Dare Bioscience Inc.
08/13/2026 | Press release | Distributed by Public on 08/13/2026 14:02
Quarterly Report for Quarter Ending June 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of 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 unaudited condensed consolidated financial statements and notes thereto included in this Quarterly Report on Form 10-Q and our audited consolidated financial statements and notes thereto for the year ended December 31, 2025 included in our Annual Report on Form 10-K for the year ended December 31, 2025, or our 2025 10-K, filed with the Securities and Exchange Commission, or SEC, on March 26, 2026. Past operating results are not necessarily indicative of results that may occur in future periods.
The following discussion includes forward-looking statements. See "CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS," above. Forward-looking statements are not guarantees of future performance and 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 of our 2025 10-K, and in our subsequent filings with the SEC, including any discussed in Part II, Item 1A of this report under the heading "Risk Factors," which are incorporated herein by reference.
In this report, "we," "us," "our," "Daré" or the "Company" refer collectively to Daré Bioscience, Inc. and 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.
We use the term "Section 503B compounding," "503B compounding," or similar terms to refer to the production and supply of compounded drugs by outsourcing facilities registered under Section 503B of the FDCA without patient-specific prescriptions in accordance with Section 503B of the FDCA.
Daré Bioscience® is a registered trademark of Daré Bioscience, Inc. and DARE to PLAY™, DARE to RESTORE™, Flora Sync LF5™, and DARE to RECLAIM™ are trademarks of Daré Bioscience, Inc. with registration pending. Ovaprene® is a registered trademark licensed to Daré Bioscience, Inc. XACIATO® is a registered trademark of N.V. Organon. All other trademarks, service marks or trade names appearing in this report are the property of their respective owners. Use or display by us of other parties' trademarks, service marks or trade names is not intended to and does not imply a relationship with, or endorsements or sponsorship of, us by the trademark, service mark or trade name owners.
Business Overview
We are a purpose-driven health biotech company solely focused on closing the gap in women's health between promising science and real-world solutions. Every innovation we advance is based in advanced science and backed by rigorous, peer-reviewed research. From contraception to menopause, sexual health to fertility, vaginal health to infectious disease, we're working to close critical gaps in care using science that serves her needs. In March 2025, we announced an expansion of our business model to include a dual-path approach to bringing new products to market. For select proprietary formulations, we are pursuing both traditional FDA approval and earlier market access via Section 503B compounding. We believe this strategy allows us to respond to clinician and patient demand for timely access while continuing to generate the data necessary to seek FDA approval and support long-term value creation. In addition to prescription-based offerings - both FDA-approved products and compounded drugs- we intend to bring to market select consumer health products that do not require a physician's prescription, where appropriate based on product profile and market opportunity.
Section 503B Compounding
Our proprietary topical cream formulation of sildenafil is our first product to market under Section 503B. The compounded drug is branded as DARE to PLAY Sildenafil Cream and became available for pre-order fulfillment by prescription in the U.S. in December 2025. We expect product to begin shipping and to record revenue from sales thereof in the third quarter of 2026, however, we do not expect the amount of such revenue, if any, to be material during 2026. The amount of potential revenue we may generate remains uncertain because we are in the early stages of executing against our Section 503B compounding strategy, we rely on a third-party Section 503B-registered outsourcing facility to manufacture DARE to PLAY and to obtain and maintain all state-level pharmacy and outsourcing facility licenses required to fulfill DARE to PLAY prescriptions, and, as an organization, we have no experience in and limited infrastructure for commercializing products.
We are also taking action to bring our proprietary estradiol progesterone intravaginal ring (DARE-HRT1) to market under Section 503B. The compounded product will be branded as DARE to RECLAIM. We are targeting to
have DARE to RECLAIM available in 2027. There are no FDA-approved products that provide estradiol and progesterone together in a non-oral monthly form.
Consumer Health Products - DARE to RESTORE
We launched our first consumer health product, Flora Sync LF5, in June 2026 under the brand family DARE to RESTORE. Flora Sync LF5 is a vaginal probiotic suppository formulated with Limosilactobacillus fermentum LF5, a clinically studied probiotic strain originally isolated from the vaginal microbiome of women with no reported history of yeast infections, manufactured by Probiotical S.p.A. in Italy. Flora Sync LF5 is available in the United States exclusively through the DARE Health Hub, an online platform operated by Medvantx Pharmacy.
Our Pipeline: Clinical Stage and Pre-Clinical Stage Programs
Our product candidates are in various stages of development, from pre-clinical through a pivotal Phase 3 clinical study, and will require review and approval from the FDA, or a comparable foreign regulatory authority, prior to being marketed and sold. The most clinically advanced product candidates we are developing are: Ovaprene®, an investigational, hormone-free, monthly intravaginal contraceptive currently being evaluated in a pivotal Phase 3 clinical study; Sildenafil Cream, 3.6%, or Sildenafil Cream, an investigational cream formulation of sildenafil, the active ingredient in Viagra®, for topical administration for the treatment of female sexual arousal disorder, or FSAD; DARE-HRT1, an intravaginal ring designed to deliver combination menopausal hormone therapy, bio-identical 17β-estradiol and progesterone together, continuously over a 28-day period for the treatment of moderate to severe vasomotor symptoms, also known as hot flashes; DARE-VVA1, an investigational formulation of tamoxifen in a soft gelatin capsule for intravaginal administration as a hormone-free alternative to estrogen-based therapies for the treatment of moderate-to-severe dyspareunia, or pain during sexual intercourse; and DARE-HPV, an investigational, proprietary fixed-dose formulation of lopinavir and ritonavir in a soft gel vaginal insert for the treatment of genital human papillomavirus (HPV) infection in women as well as treatment of cervical intraepithelial neoplasia (also known as cervical dysplasia), and other HPV-related pathologies. See ITEM 1. "BUSINESS," in Part I of our 2025 10-K and "-Recent Events-Product Candidate Updates," below, for additional information regarding our product candidates.
XACIATO®
The first FDA-approved product to emerge from our portfolio is XACIATO® (clindamycin phosphate) vaginal gel 2%, or XACIATO, was approved by the FDA in December 2021, as a single-dose prescription medication for the treatment of bacterial vaginosis in females 12 years of age and older. In 2022, we licensed exclusive worldwide rights to develop, manufacture and commercialize XACIATO to Organon and in April 2024, we sold our rights to all royalty and potential milestone payments based on net sales of XACIATO under our agreement with Organon to XOMA. See Note 3 "Strategic Agreements" and Note 8 "Royalty Purchase Agreements" to the condensed consolidated financial statements included in this report for additional information.
Operations
Our primary operations consist of research and development activities to advance our portfolio of product candidates through late-stage clinical development and/or regulatory approval, and commercialization activities for the 503B and consumer health products we seek to bring to market. Until we secure additional capital to fund our operating needs, we will focus our research and development resources primarily on advancement of Ovaprene. In addition, we expect to incur significant research and development expenses for the DARE-LARC1 and DARE-HPV programs, but we also expect such expenses will be supported by non-dilutive funding, with respect to DARE-LARC1, through IND-enabling preclinical work, and with respect to DARE-HPV, through our ongoing Phase 2 clinical study. See Note 10, "Grant Awards" to the accompanying condensed consolidated financial statements for additional information.
We have limited sales, marketing and distribution infrastructure, and currently, we do not intend to build our own sales force or marketing and distribution infrastructure. However, reflecting the shift in our business model, we have been and will be allocating resources to support commercial execution activities, including entering into and maintaining relationships with 503B-registered outsourcing facilities, dispensing pharmacies, telehealth providers and other third parties to help bring our proprietary formulations to market.
As discussed below, we will need to raise substantial additional capital to continue to fund our operations and execute our current business strategy. Our business is subject to a number of risks common to biopharmaceutical companies (see Item 1A. Risk Factors in Part II of this report) and the process of developing and obtaining regulatory approvals for prescription drug and drug/device products in the United States and in foreign jurisdictions is inherently
uncertain and requires the expenditure of substantial financial resources without any guarantee of success. The commercialization of a product and compliance with applicable laws and regulations requires the expenditure of further substantial financial resources without any guarantee of commercial success. The amount of post-approval financial resources required for commercialization and the potential revenue we may receive from sales of any product will vary significantly depending on many factors, including whether, and the extent to which, we establish our own sales and marketing capabilities and/or enter into and maintain commercial collaborations with third parties with established commercialization infrastructure.
Recent Events
Commercial Launch of First Consumer Health Product
As discussed above, our first consumer health product, Flora Sync LF5, became available for purchase in the U.S. in June 2026.
Product Candidate Updates
Ovaprene®
Enrollment is ongoing in our pivotal Phase 3 multicenter, single-arm, non-comparative clinical study of Ovaprene to evaluate its effectiveness as a contraceptive along with its safety and acceptability (ClinicalTrials.gov ID: NCT06127199). We intend to maintain active recruitment at five study sites, supported by funding received under a grant agreement we entered into in November 2024.
In May 2026, the study's data safety monitoring board (DSMB), an independent group of experts which evaluates the safety and integrity of the study, conducted a second planned interim analysis and recommended the study continue without modification. As was the case with the data presented to the DSMB in July 2025, these interim data showed that approximately 9% of the women treated in the study had experienced a pregnancy. No new types of adverse events or tolerability concerns were identified. Neither an increase in the frequency of adverse events nor the emergence of new types of adverse events was observed with prolonged Ovaprene use. Approximately 12% of participants discontinued the study due to vaginal odor, the most commonly reported product-related adverse event, which is a 5% decrease compared to data reviewed by the DSMB in July 2025. No serious adverse events related to the study device were identified. A majority of participants who had completed the study reported they would be very likely or likely to use Ovaprene if it became available.
For the interim analysis, the DSMB reviewed data from 339 study subjects, contributing 1,789 menstrual cycles of safety data. The study protocol calls for at least 2,500 cycles of exposure and expects that at least 250 subjects would complete 13 menstrual cycles of use, whom we refer to as completers. Based on current enrollment trends, we expect to achieve 2,500 menstrual cycles of exposure before 250 completers. Interim data reviewed by the DSMB indicate that prolonged product use was not associated with the emergence of new types of adverse events or an increase in the frequency of adverse events, which we believe may support the sufficiency of fewer than 250 completers to evaluate Ovaprene's safety profile. We engaged with the FDA regarding these findings and proposed amending the study protocol to remove the specific expectation of at least 250 completers. In August 2026, the FDA approved our proposed protocol amendment, but also cautioned that it believes implementing the proposed modification would result in a study that is not able to generate sufficient evidence of Ovaprene's safety profile to support a favorable premarket approval decision. We intend to continue engagement with FDA on this point as well as the additional study design and future premarket approval submission considerations it provided. Based on the interim safety data reviewed by the DSMB, including the absence of new types of adverse events or increased frequency of adverse events with prolonged use, and the study's expected achievement of at least 2,500 menstrual cycles of exposure, we believe the amended protocol will generate sufficient safety data to support a premarket approval submission, although there can be no assurance that the FDA will agree. We currently expect to proceed to amend the protocol to eliminate the 250 completer expectation and to enroll sufficient women in 2026 to achieve at least 2,500 menstrual cycles of exposure in 2027, supporting a top line data announcement in 2027.
DARE-HPV
In May 2026, we announced the initiation of a randomized, placebo-controlled, double-blinded Phase 2 clinical study of DARE-HPV to evaluate the safety and antiviral activity of a lower and higher dose of DARE-HPV in approximately 100 women with persistent high-risk HPV infection (ClinicalTrials.gov ID: NCT07601074). The primary endpoint is HPV clearance rate at three months post end of treatment. Secondary endpoints include safety,
tolerability, and reduction in viral load. The ongoing Phase 2 study is supported by ARPA-H award funding. We currently expect to report topline data from the study in 2027.
Receipt of Payment Under October 2024 Grant Award
In May 2026, we received a payment of $1.5 million under the subaward agreement we entered into with National Collegiate Inventors and Innovators Alliance, Inc. d/b/a VentureWell in October 2024 to support the development of DARE-HPV, which was the result of our selection for an initiative award by the Advanced Research Projects Agency for Health (ARPA-H), part of the U.S. Department of Health and Human Services. For a discussion of this agreement, see Note 10, "Grant Awards" to the accompanying condensed consolidated financial statements. Taking into account this payment, we have received a cumulative total of approximately $9.0 million of the up to $10.0 million in potential funding under the subaward agreement.
Nasdaq Listing
On July 13, 2026, in accordance with Nasdaq Listing Rule 5815(d)(4)(B), we received a delisting determination letter from the Listing Qualifications Staff (the "Staff") of The Nasdaq Stock Market LLC ("Nasdaq"). The Staff informed us that because our Quarterly Report on Form 10-Q for the period ended March 31, 2026 reported stockholders' equity of less than $2.5 million and, as of July 13, 2026, we did not meet the alternative requirements of $35 million in market value of listed securities or $500,000 in net income from continuing operations, we no longer complied with Nasdaq Listing Rule 5550(b) and the Staff was not permitted to grant additional time for us to regain compliance because, as previously reported, we were subject to a mandatory monitoring period of one-year from July 24, 2025 due to previous noncompliance with Nasdaq Listing Rule 5550(b)(1). We were permitted to request an appeal of the Staff's delisting determination and a hearing to address the deficiency before a Nasdaq Hearing Panel (the "Panel"). We timely submitted the hearing request, which stayed the suspension and delisting of our common stock at least pending the issuance of the Panel's decision following the hearing and the expiration of any extension period that may be granted by the Panel. The hearing has been scheduled for late August 2026. Pursuant to published Nasdaq guidance, the Panel typically issues its decision within 30 days of the hearing.
Following the hearing, the Panel may, as it deems appropriate, grant an extension period not to exceed 180 days from the date of the Staff's delisting determination letter for us to evidence compliance with Nasdaq Listing Rule 5550(b), suspend and delist our common stock from The Nasdaq Capital Market, or find us in compliance with all applicable listing standards. There can be no assurance that our hearing before the Panel will result in a favorable outcome or, if any extension period is granted, that we will regain compliance with Nasdaq Listing Rule 5550(b) within such extension period or that we will be successful in otherwise maintaining the listing of our common stock on The Nasdaq Capital Market. See the risk factor titled, Our common stock could be subject to immediate suspension of trading from the Nasdaq Capital Market and delisting if we do not obtain a favorable outcome from the Nasdaq Hearing Panel following our upcoming hearing, which could, among other things, limit demand for our common stock, substantially impair our ability to raise additional capital and have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock, under the heading "Risk Factors" in Part II, Item 1A of this report.
Macroeconomic, Political, and Regulatory Environment Considerations
Our business, financial condition, operating results, and our ability to raise additional capital may be adversely affected by the uncertainty in the U.S. and global macroeconomic, political, and regulatory environments, such as inflation, trade disruptions and restrictive measures, including tariffs, interest rate uncertainty, slowed economic growth or recession, uncertainty with respect to the federal budget and debt ceiling, potential or prolonged U.S. government shutdowns, volatility in financial markets, changes in the regulatory landscape in the U.S., including due to significant reductions in funding and staffing of federal agencies and changes in leadership, and geopolitical factors. Unstable and unfavorable market and economic conditions may make it more difficult, more costly, and more dilutive to our stockholders to raise additional capital to fund our operations and execute against our business strategy, as well as adversely impact market demand for the women's health solutions we bring to market. Further, the service providers, manufacturers, vendors, and collaborators on which we rely may be adversely affected by the foregoing risks, which could directly impact our ability to achieve our operating goals within planned timelines and budgets.
There may be significant future effects on the women's health sector and the pharmaceutical and biopharmaceutical industries as a result of federal policy and regulatory changes under the current U.S. presidential administration, including in areas relating to regulatory framework and oversight, research and development funding,
drug pricing reform, global trade policy and tariffs, and others. Moreover, we have benefited significantly from federal government funding through grants and other agreements in support of several of our development programs, including Ovaprene and DARE-HPV. In early 2025, the U.S. presidential administration took actions to freeze billions of dollars in NIH grants, and the status of NIH grant funding has continued to evolve since that time as a result of additional executive actions, legal challenges, and court orders, and the long-term status of many grants remains uncertain. Our business, financial condition and operating results may be significantly adversely affected if existing grants or other arrangements supporting our development programs are frozen or terminated or we are unable to secure additional grants or other federal government funding in the future. Given the high level of uncertainty regarding federal policy and enforcement and regulatory changes and that circumstances continue to evolve, we are not able to reasonably predict the full extent of the potential impact on our business at this time. For additional information, see the risk factors described in Part II, Item 1A, Risk Factors in this report and Part I, Item 1A. Risk Factors in our 2025 10-K.
Financial Overview
Revenue
For the six months ended June 30, 2026, substantially all of our revenue relates to two agreements we entered into with the Gates Foundation, or the Foundation, under which we provide research and development services related to preeclampsia and the contraceptive market. We commenced work under both agreements in November 2025. We may receive up to approximately $499,000 under the agreement related to preeclampsia, and up to approximately $300,000 under the agreement related to the contraceptive market. We began recording revenue from sales of Flora Sync LF5 in July 2026.
All of our revenue for 2025 was royalties from net sales of XACIATO, which have been paid to UiE under our royalty interest financing agreement with UiE, and recognized as non-cash royalty revenue.
In the future, we may generate revenue from license fees, milestone payments, and research and development payments in connection with strategic collaborations, and from product sales, including sales of 503B compounded products, consumer health products, and FDA-approved products, if any. We expect to begin recording revenue from sales of DARE to PLAY in the third quarter of 2026. Our ability to generate such revenue will depend on the extent to which we are successful in executing against our Section 503B strategy, the extent to which the clinical development of our product candidates is successful, and whether we or a strategic collaborator receive the regulatory approvals necessary to market such product candidates, as well as the eventual commercial success of any FDA-approved products. If we fail to successfully achieve any of the foregoing, our ability to generate future revenue and our results of operations would be materially adversely affected. For information regarding potential payments to upstream licensors, see Note 3 "Strategic Agreements" to the accompanying condensed consolidated financial statements. For information regarding our contractual obligations to XOMA and UiE, see Note 8 "Royalty Purchase Agreements" and Note 7 "Royalty Interest Financing," respectively, to the accompanying condensed consolidated financial statements.
Cost of Revenues
Cost of revenues primarily represent expenses associated with medical education and consumer awareness related to the commercialization of DARE to PLAY through our 503B business model and the costs of providing research and development services to the Foundation. Beginning in the third quarter of 2026, cost of revenues will also include costs related to sales of Flora Sync LF5.
Research and Development Expenses
Research and development, or R&D, represents a core operational focus. We are advancing multiple product candidates through preclinical and clinical development, supported in part by significant non-dilutive grant funding from governmental and non-governmental organizations.
Although our R&D activities remain substantial, as explained in more detail below, grant funding and other financial awards offset a significant portion of our R&D expenses. As a result, our reported operating expenses may appear to be weighted more heavily toward selling, general and administrative, or SG&A, expenses. However, this reflects the reduction to R&D expenses (contra R&D expense) as a result of grant funding and other financial awards, rather than a reduction in our commitment to or investment in R&D activities.
We expect our R&D expenses will continue to represent the majority of our operating expenses, on a pre-contra R&D expenses basis, for at least the next twelve months. R&D expenses consist primarily of:
•direct program costs, including:
◦expenses incurred under agreements with clinical research organizations (CROs), investigative sites and other third parties that assist in the conduct of our clinical trials and nonclinical studies and conduct other R&D and regulatory affairs activities on our behalf,
◦contract manufacturing expenses, primarily for the production of materials for use in our clinical trials and nonclinical studies;
◦expenses related to production of select proprietary formulations by 503B-registered outsourcing facilities prior to commercial launch of the product via Section 503B compounding;
◦transaction costs related to acquisitions of companies, technologies and related intellectual property, and other assets, and
◦milestone payments due to third parties under acquisition and in-licensing arrangements based on our product candidates' achievement of R&D and regulatory milestones specified therein, and
•indirect costs, including:
◦personnel-related costs, including salaries, bonuses, benefits, payroll taxes, and stock-based compensation expenses for employees engaged in R&D functions,
◦the costs of services performed by third parties, including consulting services,
◦facilities-related costs, including rent and maintenance costs, and insurance, depreciation, supplies, and miscellaneous expenses, and
◦costs related to travel, conference participation, service contracts, information technology, dues and subscriptions.
We recognize R&D expenses as they are incurred. External expenses are recognized based on our evaluation of the progress to completion of specific tasks using information provided to us by our service providers or our estimate of the amount of services that has been performed at each reporting date. Nonrefundable payments we make prior to the receipt of goods or services to be used in R&D are recognized as an expense as the related goods are delivered or services are performed. Milestone payments to third parties under acquisition, license, and option agreements are recognized as they are incurred or when we deem their incurrence to be probable.
We generally track direct R&D costs on a specific basis and present direct costs for our key development programs on a program-by-program basis. We present direct costs for all other programs on a consolidated basis generally by stage of development. Specifically, we present consolidated direct costs for (a) such programs that are in (i) advanced clinical development (Phase 2-ready to Phase 3), (ii) Phase 1 clinical development or that we believe are Phase 1-ready, and (iii) preclinical stage, and (b) other development programs. We do not track indirect costs on a program-by-program basis because those costs generally are deployed across multiple development programs.
We recognize the Australian Research and Development Tax Incentive Program, or the Tax Incentive, as a reduction of R&D expenses (contra R&D expense). The amounts are determined based on our eligible R&D expenditures and are non-refundable, provided that in order to qualify for the Tax Incentive the filing entity must have revenue of less than AUD $20.0 million during the tax year for which a reimbursement claim is made and cannot be controlled by an income tax exempt entity. The Tax Incentive is recognized when there is reasonable assurance that the Tax Incentive will be received, the relevant expenditure has been incurred, and the amount can be reliably measured or reliably estimated.
We have received, and may in the future receive, funding through grants and other financial awards from governmental entities, private foundations and other organizations that support activities related to the development of certain of our product candidates. As we incur eligible expenses under those grants or awards, we recognize grant funding in the statements of operations as a reduction to R&D expenses (contra-R&D expense). For more information, see Note 2 "Basis of Presentation and Summary of Significant Accounting Policies-Grant Funding" to our consolidated financial statements contained in our 2025 10-K and Note 10 "Grant Awards" to the accompanying condensed consolidated financial statements. We recognized contra-R&D expense of approximately $4.7 million and $8.2 million for the three and six months ended June 30, 2026, respectively, and $4.5 million and $7.6 million for the three and six months ended June 30, 2025, respectively.
At any one time, we are working on multiple programs at various stages of development. We anticipate that we will make determinations as to which product candidates to pursue and how much funding to direct to each development program on an ongoing basis based on our cash position and capital resources and in response to the results of ongoing and future clinical trials and preclinical studies, regulatory developments, and our ongoing assessments as to the commercial potential of each product candidate.
Investment in the development of and seeking regulatory approval for our clinical-stage and Phase 1-ready product candidates and the development of any other potential product candidates we may advance into and through clinical trials in the pursuit of regulatory approvals, will increase our R&D expenses. Activities associated with the foregoing will require a significant increase in investment in regulatory support, clinical supplies, inventory build-up related costs, and the payment of success-based milestones to licensors. In addition, we continue to evaluate opportunities to acquire or in-license other product candidates and technologies, which may result in higher R&D expenses due to, among other factors, milestone payments. 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 or cost-effective basis, or at all. Our future R&D expenses and the probability of success of our product candidates may be affected by numerous factors, including the number, scope, rate of progress, expense, and results of our clinical trials and nonclinical R&D activities, the countries in which our clinical trials are conducted, the phase of clinical development of our product candidates, the cost and timing of manufacturing our product candidates, our ability to scale up manufacturing as needed to support later-stage clinical trials and, if approved, commercialization of our product candidates, the extent of changes in government regulation and regulatory guidance relating to development and approval of our product candidates, the timing, receipt, and terms of any clearances to conduct clinical trials and any marketing approvals from applicable regulatory authorities, competition and commercial viability of our product candidates, the extent to which we establish and maintain intellectual property rights, the extent to which we establish and maintain license, collaboration, or other arrangements. As a result, we cannot accurately determine the duration and completion costs of development projects or if, when and to what extent we will generate revenue from any products we develop.
Selling, General and Administrative Expenses
SG&A expenses consist of personnel costs, facility expenses, expenses for outside professional services, including legal, audit and accounting services, commercial-readiness expenses, including for Section 503B compounded drug products and consumer health products, and milestone expenses. Personnel costs consist of salaries, benefits and stock-based compensation. Facility expenses consist of rent and other related costs. Commercial-readiness expenses consist of consultant and advisor costs. Milestone expenses consist of amounts that become due to third parties under our in-license or other agreements under which we acquired rights to technology or other intellectual property we use in a product based on the product's achievement of commercial milestones specified therein.
Critical Accounting Policies and Estimates
Management's discussion and analysis of financial condition and results of operations is based on our interim condensed consolidated financial statements, that we prepared in accordance with accounting principles generally accepted in the United States, or GAAP. Preparing these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities and expenses, and related disclosures. On an ongoing basis, we evaluate these estimates and judgments. We base our estimates on historical experience and on various assumptions 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. For a description of critical accounting policies that affect our significant judgments and estimates used in the preparation of our accompanying condensed consolidated financial statements, refer to Item 7 in Management's Discussion and Analysis of Financial Condition and Results of Operations in our 2025 10-K. Since December 31, 2025, there have been no material changes to our critical accounting policies or the methodologies or assumptions we apply under them except for as described below.
Research and Development Services Revenue
We entered into two services agreements with the Foundation (the "Foundation Services Agreements") pursuant to which we provide research and development support services. Revenue from these arrangements is recognized in accordance with ASC 606. Additional information is included in Note 2 to the accompanying condensed consolidated financial statements.
We consider revenue recognition under the Foundation Services Agreements to be a critical accounting policy due to the judgments required in determining the appropriate pattern of revenue recognition and in measuring variable consideration. We recognize revenue over time under both agreements. This determination requires judgment in evaluating whether the customer simultaneously receives and consumes the benefits of our performance or whether our performance creates an asset with no alternative use and an enforceable right to payment for performance completed to date. These conclusions are based on the specific contractual terms and the nature of the services provided. The transaction price under the Foundation Services Agreements is variable and is based on actual hours incurred by designated personnel at contractually specified billing rates. We recognize revenue in the period in which services are performed and apply judgment in determining the appropriate level of effort incurred and the allocation of personnel time to the contracts. Changes in estimates of hours incurred or services performed could result in variability in the timing and amount of revenue recognized. For arrangements involving delivery of a defined work product, revenue is recognized based on progress toward completion. We apply judgment in measuring progress, including estimating total expected effort. Changes in these estimates could result in adjustments to revenue in future periods.
Because we invoice the Foundation in arrears, revenue recognized may exceed amounts invoiced, resulting in contract assets. We evaluate such balances to ensure revenue recognized appropriately reflects the transfer of services. Changes in our judgments or estimates regarding performance obligations, measure of progress, or variable consideration could materially impact the amount and timing of revenue recognized.
Results of Operations
Comparison of Three Months Ended June 30, 2026 and 2025 (Unaudited)
The following table summarizes our condensed consolidated results of operations for the periods indicated, together with the changes in those items in terms of dollars and percentage:
| Three Months Ended June 30, | Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Research and development services and royalty revenue | $ | 187,546 | $ | (21,172) | $ | 208,718 | 986 | % | |||||||||||||||
| Total revenue | 187,546 | (21,172) | 208,718 | 986 | % | ||||||||||||||||||
|
Cost of revenues
|
319,889 | - | 319,889 | N/A | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
|
Selling, general and administrative
|
2,593,671 | 2,377,866 | 215,805 | 9 | % | ||||||||||||||||||
| Research and development | 241,966 | 1,428,762 | (1,186,796) | (83) | % | ||||||||||||||||||
| Total operating expenses | 2,835,637 | 3,806,628 | (970,991) | (26) | % | ||||||||||||||||||
| Loss from operations | (2,967,980) | (3,827,800) | 859,820 | (22) | % | ||||||||||||||||||
| Other expense | (14,793) | (188,683) | 173,890 | (92) | % | ||||||||||||||||||
|
Net loss
|
$ | (2,982,773) | $ | (4,016,483) | $ | 1,033,710 | (26) | % | |||||||||||||||
| Other comprehensive loss | |||||||||||||||||||||||
| Foreign currency translation adjustments | 2,225 | 12,893 | (10,668) | (83) | % | ||||||||||||||||||
|
Comprehensive loss
|
$ | (2,980,548) | $ | (4,003,590) | $ | 1,023,042 | (26) | % | |||||||||||||||
Revenues
The increase of approximately $0.2 million in revenue for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was attributable to R&D services revenues from the agreements we entered into with the Foundation in September and October 2025, partially offset by a decrease in non-cash royalty revenues related to XACIATO. See "-Financial Overview-Revenue," above for information.
Cost of revenues
Cost of revenues increased by approximately $0.3 million compared to the prior period, which had no comparable activity. Cost of revenues related to the cost of performing research and development services under our R&D services agreements we entered into with the Foundation in September and October 2025, and to expenses associated with medical education and awareness related to the commercialization of DARE to PLAY.
Selling, general and administrative expenses
The increase of approximately $0.2 million in SG&A expenses for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was primarily attributable to an approximately $0.3 million non-cash write down of previously deferred offering costs, an increase of approximately $0.1 million in personnel costs, and an increase of approximately $0.1 million in commercial-readiness expenses driven by execution against our expanded business strategy, partially offset by decreases of approximately $0.2 million in professional services and approximately $0.1 million in stock-based compensation expense. See Note 4 "Stockholders' Equity" to the accompanying condensed consolidated financial statements for additional information regarding the non-cash write down of previously deferred offering costs.
Research and development expenses
The following table summarizes our R&D expenses for the periods indicated, together with the changes in those items in terms of dollars and percentage:
|
Three Months Ended June 30, |
Change | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Direct program costs: | ||||||||||||||||||||||||||
|
Ovaprene (1)
|
$ | 843,503 | $ | 1,316,372 | $ | (472,869) | (36) | % | ||||||||||||||||||
|
Sildenafil Cream (2)
|
134,769 | 49,881 | 84,888 | 170 | % | |||||||||||||||||||||
|
Other advanced clinical stage programs (1)
|
1,244,028 | 975,489 | 268,539 | 28 | % | |||||||||||||||||||||
|
Phase 1 and Phase 1-ready clinical stage programs (1)
|
164,068 | 628,595 | (464,527) | (74) | % | |||||||||||||||||||||
|
Preclinical stage programs (1)
|
1,457,723 | 1,718,320 | (260,597) | (15) | % | |||||||||||||||||||||
| Personnel-related (including stock-based compensation) | 1,084,019 | 1,209,437 | (125,418) | (10) | % | |||||||||||||||||||||
|
Contra R&D expenses (3)
|
(4,017,949) | (3,780,794) | (237,155) | 6 | % | |||||||||||||||||||||
| Total direct program costs | 910,161 | 2,117,300 | (1,207,139) | (57) | % | |||||||||||||||||||||
| Indirect costs: | ||||||||||||||||||||||||||
| Outside services (including consulting) | 124 | (8,839) | 8,963 | (101) | % | |||||||||||||||||||||
| Facilities-related (including depreciation) | 20,632 | 18,516 | 2,116 | 11 | % | |||||||||||||||||||||
| Other indirect R&D costs | 9,898 | 60,785 | (50,887) | (84) | % | |||||||||||||||||||||
| Contra R&D expenses | (698,849) | (759,000) | 60,151 | (8) | % | |||||||||||||||||||||
| Total indirect R&D costs | (668,195) | (688,538) | 20,343 | (3) | % | |||||||||||||||||||||
| Total R&D expenses | $ | 241,966 | $ | 1,428,762 | $ | (1,186,796) | (83) | % | ||||||||||||||||||
|
1.The applicable program(s) receive grant funding and/or the Tax Incentive. The amount of R&D expense for the period indicated is shown on a gross basis (i.e., without deducting the amount of contra R&D expense for the applicable program(s). See footnote (3) below.
2.The amounts include expenses for Sildenafil Cream, 3.6% and DARE to PLAY Sildenafil Cream.
3.These contra R&D expenses were recognized as follows for the three months ended June 30, 2026 and 2025: (a) Ovaprene, $0.8 million and $0.4 million, respectively; (b) other advanced clinical stage programs, $1.3 million and $1.0 million, respectively, (c) Phase 1 and Phase 1-ready clinical stage programs, $0 and $0.1 million, respectively; and (d) preclinical stage programs, $1.9 million and $2.2 million, respectively.
|
||||||||||||||||||||||||||
The decrease of approximately $1.2 million in R&D expenses for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025 was related to an increase in contra R&D expenses in direct program costs, and decreases in expenses related to (i) the ongoing Phase 3 clinical trial of Ovaprene, (ii) our Phase 1 and Phase 1-ready clinical stage programs - primarily attributable to our DARE-PTB1 program, (iii) our pre-clinical and other development programs -primarily attributable to our DARE-LARC1 program, and (iv) personnel-related costs. Such decreases were partially offset by increases in expenses related to (A) our other advanced clinical stage programs - primarily attributable to our DARE-HPV program, and (B) Sildenafil Cream and DARE to PLAY Sildenafil Cream. Contra R&D expenses for the three months ended June 30, 2026 and 2025 primarily offset direct program costs for DARE-LARC1, Ovaprene and DARE-HPV.
Other expense
The decrease of approximately $0.2 million in other expense for the three months ended June 30, 2026 as compared to the same period in 2025 was primarily due to an increase on interest earned on cash balances in the current period and a decrease of interest expense in the current period.
Comparison of Six Months Ended June 30, 2026 and 2025 (Unaudited)
The following table summarizes our condensed consolidated results of operations for the periods indicated, together with the changes in those items in terms of dollars and percentage:
|
Six Months Ended June 30, |
Change | ||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Research and development services and royalty revenue | $ | 340,001 | $ | 4,255 | $ | 335,746 | 7891 | % | |||||||||||||||
| Total revenue | 340,001 | 4,255 | 335,746 | 7891 | % | ||||||||||||||||||
| Cost of revenues | 562,214 | - | 562,214 | NA | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Selling, general and administrative | 4,842,237 | 4,687,030 | 155,207 | 3% | |||||||||||||||||||
| Research and development expenses | 902,428 | 3,726,143 | (2,823,715) | (76) | % | ||||||||||||||||||
| Total operating expenses | 5,744,665 | 8,413,173 | (2,668,508) | (32) | % | ||||||||||||||||||
| Loss from operations | (5,966,878) | (8,408,918) | 2,442,040 | (29) | % | ||||||||||||||||||
| Other (expense) income, net | (15,784) | 14,128 | (29,912) | (212) | % | ||||||||||||||||||
| Net loss | (5,982,662) | (8,394,790) | 2,412,128 | (29) | % | ||||||||||||||||||
| Other comprehensive loss: | |||||||||||||||||||||||
| Foreign currency translation adjustments | 46,768 | 25,983 | 20,785 | 80 | % | ||||||||||||||||||
| Comprehensive loss | $ | (5,935,894) | $ | (8,368,807) | $ | 2,432,913 | (29) | % | |||||||||||||||
Revenues
The increase of approximately $0.3 million in revenue for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was attributable to R&D services revenues from the agreements we entered into with the Foundation in September and October 2025, partially offset by a decrease in non-cash royalty revenues related to XACIATO. See "-Financial Overview-Revenue," above for information.
Cost of revenues
Cost of revenues increased by approximately $0.6 million compared to the prior period, which had no comparable activity. Cost of revenues relates primarily to the cost of performing research and development services under our R&D services agreements we entered into with the Foundation in September and October 2025, and to expenses associated with medical education and awareness related to the commercialization of DARE to PLAY.
Selling, general and administrative expenses
The increase of approximately $0.2 million in SG&A expenses for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was primarily attributable to an approximately $0.3 million non-cash write down of previously deferred offering costs, an increase of approximately $0.1 million in commercial-readiness expenses driven by execution against our expanded business strategy, partially offset by a decrease of approximately $0.2 million in professional services expense. See Note 4 "Stockholders' Equity" to the accompanying condensed consolidated financial statements for additional information regarding the non-cash write down of previously deferred offering costs.
Research and development expenses
The following table summarizes our R&D expenses for the periods indicated, together with the changes in those items in terms of dollars and percentage:
| Six months ended June 30, | Change | |||||||||||||||||||||||||
| 2026 | 2025 | $ | % | |||||||||||||||||||||||
| Direct program costs: | ||||||||||||||||||||||||||
|
Ovaprene (1)
|
$ | 2,075,263 | $ | 2,812,101 | $ | (736,838) | (26) | % | ||||||||||||||||||
|
Sildenafil Cream (2)
|
202,560 | 261,270 | (58,710) | (22) | % | |||||||||||||||||||||
|
Other advanced clinical stage programs (1)
|
1,619,791 | 1,466,051 | 153,740 | 10 | % | |||||||||||||||||||||
|
Phase 1 and Phase 1-ready clinical stage programs (1)
|
260,123 | 1,125,342 | (865,219) | (77) | % | |||||||||||||||||||||
|
Preclinical stage programs (1)
|
2,626,102 | 2,767,058 | (140,956) | (5) | % | |||||||||||||||||||||
| Personnel-related (including stock compensation) | 2,276,881 | 2,701,684 | (424,803) | (16) | % | |||||||||||||||||||||
|
Contra R&D expenses (3)
|
(7,087,095) | (6,399,167) | (687,928) | 11 | % | |||||||||||||||||||||
| Total direct program costs | 1,973,625 | 4,734,339 | (2,760,714) | (58) | % | |||||||||||||||||||||
| Indirect costs: | ||||||||||||||||||||||||||
| Outside services (including consulting) | 248 | 10,447 | (10,199) | (98) | % | |||||||||||||||||||||
| Facilities-related (including depreciation) | 41,724 | 36,714 | 5,010 | 14 | % | |||||||||||||||||||||
| Other indirect R&D costs | 17,528 | 152,035 | (134,507) | (88) | % | |||||||||||||||||||||
| Contra R&D expenses | (1,130,697) | (1,207,392) | 76,695 | (6) | % | |||||||||||||||||||||
| Total indirect R&D costs | (1,071,197) | (1,008,196) | (63,001) | 6 | % | |||||||||||||||||||||
| Total R&D expenses | $ | 902,428 | $ | 3,726,143 | $ | (2,823,715) | (76) | % | ||||||||||||||||||
|
1.The applicable program(s) receive grant funding and/or the Tax Incentive. The amount of R&D expense for the period indicated is shown on a gross basis (i.e., without deducting the amount of contra R&D expense for the applicable program(s). See footnote (3) below.
2.The amounts include expenses for Sildenafil Cream, 3.6% and DARE to PLAY Sildenafil Cream.
3.These contra R&D expenses were recognized as follows for the six months ended June 30, 2026 and 2025: (a) Ovaprene, $1.7 million and $0.9 million, respectively; (b) other advanced clinical stage programs, $1.8 million and $1.5 million, respectively, (c) Phase 1 and Phase 1-ready clinical stage programs, $0 million and $0.2 million, respectively; and (d) preclinical stage programs, $3.6 million and $3.8 million, respectively.
|
||||||||||||||||||||||||||
The decrease of approximately $2.8 million in R&D expenses for the six months ended June 30, 2026 as compared to the six months ended June 30, 2025 was primarily attributable to an increase in contra R&D expenses in direct program costs, and decreases in expenses related to (i) our Phase 1 and Phase 1-ready clinical stage programs - primarily attributable to our DARE-PTB1 program, (ii) the ongoing Phase 3 clinical trial of Ovaprene, (iii) Sildenafil Cream and DARE to PLAY Sildenafil Cream, (iv) personnel costs, and (v) our pre-clinical and other development programs -primarily attributable to our DARE-LARC1 program. Such decreases were partially offset by increases in expenses related to our other advanced clinical stage programs - primarily attributable to our DARE-HPV program. Contra R&D expenses for the six months ended June 30, 2026 and 2025 primarily offset direct program costs for DARE-LARC1, Ovaprene and DARE-HPV.
Other (expense) income
The decrease of approximately $30,000 in other expense for the six months ended June 30, 2026 as compared to the same period in 2025 was due to (i) the absence of employee retention credits recognized in the prior year period- in the first quarter of 2025, we recognized approximately $0.2 million of employee retention credits related to applications filed in 2023 with no comparable benefit in the current period, and (ii) decreased interest expense in the current period. Such decreases were partially offset by increased interest income due to an increase on interest earned on cash balances in the current period.
Liquidity and Capital Resources
Plan of Operations and Future Funding Requirements
In the near term, we plan to focus primarily on: (a) our ongoing Ovaprene Phase 3 study; (b) executing against our Section 503B compounding and consumer health products business strategies, with a focus on DARE to PLAY, DARE to RECLAIM estradiol progesterone intravaginal ring, and DARE to RESTORE vaginal probiotics; and (c) advancing the development of product candidates for which the costs are being supported by non-dilutive grant or other award funding, in particular DARE-LARC1 and DARE-HPV. We will also continue engagement with the FDA to align on the Phase 3 program for Sildenafil Cream and will continue to work on the development of our other clinical and preclinical-stage programs. For additional information, see "Business Overview" and "Recent Events" above and Note 10 "Grant Awards" to the accompanying condensed consolidated financial statements.
At June 30, 2026, our cash and cash equivalents were approximately $12.6 million, and our working capital deficit was approximately $0.2 million. As of June 30, 2026, our deferred grant funding liability was approximately $15.0 million, substantially all of which consisted of funds intended to support the DARE-LARC1 program, the Ovaprene Phase 3 clinical study, and the DARE-HPV program. For more information about our cash and cash equivalents and our deferred grant funding liability, see Note 2 "Basis of Presentation and Summary of Significant Accounting Policies-Going Concern" to the accompanying condensed consolidated financial statements, and Note 2 "Basis of Presentation and Summary of Significant Accounting Policies-Grant Funding" to our consolidated financial statements in our 2025 10-K.
We believe that our existing cash and cash equivalents will be sufficient to fund our operating needs, including planned commercial launch activities for DARE to PLAY, into the fourth quarter of 2026. We have based this estimate on assumptions that may prove to be wrong, and we could deplete our capital resources sooner than we expect. We will continue to evaluate and may pursue various capital raising options, including sales of equity, debt financings, government or other grant funding, collaborations, structured financings, and commercial collaborations or other strategic transactions. Our ability to obtain additional capital and the timing and terms thereof, depend on various factors, many aspects of which are not entirely within our control, and there can be no assurance that capital will be available when needed or, if available, on terms favorable to us and our stockholders. Raising additional capital may cause substantial dilution to our stockholders, restrict our operations or require us to relinquish rights in our technologies or product candidates and their future revenue streams. If we cannot raise capital when needed, on favorable terms or at all, we will need to reevaluate our planned operations and may need to delay, scale back or eliminate some or all of our product candidate programs and/or reduce expenses.
At June 30, 2026, our accumulated deficit was approximately $194.7 million, and we had a net loss of approximately $6.0 million and negative cash flows from operations of approximately $12.3 million for the six months ended June 30, 2026. We may continue to incur significant losses from operations and negative cash flows from operations for the next several years and may never generate sufficient revenues to finance our operations or achieve profitability. Based on our current analysis of the conditions described above, there is substantial doubt about our ability to continue as a going concern within the 12-month period from the issuance date of the accompanying condensed consolidated financial statements. The accompanying condensed consolidated financial statements were prepared on a going concern basis, which assumes that we will realize our assets and satisfy our liabilities in the normal course of business. The accompanying condensed 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.
We expect our operating expenses will increase substantially in the future as we continue to develop and seek FDA approval for our product candidates and expand our capabilities to support our 503B compounding and consumer health business strategies. Our future capital requirements are difficult to predict because they will depend on many factors that are highly variable and difficult to predict, including, but not limited to, those discussed in the risk factors in Part I, Item 1A of our 2025 10-K under "Risks Related to Our Financial Position and Capital Needs."
Capital Resources
Historically, the cash used to fund our operations has come from a variety of sources and predominantly from sales of shares of our common stock. We have also received a significant amount of cash through non-dilutive grants, strategic collaborations and royalty monetization transactions.
In our Regulation A offering we are offering up to 4,854,000 units, each consisting of one share of our Series A convertible preferred stock, which is convertible into two shares of our common stock, and two warrants, each exercisable for one share of our common stock at an exercise price of $4.00 per share. The offering price of each unit is $5.00. As of the date of this report, we have issued an aggregate of 338,000 units to investors in the offering, consisting of 338,000 shares of Series A convertible preferred stock and warrants to purchase up to 676,000 shares of our common stock, for gross proceeds of approximately $1.7 million.
We have a sales agreement with Stifel, Nicolaus & Company, Incorporated, or Stifel, to sell shares of our common stock from time to time through an "at-the-market," or ATM, equity offering program under which Stifel acts as our agent. Shares of our common stock sold under the sales agreement are offered and sold under our shelf registration statement on Form S-3 (File No. 333-278380) declared effective by the SEC on May 10, 2024. During 2025, we sold 4,329,116 shares of our common stock under the sales agreement for net proceeds of approximately $17.6 million. Because the market value of the outstanding shares of our common stock held by non-affiliates, or our public float, is less than $75.0 million, we are subject to the SEC's "baby shelf rule," which limits the amount of securities we may offer and sell under a shelf registration statement to one-third of our public float in any 12-month period. As of August 1, 2026, all prior offers and sales under our shelf registration statement fell outside the trailing 12-month period, and we became eligible to offer and sell our securities under the shelf registration statement, subject to the baby shelf rule limitation.
We have a purchase agreement with Lincoln Park Capital Fund, LLC, or Lincoln Park, under which, subject to the conditions thereof, we have the right, but not the obligation, to sell to Lincoln Park, and Lincoln Park is obligated to purchase, up to $15.0 million in shares of our common stock. Such sales of our common stock to Lincoln Park, if any, may occur from time to time, at our sole discretion through December 1, 2026. See Note 4 "Stockholders' Equity-Equity Line" to the accompanying condensed consolidated financial statements for additional information. During 2025, we sold 1,470,000 shares of our common stock under this purchase agreement and received net proceeds of approximately $3.1 million. We sold 150,000 shares of our common stock under this purchase agreement during the six months ended June 30, 2026 and received net proceeds of approximately $0.3 million. We sold 120,000 shares of our common stock under this agreement subsequent to June 30, 2026 and received net proceeds of approximately $0.2 million.
We began recording revenue from sales of Flora Sync LF5 in July 2026, and we expect to begin recording revenue from sales of DARE to PLAY in the third quarter of 2026. The amount of potential revenue we may generate remains uncertain because we are in the early stages of executing against our Section 503B compounding and consumer health products business strategies, we rely on a third-party Section 503B-registered outsourcing facility to manufacture DARE to PLAY and to obtain and maintain all state-level pharmacy and outsourcing facility licenses required to fulfill DARE to PLAY prescriptions and, as an organization, we have no experience in and limited infrastructure for commercializing products.
Cash Flows
The following table shows a summary of our cash flows for the periods indicated:
| Six months ended June 30, | |||||||||||
| 2026 | 2025 | ||||||||||
|
Net cash used in operating activities
|
$ | (12,295,690) | $ | (10,887,999) | |||||||
| Net cash used in investing activities | (80,586) | (3,935) | |||||||||
| Net cash provided by financing activities | 235,747 | 202,783 | |||||||||
| Effect of exchange rate changes on cash and cash equivalents | 46,767 | 25,983 | |||||||||
|
Net decrease in cash and cash equivalents
|
$ | (12,093,762) | $ | (10,663,168) | |||||||
Net cash used in operating activities
Net cash used in operating activities of $12.3 million for the six months ended June 30, 2026 was primarily due to our net loss of $6.0 million and changes in operating assets and liabilities, offset by non-cash items such as depreciation and amortization expense, stock-based compensation expense, and our operating lease right-of-use asset. Net cash used by changes in operating assets and liabilities resulted primarily from a decrease of $4.7 million in our deferred grant funding liability, an increase of $1.8 million in other non-current assets, an increase of $1.4 million in prepaid expenses, an increase of $0.5 million in other current assets, a decrease of $0.4 million in accounts payable, a decrease of $0.3 million in operating lease liability, partially offset by an increase of $0.3 million in interest payable. The $1.8 million increase in other non-current assets relates primarily to a payment made to the third-party Section 503B-registered outsourcing facility for DARE to RECLAIM during the three months ended March 31, 2026, which will be credited against amounts otherwise owed to such third-party for future purchases of DARE to RECLAIM.
Net cash used in operating activities of $10.9 million for the six months ended June 30, 2025 was primarily due to our net loss of $8.4 million and changes in operating assets and liabilities, offset by non-cash items such as depreciation and amortization expense, stock-based compensation expense, and our operating lease right-of-use asset. Net cash used by changes in operating assets and liabilities resulted primarily from decreases of $4.2 million in our deferred grant funding liability, $0.4 million in accrued expenses, and $0.3 million in operating lease liability, offset by increases of $0.5 million in prepaid expenses, $0.2 million in accounts payable, and $0.3 million in interest payable.
Net cash used in investing activities
Net cash used in investing activities for the six months ended June 30, 2026 and June 30, 2025 related to purchases of property and equipment.
Net cash provided by financing activities
Net cash provided by financing activities for the six months ended June 30, 2026 resulted primarily from approximately $1.5 million of net proceeds from sales of units in our Regulation A offering and approximately $0.3 million of net proceeds from sales of our common stock under our purchase agreement with Lincoln Park, partially offset by (i) approximately $1.3 million in payments on our facility financing lease and (ii) approximately $0.2 million in payments on a note payable related to an insurance premium financing obtained in July 2025 related to certain director and officer and other insurance premiums.
Net cash provided by financing activities for the six months ended June 30, 2025 consisted primarily of approximately $0.9 million of net proceeds from the sales of our common stock under our purchase agreement with Lincoln Park partially offset by payments on (i) our facility finance lease of approximately $0.5 million and (ii) insurance premium financing of approximately $0.3 million.
Contractual Obligations and Other Commitments
License and Royalty Agreements
We have assembled our pipeline primarily through acquisitions, in-license agreements, and other collaborations. We agreed to make royalty and milestone payments, and in some cases annual license fee payments, under the license and development agreements under which we acquired rights to intellectual property from third parties. For information about these obligations see Note 3 "Strategic Agreements-Strategic Agreements for Pipeline Development" to the accompanying condensed consolidated financial statements. The amount and timing of most of these payments are difficult to predict because the timing of milestone payments for pre-commercial programs generally depends on the progress of and success in development of a particular program, which is subject to many risks and uncertainties as discussed elsewhere in this report and difficult to predict, and the timing and amount of royalty and milestone payments related to commercial products generally depends on their commercial success, which may, as it is with XACIATO, be out of our control.
During the remainder of 2026, based on our current expectations regarding the progress of development of our product candidates and sales of XACIATO and DARE to PLAY, we expect such payments to upstream licensors to be immaterial. With respect to our license agreement relating to XACIATO, royalties payable by us to upstream licensors will be funded by royalty payments made by our licensee, Organon. For further discussion of these potential payments, see Note 3 "Strategic Agreements-Strategic Agreements for Pipeline Development" to the accompanying condensed consolidated financial statements. With respect to DARE to PLAY, for at least the first twelve months following its market introduction, we anticipate a mid single-digit royalty payment obligation to our upstream licensor on annual net sales.
Grant Agreements
For information regarding our grant agreements with the Foundation, see Note 10 "-Grant Awards-Other Non-Dilutive Grant Funding" to the accompanying condensed consolidated financial statements, and Note 2 "Basis of Presentation and Summary of Significant Accounting Policies-Grant Funding" to our consolidated financial statements in our 2025 10-K.
Royalty Purchase Agreements with XOMA
In April 2024, we entered into a traditional royalty purchase agreement and a synthetic royalty purchase agreement with XOMA pursuant to which, among other things, we sold our right, title and interest in the following to XOMA: (a) all of the royalties and potential milestone payments we would otherwise have the right to receive from and after April 1, 2024 under our exclusive license agreement with Organon based on net sales of XACIATO, net of our obligations to upstream licensors and UiE; and (b) a portion of future net sales of Ovaprene, Sildenafil Cream and DARE to PLAY.
For more information regarding our contractual obligations to XOMA, see Note 8 "Royalty Purchase Agreements" to the accompanying condensed consolidated financial statements.
Royalty Interest Financing Agreement
In December 2023, we entered into a royalty interest financing agreement with UiE pursuant to which we sold to UiE an interest in the royalty and milestone payments we are entitled to receive in respect of net sales of XACIATO under our license agreement with Organon. In exchange for any payments to us from UiE under the agreement, we agreed to make payments to UiE out of royalty and milestone payments earned on net sales of XACIATO from Organon, net of our obligations to upstream licensors, until UiE receives a specified return on its investment, or using our other sources of assets or income to complete such payments if UiE has not received the specified return on its investment by the end of 2035. We have the right to make prepayments on or pay in full and retire all of our payment obligations to UiE.
For more information regarding our contractual obligations to UiE, see Note 7 "Royalty Interest Financing" to the accompanying condensed consolidated financial statements.
Leases
We have two operating leases for our laboratory and office spaces that each expire in 2027. As of June 30, 2026, we had future minimum lease payments under these leases of $0.9 million, $0.6 million of which is classified as current and $0.3 million of which is classified as long-term, the remainder of which represents future interest payments. We have one finance lease for our clean room space that expires in December 2026. As of June 30, 2026, we had future minimum lease payments under this lease of $0.2 million, all of which is classified as current. For additional information on our lease obligations, See Note 6 "Leases" to the accompanying condensed consolidated financial statements.
Other Contractual Obligations
We enter into contracts in the normal course of business with various third parties for research studies, clinical trials, testing and other services, and with Section 503B-registered outsourcing facilities, dispensing pharmacies, telehealth providers, and other third parties to help bring our proprietary formulations to market. These contracts generally provide for termination upon notice, and we do not believe that our non-cancelable obligations under these agreements are material.
For descriptions of additional contractual obligations and commitments, see Note 9 "Commitments and Contingencies" to the accompanying condensed consolidated financial statements.
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.
Dare Bioscience Inc. published this content on August 13, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on August 13, 2026 at 20:03 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]