Dare Bioscience, Inc.

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 2023 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. Except as discussed below, there have been no material changes from the risk factors disclosed in Part I, Item 1A. Risk Factors in our 2023 10-K.

The Revenue Sharing Threshold may never be achieved and, as a result, we may not realize any future income based on sales of XACIATO.

We have sold our right, title and interest in 100% of the royalties and potential milestone payments we would otherwise have the right to receive under our license agreement with Organon based on net sales of XACIATO, net of payments to upstream third-party licensors and UiE. Whether we receive any future income based on net sales of XACIATO will depend on whether the Revenue Sharing Threshold is reached, which may not occur. Whether the Revenue Sharing Threshold is reached will depend, in part, on Organons future commercial success with XACIATO, which is outside of our control, and the successful development and commercialization of Ovaprene and/or Sildenafil Cream, which are subject to significant risks and uncertainties, some of which are outside of our control, as discussed in Part I, Item 1A. Risk Factors of our 2023 10-K.

The grants and other non-dilutive funding awards supporting several of our development programs do not guarantee that the pre-clinical or clinical development work being funded will be successful or that we will be able or will choose to fund the additional development work that will be required in the future to advance the product candidates toward regulatory approval.

The grants supporting pre-clinical development of DARE-LARC1, DARE-LBT, and activities to aid in the identification and development a novel non-hormonal intravaginal contraceptive candidate, and the ARPA-H funding we expect to receive in support of DARE-HPVs development do not guarantee that pre-clinical or, as applicable, clinical development will be successful, or, even if we are successful with all specified development activities, that we will be able or will choose to fund the additional clinical and nonclinical development work that will be required in the future to advance the product candidates toward regulatory approval. Further, the grant agreements or other non-dilutive funding award agreements supporting these development programs generally feature milestone-based payments and there is no assurance that we will be able to achieve or otherwise demonstrate satisfaction of the specified development and reporting milestones required to receive future payments under the agreements. Additionally, the counterparties to these agreements may modify, suspend, discontinue payment of funds or terminate the agreements in certain circumstances largely in their discretion. Accordingly, we may never receive future payments under these agreements or realize the full potential amount of the grant or other funding award.

If we fail to regain and maintain compliance with the continued listing requirements of The Nasdaq Capital Market, our common stock could be suspended and delisted, 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.

Our common stock is listed on The Nasdaq Capital Market. On August 12, 2024, we received written notice from Nasdaq notifying us that we do not meet the requirement in Nasdaq Listing Rule 5550(b)(2) to maintain a minimum MVLS (as definarket Value of Listed in Item 5(a) below) Securities, or MVLS, of $35.0 million that is required for continued listing on The Nasdaq Capital Market. The notice has no effect at this time on the listing of our common stock on The Nasdaq Capital Market.

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We have a period of 180 days, or until February 10, 2025, to regain compliance with the minimum MVLS rule. We will regain compliance if at any time during the 180 day period, our MVLS closes at $35.0 million or more for a minimum of 10 consecutive business days. If we do not regain compliance prior to February 10, 2025, Nasdaq will notify us that our securities are subject to delisting, at which time we may appeal the delisting determination to a Nasdaq hearings panel. There can be no assurance that, if we were to appeal the delisting determination, such an appeal would be successful.

There are many factors that affect the trading price of our common stock, and many of those factors are outside of our control. We intend to actively monitor our MVLS and may, if appropriate, consider implementing available options to regain compliance with the minimum MVLS rule. There can be no assurance that we will be able to regain compliance with such rule or that we will be able to satisfy all other continued listing requirements of The Nasdaq Capital Market and maintain the listing of our common stock on The Nasdaq Capital Market even if we regain compliance with the minimum MVLS rule. For example, until we regained compliance on July 18, 2024, we were not in compliance with the continued listing standard commonly referred to as the minimum bid price rule since July 19, 2023.

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The suspension or delisting of our common stock, for whatever reason, could, among other things, substantially impair our ability to raise additional capital; result in the loss of interest from institutional investors, the loss of confidence in our company by investors and employees, and in fewer financing, strategic and business development opportunities; and result in potential breaches of agreements under which we made representations or covenants relating to our compliance with applicable listing requirements. Claims related to any such breaches, with or without merit, could result in costly litigation, significant liabilities and diversion of our managements time and attention and could have a material adverse effect on our financial condition, business and results of operations. In addition, the suspension or delisting of our common stock, for whatever reason, may materially impair our stockholders ability to buy and sell shares of our common stock and could have an adverse effect on the market price of, and the efficiency of the trading market for, our common stock.

The sale of our common stock in ATM offerings or under our equity line arrangement may cause substantial dilution to our existing stockholders, and such sales, or the anticipation of such sales, may cause the price of our common stock to decline.

We have used at-the-market, or ATM, offerings to fund a significant portion of our operations in prior years, and we may continue to use ATM offerings to raise additional capital in the future. For example, in 2021, we sold an aggregate of approximately 3.0 million shares of our common stock in ATM offerings. We sold substantially fewer shares in ATM offerings in 2022 and 2023 and to-date in 2024, however, we may sell significant amounts of shares in ATM offerings again in the future. In addition, we may sell up to $15.0 million in shares of our common stock under our equity line arrangement. The purchase price for the shares we may sell under our equity line arrangement will vary based the market price of our common stock at the time we initiate a sale. While sales of shares of our common stock in ATM offerings and under our equity line arrangement may enable us to raise capital at a lower cost compared with other types of equity financing transactions; such sales may result in substantial dilution to our existing stockholders, and such sales, or the anticipation of such sales, may cause the trading price of our common stock to decline.