candidates, particularly those like DARE-FRT1 and DARE-VVA1 that have the opportunity to advance into clinical studies more quickly. We expect that DARE-FRT1 will advance into a clinical study in approximately 12 to 18 months. Any additional product candidates we may obtain in the future will also require ~~funding.~~

cash to fund their development.

DARE-BV1

DARE-BV1 is a proprietary solution-to-gel formulation containing clindamycin, an antibiotic used to treat certain bacterial infections, including BV. DARE-BV1 is designed to be administered in a convenient, single vaginal dose with a dual release pattern to prolong the duration of exposure to clindamycin at the site of infection and to potentially improve the rate of effectiveness compared to existing FDA-approved therapies. Current FDA-approved therapies for BV have clinical cure rates of less than 70 percent. In an investigator initiated pilot study that enrolled 30 women, DARE-BV1 demonstrated an 88 percent clinical cure rate in evaluable subjects (n=26) at the test-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 DARE-BV1 for BV in the U.S. We expect to commence a Phase 3 clinical study of DARE-BV1 in approximately 250 women in the fourth quarter of 2019 and, if the study is successful, to be in a position to file a new drug application, or NDA, with the FDA in 2020. We anticipate that the cost of the Phase 3 clinical study, including manufacturing activities, and the NDA filing thereafter to be less than $10.0 million.

Ovaprene

Ovaprene is an intravaginal ring that, if approved, would represent a new category of birth control. Ovaprene is designed to be worn conveniently over multiple weeks, require no intervention at the time of intercourse, and it does not contain hormones. Ovaprene is a silicone-reinforced ring with a soft, absorbable scaffolding that encircles a fluid-permeable barrier. A non-braided, multi-filament mesh in the center of the ring functions as a physical barrier to sperm. The silicone ring also releases ferrous gluconate to create a spermiostatic environment within the vagina.

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 agency 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.

In May 2018, we announced initiation of a postcoital test, or PCT, clinical trial of Ovaprene. This ongoing clinical trial is designed to assess general safety, acceptability, and effectiveness in preventing progressively motile sperm, or PMS, from reaching the cervical canal following intercourse. The study will enroll approximately 50 couples, with the woman to be evaluated over the course of five menstrual cycles, with a target of having approximately 25 women complete a total of 21 visits. Each woman’s cervical mucus will be measured at several points during the study, including a baseline measurement at menstrual cycle 1 that excludes the use of any product. Subsequent cycles and visits will include the use of a diaphragm (menstrual cycle 2) and Ovaprene (menstrual cycles 3, 4 and 5). Data from the PCT clinical trial are expected to be available in the second half of 2019.

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 high power field, or HPF, of from greater than one to greater than 20 sperm, and less than 5 PMS per HPF is considered reflective of contraceptive effectiveness.

If the PCT clinical trial demonstrates that less than 5 PMS per HPF progressed into the cervical canal in most women and can be safely worn over multiple weeks, we intend to prepare and file an Investigational Device Exemption, or IDE, with the FDA to commence a pivotal clinical trial 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 characterized primarily by a persistent or recurrent inability to attain or maintain sufficient physical sexual arousal, frequently resulting in distress or interpersonal difficulty. Sildenafil Cream, 3.6% is formulated to increase blood flow locally to the vulvar-vaginal tissue, leading to a potential improvement in genital arousal response.

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 commenced Phase 2b related activities during the fourth quarter of 2018 with the initiation of a non-interventional study intended to support the validity of specific patient reported outcome, or PRO, measures. This content validity PRO study seeks to identify and document the genital arousal symptoms that will be assessed in our planned at-home Phase 2b trial, as well as our pivotal studies, and to demonstrate that these symptoms are the most important and relevant to our target population and are also acceptable endpoints for the FDA. In parallel, we will continue to explore additional clinical and non-clinical work that might be valuable or required to support the overall program and the anticipated design of the Phase 2b trial. Because our plan is for the co-primary endpoints used in the Phase 2b trial to reflect the endpoints used in the Phase 3 trials, after the ongoing qualitative study is completed and before the Phase 2b at-home trial is initiated, we plan to request another Type C meeting to obtain the FDA’s guidance on the endpoints for our Phase 2b and Phase 3 clinical trials, including whether the FDA agrees that the PRO instruments are content valid for the target population. The timing of when we initiate the Phase 2b at-home trial will be influenced by such guidance.

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 for DARE-HRT1 during 2019 and to report topline results in 2020. DARE-HRT1 has the potential to be a first-in-class product.

Financial Overview

We incurred ~~losses~~a loss of approximately ~~$11.5~~$3.1 million for the ~~year~~quarter ended ~~December~~March 31, ~~2017.~~ 2019. As of ~~December~~March 31, ~~2017,~~2019, we had (a) an accumulated deficit of approximately ~~$12.2~~$32.0 million and (b) cash and cash equivalents of ~~$7.6~~approximately $3.5 million. We also had negative cash flow from operations of approximately ~~$2.5 million for the year ended December 31, 2017. As of March 31, 2018, we had~~ ~~an accumulated deficit of approximately~~ ~~$19.9 million~~ ~~and cash and cash equivalents~~ ~~of approximately~~ ~~$15.6 million~~ ~~as of March 31, 2018. We also had negative cash flow from operations of approximately $2.1~~$3.3 million during the three ~~mont~~hsmonths ended March 31, ~~2018~~. 2019. As further discussed below, in ~~at-the-market offerings and in~~ an underwritten public offering ~~that~~ we closed in ~~early 2018,~~April 2019, we received aggregate net proceeds of approximately ~~$10.4 million in the aggregate.~~$5.2 million. 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 future funding ~~requirements~~ will depend on many factors, including the pace and results of our clinical development efforts. If we do not raise capital as and when needed, we will not be able to continue development of our product candidates or we will be required to delay, scale back or eliminate some or all of our development programs or cease operations.

2017 Business Combination and Related Transactions

Until July 20, 2017, our corporate name was Cerulean Pharma Inc., or Cerulean. Cerulean was incorporated in Delaware in December 2005. On July 19, 2017, Cerulean and Daré Bioscience Operations, Inc., a privately held Delaware corporation, or Private Daré, completed a transaction in which the holders of capital stock and securities convertible into capital stock of Private Daré, which holders are collectively referred to as the Private Daré Stockholders, sold their shares of capital stock of Private Daré to Cerulean in exchange for newly issued shares of Cerulean common stock. As a result of that transaction, Private Daré became a wholly owned subsidiary of Cerulean. As of i~~mmediately~~immediately following the closing of that transaction: (i) the Private Daré Stockholders owned approximately 51% of the outstanding common stock of Cerulean, and (ii) the equity holders of Cerulean immediately prior to the closing, collectively, owned approximately 49% of the outstanding common stock of ~~Cerulean~~.Cerulean. In connection with the transaction, Cerulean changed

its name from “Cerulean Pharma, Inc.” to “Daré Bioscience, Inc.” We refer to the transaction described above as the Cerulean/Private Daré stock purchase transaction.

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

~~We and our wholly owned subsidiaries, Private Daré and Daré Bioscience Australia Pty LTD, operate in one business segment.~~

~~On July 20, 2017, we effected~~ a ~~1-for-10 reverse stock split~~ of ~~our~~ ~~common stock.~~ All share and per share amounts of common stock, options and warrants in this report, including those amounts included in the accompanying interim consolidated financial statements, have been restated for all periods to give retroactive effect to the reverse stock split

Recent Events

Capital Raising

On January 4, 2018, we entered into an at-the-market issuance of common stock sales agreement pursuant to which we may sell up to an aggregate of $10 million worth of shares of our common stock from time to time in “at-the-market” offerings (as defined in Rule 415 promulgated under the Securities Act of 1933, as amended), including in sales made directly on Nasdaq, to or through a market maker or, subject to our prior approval, in negotiated transactions. We will pay an aggregate commission rate of up to 3% of the gross proceeds of any common stock sold under this agreement. In January and February 2018, we generated gross proceeds of approximately $1.1 million resulting in net proceeds of an aggregate of approximately $840,000 on sales of 375,000 shares of our common stock under this agreement.

~~On February 15, 2018,~~April 11, 2019, we closed an underwritten public offering of ~~5.0 million~~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 in the underwritten public offering, and received gross proceeds of approximately $5.8 million and net proceeds of approximately $5.2 million after deducting underwriting discounts and offering expenses.

February 2018 Warrant Exercise Price Reduced

As discussed in Note 6 of the accompanying Notes to Consolidated Financial Statements, the outstanding warrants to purchase up to ~~3.5 million~~an aggregate of 3,720,500 shares of ~~common stock. Each share of~~our common stock ~~was~~we issued and sold ~~together with a warrant~~in February 2018 include price-based anti-dilution provisions. Under the terms of those warrants, subject to ~~purchase up to 0.70 of a share of common stock, at an~~certain limited exceptions, their exercise price ~~of $3.00 per share. We generated gross proceeds of approximately $10.3 million, resulting in net proceeds of approximately $9.4 million. The warrants are exercisable immediately and~~will be reduced each time we issue or sell any securities for a ~~period of five years from the date of issuance. The warrants include~~consideration per share less than a ~~price-~~

~~based anti-dilution provision, which provides that~~price equal to the exercise price of ~~the~~those warrants ~~will be adjusted downward if we issue or sell (or are deemed to issue or sell) securities at a price that is less than the exercise price~~ in effect immediately prior to such issuance or ~~sale (or~~sale. If we issue shares of our common stock for cash, the consideration received therefor will be deemed ~~issuance or sale), before~~to be the ~~expiration~~net amount of consideration we received therefor. As of immediately prior to the initial closing of the ~~warrant term. In that case,~~April 2019 underwritten public offering, the ~~new~~ exercise price of the warrants ~~would equal~~was $3.00 per share. The net amount of consideration we received for shares issued and sold at the price at which the new securities are issued or sold (or are deemed to have been issued or sold). In addition, if we issue, sell or enter into any agreement to issue or sell securities at a price which varies or may varyinitial closing was $0.98 per share. On April 11, 2019, in accordance with the ~~market price of the shares of our common stock, the holders~~anti-dilution provision of the warrants ~~shall have~~and as a result of the ~~right to substitute~~sale of such ~~variable price for~~shares, the exercise price of the ~~warrant then in effect. The~~ warrants ~~are exercisable only for cash, unless the registration statement of which the prospectus registering the offering~~ was ~~part is not effective for the issuance of the shares underlying the warrants, in which case the warrants may be exercised on a cashless basis.~~ ~~We granted the underwriters a 30-day option~~automatically reduced to ~~purchase up to an additional 750,000 shares of our common stock and warrants to purchase up to 525,000 shares of our common stock directly from us at a price of $2.05~~$0.98 per ~~common share and accompanying warrant. We received an overallotment notice from the underwriter for warrants to purchase up to 220,500 shares of our common stock, which shares were issued on February 15, 2018.~~

~~SST-6007 License and Collaboration Agreement~~

On February 11, 2018, we entered into a license and collaboration agreement, or the SST License Agreement, with Strategic Science & Technologies-D LLC and Strategic Science & Technologies, LLC, or referred to collectively as SST. Under the SST License Agreement, subject to our securing an investment of at least $10.0 million by March 31, 2018, which we secured as a result of the underwritten public offering that closed on February 15, 2018 discussed above, we obtained a worldwide 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 citrate 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 SST Licensed Products.

We agreed to use commercially reasonable efforts to develop the SST Licensed Products in the SST Field of Use in accordance with a development plan contained in the SST License Agreement, and to commercialize the SST Licensed Products in the SST Field of Use.

share.

SST will be eligible to receive tiered royalties based on percentages of annual net sales of the SST Licensed Products in the single digits to the mid-double digits, including customary provisions permitting royalty reductions and offset, and a percentage of sublicense revenue. We are responsible for all reasonable internal and external costs and expenses incurred by SST in its performance of the development activities it is required to perform under the SST License Agreement. Further, the SST License Agreement provides that we shall make base milestone payments to SST ranging from $0.5 million to $18.0 million on achieving certain clinical and regulatory milestones in the U.S. and worldwide, and an additional $10.0 million to $100 million upon achieving certain commercial milestones. Should we enter into strategic development or distribution partnerships related to the SST Licensed Products, additional milestone payments would be due to SST.

~~Orbis Development and Option Agreement~~

On March 12, 2018 we entered into an exclusive development and option 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). The collaboration represents our first partnership that leverages funds and development work supported to date by investment from a donor and non-profit development community devoted to improving options in women’s reproductive health, positioning us as a committed industry partner to advance innovation that addresses global gaps in therapeutic options. We have agreed to pay Orbis $300,000 to conduct the first stage of development work, Stage One, as follows: $150,000 upon signing the Development and Option Agreement, $75,000 at the fifty percent (50%) completion point, not later than six (6) months following signing of Development and Option Agreement, and $75,000 upon delivery by Orbis of the 6-month batch, not later than eleven (11) months following signing of Development and Option Agreement. Upon Orbis successfully completing Stage 1 of the development program and achieving the predetermined target milestones for Stage 1, the Company will have ninety (90) days to instruct Orbis in writing whether or not to

~~commence the second stage of development work, Stage 2. Should we execute our option to proceed to Stage 2, we will be obligated to provide additional funding to Orbis for such activities.~~

The initial development on Orbis’s long-acting injectable contraceptive program was carried out under a subcontract funded by Family Health International, or FHI 360, through a grant from the Bill and Melinda Gates Foundation, or the Gates Foundation. The Gates Foundation and FHI 360 are world leaders in the funding and development of novel contraceptive products and programs. In July of 2017, the Gates Foundation announced a commitment of $375 million over three years in support of Family Planning 2020, a global public/private partnership aimed at providing access to contraception.

An injectable contraceptive is designed to provide discreet, non-implanted protection over several months. Limitations of the currently marketed injectable contraceptive is that it provides contraceptive protection for only three months and can delay the ability to get pregnant for up to ten months after receiving the injection. The target product profiles of ORB-204 and ORB-214 include prolonged duration (six to 12 months), improved ease of use, with an improved side effect profile and predictable return to fertility.

Pre-clinical studies for the 6- and 12-month formulations have been completed to date, 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 terms of the agreement with Orbis provide us with an option to enter into a license agreement for ORB-204 and ORB-214 should upcoming development efforts be successful.~~

~~Juniper Exclusive License Agreement~~

On April 24, 2018, we entered into an Exclusive License Agreement, or the Juniper License Agreement, with Juniper Pharmaceuticals, Inc., or Juniper, pursuant to which Juniper granted Daré (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. Daré is entitled to sublicense the rights granted to it under the Juniper License Agreement.

~~The following is a summary of the material terms of the Juniper License Agreement:~~

•~~Upfront Fee. We paid a $250,000 non-creditable upfront license fee to Juniper in connection with the execution of the Juniper License Agreement.~~

•~~Annual Maintenance Fee~~. We 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~~. We are required to make potential future development and sales milestone payments of up to $43.75 million (up to $13.50 million in development milestones and up to $30.25 in sales milestones) for each product or process covered by the licenses granted under the Juniper License Agreement.

•~~Royalty Payments~~. During the royalty term, we 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 Juniper License Agreement. In lieu of such royalty payments, we will pay Juniper a low double-digit percentage of all sublicense income that we receive 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~~. We are required to 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 earlier 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 Daré’s uncured breach of any payment obligation under the Juniper License Agreement, (2) if we fail to maintain required insurance, (3) immediately upon our insolvency or the making of an assignment for the benefit of our creditors or if a bankruptcy petition is filed for or against us, which petition is not dismissed within 90 days, or (4) upon 60 days’ notice for any uncured material breach by us of any of our other obligations under the Juniper License Agreement. We 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 we terminate 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 us.

~~Pear Tree Pharmaceuticals Acquisition~~

On April 30, 2018, we entered into an Agreement and Plan of Merger, or the Merger Agreement, with Pear Tree Pharmaceuticals, Inc., or Pear Tree, Daré Merger Sub, Inc., our wholly-owned subsidiary, or Merger Sub, and Fred Mermelstein and Stephen C. Rocamboli, in their respective capacities as stockholders’ representatives. If the Pear Tree Merger is consummated, then at such time Merger Sub will merge with and into Pear Tree with Pear Tree surviving the merger as our wholly owned subsidiary.

Upon the potential closing of the Pear Tree Merger, certain former and continuing Pear Tree service providers and former holders of Pear Tree’s capital stock, or the Holders, will be entitled to receive an amount of cash equal to the sum of $75,000, and the cash and cash equivalents held by Pear Tree at closing, or the Positive Consideration Amount, less (i) certain indebtedness and transaction expenses of Pear Tree, (ii) transaction expenses of the stockholders’ representatives and (iii) amounts payable under Pear Tree’s management incentive plan, collectively referred to as the Negative Consideration Amount. In accordance with the Merger Agreement, if the Negative Consideration Amount is greater than the Positive Consideration Amount, then we will be allowed to offset such difference from future payments that would otherwise be due to the Holders, including the potential payment of $75,000 due on the one-year anniversary of the closing. The Merger Agreement also provides that the Holders will be eligible to receive, subject to certain offsets, tiered royalties, including customary provisions permitting royalty reductions and offset, based on percentages of annual net sales of certain products subject to license agreements assumed by Daré, and a percentage of sublicense revenue. Further, the Merger Agreement provides that we shall make milestone payments to the Holders, with such payments contingent on achieving certain clinical, regulatory and commercial milestones, which payments may be paid, in our sole discretion, in cash or in shares of our common stock, as more fully set forth in the Merger Agreement~~. The~~ ~~parties have made customary representations, warranties, and covenants in the Merger Agreement, including provisions regarding indemnification.~~

Financial Operations Overview

The results of our operations discussed in this section and the operations presented in the interim consolidated financial statements and accompanying notes for the three months ended March 31, 2018 represent our operations after giving effect to the Cerulean/~~Private Daré stock purchase transaction~~. The interim consolidated financial statements and accompanying notes for the three months ended March 31, 2017 represent the operations of Private Daré, making a comparison between periods difficult.

Revenue

To date we have not generated any revenue and do not expect to generate any revenue for the foreseeable future. In the future, we may generate revenue from ~~a combination of~~ product sales, license fees, milestone and research and development payments in connection with strategic partnerships, and royalties resulting from the sales

of products developed under licenses of intellectual property. Any revenue generated is expected to fluctuate from quarter to quarter as a result of the timing and amounts of any such payments. Our ability to generate product revenue will depend on the successful clinical development of our product candidates, ~~the receipt of~~receiving regulatory approvals to market such products and the eventual successful commercialization of product candidates. If we fail to complete the development of ~~product~~products candidates in a timely manner, or to ~~obtain~~receive regulatory approval for such product candidates, our ability to generate future revenue and our results of operations would be materially adversely affected.

Research and Development Expenses

Research and development expenses ~~represent costs incurred to conduct~~include research and development ofcosts for our product ~~candidates.~~candidates and transaction costs related to our acquisitions. We recognize all research and development expenses 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 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.

We expect research and development expenses to increase in the future as ~~Ovaprene, SST-6007, vaginal tamoxifen, if acquired,~~we invest in the development of our clinical-stage product candidates and as any other potential product candidates ~~that~~ we may ~~choose to~~ develop are advanced

into and through clinical trials in the pursuit of regulatory approvals. Such activities will require a significant increase in investment in regulatory support, clinical supplies, inventory build-up related costs, and the payment of success-based milestones. In addition, we 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 not obtain regulatory approval for any product candidate on a timely and cost-effective basis or at all. The probability of success of our 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 to~~cannot 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. We expect to ~~continue to~~ incur additional expenses because of additional costs associated with being a public company, including expenses related to compliance with SEC and Nasdaq rules and regulations, 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 interim consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States, or GAAP. ~~The preparation of~~Preparing 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 evaluates~~we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions ~~that Daré believes~~we 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 the~~For a description of critical accounting policies ~~discussed below are critical to understanding~~that 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 March 31, 2019 and 2018 ~~and 2017~~

(Unaudited)

The following table summarizes our results for the periods indicated, together with the changes in those items in dollars:

Three months ended March 31,

Change

2018

2017

Dollars

Operating expenses:

General and administrative expense

$
1,303,189

$
200,663

1,102,526

Research and development expenses

1,086,653

27,800

1,058,853

License expense

100,000

—

100,000

Impairment of goodwill

5,187,519

—

5,187,519

Total operating expenses

7,677,361

228,463

7,448,898

Loss from operations

(7,677,361
)

(228,463
)

(7,448,898
)
Other income (expense)

11,744

(15,400
)

27,144

Net Loss

$
(7,665,617
)

$
(243,863
)

(7,421,754
)
Other comprehensive loss:

Foreign currency translation adjustments

$
(13,746
)

$
—

(13,746
)
Comprehensive loss

$
(7,679,363
)

$
(243,863
)

(7,435,500
)



	Three months ended March 31,						Dollar
	2019			2018			Change
Operating expenses:
General and administrative expense	$	1,277,180		$	1,303,189		$	(26,009	)
Research and development expenses	1,693,391			1,086,653			606,738
License expenses	112,500			100,000			12,500
Impairment of goodwill	—			5,187,519			(5,187,519		)
Total operating expenses	3,083,071			7,677,361			(4,594,290		)
Loss from operations	(3,083,071		)	(7,677,361		)	4,594,290
Other income	31,231			11,744			19,487
Net loss	(3,051,840		)	(7,665,617		)	4,613,777
Other comprehensive loss:
Foreign currency translation adjustments	7,621			(13,746		)	21,367
Comprehensive loss	$	(3,044,219	)	$	(7,679,363	)	$	4,635,144

Revenues

We did not recognize any ~~revenue~~revenues for either of the three months ended March 31, ~~2018~~2019 or ~~2017.~~

2018.

General and administrative expenses

The ~~increase~~decrease of ~~$1,102,526~~$26,009 in general and administrative expenses for the three months ended March 31, ~~2018~~2019 as compared to the three months ended March 31, ~~2017~~2018 was primarily attributable to ~~an increase~~(i) a decrease of approximately $311,800 in legal and professional services as the result of ~~$568,133 related to the costs of being a public company,~~ ~~an increase in personnel costs of $250,166 due to salary expense~~no fundraising activities in the current period ~~including bonuses, with no comparable expense in~~as compared to the same period of the prior year, (ii) an increase in ~~insurance~~personnel costs of ~~$128,412 related to directors~~approximately $239,800 reflecting the hiring of additional employees which resulted in higher salary, benefit and ~~officers insurance policies and employee benefits, with no comparable expense~~bonus expenses in the ~~prior~~current period, and (iii) an increase in ~~taxes and licenses~~stock-based compensation expense of ~~$42,122 with no comparable expense~~$64,141 due to stock options granted in the ~~prior period. Following~~current period compared to the ~~Cerulean/Private Daré stock purchase transaction and based upon the recommendation of our compensation consultant and approval~~same period of the Compensation Committee of our Board of Directors, we began paying our newly appointed executive officers compensation at a level in line with market rates for executive officers of early stage, pre-commercial biopharmaceutical public companies.

prior year.

Research and development expenses

The increase of ~~$1,058,853~~$606,738 in research and development expenses for the three months ended March 31, ~~2018~~2019 as compared to the three months ended March 31, ~~2017~~2018 was primarily attributable to (i) an increase in costs related to development activities of approximately $389,000 for Ovaprene and Sildenafil Cream, 3.6%, and to a lesser extent, DARE-BV1 and DARE-HRT1, offset by grant funding recorded as a reduction to research and development expense related to Ovaprene of approximately $161,007, (ii) an increase in personnel costs of approximately $346,000 due to increased salary, benefit and bonus expenses due to staff additions, and (iii) an increase in stock-based compensation expense of $21,628 due to stock options granted in the current period and none being granted during the same period of the prior year.

License expenses

The license expense of $112,500 for the three months ended March 31, 2019 related to 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. We accrued $62,500 and $50,000 during the quarter with respect to, respectively, the $250,000 of license fees payable under the Assignment Agreement and the $200,000 of license fees payable under the First Amendment to License Agreement, both of which are payable, at the latest, in December 2019. In our discretion, we may both of these license fees either in cash or with shares of our common stock. The license expense of $100,000 for the three months ended March 31, 2018 was entirely related to ~~an increase in Ovaprene development costs in~~fees paid to Strategic Science and Technologies-D, LLC and Strategic Science Technologies, LLC. For further discussion, see Note 8, "Commitments and Contingencies" of the ~~current period.~~

Notes to the Interim Consolidated Financial Statements (Unaudited).

Goodwill impairment expense

We incurred an impairment loss of $5,187,519 for the three months ended March 31, 2018 due to our determination that the carrying amount of our goodwill exceeded its estimated fair value at March 31, 2018. ~~See~~For a discussion of our goodwill analysis, see Note 4, ~~“Acquisition,”~~"Acquisitions," of the Notes to the Interim Consolidated Financial Statements (Unaudited) ~~appearing in this report for a discussion of our goodwill analysis.~~

~~License expense~~

Other income

The increase of ~~$100,000~~$19,487 in ~~license expense~~other income for the three months ended March 31, ~~2018~~2019 as compared to the three months ended March 31, 2017 was entirely related to fees paid to Strategic Science and Technologies-D, LLC and Strategic Science Technologies, LLC, referred to collectively as SST. For further discussion, see Note 8, Commitments and Contingencies of the Notes to the Interim Consolidated Financial Statements (Unaudited).

~~Other income (expense)~~

~~The increase of $27,144 in other income (expense) for the three months ended March 31,~~ 2018 ~~as compared to the three months ended March 31, 2017~~ was primarily due to ~~dividends~~interest earned on cash balances in the current period.

Liquidity and Capital Resources

and Financial Condition

We ~~have~~prepared the accompanying consolidated financial statements on a ~~history of annual losses from operations and we anticipate~~going concern basis, which assumes that we will ~~continue to incur losses for at least~~realize our assets and satisfy our liabilities in the ~~next several years. As~~normal course of business. For the three months ended March 31, ~~2018,~~2019, we ~~had~~ incurred a net loss from operations of ~~$7.7 million,~~$3.1 million. 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 we expect that our net losses will continue for at least the next several years as we develop our existing product candidates and seek to acquire, license or develop additional product candidates.

At March 31, 2019, our accumulated deficit was ~~$19.9~~approximately $32.0 million, ~~we had $15.6 million~~ inour cash and cash equivalents were approximately $3.5 million and ~~we had~~ working capital was approximately $3.2 million. We also had negative cash flow from operations of ~~$15.1 million.~~

~~We have not generated any revenue~~approximately $3.3 million during the three months ended March 31, 2019. From our underwritten public offering that closed in April 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. Considering our current cash resources, we believe our existing resources will be sufficient to ~~date, and we cannot anticipate if, and when we~~fund planned operations into the first quarter of 2020. For the foreseeable future, our ability to continue our operations will ~~generate any revenue. Future product revenue will require us~~depend upon our ability 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 expectadditional capital.

These circumstances raise substantial doubt about 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~~ability to continue ~~to incur additional costs given the requirements of operating~~ as a ~~public company.~~

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 result from the outcome of 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 ~~trial~~trials 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 ~~and~~expenses, other regulatory expenses and general overhead costs.

We ~~believe~~expect our ~~existing~~expenses to increase in 2019 primarily in connection with the continuation of the Ovaprene PCT clinical trial and study readout by year end 2019, the initiation of a Phase 3 clinical trial of DARE-BV1, the continuation of Phase 2b-related activities and potential commencement of the at-home Phase 2b clinical study of Sildenafil Cream, 3.6%, the initiation of a Phase 1 clinical study of DARE-HRT1, and to a lesser extent, efforts to advance our pre-clinical portfolio candidates.

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 future. We will need to generate sufficient safety and efficacy data on our product candidates for them to be attractive assets for potential strategic partners to license or for pharmaceutical companies to acquire, and for us to generate cash ~~balances, including the $10.2 million of net proceeds~~and other license fees related to such product candidates.

Based on our current operating plan estimates, we ~~received from financings completed during the first quarter ended March 31, 2018, will be~~do not have sufficient cash to satisfy our working capital needs and other liquidity requirements ~~associated with our planned operations for~~over at least the next 12 ~~months.~~

~~Based on our current plans and existing cash balances, we believe that our available funds will be sufficient for us to commence and complete a postcoital clinical trial~~months from the date of Ovaprene during 2018 and to advance SST-6007 into a Phase 2b clinical trial. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our available cash resources sooner than we currently expect.

issuance of the accompanying interim consolidated financial statements.

We will ~~continue~~need to ~~require~~raise substantial additional capital to continue to fund our operations and to successfully execute our current operating plan, ~~to continue~~including the development of our current product ~~candidates,~~candidates. We are currently evaluating a variety of capital raising options, including a pivotal contraceptive study, to expand our product portfolio, to support new licenses or other rights related to future portfolio candidates, 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.

~~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~~alliances or other similar types of arrangements to cover our operating expenses, including the ~~extent that~~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 ~~additional~~ capital through ~~the issuance~~collaborations, strategic alliances or other similar types of ~~additional equity or convertible debt securities, the ownership interest~~arrangements, we may have to relinquish, on

terms that are not favorable to us, rights to some of our ~~current stockholders will be diluted.~~technologies or product candidates we would otherwise seek to develop or commercialize. There can be no assurance that wecapital will be ~~able~~available when needed or that, if available, it will be obtained on terms favorable to ~~raise additional capital when needed.~~us and our stockholders. In addition, equity or debt financings may have a dilutive effect on the holdings of our existing stockholders. If we ~~are unable to~~cannot raise ~~additional~~ capital when needed, on favorable terms or at all, we will not be able to continue development of our product candidates, ~~or we~~ will ~~be required~~need to reevaluate our planned operations and may need to delay, scale back or eliminate some or all of our development programs, reduce expenses, file for bankruptcy, reorganize, merge with another entity, or cease ~~operations, any of~~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 ~~would have a negative impact~~they are carried on our financial ~~condition.~~

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 shows a summary of our cash flows for the periods indicated:

Three months ended March 31,

2018

2017

Net cash used in operating activities

$
(2,118,887
)

$
(50,595
)
Net cash provided by financing activities

10,197,813

100,000

Effect of exchange rate changes on cash and cash equivalents

(13,746
)

—

Net increase in cash

$
8,065,180

$
49,405



	Three months ended March 31,
	2019			2018
Net cash used in operating activities	(3,308,484		)	(2,118,887		)
Net cash provided by financing activities	—			10,197,813
Effect of exchange rate changes on cash and cash equivalents	7,621			(13,746		)
Net increase (decrease) in cash	$	(3,300,863	)	$	8,065,180

Net cash used in operating activities

Cash used in operating activities for the three months ended March 31, 2019 included the net loss of $3,051,840, decreased by non-cash stock-based compensation expense of $97,968. Major components reducing operating cash in this period were a $201,129 increase in prepaid expenses, a $135,676 increase in other receivables, and a $134,087 decrease of accounts payable. Components providing operating cash in this period were a $59,478 increase of accrued expenses and a $55,233 increase in other non-current assets and deferred charges.

Cash used in operating activities for the three months ended March 31, 2018 included the net loss of $7,665,617, decreased by non-cash impairment of goodwill of $5,187,519, and non-cash stock-based compensation expense of $9,124. ~~A major component~~Major components reducing operating cash in this period ~~was~~were a ~~$159,046~~$40,340 decrease of accounts payable and a $118,707 decrease in accrued expenses. Major components providing operating cash were a $255,318 decrease in other receivables and a $193,495 decrease in other current assets.

~~Cash used in operating~~

Net cash provided by financing activities

No cash was provided by financing activities for the three months ended March 31, 2017 included the net loss of $243,863. A major component reducing operating cash in this period was a $2,800 increase in other current assets. Major components providing operating cash included a $180,660 increase in accounts payable and accrued expenses.

~~Net cash provided by financing activities~~

2019.

Cash provided by financing activities for the three months ended March 31, 2018 consisted of proceeds from the underwritten public offering completed in February 2018 and sales under the at-the-market offering agreement completed in January and February 2018.

~~Cash provided by financing activities for the three months ended March 31, 2017 consisted of proceeds from the issuance of convertible promissory notes.~~

License and Royalty Agreements

~~SST-6007~~

~~On February 11, 2018, we entered into~~

We have to make various royalty and milestone payments under the ~~SST License Agreement with SST, pursuant~~product license and development agreements related to ~~which we were required~~our three clinical-stage assets, DARE-BV1, Ovaprene, and Sildenafil Cream, 3.6%, and under the other agreements related to ~~secure an investment~~our preclinical candidates. For further discussion of at least $10 million by March 31, 2018. We announced that we had met this funding requirement on February 15, 2018. The SST License Agreement provides us with an exclusive, royalty-bearing, sublicensable license to developthese potential payments, see Note 8, “Commitments and ~~commercialize the SST Licensed Products in the SST Field of Use.~~

~~Under the terms~~Contingencies,” of the SST License Agreement, we retain rights to inventions made by our employees, SST retains rights to inventions made by its employees, and each party shall own a fifty percent (50%) undivided interest in all joint inventions. Each party has agreed to collaborate through a Joint Development Committee, or JDC, which shall be responsible for determining the strategic objectives for, and generally overseeing, the development efforts of both parties under the SST License Agreement. Further, we have agreed to use commercially reasonable efforts to develop the SST Licensed Products in the SST Field of Use in accordance with a development plan contained in the SST License Agreement, and to commercialize the SST Licensed Products in the SST Field of Use.

The SST License Agreement provides that, in consideration of the rights to be granted to us, SST will be eligible to receive tiered royalties based on percentages of annual net sales of SST Licensed Products in the single digitsNotes to the mid double digits, including customary provisions permitting royalty reductions and offset, and a percentage of sublicense revenue. We are also responsible for all reasonable internal and external costs and expenses incurred by SST in its performance of the development activities it is required to perform under the SST License Agreement. Further, the SST License Agreement provides that we shall make milestone payments to SST ranging from $0.5 million to $18 million on achieving certain clinical and regulatory milestones in the U.S. and worldwide, and an additional $10 million to $100 million upon achieving certain commercial milestones. Should we enter into strategic development or distribution partnerships related to the SST Licensed Products, additional milestone payments would be due to SST.

~~Our license received under the~~ ~~SST~~ ~~License Agreement continues on a country-by-country basis until the later of ten years from the date of the first commercial sale of such SST Licensed Product or~~ the expiration of the last valid claim of patent rights covering the SST Licensed Product in the SST Field of Use. The SST License Agreement provides that each party will have customary rights to terminate the SST License Agreement in the event of material uncured breach by the other party, and, (i) prior to receipt of approval by a regulatory authority necessary for commercialization of a SST Licensed Product in the corresponding jurisdiction, including New Drug Application Approval, or NDA Approval, we will have the right to terminate the SST License Agreement without cause upon ninety (90) days prior written notice to SST, and (ii) following receipt of approval by a regulatory authority necessary for commercialization of a SST Licensed Product in the corresponding jurisdiction, including NDA Approval, we will have a right to terminate the SST License Agreement without cause upon one hundred eighty (180) days prior written notice. In addition, the SST License Agreement provides SST with the right to terminate the SST License Agreement with respect to the applicable SST Licensed Product(s) in the applicable country(ies) upon thirty (30) days’ notice to us if we fail to use commercially reasonable efforts to perform development activities in substantial accordance with the development plan and do not cure such failure within sixty (60) days of receipt of SST’s notice thereof.

Upon expiration (but not termination) of the SST License Agreement in a particular country, we shall have a fully paid-up license under the licensed intellectual property to develop and commercialize the applicable SST Licensed Products in the applicable country on a non-exclusive basis.

Interim Consolidated Financial Statements (Unaudited).

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 believes~~we 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 currently have, any off-balance sheet arrangements, as defined under applicable SEC rules.

Item 3. Quantitative and ~~Qualitati~~veQualitative Disclosures About Market Risk

Under SEC rules and regulations, as a smaller reporting company we are not required to provide the information required by this item.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures (as defined in Rule 13a-15(e) of the Exchange Act) that are designed to provide reasonable assurance that information required to be disclosed in our Exchange Act reports is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can only provide reasonable assurance of achieving 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 an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Chief 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 March 31, ~~2018~~2019 at the reasonable assurance level.

Changes in Internal Control over Financial Reporting

There was no change in our internal control over financial reporting identified in connection with the evaluation required by Rules 13a-15(d) and 15d-15(d) of the Exchange Act that occurred during the fiscal quarter ~~ended March 31, 2018~~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. There are no material pending legal proceedings, other than ordinary routine litigation incidental to our business, to which we are a party or 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 from the risk factors disclosed in Part I, Item 1A. Risk Factors in our ~~Annual Report on Form 10-K for the year ended December 31, 2017 other than as described below.~~

~~Risks Related to Our Business~~

We have incurred significant losses since our inception and expect to incur continued losses in the future due to the active expansion of our portfolio of product candidates. We must raise additional funds to finance our operations and remain a going concern.

~~Since inception, we have incurred significant operating losses. We incurred a net loss of approximately $7.7 million for the quarter ended March 31, 2018. At March 31,~~ 2018 our accumulated deficit was approximately $19.9 million. Negative cash flows from our operations are expected to continue for the foreseeable future. Based on our current operating plan, our current cash reserves are sufficient to fund operations for at least 12 months.

Our utilization of cash has been and will continue to be highly dependent on the product development programs we choose to pursue, particularly our programs for Ovaprene and Topical Sildenafil (also known as SST-6007), the progress of these programs, the results of our preclinical studies and clinical trials, the cost, timing and outcomes of regulatory decisions regarding a potential approval for our current product candidates or any future product candidates we may choose to develop, the terms and conditions of our contracts with service providers and license partners, and the rate of recruitment of patients in our clinical trials. In addition, the continuation of our clinical trials, and quite possibly our entire business, will depend on results of upcoming analyses and our financial resources at the time. Should our product development efforts be successful, we will need to develop a commercialization plan for each product developed, which would also require significant resources.

We will need to raise additional capital through public or private equity financings, debt financings, strategic partnerships or other types of arrangements in order to successfully execute our current operating plan and to continue the development of our current product candidates. See also “—We expect to be heavily reliant on our ability to raise capital through capital market transactions. Due to our small public float, low market capitalization, limited operating history and lack of revenue, it may be difficult and expensive for us to raise additional funds.” If we raise capital through strategic partnerships or other types of arrangements, we may be required to relinquish, on terms that are not favorable to us, rights to some of our technologies or product candidates that we would otherwise seek to develop or commercialize. There can be no assurance that we will be able to raise additional capital when needed. If we are unable to raise additional capital when needed, we will not be able to continue development of our product candidates or we will be required to delay, scale back or eliminate some or all of our development programs or cease operations.

Due in part to our limited financial resources, we may fail to select or capitalize on the most scientifically, clinically or commercially promising or profitable indications or therapeutic areas for our product candidates, and we may be unable to pursue and complete the clinical trials that we would like to pursue and complete.

Our current financial and technical resources are not sufficient to develop all of the product candidates to which we hold licenses or options to license. This may impact the development efforts of our key portfolio candidates and any future candidates we may choose to develop. Due to our limited resources, we may be required to curtail clinical development programs and activities that might otherwise have led to more rapid progress of our product candidate, or product candidates that we may in the future choose to develop, through the regulatory and development processes. We may make incorrect determinations with regard to the indications and clinical trials on

10-K.

which to focus the available resources that we do have. The decisions to allocate our research, management and financial resources toward particular indications may not lead to the development of viable commercial products and may divert resources from better opportunities. Similarly, our decisions to delay or terminate development programs may also cause us to miss valuable opportunities.

We expect to be heavily reliant on our ability to raise capital through capital market transactions. Due to our small public float, low market capitalization, limited operating history and lack of revenue, it may be difficult and expensive for us to raise additional capital.

We are heavily reliant on our ability to raise additional capital through the issuance of shares of our common stock or securities linked to our common stock. Our ability to raise capital will depend on a number of factors, many of which may not be favorable for raising capital, including the low trading volume and volatile trading price of our common stock, unfavorable market conditions or other market factors outside of our control, and the risk factors described elsewhere in this report, including those related to warrants we issued in February 2018. Even if we are able to raise additional capital, the cost of capital may be substantial due to our low market capitalization and our small public float, and the costs associated with raising capital and the effective cost of such capital for public companies like ours with a small public float may be more expensive when compared to the cost of capital for larger public companies. The terms of any funding we are able to obtain may not be favorable to us and may be highly dilutive to our stockholders, and debt financing, if available, may involve restrictive covenants. There can be no assurance that we will be able to raise additional capital when needed. The failure to obtain additional capital when needed would have a material adverse effect on our business.

We have been actively adding product candidates to our portfolio of innovative products for women’s reproductive health, but we currently are not adequately capitalized to advance these product candidates through development.

Our business strategy is to license or otherwise acquire the rights to differentiated reproductive health product candidates primarily in the areas of contraception, vaginal health, sexual health, and fertility, and to take those candidates through advanced stages of clinical development. Taking product candidates through advanced stages of clinical development requires substantial capital and does not generate any income. We currently do not have the capital necessary to advance the product candidates to which we hold licenses and options to license. Executing our business strategy requires us to obtain additional capital to license or otherwise acquire rights to additional product candidates to grow and advance our portfolio and to take our product candidates through clinical development and eventually to commercialization or strategic partnership. Such capital may not be available to us, or even it is, the cost of such capital may be high. See “—We have incurred significant losses since our inception and expect to incur continued losses in the future due to the active expansion of our portfolio of product candidates. We must raise additional funds to finance our operations and remain a going concern,” above. Based on our current operating plan, our current cash reserves are sufficient to fund operations for at least 12 months. Should we add additional product candidates to our portfolio or should our existing product candidates require testing or other capital-intensive procedures that we did not anticipate, our cash resources will be strained. We may be forced to obtain additional capital before reaching clinical milestones, when our stock price or trading volume or both are low, or when the general market for biopharmaceutical, medical device, or other life sciences companies is weak. Raising capital under any of these or similar scenarios, if we can raise any at all, may lead to significant dilution to our existing stockholders. If we are unable to raise additional capital when required and on acceptable terms, we will not be able to advance our product candidates or add additional product candidates to our portfolio or we will be required to delay, scale back or eliminate some or all our development programs or cease operations.

We depend on strategic collaborations with third parties to develop and commercialize our product candidates and we will not have control over a number of key elements relating to the development and commercialization of these product candidates if we are able to achieve such third-party arrangements.

A key aspect of our strategy is to seek collaborations with partners, such as large pharmaceutical companies, that are willing to conduct later-stage clinical trials and further develop and commercialize selected product candidates. To date, we have not entered into any such collaborative arrangements, and we may not be able to enter into any collaborations or otherwise monetize these product candidates on acceptable terms, if at all.

By entering into a strategic collaboration with a partner, we may rely on the partner for financial resources and for development, regulatory and commercialization expertise. Even if we are successful in entering into a strategic collaboration for one of our product candidates, our partner may fail to develop or effectively commercialize the product candidate because such partner:

~~does not have sufficient resources or decides not to devote the necessary resources due to internal constraints such as limited cash or human resources;~~

~~decides to pursue a competitive potential product developed outside of the collaboration;~~

~~cannot obtain the necessary regulatory approvals;~~

~~determines that the market opportunity is not attractive; or~~

~~cannot manufacture the necessary materials in sufficient quantities from multiple sources or at a reasonable cost.~~

We also face competition in our search for partners from other biotechnology and pharmaceutical companies worldwide, many of whom are larger and able to offer more attractive deals in terms of financial commitments, contribution of human resources, or development, manufacturing, regulatory or commercial expertise and support.

If we are not successful in attracting partners and entering into collaborations on acceptable terms for these product candidates or otherwise monetizing these product candidates, we may not be able to complete development of or obtain regulatory approval for such product candidates. In such event, our ability to generate revenues from such products and achieve or sustain profitability would be significantly hindered.

The women’s health care product candidates we are developing or may develop in the future are likely to face significant competition. In the event we receive regulatory approval for any of our product candidates, our ability to compete in the marketplace will be impacted by the efficacy and safety outcomes of our clinical trials.

Today, there are a variety of hormonal and non-hormonal contraceptive options available to women, including oral contraceptive pills and intrauterine devices, newer hormonal contraceptive products including implants, injectables, vaginal rings, patches, and hormonal intrauterine systems, and non-hormonal methods such as female condoms, novel diaphragms, and new methods of female sterilization. In surveys, women have said that the features they consider most important when selecting a contraceptive method are efficacy, ease-of-use and side effects. In order to have significant revenue potential as a new contraceptive product option, we believe Ovaprene must generate typical use efficacy outcomes (which are the expected rates of pregnancy protection once the product is used widely under every day circumstances) consistent with the most commonly used short-acting non-hormonal method, the condom, which is 82% effective and approaching that of a diaphragm which is approximately 88% effective. Clinical testing will also need to demonstrate that the device can be safely worn for multiple weeks. Should Ovaprene fail to generate the safety and efficacy data expected, our business prospects would be materially damaged.

Today’s available options for treating FSAD consist primarily of over-the-counter products for vaginal lubrication. Although no products have been approved by the FDA specifically for the treatment of FSAD, we believe it is likely that new product candidates will be developed by others over time. Sexual arousal can be influenced by many different emotional and physiological factors and hence, our clinical trials must anticipate such factors in order to produce efficacious outcomes. SST-6007, our Topical Sildenafil product candidate, is designed to increase local blood flow to the genital tissue. Even if we are successful in increasing blood flow, the product may not lead to an increase in arousal or an improvement in the overall sexual experience in some women. If we fail to generate compelling clinical results from our trials, many women suffering from sexual arousal disorder may opt not to try SST-6007. If we fail to produce strong clinical outcomes, our ability to build a commercial market for SST-6007 will be materially impacted. See also “The patents and the patent applications related to SST-6007 cover topical formulations, processes and uses of sildenafil, and our market opportunity may be limited by the lack of patent protection for the active ingredient itself and other formulations and delivery technology and systems that may be developed by competitors,” below.

Today, a variety of options are available for the delivery of hormones to assist in the maintenance of pregnancy or to treat the symptoms of menopause. If approved, our intravaginal ring, or IVR, candidates will

compete with pills, patches and other hormonal delivery methods, and competing with those products may prove difficult given the current marketplace and established clinical practices. We believe our clinical trials for these candidates must demonstrate efficacy that is comparable to or better than existing products and also prove that the candidates would be more convenient. Some women may be uncomfortable with the notion of using an IVR and may never try our IVR products. If we fail to generate compelling clinical results from clinical trials, we may lack the data to generate a commercially viable product, which would harm our business.

If the Pear Tree Merger is consummated, we will acquire a proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy. Today’s treatments for Vulvar and Vaginal Atrophy, or VVA, primarily consist of hormones, including localized estrogen. However, this therapeutic approach is often contraindicated for women diagnosed with, or at risk of recurrence of, hormone receptor positive breast cancer. The American College of Obstetricians and Gynecologists recommends a local non-hormonal approach for treating chronic conditions like VVA in these women. Although many women may be contraindicated for hormone use, particularly with respect to estrogen use, and there are no FDA-approved VVA treatments that have been specifically studied in these hormone receptor positive women, and therefore many doctors continue to prescribe, and many women continue to use, hormone-based treatments. If approved, our tamoxifen candidate for the treatment of VVA will compete with branded pills, vaginal inserts and other delivery methods for hormones. We believe our clinical trials must demonstrate comparable efficacy and safety with existing products that are currently used in VVA, including those that have not been studied in, but are nonetheless used in, breast cancer survivors.

Our business development strategy has included, and will likely continue to include, the acquisition of products, product licenses or other businesses. We may not be able to successfully manage such activities.

~~We may engage in strategic transactions that could cause us to incur additional liabilities, commitments or significant expense.~~ ~~Strategic~~ transactions, including the SST license agreement and the Juniper license agreement, both of which occurred between February 2018 and April 2018, and the Pear Tree Merger, if consummated, could subject us to a number of risks, including, but not limited to:

~~our inability to appropriately evaluate the potential risks and uncertainties associated with a given transaction;~~

~~our inability to effectively integrate a new technology, product and/or business, personnel, intellectual property or business relationships; and~~

~~our inability to generate milestones or revenues from a strategic transaction sufficient to meet our objectives in undertaking the transaction.~~

We may underestimate development costs, timelines, regulatory approval challenges and commercial market opportunity for a strategic transaction that would cause us to fail to realize the anticipated value of the transaction. Any strategic transaction we may pursue may not produce the outcomes and benefits we originally anticipated, may result in costs that end up outweighing the benefits, and may adversely impact our financial condition and be detrimental to our company in general.

~~Risks Related to Clinical Development, Manufacturing and Commercialization~~

~~Our success will depend heavily on our ability to develop Ovaprene, SST-6007 and our other product candidates. Failure to develop these product candidates would likely adversely affect our business.~~

We currently have only two human clinical trial stage product candidates and our business depends on the successful clinical development and regulatory approval of each of these product candidates and/or our preclinical candidates, which may never occur. For example, Ovaprene will require substantial clinical testing in order to demonstrate that it is a safe and effective contraceptive option. Likewise, we will need to demonstrate that SST-6007 is a safe and effective option for women seeking treatment of FSAD. We have never received a regulatory approval for any product. Even if we are able to conduct clinical trials for these product candidates, we may be unable to obtain regulatory approval for any of them, which would have a material adverse effect on our business and operations. We rely on license agreements to license the product and technology rights of our current product candidates and may seek to license the product and technology rights to additional product candidates in women’s reproductive health, but there can be no assurance we will be able to do so, or do so on favorable terms. There are

risks, uncertainties and costs associated with identifying, licensing and advancing product candidates through successful clinical development. Even if we were able to obtain the rights to additional product candidates, there can be no assurance that these candidates will ever be advanced successfully through clinical development.

Delays in the commencement or completion of clinical testing of our current and any other future product candidates we may seek to develop could result in increased costs and longer timelines and could impact our ability to ever become profitable. Clinical testing is time consuming and expensive and its outcome is uncertain.

We expect to commence a PCT clinical trial during the first half of 2018 in order to assess the safety and preliminary efficacy of Ovaprene. In addition, pending authorization to do so from the FDA, we anticipate commencing a Phase 2b clinical trial for SST-6007 in the second half of 2018. All of our IVR product candidates have only been tested in preclinical studies, and we will need to obtain authorizations from the FDA as well as from the institutional review boards of universities and clinics, as appropriate, in order to commence clinical testing of those candidates in humans. The initiation and completion of these and other clinical trials for our product candidates may vary dramatically due to factors within and outside of our control, and the results from early clinical trials may not necessarily be predictive of results obtained in later clinical trials; even if results from early clinical trials are positive, we may not be able to confirm those results in future clinical trials. Further, clinical trials may not ever demonstrate sufficient safety and effectiveness to obtain the requisite regulatory approvals for our product candidates. Any change in, or termination of, clinical trials could materially harm our business, financial condition, and results of operations.

Successful challenges to the FDA’s interpretation of Section 505(b)(2) could impact the clinical development of SST-6007, our IVR product candidates and other candidates we may license or acquire and materially harm our business.

We intend to develop and seek approval for SST-6007 and our IVR product candidates pursuant to the FDA’s Section 505(b)(2) regulatory pathway. If the Pear Tree Merger is consummated, we will acquire a proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy, which we also intend to develop pursuant to the FDA’s Section 505(b)(2) regulatory pathway. If the FDA determines that we may not use the 505(b)(2) pathway for the development of any of these candidates, then we would be required to seek regulatory approval via a “full” or “stand-alone” NDA under Section 505(b)(1). This would require us to conduct additional clinical trials, ~~provide~~ additional data and information, and meet additional standards for regulatory approval. If this were to occur, the time and financial resources required to obtain FDA approval for SST-6007, any IVR product candidate and vaginal tamoxifen, if acquired, and the complications and risks associated with the respective product candidate or candidates, would likely substantially increase and would have a material adverse effect on our business and financial condition.

The Drug Price Competition and Patent Term Restoration Act of 1984, also known as the Hatch-Waxman Act, added Section 505(b)(2) to the FDCA. As described above, Section 505(b)(2) permits the filing of an NDA where at least some of the information required for approval comes from studies that were not conducted by or for the applicant and for which the applicant has not obtained a right of reference. Section 505(b)(2), if applicable to us under the FDCA, would allow an NDA we submit to the FDA to rely in part on data in the public domain or the FDA’s prior conclusions regarding the safety and effectiveness of approved compounds, which could expedite the development programs for SST-6007, our IVR product candidates and vaginal tamoxifen, if acquired.

~~Although the FDA’s longstanding position has been that it may rely upon prior findings of safety or effectiveness to support approval of a~~ ~~505~~(b)(2) application, this policy has been controversial and subject to challenge in the past. In addition, notwithstanding the approval of an increasing number of products by the FDA under Section 505(b)(2) over the last few years, certain brand-name pharmaceutical companies and others have objected to the FDA’s interpretation of Section 505(b)(2). If the FDA’s interpretation of Section 505(b)(2) is successfully challenged, the FDA may change its 505(b)(2) policies and practices, which could delay or even prevent the FDA from approving any NDA that we submit under Section 505(b)(2). In addition, the pharmaceutical industry is highly competitive, and Section 505(b)(2) NDAs are subject to special requirements designed to protect the patent rights of sponsors of previously approved drugs that are referenced in a Section 505(b)(2) NDA. Even if we are able to utilize the Section 505(b)(2) regulatory pathway for one or more of our candidates, there is no guarantee this would ultimately lead to accelerated product development or earlier approval.

Moreover, any delay resulting from our inability to pursue the Section 505(b)(2) regulatory pathway could result in new competitive products reaching the market more quickly than our product candidates, which would likely materially adversely impact our competitive position and ~~prospects. Even if we are allowed to pursue the Section 505(b)(2) regulatory pathway, we cannot assure you that our product candidates will receive the requisite approvals for commercialization.~~

~~Obtaining regulatory approval is a lengthy, expensive and uncertain process and may not be obtained on a timely basis, or at all. The requirements for~~ ~~approval~~ ~~may change over time and our clinical development programs may not accurately anticipate all of our regulatory requirements.~~

Our success relies on third party suppliers, manufacturers and distributors, including multiple single source suppliers and manufacturers. We have no internal sales, marketing or distribution capabilities. Any failure by such third parties could negatively impact our business and our ability to develop and market any approved products.

We have a very small number of employees and no personnel dedicated to marketing, manufacturing or sales and distribution. If we receive the requisite regulatory approvals for one or more products, we expect to rely on third parties to manufacture such products, and as such we will be subject to inherent uncertainties related to product safety, availability and security. For example, our agreement with ADVA-Tec limits our ability to engage a manufacturing source for Ovaprene other than ADVA-Tec following regulatory approval. If ADVA-Tec fails to produce sufficient ring quantities to meet commercial demand, our ability to become profitable could be adversely impacted. To date, ADVA-Tec has only produced a small number of rings for clinical testing. Furthermore, for some of the key raw materials and components of Ovaprene, we have only a single source of supply, and alternate sources of supply may not be readily available.

Under the terms of the SST license agreement, Strategic Science will be responsible for obtaining supplies of SST-6007 for the Phase 2 clinical trials expected to be conducted in the United States. Thereafter, we will be responsible for obtaining pre-clinical, clinical and commercial supplies of SST-6007. Both ADVA-Tec and SST will need to rely on third party suppliers to provide the quantities required. We are responsible for sourcing supplies for our IVR product candidates, and our ability to develop and commercialize these products is dependent on complex supply chains. Additionally, if the Pear Tree Merger is consummated, we will be responsible for sourcing supplies related to the acquired proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy.

Moreover, we do not expect to control the manufacturing processes for the production of any current or future products or product candidates, all of which must be made in accordance with relevant regulations, and includes, among other things, quality control, quality assurance, compliance with cGMP and the maintenance of records and documentation. In the future, it is possible that our suppliers or manufacturers may fail to comply with FDA regulations, the requirements of other regulatory bodies or our own requirements, any of which would result in suspension or prevention of commercialization and/or manufacturing of our products or product candidates, including Ovaprene and SST-6007, suspension of ongoing research, disqualification of data or other enforcement actions such as product recall, injunctions, civil penalties or criminal prosecutions against us. Furthermore, we may be unable to replace any supplier or manufacturer with an alternate supplier or manufacturer on a commercially reasonable or timely basis, or at all.

If we were to outsource product distribution for any current or future product candidates, this outsourcing would also be subject to uncertainties related to these services including the quality of such services. For example, distributors may not have the capacity to supply sufficient product if demand increases rapidly or which may be subject to issues of force majeure. Further, we would be dependent on the distributors to ensure that the distribution process accords with relevant regulations, which includes, among other things, compliance with current good documentation practices, the maintenance of records and documentation, and compliance with applicable state laws that govern the licensure of distributors of prescription medical products. Failure to comply with these requirements could result in significant remedial action, including improvement of facilities, suspension of distribution or recall of product. Furthermore, we may be unable to replace any such distributor with an alternate distributor on a commercially reasonable or timely basis, or at all.

If we were to experience an unexpected loss of supply of, or if we fail to maintain relationships with our current suppliers, manufacturers, distributors or regulatory service providers, we may not be able to complete

development of Ovaprene, SST-6007, our IVR product candidates, vaginal tamoxifen, if acquired, or any other future product candidates, or to commercialize or market any products following approval, which would have a material and adverse effect on our business, financial condition, results from operation and prospects. Third-party suppliers, manufacturers, distributors or regulatory service providers may not perform as agreed or may terminate their agreements with us. Any significant problem that our suppliers, manufacturers, distributors or regulatory service providers experience could delay or interrupt our supply of materials or product candidates until the supplier, manufacturer, distributor or regulatory service provider cures the problem or until we locate, negotiate for, validate and receive FDA approval for an alternative provider (when necessary), if one is available.

Additionally, any failure by us to forecast demand for finished product, including Ovaprene and SST-6007, and failure by us to ensure our distributors have appropriate capacity to distribute such quantities of finished product, could result in an interruption in the supply of certain products and a decline in sales of that product.

If we were to experience an unexpected loss of supply of, or if any supplier or manufacturer were unable to meet its demand for our product candidates, we could experience delays in research, planned clinical trials or commercialization. We might be unable to find alternative suppliers or manufacturers with FDA approval, of acceptable quality, in the appropriate volumes and at an acceptable cost. The long transition periods necessary to switch manufacturers and suppliers would significantly delay our timelines, which would materially adversely affect our business, financial conditions, results of operation and prospects.

~~Risks Related to Our Intellectual Property~~

Our failure to adequately protect or enforce our, or our licensor’s, intellectual property rights could materially harm our proprietary position in the marketplace or prevent the commercialization of our current and potential future products.

Our success depends in part on our ability, and the ability of our licensor(s), to obtain and maintain protection in the United States and other countries for the intellectual property covering or incorporated into our technologies and products. The patents and patent applications relied upon by us are licensed to us by third parties. Our ability, or the ability of our licensor(s), to protect our product candidates from unauthorized use or infringement by third parties depends substantially on our abilities and the abilities of such licensors to obtain and maintain, or license, valid and enforceable patents. Due to evolving legal standards relating to the patentability, validity and enforceability of patents covering pharmaceutical inventions and the scope of claims made under these patents, our ability to obtain or enforce patents is uncertain and involves complex legal and factual questions for which important legal principles are unresolved.

Our patent strategy for the protection of Ovaprene includes in-licensing a patent family from ADVA-Tec, whose last claim expires in August 2028, but which could potentially be extended to August 2033 in the United States and Europe. Further, patent prosecution for the intellectual property incorporated into Ovaprene is entirely controlled by ADVA-Tec and we have little, if any, influence or control over such patent prosecution.

Our patent strategy for the protection of SST-6007 includes in-licensing a patent family from Strategic Science, whose last claim expires in 2031, but which could potentially be extended under the Hatch-Waxman Act in the United States.

With respect to patents related to SST-6007, Strategic Science will have the sole right, but not the obligation, to prepare, file, prosecute and maintain such patents. We will be responsible for the costs incurred to maintain and prosecute all such patents and we will be kept informed of all strategies. However, we will have little if any, influence or control over the implementation of the patent strategy.

With respect to patent rights related to our IVR product candidates, The General Hospital Corporation (known as MGH) has the sole right to prosecute and maintain its patent rights, and we have the right to prosecute and maintain Juniper’s patent rights. We will be responsible for the costs incurred by MGH to maintain and prosecute such patents and we will be kept informed of all strategies. However, we will have little, if any, influence or control over MGH’s implementation of the patent strategy.

If the Pear Tree Merger is consummated, we will acquire a proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy. With respect to patents related to vaginal tamoxifen, if acquired, we

~~anticipate we will have the right and obligation to prosecute and maintain the in-licensed patent rights in certain major markets, if possible.~~

There is a substantial backlog of patent applications at the United States Patent and Trademark Office. There can be no assurance that any patent applications relating to our products or methods will be issued as patents or, if issued, that the patents will not be challenged, invalidated or circumvented or that the rights granted thereunder will provide a competitive advantage. We may not be able to obtain patent rights on products, treatment methods or manufacturing processes that we may develop or to which we may obtain license or other rights. Even if we do obtain patents, rights under any issued patents may not provide us with sufficient protection for our product candidates or provide sufficient protection to afford us a commercial advantage against our competitors or their competitive products or processes. It is possible that no patents will be issued from any pending or future patent applications owned by us or licensed to us. Others may challenge, seek to invalidate, infringe or circumvent any patents we own or license, including the patents we have licensed from ADVA-Tec, Strategic Science, Juniper, and any other patents we may license in the future. Conversely, in the future we may be required to initiate litigation against third parties to enforce our intellectual property rights. The defense and prosecution of patent and intellectual property claims are both costly and time consuming, even if the outcome is favorable to us. Any adverse outcome could subject us to significant liabilities, require us to license disputed rights from others or require us to cease selling our future products.

In addition, many other organizations are engaged in research and product development efforts that may overlap with our products. Such organizations may currently have, or may obtain in the future, legally blocking proprietary rights, including patent rights, in one or more products or methods we are developing or considering for development. These rights may prevent us from commercializing technology, or they may require us to obtain a license from the organizations to use the technology. We may not be able to obtain any such licenses that may be required on reasonable financial terms, if at all, and we cannot be sure that the patents underlying any such licenses will be valid or enforceable. As with other companies in the pharmaceutical industry, we are subject to the risk that persons located in other countries will engage in development, marketing or sales activities of products that would infringe our intellectual property rights if such activities were conducted in the United States.

Our patents and intellectual property also may not afford protection against competitors with similar technology. We may not have identified all patents, published applications or published literature that affect our business either by blocking our ability to commercialize our product candidates, by preventing the patentability of our products or by covering the same or similar technologies that may affect our ability to market or license our product candidates. Many companies have encountered difficulties in protecting and defending their intellectual property rights in foreign jurisdictions. If we encounter such difficulties or are otherwise precluded from effectively protecting our intellectual property rights in either the United States or foreign jurisdictions, our business prospects could be substantially harmed. In addition, because of funding limitations and our limited cash resources, we may not be able to devote the resources that we might otherwise desire to prepare or pursue patent applications, either at all or in all jurisdictions in which we might desire to obtain patents, or to maintain already-issued patents.

~~The patents and the patent applications covering SST-6007 are limited to specific topical formulations, processes and uses of~~ ~~sildenafil,~~ and our market opportunity may be limited by the lack of patent protection for the active ingredient itself and other formulations and delivery technology and systems that may be developed by competitors.

The active ingredient in our product candidate for FSAD, SST-6007, is sildenafil. Patent protection for this molecule has expired and generic oral formulation products are available for the treatment of male erectile dysfunction. As a result, a competitor that obtains the requisite regulatory approvals could offer products with the same active ingredient in a different formulation so long as the competitor does not ~~infringe~~ ~~any process, use or formulation patents that we have developed.~~

Competitors may seek to develop and market competing formulations that may not be covered by our patents and patent applications. The commercial opportunity for SST-6007 could be significantly harmed if competitors are able to develop and commercialize alternative formulations of sildenafil, including topical or other delivery mechanisms.

~~The patents and the patent applications covering our IVR product candidates cover the method of delivery and the device~~, and our market opportunity may be limited by the lack of patent protection for the active ingredients themselves and other formulations, delivery technology and systems that may be developed by competitors.

~~The active ingredients in our IVR product candidates include~~ ~~natural progesterone, estrogen and oxybutynin, and~~ none of those ingredients are proprietary to us. As a result, we must compete with currently available products and any future products developed by competitors using same active ingredients in a different formulation or via a different delivery system. The commercial opportunity for our IVR product candidates could be significantly harmed if competitors are able to develop and commercialize alternative formulations or better delivery approaches.

We have entered into an agreement pursuant to which we will acquire the right to develop a vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy. If the Pear Tree Merger is consummated, the patents and the patent applications covering the use and delivery of vaginal tamoxifen, and our market opportunity may be limited by the lack of patent protection for the active ingredient itself and other formulations, delivery technology and systems that may be developed by competitors.

If the Pear Tree Merger is consummated, we will acquire the right to develop a proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy. The active ingredient in this treatment for VVA~~, tamoxifen,~~ will not be proprietary to us. As a result, we must compete with currently available products and any future products developed by competitors using the same active ingredient in a different formulation or via a different delivery system. The commercial opportunity for our product candidate for the treatment of VVA could be significantly harmed if competitors are able to develop and commercialize alternative formulations or better delivery approaches.

We may become involved in patent litigation or other intellectual property proceedings relating to our future product approvals, which could result in liability for damages or delay or stop our development and commercialization efforts.

The pharmaceutical industry has been characterized by significant litigation and other proceedings regarding patents, patent applications, trademarks and other intellectual property rights. The situations in which we may become party to such litigation or proceedings may include any third parties initiating litigation claiming that our products infringe their patent or other intellectual property rights, or that one of our trademarks or trade names infringes the third party’s trademark rights; in such case, we would need to defend against such proceedings. The costs of resolving any patent litigation or other intellectual property proceeding, even if resolved in our favor, could be substantial. Many of our potential competitors will be able to sustain the cost of such litigation and proceedings more effectively than us because of their substantially greater resources. Uncertainties resulting from the initiation and continuation of patent litigation or other intellectual property proceedings could have a material adverse effect on our ability to compete in the marketplace. Patent litigation and other intellectual property proceedings may also consume significant management time.

In the event that a competitor infringes upon our patent or other intellectual property rights, including any rights licensed by us, enforcing those rights may be costly, difficult and time-consuming. Even if successful, litigation to enforce our intellectual property rights or to defend our patents against challenge could be expensive and time-consuming and could divert our management’s attention. We may not have sufficient resources to enforce our intellectual property rights or to defend our patent or other intellectual property rights against a challenge. If we were unsuccessful in enforcing and protecting our intellectual property rights and protecting our products, it could materially harm our business.

With respect to Ovaprene, ADVA-Tec has the right, in certain instances, to control the defense against any infringement litigation arising from the manufacture or development (but not the sale) of Ovaprene. While our license agreement with ADVA-Tec requires ADVA-Tec to indemnify us for certain losses arising from these claims, this indemnification may not be sufficient to adequately compensate us for any related losses or the potential loss of our ability to manufacture and develop Ovaprene.

With respect to SST-6007, we have the initial right to enforce the applicable licensed patents against infringers in the field of use where a third party is exploiting a topically applied pharmaceutical product that

contains at least one of the same active pharmaceutical ingredients as a licensed product, and Strategic Science will provide us with reasonable assistance (excluding financial assistance), at our expense. We also have the initial right to defend any claim initiated by any third party alleging that a licensed product developed or commercialized under the SST license agreement has infringed any third party intellectual property rights. While the SST license agreement requires Strategic Science to indemnify us for certain losses arising from these claims, this indemnification may not be sufficient to adequately compensate us for any related losses or the potential loss of our ability to manufacture and develop SST-6007.

~~With respect to our IVR product candidates, we have the first right to enforce the applicable licensed patents against third party infringers in the fields of~~ pharmaceutical, therapeutic, preventative, diagnostic and palliative uses. If the Pear Tree Merger is consummated, we will acquire the right to develop a proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy. With respect to ~~vaginal tamoxifen, we have the first right to enforce the applicable licensed patents against third party infringers in all fields.~~

Our exclusive, in-license agreements covering the critical patents and related intellectual property related to Ovaprene, SST-6007, IVR product candidates and other product candidates we may acquire or license impose significant monetary obligations and other requirements that may adversely affect our ability to execute our business plan. The termination of any of these in-license agreements could prevent us from developing and commercializing our drug candidates and may harm our business.

Our license agreements with ADVA-Tec, Strategic Science and Juniper include intellectual property rights to Ovaprene, SST-6007 and IVR product candidates, respectively. If the Pear Tree Merger is consummated, we will acquire intellectual property rights to a proprietary vaginal tamoxifen tablet for the treatment of vulvar and vaginal atrophy. These agreements require us, as a condition to the maintenance of our license and other rights, to make milestone and royalty payments and satisfy certain performance obligations. Our obligations under these in-license agreements impose significant financial and logistical burdens upon our ability to carry out our business plan. Furthermore, if we do not meet such obligations in a timely manner, and, in the case of milestone payment requirements, if we were unable to obtain an extension of the deadlines for meeting such payment requirements, we could lose the rights to these proprietary technologies, which would have a material adverse effect on our business, financial condition and results of operations.

Further, there is no assurance that the existing license agreements covering the rights related to Ovaprene, SST-6007, and the IVR product candidates, or license agreements we enter into or acquire the rights to in the future, will not be terminated due to a material breach of the underlying agreements. With regard to the agreement covering Ovaprene, this would include a failure on our part to make milestone and royalty payments, our failure to obtain applicable approvals from governmental authorities, or the loss of rights to the underlying intellectual property by any such licensors. With regard to the agreement covering SST-6007, this would include a failure to assume responsibility for suspended development activities within the requisite period, our failure to use commercially reasonable efforts in performing development activities, or the failure on our part to make milestone and royalty payments. With regard to the agreement covering our IVR product candidates, this would include a failure on our part to make milestone and royalty payments, our failure to obtain applicable approvals from governmental authorities or the loss of rights to the underlying intellectual property by any such licensors. With regard to the agreement covering vaginal tamoxifen, if acquired, this would include our failure to use commercially reasonable efforts to bring a product to market.

Moreover, because some of our rights to Ovaprene, SST-6007 and the IVR product candidates are sublicensed pursuant to underlying agreements, there is no assurance that the existing license agreements covering the rights related to these product candidates will not be terminated due to termination of the underlying agreements, or due to the loss of rights to the underlying intellectual property by ADVA-Tec’s, Strategic Science’s or Juniper’s licensors. There is no assurance that we will be able to renew or renegotiate license agreements on acceptable terms if our license agreements with ADVA-Tec, Strategic Science or Juniper the underlying agreements are terminated. We cannot guarantee that any license agreement will be enforceable. The termination of these license agreements or our inability to enforce our rights under these license agreements would materially and adversely affect our ability to develop and commercialize Ovaprene, SST-6007 and potential IVR product candidates.

~~All of the IVR product candidates licensed through our agreement with Juniper Pharmaceuticals are in preclinical stages of development.~~

~~Preclinical studies refer to~~ ~~a stage of research that begins before clinical~~ ~~trials~~ ~~(testing in humans)~~ ~~can~~ ~~begin, and during which important feasibility, iterative testing and drug safety data are collected.~~ Because of their early nature, preclinical product candidates tend to carry a higher risk of failure as compared with clinical-stage assets. Preclinical candidates must generate sufficient safety and efficacy data through in vitro studies, animal studies and a variety of tests before they can be considered appropriate for testing in humans. The development risks, timeline and cost of preclinical assets can be high because of the unknowns and absence of data. It can be difficult to identify relevant tests and animal models for preclinical studies. Even if the results from our preclinical studies are favorable, we still may not be able to advance the candidates into clinical trials. If we are unable to generate strong preclinical data, the IVR product candidates may never progress and may prove to be worthless.

~~Risks Related to Our Securities~~

~~Preclinical product candidates may not be valued by investors and may be difficult to fund.~~

Given their early stage of development and the lack of data, many preclinical assets are often perceived as having low valuations by investors and pharmaceutical companies. Our investment of time and resources in such assets may not be appreciated or valued. As a result, it may be difficult for us to fund such programs. If the IVR product candidates we licensed from Juniper fail to be valued, our stock price may be adversely affected.

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.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

(a) None.

(b) None.

Item 6. Exhibits

Incorporated by Reference

Exhibit
Number

Description of Exhibit

Form

File
Number

Date of
Filing

Exhibit
Number

Filed
Herewith
4.1

Form of Warrant to Purchase Common Stock

8-K

001-36395

02/13/2018

4.1

Incorporated by Reference

Exhibit
Number

Description of Exhibit

Form

File
Number

Date of
Filing

Exhibit
Number

Filed
Herewith
10.1Δ

License and Collaboration Agreement dated February 11, 2018 between Daré Bioscience, Inc., Strategic Science and
Technologies-D, LLC and Strategic Science Technologies, LLC

10-K/A

001-36395

04/30/2018

10.1

10.2

Common Stock Sales Agreement dated January 4, 2018 by and between Daré Bioscience, Inc. and H.C. Wainwright & Co., LLC

8-K

001-36395

01/04/2018

10.1

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

101.SCH

XBRL Taxonomy Extension Schema Document

X

101.CAL

XBRL Taxonomy Calculation Linkbase Document

X

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

X

101.LAB

XBRL Taxonomy Label Linkbase Document

X

101.PRE

XBRL Taxonomy Presentation Linkbase Document

X

Incorporated by Reference

Exhibit

Number

Description of Exhibit

Form

File No.

Filing Date

Exhibit No.

Filed Herewith

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

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

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.INS

XBRL Instance Document

101.SCH

XBRL Taxonomy Extension Schema Document

101.CAL

XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

XBRL Taxonomy Extension Label Linkbase Document

101.PRE

XBRL Taxonomy Extension Presentation Linkbase Document

~~Δ Portions of this document are subject to a confidential treatment request submitted to the SEC~~

# 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 Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated herein by reference into any filing of the 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: May 14, ~~2018~~ 2019	By:	/s/ Sabrina Martucci Johnson
		Sabrina Martucci Johnson
		President and Chief Executive Officer
		(Principal Executive Officer)

Date: May 14, ~~2018~~ 2019	By:	/s/ Lisa Walters-Hoffert
		Lisa Walters-Hoffert
		Chief Financial Officer
		(Principal Financial and Accounting Officer)

	March 31, 2018			December 31, 2017
	(unaudited)
Assets
Current Assets
Cash and cash equivalents	$	15,625,026		$	7,559,846
Other receivables		28,888			284,206
Prepaid expenses		290,877			311,571
Other current assets		—			193,495
Total current assets		15,944,791			8,349,118
Goodwill		—			5,187,519
Other non-current assets		686,060			723,191
Total assets	$	16,630,851		$	14,259,828
Liabilities and Stockholders’ equity
Current Liabilities
Accounts payable and accrued expenses	$	807,607		$	966,653
Total current liabilities		807,607			966,653
Deferred rent		2,888			392
Total liabilities		810,495			967,045
Commitments and contingencies (Note 8)
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, 11,422,161 and 6,047,161 shares issued and outstanding at March 31, 2018 and December 31, 2017, respectively		1,142			605
Accumulated other comprehensive loss		(31,826	)		(18,080	)
Additional paid-in capital		35,747,609			25,541,210
Accumulated deficit		(19,896,569	)		(12,230,952	)
Total stockholders' equity		15,820,356			13,292,783
Total liabilities and stockholders' equity	$	16,630,851		$	14,259,828

	Three months ended March 31,
	2018			2017
Operating expenses:
General and administrative	$	1,303,189		$	200,663
Research and development expenses		1,086,653			27,800
License expenses		100,000			—
Impairment of goodwill		5,187,519			—
Total operating expenses		7,677,361			228,463
Loss from operations		(7,677,361	)		(228,463	)
Other income (expense)		11,744			(15,400	)
Net loss	$	(7,665,617	)	$	(243,863	)
Foreign currency translation adjustments	$	(13,746	)	$	—
Comprehensive loss	$	(7,679,363	)	$	(243,863	)
Loss per common share - basic and diluted	$	(0.88	)	$	(0.27	)
Weighted average number of common shares outstanding:
Basic		8,684,550			910,000

	Number of Shares		Weighted Average Exercise Price
Outstanding at December 31, 2017 ⁽¹⁾		539,896	$	31.40
Granted		3,500		2.37
Exercised		—		—
Cancelled/expired		—		—
Outstanding at March 31, 2018 (unaudited)		543,396	$	31.21
Exercisable at March 31, 2018 (unaudited)		526,338	$	32.10

	Three months ended
	March 31, 2018
Expected life in years		10.0
Risk-free interest rate	2.52%
Expected volatility	122%
Forfeiture rate	0.0%
Dividend yield	0.0%
Weighted-average fair value of options granted	$	2.26

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

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x

Smaller reporting company

Emerging growth company