Company: DARE
Filing Date: 2025-04-24
Form Type: ARS
Source: 0001401914-25-000018
Chunk: 277

Company: Dare Bioscience, Inc.
Filing Date: 2025-04-24
Form: ARS
Chunk 277
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22.0 million XOMA receives under the royalty purchase agreements. If the Company earns any such payments, they will be accounted for as variable consideration under ASC 606, Revenue Recognition, and will be recorded as income when such payments are received. See Note 13, Royalty Purchase Agreements, for additional information regarding the terms of the royalty purchase agreements. The Company evaluated the expected cash flows to XOMA from royalties and milestone payments expected to be earned on XACIATO, Ovaprene and Sildenafil Cream over the period that the Company expects it will take for XOMA to receive total payments of $88.0 million under the royalty purchase agreements, and determined to allocate the $22.0 million it received from XOMA in connection with entering into the royalty purchase agreements, net of transaction costs of approximately $1.6 million, to the traditional royalty purchase agreement for XACIATO, and none of it to the synthetic royalty purchase agreement for Ovaprene and Sildenafil Cream. The cash flows to XOMA from royalties and milestone payments expected to be earned on Ovaprene and Sildenafil Cream are expected to be de minimis over the period that the Company expects it will take for XOMA to receive total payments of $88.0 million under the royalty purchase agreements because, unlike XACIATO, Ovaprene and Sildenafil Cream are still in development stage and not commercial assets. The Company determined that the traditional royalty purchase agreement represents a complete sale of a nonfinancial asset (the Company's right, title and interest in and to future payments related to commercial sales of XACIATO) for which XOMA bears all benefit and for which the Company has no obligations or involvement going forward, and therefore should be accounted for within the scope of ASC 610-20, Other Income - Gains and Losses from the Derecognition of Nonfinancial Assets. The $22.0 million net of transaction costs of approximately $1.6 million, was recorded as other income on the Company's consolidated statements of operations and comprehensive loss. Liability Related to the Sale of Future Royalties In December 2023, the Company entered into a royalty interest financing agreement with United in Endeavor, or United, pursuant to which the Company sold to United an interest in royalty and milestone payments the Company receives based on net sales of XACIATO. The Company received $5.0 million from United in connection with entering into the royalty interest financing agreement. The Company evaluated the