Company: DARE
Filing Date: 2025-05-13
Form Type: 10-Q
Source: 0001401914-25-000022
Chunk: 40

Company: Dare Bioscience, Inc.
Filing Date: 2025-05-13
Form: 10-Q
Item: Part I, Item 1
Chunk 40
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 interest rate of approximately 22.48%. This estimate contains significant assumptions that impact both the amount recorded at execution and the interest expense that will be recognized over the royalty period. The Company will periodically assess the estimated amounts due and payable to UiE and to the extent the amount or timing of such payments is materially different than the original estimates, an adjustment will be recorded prospectively to increase or decrease interest expense. There are a number of factors that could materially affect XACIATO's commercial success, and therefore the amount and timing of the Company's payments to UiE, and correspondingly, the amount of interest expense recorded by the Company, most of which are not within the Company’s control. Such factors include, but are not limited to, the capabilities of Organon and its commitment of sufficient resources to market, distribute and sell the product; timely and adequate commercial supply of the finished product and its components; perceived superiority of its cure rates compared to other available treatments; patient satisfaction and willingness to use it again and refer it to others; price pressure given the high level of generic treatments and changes in health care laws and regulations; adequate coverage, pricing and reimbursement from third-party payors; and approval of new entrants, including alternative, non-antibiotic treatment options. These factors could result in increases or decreases to both royalty revenues and interest expense. 

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Warrants In connection with entering into the Royalty Interest Agreement, the Company issued to UiE a warrant (the “Initial Royalty Warrant”) to purchase up to 422,805 shares of the Company’s common stock (see Note 4). In addition, for every $1,000,000 of Supplemental Investment, the Company will issue to UiE a warrant to purchase 84,561 shares of common stock, for an aggregate of warrants to purchase up to 591,927 shares of common stock (collectively the “Additional Royalty Warrants,” and together with the Initial Royalty Warrant, the “Royalty Interest Agreement Warrants”).The Royalty Interest Agreement Warrants were deemed to be equity classified warrants and recorded as additional paid in capital. The fair value of the Initial Royalty Warrant was determined to be $0.8 million (Note 8) and was recorded as a debt discount against the Initial Investment. The following table shows the activity of the Royalty Obligation since the transaction inception through the period indicated:March 31, 2025Upfront payment from the sale of future royalties$5,000,000