Company: DARE
Filing Date: 2025-04-24
Form Type: ARS
Source: 0001401914-25-000018
Chunk: 240

Company: Dare Bioscience, Inc.
Filing Date: 2025-04-24
Form: ARS
Chunk 240
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 the license is deemed to be the predominant item to which the royalties relate, we recognize revenue at the later of (i) when the related sales occur, or (ii) when the performance obligation to which some or all of the royalty has been allocated has been satisfied (or partially satisfied). To date, we have recognized approximately $18,000 of royalty revenue. Product Supply. Arrangements that include a promise for future supply of product for commercial supply at the licensee’s discretion are generally considered as options. We assess if these options provide a material right to the licensee and if so, they are accounted for as separate performance obligations. We evaluate whether we are the principal or agent in the arrangement based on the degree we control the specified product at any time before transfer to the customer. If we are in the capacity of a principal, revenues are recognized on a gross basis. If we are in the capacity of an agent, revenues are recognized on a net basis. To date, we have recognized approximately $205,000 in revenue (and $201,000 in other expense attributed to the cost of revenue) associated with our XACIATO product supply arrangement, which is recorded in other income in our consolidated statements of operations and comprehensive loss. In connection with the transfer of the NDA for XACIATO to Organon in December 2023, that arrangement was terminated and we will not recognize product supply revenue associated with that arrangement in the future. Stock-Based Compensation The compensation cost for all stock-based awards is measured at the grant date, based on the fair value of the award (determined using a Black-Scholes option pricing model), and is recognized as an expense over the requisite service period (generally the vesting period of the award). Determining the fair value of stock-based awards at the grant date requires significant estimates and judgments, including estimating the market price volatility of our common stock, future stock option exercise behavior and requisite service periods. Due to our limited history of stock option exercises, we applied the simplified method prescribed by SEC Staff Accounting Bulletin 110, Share-Based Payment: Certain Assumptions Used in Valuation Methods - Expected Term, to estimate expected life. Stock options or stock awards with performance conditions issued to non-employees who are not directors are measured on the grant date and recognized when the performance is complete. Refer to Note 10 to our consolidated financial statements included in this report for more information. Sale of Future Payments On April 29, 2024, we entered into and closed a traditional royalty purchase agreement and