10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2024

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from______ to ______

Commission File Number: 001-36754

EVOFEM BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

Delaware	20-8527075
(State or other jurisdiction of incorporation)	(IRS Employer Identification No.)

7770 Regents Road, Suite 113-618 San Diego, CA 92122	92122
(Address of Principal Executive Offices)	(Zip Code)

Registrant’s telephone number, including area code: (858) 550-1900

N/A

(Former name or former address, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	EVFM	OTCQB

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer”, “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐	Accelerated filer ☐
Non-accelerated filer ☒	Smaller reporting company ☒
	Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

The number of shares of the registrant’s common stock, $0.0001 par value per share, outstanding as of November 8, 2024 was 100,328,686.

Table of Contents

		Page
	FORWARD-LOOKING STATEMENTS	1
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Comprehensive Income (Loss)	5
	Condensed Consolidated Statements of Convertible and Redeemable Preferred Stock and Stockholders’ Deficit	6
	Condensed Consolidated Statements of Cash Flows	7
	Notes to Unaudited Condensed Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	33
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	46
Item 4.	Controls and Procedures	46
PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	48
Item 1A.	Risk Factors	48
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	52
Item 3.	Defaults Upon Senior Securities	52
Item 4.	Mine Safety Disclosures	52
Item 5.	Other Information	52
Item 6.	Exhibits	53
Signatures		54

FORWARD-LOOKING STATEMENTS

This quarterly report on Form 10-Q (Quarterly Report), contains forward-looking statements that involve substantial risks and uncertainties. The forward-looking statements are contained principally in the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” All statements, other than statements of historical facts, contained in this Quarterly Report, including statements regarding our strategy, future operations, future financial position, projected costs, prospects, plans and objectives of management, are forward-looking statements. Words such as, but not limited to, “anticipate,” “aim,” “believe,” “contemplate,” “continue,” “could,” “design,” “estimate,” “expect,” “intend,” “may,” “might,” “plan,” “possible,” “potential,” “predict,” “project,” “seek,” “should,” “suggest,” “strategy,” “target,” “will,” “would,” and similar expressions or phrases, or the negative of those expressions or phrases, are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words.

These forward-looking statements include, among other things, statements about:

● our ability to maintain compliance with listing standards of the OTCQB® Venture Market to maintain the listing of our shares thereon;

● our ability to continue as a going concern;

● the Notice of Default and cancellation of Forbearance Agreement received by FuturePak, LLC and any potential legal action(s) against the Company and its assets that could be taken;

● the requirement to change the name of Phexxi

● the consummation of the transactions contemplated by the Amended and Restated Merger Agreement, as amended, and documents related thereto;

● the Support Agreements related to the transactions contemplated under the Amended and Restated Merger Agreements as amended;

● our ability to successfully integrate and commercialize SOLOSEC® (secnidazole) 2g oral granules (SOLOSEC);

● our ability to remediate the material weaknesses in our internal controls and procedures identified by management;

● our ability to obtain necessary approvals of any corporate action(s) needing stockholder, FINRA, or other approvals;

● our ability to file Annual and Quarterly Reports on a timely basis;

● our ability to raise additional capital to fund our operations if and as needed;

● our ability to achieve and sustain profitability;

● our estimates regarding our future performance including, without limitation, any estimates of potential future revenues;

● estimates regarding market size;

● our estimates regarding expenses, revenues, financial performance and capital requirements, including the length of time our capital resources will sustain our operations;

● our ability to comply with the provisions and requirements of our debt arrangements, to avoid future defaults pursuant to our debt arrangements and to pay amounts owed, including any amounts that may be accelerated, pursuant to our debt arrangements;

● estimates regarding health care providers’ (HCPs) recommendations of Phexxi® (lactic acid, citric acid, and potassium bitartrate) vaginal gel (Phexxi) to patients;

● estimates regarding HCPs recommendations of SOLOSEC to patients suffering from the sexually transmitted infections (STIs) for which it is indicated;

● the rate and degree of market acceptance of our products;

● our ability to successfully commercialize and distribute our products and continue to develop our sales and marketing capabilities, particularly after any product rebrand;

● our estimates regarding the timing and cost of a product rebrand;

● our estimates regarding the effectiveness of our marketing campaigns;

● our strategic plans for our business, including the commercialization of our products;

● the potential for changes to current regulatory mandates requiring health insurance plans to cover U.S. Food and Drug Administration (FDA)-cleared or -approved contraceptive products or STI treatments without cost sharing;

● our ability to obtain or maintain third-party payer coverage and adequate reimbursement, and our reliance on the willingness of patients to pay out-of-pocket for our products absent full or partial third-party payer reimbursement;

● our ability to protect and defend our intellectual property position and our reliance on third party licensors;

● our ability to obtain additional patent protection for our products;

● our dependence on third parties for the manufacture of our products;

● our ability to expand our organization to accommodate potential growth; and

● our ability to retain and attract key personnel.

1

Although we believe that we have a reasonable basis for each forward-looking statement contained in this Quarterly Report, we caution you that these statements are based on our projections of the future that are subject to known and unknown risks and uncertainties and other factors that may cause our actual results, level of activity, performance or achievements expressed or implied by these forward-looking statements, to differ. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements, and you should not place undue reliance on our forward-looking statements. All forward-looking statements are qualified in their entirety by this cautionary statement. Forward-looking statements should be regarded solely as our current plans, estimates and beliefs. You should read this Quarterly Report and the documents that we have filed as exhibits to this Quarterly Report and incorporated by reference herein completely and with the understanding that our actual results may be materially different from the plans, intentions and expectations disclosed in the forward-looking statements we make. Moreover, we operate in a very competitive and rapidly changing environment and new risks emerge from time to time. It is not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements we may make. The forward-looking statements contained in this Quarterly Report are made as of the date of this Quarterly Report, and we do not assume any obligation to update any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law.

This Quarterly Report contains estimates and other statistical data made by independent parties and by the Company relating to market size and growth and other data about its industry. This data involves a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.

Our first commercial product, Phexxi, was approved by the FDA on May 22, 2020, for the prevention of pregnancy. Phexxi is the first and only non-hormonal prescription contraceptive gel. Women use it when they have sex, applying Phexxi 0-60 minutes prior to intercourse. Because Phexxi is hormone-free and non-systemic, it is not associated with side effects of hormonal contraceptive methods such as depression, weight gain, headaches, loss of libido, mood swings and irritability. Taking hormones may not be right for some women, especially those with certain medical conditions, including clotting disorders, hormone-sensitive cancers, diabetes or a BMI over 30, as well as women who are breast feeding, and / or smoke. More than 23.3 million women in the U.S. do not want to get pregnant and will not use a hormonal contraceptive.

We have delivered Phexxi net sales growth in each consecutive year since it was launched in September 2020. Key growth drivers for 2024 include expanded use of Phexxi in women who take oral birth control pills in conjunction with GLP-1 prescription medications like Ozempic, Mounjaro, and Zepbound for weight loss. These drugs may make oral birth control pills less effective at certain points in the dosing schedule. Per the USPI, prescribers are counselled to “advise patients using oral contraceptives to switch to a non-oral contraceptive method or add a barrier method” to prevent unintended pregnancy during these times.

Outside the U.S., the Company’s strategy is to commercialize Phexxi in global markets through commercial partnerships and/or license agreements. Phexxi was approved in Nigeria on October 6, 2022, as Femidence™ by the National Agency for Food and Drug Administration and Control. Phexxi has been submitted for approval in Mexico, Ethiopia and Ghana. In July 2024, we licensed commercial rights to Phexxi in the Middle East to Pharma 1 Drug Store, LLC, an emerging Emirati health care company (Pharma 1). Pharma 1 intends to file for regulatory approval of Phexxi in the United Arab Emirates (UAE) in the fourth quarter of 2024.

In July 2024 we acquired global rights to SOLOSEC. This FDA-approved single-dose oral antimicrobial agent provides a complete course of therapy for the treatment of two common sexual health infections – bacterial vaginosis (BV) and trichomoniasis (Trich). The SOLOSEC acquisition aligns with and advances our mission to improve access to innovative and differentiated options that impact women’s daily lives. We expect commercialization of SOLOSEC will benefit from our commercial infrastructure and strong physician relationships.

Unless the context requires otherwise, references in this Quarterly Report to “Evofem,” “Company,” “we,” “us” and “our” refer to Evofem Biosciences, Inc. and its subsidiaries.

This Quarterly Report includes our trademarks, trade names and service marks, including “Phexxi®”, “Femidence™” and “SOLOSEC®”, which are protected under applicable intellectual property laws and are the property of Evofem Biosciences, Inc. or its subsidiaries. Solely for convenience, trademarks, trade names and service marks referred to in this Quarterly Report may appear without the ®, ™ or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties.

2

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands, except par value and share data)

	As of
	September 30, 2024			December 31, 2023
Assets
Current assets:
Cash and cash equivalents	$	-		$	-
Restricted cash		722			580
Trade accounts receivable, net		5,393			5,738
Inventories		1,463			1,697
Prepaid and other current assets		999			1,195
Total current assets		8,577			9,210
Property and equipment, net		1,181			1,203
Operating lease right-of-use assets		127			106
Intangible asset, net (Note 7)		14,021			-
Other noncurrent assets		36			35
Total assets	$	23,942		$	10,554
Liabilities, convertible and redeemable preferred stock and stockholders’ deficit
Current liabilities:
Accounts payable	$	16,864		$	17,020
Notes - carried at fair value (Note 4)		14,183			14,731
Convertible notes - Adjuvant (Note 4)		30,202			28,537
Short term debt		268			-
Accrued expenses		5,124			4,227
Accrued compensation		3,222			2,609
Operating lease liabilities - current		116			97
Derivative liabilities		162			1,926
Contingent liabilities – current (Note 7)		808			-
Other current liabilities		4,652			3,316
Other current liabilities - related party		685			-
Total current liabilities		76,286			72,463
Operating lease liabilities- noncurrent		10			8
Contingent liabilities – noncurrent (Note 7)		13,775			-
Total liabilities		90,071			72,471
Commitments and contingencies (Note 7)		-			-
Convertible and redeemable preferred stock, $0.0001 par value, senior to common stock
Series E-1 and F-1 convertible preferred stock, 2,300 and 95,000 shares authorized; 2,017 and 1,874 shares of E-1 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively; 23,540 and 22,280 shares of F-1 issued and outstanding at September 30, 2024 and December 31, 2023, respectively		4,759			4,593
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2024 and December 31, 2023		-			-
Common Stock, $0.0001 par value; 3,000,000,000 shares authorized; 100,328,686 and 20,007,799 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively		10			2
Additional paid-in capital		825,430			823,036
Accumulated other comprehensive loss		(1,707	)		(849	)
Accumulated deficit		(894,621	)		(888,699	)
Total stockholders’ deficit		(70,888	)		(66,510	)
Total liabilities, convertible and redeemable preferred stock and stockholders’ deficit	$	23,942		$	10,554

See accompanying notes to the condensed consolidated financial statements (unaudited).

3

EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except share and per share data)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Product sales, net	$	4,496		$	5,112		$	12,259		$	13,379
Operating Expenses:
Cost of goods sold		869			1,889			2,322			5,558
Amortization of intangible asset		301			-			301			-
Research and development		332			614			1,196			1,556
Selling and marketing		2,382			2,985			6,970			9,036
General and administrative		3,052			3,176			8,143			11,696
Total operating expenses		6,936			8,664			18,932			27,846
Loss from operations		(2,440	)		(3,552	)		(6,673	)		(14,467	)
Other income (expense):
Interest income		3			2			13			28
Other expense, net		(562	)		(596	)		(1,736	)		(2,041	)
Loss on issuance of financial instruments		-			(5,175	)		(3,300	)		(5,286	)
Gain (loss) on debt extinguishment, net		(143	)		75,337			977			75,337
Change in fair value of financial instruments		769			-			4,896			1,539
Total other income, net		67			69,568			850			69,577
Income (loss) before income tax		(2,373	)		66,016			(5,823	)		55,110
Income tax benefit (expense)		8			(11	)		-			(17	)
Net income (loss)		(2,365	)		66,005			(5,823	)		55,093
Convertible preferred stock deemed dividends		(5	)		-			(99	)		-
Net income (loss) attributable to common stockholders	$	(2,370	)	$	66,005		$	(5,922	)	$	55,093
Net income (loss) per share attributable to common stockholders:
Basic (Note 2)	$	(0.02	)	$	15.34		$	(0.09	)	$	21.42
Diluted (Note 2)	$	(0.02	)	$	0.10		$	(0.09	)	$	0.09
Weighted-average shares used to compute net income (loss) per share attributable to common shareholders:
Basic		96,459,121			4,236,477			64,924,454			2,524,302
Diluted		96,459,121			729,979,486			64,924,454			694,561,898

See accompanying notes to condensed consolidated financial statements (unaudited).

4

EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Unaudited)

(In thousands)

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Net income (loss)	$	(2,365	)	$	66,005		$	(5,823	)	$	55,093
Other comprehensive income (loss):
Change in fair value of financial instruments attributed to credit risk change (Note 4)		(1,069	)		(455	)		(1,001	)		23,373
Reclassification adjustment related to debt extinguishment		143			(73,187	)		143			(73,187	)
Comprehensive income (loss)	$	(3,291	)	$	(7,637	)	$	(6,681	)	$	5,279

See accompanying notes to condensed consolidated financial statements (unaudited).

5

EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CONVERTIBLE AND REDEEMABLE PREFERRED STOCK AND STOCKHOLDERS’ DEFICIT

(Unaudited)

(In thousands, except share data)

	Series E-1 Convertible and Redeemable Preferred Stock				Series F-1 Convertible and Redeemable Preferred Stock				Common Stock				Additional Paid-in		Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Shares		Amount		Capital		Income (Loss)			Deficit			Deficit
Balance as of January 1, 2024		1,874	$	1,874		22,280	$	2,719		20,007,799	$	2	$	823,036	$	(849	)	$	(888,699	)	$	(66,510	)
Issuance of common stock upon exercise of warrants		-		-		-		-		246,153		-		15		-			-			15
Issuance of common stock upon noncash exercise of purchase rights		-		-		-		-		17,725,000		2		87		-			-			89
Issuance of common stock upon conversion of notes		-		-		-		-		10,731,443		1		34		-			-			35
Stock-based compensation		-		-		-		-		-		-		237		-			-			237
Change in fair value of financial instruments attributed to credit risk change (Note 4)		-		-		-		-		-		-		-		324			-			324
Series E-1 Shares dividends		47		47		-		-		-		-		-		-			(47	)		(47	)
Net loss		-		-		-		-		-		-		-		-			(4,809	)		(4,809	)
Balance as of March 31, 2024		1,921	$	1,921		22,280	$	2,719		48,710,395	$	5	$	823,409	$	(525	)	$	(893,555	)	$	(70,666	)
Issuance of common stock upon noncash exercise of purchase rights		-		-		-		-		24,350,000		2		66		-			-			68
Issuance of common stock upon conversion of notes		-		-		-		-		9,768,291		1		15		-			-			16
Stock-based compensation		-		-		-		-		-		-		219		-			-			219
Change in fair value of financial instruments attributed to credit risk change (Note 4)		-		-		-		-		-		-		-		(256	)		-			(256	)
Series E-1 Shares dividends		47		47		-		-		-		-		-		-			(47	)		(47	)
Net loss		-		-		-		-		-		-		-		-			1,351			1,351
Balance as of June 30, 2024		1,968	$	1,968		22,280	$	2,719		82,828,686	$	8	$	823,709	$	(781	)	$	(892,251	)	$	(69,315	)
Issuance of common stock upon noncash exercise of purchase rights		-		-		-		-		17,500,000		2		9		-			-			11
Stock-based compensation		-		-		-		-		-		-		203		-			-			203
Extinguishment of Baker Notes (Note 4)		-		-		-		-		-		-		-		143			-			143
Change in fair value of financial instruments attributed to credit risk change (Note 4)		-		-		-		-		-		-		-		(1,069	)		-			(1,069	)
Series E-1 Shares dividends		49		5		-		-		-		-		-		-			(5	)		(5	)
Issuance of Series F-1 Shares to Aditxt (Related Party)		-		-		1,260		67		-		-		1,193		-			-			1,193
Allocation of reinstatement proceeds (Related Party)		-		-		-		-		-		-		316		-			-			316
Net loss		-		-		-		-		-		-		-		-			(2,365	)		(2,365	)
Balance as of September 30, 2024		2,017	$	1,973		23,540	$	2,786		100,328,686	$	10	$	825,430	$	(1,707	)	$	(894,621	)	$	(70,888	)

	Series E-1 Convertible and Redeemable Preferred Stock				Common Stock				Additional Paid-in			Accumulated Other Comprehensive			Accumulated			Total Stockholders’
	Shares		Amount		Shares		Amount		Capital			Income			Deficit			Deficit
Balance as of January 1, 2023		-	$	-		984,786	$	-	$	817,367		$	49,527		$	(938,694	)	$	(71,800	)
Issuance of common stock upon cash exercise of warrants		-		-		24,200		-		67			-			-			67
Issuance of common stock upon noncash exercise of Purchase Rights (Note 4)		-		-		718,704		-		180			-			-			180
Issuance of SSNs (Note 4)		-		-		-		-		1,629			-			-			1,629
Change in fair value of financial instruments attributed to credit risk change (Note 4)		-		-		-		-		-			15,460			-			15,460
Stock-based compensation		-		-		-		-		417			-			-			417
Net loss		-		-		-		-		-			-			(2,354	)		(2,354	)
Balance as of March 31, 2023		-	$	-		1,727,690	$	-	$	819,660		$	64,987		$	(941,048	)	$	(56,401	)
Issuance of common stock upon cash exercise of warrants						122,729		-		101			-			-			101
Issuance of common stock upon noncash exercise of Purchase Rights (Note 4)						673,820		-		6			-			-			6
Noncash reclassification of liability-classified derivatives to equity						-		-		53			-			-			53
Issuance of SSNs (Note 4)						-		-		499			-			-			499
Stock-based compensation						-		-		268			-			-			268
Change in fair value of financial instruments attributed to credit risk change (Note 4)						-		-		-			8,368			-			8,368
Net loss						-		-		-			-			(8,558	)		(8,558	)
Balance as of June 30, 2023		-	$	-		2,524,239	$	-	$	820,587		$	73,355		$	(949,606	)	$	(55,664	)
Issuance of common stock upon cash exercise of warrants		-		-		1		-		14			-			-			14
Issuance of common stock upon noncash exercise of Purchase Rights (Note 4)		-		-		2,767,332		-		-			-			-			-
Issuance of common stock upon conversion of note		-		-		388,638		-		-			-			-			-
Issuance of series E-1 convertible and redeemable preferred stock upon exchange of notes (Note 8)		1,800		1,800		-		-		(1,797	)		(3	)		-			(1,800	)
Issuance of SSNs (Note 4)		-		-		-		-		3,563			-			-			3,563
Issuance of additional purchase rights due to price reset (Note 4)		-		-		-		-		4,904			-			-			4,904
Down round feature adjustment to financial instruments (Note 6)		-		-		-		-		1,023			-			(1,023	)		-
Stock-based compensation		-		-		-		-		258			-			-			258
Extinguishment of Baker Notes (Note 4)		-		-		-		-		-			(73,187	)		-			(73,187	)
Change in fair value of financial instruments attributed to credit risk change (Note 4)		-		-		-		-		-			(452	)		-			(452	)
Net income		-		-		-		-		-			-			66,005			66,005
Balance as of September 30, 2023		1,800	$	1,800		5,680,210	$	-	$	828,552		$	(287	)	$	(884,624	)	$	(56,359	)

See accompanying notes to condensed consolidated financial statements (unaudited).

6

EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands)

	Nine months ended September 30,
	2024			2023
Cash flows from operating activities:
Net income (loss)	$	(5,823	)	$	55,093
Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash used in operating activities:
Loss on issuance of financial instruments		3,300			5,286
Gain on debt extinguishment		(977	)		(75,337	)
Change in fair value of financial instruments		(4,896	)		(1,539	)
Inventory write-down for excess & obsolescence		-			1,505
Loss on contingent liability		840			-
Stock-based compensation		659			943
Depreciation		25			455
Amortization of intangible asset		301			-
Noncash interest expense		1,673			1,702
Noncash right-of-use asset amortization		69			1,259
Net gain on lease termination		-			(466	)
Net loss on disposal of property and equipment		11			1,858
Changes in operating assets and liabilities:
Trade accounts receivable		345			(5,196	)
Inventories		234			1,348
Prepaid and other assets		195			3,231
Accounts payable		(211	)		1,215
Accrued expenses and other liabilities		2,234			1,632
Accrued compensation		613			(355	)
Operating lease liabilities		(69	)		(1,432	)
Net cash and restricted cash used in operating activities		(1,477	)		(8,798	)
Cash flows from investing activities:
Payments related to asset acquisition		(509	)		-
Purchases of property and equipment		(14	)		(4	)
Net cash and restricted cash used in investing activities		(523	)		(4	)
Cash flows from financing activities:
Proceeds from issuance of common stock - exercise of warrants		-			174
Borrowings under term notes		397			5,262
Proceeds from issuance of preferred stock - Related Party		1,260			-
Proceeds from reinstatement of Merger Agreement - Related Party		1,000			-
Payments under term notes		(515	)		(1,000	)
Net cash and restricted cash provided by financing activities		2,142			4,436
Net change in cash, cash equivalents and restricted cash		142			(4,366	)
Cash, cash equivalents and restricted cash, beginning of period		580			4,776
Cash, cash equivalents and restricted cash, end of period	$	722		$	410
Supplemental disclosure of noncash investing and financing activities:
Exchange of convertible notes to Series E-1 convertible preferred stock		-			1,800
Borrowings under term notes included in prepaid and other current assets		-			375
Net change in contingent consideration liabilities		13,743			-
Allocation of reinstatement proceeds - Related Party		316			-
Issuance of common stock upon exercise of purchase rights		168			186
Series E-1 shares deemed dividends		99			-
Right-of-use assets obtained for lease liabilities (fleet lease renewals)		90			-
Acquisition related amounts included in accounts payable and accrued expenses		70			-
Issuance of common stock upon conversion of notes		51			-
Issuance of common stock upon exercise of warrants		15			-
Purchases of property and equipment included in accounts payable and accrued expenses		78			-

See accompanying notes to condensed consolidated financial statements (unaudited).

7

EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1. Description of Business and Basis of Presentation

Description of Business

Evofem is a San Diego-based biopharmaceutical company focused on commercializing innovative products to address unmet needs in women’s sexual and reproductive health.

The Company’s first commercial product, Phexxi® (lactic acid, citric acid, and potassium bitartrate) vaginal gel (Phexxi), was approved by the U.S. Food and Drug Administration (FDA) on May 22, 2020. It is the first and only FDA-approved, hormone-free, woman-controlled, on-demand prescription contraceptive gel. The Company commercially launched Phexxi in September 2020 and has grown net sales in each successive year. Phexxi net product sales were $16.8 million in 2022 and increased to $18.2 million in 2023.

On December 11, 2023, the Company entered into an Agreement and Plan of Merger, as amended, (the Merger Agreement) with Aditxt, Inc., a Delaware corporation (Aditxt) and Adifem, Inc. (f/k/a Adicure, Inc.), a Delaware corporation and a wholly-owned Subsidiary of Aditxt (Merger Sub), respectively, (collectively, the Parties), pursuant to which, and on the terms and subject to the conditions thereof, the Merger Sub is expected to merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Aditxt (the Merger). The Parties entered into an amended and restated Merger Agreement (the A&R Merger Agreement) in July 2024 and subsequently amended the A&R Merger Agreement in August, September, and October 2024. The parties are working towards a closing in 2025.

On July 14, 2024, the Company acquired global rights to SOLOSEC® (secnidazole) 2g oral granules. This FDA-approved single-dose oral antimicrobial agent provides a complete course of therapy for the treatment of two common sexual health infections – bacterial vaginosis (BV) and trichomoniasis. This acquisition aligns with and advances the Company’s mission to commercialize innovative and differentiated products for women’s sexual and reproductive health. The Transferred Assets, as defined in the SOLOSEC Asset Purchase Agreement, included all registered intellectual property related to SOLOSEC (SOLOSEC IP) as well as assorted SOLOSEC related documentation and contracts. The Company accounted for this acquisition as an asset acquisition, pursuant to which the Company recorded contingent liabilities for the fair value of future sales-based payments and an intangible asset for the fair value of the SOLOSEC IP plus certain transaction costs; see Note 6 – Fair Value of Financial Instruments and Note 7 – Commitments and Contingencies for more detailed information about the asset acquisition accounting and fair value methodology.

Basis of Presentation and Principles of Consolidation

The Company prepared the unaudited interim condensed consolidated financial statements included in this Quarterly Report in accordance with accounting principles generally accepted (GAAP) in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC) related to quarterly reports on Form 10-Q.

The Company’s financial statements are presented on a consolidated basis, which include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim condensed consolidated financial statements do not include all information and disclosures required by GAAP for annual audited financial statements and should be read in conjunction with the Company’s condensed consolidated financial statements and notes thereto for the year ended December 31, 2023 included in its Annual Report on Form 10-K as filed with the SEC on March 27, 2024 (the 2023 Audited Financial Statements).

The unaudited interim condensed consolidated financial statements included in this report have been prepared on the same basis as the Company’s audited consolidated financial statements and include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations, cash flows, and statements of convertible and redeemable preferred stock and stockholders’ deficit for the periods presented. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the full year. The condensed consolidated balance sheet as of December 31, 2023 was derived from the 2023 Audited Financial Statements.

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Risks, Uncertainties and Going Concern

Any disruptions in the commercialization of Phexxi or SOLOSEC and/or their supply chains could have a material adverse effect on the Company’s business, results of operations and financial condition.

The condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities, in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company’s principal operations are related to the commercialization of Phexxi and SOLOSEC, following its acquisition in July 2024. Additional activities have included raising capital, identifying alternative manufacturing to lower Phexxi cost of goods sold (COGS), seeking ex-U.S. licensing partners to add non-dilutive capital to the balance sheet, seeking product in-licensing/acquisition opportunities to expand and diversify the U.S. revenue stream, and establishing and maintaining a corporate infrastructure to support a commercial product. The Company has incurred operating losses and negative cash flows from operating activities since inception. As of September 30, 2024, the Company had a working capital deficit of $67.7 million and an accumulated deficit of $894.6 million.

Since October 3, 2022, the Company’s common stock has traded on the OTC Venture Market (the OTCQB) of the OTC Markets Group, Inc. (the OTC), a centralized electronic quotation service for over-the-counter securities, under the symbol “EVFM.” The OTCQB imposes, among other requirements, a minimum $0.01 per share bid price requirement (the Bid Price Requirement) for continued inclusion on the OTCQB. The closing bid price for the Company’s common stock must remain at or above $0.01 per share to comply with the Bid Price Requirement for continued listing. The Company received a written notice (the OTC Notice), dated August 28, 2024, from the OTC notifying the Company that, because the closing bid price for the Company’s common stock was below $0.01 per share for 30 consecutive trading days, the Company was not in compliance with the minimum closing bid price requirement for continued listing on OTCQB as set forth in the OTCQB listing standards, section 2.3 (the Minimum Bid Price Requirement). The OTC Notice had no immediate effect on the listing of the Company’s common stock on OTCQB. In accordance with OTCQB Listing Standards, Section 4.1 the Company had a compliance period of 90 days, or until November 26, 2024, to regain compliance with the Minimum Bid Price Requirement. On November 8, 2024, the OTC notified the Company that the Company’s closing bid price was equal to or greater than $0.01 for the preceding ten consecutive days and therefore the Company had regained compliance with the OTCQB listing standards and the matter is rectified as of November 7, 2024. As of November 8, 2024, the closing bid price was $0.0116.

Management’s plans to meet its cash flow needs in the next 12 months include generating recurring product revenue from Phexxi and SOLOSEC, restructuring its current payables, and obtaining additional funding through means such as the issuance of preferred stock to Aditxt as was done under the A&R Merger Agreement, as amended, non-dilutive financings, or through collaborations or partnerships with other companies, including license agreements for Phexxi and/or SOLOSEC in the U.S. or foreign markets, or other potential business combinations.

The Company anticipates it will continue to incur net losses for the foreseeable future. According to management estimates, liquidity resources as of September 30, 2024 were not sufficient to maintain the Company’s cash flow needs for the twelve months from the date of issuance of these condensed consolidated financial statements.

If the Company is not able to obtain the required funding through a significant increase in revenue, equity or debt financings, license agreements for Phexxi and/or SOLOSEC, or other means, or is unable to obtain funding on terms favorable to the Company, or if there is another event of default affecting the notes payable, or if the Company is enjoined from using the Phexxi mark, there will be a material adverse effect on commercialization operations and the Company’s ability to execute its strategic development plan for future growth. If the Company cannot successfully raise additional funding and implement its strategic development plan, the Company may be forced to make further reductions in spending, including spending in connection with its commercialization activities, extend payment terms with suppliers, liquidate assets where possible at a potentially lower amount than as recorded in the condensed consolidated financial statements, suspend or curtail planned operations, or cease operations entirely. Any of these could materially and adversely affect the Company’s liquidity, financial condition and business prospects, and the Company would not be able to continue as a going concern. The Company has concluded that these circumstances and the uncertainties associated with the Company’s ability to obtain additional equity or debt financing on terms that are favorable to the Company, or at all, and otherwise succeed in its future operations raise substantial doubt about the Company’s ability to continue as a going concern.

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2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the notes thereto.

Significant estimates affecting amounts reported or disclosed in the condensed consolidated financial statements include, but are not limited to: the assumptions used in measuring the revenue gross-to-net variable consideration items; the trade accounts receivable credit loss reserve estimate; the assumptions used in estimating the fair value of convertible notes, preferred stock, warrants, purchase rights issued, asset acquisition intangible asset, and contingent liabilities; the assumptions used in the valuation of inventory; the useful lives of property and equipment; the recoverability of long-lived assets; and the valuation of deferred tax assets. These assumptions are more fully described in Note 3 – Revenue, Note 4 – Debt, Note 6 - Fair Value of Financial Instruments, Note 7 - Commitments and Contingencies, and Note 9 - Stock-based Compensation. The Company bases its estimates on historical experience and market-specific or other relevant assumptions that it believes to be reasonable under the circumstances and adjusts when facts and circumstances dictate. The estimates are the basis for making judgments about the carrying values of assets, liabilities and recorded expenses that are not readily apparent from other sources. As future events and their effects cannot be determined with precision, actual results may materially differ from those estimates or assumptions.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer of the Company, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. Deposits in the Company’s checking, time deposit and investment accounts are maintained in federally insured financial institutions and are subject to federally insured limits or limits set by Securities Investor Protection Corporation. The Company invests in funds through a major U.S. bank and is exposed to credit risk in the event of default to the extent of amounts recorded on the condensed consolidated balance sheets.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant concentrations of credit risk on its cash, cash equivalents and restricted cash balances on amounts in excess of federally insured limits due to the financial position of the depository institutions in which these deposits are held.

The Company is also subject to credit risk related to its trade accounts receivable from product sales. Its customers are located in the U.S. and consist of wholesale distributors, retail pharmacies, and mail-order specialty pharmacies. The Company extends credit to its customers in the normal course of business after evaluating their overall financial condition and evaluates the collectability of its accounts receivable by periodically reviewing the age of the receivables, the financial condition of its customers, and its past collection experience. Historically, the Company has not experienced any credit losses. As of September 30, 2024, based on the evaluation of these factors the Company did not record a reserve for expected credit loss.

Products are distributed primarily through three major distributors and mail-order pharmacies, who receive service fees calculated as a percentage of the gross sales, and a fee-per-unit shipped, respectively. These entities are not obligated to purchase any set number of units and distribute products on demand as orders are received.

For the three and nine months ended September 30, 2024, the Company’s three largest customers combined made up approximately 80% and 79% of its gross product sales, respectively. For the three and nine months ended September 30, 2023, the Company’s three largest customers combined made up approximately 86% and 85% of its gross product sales, respectively. As of September 30, 2024 and December 31, 2023, the Company’s three largest customers combined made up 90% and 87%, respectively, of its trade accounts receivable balance.

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Significant Accounting Policies

There have been no changes to the significant accounting policies that were described in Note 2 – Summary of Significant Accounting Policies of the 2023 Audited Financial Statements in the Company’s Annual Report, other than the addition of policies on intangibles and contingent liabilities due to the SOLOSEC asset acquisition; see below.

Intangible Assets

Finite lived intangible assets, including the SOLOSEC IP acquired as part of the SOLOSEC asset acquisition as described further in Note 6 – Fair Value of Financial Instruments and Note 7 – Commitments and Contingencies, are amortized on a straight-line basis over their estimated useful lives. Intangible assets are typically only recognized when an asset is acquired as part of a business combination or asset acquisition and the initial value is based on the fair value of the asset as determined by a third-party valuation. In the case of intangible assets acquired through an asset acquisition, the initial value includes the fair value of the intangible plus any direct acquisition related expenses. For intangible assets acquired in an asset acquisition with contingent liabilities as part of the consideration, the Company will adjust the carrying value of the intangible assets as part of the quarterly adjustment to bring the contingent consideration to fair value. Additionally, the Company reviews the carrying amount of its amortizing intangible assets for possible impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. When testing for impairment, the Company compares the undiscounted cash flows of the asset or asset group to its carrying value. If the estimated undiscounted cash flows exceed the carrying value, no impairment is recorded. If the undiscounted cash flows do not exceed the carrying value, an impairment is recorded to bring the carrying value of the asset down to its fair value.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of readily available cash in checking accounts and money market funds. Restricted cash consists of cash held in monthly time deposit accounts and letters of credit as described in Note 7- Commitments and Contingencies. During the nine months ended September 30, 2023, the letters of credit of $0.3 million for the Company’s fleet leases were released. Upon receipt of a notice of default from its landlord on March 20, 2023, for failing to pay March 2023 rent timely resulting in a breach under the office lease agreement, the Company’s letter of credit in the amount of $0.8 million in restricted cash was recovered by the landlord.

Additionally, the remaining funds of the $25.0 million received from the issuance of Adjuvant Notes (as defined below) in the fourth quarter of 2020 are classified as restricted cash since the Company is contractually obligated to use these funds for specific purposes.

For the nine months ended September 30, 2024 and 2023, the Company’s cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows include restricted cash only.

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. The net income (loss) available to common stockholders is adjusted for amounts in accumulated deficit related to the deemed dividends triggered for certain financial instruments. Such adjustment was immaterial and $0.1 million in the three and nine months ended September 30, 2024, respectively and zero in each of the three and nine months ended September 30, 2023. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for the three and nine months ended September 30, 2024. Potentially dilutive securities excluded from the calculation of diluted net loss per share are summarized in the table below. Common shares were calculated for the convertible preferred stock and the convertible debt using the if-converted method.

	Three and Nine months ended September 30,
	2024
Options to purchase common stock		3,747
Warrants to purchase common stock		20,807,539
Purchase rights to purchase common stock		1,529,448,899
Convertible debt		2,577,050,313
Series E-1 and F-1 preferred stock		1,659,594,703
Total (1)		5,786,905,201

(1) The potentially dilutive securities in the table above include all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit includes the shares that must legally be reserved based on the applicable instruments’ agreements.

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The following table sets forth the computation of net income attributable to common stockholders, weighted average common shares outstanding for diluted net income per share, and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2023 (in thousands, except share and per share amounts).

	Three months ended September 30,		Nine months ended September 30,
	2023		2023
Numerator:
Net income attributable to common stockholders	$	66,005	$	55,093
Adjustments:
Change in fair value of purchase rights		4,904		5,008
Noncash interest expense on convertible debt, net of tax		361		1,064
Net loss attributable to common stockholders	$	71,270	$	61,165
Denominator:
Weighted average shares used to compute net loss attributable to common stockholder, basic		4,236,477		2,524,302
Add:
Pro forma adjustments to reflect assumed conversion of convertible debt		402,509,558		376,225,027
Pro forma adjustments to reflect assumed exercise of outstanding warrants and purchase rights		311,456,630		311,456,630
Pro forma adjustments to reflect the assumed conversion of Series E-1 Convertible Preferred Shares		12,925,778		4,355,940
Weighted average shares used to compute net loss attributable to common stockholder, diluted		731,128,443		694,561,899
Net loss per share attributable to common stockholders, diluted	$	0.10	$	0.09

Recently Adopted Accounting Pronouncements

No significant new standards were adopted during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements — Not Yet Adopted

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standards setting bodies that are adopted as of the specified effective date.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, designed to clarify or improve disclosure and presentation requirements on a variety of topics and align the requirements in the FASB Accounting Standards Codification (ASC) with the SEC regulations. This guidance is effective for the Company no later than June 30, 2027. The Company will adopt ASU No. 2023-06 by complying with the various disclosure requirements but does not expect the requirements to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, designed to improve financial reporting by requiring disclosure of incremental segment information to enable investors to develop more decision-useful financial analyses. ASU No. 2023-07 will be effective for the Company beginning with the annual filing for the period ended December 31, 2024 and will require retroactive application to comparison periods presented. For Companies that have only one reportable segment (such as the Company), all the requirements of ASU No. 2023-07 will be required to be disclosed regarding the one reportable segment. The Company is still evaluating the impact of ASU No. 2023-07 on the consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures addressing income tax disclosures, requiring entities to annually disclose specific categories in the rate reconciliation and provide additional information for certain reconciling items and categories. ASU No. 2023-09 will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company will adopt ASU No. 2023-09 by adding the required disclosures for the December 31, 2024 Annual Report.

The Company does not believe the impact of any other recently issued standards and any issued but not yet effective standards will have a material impact on its condensed consolidated financial statements upon adoption.

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3. Revenue

The Company recognizes revenue from the sale of Phexxi and SOLOSEC in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). The provisions of ASC 606 require the following steps to determine revenue recognition: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

In accordance with ASC 606, the Company recognizes revenue when its performance obligation is satisfied by transferring control of the product to a customer. In accordance with the Company’s contracts with customers, control of the product is transferred upon the conveyance of title, which occurs when the product is sold to and received by a customer. The Company’s customers are located in the U.S. and consist of wholesale distributors, retail pharmacies, and mail-order specialty pharmacies. Payment terms typically range from 31 to 66 days, include prompt pay discounts, and vary by customer. Trade accounts receivable due to the Company from contracts with its customers are stated separately in the condensed consolidated balance sheets, net of various allowances as described in the Trade Accounts Receivable policy in Note 2 – Summary of Significant Accounting Policies to the 2023 Audited Financial Statements.

The amount of revenue recognized by the Company is equal to the amount of consideration that is expected to be received from the sale of products to its customers. Revenue is only recognized when the performance obligation is satisfied. To determine whether a significant reversal will occur in future periods, the Company assesses both the likelihood and magnitude of any such potential reversal of revenue.

Products are sold to customers at the wholesale acquisition cost (WAC) or, in some cases, at a discount to WAC. However, the Company records product revenue net of reserves for applicable variable consideration. These types of variable consideration reduce revenue and include the following:

● Distribution services fees

● Prompt pay and other discounts

● Product returns

● Chargebacks

● Rebates

● Patient support programs, including our co-pay programs

An estimate for variable consideration is made with each sale and is recorded in conjunction with the revenue being recognized. To calculate the variable consideration, the Company uses the expected value method and the estimated amounts are recorded as a reduction to accounts receivable or as a current liability based on the nature of the allowance and the terms of the related arrangements. An estimated amount of variable consideration may differ from the actual amount. At each balance sheet date, these provisions are analyzed and adjustments are made if necessary. Any adjustments made to these provisions would also affect net product revenue and earnings.

In accordance with ASC 606, the Company must make significant judgments to determine the estimate for certain variable consideration. For example, the Company must estimate the percentage of end-users that will obtain the product through public insurance, such as Medicaid, versus private commercial insurance. To determine these estimates, the Company relies on historical sales data showing the amount of various end-user consumer types, inventory reports from the wholesale distributors and mail-order specialty pharmacies, and other relevant data reports.

The specific considerations that the Company uses in estimating these amounts related to variable consideration are as follows:

Distribution services fees – The Company pays distribution service fees to its wholesale distributors and mail-order specialty pharmacies. These fees are a contractually fixed percentage of WAC and are calculated at the time of sale based on the purchase amount. The Company considers these fees to be separate from the customer’s purchase of the product and, therefore, they are recorded in other current liabilities on the condensed consolidated balance sheets.

Prompt pay and other discounts – The Company incentivizes its customers to pay their invoices on time through prompt pay discounts. These discounts are an industry standard practice, and the Company offers a prompt pay discount to each wholesale distributor and retail pharmacy customer. The specific prompt pay terms vary by customer and are contractually fixed. Prompt pay discounts are typically taken by the Company’s customers, so an estimate of the discount is recorded at the time of sale based on the purchase amount. Prompt pay discount estimates are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

The Company may also give other discounts to its customers to incentivize purchases and promote customer loyalty. The terms of such discounts may vary by customer. These discounts reduce gross product revenue at the time the revenue is recognized.

Chargebacks – Certain government entities and covered entities (e.g., Veterans Administration, 340B covered entities, group purchasing organizations) are able to purchase products at a price discounted below WAC. The difference between the government or covered entity purchase price and the wholesale distributor purchase price of WAC will be charged back to the Company. The Company estimates the amount of each chargeback channel based on the expected number of claims in each channel and related chargeback that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Estimated chargebacks are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

Rebates – The Company is subject to mandatory discount obligations under the Medicaid and Tricare programs. The rebate amounts for these programs are determined by statutory requirements or contractual arrangements. Rebates are owed after the product has been dispensed to an end user and the Company has been invoiced. Rebates for Medicaid and Tricare are typically invoiced in arrears. The Company estimates the amount of rebates based on the expected number of claims and related cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Rebate estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

13

Patient support programs – The Company voluntarily offers a co-pay program to provide financial assistance to patients meeting certain eligibility requirements. The Company estimates the amount of financial assistance for these programs based on the expected number of claims and related cost associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Patient support programs estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

Product returns – Customers have the right to return product that is within six months or less of the labeled expiration date or that is past the expiration date by no more than twelve months. Phexxi was commercially launched in September 2020 with a 30-month shelf life. The shelf life increased to 48 months in June 2022. SOLOSEC has a shelf life of 60 months. The Company uses historical sales and return data to estimate future product returns. Product return estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

The variable considerations discussed above were recorded in the condensed consolidated balance sheets and consisted of $0.2 million and $0.3 million in contra trade accounts receivable as of September 30, 2024 and December 31, 2023, respectively, and $4.5 million and $3.2 million in other current liabilities as of September 30, 2024 and December 31, 2023, respectively.

4. Debt

Baker Notes (temporarily owned by Aditxt from December 11, 2023 through February 26, 2024 and owned by Future Pak, LLC since July 23, 2024)

On April 23, 2020, the Company entered into a Securities Purchase and Security Agreement (the Baker Bros. Purchase Agreement) with certain affiliates of Baker Bros. Advisors LP, as purchasers (the Baker Purchasers), and Baker Bros. Advisors LP, as designated agent, pursuant to which the Company agreed to issue and sell to the Baker Purchasers (i) convertible senior secured promissory notes (the Baker Notes) in an aggregate principal amount of up to $25.0 million and (ii) warrants to purchase shares of common stock (the Baker Warrants) in a private placement, which closed in two closings (April 24, 2020, the Baker Initial Closing, and June 9, 2020, the Baker Second Closing) As a result of the two closings, the Company issued and sold Baker Notes with an aggregate principal amount of $25.0 million and Baker Warrants exercisable for 2,731 shares of common stock. Upon the completion of the underwritten public offering in June 2020, the exercise price of the Baker Warrants was $4,575 per share. The Baker Warrants have a five-year term with a cashless exercise provision and are immediately exercisable at any time from their respective issuance date.

The Baker Notes have a five-year term, with no pre-payment ability during the first three years. Interest on the unpaid principal balance of the Baker Notes (the Baker Outstanding Balance) accrues at 10.0% per annum, with interest accrued during the first year from the two respective closing dates recognized as payment-in-kind. The effective interest rate for the period was 10.0%. Accrued interest beyond the first year of the respective closing dates is to be paid in arrears on a quarterly basis in cash or recognized as payment-in-kind, at the direction of the Baker Purchasers. As discussed below, with the amendment to the Baker Bros. Purchase Agreement, interest payments were paid in-kind. Interest pertaining to the Baker Notes for the three and nine months ended September 30, 2024 was approximately $2.7 million and $7.8 million, respectively, which was added to the outstanding principal balance. Interest pertaining to the Baker Notes for the three and nine months ended September 30, 2023 was approximately $2.4 million and $6.2 million, respectively, which was added to the outstanding principal balance. The Company accounts for the Baker Notes under the fair value method as described below and, therefore, the interest associated with the Baker Notes is included in the fair value determination.

The Baker Notes were callable by the Company on 10 days’ written notice beginning on the third anniversary of the initial closing date of April 24, 2020 at a call price equal to 100% of the Baker Outstanding Balance plus accrued and unpaid interest if the Company’s common stock as measured using a 30-day volume weighted average price (VWAP) was greater than the benchmark price of $9,356.25 as stated in the Baker Bros. Purchase Agreement, or 110% of the Baker Outstanding Balance plus accrued and unpaid interest if the VWAP was less than such benchmark price. The Baker Purchasers also had the option to require the Company to repurchase all or any portion of the Baker Notes in cash upon the occurrence of certain events. In a repurchase event, as defined in the Baker Bros. Purchase Agreement, the repurchase price will equal 110% of the Baker Outstanding Balance plus accrued and unpaid interest. In the event of default or the Company’s change of control, the repurchase price would equal to the sum of (x) three times of the Baker Outstanding Balance plus (y) the aggregate value of future interest that would have accrued. The Baker Notes were convertible at any time at the option of the Baker Purchasers at the conversion price of $4,575 per share prior to the First and Second Baker Amendments (as defined below).

14

On November 20, 2021, the Company entered into the first amendment to the Baker Bros. Purchase Agreement (the First Baker Amendment), in which each Baker Purchaser had the right to convert all or any portion of the Baker Notes into common stock at a conversion price equal to the lesser of (a) $4,575 and (b) 115% of the lowest price per share of common stock (or, as applicable with respect to any equity securities convertible into common stock, 115% of the applicable conversion price) sold in one or more equity financings until the Company has met a qualified financing threshold defined as one or more equity financings resulting in aggregate gross proceeds to the Company of at least $50 million (the Financing Threshold).

The First Baker Amendment extended, effective upon the Company’s achievement of the Financing Threshold, the affirmative covenant to achieve $100.0 million in cumulative net sales of Phexxi by June 30, 2022 to June 30, 2023. Additionally per the First Baker Amendment, if the Company were to issue warrants to purchase capital stock of the Company (or other similar consideration) in any equity financing that closed on or prior to the date on which the Company met the Financing Threshold, the Company was required to issue to the Baker Purchasers an equivalent coverage of warrants (or other similar consideration) on the same terms as if the Baker Purchasers had participated in the financing in an amount equal to the then outstanding principal of Baker Notes held by the Baker Purchasers. In satisfaction of this requirement and in connection with the closing of the May 2022 Public Offering, the Company issued warrants to purchase 582,886 shares of the Company’s common stock at an exercise price of $93.75 per share to the Baker Purchasers (the June 2022 Baker Warrants). As required by the terms of the First Baker Amendment, the June 2022 Baker Warrants have substantially the same terms as the warrants issued in the May 2022 Public Offering. Refer to Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit for further information. The exercise price of the initial Baker Warrants and the June 2022 Baker Warrants was reset multiple times as a result of various Notes issuances in accordance with the agreement. The exercise price was $0.0154 per share as of September 30, 2024.

On March 21, 2022, the Company entered into the second amendment to the Baker Bros. Purchase Agreement (the Second Baker Amendment), which granted each Baker Purchaser the right to convert all or any portion of the Baker Notes into common stock at a conversion price equal to the lesser of (a) $725.81 or (b) 100% of the lowest price per share of common stock (or as applicable with respect to any equity securities convertible into common stock, 100% of the applicable conversion price) sold in any equity financing until the Company (i) met the qualified financing threshold by June 30, 2022, defined as a single underwritten financing resulting in aggregate gross proceeds to the Company of at least $20 million (Qualified Financing Threshold) and (ii) disclosed top-line results from the EVOGUARD clinical trial (the Clinical Trial Milestone) on or before October 31, 2022. The Second Baker Amendment also provided that the exercise price of the Baker Warrants will equal the conversion price of the Baker Notes. The Company met the Qualified Financing Threshold upon the closing of the May 2022 Public Offering, and as of September 30, 2022, the conversion price and exercise price of the Baker Warrants was reset to $93.75. The Company achieved the Clinical Trial Milestone in October 2022. Also, with the achievement of the Qualified Financing Threshold and the Clinical Trial Milestone, the affirmative covenant to achieve $100.0 million in cumulative net sales of Phexxi was extended to June 30, 2023, which was subsequently waived via the Baker Fourth Amendment as discussed below.

On September 15, 2022, the Company entered into the third amendment to the Baker Bros. Purchase Agreement (the Third Baker Amendment), pursuant to which the conversion price was amended to $26.25, subject to adjustment for certain dilutive Company equity issuance adjustments for a two-year period; an interest make-whole payment due in certain circumstances was removed; and certain change of control and liquidation payment amounts were reduced from three times the outstanding amounts of the Baker Notes to two times the outstanding amounts. In addition, the Third Baker Amendment provided that the Company may make future interest payments to the Baker Purchasers in kind or in cash, at the Company’s option. On the same day, the Company also entered into a Secured Creditor Forbearance Agreement with the Baker Purchasers (Forbearance Agreement), according to which the Baker Purchasers agreed to forebear the defaults that existed at that time.

On December 19, 2022, the Company entered into the First Amendment to the Forbearance Agreement (the Amendment) effective as of December 15, 2022 to amend certain provisions of the Forbearance Agreement dated September 15, 2022. The Amendment revised the Forbearance Agreement to (i) amend the Fifth Recital Clause to clarify that the Purchasers consent to any additional indebtedness pari passu, but not senior to that of the Purchasers, in an amount not to exceed $5.0 million, and (ii) strike and entirely replace Section 4 to clarify the terms of the Purchasers’ consent to Interim Financing (as defined therein). No other revisions were made to the Forbearance Agreement.

15

On March 7, 2023, Baker Bros. Advisors, LP (the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Baker Bros. Purchase Agreement. The Notice of Default claimed that the Company failed to maintain the “Required Reserve Amount” as required by the Third Baker Amendment. The Designated Agent, at the direction of the Baker Purchasers, accelerated repayment of the outstanding balance payable. As a result, approximately $92.7 million, representing two times the sum of the outstanding balance and all accrued and unpaid interest thereon and all other amounts due under the Baker Bros. Purchase Agreement and other documents, was due and payable within three business days of receipt of the Notice of Default. In addition, the Company did not meet the $100.0 million cumulative net sales threshold by June 30, 2023 and as such was in default as of that date. As discussed below, all existing defaults were cured upon the signing of the Fourth Baker Amendment.

On September 8, 2023, the Company entered into the Fourth Amendment to the Baker Bros. Purchase Agreement (the Fourth Baker Amendment) with the Baker Purchasers. The Fourth Amendment amends certain provisions within the Baker Bros. Purchase Agreement including:

(i)	the rescission of the Notice of Default delivered to the Company on March 7, 2023 and waiver of the Events of Default named therein;
(ii)	the waiver of any and all other Events of Default existing as of the Fourth Amendment date;
(iii)	the removal of the conversion feature into shares of Company common stock, including the removal of any requirement to reserve shares of common stock for conversion of the Baker Notes as well as any registration rights related thereto;
(iv)	the clarification that for the sole purpose of enabling ex-U.S. license agreements for such assets, any Patents, Trademarks or Copyrights acquired after the Effective Date shall be excluded from the definition of Collateral; and,
(v)	the removal of the requirement for the Company to achieve $100 million in cumulative net Phexxi sales in the specified timeframe.

The outstanding balance of the Baker Notes will continue to accrue interest at 10% per annum and, in the event of a default in the agreement or a failure to pay the Repurchase Price (as defined below) on or before September 8, 2028 (the Maturity Date), the Baker Purchasers may collect on the full principal amount then outstanding.

The Company paid the required $1.0 million upfront payment in September 2023 and is required to make quarterly cash payments based upon a percentage of the Company’s global net product revenue. The cash payments will be determined based upon the quarterly global net revenue of Phexxi according to the table below.

Quarterly global net revenue	Quarterly cash payment
≤ $5.0 million	3% of such global net revenues
>$5.0 million and ≤ $7.0 million	3% on net revenue ≤ $5.0 million; 4% on the net revenue over $5.0 million
Greater than $7.0 million	3% on the net revenue ≤ $5.0 million; 4% on the net revenue over $5.0 million and up to $7.0 million; 5% on net revenue over $7.0 million

The cash payments were payable beginning in the fourth quarter of 2023 and have been timely paid.

Regardless of the percentage paid, the quarterly cash payment amounts, along with the $1.0 million upfront payment, will be deducted from the Repurchase Price as Applicable Reductions. Quarterly cash payments that will be treated as Applicable Reductions paid to date as of September 30, 2024 amount to $0.5 million.

The Fourth Amendment also granted the Company the ability to repurchase the principal amount and accrued and unpaid interest of the Baker Notes for up to a five-year period for the one-time Repurchase Price designated below:

Date of Notes’ Repurchase	Repurchase Price
On or prior to September 8, 2024	$14,000,000 (less Applicable Reductions)
September 9, 2024-September 8, 2025	$16,750,000 (less Applicable Reductions)
September 9, 2025-September 8, 2026	$19,500,000 (less Applicable Reductions)
September 9, 2026-September 8, 2027	$22,250,000 (less Applicable Reductions)
September 9, 2027-September 8, 2028	$25,000,000 (less Applicable Reductions)

16

The Company evaluated whether any of the Embedded Features required bifurcation as a separate component. The Company elected the fair value option (FVO) under ASC 825, Financial Instruments (ASC 825), as the Baker Notes are qualified financial instruments and are, in whole, classified as liabilities. Under the FVO, the Company recognized the debt instrument at fair value, inclusive of the Embedded Features, with changes in fair value related to changes in the Company’s credit risk being recognized as a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. All other changes in fair value were recognized in the condensed consolidated statements of operations.

Due to the execution of the Fourth Baker Amendment, the Company reviewed the Baker Notes in accordance with ASC 470, Debt (ASC 470). Because the Baker Notes were recorded under the FVO, the Fourth Amendment was outside the scope of ASC 470-60 and as such did not qualify as a troubled debt restructuring (TDR). The Baker Notes were evaluated in accordance with ASC 470 and were determined to have failed certain qualitative factors to qualify as a modification and, therefore, were accounted for as an extinguishment. The Company removed the fair value of the old Baker Notes of $15.6 million and the related accumulated other comprehensive income of $73.2 million as of the date of extinguishment and recorded the fair value of the new Baker Notes, as measured on the date of the Baker Fourth Amendment as $12.5 million, and recognized a gain of approximately $75.3 million within the condensed consolidated statements of operations, in the gain (loss) on debt extinguishment line item, upon extinguishment in the year ended December 31, 2023. The gain included recognizing $73.2 million that had previously been a component of other comprehensive income as part of the prior quarterly revaluations using the valuation methods discussed in Note 6 – Fair Value of Financial Instruments.

As part of the consideration for the Merger, on December 11, 2023, the Baker Purchasers signed an agreement to assign the Baker Notes to Aditxt (the December Assignment Agreement). Upon execution of the December Assignment Agreement, Aditxt assumed all terms under the Baker Notes, with Aditxt becoming the new senior secured debtholder of the Company, governed by the requirements under the Fourth Baker Amendment. The Baker Notes were re-assigned back to the Baker Purchasers on February 26, 2024 (the February Assignment Agreement).

Due to the execution of the February Assignment Agreement, the Company reviewed the Baker Notes in accordance with ASC 470. The Baker Notes, having been effectively terminated, were extinguished on February 26, 2024, resulting in removing the fair value of the old Baker Notes of $13.5 million. The newly re-assigned Baker Notes were subsequently recorded at fair value using the valuation methods discussed in Note 6 – Fair Value of Financial Instruments.

On July 23, 2024, the Company consented to the transfer of ownership of the senior secured notes from Baker Brothers Life Sciences, 667, L.P., and Baker Bros. Advisors, LP, each a Delaware limited partnership (collectively, Baker) to Future Pak, LLC, a Michigan limited liability company (the Assignee). The terms of the senior secured notes were not changed in connection with the assignment from Baker to the Assignee. Due to the July 2024 assignment, the Company reviewed the Baker Notes in accordance with ASC 470. The Baker Notes, having been effectively terminated, were extinguished on July 23, 2024, resulting in removing the fair value of the old Baker Notes of $12.3 million and the related accumulated other comprehensive income of $0.1 million as of the date of the extinguishment. The Company also recognized a loss of approximately $0.1 million within the condensed consolidated statements of operations, in the gain (loss) on debt extinguishment line item for the three and nine months ended September 30, 2024. The newly re-assigned Baker Notes were subsequently recorded at fair value using the valuation methods discussed in Note 6 – Fair Value of Financial Instruments.

The Company did not repurchase the Baker Notes prior to September 8, 2024 for a repurchase price of $14.0 million less applicable reductions. As of September 30, 2024, the Baker Notes are recorded at fair value in the condensed consolidated balance sheet as short-term Notes – carried at fair value with a total fair value of $13.9 million, and the total outstanding balance including principal and accrued interest is $106.9 million. As of December 31, 2023, the Baker Notes are recorded at fair value in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $13.5 million, and the total outstanding balance including principal and accrued interest is $99.5 million. During the three and nine months ended September 30, 2024, the Company paid a total of $0.1 million and $0.4 million, respectively, in required cash payments as described above. No such payments were required in the prior year.

On September 27, 2024, the Assignee, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the September 2024 Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended, by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a Purchaser and collectively Purchasers). The September 2024 Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA.

According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to the total outstanding balance, including principal and accrued interest. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Initial Notice of Default (the Amended Notice of Default) which adds new claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Baker Bros. Purchase Agreement, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024.

On November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment.

The Company strongly disagrees with the Designated Agent’s claim that an Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

Adjuvant Notes

On October 14, 2020, the Company entered into a Securities Purchase Agreement (the Adjuvant Purchase Agreement) with Adjuvant Global Health Technology Fund, L.P., and Adjuvant Global Health Technology Fund DE, L.P. (together, the Adjuvant Purchasers), pursuant to which the Company sold unsecured convertible promissory notes (the Adjuvant Notes) in aggregate principal amount of $25.0 million.

The Adjuvant Notes have a five-year term and, in connection with certain Company change of control transactions, the Adjuvant Notes may be prepaid at the option of the Company or will become payable on the date of the consummation of a change of control transaction at the option of the Adjuvant Purchasers. The Adjuvant Notes accrue interest at 7.5% per annum on a quarterly basis in arrears to the outstanding balance of the Adjuvant Notes and are recognized as payment-in-kind. The effective interest rate for the nine months ended September 30, 2024 was 7.5%.

17

Interest expense for the Adjuvant Notes consists of the following, and is included in other expense, net on the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Coupon interest	$	556	$	516	$	1,637	$	1,520
Amortization of issuance costs		-		51		28		179
Total	$	556	$	567	$	1,665	$	1,699

The Adjuvant Notes are convertible, subject to customary 4.99% and 19.99% beneficial ownership limitations, into shares of the Company’s common stock, par value $0.0001 per share, at any time at the option of the Adjuvant Purchasers at a conversion price of $6,843.75 per share. In connection with certain Company change of control transactions, the Adjuvant Notes may be prepaid at the option of the Company or will become payable at the option of the Adjuvant Purchasers. To the extent not previously prepaid or converted, the Adjuvant Notes were originally automatically convertible into shares of the Company’s common stock at a conversion price of $6,843.75 per share immediately following the earliest of the time at which the (i) 30-day value-weighted average price of the Company’s common stock was $18,750 per share, or (ii) the Company achieved cumulative net sales of $100.0 million, provided such net sales were achieved prior to July 1, 2022.

On April 4, 2022, the Company entered into the first amendment to the Adjuvant Purchase Agreement (the Adjuvant Amendment). The Adjuvant Amendment extended the affirmative covenant to achieve $100.0 million in cumulative net sales of Phexxi by June 30, 2022 to June 30, 2023. The Adjuvant Amendment also provided for an adjustment to the conversion price of the Adjuvant Notes such that the conversion price (the Conversion Price) for these Notes, effective as of the May 2023 reverse stock split, will now be the lesser of (i) $678.49 and (ii) 100% of the lowest price per share of common stock (or with respect to securities convertible into common stock, 100% of the applicable conversion price) sold in any equity financing until the Company met the Qualified Financing Threshold. Effective as of the Company’s achievement of the Qualified Financing Threshold, the automatic conversion provisions in the Agreement were further amended to provide that the Adjuvant Notes will automatically convert into shares of the Company’s common stock at the Conversion Price immediately following the earliest of the time at which the (i) 30-day value-weighted average price of the Company’s common stock is $18,750 per share, or (ii) the Company achieves cumulative net sales of Phexxi of $100.0 million, provided such net sales were achieved prior to July 1, 2023.

The Adjuvant Notes contain various customary affirmative and negative covenants agreed to by the Company. On September 12, 2022, the Company was in default of the Adjuvant Notes due to the default with the Baker Notes under the cross-default provision. On September 15, 2022, the Company entered into a Forbearance Agreement (the Adjuvant Forbearance Agreement) with the Adjuvant Purchasers, pursuant to which the Adjuvant Purchasers agreed to forbear from exercising any of their rights and remedies during the Forbearance Period as defined in therein, but solely with respect to the specified events of default provided under the Adjuvant Forbearance Agreement.

On September 15, 2022, the Company also entered into the second amendment to the Adjuvant Purchase Agreement (the Second Adjuvant Amendment), pursuant to which the conversion price per share was reduced to $26.25, subject to adjustment for certain dilutive Company equity issuance adjustments for a two-year period. In addition, the Company entered into an exchange agreement, pursuant to which the Adjuvant Purchasers agreed to exchange 10% of the outstanding amount of the Adjuvant Notes as of September 15, 2022 (or $2.9 million) for rights to receive 109,842 shares of common stock (the Adjuvant Purchase Rights). The number of shares for each Adjuvant Purchase Right was initially fixed, but is subject to certain customary adjustments, and, until the second anniversary of issuance (i.e., October 14, 2022), adjustments for certain dilutive Company equity issuances. Refer to Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit for discussion regarding additional issuances of purchase rights under this provision. The Adjuvant Purchase Rights expire on June 28, 2027 and do not have an exercise price per share and, therefore, will not result in cash proceeds to the Company. As of September 30, 2024, all Adjuvant Purchase Rights remain outstanding. The conversion price of the Adjuvant Notes was $0.0154 as of September 30, 2024. Assuming this conversion price per share, the Adjuvant Notes could be converted into 1,961,188,772 shares of common stock.

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The Adjuvant Notes are accounted for in accordance with authoritative guidance for convertible debt instruments and are classified as current liabilities in the condensed consolidated balance sheets. The aggregate proceeds of $25.0 million were initially classified as restricted cash for financial reporting purposes due to contractual stipulations that specify the types of expenses the money can be spent on and how it must be allocated. The conversion feature was required to be bifurcated as an embedded derivative because the Company did not have a sufficient number of shares reserved upon conversion as of March 31, 2023; however, the fair value of such feature was immaterial as of such date. As of June 30, 2023, the Company had a sufficient number of shares reserved and the conversion feature was reclassified to stockholders’ deficit in accordance with ASC 815, Derivatives and Hedging (ASC 815) at that time. See Note 6 - Fair Value of Financial Instruments for a description of the accounting treatment for the Adjuvant Purchase Rights.

The Company was in default of the Adjuvant Notes as of September 30, 2023, due to the failure to meet the cumulative net sales requirement. However, Adjuvant forbore such default in October 2023 and therefore the Company is no longer in default.

As of September 30, 2024, the Adjuvant Notes are recorded in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $30.2 million. The balance is comprised of $22.5 million in principal, net of unamortized debt issuance costs, and $7.7 million in accrued interest. As of December 31, 2023, the Adjuvant Notes were recorded in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $28.5 million. The balance was comprised of $22.5 million in principal, net of unamortized debt issuance costs, and $6.1 million in accrued interest.

Term Notes

December 2022 and February, March, April, July, August, and September 2023 Notes (SSNs)

The Company entered into eight Securities Purchase Agreements (SPAs) between December 2022 and September 2023 with certain investors. Each of the agreements was materially similar. The variable details of each SPA, such as the principal amount of each note offering, net proceeds, and maturity date, are outlined in the table below. Pursuant to each SPA, the Company agreed to sell in a registered direct offering (i) unsecured 8.0% senior subordinated notes with the maturity dates and aggregate issue prices (ii) warrants to purchase the listed number of shares of the Company’s common stock, $0.0001 par value per share (including prefunded common stock Warrants as a part of the September 2023 SPA) and (iii) Series D Preferred Stock (the Preferred Shares; December 2022 SPA only) (collectively, the Senior Subordinated Notes, or SSNs). The SSNs had net proceeds to the Company, and are convertible at, the amounts listed below. Assuming the applicable conversion price per share, the SSNs could be converted into 615,861,541 shares of common stock as of September 30, 2024.

The SSNs’ interest rates are subject to increase to 12% upon an event of default and the SSNs have no Company right to prepayment prior to maturity; however, the Company has the option to redeem the respective SSNs at a redemption premium of 32.5%. The Purchasers can also require the Company to redeem their respective SSNs a) at the respective premium rate tied to the occurrence of certain subsequent transactions, and b) in the event of subsequent placements (as defined). Also, pursuant to the terms of the SPAs, Purchasers have certain rights to participate in subsequent issuances of the Company’s securities, subject to certain exceptions. Additionally, the conversion rate and warrant strike price are subject to adjustment upon the issuance of other securities (as defined) below the stated conversion rate and strike price at issuance. The strike prices adjusted as discussed in the table below.

The Company evaluated the SSNs in accordance with ASC 480 and determined that the Notes were all liability instruments at issuance. The applicable SSNs were then evaluated in accordance with the requirements of ASC 825 and the Company concluded that they were not precluded from electing the fair value option for the applicable SSNs.

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The Company also evaluated the Warrants in accordance with ASC 480 and determined that the Warrants issued before the Reverse Stock Split in May 2023 were required to be recorded as liabilities at fair value in the Company’s condensed consolidated balance sheets. The applicable SSNs were marked-to-market at each reporting date with changes in fair value recognized in the condensed consolidated statement of operations, unless the change is concluded to be related to changes in the Company’s credit rating, in which case the change was recognized as a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. As a result of the Reverse Stock Split, the Company had sufficient shares available for issuance to cover the potential exercises; therefore, the Warrants that were previously classified as liabilities were marked-to-market and reclassified to equity in May 2023. For the Warrants issued after the Reverse Stock Split, the Company determined they were required to be recorded in equity.

On December 21, 2023, warrants to purchase up to 9,972,074 shares of the Company’s common stock were exchanged for 613 shares of the Company’s series F-1 convertible and redeemable preferred stock (Series F-1 Shares, as defined below). The Series F-1 Shares, some of which were also issued based on the partial value of certain purchase rights, as described above, were immediately exchanged for Aditxt series A-1 preferred stock; 22,280 and 23,540 Series F-1 Shares were outstanding as of December 31, 2023 and September 30, 2024, respectively, and held by Aditxt. The Series F-1 Shares are to be cancelled, without the right to receive compensation, upon the consummation of the Merger.

Summary of SSNs and Warrants at Issuance (December 2022 to September 2023):

										Conversion Price
Notes	Principal At Issuance (in Thousands)		Net Proceeds Before Issuance Costs (in Thousands)		Common Warrants		Preferred Shares		Maturity Date	At Issuance		At 9/30/2023		At 12/31/2023		At 3/31/2024		At 6/30/2024		At 9/30/2024
December 2022 Notes	$	2,308	$	1,500		369,230		70 - Series D	12/21/2025	$	6.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
February 2023 Notes(1)		1,385		900		653,538		-	2/17/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
March 2023 Notes		600		390		240,000		-	3/17/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
March 2023 Notes(2)		538		350		258,584		-	3/20/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
April 2023 Notes		769		500		615,384		-	3/6/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
July 2023 Notes		1,500		975		1,200,000		-	3/6/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
August 2023 Notes		1,000		650		799,999		-	8/4/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
September 2023 Notes(3)		2,885		1,875		26,997,041		-	9/26/2026	$	0.13	$	0.13	$	0.0615	$	0.0158	$	0.0154	$	0.0154
Total Offerings	$	10,985	$	7,140		31,133,776

(1)	Warrants include 99,692 issued to the placement agent.
(2)	Warrants include 43,200 issued to the placement agent.
(3)	Warrants include 22,189,349 common warrants at $0.13 per share and 4,807,692 pre-funded warrants exercisable at $0.001 per share.

Short-term Debt

Insurance Premium Finance Agreement

In June 2024, the Company entered into an insurance premium finance agreement with First Insurance Funding (FIF) to finance a portion of its current policy year’s Directors and Officers (D&O) and general insurance policies. The total amount financed was $0.4 million at an annual interest rate of 8.57%. The Company will make nine equal payments, which commenced in July 2024. The Company recorded the total financed amount as a Short-term debt on the condensed consolidated balance sheet. The interest expense, included in Other expense, net, in the condensed consolidated statement of operations, was immaterial for the three and nine months ended September 30, 2024.

20

5. Balance Sheet Details

Inventories

Inventories consist of the following (in thousands) for the period indicated:

	September 30, 2024		December 31, 2023
Raw materials (1)	$	423	$	520
Work in process		863		386
Finished goods (1)(2)		177		791
Total	$	1,463	$	1,697

(1)

The raw materials and finished goods balances include a combined estimated reserve on obsolescence and excess inventory which might not be sold prior to its expiration of $0.3 million as of both September 30, 2024 and December 31, 2023. These estimates are based upon assumptions about future manufacturing needs and gross sales of Phexxi. Inventory associated with the additional write-down of $1.3 million recorded during the year ended December 31, 2023, was disposed and no longer in the inventory balance as of December 31, 2023.

(2)

The finished goods balance as of September 30, 2024 includes an immaterial amount of SOLOSEC finished goods inventory. No such inventory existed at December 31, 2023. None of the reserve on obsolescence and excess inventory was related to SOLOSEC product.

Prepaid and Other Current Assets

Prepaid and other current assets consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Insurance	$	627	$	777
Research & development		23		13
Short-term deposits		202		76
Other		147		329
Total	$	999	$	1,195

Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):

	Useful Life		September 30, 2024			December 31, 2023
Research equipment		5 years	$	585		$	586
Computer equipment and software		3 years		145			647
Construction in-process		-		1,146			1,156
				1,876			2,389
Less: accumulated depreciation				(695	)		(1,186	)
Total, net			$	1,181		$	1,203

Depreciation expense for property and equipment was immaterial in both the three and nine months ended September 30, 2024. Depreciation expense for property and equipment was immaterial and $0.5 million in the three and nine months ended September 30, 2023, respectively.

Intangible Asset, Net

Intangible asset, net, consists of the following (in thousands):

	Useful Life	September 30, 2024			December 31, 2023
Intellectual property	11 years	$	14,322		$	-
Less: accumulated amortization			(301	)		-
Total, net		$	14,021		$	-

The intangible asset relates entirely to the asset acquired with the SOLOSEC asset acquisition and as described further in Note 7 – Commitments and Contingencies, the useful life is based on the SOLOSEC IP patent expiration. Additional acquired intellectual property could have a different useful life. Amortization expense was $0.3 million in both the three and nine months ended September 30, 2024. Amortization expense is expected to be approximately $0.3 million in the three months ended December 31, 2024 and approximately $1.3 million in each year thereafter until the intangible asset is fully amortized. As described in Note 2 – Summary of Significant Accounting Policies, the intangible asset value is adjusted at each reporting date in conjunction with the mark-to-market adjustment of the contingent liabilities, which could impact the expected amortization.

21

Accrued Expenses

Accrued expenses consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Clinical trial related costs	$	2,498	$	2,498
Accrued royalty		1,723		1,146
Other		903		583
Total	$	5,124	$	4,227

6. Fair Value of Financial Instruments

Fair Value of Financial Liabilities

The following tables summarize the Company’s convertible debt instruments as of September 30, 2024 and December 31, 2023, respectively (in thousands):

									Fair Value
As of September 30, 2024	Principal Amount		Unamortized Issuance Costs		Accrued Interest		Net Carrying Amount		Amount		Leveling
Baker Notes(1)(2)	$	106,869	$	-	$	-	$	106,869	$	13,876	Level 3
Adjuvant Notes(3)		22,500		-		7,702		30,202		N/A	N/A
December 2022 Notes(1)		953		-		-		953		31	Level 3
February 2023 Notes (1)		961		-		-		961		31	Level 3
March 2023 Notes (1)		1,185		-		-		1,185		38	Level 3
April 2023 Notes (1)		866		-		-		866		28	Level 3
July 2023 Notes (1)		1,296		-		-		1,296		42	Level 3
August 2023 Notes (1)		1,097		-		-		1,097		36	Level 3
September 2023 Notes (1)		3,126		-		-		3,126		101	Level 3
Totals	$	138,853	$	-	$	7,702	$	146,555	$	14,183	N/A

										Fair Value
As of December 31, 2023	Principal Amount		Unamortized Issuance Costs			Accrued Interest		Net Carrying Amount		Amount		Leveling
Baker Notes(1)(2)	$	99,460	$	-		$	-	$	99,460	$	13,510	Level 3
Adjuvant Notes(3)		22,500		(27	)		6,064		28,537		N/A	N/A
December 2022 Notes(1)		940		-			-		940		118	Level 3
February 2023 Notes (1)		905		-			-		905		118	Level 3
March 2023 Notes (1)		1,204		-			-		1,204		157	Level 3
April 2023 Notes (1)		816		-			-		816		106	Level 3
July 2023 Notes (1)		1,534		-			-		1,534		202	Level 3
August 2023 Notes (1)		1,033		-			-		1,033		136	Level 3
September 2023 Notes (1)		2,945		-			-		2,945		384	Level 3
Totals	$	131,337	$	(27	)	$	6,064	$	137,374	$	14,731	N/A

(1) These liabilities are/were carried at fair value in the condensed consolidated balance sheets. As such, the principal and accrued interest was included in the determination of fair value. The related debt issuance costs were expensed.

(2) The Baker Notes principal amount includes $22.2 million and $13.7 million of interest paid in-kind as of September 30, 2024, and December 31, 2023, respectively.

(3) The Adjuvant Notes are recorded in the condensed consolidated balance sheets at their net carrying amount which includes principal and accrued interest, net of unamortized issuance costs.

22

The following tables summarize the Company’s derivative liabilities as of September 30, 2024 and December 31, 2023 as discussed in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (in thousands):

	Fair Value
	September 30, 2024		December 31, 2023		Leveling
Purchase rights	$	162	$	1,926		Level 3
Total derivative liabilities	$	162	$	1,926

Change in Fair Value of Level 3 Financial Liabilities

The following table summarizes the changes in Level 3 financial liabilities related to Baker Notes and SSNs measured at fair value on a recurring basis for the three and nine months ended September 30, 2024 (in thousands):

	Baker Notes (Assigned to Future Pak; Note 4)			Total SSNs (Note 4)			Total
Balance at June 30, 2024	$	12,280		$	959		$	13,239
Balance at issuance		12,280			-			12,280
Extinguishment/conversion		(12,280	)		-			(12,280	)
Payments		(125	)		-			(125	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		1,721			(652	)		1,069
Balance at September 30, 2024	$	13,876		$	307		$	14,183

	Baker Notes (Assigned to Future Pak; Note 4)			Total SSNs (Note 4)			Total
Balance at December 31, 2023	$	13,510		$	1,221		$	14,731
Balance at issuance		24,670			-			24,670
Extinguishment/conversion		(25,790	)		(51	)		(25,841	)
Payments		(378	)		-			(378	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		1,864			(863	)		1,001
Balance at September 30, 2024	$	13,876		$	307		$	14,183

The following table summarizes the changes in Level 3 financial liabilities related to Baker Notes and SSNs measured at fair value on a recurring basis for the three and nine months ended September 30, 2023 (in thousands):

	Baker Notes			Total SSNs (Note 4)		Total
Balance at June 30, 2023	$	15,600		$	-	$	15,600
Balance at issuance		13,450			208		13,658
Debt repayment		(1,000	)		-		(1,000	)
Extinguishment		(15,600	)		-		(15,600	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		-			452		452
Balance at September 30, 2023	$	12,450		$	660	$	13,110

	Baker Notes			Total SSNs (Note 4)		Total
Balance at December 31, 2022	$	39,260		$	156	$	39,416
Balance at issuance		13,450			220		13,670
Debt repayment		(1,000	)		-		(1,000	)
Extinguishment		(13,450	)		-		(15,600	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		(23,660	)		284		(23,376	)
Balance at September 30, 2023	$	12,450		$	660	$	13,110

23

The following table summarizes the changes in Level 3 financial liabilities related to derivative liabilities measured at fair value on a recurring basis for the three and nine months ended September 30, 2024 (in thousands):

	Purchase Rights			Derivative Liabilities Total
Balance at June 30, 2024	$	942		$	942
Exercises		(11	)		(11	)
Change in fair value presented in the condensed consolidated statements of operations		(769	)		(769	)
Balance at September 30, 2024	$	162		$	162

	Purchase Rights			Derivative Liabilities Total
Balance at December 31, 2023	$	1,926		$	1,926
Balance at issuance		3,300			3,300
Exercises		(168	)		(168	)
Change in fair value presented in the condensed consolidated statements of operations		(4,896	)		(4,896	)
Balance at September 30, 2024	$	162		$	162

The following tables summarize the changes in Level 3 financial liabilities related to derivative liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2023 (in thousands). There was no such activity for the three months ended September 30, 2023.

	April and June 2020 Baker Warrants			May 2022 Public Offering Common Warrants			June 2022 Baker Warrants			December 2022 Warrants			February and March 2023 Warrants			Purchase Rights			Derivative Liabilities Total
Balance at December 31, 2022	$	1		$	303		$	170		$	107		$	-		$	1,095		$	1,676
Balance at issuance		-			-			-			-			6			105			111
Exercises		-			(7	)		-			-			-			(186	)		(193	)
Change in fair value presented in the condensed consolidated statements of operations		(1	)		(295	)		(169	)		(107	)		(6	)		(961	)		(1,539	)
Reclassified to equity		-			(1	)		(1	)		-			-			(53	)		(55	)
Balance at September 30, 2023	$	-		$	-		$	-		$	-		$	-		$	-		$	-

24

Valuation Methodology

From the third quarter of 2022 through the second quarter of 2023, the fair value of the Baker Notes issued, as described in Note 4 – Debt, and subsequent changes in fair value recorded at each reporting date, was determined by estimating the fair value of the Market Value of Invested Capital (MVIC) of the Company. This was estimated using forms of the cost and market approaches. In the Cost approach, an adjusted net asset value method was used to determine the net recoverable value of the Company, including an estimate of the fair of the Company’s intellectual property. The estimated fair value of the Company’s intellectual property was valued using a relief from royalty method which required management to make significant estimates and assumptions related to forecasts of future revenue, and the selection of the royalty and discount rates. The guideline public company method served as another valuation indicator. In this form of the Market approach, comparable market revenue multiples were selected and applied to the Company’s forward revenue forecast to ultimately derive a MVIC indication. If the resulting fair value from these approaches was not estimated as greater than the contractual payout, the fair value of the Baker Notes became only the Company MVIC available for distribution to this first lien note holder.

Starting in the third quarter of 2023, the fair value of the Baker Notes is determined using a Monte Carlo simulation-based model. The Monte Carlo simulation was used to take into account several embedded features and factors, including the exercise of the repurchase right, the Company’s future revenues, meeting certain debt covenants, the maturity term of the note and dissolution. For the dissolution scenario, the cost approach, an adjusted net asset value method was used to determine the net recoverable value of the Company, including an estimate of the fair value of the Company’s intellectual property. The estimated fair value of the Company’s intellectual property was valued using a relief from royalty method which required management to make significant estimates and assumptions related to forecasts of future revenue, and the selection of the royalty (5.0%) and discount (15.0%) rates.

The fair value of the Baker Notes is subject to uncertainty due to the assumptions that are used in the Monte Carlo simulation-based model. These factors include but are not limited to the Company’s future revenue, and the probability and timing of the exercise of the repurchase right. The fair value of the Baker Notes is sensitive to these estimated inputs made by management that are used in the calculation.

SSNs

The fair values of the SSNs issued, as described in Note 4 – Debt, were determined using the methods described above in Valuation Methodology using the residual value of the Company after the fair value of the Baker Notes. The quarterly valuation adjustments for the three and nine months ended September 30, 2024 were respectively recorded as a $0.7 million and a $0.9 million change in fair value of financial instruments attributed to credit risk change in the condensed consolidated comprehensive statements of income (loss). The quarterly valuation adjustments for the three and nine months ended September 30, 2023 were recorded as a $0.5 million and a $0.3 million change in fair value of financial instruments attributed to credit risk change in the condensed consolidated comprehensive statements of income (loss).

Purchase Rights

The Adjuvant Purchase Rights and the May Note Purchase Rights (collectively Purchase Rights) are recorded as derivative liabilities in the condensed consolidated balance sheets. The Purchase Rights are valued using an OPM, like a Black-Scholes Methodology, with changes in the fair value being recorded in the condensed consolidated statements of operations. The assumptions used in the OPM are considered level 3 assumptions and include, but are not limited to, the market value of invested capital, the cumulative equity value of the Company as a proxy for the exercise price and the expected term the Purchase Rights will be held prior to exercise and a risk-free interest rate.

Warrants

Warrants previously classified as liabilities were reclassified as equity instruments during the second quarter of 2023 as a result of the Reverse Stock Split. The Company will continue to re-evaluate the classification of its warrants at the close of each reporting period to determine their proper balance sheet classification. The warrants are valued using an OPM based on the applicable assumptions, which include the exercise price of the warrants, time to expiration, expected volatility of our peer group, risk-free interest rate, and expected dividends. The assumptions used in the OPM are considered level 3 assumptions and include, but are not limited to, the market value of invested capital, the cumulative equity value of the Company as a proxy for the exercise price, the expected term the warrants will be held prior to exercise, a risk-free interest rate, and probability of change of control event. Additionally, because the warrants are re-priced under certain provisions in the agreements, at each re-pricing event the Company must value the warrants using a Black-Scholes model immediately prior to and immediately following the re-pricing event. The incremental fair value is recorded as an increase to accumulated deficit and additional paid-in-capital, in accordance with ASC 470.

25

SOLOSEC Asset Acquisition Intangible Asset and Contingent Liabilities

The total consideration for the SOLOSEC asset acquisition included an up-front payment (paid at closing), sales-based payments to be paid over the next 15 years (the Earnout Term) in each year in which SOLOSEC adjusted net revenue is over a specified threshold, a $10.0 million one-time payment once the cumulative SOLOSEC adjusted net revenues reach $100 million, and assumption of quarterly royalty payments based on SOLOSEC net revenue. As discussed in Note 7 – Commitments and Contingencies, the fair value of the consideration is attributed to the SOLOSEC product line and was therefore recorded as an intangible asset.

The fair value of the total consideration, including cash paid and future sales-based payments, is determined using a Monte Carlo simulation model, which assumes the Company’s revenue follows a geometric Brownian motion. Using specific revenue factors, including expected growth, risk adjustments, and revenue volatility, future revenues were simulated through the Earnout Term to assess whether sales-based payments would be triggered in each relevant period, as stipulated by the SOLOSEC Asset Purchase Agreement. The average output of the Monte Carlo simulations for each period provides the expected payment value, which is then discounted to its present value to derive the fair value of future sales-based payments and recorded as contingent liabilities. The discount rate is based on (i) the risk-free rate, plus (ii) a credit spread reflecting the Company’s interest-bearing debt, (iii) an additional spread to account for credit migration as of the valuation date, and (iv) a further incremental spread to reflect that the contingent liabilities is subordinated obligations relative to the Company’s other debt obligations.

The fair value of the SOLOSEC contingent liabilities is subject to uncertainty due to the assumptions made by management that are used in the Monte Carlo simulation-based model. These factors include the estimated future SOLOSEC net revenue, the risk-neutral revenue calculation and simulation assumptions, payment timing, and the discount rate.

The fair value of the SOLOSEC contingent liabilities will be updated at each reporting period using the methodology described above. Any changes to the fair value will be recorded as an adjustment to the carrying value of both the contingent liabilities and the SOLOSEC IP intangible asset as per ASC 323, Investments – Equity Method and Joint Ventures (ASC 323). Periodic intangible amortization will also be updated based on the new fair value of the SOLOSEC IP.

7. Commitments and Contingencies

Asset Acquisition and Contingent Liabilities

SOLOSEC

The Company reviewed the SOLOSEC acquisition in accordance with ASC 805, Business Combinations (ASC 805), including applying the screen test, and determined that it was out of scope of the ASC 805 because the acquired asset did not constitute a business or nonprofit activity. In accordance with ASC 805, the Company engaged a third-party valuation specialist to provide a fair value for the SOLOSEC IP as well as for the total consideration. Per the valuation, the fair value of the SOLOSEC IP exceeded 90% of the total consideration, which indicates that the screen test failed. Further, the Company did not acquire any substantive processes, which indicates that the acquisition is an asset acquisition rather than a business combination. The Company recorded the fair value of the future sales-based payments as contingent liabilities in accordance with ASC 450, Contingencies (ASC 450) and the fair value of the total consideration plus the transaction costs as an intangible asset in accordance with ASC 350, Intangibles (ASC 350). The total intangible asset will be amortized over the expected remaining useful life of the assets, which is 11 years.

Per the Transition Services Agreement (TSA) entered into in conjunction with the SOLOSEC asset acquisition, the Company is committed to purchasing finished goods inventory from the seller through a transition period ending in November 2026 at a pre-defined unit price. The total expected commitment is approximately $3.5 million; however, the quantities purchased can be negotiated if both parties agree. The Company concluded that the inventory purchase commitment does not meet the definition of derivatives under ASC 815. During the three and nine months ended September 30, 2024, there were approximately $0.1 million in purchases under this commitment. The Company expects to purchase approximately $0.2 million under this commitment for the remainder of 2024, $1.3 million in the year ended December 31, 2025, and $1.9 million in the year ended December 2026. The TSA also requires the seller to provide transitional support services until the Company can fully establish SOLOSEC operations; the Company is obligated to pay an immaterial amount quarterly for these services.

The Company is also obligated to pay a quarterly royalty in amounts equal to a certain percentage of the SOLOSEC net revenue, beginning July 14, 2024. There are no minimum quarterly or annual royalty payment amounts. Such royalty costs were immaterial for the three and nine months ended September 30, 2024. As of September 30, 2024, an immaterial amount related to the SOLOSEC royalty was included in contingent liabilities in the condensed consolidated balance sheet.

Operating Leases

Fleet Lease

In December 2019, the Company and Enterprise FM Trust (the Lessor) entered into a Master Equity Lease Agreement whereby the Company leases vehicles to be delivered by the Lessor from time to time with various monthly costs depending on whether the vehicles are delivered for a term of 24 or 36 months, commencing on each corresponding delivery date. The leased vehicles are for use by eligible employees of the Company’s commercial operations team. As of September 30, 2024, there were a total of 19 leased vehicles. The Company determined that the leased vehicles are accounted for as operating leases under ASC 842, Leases (ASC 842).

In September 2022, the Company extended the lease term of the vehicles with a term of 24 months by an additional 12 months. In May and June 2024, the Company again extended the lease term by an additional 12 months for vehicles with initial terms of 24 months. In both instances, the Company determined that such extensions are accounted for as modifications; the Company reassessed the lease classification and the incremental borrowing rate on the modification dates and accounted for these modifications accordingly.

2020 Lease and the First Amendment

On October 3, 2019, the Company entered into an office lease for approximately 24,474 square feet (the High Bluff Premises) pursuant to a non-cancelable lease agreement (the 2020 Lease). The 2020 Lease commenced on April 1, 2020 with an expiry of September 30, 2025, unless terminated earlier in accordance with its terms. The Company provided the landlord with a $0.8 million security deposit in the form of a letter of credit for the High Bluff Premises.

On April 14, 2020, the Company entered into the first amendment to the 2020 Lease for an additional 8,816 rentable square feet of the same office location (the Expansion Premises), which commenced on September 1, 2020 with an expiry of September 30, 2025. The Company provided an additional $0.05 million in a letter of credit for the Expansion Premises.

On March 20, 2023, the Company received a notice of default from its landlord for failing to timely pay March 2023 rent, resulting in a breach under the agreement. As a result, the Company’s letter of credit in the amount of $0.8 million, in restricted cash, was recovered by the landlord. In June 2023, the Company reached a settlement with the landlord. As a result of such settlement, the Company reversed its associated remaining ROU assets of $3.3 million and lease liabilities of $4.2 million and recognized a gain of $0.2 million.

26

2022 Sublease

On May 27, 2022, the Company entered into a sublease agreement with AMN Healthcare, Inc. (AMN), pursuant to which the Company agreed to sublease 16,637 rentable square feet of the High Bluff Premises to AMN for a term commencing on June 15, 2022 and ending coterminous with the 2020 Lease on September 30, 2025, in exchange for the sum of approximately $0.1 million per month, subject to an annual 3.5% increase each year. The sublease was terminated along with the settlement of the 2020 Lease in June 2023. Gross sublease income was zero and $0.3 million for the three and nine months ended September 30, 2023, respectively.

Supplemental Financial Statement Information

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost (in thousands)	Classification	2024		2023		2024		2023
Operating lease expense	Research and development	$	-	$	1	$	2	$	126
Operating lease expense	Selling and marketing		40		55		135		302
Operating lease expense	General and administrative		3		2		8		336
Total		$	43	$	58	$	145	$	764

Lease Term and Discount Rate	September 30, 2024			December 31, 2023
Weighted Average Remaining Lease Term (in years)		0.97			0.75
Weighted Average Discount Rate		12	%		12	%

Maturity of Operating Lease Liabilities (in thousands)	September 30, 2024
Remainder of 2024 (3 months)	$	39
Year ending December 31, 2025		86
Year ending December 31, 2026		8
Total lease payments		133
Less imputed interest		(7	)
Total	$	126

	Nine Months Ended September 30,
Other information (in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows in operating leases	$	218	$	1,470

Other Contractual Commitments

In November 2019, the Company entered into a supply and manufacturing agreement with a third-party to manufacture Phexxi, with potential to manufacture other product candidates, in accordance with all applicable current good manufacturing practice regulations. There were approximately $0.8 million and $1.0 million in purchases under the supply and manufacturing agreement for the three and nine months ended September 30, 2024, and no such purchases during the three and nine months ended September 30, 2023.

27

Contingencies

From time to time the Company may be involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business. As of September 30, 2024, there were no other claims or actions pending against the Company which management believes have a probable, or a reasonably possible, probability of an unfavorable outcome other than the TherapeuticsMD dispute as described below.

During the nine months ended September 30, 2023, the Company settled a portion of its trade payables with numerous vendors, which resulted in a $1.5 million reduction in trade payables. However, the Company may receive trade payable demand letters from its vendors that could lead to potential litigation. As of September 30, 2024, approximately 87% of our trade payables were greater than 90 days past due.

On December 14, 2020, a trademark dispute captioned TherapeuticsMD, Inc. v Evofem Biosciences, Inc., was filed in the U.S. District Court for the Southern District of Florida against the Company, alleging trademark infringement of certain trademarks owned by TherapeuticsMD under federal and state law (Case No. 9:20-cv-82296). On July 18, 2022, the Company settled the lawsuit with TherapeuticsMD, with certain requirements which were required to be performed by July 2024 (the Settlement Timeline), including changing the name of Phexxi. The Company failed to meet the terms of the settlement agreement by the Settlement Timeline. As a result, the Company is currently working with TherapeuticsMD on resolution of this issue. In accordance with ASC 450, the Company has accrued $0.8 million, the present value of the probable settlement amounts payable over the next several years, as a component of contingent liabilities in the condensed consolidated balance sheet.

As of November 13, 2024, the Company has received five letters from purported Company stockholders demanding that the Company’s board of directors take action on behalf of the Company to remedy allegations regarding the Company’s disclosures to shareholders with respect to various alleged omissions of material information in its preliminary proxy statement filed September 23, 2024 relating to the Amended and Restated Merger Agreement, as amended, and one demand made under Section 220 of the DGCL for books and records related to the transaction and disclosures in the proxy statement. The Company believes all such demands are without merit.

On September 27, 2024, Future Pak, LLC, a Michigan limited liability company, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended (SPA), by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a Purchaser and collectively Purchasers). The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA. According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to approximately $106.8 million. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Notice of Default which adds additional claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Securities Purchase and Security Agreement dated April 23, 2020, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (the Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024. The Company strongly disagrees with the Designated Agent’s claim that any Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

On November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment.

Intellectual Property Rights

In 2014, the Company entered into an amended and restated license agreement (the Rush License Agreement) with Rush University Medical Center (Rush University) pursuant to which Rush University granted the Company an exclusive, worldwide license of certain patents and know-how related to its multipurpose vaginal pH modulator technology. For the U.S. patent that the Company licensed from Rush University, multiple Orders Granting Interim Extension (OGIEs) have been received from the United States Patent and Trademark Office (USPTO), currently extending the expiration of this patent to March 2025. Pursuant to the Rush License Agreement, the Company is obligated to pay Rush University an earned royalty based upon a percentage of net sales in the range of mid-single digits until the expiration of this patent. In September 2020, the Company entered into the first amendment to the Rush License Agreement, pursuant to which the Company is also obligated to pay a minimum annual royalty amount of $0.1 million to the extent the earned royalties do not equal or exceed $0.1 million commencing January 1, 2021. Such royalty costs, included in cost of goods sold, were $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million and $0.4 million, respectively, for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, approximately $1.7 million and $1.1 million, respectively, were included in accrued expenses in the condensed consolidated balance sheets.

8. Convertible and Redeemable Preferred Stock and Stockholders’ Deficit

Warrants

In April and June 2020, pursuant to the Baker Bros. Purchase Agreement, as discussed in Note 4 – Debt, the Company issued warrants to purchase up to 2,732 shares of common stock in a private placement at an exercise price of $4,575 per share. The Second Baker Amendment provides that the exercise price of the Baker Warrants will equal the conversion price of the Baker Notes. The exercise price of the Baker warrants was $0.0154 per share as of September 30, 2024.

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In May 2022, the Company completed an underwritten public offering (the May 2022 Public Offering) which included the issuance of common warrants to purchase 362,640 shares of common stock at a price to the public of $93.75 and the issuance of common warrants to purchase 205,360 shares of common stock at a price to the public of $93.63 (the May 2022 Common Stock Warrants). The May 2022 Common Stock Warrants were exercisable beginning on May 24, 2022 and have a five-year term. Due to features in the May 2022 Common Stock Warrants, including dilution adjustments requiring strike price resets, as of September 30, 2024 there were 894,194 May 2022 Common Stock Warrants outstanding with an exercise price of $0.0154.

In June 2022, as required by the Second Baker Amendment, the Company issued the June 2022 Baker Warrants to purchase up to 582,886 shares of the Company’s common stock, $0.0001 par value per share. The June 2022 Baker Warrants have an exercise price of $93.75 per share and a five-year term and were exercisable beginning June 28, 2022. The June 2022 Baker Warrants also contain customary 4.99% and 19.99% limitations on exercise provisions. The exercise price and number of shares issuable upon exercise of the June 2022 Baker Warrants is subject to adjustment for certain dilutive issuances, stock splits and similar recapitalization transactions. The exercise price of these warrants was $0.0154 per share as of September 30, 2024.

In February, March, April, July, August, and September 2023, pursuant to the SSNs as discussed in Note 4 – Debt, the Company issued warrants to purchase up to 1,152,122 shares of the Company’s common stock at an exercise price of $2.50 per share, up to 2,615,383 shares of the Company’s common stock at an exercise price of $1.25 per share, and up to 22,189,349 shares of the Company’s common stock at an exercise price of $0.13 per share. The exercise price of these warrants was $0.0154 per share as of September 30, 2024.

On December 21, 2023, warrants to purchase up to 9,972,074 shares of the Company’s common stock were exchanged for 613 shares of the Company’s Series F-1 Shares.

As of September 30, 2024, warrants to purchase up to 20,807,539 shares of the Company’s common stock remain outstanding at a weighted average exercise price of $2.42 per share. In accordance with ASC 815, certain warrants previously classified as equity instruments were determined to be liability classified (the Reclassified Warrants) due to the Company having an insufficient number of authorized shares as of December 31, 2022; however, the impacted warrants were reclassified back to as equity instruments during the second quarter of 2023 as a result of the May 2023 Reverse Stock Split. During the first quarter of 2024, the Company obtained waivers from a majority of the convertible instrument holders, removing the requirement for shares to be reserved for conversion of their instruments, which will prevent the instruments from needing to be liability classified due to an insufficient number of authorized shares going forward. The Company will continue to re-evaluate the classification of its warrants at the close of each reporting period to determine the proper balance sheet classification for them. These warrants are summarized below:

Type of Warrants	Underlying common stock to be Purchased		Exercise Price		Issue Date	Exercise Period
Common Warrants		451	$	14,062.50	May 24, 2018	May 24, 2018 to May 24 2025
Common Warrants		888	$	11,962.50	April 11, 2019	October 11, 2019 to April 11, 2026
Common Warrants		1,480	$	11,962.50	June 10, 2019	December 10, 2019 to June 10, 2026
Common Warrants		1,639	$	0.0154	April 24, 2020	April 24, 2020 to April 24, 2025
Common Warrants		1,092	$	0.0154	June 9, 2020	June 9, 2020 to June 9, 2025
Common Warrants		8,003	$	735.00	January 13, 2022	March 1, 2022 to March 1, 2027
Common Warrants		8,303	$	897.56	March 1, 2022	March 1, 2022 to March 1, 2027
Common Warrants		6,666	$	309.56	May 4, 2022	May 4, 2022 to May 4, 2027
Common Warrants		894,194	$	0.0154	May 24, 2022	May 24, 2022 to May 24, 2027
Common Warrants		582,886	$	0.0154	June 28, 2022	May 24, 2022 to June 28, 2027
Common Warrants		49,227	$	0.0154	December 21, 2022	December 21, 2022 to December 21, 2027
Common Warrants		130,461	$	0.0154	February 17, 2023	February 17, 2023 to February 17, 2028
Common Warrants		258,584	$	0.0154	March 20, 2023	March 20, 2023 to March 20, 2028
Common Warrants		369,231	$	0.0154	April 5, 2023	April 5, 2023 to April 5, 2028
Common Warrants		349,463	$	0.0154	July 3, 2023	July 3, 2023 to July 3, 2028
Common Warrants		615,384	$	0.0154	August 4, 2023	August 4, 2023 to August 4, 2028
Common Warrants		12,721,893	$	0.0154	September 27, 2023	September 27, 2023 to September 27, 2028
Prefunded Common Warrants		4,807,694	$	0.0010	September 27, 2023	September 27, 2023 to September 27, 2028
Total		20,807,539

Preferred Stock

Effective December 15, 2021, the Company amended and restated its certificate of incorporation, under which the Company is currently authorized to issue up to 5,000,000 shares of total preferred stock, including the authorized convertible and redeemable preferred stock designated for Series B-1 and B-2, Series C, Series E-1, and Series F-1, and nonconvertible and redeemable preferred stock (Series D), par value $0.0001 per share.

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Convertible and Redeemable Preferred Stock

On August 7, 2023, the Company filed a Certificate of Designation of Series E-1 Convertible Preferred Stock (E-1 Certificate of Designation), par value $0.0001 per share (the Series E-1 Shares). An aggregate of 2,300 shares was authorized. The Series E-1 Shares are convertible into shares of common stock at a conversion price of $0.40 per share and are both a) counted toward quorum on the basis of and b) have voting rights equal to the number of shares of common stock into which the Series E-1 Shares are then convertible, subject to standard 4.99% or 9.99% beneficial ownership limitations. The Series E-1 Shares are senior to all common stock with respect to preferences as to dividends, distributions, and payments upon a dissolution event. In the event of a liquidation event, the Series E-1 Shares are entitled to receive an amount per share equal to the Black Scholes Value as of the liquidation event plus the greater of 125% of the conversion amount (as defined in the Certificate of Designation) and the amount the holder of the Series E-1 Shares would receive if the shares were converted into common stock immediately prior to the liquidation event. If the funds available for liquidation are insufficient to pay the full amount due to the holders of the Series E-1 Shares, each holder will receive a percentage payout. The Series E-1 Shares are entitled to dividends at a rate of 10% per annum or 12% upon a triggering event. Dividends are payable in shares of common stock and may, at the Company’s election, be capitalized and added to the principal monthly. The Series E-1 Shares also have a provision that allows them to be converted to common stock at a conversion rate equal to the Alternate Conversion Price (as defined in the E-1 Certificate of Designation) times the number of shares subject to conversion times the 25% redemption premium in the event of a Triggering Event (as defined in the E-1 Certificate of Designation) such as in a liquidation event. The Series E-1 Shares are mandatorily redeemable in the event of bankruptcy.

On August 7, 2023, certain investors party to the December 2022 Notes and the February 2023 Notes exchanged $1.8 million total in principal and accrued interest under the outstanding convertible promissory notes for 1,800 shares of Series E-1 Shares (the August 2023 Preferred Stock Transaction). Per the E-1 Certificate of Designation, the conversion rate can also be adjusted in several future circumstances, such as on certain dates after the exchange date and upon the issuance of additional convertible securities with a lower conversion rate or in the instance of a Triggering Event. As such, the conversion price as of June 30, 2024 was adjusted to $0.0154 per share and the price has not been adjusted since. The Series E-1 Shares are classified as mezzanine equity within the condensed consolidated balance sheets in accordance with ASC 480 because of a fixed 25% redemption premium upon a Triggering Event and no mandatory redemption feature. During the year ended December 31, 2023, $1.8 million was recorded as an increase to additional paid-in-capital for the preferred shares in the condensed consolidated statement of convertible and redeemable preferred stock and stockholders’ deficit related to the August 2023 Preferred Stock Transaction. For the three and nine months ended September 30, 2024, an immaterial and $0.1 million deemed dividend was recorded as an increase to the number of Series E-1 Shares outstanding.

On December 11, 2023, the Company filed a Certificate of Designation of Series F-1 Convertible Preferred Stock (F-1 Certificate of Designation), par value $0.0001 per share (the Series F-1 Shares). An aggregate of 95,000 shares was authorized. The Series F-1 Shares are convertible into shares of common stock at a conversion price of $0.0635 per share and do not have the right to vote on any matters presented to the holders of the Company’s common stock. The Series F-1 Shares are senior to all common stock and subordinate to the Series E-1 Shares with respect to preferences as to distributions and payments upon a dissolution event. In the event of a liquidation event, the Series F-1 Shares are entitled to receive an amount per share equal to the Black Scholes Value as of the liquidation event plus the greater of 125% of the conversion amount (as defined in the F-1 Certificate of Designation) and the amount the holder of the Series F-1 Shares would receive if the shares were converted into common stock immediately prior to the liquidation event. If the funds available for liquidation are insufficient to pay the full amount due to the holders of the Series F-1 Shares, each holder will receive a percentage payout. The Series F-1 Shares are not entitled to dividends. The Series F-1 Shares also have a provision that allows them to be converted to common stock at a conversion rate equal to the Alternate Conversion Price (as defined in the F-1 Certificate of Designation) times the number of shares subject to conversion times the 25% redemption premium in the event of a Triggering Event (as defined in the F-1 Certificate of Designation) such as in a liquidation event. The Series F-1 Shares are mandatorily redeemable in the event of bankruptcy. In June 2024, the Required Holders, as defined in the F-1 Certificate of Designation, approved an amended and restated certificate of designation (the Amended F-1 Certificate of Designation) to the Company’s certificate of designation designating the rights, preferences and limitations of the Company’s Series F-1 Shares. The Amended F-1 Certificate of Designation provides for the removal of the conversion price adjustment provisions previously included and changed the conversion price to $0.0154.

On December 21, 2023, the Company issued a total of 22,280 Series F-1 Shares to certain investors, including 613 shares exchanged for warrants to purchase up to 9,972,074 shares of the Company’s common stock and 21,667 shares to exchange a partial value of the outstanding purchase rights. The holders of the Series F-1 Shares immediately exchanged their Series F-1 Shares into Aditxt’s Series A-1 preferred stock and, as a result, Aditxt currently holds all outstanding Series F-1 Shares. The Series F-1 Shares are to be cancelled upon the consummation of the Merger.

During the third quarter of 2024, as part of the funding requirement by Aditxt pursuant to the A&R Merger Agreement, the Company issued a total of 1,260 Series F-1 Shares to Aditxt for an aggregate purchase price of approximately $1.3 million. These shares were recorded at fair value with the variance between the immaterial fair value and the $1.3 million cash received being recorded as additional paid-in-capital in the condensed consolidated balance sheet as of September 30, 2024. As discussed in Note 10 - Subsequent events, subsequent to September 30, 2024, the Company issued a total of 2,740 Series F-1 Shares to Aditxt for an aggregate purchase price of $2.7 million.

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Nonconvertible and Redeemable Preferred Stock

On December 16, 2022, the Company filed a Certificate of Designation of Series D Non-Convertible Preferred Stock (the D Certificate of Designation), par value $0.0001 per share (the Series D Preferred Shares). An aggregate of 70 shares was authorized; these shares were not convertible into shares of common stock, had limited voting rights equal to 1% of the total voting power of the then-outstanding shares of common stock entitled to vote, were not entitled to dividends, and were required to be redeemed by the Company once its stockholders approved a reverse split, as described in the D Certificate of Designation. All 70 shares of the Series D Preferred were subsequently issued in connection with the December 2022 Securities Purchase Agreement as discussed in Note 4 – Debt. The Series D Preferred Shares were redeemed in July 2023.

Common Stock

Effective September 14, 2023, the Company further amended its amended and restated certificate of incorporation to increase the number of authorized shares of common stock to 3,000,000,000 shares.

Purchase Rights

On September 15, 2022, the Company entered into certain exchange agreements with the Adjuvant Purchasers and the May 2022 Notes Purchasers to exchange, upon request, the Purchase Rights for an aggregate of 942,080 shares of the Company’s common stock. The number of right shares for each Purchase Right was initially fixed at issuance, but subject to certain customary adjustments for certain dilutive Company equity issuances until the second anniversary of issuance. These Purchase Rights expire on June 28, 2027. Refer to Note 6 – Fair Value of Financial Instruments for the accounting treatment of the Purchase Rights.

In 2023, the Company signed an additional agreement with the holders of the Purchase Rights which fixed the total aggregate value of the Purchase Rights at $24.7 million, to be paid in a variable number of shares based on the then current exercise price. On December 21, 2023, the Company issued 21,667 of the Series F-1 Shares in exchange for a partial value of certain purchase rights, as described above.

In connection with the issuance of the SSNs, during the three and nine months ended September 30, 2024, the number of outstanding Purchase Rights increased by zero and 1,161,636,815, respectively, and increased by 262,221,766 and 283,747,468, respectively, during the three and nine months ended September 30, 2023, due to the reset of their exercise price. This was recorded as a loss on issuance of financial instruments in an immaterial amount in the condensed consolidated statements of operations for the nine months ended September 30, 2024. The reset of the exercise price resulted in a loss on issuance of financial instruments of $4.9 million in both the three and nine months ended September 30, 2023. The exercise price will be further adjusted if any other convertible instruments have price resets.

During the three and nine months ended September 30, 2024, the Company issued 17,500,000 and 59,575,000 shares of common stock upon the exercise of certain Purchase Rights, respectively. During the three and nine months ended September 30, 2023, the Company issued 2,767,332 and 4,018,256 shares of common stock upon the exercise of certain Purchase Rights, respectively. As of September 30, 2024, Purchase Rights of 1,529,448,899 shares of the Company’s common stock remained outstanding.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance is as follows in common equivalent shares as of September 30, 2024:

Common stock issuable upon the exercise of stock options outstanding	3,747
Common stock issuable upon the exercise of common stock warrants	10,598,201
Common stock available for future issuance under the 2019 ESPP	509
Common stock available for future issuance under the Amended and Restated 2014 Plan	5,789
Common stock available for future issuance under the Amended Inducement Plan	609
Common stock reserved for the exercise of purchase rights	741,490,642
Common stock reserved for the conversion of convertible notes	158,598,174
Common stock reserved for the conversion of series E-1 preferred stock	40,991,761
Total common stock reserved for future issuance (1)	951,689,432

(1) The potentially dilutive securities in Note 2 – Summary of Significant Accounting Policies includes all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in the table above includes the shares that must legally be reserved based on the applicable instruments’ agreements.

9. Stock-based Compensation

Equity Incentive Plans

The following table summarizes stock-based compensation expense related to stock options granted to employees, non-employee directors and consultants included in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	5	$	30	$	31	$	99
Selling and marketing		18		42		77		146
General and administrative		180		186		551		698
Total	$	203	$	258	$	659	$	943

Stock Options

There were no stock options granted during the three or nine months ended September 30, 2024 or 2023. As of September 30, 2024, unrecognized stock-based compensation expense for employee stock options was approximately $0.4 million, which the Company expects to recognize over a weighted-average remaining period of 0.9 years, assuming all unvested options become fully vested.

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Employee Stock Purchase Plan

The purchase price under the 2019 ESPP is 85% of the lesser of the fair market value of the common stock on the first or the last business day of an offering period. The maximum number of shares of common stock that may be purchased by any participant during an offering period is equal to $25,000 divided by the fair market value of the common stock on the first business day of an offering period. In October 2022, the Board suspended future offering periods.

Restricted Stock Awards

There were no shares of performance-based RSAs granted to the Company’s executive management team in any period presented.

For performance-based RSAs, (i) the fair value of the award is determined on the grant date; (ii) the Company assesses the probability of achieving each individual milestone associated with the award using reasonable assumptions based on the Company’s operation performance towards each milestone; (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met; and (iv) the Company reassesses the probability of achieving each individual milestone at each reporting date, and any change in estimate is accounted for through a cumulative adjustment in the period when the change in estimate occurs. Non-performance based RSAs are valued at the fair value on the grant date and the associated expenses will be recognized over the vesting period.

As of September 30, 2024, there was no unrecognized noncash stock-based compensation expense related to unvested RSAs.

10. Subsequent Events

Notes Conversions

Subsequent to September 30, 2024, 2,727,668 common shares were issued for conversion of $0.04 million of convertible notes.

Notice of Default and Termination of Forbearance Agreement

On September 27, 2024, Future Pak, LLC, a Michigan limited liability company, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended (SPA), by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a “Purchaser” and collectively Purchasers). The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA.

According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to approximately $106.8 million. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Notice of Default which adds additional claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Securities Purchase and Security Agreement dated April 23, 2020, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (the Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024.

Subsequently, on November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment.

The Company strongly disagrees with the Designated Agent’s claim that any Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

Third Amendment to the A&R Merger Agreement and F-1 Issuance

On October 2, 2024, the Company, Aditxt and Merger Sub entered into the third amendment to the A&R Merger Agreement (the Third Amendment), to (i) change the date of the Third Parent Equity Investment Date (as defined in the A&R Merger Agreement) from September 30, 2024 to October 2, 2024, (ii) change the Third Parent Equity Investment from 1,500 shares of Series F-1 Preferred Shares to 720 shares of Series F-1 Preferred Shares, and (iii) amend the Fourth Parent Equity Investment (as defined in the A&R Merger Agreement) from 1,500 shares of Series F-1 Preferred Shares to 2,280. Pursuant to the Third Amendment to the A&R Merger Agreement, Aditxt purchased an aggregate of 2,740 shares of Series F-1 Preferred Shares for an aggregate $2.7 million subsequent to September 30, 2024.

Support Agreements

Between October 28 and October 31, 2024, the Company entered into support agreements (each a Support Agreement) with some of its investors (the Investors and each an Investor) pursuant to which the Investors agreed (i) to vote all Subject Shares (as defined in the Support Agreement) that an Investor is entitled to vote at the time any vote to approve and adopt the A&R Merger Agreement and the Merger at any meeting of the stockholders of the Company, and at any adjournment thereof, at which the A&R Merger Agreement is submitted for consideration and vote of the stockholders of the Company, and (ii) that he or it will not vote any Subject Shares in favor of, and will vote such Subject Shares against the approval of, any Company Acquisition Proposal (as defined in the Support Agreement). Each Investor also revoked any and all previous proxies granted with respect to the Subject Shares. The Investors agreed that all shares of Company Capital Stock (as defined in the Support Agreement) that each Investor purchases, acquires the right to vote, or otherwise acquires beneficial ownership of, after the execution of the Support Agreement and prior to the Expiration Date (as defined below) shall be subject to the terms and conditions of the Support Agreement.

Furthermore, the Investors agreed not to sell or transfer any of such Subject Shares until: (a) the A&R Merger Agreement shall have been terminated for any reason; (b) the Merger shall become effective in accordance with the terms and provisions of the A&R Merger Agreement; (c) the acquisition by Aditxt of all Subject Shares of the Investors, whether pursuant to the Merger or otherwise; (d) any amendment, change or waiver to the A&R Merger Agreement as in effect on the date hereof, without each Investor’s consent, that (1) decreases the amount, or changes the form or timing (except with respect to extensions of time of the offer in accordance with the terms of the A&R Merger Agreement) of consideration payable to the Investors pursuant to the terms of the A&R Merger Agreement as in effect on the date hereof or (2) materially and adversely affects such Investor; or (e) is agreed to in writing by Aditxt and each Investor (collectively the Expiration date).

The Investors own collectively an aggregate of 1,468 shares of Company preferred stock, 364,539,337 shares of common stock issuable upon the conversion of convertible notes, 9,549,716 shares of common stock issuable upon exercise of warrants, and 788,983,896 shares of Company common stock issuable upon any other instrument convertible into Company common stock.

Employment Agreements

On November 8, 2024, the company entered into amended and restated employment agreements with Ms. Pelletier and Ms. Zhang. If Ms. Pelletier is terminated other than for cause or Ms. Pelletier resigns for good reason, then pursuant to her amended employment agreement, the Company will pay and provide to Ms. Pelletier: (i) an amount equal to her target bonus for the year in which the termination occurs and (ii) an amount equal to thirty-six months of her then-current base salary in a lump sum. If Ms. Zhang is terminated other than for cause or Ms. Zhang resigns for good reason, then pursuant to her amended employment agreement, the Company will pay and provide to Ms. Zhang: (i) an amount equal to her target bonus (such bonus percentage was updated to 75%) for the year in which the termination occurs and (ii) an amount equal to twenty-four months of her then-current base salary in a lump sum. The employment agreement is further described under Item 5 of this Quarterly Report on form 10-Q.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The terms “we,” “us,” “our,” “Evofem” or the “Company” refer collectively to Evofem Biosciences, Inc. and its wholly-owned subsidiaries, unless otherwise stated. All information presented in this quarterly report on Form 10-Q (Quarterly 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.

You should read the following discussion and analysis of our financial condition and results of operations together with our condensed consolidated financial statements and related notes appearing elsewhere in this Quarterly Report. Some of the information contained in this discussion and analysis is set forth elsewhere in this Quarterly Report, including information with respect to our plans and strategy for our business and related financing, includes forward-looking statements that involve risks and uncertainties. As a result of many factors, including those factors set forth in the “Risk Factors” section of this Quarterly Report, our actual results could differ materially from the results described in, or implied by, the forward-looking statements contained in the following discussion and analysis.

Overview

We are a San Diego-based commercial-stage biopharmaceutical company with a strong focus on innovation in women’s health. Our first commercial product, Phexxi, was approved by the FDA on May 22, 2020. Phexxi is the first and only non-hormonal prescription contraceptive gel. It is locally acting, with no systemic activity, and used on-demand by women only when they have sex. Because Phexxi is a non-hormonal contraceptive, it is not associated with side effects of exogenous hormone use like depression, weight gain, headaches, loss of libido, mood swings and irritability. Taking hormones may not be right for some women, especially those with certain medical conditions, including clotting disorders hormone-sensitive cancer, diabetes or a BMI over 30, or those who are breast feeding or smoke. More than 23.3 million women in the U.S. will not use a hormonal contraceptive.

Evofem has delivered Phexxi net sales growth in each consecutive year since it was launched in Sept 2020. Key growth drivers for 2024 include expanded use of Phexxi in women who take oral birth control pills in conjunction with GLP-1 prescription medications like Ozempic, Mounjaro and Zepbound for weight loss. These drugs may make oral birth control pills less effective at certain points in the dosing schedule. Per the USPI, prescribers are instructed to “advise patients using oral contraceptives to switch to a non-oral contraceptive method or add a barrier method” to prevent unintended pregnancy during these times.

Outside the U.S., Phexxi was approved in Nigeria on October 6, 2022, as Femidence™ by the National Agency for Food and Drug Administration and Control. To-date, Phexxi has been submitted for approval in Mexico, Ethiopia and Ghana. We intend to commercialize Phexxi in all other global markets through partnerships or licensing agreements.

We halted clinical development of our investigational product candidates in October 2022 to focus resources on growing sales of Phexxi for the prevention of pregnancy.

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On July 17, 2024, we licensed exclusive commercial rights to Phexxi in the Middle East to Pharma 1 Drug Store, an emerging Emirati health care company. The licensed territory includes the United Arab Emirates (UAE), Kuwait, Saudi Arabia, Qatar and certain other countries in the region. Pharma 1 is responsible for obtaining and maintaining any regulatory approvals required to market and sell Phexxi, and will handle all aspects of distribution, sales and marketing, pharmacovigilance and all other commercial functions in these countries. Evofem will supply Phexxi to Pharma 1 at cost-plus. Pharma 1 is expected to file for regulatory approval of Phexxi in the UAE in the fourth quarter of 2024 and is contractually obligated to launch within 60 days of approval.

In July 2024 we acquired global rights to SOLOSEC. This FDA-approved single-dose oral antimicrobial agent provides a complete course of therapy for the treatment of two common sexual health infections – bacterial vaginosis (BV) and trichomoniasis. The SOLOSEC acquisition aligns with and advances our mission to improve access to innovative and differentiated options that impact women’s daily lives. We expect commercialization of SOLOSEC will benefit from our commercial infrastructure and strong physician relationships.

Recent Developments

On October 30, 2024 Evofem paid its outstanding balance, including interest and penalties, to the FDA for its Fiscal Year 2023, 2024 and 2025 Prescription Drug User Fee Act (PDUFA) invoices for Phexxi and the 2025 PDUFA invoice for SOLOSEC.

Notice of Default and Termination of Forbearance Agreement

On September 27, 2024, Future Pak, LLC, a Michigan limited liability company, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended (SPA), by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a “Purchaser” and collectively Purchasers). The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA.

According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to approximately $106.8 million. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

Subsequently, on October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Notice of Default which adds additional claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Securities Purchase and Security Agreement dated April 23, 2020, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (the Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024.

The Company strongly disagrees with the Designated Agent’s claim that any Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

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Support Agreements

Between October 28 and October 31, 2024, the Company entered into support agreements (each a Support Agreement) with some of its investors (the Investors and each an Investor) pursuant to which the Investors agreed (i) to vote all Subject Shares (as defined in the Support Agreement) that an Investor is entitled to vote at the time any vote to approve and adopt the A&R Merger Agreement and the Merger at any meeting of the stockholders of the Company, and at any adjournment thereof, at which the A&R Merger Agreement is submitted for consideration and vote of the stockholders of the Company, and (ii) that he or it will not vote any Subject Shares in favor of, and will vote such Subject Shares against the approval of, any Company Acquisition Proposal (as defined in the Support Agreement). Each Investor also revoked any and all previous proxies granted with respect to the Subject Shares. The Investors agreed that all shares of Company Capital Stock (as defined in the Support Agreement) that each Investor purchases, acquires the right to vote, or otherwise acquires beneficial ownership of, after the execution of the Support Agreement and prior to the Expiration Date (as defined below) shall be subject to the terms and conditions of the Support Agreement.

Furthermore, the Investors agreed not to sell or transfer any of such Subject Shares until: (a) the A&R Merger Agreement shall have been terminated for any reason; (b) the Merger shall become effective in accordance with the terms and provisions of the A&R Merger Agreement; (c) the acquisition by Aditxt of all Subject Shares of the Investors, whether pursuant to the Merger or otherwise; (d) any amendment, change or waiver to the A&R Merger Agreement as in effect on the date hereof, without each Investor’s consent, that (1) decreases the amount, or changes the form or timing (except with respect to extensions of time of the offer in accordance with the terms of the A&R Merger Agreement) of consideration payable to the Investors pursuant to the terms of the A&R Merger Agreement as in effect on the date hereof or (2) materially and adversely affects such Investor; or (e) is agreed to in writing by Aditxt and each Investor (collectively the Expiration date).

The Investors own collectively an aggregate of 1,468 shares of Company preferred stock, 364,539,337 shares of common stock issuable upon the conversion of convertible notes, 9,549,716 shares of common stock issuable upon exercise of warrants, and 788,983,896 shares of Company common stock issuable upon any other instrument convertible into Company common stock.

Issuance of Series F-1 Preferred Shares to Aditxt

In October 2024, the Company received $2.7 million, in aggregate, from the sale of Series F-1 preferred stock to Aditxt, Inc. under the A&R Merger Agreement, as discussed in detail below.

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Aditxt Merger

On December 11, 2023, the Company entered into an Agreement and Plan of Merger, as amended, (the Merger Agreement) with Aditxt, Inc., a Delaware corporation (Aditxt), Adifem, Inc., a Delaware corporation and wholly-owned Subsidiary of Aditxt (Merger Sub), pursuant to which, and on the terms and subject to the conditions thereof, Merger Sub will merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Aditxt (the Merger).

On July 12, 2024, the Company, the Merger Sub and Aditxt entered into the Amended and Restated Merger Agreement (the A&R Merger Agreement) which amends and restates in its entirety the Agreement and Plan of Merger (as amended January 10, 2024, January 30, 2024, February 29, 2024, and May 2, 2024 (collectively, the Original Merger Agreement)). Except as described below, the terms and provisions of the A&R Merger Agreement are consistent with the terms and provision of the Original Merger Agreement.

● As consideration for the Merger, Parent will (i) pay $1.8 million less an amount equal to the product of (x) the number of Dissenting Shares represented by Company Common Stock and (y) the Common Exchange Ratio (as defined in the A&R Merger Agreement) (the Common Consideration)

● Each share of the Company’s Series E-1 Preferred Stock, par value $0.0001 (the Series E-1), issued and outstanding as of the Effective Time (as defined in the A&R Merger Agreement) shall automatically be converted into the right to receive from Aditxt one share Parent Preferred Stock (the Preferred Merger Consideration)

At the Effective Time of the Merger:

(i)	The Company Convertible Note Holders will enter into an Exchange Agreement, pursuant to which these Note Holders exchange the value of their then-outstanding Company Convertible Notes and purchase rights for an aggregate of not more than 88,161 shares of Parent Preferred Stock.
(ii)	Each stock option of the Company (the Options), that was outstanding and unexercised immediately prior to the Effective Time will be cancelled without the right to receive any consideration.
(iii)	all shares of Company Common Stock or Company Preferred Stock held by Parent or Merger Sub or by any wholly-owned Subsidiary thereof, shall be automatically cancelled and retired and shall cease to exist and no consideration shall be delivered or deliverable in exchange therefore;

Further, Aditxt agreed to, on or prior to: (a) July 12, 2024, purchase 500 shares of the Company’s Series F-1 Preferred Shares for an aggregate purchase price of $0.5 million (the July Purchase) (b) August 9, 2024, purchase an additional 500 shares of F-1 Preferred Shares for an aggregate purchase price of $0.5 million (the August Purchase), (c) the earlier of August 30, 2024 or within five business days of the closing of a public offering by Aditxt resulting in aggregate net proceeds to Aditxt of no less than $20.0 million, purchase an additional 2,000 shares of F-1 Preferred Shares for an aggregate purchase price of $2.0 million (the Third Parent Equity Investment); and (d) September 30, 2024, purchase an additional 1,000 shares of F-1 Preferred Stock at an aggregate purchase price of $1.0 million (the Fourth Parent Equity Investment). The July Purchase and subsequent August Purchase of 500 shares of the Company’s Series F-1 Preferred Shares in each respective purchase were completed as scheduled.

On August 16, 2024, the Company, Aditxt and Merger Sub entered into the first amendment to the A&R Merger Agreement (the First Amendment), to change the funding date for the Third Parent Equity Investment Date (as defined in the A&R Merger Agreement) from August 30, 2024 to the earlier of (i) September 6, 2024 or (ii) within five (5) business days of the closing of a public offering by Parent resulting in aggregate net proceeds to Parent of no less than $20.0 million.

On September 6, 2024, the Company, Aditxt and Merger Sub entered into the second amendment to the A&R Merger Agreement (the Second Amendment), to (i) change the date of the Third Parent Equity Investment Date and Fourth Parent Equity Investment Date (as defined in the A&R Merger Agreement) from September 6, 2024 and September 30, 2024 to September 30, 2024 and October 31, 2024, respectively and (ii) to change the required consummation date to November 29, 2024.

On October 2, 2024, the Company, Aditxt and Merger Sub entered into the third amendment to the A&R Merger Agreement (the Third Amendment), to (i) change the date of the Third Parent Equity Investment Date (as defined in the A&R Merger Agreement) from September 30, 2024 to October 2, 2024, (ii) change the Third Parent Equity Investment from 1,500 shares of Series F-1 Preferred Shares to 720 shares of Series F-1 Preferred Shares, and (iii) amend the Fourth Parent Equity Investment (as defined in the A&R Merger Agreement) from 1,500 shares of Series F-1 Preferred Shares to 2,280. The Third and Fourth Parent Equity Investments were timely completed on October 2 and October 28, 2024, respectively.

The companies are working toward closing in 2025. The accompanying condensed consolidated financial statements in this Quarterly Report do not reflect the potential impact of the A&R Merger Agreement.

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The A&R Merger Agreement, as amended, is subject to certain closing conditioned and contains customary representations, warranties and covenants and indemnifications provisions.

The consummation of the Merger is conditioned upon, among other things: (i) the Company Shareholder approval shall having been obtained in accordance with applicable Law; (ii) no governmental entity having jurisdiction over any party shall have issue any order, decree, ruling injunction or other action that is in effect restraining the Merger; (iii) a voting agreement shall have been executed and delivered by the parties thereto; (iv) all Company preferred stock shall have been converted to Company common stock except for the Unconverted Company Preferred Stock (as defined by the A&R Merger Agreement); (v) the Company shall have received agreements from all of the holders of the Company’s warrants, duly executed, containing waivers with respect to any fundamental transaction, change in control or other similar rights that such warrant holders may have under any such Company warrants and exchange such Company warrants as they hold for an aggregate of not more than 930,336 shares of Parent Preferred Stock (as defined in the A&R Merger Agreement); (vi) the Company shall have cashed out any other warrant holder who has not provided a warrant holder agreement, provided, however, that the aggregate amount of such cash out for any and all other warrant holders who have not provided a warrant holder agreement shall not exceed $0.15 million; (vii) the Company shall have obtained waivers from holders of Company convertible notes of the original principal amount thereof with respect to any fundamental transaction rights such Company convertible note holders may have under any such Company convertible notes, including any right to vote, consent or otherwise approve or veto any of the transaction contemplated by this A&R Merger Agreement; (viii) Aditxt shall have received sufficient financing to satisfy its payment obligations under the A&R Merger Agreement; (ix) the requisite stockholder approval shall have been obtained by Aditxt at a special meeting of its stockholders to approve the Parent Stock Issuance (as defined in the A&R Merger Agreement); (x) Aditxt shall have received a compliance certificate from the Company certifying Company complied with all reps and warranties in the A&R Merger Agreement; (xi) Aditxt shall have received waivers from the parties to the agreements listed in Section 7.2(f) of the A&R Merger Agreement Parent Disclosure Letter of the issuance of securities in a “Variable Rate Transaction” (as such term in defined in such agreements); (xii) Parent shall have received a certificate certifying that no interest in the Company is a U.S. real property interest, as required under U.S. treasury regulation section 1.897-2(h) and 1.1445-3(c); (xiii) Aditxt shall have paid, in full, the Repurchase Price, as defined in the Fourth Amendment to the Securities Purchase and Security Agreement dated as of September 8, 2023, by and among the Company, Baker Brothers Life Sciences, L.P., 667, L.P. and Bakers Bros. Advisors LP, which was assigned to Future Pak in 2024; (xv) there shall be no more than 4,141,434 dissenting shares that are Company common stock or 98 dissenting shares that are Company preferred stock; (xiv) Company shall have received from Aditxt a compliance certificate certifying that Parent has complied with all representations and warranties; and (xv) that Aditxt shall be incompliance with stockholders’ equity requirements in Nasdaq listing rule 5550(b)(1).

On September 23, 2024, the Company filed a preliminary proxy statement with the SEC. Subject to certain exceptions, the Company’s Board of Directors will recommend that the A&R Merger Agreement be adopted by the Company’s stockholders at a special meeting of the Company’s stockholders (the Company Board Recommendation). However, subject to the satisfaction of certain terms and conditions, the Company and the Board are permitted to take certain actions which may, as more fully described in the A&R Merger Agreement, include changing the Company Board Recommendation and entering into a definitive agreement with respect to a Company Change of Recommendation (as defined in the A&R Merger Agreement) if the Company Board or any committee thereof determines in good faith, after consultation with the Company’s outside legal and financial advisors and after taking into account relevant legal, financial, regulatory, estimated timing of consummation and other aspects of such proposal that the Company Board considers in good faith and the Person or group making such proposal, would, if consummated in accordance with its terms, result in a transaction more favorable to the Company Shareholders than the Merger. If the Company has a Company Change of Recommendation, the Company must provide Aditxt with a ten (10) calendar day written notice thereof and negotiate with Aditxt in good faith to provide a competing offer.

In connection with the Merger Agreement, Aditxt, the Company and the holders (the Holders) of certain senior indebtedness of Evofem (the Notes) entered into an Assignment Agreement dated December 11, 2023 (the December Assignment Agreement), pursuant to which the Holders assigned the Notes to Aditxt in consideration for the issuance by Aditxt of (i) an aggregate principal amount of $5.0 million in secured notes of Aditxt due on January 2, 2024 (the January 2024 Secured Notes), (ii) an aggregate principal amount of $8.0 million in secured notes of Aditxt due on September 30, 2024 (the September 2024 Secured Notes), (iii) an aggregate principal amount of $5.0 million in ten-year unsecured notes (the Unsecured Notes), and (iv) payment of $0.2 million in respect of net sales of Phexxi in respect of the calendar quarter ended September 30, 2023.

On February 26, 2024, Aditxt and the Holders entered into an Assignment Agreement (the February Assignment Agreement), pursuant to which the Company consented to the assignment of all remaining amounts due under the Notes from Aditxt back to the Holders.

On February 29, 2024, as part of the Third Amendment, Aditxt agreed to have, as a condition of closing, that the outstanding balance, plus all accrued and unpaid interest thereon, in an amount not to exceed the Repurchase Price, shall have been paid in full. The A&R Merger Agreement, as amended, entered into on July 12, 2024, maintains the same condition to closing. As discussed above, the A&R Merger Agreement was amended on August 16, 2024, September 6, 2024, and October 2, 2024; none of the amendments updated this closing condition.

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Phexxi as a Contraceptive; Commercial Strategies

In September 2020, we commercially launched Phexxi in the United States. Our sales force promotes Phexxi directly to obstetrician/gynecologists and their affiliated health professionals, who collectively write the majority of prescriptions for contraceptive products. Our sales force comprises approximately 16 regional sales representatives, two business directors and an SVP of Commercial Operations, supported by a self-guided virtual health care provider (HCP) learning platform. Additionally, we offer women direct access to Phexxi via a telehealth platform. Using this platform, women can directly meet with an HCP to determine their eligibility for a Phexxi prescription and, if eligible, have the prescription written by the HCP, then filled and mailed directly to them by a third-party pharmacy.

Our comprehensive commercial strategy for Phexxi includes marketing and product awareness campaigns targeting women of reproductive potential in the U.S., including the approximately 23.3 million women who are not using hormonal contraception and the approximately 20.0 million women who are using a prescription contraceptive, some of whom, particularly oral birth control pill users, may be ready to move to an FDA-approved, non-invasive, non-systemic hormone-free contraceptive, as well as certain identified target HCP segments. In addition to marketing and product awareness campaigns, our commercial strategy includes payer outreach and execution of our consumer digital and media strategy.

Key growth drivers for 2024 include expanded use of Phexxi in women who take oral birth control pills in conjunction with GLP-1 prescription medications like Ozempic, Mounjaro and Zepbound for weight loss. These drugs may make oral birth control pills less effective at certain points in the dosing schedule. Per the USPI, prescribers are instructed to “advise patients using oral contraceptives to switch to a non-oral contraceptive method or add a barrier method” to prevent unintended pregnancy during these times.

We continue working to increase the number of lives covered and to gain a preferred formulary position for Phexxi. We gained approximately 17.7 million unrestricted lives (people whose plans cover Phexxi with no PA required) in the past two years, a 5% increase in unrestricted coverage for Phexxi from January 2022 (47%) to November 2023 (53%).

Payer wins in 2024 include the removal of the Prior Authorization requirement for Phexxi by the Washington State Health Care Authority effective January 1, 2024, and, as a result of the Company’s successful renegotiation, a 7.4% reduction in the rebate paid by the Company to Medi-Cal on Phexxi prescriptions dispensed to Medi-Cal members. The approval rate was over 80% for all of 2024 to-date.

In the second quarter of 2022, we successfully negotiated a contract with one of the largest pharmacy benefit managers (PBMs) in the nation, which added Phexxi to its formulary with no restrictions for most women covered by the plan. The agreement was retroactive and took effect January 1, 2022 and is representative of approximately 46 million lives.

An additional 13.7 million lives are covered under our December 2020 contract award from the U.S. Department of Veterans Affairs.

We also participate in government programs, including the 340B and the Medicaid Drug Rebate Program. As a result of our participation in the Medicaid National Drug Rebate Program, the U.S. Medicaid population gained access to Phexxi on January 1, 2021. As of May 2024, Medicaid provides health coverage to approximately 73.9 million members; nearly two-thirds of adult women enrolled in Medicaid are in their reproductive years (19-44). Additionally, we recently began participating in a 340B Group Purchasing Organization (GPO) that serves safety-net clinics throughout the US. This GPO has over 6,500 members, which expands our reach among safety-net providers.

Approximately 83% of commercial and Medicaid Phexxi prescriptions are being approved by payers.

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Phexxi is classified in the databases and pricing compendia of Medi-Span and First Databank, two major drug information databases that payers can consult for pricing and product information, as the first and only “Vaginal pH Modulator.”

Effective as of January 1, 2023, most insurers and PBMs must provide coverage, with no out-of-pocket costs (e.g. $0 copay) to the subscriber or dependent, for FDA-approved contraceptive products, like Phexxi, prescribed by healthcare providers.

As a result, to comply with these Guidelines, payers are increasingly covering Phexxi by:

– Adding Phexxi to formulary (commercial insurers) or preferred drug list (Medicaid)

– Removing the requirement for a Prior Authorization letter from the HCP (commercial insurers)

– Moving Phexxi to $0 copay (commercial insurers)

In 2022, Evofem developed and introduced a new contraceptive educational chart for patients and HCPs that details high-level information about birth control methods currently available to women in the U.S., including the vaginal pH modulator. This new contraceptive educational tool has been extremely well received and has had a positive impact with HCPs and patients alike.

SOLOSEC

In July 2024, we expanded our commercial portfolio by acquiring global rights to SOLOSEC® (secnidazole) 2g oral granules, a single-dose oral antimicrobial agent that provides a complete course of therapy with just one dost for the treatment of two common sexual health infections. SOLOSEC is FDA-approved for the treatment of two sexual health diseases: bacterial vaginosis (BV), a common vaginal infection, in females 12 years of age and older, and Trichomonas vaginalis, a common sexually transmitted infection (STI), in people 12 years of age and older. SOLOSEC has the same call point as Phexxi, enabling us to leverage our commercial infrastructure and strong physician relationships.

Bacterial Vaginosis

Bacterial vaginosis (BV) affects an estimated 21 million women in the U.S., approximately 29% of the U.S. population, making it the most common vaginal condition in women ages 15-44. It results from an overgrowth of bacteria, which upsets the balance of the natural vaginal microbiome and can lead to symptoms including odor and discharge. Of interest, BV raises the pH of the vagina, making it a more friendly environment for trichomoniasis and other STIs; approximately 20% of BV patients also have trichomoniasis.

If left untreated, BV can have serious health consequences. Untreated or improperly treated BV is associated with increased risk of infection with STIs like HPV, herpes, trichomoniasis, chlamydia, gonorrhea and HIV, as well as transmission of STIs to a partner. Additional risks include developing pelvic inflammatory disease (PID), which can threaten a women’s fertility, and complications with gynecological surgery.

Research has shown that as many as 50% of patients with BV do not adhere to a full course of metronidazole treatment (500mg BID x 7d) 14 doses. 58% of women who do not complete therapy will have a recurrence within one year. Noncompliance to a multiple-day metronidazole regimen is a contributing factor to persistent BV.

In clinical trials, SOLOSEC demonstrated clinically and statistically significant efficacy in the treatment of BV with just one dose. The clinical cure rate was 77%, and 68% of patients treated with SOLOSEC did not require any additional treatment for BV. Guidelines for the American College of Obstetricians and Gynecologists (ACOG) in 2020 and the U.S. Centers for Disease Control (CDC) in 2021 each include single dose SOLOSEC for the treatment of BV.

Trichomoniasis

Trichomoniasis (Trich) is the most common non-viral STI in the world. It is caused by a parasite called Trichomonas vaginalis and affects both women and men. All sexual partners of an infected person must be treated to prevent reinfection with the parasite. In 2018, there were an estimated 6.9 million new T. vaginalis infections in the U.S. According to the CDC, the U.S. prevalence of T. vaginalis is 2.1% among females and 0.5% among males, with the highest rates among Black females (9.6%) and Black males (3.6%). A study of STD clinic attendees in Birmingham, Alabama, identified a prevalence of 27% among women and 9.8% among men. Approximately 70% of women with trichomoniasis are also infected with the bacteria that cause BV.

In clinical trials, a single dose of SOLOSEC demonstrated a cure rate of 92.2% for Trich in women, while reported cure rates in males range from 91.7%-100%.

SOLOSEC’s one-and-done dosing and the resulting high level of compliance is believed to be a significant differentiator. Non-compliance to a multi-day metronidazole regimen is a contributing factor to persistent Trich or BV; and ACOG and the CDC no longer recommend single dose metronidazole to treat Trich in women.

Our Pipeline

While Evofem’s pipeline includes multiple candidates that are designed to address critical unmet needs in women’s health, the Company halted all clinical development in October 2022 due to financial constraints.

EVO100 for STI Prevention

EVO100 vaginal gel was in development for the prevention of urogenital chlamydia and gonorrhea in women. Chlamydia and gonorrhea are among the many bacterial and viral pathogens that require a higher pH environment to thrive. The CDC reported that infections with these two sexually transmitted pathogens cost the U.S. healthcare system $1.0 billion, in aggregate direct and indirect costs. There are no FDA-approved drugs to prevent these sexually transmitted diseases (STIs). The FDA granted EVO100 Fast Track Designation for the prevention of chlamydia and gonorrhea, and designated EVO100 a Qualified Infectious Disease Product (QIDP) for the prevention of infection these pathogens.

The Phase 2B/3 trial (AMPREVENCE) achieved its primary and secondary endpoints, demonstrating statistically significant and clinically meaningful reductions in chlamydia and gonorrhea infections of 50% and 78%, respectively, in women receiving EVO100 vs. placebo. Based on these highly positive clinical outcomes we initiated a Phase 3 clinical trial (EVOGUARD) to evaluate EVO100 for these potential indications in 2020. On October 11, 2022, we reported that EVOGUARD did not meet its primary efficacy endpoint. We and our advisors believe the public health response to the COVID pandemic caused changes in clinical site operations and subject behavior and actions, including deviations from following the clinical study protocol requirements related to STI acquisition, detection, and prevention, which contributed to this outcome.

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EVO200 Vaginal Gel for Recurrent Bacterial Vaginosis

Our investigational candidate for the reduction of recurrent bacterial vaginosis (BV), EVO200 vaginal gel, uses the same proprietary vaginal pH modulator platform as Phexxi. In a Phase 1 dose-finding trial for this indication, the highest dose formulation of the study drug demonstrated reduced vaginal pH for up to seven days following a single administration. The FDA has designed EVO200 as a Qualified Infectious Disease Product (QIDP) for this indication, which provides several important potential advantages including, but not limited to, longer market exclusivity.

MPT Vaginal Gel for HIV Prevention

In December 2021, we launched a collaboration with Orion Biotechnology Canada Ltd. (Orion) to evaluate the compatibility and stability of Orion’s novel CCR5 antagonist, OB-002, in Phexxi with the goal of developing a Multipurpose Prevention Technology (MPT) product candidate for indications including the prevention of HIV in women. Assuming positive preclinical results, Evofem and Orion may seek government and philanthropic funding for subsequent clinical trials of any resulting MPT vaginal gel product candidate.

Thin Film Project

In February 2020, we contracted with the University of South Australia to develop a vaginally applied thin film as a second-generation vaginal pH modulator product. The lead thin film candidates have been selected, and stability data has been generated with positive results. Next steps are to optimize the lead candidates and identify funding to proceed.

Financial Operations Overview

Net Product Sales

We recognize revenue once units shipped from our third-party logistics warehouse arrive at our customers, which consist of wholesale distributors, retail pharmacies, telehealth companies, and mail-order specialty pharmacies. We have recognized net product sales in the U.S. since the commercial launch of Phexxi in September 2020. Gross revenues, as discussed in Note 3 - Revenue, are adjusted for variable consideration, including our patient support programs.

Operating Expenses

Cost of Goods Sold

Inventory costs include all purchased materials, direct labor and manufacturing overhead. In addition, we are obligated to pay quarterly royalty payments pursuant to our license agreement with Rush University, in amounts equal to a single-digit percentage of the gross amounts we receive on a quarterly basis, less certain deductions incurred in the quarter based on a sliding scale. We are also obligated to pay a minimum annual royalty amount of $0.1 million to the extent these earned royalties do not equal or exceed $0.1 million in a given year. Such royalty costs, included in cost of goods sold, were $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million and $0.4 million for the three and nine months ended September 30, 2023, respectively.

We are also obligated to pay quarterly royalty payments under the SOLOSEC Asset Purchase Agreement dated July 14, 2024 based on a percentage of SOLOSEC net revenues. There are no minimum quarterly or annual royalty amounts. Such royalty costs were immaterial for the three and nine months ended September 30, 2024.

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Research and Development Expenses

Our research and development expenses primarily consist of costs associated with the continuous improvements related to Phexxi. These expenses include:

● improvements of manufacturing and analytical efficiency;

● on-going product characterization and process optimization;

● alternative raw material evaluation to secure an uninterrupted supply chain and reduce cost of goods sold;

● employee-related expenses, including salaries, benefits, travel and noncash stock-based compensation expense; and

● facilities, depreciation and other allocated expenses, which include direct and allocated expenses for rent and maintenance of facilities, depreciation of leasehold improvements and equipment, and research and other supplies.

We expense internal and third-party research and development expenses as incurred. The following table summarizes research and development expenses by product candidate (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Allocated third-party development expenses:
EVO100 for prevention of chlamydia/gonorrhea - Phase 3 (EVOGUARD)	$	-	$	-	$	-	$	(93	)
Total allocated third-party development expenses		-		-		-		(93	)
Unallocated internal research and development expenses:
Noncash stock-based compensation expenses		6		29		31		99
Payroll related expenses		62		315		593		949
Outside services costs		214		167		371		237
Other		50		103		201		364
Total unallocated internal research and development expenses		332		614		1,196		1,649
Total research and development expenses	$	332	$	614	$	1,196	$	1,556

Selling and Marketing Expenses

Our selling and marketing expenses consist primarily of product commercialization costs, the Phexxi telehealth platform, training, salaries, benefits, travel, noncash stock-based compensation expense and other related costs for our employees and consultants.

In connection with our overall cost reduction strategy, our selling and marketing expenses decreased significantly in 2023 and are expected to stabilize slightly below 2023 levels in the current year, with a slight increase due to the expenses associated with the addition of SOLOSEC to our commercial offering.

General and Administrative Expenses

Our general and administrative expenses consist primarily of salaries, benefits, travel, business development expenses, investor and public relations expenses, noncash stock-based compensation, and other related costs for our employees and consultants performing executive, administrative, finance, legal and human resource functions. Other general and administrative expenses include facility-related costs not otherwise included in research and development or selling and marketing, and professional fees for accounting, auditing, tax and legal fees, and other costs associated with obtaining and maintaining our patent portfolio.

Other Income (Expense)

Other income (expense) consists primarily of interest expense and the change in fair value of financial instruments issued in various capital raise transactions. The change in fair value of financial instruments was recognized as a result of mark-to-market adjustments for those financial instruments. Additionally, other income (expense) also includes a gain (loss) on debt modification or extinguishment in the current period and loss on issuance of financial instruments in each of the presented periods.

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Results of Operations

Three Months Ended September 30, 2024 Compared to Three Months Ended September 30, 2023 (in thousands):

Net Product Sales

	Three Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Product sales, net	$	4,496	$	5,112	$	(616	)		(12	)%

The lower product sales, net in the current year quarter, was primarily due to lower unit sales, partially offset by the increased WAC and slight decrease in variable considerations.

Cost of Goods Sold

	Three Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Cost of goods sold	$	869	$	1,889	$	(1,020	)		(54	)%

The decrease in cost of goods sold in the current year quarter was due to the lower product sales and absence of re-packaging costs in the current year quarter. The units sold in the 2023 quarter had to be re-packaged to reflect the extended shelf life approved by the FDA in June 2022; this added costs to re-worked units that were sold in the prior year quarter.

Research and Development Expenses

	Three Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Research and development	$	332	$	614	$	(282	)		(46	)%

The decrease in research and development expenses was primarily due to a decrease of $0.3 million in personnel costs due to lower headcount.

Selling and Marketing Expenses

	Three Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Selling and marketing	$	2,382	$	2,985	$	(603	)		(20	)%

The decrease in selling and marketing expenses was primarily due to a $0.7 million decrease in business development, partially offset by an increase of $0.1 million outside services.

General and Administrative Expenses

	Three Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
General and administrative	$	3,052	$	3,176	$	(124	)		(4	)%

The decrease in general and administrative expenses was primarily due to a $0.8 million reduction in legal fees and a $0.2 million decrease in outside services, which were partially offset by the contingent liability of $0.8 million recognized in conjunction with the potential settlement with TherapeuticsMD.

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Total other income, net

	Three Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Total other income, net	$	67	$	69,568	$	(69,501	)		(100	)%

Total other income, net, for the three months ended September 30, 2024 primarily included a $0.8 million gain on the change in fair value of financial instruments, partially offset by $0.6 million in interest expense related to the Adjuvant Note and loss on the debt extinguishment of $0.1 million.

Total other income, net, for the three months ended September 30, 2023 primarily included a $75.3 million gain related to the Baker Fourth Amendment, which was treated as a debt extinguishment, offset in part by a $5.3 million loss on the quarterly valuation of the senior subordinated convertible notes and purchase rights and warrant modifications, and $0.5 million of interest expense related to the Adjuvant Note.

Nine Months Ended September 30, 2024 Compared to Nine Months Ended September 30, 2023 (in thousands):

Net Product Sales

	Nine Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Product sales, net	$	12,259	$	13,379	$	(1,120	)		(8	)%

The decrease in product sales, net, was primarily due to the impact of the timing of price increases on sales volumes to our customers. Wholesalers typically purchase larger volumes of product ahead of a price increase, pause purchasing until that product has been used to fill consumer demand, then resume purchasing again. Sales volume in the first quarter of 2024 was low due to the January 2024 price increase, where sales volume in the first quarter of 2023 was high, after a very small fourth quarter of 2022 due to the October 2022 price increase.

Cost of Goods Sold

	Nine Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Cost of goods sold	$	2,322	$	5,558	$	(3,236	)		(58	)%

The decrease in cost of goods sold was partially due to the decrease in sales in the current period as compared to the same period in the prior year. Additionally, the units sold in the prior year had been re-packaged to reflect the extended shelf life approved by the FDA in June 2022; this added costs to re-worked units that were sold in the prior year, whereas the units sold in the current year did not need to be re-packaged. Finally, there was a $1.1 million inventory excess and obsolescence reserve recorded in the 2023 period that was not repeated in the current year.

Research and Development Expenses

	Nine Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Research and development	$	1,196	$	1,556	$	(360	)		(23	)%

The decrease in research and development expenses was primarily due to a decrease of approximately $0.4 million in personnel costs and a decrease of approximately $0.3 million in clinical and facilities costs, which was partially offset by an increase in outside services costs of $0.4 million.

Selling and Marketing Expenses

	Nine Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Selling and marketing	$	6,970	$	9,036	$	(2,066	)		(23	)%

The decrease in selling and marketing expenses was primarily due to a $1.0 million decrease in marketing and DTC promotion costs, including media agency fees, a $0.9 million decrease in personnel costs due to reduced headcount and lower noncash stock-based compensation, and a $0.6 million decrease in facilities costs. The decreases were partially offset by an increase of $0.4 million in outside services and other costs.

General and Administrative Expenses

	Nine Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
General and administrative	$	8,143	$	11,696	$	(3,553	)		(30	)%

The decrease in general and administrative expenses was primarily due to a $3.5 million decrease in facilities and outside services costs and a $1.2 million decrease in professional services fees related to legal and finance partially offset by an increase of $0.3 million in personnel costs and the $0.8 million contingent liability recognized in conjunction with the potential settlement with TherapeuticsMD.

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Total other income (expense), net

	Nine Months Ended September 30,				2024 vs. 2023
	2024		2023		$ Change			% Change
Total other income, net	$	850	$	69,577	$	(68,727	)		(99	)%

Total other income, net, for the nine months ended September 30, 2024 primarily included a $4.9 million gain on the change in fair value of financial instruments and a gain of $1.0 million related to the Baker Notes extinguishment. The gains were offset by a $3.3 million loss on the issuance of financial instruments related to the anti-dilution adjustment for the purchase rights and $1.7 million interest expense related to the Adjuvant Note.

Total other income, net, for the nine months ended September 30, 2023 primarily included a $75.3 million gain related to the Baker Fourth Amendment, which was treated as a debt extinguishment offset in part by a $4.3 million loss on the quarterly valuation of the senior subordinated convertible notes and $1.5 million of interest expense related to the Adjuvant Note.

Liquidity and Capital Resources

Overview

As of September 30, 2024, we had a working capital deficit of $67.7 million and an accumulated deficit of $894.6 million. We have financed our operations to date primarily through the issuance of preferred stock, common stock, warrants and convertible and term notes; cash received from private placement transactions; and, to a lesser extent, product sales. As of September 30, 2024, we had approximately $0.7 million in cash and cash equivalents comprised entirely of restricted cash available for use as prescribed in the Adjuvant Notes (as defined in Note 4 - Debt). Our cash, cash equivalents and restricted cash include amounts held in checking accounts. Management believes that the Company’s cash and cash equivalents as of September 30, 2024 are insufficient to fund operations for at least the next 12 months from the date on which this Quarterly Report on Form 10-Q is filed with the SEC.

We have incurred losses and negative cash flows from operating activities since inception. In 2023, we focused on further improving and increasing Phexxi access and delivered our third consecutive year of Phexxi net sales growth. We have restructured many of our trade payables with extended terms and implemented measures to better align our cost structure with projected revenues. In 2024, we have continued to focus on top-line growth while maintaining a lean operating structure. We will continue to explore opportunities for organic growth, entry into new markets, and expansion of our product offering beyond Phexxi and SOLOSEC.

As of September 30, 2024, the Company’s significant commitments include the Baker Notes and Adjuvant Notes, as described in Note 4 - Debt and fleet leases, Rush University royalty, and SOLOSEC royalty, as described in Note 7 - Commitments and Contingencies. Management’s plans to meet the Company’s cash flow needs in the next 12 months include generating revenue from the sale of Phexxi and SOLOSEC, further restructuring of its current payables, and obtaining additional funding through means such as the issuance of its capital stock, non-dilutive financings, or through collaborations or partnerships with other companies, including license agreements for Phexxi and/or SOLOSEC in the U.S. or foreign markets, or other potential business combinations (including the Merger, as defined in Note 1 – Description of Business and Basis of Presentation).

If the Company is not able to obtain the required funding through a significant increase in revenue, equity or debt financings, license agreements for Phexxi in the U.S. or foreign markets, or other means, is enjoined from selling under the Phexxi mark, or is unable to obtain funding on terms favorable to the Company, there will be a material adverse effect on commercialization and development operations and the Company’s ability to execute its strategic development plan for future growth. If the Company cannot successfully raise additional funding and implement its strategic development plan, the Company may be forced to make further reductions in spending, including spending in connection with its commercialization activities, extend payment terms with suppliers, liquidate assets where possible at a potentially lower amount than as recorded in the condensed consolidated financial statements, suspend or curtail planned operations, or cease operations entirely. Any of these could materially and adversely affect the Company’s liquidity, financial condition and business prospects, and the Company would not be able to continue as a going concern. The Company has concluded that these circumstances and the uncertainties associated with the Company’s ability to obtain additional equity or debt financing on terms that are favorable to the Company, or at all, and otherwise succeed in its future operations raise substantial doubt about the Company’s ability to continue as a going concern.

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If we are unable to continue as a going concern, we may have to liquidate our assets and, in doing so, we may receive less than the value at which those assets are carried on our condensed consolidated financial statements. Any of these developments would materially and adversely affect the price of our stock and the value of an investment in our stock. As a result, our condensed consolidated financial statements include explanatory disclosures expressing substantial doubt about our ability to continue as a going concern.

The opinion of our independent registered public accounting firms on our audited consolidated financial statements as of and for the years ended December 31, 2023 and 2022 contains an explanatory paragraph regarding substantial doubt about our ability to continue as a going concern. Future reports on our consolidated financial statements may include an explanatory paragraph with respect to our ability to continue as a going concern. Our unaudited condensed consolidated financial statements as of September 30, 2024 and for the three and nine months ended September 30, 2024 and 2023 included in this Quarterly Report do not include any adjustments relating to the recoverability and classification of recorded asset amounts or amounts of liabilities that might be necessary should we be unable to continue our operations.

Debt Financings

As described in Note 4 - Debt, we entered into an insurance premium financing agreement with FIF, which resulted in a financing inflow of $0.4 million in the statement of cash flows in the first three quarters of 2024. Additionally, we received gross proceeds of approximately $5.3 million, before issuance costs, from the sale of notes and warrants in seven registered direct offerings in the first three quarters of 2023.

Summary Statements of Cash Flows

The following table sets forth a summary of the net cash flow activity for each of the periods set forth below (in thousands):

	Nine Months Ended September 30,						2024 vs. 2023
	2024			2023			$ Change			% Change
Net cash and restricted cash used in operating activities	$	(1,477	)	$	(8,798	)	$	7,321			83	%
Net cash and restricted cash used in investing activities		(523	)		(4	)		(519	)		(12975	)%
Net cash and restricted provided by financing activities		2,142			4,436			(2,294	)		(52	)%
Net change in cash and restricted cash	$	142		$	(4,366	)	$	4,508			(103	)%

Cash Flows from Operating Activities. During the nine months ended September 30, 2024 and 2023, the primary use of cash, cash equivalents and restricted cash was to fund the commercialization and manufacturing of Phexxi and to support general and administrative operations.

Cash Flows from Investing Activities. During the nine months ended September 30, 2024, the primary use of cash, cash equivalents and restricted cash was the acquisition of the SOLOSEC asset.

Cash Flows from Financing Activities. During the nine months ended September 30, 2024, the primary source of cash, cash equivalents, and restricted cash was from the $1.0 million received from Aditxt in order to reinstate the Merger Agreement as described above as well as the $1.3 million in Series F-1 Preferred Stock purchased by Aditxt, and the finance agreement with First Insurance Funding for $0.4 million. These inflows were offset by $0.4 million payments under the Baker Notes and short-term debt. During the nine months ended September 30, 2023, the primary source of cash, cash equivalents and restricted cash was the sale of senior subordinate convertible notes and warrants for proceeds of approximately $5.3 million, in aggregate, before debt issuance costs, which was offset by the $1.0 million upfront payment required under the Baker Fourth Amendment.

Operating and Capital Expenditure Requirements

Our specific future operating and capital expense requirements are difficult to forecast. However, we can anticipate the general types of expenses and areas in which they might occur. In 2024, while we expect to maintain a lean operating structure at approximately the same level as 2023, should resources become available we may increase marketing spend to drive further sales growth.

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Contractual Obligations and Commitments

Operating Leases

Operating lease right-of-use assets and lease liabilities were $0.1 million each on both September 30, 2024 and December 31, 2023. See Note 7- Commitments and Contingencies for more detailed discussions on leases and financial statements information under ASC 842, Leases.

Other Contractual Commitments

As described in Note 7 - Commitments and Contingencies, in November 2019, the Company entered into a supply and manufacturing agreement with a third-party to manufacture Phexxi, with potential to manufacture other product candidates, in accordance with all applicable current good manufacturing practice regulations. There were approximately $0.8 million and $1.0 million in purchases under the supply and manufacturing agreement for the three and nine months ended September 30, 2024, respectively, and no such purchases during the three and nine months ended September 30, 2023.

As described in Note 7 - Commitments and Contingencies, the Company also has commitments related to the SOLOSEC asset acquisition including a commitment to purchase inventory from the seller through November 2026 at a pre-defined unit price. The Company is also obligated to pay contingent liabilities and quarterly royalties based on SOLOSEC net revenue over the Earnout Term as described in Note 7 - Commitments and Contingencies.

Intellectual Property Rights

As described in Note 7 - Commitments and Contingencies, royalty costs owed to Rush University pursuant to the Rush License Agreement were $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million and $0.4 million for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, approximately $1.7 million and $1.1 million were included in accrued expenses in the condensed consolidated balance sheets and will be paid via the agreed upon payment plan.

Other Matters

Recently Issued Accounting Pronouncements

For information with respect to recent accounting pronouncements, see Note 2 - Summary of Significant Accounting Policies to our condensed consolidated financial statements appearing in Part I, Item 1 of this Quarterly Report.

Critical Accounting Policies

There have not been any material changes to the critical accounting policies disclosed in our Form 10-K for the year ended December 31, 2023 other than the new policies on intangibles and contingent liabilities as described in Note 2 - Summary of Significant Accounting Policies.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

Not applicable.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures are controls and other procedures of a company that are designed to ensure that information required to be disclosed by the company in the reports that it files or submits under the Securities Exchange Act of 1934, as amended (the Exchange Act) is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

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As described in our Annual Report on Form 10-K for the year ended December 31, 2023, we identified material weaknesses in our internal control over financial reporting. As a result of these material weaknesses, our Chief Executive Officer (CEO) and Chief Financial Officer (CFO) have concluded that our disclosure controls and procedures are not effective to provide reasonable assurance that information required to be disclosed in the reports we file and submit under the Securities and Exchange Act is recorded, processed, summarized and reported as and when required.

Notwithstanding the conclusion by our CEO and CFO that our Disclosure Controls as of September 30, 2024 were not effective, and notwithstanding the material weaknesses in our internal control over financial reporting described more fully under Item 9A in the Company’s Annual Report on Form 10-K for the year ended December 31, 2023, management believes that the condensed consolidated financial statements and related financial information included in this Quarterly Report on Form 10-Q fairly present in all material respects our financial condition, results of operations and cash flows as of the date presented, and for the periods ended on such dates, in conformity with accounting principles generally accepted in the United States of America (U.S. GAAP).

Remediation Activities:

Management continues to evaluate the material weaknesses discussed above and is implementing its remediation plan. However, assurance as to when the remediation efforts will be complete cannot be provided and the material weaknesses cannot be considered remedied until the applicable controls have operated for a sufficient period of time and management has concluded, through testing, that these controls are operating effectively. Management cannot assure readers that the measures that have been taken to date, and are continuing to be implemented, will be sufficient to remediate the material weaknesses identified or to avoid potential future material weaknesses.

Changes in Internal Control over Financial Reporting

Except for ongoing remediation activities, there were no changes in our internal control over financial reporting that occurred during our latest fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Inherent Limitations of Internal Controls

Management recognizes that a control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud or error, if any, have been detected. These inherent limitations include the realities that judgments in decision making can be faulty, and that breakdowns can occur because of a simple error or mistake. Additionally, controls can be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions; over time, controls may become inadequate because of changes in conditions, or the degree of compliance with policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Refer to Note 7 - Commitments and Contingencies to the unaudited condensed consolidated financial statements in this Form 10-Q for any required disclosure.

Item 1A. Risk Factors

An investment in our common stock is speculative and involves a high degree of risk. You should consider carefully the risks described below, together with the other information contained in this Quarterly Report on Form 10-Q, including our condensed consolidated financial statements and the related notes and in the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” before deciding whether to purchase, hold or sell shares of our common stock. If any of the following risks occur, our business, financial condition, results of operations and future growth prospects could be materially and adversely affected. In these circumstances, the market price of our common stock could decline, and you may lose all or part of your investment. This Quarterly Report on Form 10-Q also contains forward-looking statements that involve risks and uncertainties. Our actual results could differ materially from those anticipated in the forward-looking statements as a result of a number of factors, including the risks described below. See the section titled “Special Note Regarding Forward-Looking Statements.” The risk factors set forth below with an asterisk (*) next to the title contain changes to the description of the risk factors associated with our business previously disclosed in Item 1A of our 2023 Annual Report on Form 10-K for the year ended December 31, 2023.

The Company received two Notice of Defaults (on September 27, 2024 and October 27, 2024) from their largest creditor, Future Pak, LLC , alleging a number of Events of Default, accelerating the Principal due and payable and declaring the termination of the existing Forbearance Agreement.

On September 27, 2024, Future Pak, LLC, a Michigan limited liability company, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended (SPA), by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a Purchaser and collectively Purchasers). The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA.

According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to approximately $106.8 million. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Notice of Default which adds additional claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Securities Purchase and Security Agreement dated April 23, 2020, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (the Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024.

Subsequently, on November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment. 

As such, the Designated Agent could take significant, adverse action against the Company, its assets and its accounts. There can be no assurances that the Company can cure the Events of Default or otherwise stop or mitigate any adverse actions taken by the Designated Agent.

TherapeuticsMD may take adverse action against the Company and its use of the Phexxi mark.

On December 14, 2020, a trademark dispute captioned TherapeuticsMD, Inc. v Evofem Biosciences, Inc., was filed in the U.S. District Court for the Southern District of Florida against the Company, alleging trademark infringement of certain trademarks owned by TherapeuticsMD under federal and state law (Case No. 9:20-cv-82296). On July 18, 2022, the Company settled the lawsuit with TherapeuticsMD, with certain requirements which were required to be performed by July 2024 (the Settlement Timeline), including changing the name of Phexxi. On July 29, 2024 the Company received a cease and desist letter from TherapeuticsMD, demanding that the Company change the name of Phexxi. The Company is currently finalizing plans to re-brand Phexxi in connection with the settlement reached with TherapeuticsMD in 2022.

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There can be no assurance that we will be able to comply with the continued listing standards of OTCQB.

OTC has certain listing standards that we must meet to maintain our listing on the OTCQB exchange. If we are unable to comply with these continued listing standards, we and our stockholders could face significant material adverse consequences including:

● a limited availability of market quotations for our securities;

● reduced liquidity for our securities;

● a limited amount of new and analyst coverage; and

● a decreased ability to issue additional securities or obtain additional financing in the future.

As of November 7, 2024, the Company regained compliance with the Minimum Bid Price Requirement of OTCQB, however there can be no guarantee the Company will remain in compliance with such listing requirements in the future.

Our stock price is and may continue to be volatile.

Our Common Stock is currently quoted for public trading on the OTCQB under the symbol “EVFM”. The market price for our common stock is volatile and may fluctuate significantly in response to a number of factors, many of which we cannot control, such as potential irregularity in financial results from quarter to quarter, political developments related to women’s reproductive rights and contraception, the content and tone of media coverage and commentary, or changes in securities analysts’ recommendations, any of which could cause the price of our common stock to fluctuate substantially. Each of these factors, among others, could harm your investment in our securities and could result in your being unable to resell any of our securities that you purchase at a price equal to or above the price you paid.

In addition, the stock market in general and the market for biopharmaceutical companies in particular have experienced extreme volatility that has often been unrelated to companies operating performance. The market price for our common stock may be influenced by many factors, including:

● the potential delisting of our common stock from OTCQB, should we not comply with listing standards;

● failure to timely file future required filings;

● the failure to consummate the transactions in the A&R Merger Agreement;

● the loss of key personnel;

● the results of our efforts to commercialize Phexxi, SOLOSEC, or any other products, particularly in the event of a rebrand;

● the results of our efforts to acquire or in-license products;

● commencement or termination of any collaboration or licensing arrangement;

● disputes or other developments relating to proprietary rights, including patents, litigation matters and our ability to obtain patent protection for our technology;

● announcements by us or our competitors of significant acquisitions, strategic partnerships, joint ventures and capital commitments;

● additions or departures of key management personnel;

● variations in our financial results or those of companies that are perceived to be similar to us;

● new products, product candidates or new uses for existing products introduced or announced by our competitors, and the timing of these introductions or announcements;

● results of clinical trials of product candidates of our competitors;

● general economic and market conditions and other factors that may be unrelated to our operating performance or the operating performance of our competitors, including changes in market valuations of similar companies, wars, terrorism and political unrest, outbreak of disease (e.g., the COVID-19 pandemic), boycotts and other business restrictions;

● regulatory or legal developments in the US and other countries;

● changes in the structure of healthcare payment systems;

● conditions or trends in the biotechnology and biopharmaceutical industries;

● actual or anticipated changes in earnings estimates, development timelines or recommendations by securities analysts;

● announcement or expectation of additional financing efforts and related debt and equity issuances;

● sales of common stock by us or our stockholders in the future, as well as the overall trading volume of our common stock;

● stockholder activism;

● any stockholder derivative actions; and

● other factors described in this “Risk Factors” section.

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Upon being listed on the OTCQB Marketplace on October 10, 2022 the closing sales price started at $21.25, was $0.064 as of December 31, 2023, was $0.0158 as of March 21, 2024 and was $0.0090 as of September 30, 2024. These broad market fluctuations may adversely affect the trading price or liquidity of our common stock. In the past, following periods of volatility in companies’ stock prices, securities class-action litigation has often been instituted against such companies. Such litigation, if instituted against us, could result in substantial costs and diversion of management’s attention and resources, which could materially and adversely affect our business and financial condition.

We will need to raise significant additional funds to finance our operations, including the commercialization of Phexxi and SOLOSEC, and to remain a going concern. If we are unable to raise additional capital when needed or on acceptable terms, we may be forced to delay, reduce and/or eliminate one or more of our business initiatives or to cease our operations entirely.*

We have incurred significant losses and negative cash flows since our inception. We believe our existing capital resources as of the filing of this Quarterly Report are sufficient to fund our planned operations into the first half of 2025. Our ability to raise additional funds will depend, in part, on our ability to successfully commercialize Phexxi and SOLOSEC (collectively our Products) in the US. If, for whatever reason, we are unsuccessful in these efforts, it may make any necessary debt, equity or alternative financing more difficult, more costly and more dilutive. Attempting to secure additional financing will divert our management from our day-to-day activities, which may adversely affect our ability to commercialize our Products. In addition, we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us, if at all. Furthermore, the global credit and financial markets have experienced extreme volatility and disruptions in recent history, particularly for life science companies. If the equity and credit markets deteriorate, it may make any necessary debt or equity financing more difficult, more costly and more dilutive. If we are unable to raise additional funds when needed or on acceptable terms, we may be unable to continue commercializing Phexxi as a contraceptive or successfully relaunch SOLOSEC as a treatment for bacterial vaginosis or trichomoniasis. In addition, we may be required to delay, scale back or eliminate some or all of our business initiatives or be forced to cease operations entirely. To the extent we raise additional capital through the sale of equity, convertible debt or other securities convertible into equity, the ownership interest of our stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our stockholders. Future debt financings, if available at all, would likely involve agreements with additional covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, making additional product acquisitions, or declaring dividends. If we raise additional funds through strategic collaborations (including, but not limited to closing the Merger Agreement with Aditxt), alternative non-dilutive financing, such as royalty-based financing, or licensing arrangements with third parties, we may have to relinquish valuable rights to Phexxi, SOLOSEC, or future revenue streams or grant licenses on terms that are not favorable to us.

Women’s health has historically been an underfunded sector. Recently, a number of public companies focused in women’s health have failed to achieve expected commercial success and struggled to access sufficient capital. We are solely focused in women’s health and may be unfavorably impacted by weak investor sentiment and a lack of interest in the category. Our ability to access capital and to advance our candidates could be adversely impacted.*

We are solely focused in women’s health, and primarily in the areas of contraception, vaginal health, reproductive health, and sexual health. The sector has historically been underfunded, with only about one percent of healthcare research and innovation in the U.S. invested in female-specific conditions beyond oncology according to market research. The failure of the women’s health sector to receive consistent and committed investment fuels investor sentiment that market opportunities for new products in women’s health are limited. Our stock price and our ability to access additional capital on acceptable terms when needed may be adversely impacted by unfavorable investor perception of market opportunities for women’s health products, and our business, operating results, financial condition and prospects could suffer.

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We face competition from other medical device, biotechnology and biopharmaceutical companies and our operating results will suffer if we are unable to compete effectively.*

The medical device, biotechnology and biopharmaceutical industries, and the women’s health sector, are intensely competitive. Significant competition among various contraceptive products already exists. Existing products have name recognition, are marketed by companies with established commercial infrastructures, and are marketed with greater financial, technical and personnel resources than we have. To compete and gain market share, any new product must demonstrate advantages in efficacy, convenience, tolerability, and/or safety, among other things. In addition, new products developed by others could emerge as competitors to Phexxi. These products could potentially offer an alternative form of non-hormonal contraception that is more convenient, is more effective and/or provides protection over longer periods of time as compared to Phexxi. We also compete with these organizations to recruit management, and sales and marketing personnel. Any failure to attract and retain such personnel could negatively affect our level of expertise and our ability to execute our business plan. We also face competition in connection with identifying and engaging in strategic transactions. If we are not able to compete effectively against our current and future competitors, our business will not grow and our financial condition and operations will suffer.

With respect to SOLOSEC, there are many FDA-approved products for the treatment of bacterial vaginosis, and many are generic. SOLOSEC will compete with those products. Current therapies for the treatment of bacterial vaginosis primarily consist of oral and vaginal formulations of antibiotics delivered as a single dose or through multiple doses over consecutive days. If health care providers do not view the prescribing information for SOLOSEC as compelling compared with other products available for the treatment of bacterial vaginosis, or if competitive products have better insurance coverage or reimbursement levels than SOLOSEC, health care providers may opt to continue to prescribe existing treatments rather than recommend or prescribe SOLOSEC to their patients.

Our potential competitors include large, well-established pharmaceutical companies and specialty pharmaceutical companies who have significantly more resources than Evofem. These companies include Merck & Co., Inc., Organon, Allergan PLC, Pfizer Inc., Bayer AG, Johnson & Johnson, CooperSurgical Inc. and Mylan Inc. Additionally, several generic manufacturers currently market and continue to introduce new generic contraceptives.

Phexxi, SOLOSEC, and any other approved products we promote may not gain sufficient market acceptance among physicians, patients or the medical community, thereby limiting our potential to generate revenue, which will undermine our future growth prospects.*

Even though Phexxi has been approved by the FDA for commercial sale for the prevention of pregnancy, and SOLOSEC has been approved by the FDA for commercial sale for the prevention of BV and trichomoniasis, the degree of market acceptance of any new product by physicians, patients and the medical community will depend on a number of factors, including:

● demonstrated evidence of efficacy and safety and potential advantages compared to competing products;

● perceptions by the medical community, physicians, and patients, regarding the safety and effectiveness of the product and the willingness of the target patient population to try it and of physicians to prescribe it;

● relative convenience and ease of administration compared to other products approved for the same indication;

● the regulatory label requirements for the product, including any potential restrictions on use or precautionary statements;

● sufficient third-party insurance coverage and adequate reimbursement;

● the terms of any approvals, such as any restrictions on the use of our product together with other medications;

● the willingness of wholesalers and pharmacies to stock the products;

● the prevalence and severity of any adverse side effects;

● the ability to sufficiently educate physicians with respect to the product’s safety and efficacy; and

● availability of alternative products and the cost-effectiveness of our product relative to competing products.

If any approved product that we may license, acquire or sell, including Phexxi, does not provide a benefit over currently available options, that product is unlikely to achieve market acceptance, and we will not generate sufficient revenues to achieve profitability.

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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None, except as report on Current Reports on Form 8-K filed by the Company on July 17, 2024 and September 20, 2024.

Item 3. Defaults Upon Senior Securities

The Company has received those certain notices of default, as reported on Current Reports on Form 8-K filed by the Company on October 2, 2024 and October 31, 2024.

Furthermore, on November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the SPA plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed the Repurchase Price, as defined in the Baker Fourth Amendment.

Item 4. Mine Safety Disclosures

Not applicable.

Item 5. Other Information

Saundra Pelletier Employment Agreement

The Company and its Chief Executive Officer, Saundra Pelletier, have entered into a new employee agreement (Pelletier Agreement) to be effective on November 8, 2024 (Pelletier Effective Date). The Pelletier Agreement replaces and supersedes all previous employment agreements.

The term of the Pelletier Agreement shall commence as of the Pelletier Effective Date and continue thereafter, subject to earlier termination in accordance with the terms of the Pelletier Agreement. Pursuant to the terms of the Pelletier Agreement, Ms. Pelletier shall be entitled to:

● receive an annual base salary of $579,828 per annum (subject to annual review and adjustment) (Base Salary). The Board of Directors of the Company (Board) shall review the base salary on annual basis adjust it upward or downward at their sole discretion;

● receive an annual cash bonus paid out annually if targets are met with a target amount of one hundred percent (100%) of the Base Salary (Annual Performance Bonus) in the year in which the Annual Performance Bonus relates, subject to approval by the Board which may adjust to be greater or less than pre-stated Annual Performance Bonus;

● receive equity incentive compensation under the Company’s equity incentive plan, subject to approval by the Board; and

● be eligible to participate in a number of Company-sponsored benefit plans that may be in effect from time to time.

Pursuant to the Pelletier Agreement, in the event that Ms. Pelletier is terminated for a reason other than for “Cause,” (as defined in the Pelletier Agreement) “Good Reason,” (as defined in the Pelletier Agreement) or for a Change of Control (as defined in the Pelletier Agreement), Ms. Pelletier, upon signing and returning an effective waiver and release of claims (the Release), shall be entitled to receive: (i) a lump sum payment in an amount equal to thirty-six (36) months in value of her then current Base Salary, less all customary and required taxes and relate deductions, payable in the first payroll following the date on which the Release becomes effective and non-revocable; (ii) a lump sum payment equal to the then target Annual Performance Bonus amount multiplied by 1.0, after deduction of all amounts required to be deducted or withheld under applicable law, payable in the first payroll following the date on which the Release becomes effective and non-revocable; (iii) upon the effective date of the Release, vesting of any unvested equity awards held by Ms. Pelletier shall be accelerated such that 100% of such awards shall become fully vested as of the date of such termination; (iv) that portion of Ms. Pelletier’s Base Salary accrued prior to termination of Ms. Pelletier’s employment with Company that has not yet been paid by the Company; (v) accrued but unused paid time off; (vi) reimbursement for any reasonable out-of-pocket expenses properly incurred by Ms. Pelletier on behalf of the Company prior to any such termination and not yet reimbursed; and (vii) continuation of group health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) at the Company’s expense, until the earlier to occur of: (A) twelve (12) months following the termination date of Ms. Pelletier’s employment, or (B) the date that Ms. Pelletier becomes eligible for medical benefits with another employer.

Ivy Zhang Employment Agreement

The Company and Chief Financial Officer, Ivy Zhang, have entered into a new employee agreement (Zhang Agreement) to be effective on November 8, 2024 (Zhang Effective Date). The term of the Zhang Agreement shall commence as of the Zhang Effective Date and continue thereafter, subject to earlier termination in accordance with the terms of the Zhang Agreement. Pursuant to the terms of the Zhang Agreement, Ms. Zhang will be entitled to receive:

● an annual base salary of $450,000 per annum (subject to annual review and adjustment) (CFO Base Salary). The Board shall review the base salary on annual basis adjust it upward or downward at their sole discretion;

● an annual cash bonus with the target amount equal to seventy-five percent (75%) of the Base Salary (the “CFO Annual Performance Bonus”) in the year in which the CFO Annual Performance Bonus relates, subject to approval by the Board which may adjust to be greater or less than pre-stated CFO Annual Performance Bonus;

● equity incentive compensation under the Company’s equity incentive plan, subject to approval by the Board; and

● eligibility to participate in a number of Company-sponsored benefit plans that may be in effect from time to time.

Pursuant to the Zhang Agreement, in the event that the Zhang Agreement is terminated for a reason other than for “Cause,” (as defined in the Zhang Agreement) “Good Reason,” (as defined in the Zhang Agreement) or for a Change of Control (as defined in the Zhang Agreement), Ms. Zhang, upon signing and returning an effective waiver and release of claims (the CFO Release), shall be entitled to receive: (i) a lump sum payment in an amount equal to twenty-four (24) months in value of her then current CFO Base Salary, less all customary and required taxes and related deductions, payable in the first payroll following the date on which the Release becomes effective and non-revocable; (ii) a lump sum payment equal to the then target CFO Annual Performance Bonus amount multiplied by 1.0, after deduction of all mounts required to be deducted or withheld under applicable law, payable in the first payroll following the date on which the CFO Release becomes effective and non-revocable; (iii) upon the effective date of the CFO Release, vesting of any unvested equity awards held by Ms. Zhang shall be accelerated such that 100% of such awards shall become fully vested as of the date of such termination; (iv) that portion of Ms. Zhang’s CFO Base Salary accrued prior to termination of Ms. Zhang’s employment with Company and that has not yet been paid; (v) accrued but unused paid time off; (vi) reimbursement for any reasonable out-of-pocket expenses properly incurred by Ms. Zhang on behalf of the Company prior to any such termination and not yet reimbursed; and (vii) continuation of group health continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1986 (“COBRA”) at the Company’s expense, until the earlier to occur of: (A) twelve (12) months following the termination date of Ms. Zhang’s employment, or (B) the date that Ms. Zhang becomes eligible for medical benefits with another employer.

Compliance with OTCQB requirements

On November 8, 2024, the Company received notice from OTCQB notifying the Company that it has regained compliance with the minimum closing bid price requirement for continued listing on OTCQB as set forth in the OTCQB listing standards, section 2.3.

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Item 6. Exhibits

The exhibits filed as part of this Quarterly Report on Form 10-Q are set forth on the Exhibit Index.

EXHIBIT INDEX

				Incorporated by Reference
Exhibit No.		Exhibit Title	Filed Herewith	Form	File No.	Date Filed
2.1		Definitive Agreement between the Company and Aditxt, Inc.		8-K	001-36754	12/12/2023
2.2		First Amendment to the Merger Agreement, dated January 8, 2024		8-K	001-36754	1/11/2024
2.3		Second Amendment to the Merger Agreement, dated January 30, 2024		8-K	001-36754	1/31/2024
2.4		Third Amendment to the Merger Agreement, dated February 29, 2024		8-K	001-36754	3/6/2024
2.5		Reinstatement and Fourth Amendment to Merger Agreement dated May 2, 2024		8-K	001-36754	5/2/2024
2.6		Amended and Restated Plan of Merger, by and between the Company, Aditxt, Inc. and Adifem, Inc.		8-K	001-36754	7/18/2024
2.7		First Amendment to the Amended and Restated Agreement and Plan of Merger, by and between the Company, Aditxt, Inc., and Adifem, Inc., dated August 16, 2024		8-K	001-36754	8/20/2024
2.8		Second Amendment to the Amended and Restated Agreement and Plan of Merger, by and between the Company, Aditxt, Inc., and Adifem, Inc., dated September 6, 2024		8-K	001-36754	9/6/2024
2.9		Third Amendment to the Amended and Restated Agreement and Plan of Merger, by and among the Company, Aditxt, Inc. and Adifem, Inc., dated October 2, 2024		8-K	001-36754	10/3/2024
3.1		Amended and Restated certificate of Designation of Series F-1 Convertible Preferred Stock		8-K	001-36754	6/26/2024
10.1		Asset Purchase Agreement, by and between the Company and Lupin Inc.		8-K	001-36754	7/18/2024
10.2		License Agreement, by and between the Company and Pharma 1 Drug Store, L.L.C.		8-K	001-36754	7/23/2024
10.3		Securities Purchase Agreement, by and between the Company and Aditxt, Inc., dated as of July 12, 2024.		8-K	001-36754	7/23/2024
10.4		Registration Rights Agreement, by and between the Company and Aditxt, Inc., dated as of July 12, 2024.		8-K	001-36754	7/23/2024
10.5		Securities Purchase Agreement, by and between the Company and Aditxt, Inc., dated as of August 9, 2024.		10-Q	001-36754	8/14/2024
10.6		Registration Rights Agreement, by and between the Company and Aditxt, Inc., dated as of August 9, 2024.		10-Q	001-36754	8/14/2024
10.7		Securities Purchase Agreement, by and between the Company and Aditxt, Inc., dated as of September 20, 2024.		10-Q	001-36754	9/25/2024
10.8		Registration Rights Agreement, by and between the Company and Aditxt, Inc., dated as of September, 2024.		10-Q	001-36754	9/25/2024
10.9		Securities Purchase Agreement, by and between the Company and Aditxt, Inc., dated as of October 2, 2024.		8-K	001-36754	10/3/2024
10.10		Registration Rights Agreement, by and between the Company and Aditxt, Inc., dated as of October 2, 2024.		8-K	001-36754	10/3/2024
10.11		Securities Purchase Agreement, by and between the Company and Aditxt, Inc., dated as of October 28, 2024.		8-K	001-36754	10/28/2024
10.12		Registration Rights Agreement, by and between the Company and Aditxt, Inc., dated as of October 28, 2024.		8-K	001-36754	10/28/2024
10.13		Form of Support Agreement, by and between the Company and the Investor, dated as of October 28, and October 30, 2024.		8-K	001-36754	10/31/2024
10.14		Amended Employment Agreement, by and between the Registrant and Ivy Zhang, dated as of November 8, 2024.	X
10.15		Amended Employment Agreement, by and between the Registrant and Saundra Pelletier, dated as of November 8, 2024.	X
31.1		Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
31.2		Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.	X
32.1	*	Certification of Principal Executive Officer and Principal Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.	X
99.1		Lupin press release, dated July 15, 2024		8-K	001-36754	7/18/2024
101.INS	†	Inline XBRL Instance Document	X
101.SCH	†	Inline XBRL Taxonomy Extension Schema Document	X
101.CAL	†	Inline XBRL Taxonomy Extension Calculation Linkbase Document	X
101.DEF	†	Inline XBRL Definition Linkbase Document	X
101.LAB	†	Inline XBRL Taxonomy Extension Labels Linkbase Document	X
101.PRE	†	Inline XBRL Taxonomy Extension Presentation Linkbase Document	X
104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

*	Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and is not being filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, and is not to be incorporated by reference into any filing of the registrant, whether made before or after the date hereof, regardless of any general incorporation by reference language in such filing.
†	The financial information of Evofem Biosciences, Inc. Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 filed on November 14, 2024 formatted in XBRL (Extensible Business Reporting Language): (i) the Condensed Consolidated Balance Sheets, (ii) Parenthetical Data to the Condensed Consolidated Balance Sheets, (iii) the Condensed Consolidated Statements of Operations, (iv) the Condensed Consolidated Statements of Convertible and Redeemable Preferred Stock and Stockholders’ Deficit, (v) the Condensed Consolidated Statements of Cash Flows, and (vi) Notes to Unaudited Condensed Consolidated Financial Statements, is furnished electronically herewith.
^^	Certain exhibits and schedules have been omitted pursuant to Item 601(a)(5) of Regulation S-K. The Company hereby undertakes to furnish supplementally a copy of any omitted exhibit or schedule upon request by the SEC.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

	EVOFEM BIOSCIENCES, INC.
Date: November 14, 2024	By:	/s/ Ivy Zhang
		Ivy Zhang
		Chief Financial Officer
		(Principal Financial Officer and Principal Accounting Officer)

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EX-10.14

Exhibit 10.14

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made and entered into this 8th day of November, 2024 (the “Effective Date”) by and between Evofem Biosciences, Inc., a Delaware corporation (“Company”), and Ivy Zhang (“Employee”).

1. Roles and Duties.

(a) Chief Financial Officer Role. Subject to the terms and conditions of this Agreement, Company shall employ Employee as its Chief Financial Officer reporting to the Company’s Chief Executive Officer (“CEO”). The Employee shall have such duties and responsibilities as are reasonably determined by the CEO and are consistent with the duties customarily performed by a Chief Financial Officer of a similarly situated company in the United States. Employee accepts such employment upon the terms and conditions set forth herein and agrees to perform such duties and discharge such responsibilities to the best of Employee’s ability. During Employee’s employment, Employee shall devote all of Employee’s business time and energies to the business and affairs of the Company. Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) performing services for such other companies as the Company may designate or permit; (ii) serving, with the prior written consent of the Company’s Board of Directors (“Board”), which consent shall not be unreasonably withheld, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses or charitable, educational or civic organizations; (iii) engaging in charitable activities and community affairs; and (iv) managing Employee’s personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by Employee so as not to materially interfere, individually or in the aggregate, with the performance of Employee’s duties and responsibilities hereunder.

2. Term of Employment.

(a) Term. Subject to the terms hereof, Employee’s employment hereunder shall continue until terminated hereunder by either party (such term of employment referred to herein as the “Term”).

(b) Termination. Notwithstanding anything else contained in this Agreement, Employee’s employment hereunder shall terminate upon the earliest to occur of the following and in accordance with the following:

(i) Death. Immediately upon Employee’s death;

(ii) Termination by the Company.

(A) If because of Employee’s Disability (as defined below in Section 2(c)), written notice by the Company to Employee that Employee’s employment is being terminated as a result of Employee’s Disability, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

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(B) If for Cause (as defined below in Section 2(d)), written notice by the Company to Employee that Employee’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company; provided that if prior to the effective date of such termination Employee has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective; or

(C) If by the Company for reasons other than under Sections 2(b)(ii)(A) or (B), written notice by the Company to Employee that Employee’s employment is being terminated, which termination shall be effective thirty (30) days after the date of such notice.

(iii) Termination by Employee.

(A) If for Good Reason (as defined below in Section 2(e)), written notice by Employee to the Company that Employee is terminating Employee’s employment for Good Reason and that sets forth the factual basis supporting the alleged Good Reason, which termination shall be effective thirty (30) days after the date of such notice; provided that if prior to the effective date of such termination the Company has cured the circumstances giving rise to the Good Reason if capable of being cured as provided in Section 2(e), then such termination shall not be effective; or

(B) If without Good Reason, written notice by Employee to the Company that Employee is terminating Employee’s employment, which termination shall be effective no fewer than thirty (30) days after the date of such notice unless such notice period is waived, in whole or in part, by the Company.

Notwithstanding anything in this Section 2(b), the Company may at any point, under the conditions set forth in Section 2(b)(ii)(B), terminate Employee’s employment for Cause prior to the effective date of any other termination contemplated hereunder; provided that if prior to the effective date of such for-Cause termination Employee has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective.

(c) Definition of “Disability.” For purposes of this Agreement, “Disability” shall mean Employee’s incapacity or inability to perform Employee’s duties and responsibilities as contemplated herein by reason of a medically determinable mental or physical impairment for one hundred twenty (120) days or more within any one (1) year period (cumulative or consecutive), which impairment can reasonably be expected to result in death or can be expected to last for a continuous period of not less than six (6) months.

The determination that Employee is disabled hereunder, if disputed by the parties, shall be resolved by a physician reasonably satisfactory to Employee and the Company, at the Company’s expense, and the determination of such physician shall be final and binding upon both Employee and the Company. Employee hereby consents to such examination and consultation by a physician. The Company will keep all information it receives as a result of such inquiry and determination confidential and will not use it for any purpose other than in connection with exercising its rights under this Agreement.

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(d) Definition of “Cause.” As used herein, “Cause” shall mean: (i) Employee’s conviction of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (ii) Employee’s willful failure or refusal to comply with lawful directions of Employee’s supervisor or the Board, which failure or refusal continues for more than five (5) business days after written notice is given to Employee, which notice sets forth in reasonable detail the nature of such failure or refusal; (iii) willful and material breach by Employee of a material written Company policy or this Agreement, provided Employee does not cure such breach within five (5) business days after receiving written notice of the alleged breach; or (iv) misconduct by Employee that materially damages the Company or any of its affiliates. Except in the case of (ii) above, it is not necessary that the Company’s finding of Cause occur prior to Employee’s termination of service. If the Company determines, subsequent to Employee’s termination of service, that prior to Employee’s termination, Employee engaged in conduct which would constitute “Cause” (other than pursuant to (ii) above), then Employee shall have no right to any benefit or compensation under this Agreement.

(e) Definition of “Good Reason.” As used herein, “Good Reason” shall mean: (i) relocation of Employee’s principal business location to a location more than fifty (50) miles from Employee’s then-current business location; (ii) a material diminution in Employee’s duties, authority or responsibilities, which shall include, without limitation, Employee no longer performing similar functions associated with Employee’s services as Chief Financial Officer of a Company registered under the Securities Exchange Act of 1934, as amended; (iii) a reduction in Employee’s then in effect Base Salary by more than 10% and in a manner inconsistent with other employees of the Company having similar authority; or (iv) willful and material breach by the Company of its covenants and/or obligations under this Agreement; provided that, in each of the foregoing clauses (i) through (iv) (A) Employee provides Company with written notice that Employee intends to terminate Employee’s employment hereunder for one of the grounds set forth in this Section 2(e) within thirty (30) days of such ground occurring, (B) if such ground is capable of being cured, Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (C) Employee terminates by written notice Employee’s employment within sixty-five (65) days from the date that Employee provides the notice contemplated by clause (A) of this Section 2(e). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of Good Reason shall not disqualify Employee from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) and any successor statute, regulation and guidance thereto.

3. Compensation.

(a) Base Salary. The Company shall pay Employee a base salary (the “Base Salary”) equal to Employee’s base salary as of the Effective Date of this Agreement, as adjusted from time to time. The Base Salary shall be payable in substantially equal periodic installments in accordance with the Company’s payroll practices as in effect from time to time. The Company shall deduct from each such installment all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Employee participates. The Board or an appropriate committee thereof shall, on an annual basis, review the Base Salary, which may be adjusted upward or downward at the Company’s discretion.

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(b) Annual Performance Bonus. Employee shall be eligible to receive an annual cash bonus (the “Annual Performance Bonus”), with the target amount of such Annual Performance Bonus equal to seventy-five percent (75%) of Employee’s Base Salary in the year to which the Annual Performance Bonus relates; provided that the actual amount of the Annual Performance Bonus may be greater or less than such target amount. The amount of the Annual Performance Bonus earned shall be determined and approved by the Board or an appropriate committee thereof in its sole discretion. Except as provided in Section 4, Employee must be employed by the Company at the time of the bonus payout for the Annual Performance Bonus to be deemed as having been earned. The Company shall deduct from the Annual Performance Bonus all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Employee participates.

(c) Equity. In addition to any equity awards currently outstanding, Employee will be eligible to be considered for the grant of stock options and/or other equity-based awards commensurate with Employee’s position and responsibilities. The amount, terms and conditions of any stock option or other equity-based award will be determined by the Board or an appropriate committee thereof in its discretion and set forth in the applicable equity plan and other documents governing the award.

(d) Vacation. Employee shall also be entitled to vacation time off in accordance with the Company’s then in effect vacation policy applicable to Employee.

(e) Fringe Benefits. Employee shall be entitled to participate in all benefit/welfare plans and fringe benefits provided to Company senior Employees. Employee understands that, except when prohibited by applicable law, the Company’s benefit plans and fringe benefits may be amended by the Company from time to time in its sole discretion. The terms of any such benefits shall be governed by the applicable plan documents and Company policies in effect from time to time (and, to the extent this Agreement conflicts with such terms, the terms of such benefit plans shall govern).

(f) Reimbursement of Expenses. The Company shall reimburse Employee for all ordinary and reasonable out-of-pocket business expenses incurred by Employee in furtherance of the Company’s business in accordance with the Company’s policies with respect thereto as in effect from time to time. Employee must submit any request for reimbursement no later than ninety (90) days following the date that such business expense is incurred. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(g) Forfeiture/Clawback. All compensation shall be subject to any forfeiture or clawback policy established by the Company generally for senior executives from time to time and when required by applicable law.

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4. Payments Upon Termination.

(a) Definition of Accrued Obligations. For purposes of this Agreement, “Accrued Obligations” means:

(i) the portion of Employee’s Base Salary that has accrued prior to any termination of Employee’s employment with Company and has not yet been paid;

(ii) accrued but unused paid time off, if any, pursuant to the Company’s standard policy and practices; and

(iii) the amount of any expenses properly incurred by Employee on behalf of the Company prior to any such termination and not yet reimbursed. Employee’s entitlement to any other compensation or benefit under any Company plan shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

(b) Termination by the Company for Cause. If Employee’s employment hereunder is terminated by the Company for Cause, then the Company shall pay the Accrued Obligations to Employee within the time provided by law and the Company shall have no further obligations to Employee under this Agreement.

(c) Termination by Employee Without Good Reason. If Employee’s employment hereunder is terminated by Employee without Good Reason, then the Company shall pay the Accrued Obligations to Employee within the time provided by law and the Company shall have no further obligations to Employee under this Agreement.

(d) Termination as a Result of Employee’s Disability or Death. If Employee’s employment hereunder terminates as a result of Employee’s Disability or death, the Company shall pay to Employee (or Employee’s estate) within the time provided by law (i) the Accrued Obligations; (ii) any accrued and unpaid Annual Performance Bonus for the prior fiscal year; and (iii) the Pro Rated Bonus (as defined below) and, shall have no further obligations with respect to any benefit or compensation under this Agreement to Employee hereunder. As used in this Section 4, “Pro Rated Bonus” shall mean an amount in cash equal to the target Annual Performance Bonus for which Employee would have been eligible with respect to the year in which termination of Employee’s employment occurs multiplied by a fraction, the numerator of which is the number of days during which Employee is employed by the Company during the year of termination and the denominator of which is 365.

(e) Termination by the Company Without Cause or by Employee For Good Reason; Change in Control. In the event that Employee’s employment is terminated by action of the Company other than for Cause, or Employee terminates Employee’s employment for Good Reason, or in the event that a Change in Control of the Company (as defined below) occurs and within a period of one (1) year following the Change in Control, or ninety (90) days preceding the earlier to occur of a Change in Control or the execution of a definitive agreement the consummation of which would result in a Change in Control, Employee’s employment is terminated other than for Cause, or during such period of time Employee terminates Employee’s employment for Good Reason, then, in addition to the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year, Employee shall receive the following, subject to the terms and conditions described in Section 4(f).

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(i) Severance Payments. A lump sum payment in an amount equal to twenty-four (24) months in value of Employee’s then-current Base Salary, less all customary and required taxes and employment- related deductions, which payment shall be made in the first payroll following the date on which the Release required by Section 4(f) becomes effective and non-revocable.

(ii) Bonus. A lump sum payment equal to the then target Annual Performance Bonus amount multiplied by 1.0, after deduction of all amounts required to be deducted or withheld under applicable law (which payment shall be made in the first payroll following the effective date of the Release required by Section 4(f)). Under this Section 4(e)(ii), payment of the Annual Performance Bonus does not require the employee to be employed through the time of bonus payout.

(iii) Equity Acceleration. On the effective date of the Release required by Section 4(f), Employee shall become fully vested in any and all unvested equity awards outstanding as of the date of Employee’s termination and this provision shall supersede any vesting acceleration provision contained in any equity award agreement outstanding on the Effective Date of this Agreement.

(iv) Benefits Payments. Upon completion of appropriate forms and subject to applicable terms and conditions under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall continue to provide Employee medical insurance coverage to the same extent that such insurance continues to be provided to similarly situated executives at the time of Employee’s termination with the total cost of the regular premium for such benefits to be paid by the Company (the “COBRA Payment”), until the earlier to occur of: (i) twelve (12) months following Employee’s termination date, or (ii) the date Employee becomes eligible for medical benefits with another employer. Notwithstanding the foregoing, if Employee’s COBRA Payment would cause the applicable group health plan to be discriminatory and, therefore, result in adverse tax consequences to Employee, the Company shall, in lieu of the COBRA Payment, provide Employee with an equivalent monthly cash payment, minus deduction of all amounts required to be deducted or withheld under applicable law, for any period of time Employee is eligible to receive the COBRA Payment. Employee shall bear full responsibility for applying for COBRA continuation coverage and the Company shall have no obligation to provide Employee such coverage if Employee fails to elect COBRA benefits in a timely fashion.

(v) “Change in Control” Defined. As used herein, a “Change in Control” shall have the meaning set forth in the Company’s Amended and Restated 2014 Equity Incentive Plan (the “Equity Plan”), or any amended or new Equity Plan(s) as may be approved by the shareholders from time to time; provided, however, that for purposes of this Agreement a Change in Control shall be deemed to have occurred in any transaction described in subsections (i) or (ii) of Section 2.1(h) of the Equity Plan in which a majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Incumbent Directors (as defined in the Equity Plan).

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Payment of the above-described severance payments and benefits are expressly conditioned on Employee’s execution without revocation of the Release required under Section 4(f), and return of Company property under Section 6.

(f) Execution of Release of Claims. The Company shall not be obligated to pay Employee any of the severance payments or benefits described in this Section 4 unless and until Employee has executed (without revocation) a release of claims as described below (the “Release”). The Release shall contain reasonable and customary provisions including a general release of claims against the Company and its affiliated entities and each of their officers, directors, employees, agents, attorneys and representatives as well as provisions concerning, among other things and when consistent with then-applicable law, non-disparagement, confidentiality, and continued cooperation. The Release must be provided to Employee not later than fifteen (15) days following the date of termination of Employee’s employment by the Company and executed by Employee and returned to the Company within sixty (60) days after receipt. If Employee fails or refuses to return the Release within such 60-day period, Employee’s severance payments and benefits to be paid hereunder shall be forfeited.

(g) No Other Payments or Benefits Owing. Except as expressly set forth herein, the payments and benefits set forth in this Section 4: (a) shall be the sole amounts owing to Employee upon termination of Employee’s employment for the reasons set forth above, and Employee shall not be eligible for any other payments or other forms of compensation or benefits; (b) shall be the sole remedy, if any, available to Employee in the event that Employee brings any claim against the Company relating to the termination of Employee’s employment under this Agreement; and (c) shall not be subject to set-off by the Company or any obligation on the part of Employee to mitigate or to offset compensation earned by Employee in other pursuits after termination of employment, other than as specified herein with respect medical benefits provided by another employer.

5. Proprietary Information. Employee expressly acknowledges that: (a) there are competitive and proprietary aspects of the business of the Company; (b) during the course of Employee’s employment, the Company shall furnish, disclose or make available to Employee confidential and proprietary information and may provide Employee with unique and specialized training; (c) such confidential information and training have been developed and shall be developed by the Company through the expenditure of substantial time, effort and money, and could be used by Employee to compete with the Company; and (d) in the course of Employee’s employment, Employee shall be introduced to customers and others with important relationships to the Company, and any and all “goodwill” created through such introductions belongs exclusively to the Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between Employee and any customers of the Company. In light of the foregoing acknowledgements, and as a condition of continued employment hereunder, Employee hereby reaffirms, confirms and approves the Confidentiality and Assignment of Creative Works Agreement previously entered into or entered into on the date hereof as a binding obligation of the Employee, enforceable in accordance with its terms. Employee’s obligations under the Confidentiality and Assignment of Creative Works Agreement shall survive termination.

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6. Property and Records. Upon the termination of Employee’s employment, for any reason or for no reason, or if the Company otherwise requests, Employee shall: (a) return to Company all tangible business information and copies thereof (regardless how such confidential information or copies are maintained), and (b) deliver to the Company any property of the Company which may be in Employee’s possession, including, but not limited to, devices, smart phones, laptops, cell phones (the foregoing, “electronic devices”), products, materials, memoranda, notes, records, reports or other documents or photocopies of the same. Employee may retain copies of any exclusively personal data contained in or on the Company-owned electronic devices returned to the Company pursuant to the foregoing. The foregoing notwithstanding, Employee understands and agrees that the Company property belongs exclusively to the Company, it should be used for Company business, and Employee has no reasonable expectation of privacy on any Company property or with respect to any information stored thereon.

7. Cooperation. During and after Employee’s employment, Employee shall fully cooperate with the Company to the extent reasonable in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company (other than claims directly or indirectly against Employee) which relate to events or occurrences that transpired while Employee was employed by the Company. Employee’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after Employee’s employment, Employee also shall fully cooperate with the Company to the extent reasonable in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Employee was employed by the Company. The Company shall reimburse Employee for any reasonable out-of-pocket expenses incurred in connection with the Employee’s performance of obligations pursuant to this section.

8. Code Sections 409A and 280G.

(a) In the event that the payments or benefits set forth in Section 4 of this Agreement constitute “non- qualified deferred compensation” subject to Section 409A, then the following conditions apply to such payments or benefits:

(i) Any termination of Employee’s employment triggering payment of benefits under Section 4 must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Employee’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Employee to the Company at the time Employee’s employment terminates), any such payments under Section 4 that constitute deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 8(a) shall not cause any forfeiture of benefits on Employee’s part, but shall only act as a delay until such time as a “separation from service” occurs.

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(ii) Notwithstanding any other provision with respect to the timing of payments under Section 4 if, at the time of Employee’s termination, Employee is deemed to be a “specified employee” of the Company (within the meaning of Section 409A(a)(2)(B)(i) of the Code), then limited only to the extent necessary to comply with the requirements of Section 409A, any payments to which Employee may become entitled under Section 4 which are subject to Section 409A (and not otherwise exempt from its application) shall be withheld until the first (1st) business day of the seventh (7th) month following the termination of Employee’s employment, at which time Employee shall be paid an aggregate amount equal to the accumulated, but unpaid, payments otherwise due to Employee under the terms of Section 4.

(b) It is intended that each installment of the payments and benefits provided under Section 4 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(c) Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted and at all times administered in a manner that avoids the inclusion of compensation in income under Section 409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A. The parties intend this Agreement to be in compliance with Section 409A. Employee acknowledges and agrees that the Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement, including but not limited to consequences related to Section 409A.

(d) In the event the benefits provided by this Agreement, when aggregated with any other payments or benefits received by Employee, would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such “Payment” shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Employee receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary to accomplish the purpose of this Section 8(d), reduction shall occur at the election, in writing, of the Employee (provided, however, that such election shall be subject to Company approval if made on or after the effective date of the event that triggers the Payment) and may reduce cash payments, cancel accelerated vesting of stock award, and/or reduce employee benefits in any order or combination that maximizes the amount of the Reduced Amount. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Employee’s stock awards unless Employee elects in writing a different order for cancellation. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to Employee and the Company within fifteen (15) calendar days after the date on which Employee’s right to a Payment is triggered (if requested at that time by Employee or the Company) or such other time as requested by Employee or the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish Employee and the Company with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon Employee and the Company.

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9. General.

(a) Notices. Except as otherwise specifically provided herein, any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or electronic mail transmission provided acknowledgment of receipt of electronic transmission is provided; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt.

Notices to Employee shall be sent to the last known address in the Company’s records or such other address as Employee may specify in writing.

Notices to the Company shall be sent to:

Evofem Biosciences, Inc.

7770 Regents Road, Suite 113-618

San Diego, California 92122

(b) Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

(c) Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given and shall not constitute a continuing waiver or consent.

(d) Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company’s business or that aspect of the Company’s business in which Employee is principally involved. Employee may not assign Employee’s rights and obligations under this Agreement without the prior written consent of the Company.

(e) Governing Law/Dispute Resolution. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of California without giving effect to the conflict of law principles thereof. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of the State of California or of the United States of America for the Southern District of California. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.

(f) Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

(g) Entire Agreement. This Agreement, together with the other agreements specifically referenced herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

(h) Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For all purposes an electronic signature shall be treated as an original.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

EVOFEM BIOSCIENCES, INC.

/s/ Saundra Pelletier

Saundra Pelletier, Chief Employee Officer

EMPLOYEE

/s/ Ivy Zhang

Ivy Zhang

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EX-10.15

Exhibit 10.15

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made and entered into this 8th day of November, 2024 (the “Effective Date”) by and between Evofem Biosciences, Inc., a Delaware corporation (“Company”), and Saundra Pelletier (“Employee”).

1. Roles and Duties.

(a) Chief Executive Officer Role. Subject to the terms and conditions of this Agreement, Company shall employ Employee as its Chief Executive Officer reporting to the Company’s Board of Directors (“Board”). The Employee shall have such duties and responsibilities as are reasonably determined by the Board and are consistent with the duties customarily performed by a Chief Executive Officer of a similarly situated company in the United States. Employee accepts such employment upon the terms and conditions set forth herein and agrees to perform such duties and discharge such responsibilities to the best of Employee’s ability. During Employee’s employment, Employee shall devote all of Employee’s business time and energies to the business and affairs of the Company. Notwithstanding the foregoing, nothing herein shall preclude Employee from (i) performing services for such other companies as the Company may designate or permit; (ii) serving, with the prior written consent of the Company’s Board of Directors (“Board”), which consent shall not be unreasonably withheld, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses or charitable, educational or civic organizations; (iii) engaging in charitable activities and community affairs; and (iv) managing Employee’s personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by Employee so as not to materially interfere, individually or in the aggregate, with the performance of Employee’s duties and responsibilities hereunder.

(b) Board Membership. Executive shall serve as a member of the Board during Executive’s employment hereunder until the term of Executive’s directorship expires and Executive is not re-elected or earlier resigns or is removed from the Board. During the Term (as defined below), the Company or the applicable Board committee will recommend to the Board for nomination, and the Board shall nominate the Executive for reelection to the Board. Executive’s service as a Board member shall be without further compensation. At such time as Executive’s service to the Company is terminated for any reason or no reason, Executive agrees to resign as a member of the Board effective upon such termination of service, unless the Board, in its discretion, requests Executive to not so resign in writing.

2. Term of Employment.

(a) Term. Subject to the terms hereof, Employee’s employment hereunder shall continue until terminated hereunder by either party (such term of employment referred to herein as the “Term”).

(b) Termination. Notwithstanding anything else contained in this Agreement, Employee’s employment hereunder shall terminate upon the earliest to occur of the following and in accordance with the following:

(i) Death. Immediately upon Employee’s death;

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(ii) Termination by the Company.

(A) If because of Employee’s Disability (as defined below in Section 2(c)), written notice by the Company to Employee that Employee’s employment is being terminated as a result of Employee’s Disability, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company;

(B) If for Cause (as defined below in Section 2(d)), written notice by the Company to Employee that Employee’s employment is being terminated for Cause, which termination shall be effective on the date of such notice or such later date as specified in writing by the Company; provided that if prior to the effective date of such termination Employee has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective; or

(C) If by the Company for reasons other than under Sections 2(b)(ii)(A) or (B), written notice by the Company to Employee that Employee’s employment is being terminated, which termination shall be effective thirty (30) days after the date of such notice.

(iii) Termination by Employee.

(A) If for Good Reason (as defined below in Section 2(e)), written notice by Employee to the Company that Employee is terminating Employee’s employment for Good Reason and that sets forth the factual basis supporting the alleged Good Reason, which termination shall be effective thirty (30) days after the date of such notice; provided that if prior to the effective date of such termination the Company has cured the circumstances giving rise to the Good Reason if capable of being cured as provided in Section 2(e), then such termination shall not be effective; or

(B) If without Good Reason, written notice by Employee to the Company that Employee is terminating Employee’s employment, which termination shall be effective no fewer than thirty (30) days after the date of such notice unless such notice period is waived, in whole or in part, by the Company.

Notwithstanding anything in this Section 2(b), the Company may at any point, under the conditions set forth in Section 2(b)(ii)(B), terminate Employee’s employment for Cause prior to the effective date of any other termination contemplated hereunder; provided that if prior to the effective date of such for-Cause termination Employee has cured the circumstances giving rise to the Cause (if capable of being cured as provided in Section 2(d)), then such termination shall not be effective.

(c) Definition of “Disability.” For purposes of this Agreement, “Disability” shall mean Employee’s incapacity or inability to perform Employee’s duties and responsibilities as contemplated herein by reason of a medically determinable mental or physical impairment for one hundred twenty (120) days or more within any one (1) year period (cumulative or consecutive), which impairment can reasonably be expected to result in death or can be expected to last for a continuous period of not less than six (6) months.

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The determination that Employee is disabled hereunder, if disputed by the parties, shall be resolved by a physician reasonably satisfactory to Employee and the Company, at the Company’s expense, and the determination of such physician shall be final and binding upon both Employee and the Company. Employee hereby consents to such examination and consultation by a physician. The Company will keep all information it receives as a result of such inquiry and determination confidential and will not use it for any purpose other than in connection with exercising its rights under this Agreement.

(d) Definition of “Cause.” As used herein, “Cause” shall mean: (i) Employee’s conviction of (A) a felony or (B) any misdemeanor involving moral turpitude, deceit, dishonesty or fraud; (ii) Employee’s willful failure or refusal to comply with lawful directions of Employee’s supervisor or the Board, which failure or refusal continues for more than five (5) business days after written notice is given to Employee, which notice sets forth in reasonable detail the nature of such failure or refusal; (iii) willful and material breach by Employee of a material written Company policy or this Agreement, provided Employee does not cure such breach within five (5) business days after receiving written notice of the alleged breach; or (iv) misconduct by Employee that materially damages the Company or any of its affiliates. Except in the case of (ii) above, it is not necessary that the Company’s finding of Cause occur prior to Employee’s termination of service. If the Company determines, subsequent to Employee’s termination of service, that prior to Employee’s termination, Employee engaged in conduct which would constitute “Cause” (other than pursuant to (ii) above), then Employee shall have no right to any benefit or compensation under this Agreement.

(e) Definition of “Good Reason.” As used herein, “Good Reason” shall mean: (i) relocation of Employee’s principal business location to a location more than fifty (50) miles from Employee’s then-current business location; (ii) a material diminution in Employee’s duties, authority or responsibilities, which shall include, without limitation, Employee no longer performing similar functions associated with Employee’s services as Chief Executive Officer of a Company registered under the Securities Exchange Act of 1934, as amended; (iii) a reduction in Employee’s then in effect Base Salary by more than 10% and in a manner inconsistent with other employees of the Company having similar authority; or (iv) willful and material breach by the Company of its covenants and/or obligations under this Agreement; provided that, in each of the foregoing clauses (i) through (iv) (A) Employee provides Company with written notice that Employee intends to terminate Employee’s employment hereunder for one of the grounds set forth in this Section 2(e) within thirty (30) days of such ground occurring, (B) if such ground is capable of being cured, Company has failed to cure such ground within a period of thirty (30) days from the date of such written notice, and (C) Employee terminates by written notice Employee’s employment within sixty-five (65) days from the date that Employee provides the notice contemplated by clause (A) of this Section 2(e). For purposes of clarification, the above-listed conditions shall apply separately to each occurrence of Good Reason, and failure to adhere to such conditions in the event of Good Reason shall not disqualify Employee from asserting Good Reason for any subsequent occurrence of Good Reason. For purposes of this Agreement, “Good Reason” shall be interpreted in a manner, and limited to the extent necessary, so that it shall not cause adverse tax consequences for either party with respect to Section 409A (“Section 409A”) of the Internal Revenue Code of 1986, as amended (the “Code”) and any successor statute, regulation and guidance thereto.

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3. Compensation.

(a) Base Salary. The Company shall pay Employee a base salary (the “Base Salary”) equal to Employee’s base salary as of the Effective Date of this Agreement, as adjusted from time to time. The Base Salary shall be payable in substantially equal periodic installments in accordance with the Company’s payroll practices as in effect from time to time. The Company shall deduct from each such installment all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Employee participates. The Board or an appropriate committee thereof shall, on an annual basis, review the Base Salary, which may be adjusted upward or downward at the Company’s discretion.

(b) Annual Performance Bonus. Employee shall be eligible to receive an annual cash bonus (the “Annual Performance Bonus”), with the target amount of such Annual Performance Bonus equal to one hundred percent (100%) of Employee’s Base Salary in the year to which the Annual Performance Bonus relates; provided that the actual amount of the Annual Performance Bonus may be greater or less than such target amount. The amount of the Annual Performance Bonus earned shall be determined and approved by the Board or an appropriate committee thereof in its sole discretion. Except as provided in Section 4, Employee must be employed by the Company at the time of the bonus payout for the Annual Performance Bonus be deemed as having been earned. The Company shall deduct from the Annual Performance Bonus all amounts required to be deducted or withheld under applicable law or under any employee benefit plan in which Employee participates.

(c) Equity. In addition to any equity awards currently outstanding, Employee will be eligible to be considered for the grant of stock options and/or other equity-based awards commensurate with Employee’s position and responsibilities. The amount, terms and conditions of any stock option or other equity-based award will be determined by the Board or an appropriate committee thereof in its discretion and set forth in the applicable equity plan and other documents governing the award.

(d) Vacation. Employee shall also be entitled to vacation time off in accordance with the Company’s then in effect vacation policy applicable to Employee.

(e) Fringe Benefits. Employee shall be entitled to participate in all benefit/welfare plans and fringe benefits provided to Company senior Employees. Employee understands that, except when prohibited by applicable law, the Company’s benefit plans and fringe benefits may be amended by the Company from time to time in its sole discretion. The terms of any such benefits shall be governed by the applicable plan documents and Company policies in effect from time to time (and, to the extent this Agreement conflicts with such terms, the terms of such benefit plans shall govern).

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(f) Reimbursement of Expenses. The Company shall reimburse Employee for all ordinary and reasonable out-of-pocket business expenses incurred by Employee in furtherance of the Company’s business in accordance with the Company’s policies with respect thereto as in effect from time to time. Employee must submit any request for reimbursement no later than ninety (90) days following the date that such business expense is incurred. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of Section 409A including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Employee’s lifetime (or during a shorter period of time specified in this Agreement); (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year; (iii) the reimbursement of an eligible expense shall be made no later than the last day of the calendar year following the year in which the expense is incurred; and (iv) the right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

(g) Forfeiture/Clawback. All compensation shall be subject to any forfeiture or clawback policy established by the Company generally for senior executives from time to time, and when required by applicable law.

4. Payments Upon Termination.

(a) Definition of Accrued Obligations. For purposes of this Agreement, “Accrued Obligations” means:

(i) the portion of Employee’s Base Salary that has accrued prior to any termination of Employee’s employment with Company and has not yet been paid;

(ii) accrued but unused paid time off, if any, pursuant to the Company’s standard policy and practices; and

(iii) the amount of any expenses properly incurred by Employee on behalf of the Company prior to any such termination and not yet reimbursed. Employee’s entitlement to any other compensation or benefit under any Company plan shall be governed by and determined in accordance with the terms of such plans, except as otherwise specified in this Agreement.

(b) Termination by the Company for Cause. If Employee’s employment hereunder is terminated by the Company for Cause, then the Company shall pay the Accrued Obligations to Employee within the time provided by law and the Company shall have no further obligations to Employee under this Agreement.

(c) Termination by Employee Without Good Reason. If Employee’s employment hereunder is terminated by Employee without Good Reason, then the Company shall pay the Accrued Obligations to Employee within the time provided by law and the Company shall have no further obligations to Employee under this Agreement.

(d) Termination as a Result of Employee’s Disability or Death. If Employee’s employment hereunder terminates as a result of Employee’s Disability or death, the Company shall pay to Employee (or Employee’s estate) within the time provided by law (i) the Accrued Obligations; (ii) any accrued and unpaid Annual Performance Bonus for the prior fiscal year; and (iii) the Pro Rated Bonus (as defined below) and, shall have no further obligations with respect to any benefit or compensation under this Agreement to Employee hereunder. As used in this Section 4, “Pro Rated Bonus” shall mean an amount in cash equal to the target Annual Performance Bonus for which Employee would have been eligible with respect to the year in which termination of Employee’s employment occurs multiplied by a fraction, the numerator of which is the number of days during which Employee is employed by the Company during the year of termination and the denominator of which is 365.

- 5 -

(e) Termination by the Company Without Cause or by Employee For Good Reason; Change in Control. In the event that Employee’s employment is terminated by action of the Company other than for Cause, or Employee terminates Employee’s employment for Good Reason, or in the event that a Change in Control of the Company (as defined below) occurs and within a period of one (1) year following the Change in Control, or ninety (90) days preceding the earlier to occur of a Change in Control or the execution of a definitive agreement the consummation of which would result in a Change in Control, Employee’s employment is terminated other than for Cause, or during such period of time Employee terminates Employee’s employment for Good Reason, then, in addition to the Accrued Obligations and any accrued and unpaid Annual Performance Bonus for the prior fiscal year, Employee shall receive the following, subject to the terms and conditions described in Section 4(f).

(i) Severance Payments. A lump sum payment in an amount equal to thirty-six (36) months in value of Employee’s then-current Base Salary, less all customary and required taxes and employment- related deductions, which payment shall be made in the first payroll following the date on which the Release required by Section 4(f) becomes effective and non-revocable.

(ii) Bonus. A lump sum payment equal to the then target Annual Performance Bonus amount multiplied by 1.0, after deduction of all amounts required to be deducted or withheld under applicable law (which payment shall be made in the first payroll following the effective date of the Release required by Section 4(f)). Under this Section 4(e)(ii), payment of the Annual Performance Bonus does not require the employee to be employed through the time of bonus payout.

(iii) Equity Acceleration. On the effective date of the Release required by Section 4(f), Employee shall become fully vested in any and all unvested equity awards outstanding as of the date of Employee’s termination and this provision shall supersede any vesting acceleration provision contained in any equity award agreement outstanding on the Effective Date of this Agreement.

(iv) Benefits Payments. Upon completion of appropriate forms and subject to applicable terms and conditions under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Company shall continue to provide Employee medical insurance coverage to the same extent that such insurance continues to be provided to similarly situated executives at the time of Employee’s termination with the total cost of the regular premium for such benefits to be paid by the Company (the “COBRA Payment”), until the earlier to occur of: (i) twelve (12) months following Employee’s termination date, or (ii) the date Employee becomes eligible for medical benefits with another employer. Notwithstanding the foregoing, if Employee’s COBRA Payment would cause the applicable group health plan to be discriminatory and, therefore, result in adverse tax consequences to Employee, the Company shall, in lieu of the COBRA Payment, provide Employee with an equivalent monthly cash payment, minus deduction of all amounts required to be deducted or withheld under applicable law, for any period of time Employee is eligible to receive the COBRA Payment. Employee shall bear full responsibility for applying for COBRA continuation coverage and the Company shall have no obligation to provide Employee such coverage if Employee fails to elect COBRA benefits in a timely fashion.

- 6 -

(v) “Change in Control” Defined. As used herein, a “Change in Control” shall have the meaning set forth in the Company’s Amended and Restated 2014 Equity Incentive Plan (the “Equity Plan”); or any amended or new Equity Plan(s) as may be approved by the shareholders from time to time; provided, however, that for purposes of this Agreement a Change in Control shall be deemed to have occurred in any transaction described in subsections (i) or (ii) of Section 2.1(h) of the Equity Plan in which a majority of the members of the board of directors of the continuing, surviving or successor entity, or parent thereof, immediately after such transaction is comprised of Incumbent Directors (as defined in the Equity Plan).

Payment of the above-described severance payments and benefits are expressly conditioned on Employee’s execution without revocation of the Release required under Section 4(f), and return of Company property under Section 6.

(f) Execution of Release of Claims. The Company shall not be obligated to pay Employee any of the severance payments or benefits described in this Section 4 unless and until Employee has executed (without revocation) a release of claims as described below (the “Release”). The Release shall contain reasonable and customary provisions including a general release of claims against the Company and its affiliated entities and each of their officers, directors, employees, agents, attorneys and representatives as well as provisions concerning, among other things and when consistent with then-applicable law, non-disparagement, confidentiality, and continued cooperation. The Release must be provided to Employee not later than fifteen (15) days following the date of termination of Employee’s employment by the Company and executed by Employee and returned to the Company within sixty (60) days after receipt. If Employee fails or refuses to return the Release within such 60-day period, Employee’s severance payments and benefits to be paid hereunder shall be forfeited.

(g) No Other Payments or Benefits Owing. Except as expressly set forth herein, the payments and benefits set forth in this Section 4: (a) shall be the sole amounts owing to Employee upon termination of Employee’s employment for the reasons set forth above, and Employee shall not be eligible for any other payments or other forms of compensation or benefits; (b) shall be the sole remedy, if any, available to Employee in the event that Employee brings any claim against the Company relating to the termination of Employee’s employment under this Agreement; and (c) shall not be subject to set-off by the Company or any obligation on the part of Employee to mitigate or to offset compensation earned by Employee in other pursuits after termination of employment, other than as specified herein with respect medical benefits provided by another employer.

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5. Proprietary Information. Employee expressly acknowledges that: (a) there are competitive and proprietary aspects of the business of the Company; (b) during the course of Employee’s employment, the Company shall furnish, disclose or make available to Employee confidential and proprietary information and may provide Employee with unique and specialized training; (c) such confidential information and training have been developed and shall be developed by the Company through the expenditure of substantial time, effort and money, and could be used by Employee to compete with the Company; and (d) in the course of Employee’s employment, Employee shall be introduced to customers and others with important relationships to the Company, and any and all “goodwill” created through such introductions belongs exclusively to the Company, including, but not limited to, any goodwill created as a result of direct or indirect contacts or relationships between Employee and any customers of the Company. In light of the foregoing acknowledgements, and as a condition of continued employment hereunder, Employee hereby reaffirms, confirms and approves the Confidentiality and Assignment of Creative Works Agreement previously entered into or entered into on the date hereof as a binding obligation of the Employee, enforceable in accordance with its terms. Employee’s obligations under the Confidentiality and Assignment of Creative Works Agreement shall survive termination.

6. Property and Records. Upon the termination of Employee’s employment, for any reason or for no reason, or if the Company otherwise requests, Employee shall: (a) return to Company all tangible business information and copies thereof (regardless how such confidential information or copies are maintained), and (b) deliver to the Company any property of the Company which may be in Employee’s possession, including, but not limited to, devices, smart phones, laptops, cell phones (the foregoing, “electronic devices”), products, materials, memoranda, notes, records, reports or other documents or photocopies of the same. Employee may retain copies of any exclusively personal data contained in or on the Company-owned electronic devices returned to the Company pursuant to the foregoing. The foregoing notwithstanding, Employee understands and agrees that the Company property belongs exclusively to the Company, it should be used for Company business, and Employee has no reasonable expectation of privacy on any Company property or with respect to any information stored thereon.

7. Cooperation. During and after Employee’s employment, Employee shall fully cooperate with the Company to the extent reasonable in the defense or prosecution of any claims or actions now in existence or which may be brought in the future against or on behalf of the Company (other than claims directly or indirectly against Employee) which relate to events or occurrences that transpired while Employee was employed by the Company. Employee’s cooperation in connection with such claims or actions shall include, but not be limited to, being available to meet with counsel to prepare for discovery or trial and to act as a witness on behalf of the Company at mutually convenient times. During and after Employee’s employment, Employee also shall fully cooperate with the Company to the extent reasonable in connection with any investigation or review of any federal, state or local regulatory authority as any such investigation or review relates to events or occurrences that transpired while Employee was employed by the Company. The Company shall reimburse Employee for any reasonable out-of-pocket expenses incurred in connection with the Employee’s performance of obligations pursuant to this section.

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8. Code Sections 409A and 280G.

(a) In the event that the payments or benefits set forth in Section 4 of this Agreement constitute “non- qualified deferred compensation” subject to Section 409A, then the following conditions apply to such payments or benefits:

(i) Any termination of Employee’s employment triggering payment of benefits under Section 4 must constitute a “separation from service” under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) before distribution of such benefits can commence. To the extent that the termination of Employee’s employment does not constitute a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h) (as the result of further services that are reasonably anticipated to be provided by Employee to the Company at the time Employee’s employment terminates), any such payments under Section 4 that constitute deferred compensation under Section 409A shall be delayed until after the date of a subsequent event constituting a separation of service under Section 409A(a)(2)(A)(i) of the Code and Treas. Reg. §1.409A-1(h). For purposes of clarification, this Section 8(a) shall not cause any forfeiture of benefits on Employee’s part, but shall only act as a delay until such time as a “separation from service” occurs.

(ii) Notwithstanding any other provision with respect to the timing of payments under Section 4 if, at the time of Employee’s termination, Employee is deemed to be a “specified employee” of the Company (within the meaning of Section 409A(a)(2)(B)(i) of the Code), then limited only to the extent necessary to comply with the requirements of Section 409A, any payments to which Employee may become entitled under Section 4 which are subject to Section 409A (and not otherwise exempt from its application) shall be withheld until the first (1st) business day of the seventh (7th) month following the termination of Employee’s employment, at which time Employee shall be paid an aggregate amount equal to the accumulated, but unpaid, payments otherwise due to Employee under the terms of Section 4.

(b) It is intended that each installment of the payments and benefits provided under Section 4 of this Agreement shall be treated as a separate “payment” for purposes of Section 409A. Neither the Company nor Employee shall have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A.

(c) Notwithstanding any other provision of this Agreement to the contrary, this Agreement shall be interpreted and at all times administered in a manner that avoids the inclusion of compensation in income under Section 409A, or the payment of increased taxes, excise taxes or other penalties under Section 409A. The parties intend this Agreement to be in compliance with Section 409A. Employee acknowledges and agrees that the Company does not guarantee the tax treatment or tax consequences associated with any payment or benefit arising under this Agreement, including but not limited to consequences related to Section 409A.

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(d) In the event the benefits provided by this Agreement, when aggregated with any other payments or benefits received by Employee, would (i) constitute a “parachute payment” within the meaning of Section 280G of the Code, and (ii) but for this sentence, be subject to the excise tax imposed by Section 4999 of the Code (the “Excise Tax”), then such “Payment” shall be reduced to the Reduced Amount. The “Reduced Amount” shall be either (x) the largest portion of the Payment that would result in no portion of the Payment being subject to the Excise Tax or (y) the largest portion, up to and including the total, of the Payment, whichever amount, after taking into account all applicable federal, state and local employment taxes, income taxes, and the Excise Tax (all computed at the highest applicable marginal rate), results in Employee receipt, on an after-tax basis, of the greater amount of the Payment notwithstanding that all or some portion of the Payment may be subject to the Excise Tax. If a reduction in payments or benefits constituting “parachute payments” is necessary to accomplish the purpose of this Section 8(d), reduction shall occur at the election, in writing, of the Employee (provided, however, that such election shall be subject to Company approval if made on or after the effective date of the event that triggers the Payment) and may reduce cash payments, cancel accelerated vesting of stock award, and/or reduce employee benefits in any order or combination that maximizes the amount of the Reduced Amount. In the event that acceleration of vesting of stock award compensation is to be reduced, such acceleration of vesting shall be cancelled in the reverse order of the date of grant of Employee’s stock awards unless Employee elects in writing a different order for cancellation. The accounting firm engaged by the Company for general audit purposes as of the day prior to the effective date of the Change in Control shall perform the foregoing calculations. If the accounting firm so engaged by the Company is serving as accountant or auditor for the individual, entity or group effecting the Change in Control, then the Company shall appoint a nationally recognized accounting firm to make the determinations required hereunder. The Company shall bear all expenses with respect to the determinations by such accounting firm required to be made hereunder. The accounting firm engaged to make the determinations hereunder shall provide its calculations, together with detailed supporting documentation, to Employee and the Company within fifteen (15) calendar days after the date on which Employee’s right to a Payment is triggered (if requested at that time by Employee or the Company) or such other time as requested by Employee or the Company. If the accounting firm determines that no Excise Tax is payable with respect to a Payment, either before or after the application of the Reduced Amount, it shall furnish Employee and the Company with an opinion reasonably acceptable to Employee that no Excise Tax will be imposed with respect to such Payment. Any good faith determinations of the accounting firm made hereunder shall be final, binding and conclusive upon Employee and the Company.

9. General.

(a) Notices. Except as otherwise specifically provided herein, any notice required or permitted by this Agreement shall be in writing and shall be delivered as follows with notice deemed given as indicated: (i) by personal delivery when delivered personally; (ii) by overnight courier upon written verification of receipt; (iii) by telecopy or electronic mail transmission provided acknowledgment of receipt of electronic transmission is provided; or (iv) by certified or registered mail, return receipt requested, upon verification of receipt.

Notices to Employee shall be sent to the last known address in the Company’s records or such other address as Employee may specify in writing.

Notices to the Company shall be sent to:

Evofem Biosciences, Inc.

7770 Regents Road, Suite 113-618

San Diego, California 92122

(b) Modifications and Amendments. The terms and provisions of this Agreement may be modified or amended only by written agreement executed by the parties hereto.

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(c) Waivers and Consents. The terms and provisions of this Agreement may be waived, or consent for the departure therefrom granted, only by a written document executed by the party entitled to the benefits of such terms or provisions. No such waiver or consent shall be deemed to be or shall constitute a waiver or consent with respect to any other terms or provisions of this Agreement, whether or not similar. Each such waiver or consent shall be effective only in the specific instance and for the purpose for which it was given and shall not constitute a continuing waiver or consent.

(d) Assignment. The Company may assign its rights and obligations hereunder to any person or entity that succeeds to all or substantially all of the Company’s business or that aspect of the Company’s business in which Employee is principally involved. Employee may not assign Employee’s rights and obligations under this Agreement without the prior written consent of the Company.

(e) Governing Law/Dispute Resolution. This Agreement and the rights and obligations of the parties hereunder shall be construed in accordance with and governed by the law of the State of California without giving effect to the conflict of law principles thereof. Any legal action or proceeding with respect to this Agreement shall be brought in the courts of the State of California or of the United States of America for the Southern District of California. By execution and delivery of this Agreement, each of the parties hereto accepts for itself and in respect of its property, generally and unconditionally, the non-exclusive jurisdiction of the aforesaid courts.

(f) Headings and Captions. The headings and captions of the various subdivisions of this Agreement are for convenience of reference only and shall in no way modify or affect the meaning or construction of any of the terms or provisions hereof.

(g) Entire Agreement. This Agreement, together with the other agreements specifically referenced herein, embodies the entire agreement and understanding between the parties hereto with respect to the subject matter hereof and supersedes all prior oral or written agreements and understandings relating to the subject matter hereof. No statement, representation, warranty, covenant or agreement of any kind not expressly set forth in this Agreement shall affect, or be used to interpret, change or restrict, the express terms and provisions of this Agreement.

(h) Counterparts. This Agreement may be executed in two or more counterparts, and by different parties hereto on separate counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For all purposes an electronic signature shall be treated as an original.

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

EVOFEM BIOSCIENCES, INC.

/s/ Tony O’Brien

Tony O’Brien, Chairman of the Compensation Committee

EMPLOYEE

/s/ Saundra Pelletier

Saundra Pelletier

- 12 -

EX-31.1

Exhibit 31.1

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Saundra Pelletier, certify that:

1	I have reviewed this quarterly report on Form 10-Q of Evofem Biosciences, Inc.;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5 The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 14, 2024	By:	/s/ Saundra Pelletier
			Saundra Pelletier
			President, Chief Executive Officer, and Interim Chairperson of the Board
			(Principal Executive Officer)

EX-31.2

Exhibit 31.2

CERTIFICATION PURSUANT TO

RULES 13a-14(a) AND 15d-14(a) UNDER THE SECURITIES EXCHANGE ACT OF 1934,

AS ADOPTED PURSUANT TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Ivy Zhang, certify that:

1	I have reviewed this quarterly report on Form 10-Q of Evofem Biosciences, Inc.;
2	Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3	Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4	The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)	Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)	Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)	Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)	Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5 The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)	All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
(b)	Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	November 14, 2024	By:	/s/ Ivy Zhang
			Ivy Zhang
			Chief Financial Officer and Secretary
			(Principal Financial Officer and Principal Accounting Officer)

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Evofem Biosciences, Inc. (the “Company”) on Form 10-Q for the period ending September 30, 2024, as filed with the Securities and Exchange Commission on the date hereof (the “Quarterly Report”), each of the undersigned officers of the Company, does hereby certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of such officer’s knowledge:

(1) The Quarterly Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2) The information contained in the Quarterly Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: November 14, 2024	By:	/s/ Saundra Pelletier
		Saundra Pelletier
		President, Chief Executive Officer, and Interim Chairperson of the Board
		(Principal Executive Officer)

Date: November 14, 2024	By:	/s/ Ivy Zhang
		Ivy Zhang
		Chief Financial Officer and Secretary
		(Principal Financial Officer and Principal Accounting Officer)

This certification accompanies the Form 10-Q to which it relates, is not deemed filed with the Securities and Exchange Commission and is not to be incorporated by reference into any filing of Evofem Biosciences, Inc. under the Securities Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended (whether made before or after the date of the Form 10-Q), irrespective of any general incorporation language contained in such filing.

XML

Cover - $ / shares	9 Months Ended
	Sep. 30, 2024	Nov. 08, 2024
Cover [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Quarterly Report	true
Document Transition Report	false
Document Period End Date	Sep. 30, 2024
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--12-31
Entity File Number	001-36754
Entity Registrant Name	EVOFEM BIOSCIENCES, INC.
Entity Central Index Key	0001618835
Entity Tax Identification Number	20-8527075
Entity Incorporation, State or Country Code	DE
Entity Address, Address Line One	7770 Regents Road
Entity Address, Address Line Two	Suite 113-618
Entity Address, City or Town	San Diego
Entity Address, State or Province	CA
Entity Address, Postal Zip Code	92122
City Area Code	(858)
Local Phone Number	550-1900
Title of 12(b) Security	Common Stock, par value $0.0001 per share
Trading Symbol	EVFM
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	true
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		100,328,686
Entity Listing, Par Value Per Share	$ 0.0001

XML

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Current assets:
Cash and cash equivalents
Restricted cash	722	580
Trade accounts receivable, net	5,393	5,738
Inventories	1,463	1,697
Prepaid and other current assets	999	1,195
Total current assets	8,577	9,210
Property and equipment, net	1,181	1,203
Operating lease right-of-use assets	127	106
Intangible asset, net (Note 7)	14,021
Other noncurrent assets	36	35
Total assets	23,942	10,554
Current liabilities:
Accounts payable	16,864	17,020
Short term debt	268
Accrued expenses	5,124	4,227
Accrued compensation	3,222	2,609
Operating lease liabilities - current	116	97
Derivative liabilities	162	1,926
Contingent liabilities – current (Note 7)	808
Total current liabilities	76,286	72,463
Operating lease liabilities- noncurrent	10	8
Contingent liabilities – noncurrent (Note 7)	13,775
Total liabilities	90,071	72,471
Commitments and contingencies (Note 7)
Convertible and redeemable preferred stock, $0.0001 par value, senior to common stock
Series E-1 and F-1 convertible preferred stock, 2,300 and 95,000 shares authorized; 2,017 and 1,874 shares of E-1 issued and outstanding as of September 30, 2024 and December 31, 2023, respectively; 23,540 and 22,280 shares of F-1 issued and outstanding at September 30, 2024 and December 31, 2023, respectively	4,759	4,593
Stockholders’ deficit:
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding as of September 30, 2024 and December 31, 2023
Common Stock, $0.0001 par value; 3,000,000,000 shares authorized; 100,328,686 and 20,007,799 shares issued and outstanding as of September 30, 2024 and December 31, 2023, respectively	10	2
Additional paid-in capital	825,430	823,036
Accumulated other comprehensive loss	(1,707)	(849)
Accumulated deficit	(894,621)	(888,699)
Total stockholders’ deficit	(70,888)	(66,510)
Total liabilities, convertible and redeemable preferred stock and stockholders’ deficit	23,942	10,554
Nonrelated Party [Member]
Current liabilities:
Other current liabilities	4,652	3,316
Related Party [Member]
Current liabilities:
Other current liabilities	685
Baker Bros. Notes [Member]
Current liabilities:
Convertible notes	14,183	14,731
Adjuvant Notes [Member]
Current liabilities:
Convertible notes	$ 30,202	$ 28,537

XML

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Sep. 30, 2024	Dec. 31, 2023
Convertible preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, par value	$ 0.0001	$ 0.0001
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.0001	$ 0.0001
Common stock, shares authorized	3,000,000,000	3,000,000,000
Common stock, shares issued	100,328,686	20,007,799
Common stock, shares outstanding	100,328,686	20,007,799
Series E-1 Convertible and Redeemable Preferred Stock [Member]
Convertible preferred stock, shares authorized	2,300	2,300
Convertible preferred stock, shares issued	2,017	1,874
Convertible preferred stock, shares outstanding	2,017	1,874
Series F-1 Convertible and Redeemable Preferred Stock [Member]
Convertible preferred stock, shares authorized	95,000	95,000
Convertible preferred stock, shares issued	23,540	22,280
Convertible preferred stock, shares outstanding	23,540	22,280

XML

Condensed Consolidated Statements of Operations (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Product sales, net	$ 4,496	$ 5,112	$ 12,259	$ 13,379
Operating Expenses:
Cost of goods sold	869	1,889	2,322	5,558
Amortization of intangible asset	301		301
Research and development	332	614	1,196	1,556
Selling and marketing	2,382	2,985	6,970	9,036
General and administrative	3,052	3,176	8,143	11,696
Total operating expenses	6,936	8,664	18,932	27,846
Loss from operations	(2,440)	(3,552)	(6,673)	(14,467)
Other income (expense):
Interest income	3	2	13	28
Other expense, net	(562)	(596)	(1,736)	(2,041)
Loss on issuance of financial instruments		(5,175)	(3,300)	(5,286)
Gain (loss) on debt extinguishment, net	(143)	75,337	977	75,337
Change in fair value of financial instruments	769		4,896	1,539
Total other income, net	67	69,568	850	69,577
Income (loss) before income tax	(2,373)	66,016	(5,823)	55,110
Income tax benefit (expense)	8	(11)		(17)
Net income (loss)	(2,365)	66,005	(5,823)	55,093
Convertible preferred stock deemed dividends	(5)		(99)
Net income (loss) attributable to common stockholders	$ (2,370)	$ 66,005	$ (5,922)	$ 55,093
Net income (loss) per share attributable to common stockholders:
Basic (Note 2)	$ (0.02)	$ 15.34	$ (0.09)	$ 21.42
Diluted (Note 2)	$ (0.02)	$ 0.10	$ (0.09)	$ 0.09
Weighted-average shares used to compute net income (loss) per share attributable to common shareholders:
Basic	96,459,121	4,236,477	64,924,454	2,524,302
Diluted	96,459,121	729,979,486	64,924,454	694,561,898

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Income Statement [Abstract]
Net income (loss)	$ (2,365)	$ 66,005	$ (5,823)	$ 55,093
Other comprehensive income (loss):
Change in fair value of financial instruments attributed to credit risk change (Note 4)	(1,069)	(455)	(1,001)	23,373
Reclassification adjustment related to debt extinguishment	143	(73,187)	143	(73,187)
Comprehensive income (loss)	$ (3,291)	$ (7,637)	$ (6,681)	$ 5,279

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Condensed Consolidated Statements of Convertible and Redeemable Preferred Stock and Stockholders' Deficit (Unaudited) - USD ($) $ in Thousands	Series E-1 Convertible and Redeemable Preferred Stock [Member] Preferred Stock [Member]	Series E-1 Convertible and Redeemable Preferred Stock [Member]	Series F-1 Convertible and Redeemable Preferred Stock [Member] Preferred Stock [Member]	Series F-1 Convertible and Redeemable Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	AOCI Attributable to Parent [Member]	Retained Earnings [Member]	Total
Balance at Dec. 31, 2022						$ 817,367	$ 49,527	$ (938,694)	$ (71,800)
Temporary equity, Balance, shares at Dec. 31, 2022
Common stock, Balance, shares at Dec. 31, 2022					984,786
Issuance of common stock upon cash exercise of warrants						67			67
Issuance of common stock upon cash exercise of warrants, shares					24,200
Issuance of common stock upon noncash exercise of Purchase Rights						180			180
Issuance of common stock upon noncash exercise of Purchase Rights, shares					718,704
Stock-based compensation						417			417
Change in fair value of financial instruments attributed to credit risk change (Note 4)							15,460		15,460
Net income (loss)								(2,354)	(2,354)
Issuance of SSNs (Note 4)						1,629			1,629
Balance at Mar. 31, 2023						819,660	64,987	(941,048)	(56,401)
Temporary equity, Balance, shares at Mar. 31, 2023
Common stock, Balance, shares at Mar. 31, 2023					1,727,690
Balance at Dec. 31, 2022						817,367	49,527	(938,694)	(71,800)
Temporary equity, Balance, shares at Dec. 31, 2022
Common stock, Balance, shares at Dec. 31, 2022					984,786
Change in fair value of financial instruments attributed to credit risk change (Note 4)									23,373
Net income (loss)									55,093
Balance at Sep. 30, 2023	$ 1,800					828,552	(287)	(884,624)	(56,359)
Temporary equity, Balance, shares at Sep. 30, 2023	1,800
Common stock, Balance, shares at Sep. 30, 2023					5,680,210
Balance at Mar. 31, 2023						819,660	64,987	(941,048)	(56,401)
Temporary equity, Balance, shares at Mar. 31, 2023
Common stock, Balance, shares at Mar. 31, 2023					1,727,690
Issuance of common stock upon cash exercise of warrants						101			101
Issuance of common stock upon cash exercise of warrants, shares					122,729
Issuance of common stock upon noncash exercise of Purchase Rights						6			6
Issuance of common stock upon noncash exercise of Purchase Rights, shares					673,820
Stock-based compensation						268			268
Change in fair value of financial instruments attributed to credit risk change (Note 4)							8,368		8,368
Net income (loss)								(8,558)	(8,558)
Issuance of SSNs (Note 4)						499			499
Noncash reclassification of liability-classified derivatives to equity						53			53
Balance at Jun. 30, 2023						820,587	73,355	(949,606)	(55,664)
Temporary equity, Balance, shares at Jun. 30, 2023
Common stock, Balance, shares at Jun. 30, 2023					2,524,239
Issuance of common stock upon cash exercise of warrants						14			14
Issuance of common stock upon cash exercise of warrants, shares					1
Issuance of common stock upon noncash exercise of Purchase Rights
Issuance of common stock upon noncash exercise of Purchase Rights, shares					2,767,332
Issuance of common stock upon conversion of note
Issuance of common stock upon conversion of note, shares					388,638
Stock-based compensation						258			258
Change in fair value of financial instruments attributed to credit risk change (Note 4)									(455)
Net income (loss)								66,005	66,005
Extinguishment of Baker Notes (Note 4)							73,187		73,187
Issuance of SSNs (Note 4)						3,563			3,563
Issuance of series E-1 convertible and redeemable preferred stock upon exchange of notes	$ 1,800					(1,797)	(3)		(1,800)
Issuance of series E-1 convertible and redeemable preferred stock upon exchange of notes, shares	1,800
Issuance of additional purchase rights due to price reset (Note 4)						4,904			4,904
Down round feature adjustment to financial instruments (Note 6)						1,023		(1,023)
Extinguishment of Baker Notes (Note 4)							(73,187)		(73,187)
Change in fair value of financial instruments attributed to credit risk change (Note 4)							(452)		(452)
Balance at Sep. 30, 2023	$ 1,800					828,552	(287)	(884,624)	(56,359)
Temporary equity, Balance, shares at Sep. 30, 2023	1,800
Common stock, Balance, shares at Sep. 30, 2023					5,680,210
Balance at Dec. 31, 2023	$ 1,874		$ 2,719		$ 2	823,036	(849)	(888,699)	$ (66,510)
Temporary equity, Balance, shares at Dec. 31, 2023	1,874	1,874	22,280	22,280
Common stock, Balance, shares at Dec. 31, 2023					20,007,799				20,007,799
Issuance of common stock upon cash exercise of warrants						15			$ 15
Issuance of common stock upon cash exercise of warrants, shares					246,153
Issuance of common stock upon noncash exercise of Purchase Rights					$ 2	87			89
Issuance of common stock upon noncash exercise of Purchase Rights, shares					17,725,000
Issuance of common stock upon conversion of note					$ 1	34			35
Issuance of common stock upon conversion of note, shares					10,731,443
Stock-based compensation						237			237
Change in fair value of financial instruments attributed to credit risk change (Note 4)							324		324
Series E-1 Shares dividends	$ 47							(47)	(47)
Series E-1 Shares dividends, shares	47
Net income (loss)								(4,809)	(4,809)
Balance at Mar. 31, 2024	$ 1,921		$ 2,719		$ 5	823,409	(525)	(893,555)	(70,666)
Temporary equity, Balance, shares at Mar. 31, 2024	1,921		22,280
Common stock, Balance, shares at Mar. 31, 2024					48,710,395
Balance at Dec. 31, 2023	$ 1,874		$ 2,719		$ 2	823,036	(849)	(888,699)	$ (66,510)
Temporary equity, Balance, shares at Dec. 31, 2023	1,874	1,874	22,280	22,280
Common stock, Balance, shares at Dec. 31, 2023					20,007,799				20,007,799
Change in fair value of financial instruments attributed to credit risk change (Note 4)									$ (1,001)
Net income (loss)									(5,823)
Balance at Sep. 30, 2024	$ 1,973		$ 2,786		$ 10	825,430	(1,707)	(894,621)	$ (70,888)
Temporary equity, Balance, shares at Sep. 30, 2024	2,017	2,017	23,540	23,540
Common stock, Balance, shares at Sep. 30, 2024					100,328,686				100,328,686
Balance at Mar. 31, 2024	$ 1,921		$ 2,719		$ 5	823,409	(525)	(893,555)	$ (70,666)
Temporary equity, Balance, shares at Mar. 31, 2024	1,921		22,280
Common stock, Balance, shares at Mar. 31, 2024					48,710,395
Issuance of common stock upon noncash exercise of Purchase Rights					$ 2	66			68
Issuance of common stock upon noncash exercise of Purchase Rights, shares					24,350,000
Issuance of common stock upon conversion of note					$ 1	15			16
Issuance of common stock upon conversion of note, shares					9,768,291
Stock-based compensation						219			219
Change in fair value of financial instruments attributed to credit risk change (Note 4)							(256)		(256)
Series E-1 Shares dividends	$ 47							(47)	(47)
Series E-1 Shares dividends, shares	47
Net income (loss)								1,351	1,351
Balance at Jun. 30, 2024	$ 1,968		$ 2,719		$ 8	823,709	(781)	(892,251)	(69,315)
Temporary equity, Balance, shares at Jun. 30, 2024	1,968		22,280
Common stock, Balance, shares at Jun. 30, 2024					82,828,686
Issuance of common stock upon noncash exercise of Purchase Rights					$ 2	9			11
Issuance of common stock upon noncash exercise of Purchase Rights, shares					17,500,000
Stock-based compensation						203			203
Change in fair value of financial instruments attributed to credit risk change (Note 4)							(1,069)		(1,069)
Series E-1 Shares dividends	$ 5							(5)	(5)
Series E-1 Shares dividends, shares	49
Net income (loss)								(2,365)	(2,365)
Extinguishment of Baker Notes (Note 4)							143		143
Issuance of Series F-1 Shares to Aditxt (Related Party)			$ 67			1,193			1,193
Issuance of Series F-1 Shares to Aditxt (Related Party), shares			1,260
Allocation of reinstatement proceeds (Related Party)						316			316
Extinguishment of Baker Notes (Note 4)							(143)		(143)
Balance at Sep. 30, 2024	$ 1,973		$ 2,786		$ 10	$ 825,430	$ (1,707)	$ (894,621)	$ (70,888)
Temporary equity, Balance, shares at Sep. 30, 2024	2,017	2,017	23,540	23,540
Common stock, Balance, shares at Sep. 30, 2024					100,328,686				100,328,686

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Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	3 Months Ended				9 Months Ended		12 Months Ended
	Sep. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Cash flows from operating activities:
Net income (loss)	$ (2,365)	$ (4,809)	$ 66,005	$ (2,354)	$ (5,823)	$ 55,093
Adjustments to reconcile net income (loss) to net cash, cash equivalents and restricted cash used in operating activities:
Loss on issuance of financial instruments			5,175		3,300	5,286
Gain on debt extinguishment	143		(75,337)		(977)	(75,337)	$ (75,300)
Change in fair value of financial instruments	(769)				(4,896)	(1,539)
Inventory write-down for excess & obsolescence						1,505	1,300
Loss on contingent liability					840
Stock-based compensation					659	943
Depreciation			500		25	455
Amortization of intangible asset	301				301
Noncash interest expense					1,673	1,702
Noncash right-of-use asset amortization					69	1,259
Net gain on lease termination						(466)
Net loss on disposal of property and equipment					11	1,858
Changes in operating assets and liabilities:
Trade accounts receivable					345	(5,196)
Inventories					234	1,348
Prepaid and other assets					195	3,231
Accounts payable					(211)	1,215
Accrued expenses and other liabilities					2,234	1,632
Accrued compensation					613	(355)
Operating lease liabilities					(69)	(1,432)
Net cash and restricted cash used in operating activities					(1,477)	(8,798)
Cash flows from investing activities:
Payments related to asset acquisition					(509)
Purchases of property and equipment					(14)	(4)
Net cash and restricted cash used in investing activities					(523)	(4)
Cash flows from financing activities:
Proceeds from issuance of common stock - exercise of warrants						174
Borrowings under term notes					397	5,262
Proceeds from issuance of preferred stock - Related Party					1,260
Proceeds from reinstatement of Merger Agreement - Related Party					1,000
Payments under term notes					(515)	(1,000)
Net cash and restricted cash provided by financing activities					2,142	4,436
Net change in cash, cash equivalents and restricted cash					142	(4,366)
Cash, cash equivalents and restricted cash, beginning of period		$ 580		$ 4,776	580	4,776	4,776
Cash, cash equivalents and restricted cash, end of period	$ 722		$ 410		722	410	$ 580
Supplemental disclosure of noncash investing and financing activities:
Exchange of convertible notes to Series E-1 convertible preferred stock						1,800
Borrowings under term notes included in prepaid and other current assets						375
Net change in contingent consideration liabilities					13,743
Allocation of reinstatement proceeds - Related Party					316
Issuance of common stock upon exercise of purchase rights					168	186
Series E-1 shares deemed dividends					99
Right-of-use assets obtained for lease liabilities (fleet lease renewals)					90
Acquisition related amounts included in accounts payable and accrued expenses					70
Issuance of common stock upon conversion of notes					51
Issuance of common stock upon exercise of warrants					15
Purchases of property and equipment included in accounts payable and accrued expenses					$ 78

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Description of Business and Basis of Presentation

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Description of Business and Basis of Presentation

1. Description of Business and Basis of Presentation

Description of Business

Evofem is a San Diego-based biopharmaceutical company focused on commercializing innovative products to address unmet needs in women’s sexual and reproductive health.

The Company’s first commercial product, Phexxi® (lactic acid, citric acid, and potassium bitartrate) vaginal gel (Phexxi), was approved by the U.S. Food and Drug Administration (FDA) on May 22, 2020. It is the first and only FDA-approved, hormone-free, woman-controlled, on-demand prescription contraceptive gel. The Company commercially launched Phexxi in September 2020 and has grown net sales in each successive year. Phexxi net product sales were $16.8 million in 2022 and increased to $18.2 million in 2023.

On December 11, 2023, the Company entered into an Agreement and Plan of Merger, as amended, (the Merger Agreement) with Aditxt, Inc., a Delaware corporation (Aditxt) and Adifem, Inc. (f/k/a Adicure, Inc.), a Delaware corporation and a wholly-owned Subsidiary of Aditxt (Merger Sub), respectively, (collectively, the Parties), pursuant to which, and on the terms and subject to the conditions thereof, the Merger Sub is expected to merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Aditxt (the Merger). The Parties entered into an amended and restated Merger Agreement (the A&R Merger Agreement) in July 2024 and subsequently amended the A&R Merger Agreement in August, September, and October 2024. The parties are working towards a closing in 2025.

On July 14, 2024, the Company acquired global rights to SOLOSEC® (secnidazole) 2g oral granules. This FDA-approved single-dose oral antimicrobial agent provides a complete course of therapy for the treatment of two common sexual health infections – bacterial vaginosis (BV) and trichomoniasis. This acquisition aligns with and advances the Company’s mission to commercialize innovative and differentiated products for women’s sexual and reproductive health. The Transferred Assets, as defined in the SOLOSEC Asset Purchase Agreement, included all registered intellectual property related to SOLOSEC (SOLOSEC IP) as well as assorted SOLOSEC related documentation and contracts. The Company accounted for this acquisition as an asset acquisition, pursuant to which the Company recorded contingent liabilities for the fair value of future sales-based payments and an intangible asset for the fair value of the SOLOSEC IP plus certain transaction costs; see Note 6 – Fair Value of Financial Instruments and Note 7 – Commitments and Contingencies for more detailed information about the asset acquisition accounting and fair value methodology.

Basis of Presentation and Principles of Consolidation

The Company prepared the unaudited interim condensed consolidated financial statements included in this Quarterly Report in accordance with accounting principles generally accepted (GAAP) in the United States for interim financial information and the rules and regulations of the Securities and Exchange Commission (SEC) related to quarterly reports on Form 10-Q.

The Company’s financial statements are presented on a consolidated basis, which include the accounts of the Company and its wholly-owned subsidiaries. Intercompany accounts and transactions have been eliminated in consolidation. The unaudited interim condensed consolidated financial statements do not include all information and disclosures required by GAAP for annual audited financial statements and should be read in conjunction with the Company’s condensed consolidated financial statements and notes thereto for the year ended December 31, 2023 included in its Annual Report on Form 10-K as filed with the SEC on March 27, 2024 (the 2023 Audited Financial Statements).

The unaudited interim condensed consolidated financial statements included in this report have been prepared on the same basis as the Company’s audited consolidated financial statements and include all adjustments (consisting only of normal recurring adjustments) necessary for a fair statement of the financial position, results of operations, cash flows, and statements of convertible and redeemable preferred stock and stockholders’ deficit for the periods presented. The results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results expected for the full year. The condensed consolidated balance sheet as of December 31, 2023 was derived from the 2023 Audited Financial Statements.

Risks, Uncertainties and Going Concern

Any disruptions in the commercialization of Phexxi or SOLOSEC and/or their supply chains could have a material adverse effect on the Company’s business, results of operations and financial condition.

The condensed consolidated financial statements have been prepared on a going concern basis, which contemplates the realization of assets and settlement of liabilities, in the normal course of business, and does not include any adjustments to reflect the possible future effects on the recoverability and classification of assets or amounts and classification of liabilities that may result from the outcome of this uncertainty.

The Company’s principal operations are related to the commercialization of Phexxi and SOLOSEC, following its acquisition in July 2024. Additional activities have included raising capital, identifying alternative manufacturing to lower Phexxi cost of goods sold (COGS), seeking ex-U.S. licensing partners to add non-dilutive capital to the balance sheet, seeking product in-licensing/acquisition opportunities to expand and diversify the U.S. revenue stream, and establishing and maintaining a corporate infrastructure to support a commercial product. The Company has incurred operating losses and negative cash flows from operating activities since inception. As of September 30, 2024, the Company had a working capital deficit of $67.7 million and an accumulated deficit of $894.6 million.

Since October 3, 2022, the Company’s common stock has traded on the OTC Venture Market (the OTCQB) of the OTC Markets Group, Inc. (the OTC), a centralized electronic quotation service for over-the-counter securities, under the symbol “EVFM.” The OTCQB imposes, among other requirements, a minimum $0.01 per share bid price requirement (the Bid Price Requirement) for continued inclusion on the OTCQB. The closing bid price for the Company’s common stock must remain at or above $0.01 per share to comply with the Bid Price Requirement for continued listing. The Company received a written notice (the OTC Notice), dated August 28, 2024, from the OTC notifying the Company that, because the closing bid price for the Company’s common stock was below $0.01 per share for 30 consecutive trading days, the Company was not in compliance with the minimum closing bid price requirement for continued listing on OTCQB as set forth in the OTCQB listing standards, section 2.3 (the Minimum Bid Price Requirement). The OTC Notice had no immediate effect on the listing of the Company’s common stock on OTCQB. In accordance with OTCQB Listing Standards, Section 4.1 the Company had a compliance period of 90 days, or until November 26, 2024, to regain compliance with the Minimum Bid Price Requirement. On November 8, 2024, the OTC notified the Company that the Company’s closing bid price was equal to or greater than $0.01 for the preceding ten consecutive days and therefore the Company had regained compliance with the OTCQB listing standards and the matter is rectified as of November 7, 2024. As of November 8, 2024, the closing bid price was $0.0116.

Management’s plans to meet its cash flow needs in the next 12 months include generating recurring product revenue from Phexxi and SOLOSEC, restructuring its current payables, and obtaining additional funding through means such as the issuance of preferred stock to Aditxt as was done under the A&R Merger Agreement, as amended, non-dilutive financings, or through collaborations or partnerships with other companies, including license agreements for Phexxi and/or SOLOSEC in the U.S. or foreign markets, or other potential business combinations.

The Company anticipates it will continue to incur net losses for the foreseeable future. According to management estimates, liquidity resources as of September 30, 2024 were not sufficient to maintain the Company’s cash flow needs for the twelve months from the date of issuance of these condensed consolidated financial statements.

If the Company is not able to obtain the required funding through a significant increase in revenue, equity or debt financings, license agreements for Phexxi and/or SOLOSEC, or other means, or is unable to obtain funding on terms favorable to the Company, or if there is another event of default affecting the notes payable, or if the Company is enjoined from using the Phexxi mark, there will be a material adverse effect on commercialization operations and the Company’s ability to execute its strategic development plan for future growth. If the Company cannot successfully raise additional funding and implement its strategic development plan, the Company may be forced to make further reductions in spending, including spending in connection with its commercialization activities, extend payment terms with suppliers, liquidate assets where possible at a potentially lower amount than as recorded in the condensed consolidated financial statements, suspend or curtail planned operations, or cease operations entirely. Any of these could materially and adversely affect the Company’s liquidity, financial condition and business prospects, and the Company would not be able to continue as a going concern. The Company has concluded that these circumstances and the uncertainties associated with the Company’s ability to obtain additional equity or debt financing on terms that are favorable to the Company, or at all, and otherwise succeed in its future operations raise substantial doubt about the Company’s ability to continue as a going concern.

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Summary of Significant Accounting Policies

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the notes thereto.

Significant estimates affecting amounts reported or disclosed in the condensed consolidated financial statements include, but are not limited to: the assumptions used in measuring the revenue gross-to-net variable consideration items; the trade accounts receivable credit loss reserve estimate; the assumptions used in estimating the fair value of convertible notes, preferred stock, warrants, purchase rights issued, asset acquisition intangible asset, and contingent liabilities; the assumptions used in the valuation of inventory; the useful lives of property and equipment; the recoverability of long-lived assets; and the valuation of deferred tax assets. These assumptions are more fully described in Note 3 – Revenue, Note 4 – Debt, Note 6 - Fair Value of Financial Instruments, Note 7 - Commitments and Contingencies, and Note 9 - Stock-based Compensation. The Company bases its estimates on historical experience and market-specific or other relevant assumptions that it believes to be reasonable under the circumstances and adjusts when facts and circumstances dictate. The estimates are the basis for making judgments about the carrying values of assets, liabilities and recorded expenses that are not readily apparent from other sources. As future events and their effects cannot be determined with precision, actual results may materially differ from those estimates or assumptions.

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer of the Company, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. Deposits in the Company’s checking, time deposit and investment accounts are maintained in federally insured financial institutions and are subject to federally insured limits or limits set by Securities Investor Protection Corporation. The Company invests in funds through a major U.S. bank and is exposed to credit risk in the event of default to the extent of amounts recorded on the condensed consolidated balance sheets.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant concentrations of credit risk on its cash, cash equivalents and restricted cash balances on amounts in excess of federally insured limits due to the financial position of the depository institutions in which these deposits are held.

The Company is also subject to credit risk related to its trade accounts receivable from product sales. Its customers are located in the U.S. and consist of wholesale distributors, retail pharmacies, and mail-order specialty pharmacies. The Company extends credit to its customers in the normal course of business after evaluating their overall financial condition and evaluates the collectability of its accounts receivable by periodically reviewing the age of the receivables, the financial condition of its customers, and its past collection experience. Historically, the Company has not experienced any credit losses. As of September 30, 2024, based on the evaluation of these factors the Company did not record a reserve for expected credit loss.

Products are distributed primarily through three major distributors and mail-order pharmacies, who receive service fees calculated as a percentage of the gross sales, and a fee-per-unit shipped, respectively. These entities are not obligated to purchase any set number of units and distribute products on demand as orders are received.

For the three and nine months ended September 30, 2024, the Company’s three largest customers combined made up approximately 80% and 79% of its gross product sales, respectively. For the three and nine months ended September 30, 2023, the Company’s three largest customers combined made up approximately 86% and 85% of its gross product sales, respectively. As of September 30, 2024 and December 31, 2023, the Company’s three largest customers combined made up 90% and 87%, respectively, of its trade accounts receivable balance.

Significant Accounting Policies

There have been no changes to the significant accounting policies that were described in Note 2 – Summary of Significant Accounting Policies of the 2023 Audited Financial Statements in the Company’s Annual Report, other than the addition of policies on intangibles and contingent liabilities due to the SOLOSEC asset acquisition; see below.

Intangible Assets

Finite lived intangible assets, including the SOLOSEC IP acquired as part of the SOLOSEC asset acquisition as described further in Note 6 – Fair Value of Financial Instruments and Note 7 – Commitments and Contingencies, are amortized on a straight-line basis over their estimated useful lives. Intangible assets are typically only recognized when an asset is acquired as part of a business combination or asset acquisition and the initial value is based on the fair value of the asset as determined by a third-party valuation. In the case of intangible assets acquired through an asset acquisition, the initial value includes the fair value of the intangible plus any direct acquisition related expenses. For intangible assets acquired in an asset acquisition with contingent liabilities as part of the consideration, the Company will adjust the carrying value of the intangible assets as part of the quarterly adjustment to bring the contingent consideration to fair value. Additionally, the Company reviews the carrying amount of its amortizing intangible assets for possible impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. When testing for impairment, the Company compares the undiscounted cash flows of the asset or asset group to its carrying value. If the estimated undiscounted cash flows exceed the carrying value, no impairment is recorded. If the undiscounted cash flows do not exceed the carrying value, an impairment is recorded to bring the carrying value of the asset down to its fair value.

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of readily available cash in checking accounts and money market funds. Restricted cash consists of cash held in monthly time deposit accounts and letters of credit as described in Note 7- Commitments and Contingencies. During the nine months ended September 30, 2023, the letters of credit of $0.3 million for the Company’s fleet leases were released. Upon receipt of a notice of default from its landlord on March 20, 2023, for failing to pay March 2023 rent timely resulting in a breach under the office lease agreement, the Company’s letter of credit in the amount of $0.8 million in restricted cash was recovered by the landlord.

Additionally, the remaining funds of the $25.0 million received from the issuance of Adjuvant Notes (as defined below) in the fourth quarter of 2020 are classified as restricted cash since the Company is contractually obligated to use these funds for specific purposes.

For the nine months ended September 30, 2024 and 2023, the Company’s cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows include restricted cash only.

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. The net income (loss) available to common stockholders is adjusted for amounts in accumulated deficit related to the deemed dividends triggered for certain financial instruments. Such adjustment was immaterial and $0.1 million in the three and nine months ended September 30, 2024, respectively and zero in each of the three and nine months ended September 30, 2023. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for the three and nine months ended September 30, 2024. Potentially dilutive securities excluded from the calculation of diluted net loss per share are summarized in the table below. Common shares were calculated for the convertible preferred stock and the convertible debt using the if-converted method.

	Three and Nine months ended September 30,
	2024
Options to purchase common stock		3,747
Warrants to purchase common stock		20,807,539
Purchase rights to purchase common stock		1,529,448,899
Convertible debt		2,577,050,313
Series E-1 and F-1 preferred stock		1,659,594,703
Total (1)		5,786,905,201

(1) The potentially dilutive securities in the table above include all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit includes the shares that must legally be reserved based on the applicable instruments’ agreements.

The following table sets forth the computation of net income attributable to common stockholders, weighted average common shares outstanding for diluted net income per share, and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2023 (in thousands, except share and per share amounts).

	Three months ended September 30,		Nine months ended September 30,
	2023		2023
Numerator:
Net income attributable to common stockholders	$	66,005	$	55,093
Adjustments:
Change in fair value of purchase rights		4,904		5,008
Noncash interest expense on convertible debt, net of tax		361		1,064
Net loss attributable to common stockholders	$	71,270	$	61,165
Denominator:
Weighted average shares used to compute net loss attributable to common stockholder, basic		4,236,477		2,524,302
Add:
Pro forma adjustments to reflect assumed conversion of convertible debt		402,509,558		376,225,027
Pro forma adjustments to reflect assumed exercise of outstanding warrants and purchase rights		311,456,630		311,456,630
Pro forma adjustments to reflect the assumed conversion of Series E-1 Convertible Preferred Shares		12,925,778		4,355,940
Weighted average shares used to compute net loss attributable to common stockholder, diluted		731,128,443		694,561,899
Net loss per share attributable to common stockholders, diluted	$	0.10	$	0.09

Recently Adopted Accounting Pronouncements

No significant new standards were adopted during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements — Not Yet Adopted

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standards setting bodies that are adopted as of the specified effective date.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, designed to clarify or improve disclosure and presentation requirements on a variety of topics and align the requirements in the FASB Accounting Standards Codification (ASC) with the SEC regulations. This guidance is effective for the Company no later than June 30, 2027. The Company will adopt ASU No. 2023-06 by complying with the various disclosure requirements but does not expect the requirements to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, designed to improve financial reporting by requiring disclosure of incremental segment information to enable investors to develop more decision-useful financial analyses. ASU No. 2023-07 will be effective for the Company beginning with the annual filing for the period ended December 31, 2024 and will require retroactive application to comparison periods presented. For Companies that have only one reportable segment (such as the Company), all the requirements of ASU No. 2023-07 will be required to be disclosed regarding the one reportable segment. The Company is still evaluating the impact of ASU No. 2023-07 on the consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures addressing income tax disclosures, requiring entities to annually disclose specific categories in the rate reconciliation and provide additional information for certain reconciling items and categories. ASU No. 2023-09 will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company will adopt ASU No. 2023-09 by adding the required disclosures for the December 31, 2024 Annual Report.

The Company does not believe the impact of any other recently issued standards and any issued but not yet effective standards will have a material impact on its condensed consolidated financial statements upon adoption.

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Revenue

9 Months Ended

Sep. 30, 2024

Revenue from Contract with Customer [Abstract]

Revenue

3. Revenue

The Company recognizes revenue from the sale of Phexxi and SOLOSEC in accordance with ASC 606, Revenue from Contracts with Customers (ASC 606). The provisions of ASC 606 require the following steps to determine revenue recognition: (1) identify the contract(s) with a customer; (2) identify the performance obligations in the contract; (3) determine the transaction price; (4) allocate the transaction price to the performance obligations in the contract; and (5) recognize revenue when (or as) the entity satisfies a performance obligation.

In accordance with ASC 606, the Company recognizes revenue when its performance obligation is satisfied by transferring control of the product to a customer. In accordance with the Company’s contracts with customers, control of the product is transferred upon the conveyance of title, which occurs when the product is sold to and received by a customer. The Company’s customers are located in the U.S. and consist of wholesale distributors, retail pharmacies, and mail-order specialty pharmacies. Payment terms typically range from 31 to 66 days, include prompt pay discounts, and vary by customer. Trade accounts receivable due to the Company from contracts with its customers are stated separately in the condensed consolidated balance sheets, net of various allowances as described in the Trade Accounts Receivable policy in Note 2 – Summary of Significant Accounting Policies to the 2023 Audited Financial Statements.

The amount of revenue recognized by the Company is equal to the amount of consideration that is expected to be received from the sale of products to its customers. Revenue is only recognized when the performance obligation is satisfied. To determine whether a significant reversal will occur in future periods, the Company assesses both the likelihood and magnitude of any such potential reversal of revenue.

Products are sold to customers at the wholesale acquisition cost (WAC) or, in some cases, at a discount to WAC. However, the Company records product revenue net of reserves for applicable variable consideration. These types of variable consideration reduce revenue and include the following:

● Distribution services fees

● Prompt pay and other discounts

● Product returns

● Chargebacks

● Rebates

● Patient support programs, including our co-pay programs

An estimate for variable consideration is made with each sale and is recorded in conjunction with the revenue being recognized. To calculate the variable consideration, the Company uses the expected value method and the estimated amounts are recorded as a reduction to accounts receivable or as a current liability based on the nature of the allowance and the terms of the related arrangements. An estimated amount of variable consideration may differ from the actual amount. At each balance sheet date, these provisions are analyzed and adjustments are made if necessary. Any adjustments made to these provisions would also affect net product revenue and earnings.

In accordance with ASC 606, the Company must make significant judgments to determine the estimate for certain variable consideration. For example, the Company must estimate the percentage of end-users that will obtain the product through public insurance, such as Medicaid, versus private commercial insurance. To determine these estimates, the Company relies on historical sales data showing the amount of various end-user consumer types, inventory reports from the wholesale distributors and mail-order specialty pharmacies, and other relevant data reports.

The specific considerations that the Company uses in estimating these amounts related to variable consideration are as follows:

Distribution services fees – The Company pays distribution service fees to its wholesale distributors and mail-order specialty pharmacies. These fees are a contractually fixed percentage of WAC and are calculated at the time of sale based on the purchase amount. The Company considers these fees to be separate from the customer’s purchase of the product and, therefore, they are recorded in other current liabilities on the condensed consolidated balance sheets.

Prompt pay and other discounts – The Company incentivizes its customers to pay their invoices on time through prompt pay discounts. These discounts are an industry standard practice, and the Company offers a prompt pay discount to each wholesale distributor and retail pharmacy customer. The specific prompt pay terms vary by customer and are contractually fixed. Prompt pay discounts are typically taken by the Company’s customers, so an estimate of the discount is recorded at the time of sale based on the purchase amount. Prompt pay discount estimates are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

The Company may also give other discounts to its customers to incentivize purchases and promote customer loyalty. The terms of such discounts may vary by customer. These discounts reduce gross product revenue at the time the revenue is recognized.

Chargebacks – Certain government entities and covered entities (e.g., Veterans Administration, 340B covered entities, group purchasing organizations) are able to purchase products at a price discounted below WAC. The difference between the government or covered entity purchase price and the wholesale distributor purchase price of WAC will be charged back to the Company. The Company estimates the amount of each chargeback channel based on the expected number of claims in each channel and related chargeback that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Estimated chargebacks are recorded as contra trade accounts receivable on the condensed consolidated balance sheets.

Rebates – The Company is subject to mandatory discount obligations under the Medicaid and Tricare programs. The rebate amounts for these programs are determined by statutory requirements or contractual arrangements. Rebates are owed after the product has been dispensed to an end user and the Company has been invoiced. Rebates for Medicaid and Tricare are typically invoiced in arrears. The Company estimates the amount of rebates based on the expected number of claims and related cost that is associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Rebate estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

Patient support programs – The Company voluntarily offers a co-pay program to provide financial assistance to patients meeting certain eligibility requirements. The Company estimates the amount of financial assistance for these programs based on the expected number of claims and related cost associated with the revenue being recognized for product that remains in the distribution channel at the end of each reporting period. Patient support programs estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

Product returns – Customers have the right to return product that is within six months or less of the labeled expiration date or that is past the expiration date by no more than twelve months. Phexxi was commercially launched in September 2020 with a 30-month shelf life. The shelf life increased to 48 months in June 2022. SOLOSEC has a shelf life of 60 months. The Company uses historical sales and return data to estimate future product returns. Product return estimates are recorded as other current liabilities on the condensed consolidated balance sheets.

The variable considerations discussed above were recorded in the condensed consolidated balance sheets and consisted of $0.2 million and $0.3 million in contra trade accounts receivable as of September 30, 2024 and December 31, 2023, respectively, and $4.5 million and $3.2 million in other current liabilities as of September 30, 2024 and December 31, 2023, respectively.

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Debt

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Debt

4. Debt

Baker Notes (temporarily owned by Aditxt from December 11, 2023 through February 26, 2024 and owned by Future Pak, LLC since July 23, 2024)

On April 23, 2020, the Company entered into a Securities Purchase and Security Agreement (the Baker Bros. Purchase Agreement) with certain affiliates of Baker Bros. Advisors LP, as purchasers (the Baker Purchasers), and Baker Bros. Advisors LP, as designated agent, pursuant to which the Company agreed to issue and sell to the Baker Purchasers (i) convertible senior secured promissory notes (the Baker Notes) in an aggregate principal amount of up to $25.0 million and (ii) warrants to purchase shares of common stock (the Baker Warrants) in a private placement, which closed in two closings (April 24, 2020, the Baker Initial Closing, and June 9, 2020, the Baker Second Closing) As a result of the two closings, the Company issued and sold Baker Notes with an aggregate principal amount of $25.0 million and Baker Warrants exercisable for 2,731 shares of common stock. Upon the completion of the underwritten public offering in June 2020, the exercise price of the Baker Warrants was $4,575 per share. The Baker Warrants have a five-year term with a cashless exercise provision and are immediately exercisable at any time from their respective issuance date.

The Baker Notes have a five-year term, with no pre-payment ability during the first three years. Interest on the unpaid principal balance of the Baker Notes (the Baker Outstanding Balance) accrues at 10.0% per annum, with interest accrued during the first year from the two respective closing dates recognized as payment-in-kind. The effective interest rate for the period was 10.0%. Accrued interest beyond the first year of the respective closing dates is to be paid in arrears on a quarterly basis in cash or recognized as payment-in-kind, at the direction of the Baker Purchasers. As discussed below, with the amendment to the Baker Bros. Purchase Agreement, interest payments were paid in-kind. Interest pertaining to the Baker Notes for the three and nine months ended September 30, 2024 was approximately $2.7 million and $7.8 million, respectively, which was added to the outstanding principal balance. Interest pertaining to the Baker Notes for the three and nine months ended September 30, 2023 was approximately $2.4 million and $6.2 million, respectively, which was added to the outstanding principal balance. The Company accounts for the Baker Notes under the fair value method as described below and, therefore, the interest associated with the Baker Notes is included in the fair value determination.

The Baker Notes were callable by the Company on 10 days’ written notice beginning on the third anniversary of the initial closing date of April 24, 2020 at a call price equal to 100% of the Baker Outstanding Balance plus accrued and unpaid interest if the Company’s common stock as measured using a 30-day volume weighted average price (VWAP) was greater than the benchmark price of $9,356.25 as stated in the Baker Bros. Purchase Agreement, or 110% of the Baker Outstanding Balance plus accrued and unpaid interest if the VWAP was less than such benchmark price. The Baker Purchasers also had the option to require the Company to repurchase all or any portion of the Baker Notes in cash upon the occurrence of certain events. In a repurchase event, as defined in the Baker Bros. Purchase Agreement, the repurchase price will equal 110% of the Baker Outstanding Balance plus accrued and unpaid interest. In the event of default or the Company’s change of control, the repurchase price would equal to the sum of (x) three times of the Baker Outstanding Balance plus (y) the aggregate value of future interest that would have accrued. The Baker Notes were convertible at any time at the option of the Baker Purchasers at the conversion price of $4,575 per share prior to the First and Second Baker Amendments (as defined below).

On November 20, 2021, the Company entered into the first amendment to the Baker Bros. Purchase Agreement (the First Baker Amendment), in which each Baker Purchaser had the right to convert all or any portion of the Baker Notes into common stock at a conversion price equal to the lesser of (a) $4,575 and (b) 115% of the lowest price per share of common stock (or, as applicable with respect to any equity securities convertible into common stock, 115% of the applicable conversion price) sold in one or more equity financings until the Company has met a qualified financing threshold defined as one or more equity financings resulting in aggregate gross proceeds to the Company of at least $50 million (the Financing Threshold).

The First Baker Amendment extended, effective upon the Company’s achievement of the Financing Threshold, the affirmative covenant to achieve $100.0 million in cumulative net sales of Phexxi by June 30, 2022 to June 30, 2023. Additionally per the First Baker Amendment, if the Company were to issue warrants to purchase capital stock of the Company (or other similar consideration) in any equity financing that closed on or prior to the date on which the Company met the Financing Threshold, the Company was required to issue to the Baker Purchasers an equivalent coverage of warrants (or other similar consideration) on the same terms as if the Baker Purchasers had participated in the financing in an amount equal to the then outstanding principal of Baker Notes held by the Baker Purchasers. In satisfaction of this requirement and in connection with the closing of the May 2022 Public Offering, the Company issued warrants to purchase 582,886 shares of the Company’s common stock at an exercise price of $93.75 per share to the Baker Purchasers (the June 2022 Baker Warrants). As required by the terms of the First Baker Amendment, the June 2022 Baker Warrants have substantially the same terms as the warrants issued in the May 2022 Public Offering. Refer to Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit for further information. The exercise price of the initial Baker Warrants and the June 2022 Baker Warrants was reset multiple times as a result of various Notes issuances in accordance with the agreement. The exercise price was $0.0154 per share as of September 30, 2024.

On March 21, 2022, the Company entered into the second amendment to the Baker Bros. Purchase Agreement (the Second Baker Amendment), which granted each Baker Purchaser the right to convert all or any portion of the Baker Notes into common stock at a conversion price equal to the lesser of (a) $725.81 or (b) 100% of the lowest price per share of common stock (or as applicable with respect to any equity securities convertible into common stock, 100% of the applicable conversion price) sold in any equity financing until the Company (i) met the qualified financing threshold by June 30, 2022, defined as a single underwritten financing resulting in aggregate gross proceeds to the Company of at least $20 million (Qualified Financing Threshold) and (ii) disclosed top-line results from the EVOGUARD clinical trial (the Clinical Trial Milestone) on or before October 31, 2022. The Second Baker Amendment also provided that the exercise price of the Baker Warrants will equal the conversion price of the Baker Notes. The Company met the Qualified Financing Threshold upon the closing of the May 2022 Public Offering, and as of September 30, 2022, the conversion price and exercise price of the Baker Warrants was reset to $93.75. The Company achieved the Clinical Trial Milestone in October 2022. Also, with the achievement of the Qualified Financing Threshold and the Clinical Trial Milestone, the affirmative covenant to achieve $100.0 million in cumulative net sales of Phexxi was extended to June 30, 2023, which was subsequently waived via the Baker Fourth Amendment as discussed below.

On September 15, 2022, the Company entered into the third amendment to the Baker Bros. Purchase Agreement (the Third Baker Amendment), pursuant to which the conversion price was amended to $26.25, subject to adjustment for certain dilutive Company equity issuance adjustments for a two-year period; an interest make-whole payment due in certain circumstances was removed; and certain change of control and liquidation payment amounts were reduced from three times the outstanding amounts of the Baker Notes to two times the outstanding amounts. In addition, the Third Baker Amendment provided that the Company may make future interest payments to the Baker Purchasers in kind or in cash, at the Company’s option. On the same day, the Company also entered into a Secured Creditor Forbearance Agreement with the Baker Purchasers (Forbearance Agreement), according to which the Baker Purchasers agreed to forebear the defaults that existed at that time.

On December 19, 2022, the Company entered into the First Amendment to the Forbearance Agreement (the Amendment) effective as of December 15, 2022 to amend certain provisions of the Forbearance Agreement dated September 15, 2022. The Amendment revised the Forbearance Agreement to (i) amend the Fifth Recital Clause to clarify that the Purchasers consent to any additional indebtedness pari passu, but not senior to that of the Purchasers, in an amount not to exceed $5.0 million, and (ii) strike and entirely replace Section 4 to clarify the terms of the Purchasers’ consent to Interim Financing (as defined therein). No other revisions were made to the Forbearance Agreement.

On March 7, 2023, Baker Bros. Advisors, LP (the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Baker Bros. Purchase Agreement. The Notice of Default claimed that the Company failed to maintain the “Required Reserve Amount” as required by the Third Baker Amendment. The Designated Agent, at the direction of the Baker Purchasers, accelerated repayment of the outstanding balance payable. As a result, approximately $92.7 million, representing two times the sum of the outstanding balance and all accrued and unpaid interest thereon and all other amounts due under the Baker Bros. Purchase Agreement and other documents, was due and payable within three business days of receipt of the Notice of Default. In addition, the Company did not meet the $100.0 million cumulative net sales threshold by June 30, 2023 and as such was in default as of that date. As discussed below, all existing defaults were cured upon the signing of the Fourth Baker Amendment.

On September 8, 2023, the Company entered into the Fourth Amendment to the Baker Bros. Purchase Agreement (the Fourth Baker Amendment) with the Baker Purchasers. The Fourth Amendment amends certain provisions within the Baker Bros. Purchase Agreement including:

(i)	the rescission of the Notice of Default delivered to the Company on March 7, 2023 and waiver of the Events of Default named therein;
(ii)	the waiver of any and all other Events of Default existing as of the Fourth Amendment date;
(iii)	the removal of the conversion feature into shares of Company common stock, including the removal of any requirement to reserve shares of common stock for conversion of the Baker Notes as well as any registration rights related thereto;
(iv)	the clarification that for the sole purpose of enabling ex-U.S. license agreements for such assets, any Patents, Trademarks or Copyrights acquired after the Effective Date shall be excluded from the definition of Collateral; and,
(v)	the removal of the requirement for the Company to achieve $100 million in cumulative net Phexxi sales in the specified timeframe.

The outstanding balance of the Baker Notes will continue to accrue interest at 10% per annum and, in the event of a default in the agreement or a failure to pay the Repurchase Price (as defined below) on or before September 8, 2028 (the Maturity Date), the Baker Purchasers may collect on the full principal amount then outstanding.

The Company paid the required $1.0 million upfront payment in September 2023 and is required to make quarterly cash payments based upon a percentage of the Company’s global net product revenue. The cash payments will be determined based upon the quarterly global net revenue of Phexxi according to the table below.

Quarterly global net revenue	Quarterly cash payment
≤ $5.0 million	3% of such global net revenues
>$5.0 million and ≤ $7.0 million	3% on net revenue ≤ $5.0 million; 4% on the net revenue over $5.0 million
Greater than $7.0 million	3% on the net revenue ≤ $5.0 million; 4% on the net revenue over $5.0 million and up to $7.0 million; 5% on net revenue over $7.0 million

The cash payments were payable beginning in the fourth quarter of 2023 and have been timely paid.

Regardless of the percentage paid, the quarterly cash payment amounts, along with the $1.0 million upfront payment, will be deducted from the Repurchase Price as Applicable Reductions. Quarterly cash payments that will be treated as Applicable Reductions paid to date as of September 30, 2024 amount to $0.5 million.

The Fourth Amendment also granted the Company the ability to repurchase the principal amount and accrued and unpaid interest of the Baker Notes for up to a five-year period for the one-time Repurchase Price designated below:

Date of Notes’ Repurchase	Repurchase Price
On or prior to September 8, 2024	$14,000,000 (less Applicable Reductions)
September 9, 2024-September 8, 2025	$16,750,000 (less Applicable Reductions)
September 9, 2025-September 8, 2026	$19,500,000 (less Applicable Reductions)
September 9, 2026-September 8, 2027	$22,250,000 (less Applicable Reductions)
September 9, 2027-September 8, 2028	$25,000,000 (less Applicable Reductions)

The Company evaluated whether any of the Embedded Features required bifurcation as a separate component. The Company elected the fair value option (FVO) under ASC 825, Financial Instruments (ASC 825), as the Baker Notes are qualified financial instruments and are, in whole, classified as liabilities. Under the FVO, the Company recognized the debt instrument at fair value, inclusive of the Embedded Features, with changes in fair value related to changes in the Company’s credit risk being recognized as a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. All other changes in fair value were recognized in the condensed consolidated statements of operations.

Due to the execution of the Fourth Baker Amendment, the Company reviewed the Baker Notes in accordance with ASC 470, Debt (ASC 470). Because the Baker Notes were recorded under the FVO, the Fourth Amendment was outside the scope of ASC 470-60 and as such did not qualify as a troubled debt restructuring (TDR). The Baker Notes were evaluated in accordance with ASC 470 and were determined to have failed certain qualitative factors to qualify as a modification and, therefore, were accounted for as an extinguishment. The Company removed the fair value of the old Baker Notes of $15.6 million and the related accumulated other comprehensive income of $73.2 million as of the date of extinguishment and recorded the fair value of the new Baker Notes, as measured on the date of the Baker Fourth Amendment as $12.5 million, and recognized a gain of approximately $75.3 million within the condensed consolidated statements of operations, in the gain (loss) on debt extinguishment line item, upon extinguishment in the year ended December 31, 2023. The gain included recognizing $73.2 million that had previously been a component of other comprehensive income as part of the prior quarterly revaluations using the valuation methods discussed in Note 6 – Fair Value of Financial Instruments.

As part of the consideration for the Merger, on December 11, 2023, the Baker Purchasers signed an agreement to assign the Baker Notes to Aditxt (the December Assignment Agreement). Upon execution of the December Assignment Agreement, Aditxt assumed all terms under the Baker Notes, with Aditxt becoming the new senior secured debtholder of the Company, governed by the requirements under the Fourth Baker Amendment. The Baker Notes were re-assigned back to the Baker Purchasers on February 26, 2024 (the February Assignment Agreement).

Due to the execution of the February Assignment Agreement, the Company reviewed the Baker Notes in accordance with ASC 470. The Baker Notes, having been effectively terminated, were extinguished on February 26, 2024, resulting in removing the fair value of the old Baker Notes of $13.5 million. The newly re-assigned Baker Notes were subsequently recorded at fair value using the valuation methods discussed in Note 6 – Fair Value of Financial Instruments.

On July 23, 2024, the Company consented to the transfer of ownership of the senior secured notes from Baker Brothers Life Sciences, 667, L.P., and Baker Bros. Advisors, LP, each a Delaware limited partnership (collectively, Baker) to Future Pak, LLC, a Michigan limited liability company (the Assignee). The terms of the senior secured notes were not changed in connection with the assignment from Baker to the Assignee. Due to the July 2024 assignment, the Company reviewed the Baker Notes in accordance with ASC 470. The Baker Notes, having been effectively terminated, were extinguished on July 23, 2024, resulting in removing the fair value of the old Baker Notes of $12.3 million and the related accumulated other comprehensive income of $0.1 million as of the date of the extinguishment. The Company also recognized a loss of approximately $0.1 million within the condensed consolidated statements of operations, in the gain (loss) on debt extinguishment line item for the three and nine months ended September 30, 2024. The newly re-assigned Baker Notes were subsequently recorded at fair value using the valuation methods discussed in Note 6 – Fair Value of Financial Instruments.

The Company did not repurchase the Baker Notes prior to September 8, 2024 for a repurchase price of $14.0 million less applicable reductions. As of September 30, 2024, the Baker Notes are recorded at fair value in the condensed consolidated balance sheet as short-term Notes – carried at fair value with a total fair value of $13.9 million, and the total outstanding balance including principal and accrued interest is $106.9 million. As of December 31, 2023, the Baker Notes are recorded at fair value in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $13.5 million, and the total outstanding balance including principal and accrued interest is $99.5 million. During the three and nine months ended September 30, 2024, the Company paid a total of $0.1 million and $0.4 million, respectively, in required cash payments as described above. No such payments were required in the prior year.

On September 27, 2024, the Assignee, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the September 2024 Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended, by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a Purchaser and collectively Purchasers). The September 2024 Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA.

According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to the total outstanding balance, including principal and accrued interest. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Initial Notice of Default (the Amended Notice of Default) which adds new claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Baker Bros. Purchase Agreement, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024.

On November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment.

The Company strongly disagrees with the Designated Agent’s claim that an Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

Adjuvant Notes

On October 14, 2020, the Company entered into a Securities Purchase Agreement (the Adjuvant Purchase Agreement) with Adjuvant Global Health Technology Fund, L.P., and Adjuvant Global Health Technology Fund DE, L.P. (together, the Adjuvant Purchasers), pursuant to which the Company sold unsecured convertible promissory notes (the Adjuvant Notes) in aggregate principal amount of $25.0 million.

The Adjuvant Notes have a five-year term and, in connection with certain Company change of control transactions, the Adjuvant Notes may be prepaid at the option of the Company or will become payable on the date of the consummation of a change of control transaction at the option of the Adjuvant Purchasers. The Adjuvant Notes accrue interest at 7.5% per annum on a quarterly basis in arrears to the outstanding balance of the Adjuvant Notes and are recognized as payment-in-kind. The effective interest rate for the nine months ended September 30, 2024 was 7.5%.

Interest expense for the Adjuvant Notes consists of the following, and is included in other expense, net on the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Coupon interest	$	556	$	516	$	1,637	$	1,520
Amortization of issuance costs		-		51		28		179
Total	$	556	$	567	$	1,665	$	1,699

The Adjuvant Notes are convertible, subject to customary 4.99% and 19.99% beneficial ownership limitations, into shares of the Company’s common stock, par value $0.0001 per share, at any time at the option of the Adjuvant Purchasers at a conversion price of $6,843.75 per share. In connection with certain Company change of control transactions, the Adjuvant Notes may be prepaid at the option of the Company or will become payable at the option of the Adjuvant Purchasers. To the extent not previously prepaid or converted, the Adjuvant Notes were originally automatically convertible into shares of the Company’s common stock at a conversion price of $6,843.75 per share immediately following the earliest of the time at which the (i) 30-day value-weighted average price of the Company’s common stock was $18,750 per share, or (ii) the Company achieved cumulative net sales of $100.0 million, provided such net sales were achieved prior to July 1, 2022.

On April 4, 2022, the Company entered into the first amendment to the Adjuvant Purchase Agreement (the Adjuvant Amendment). The Adjuvant Amendment extended the affirmative covenant to achieve $100.0 million in cumulative net sales of Phexxi by June 30, 2022 to June 30, 2023. The Adjuvant Amendment also provided for an adjustment to the conversion price of the Adjuvant Notes such that the conversion price (the Conversion Price) for these Notes, effective as of the May 2023 reverse stock split, will now be the lesser of (i) $678.49 and (ii) 100% of the lowest price per share of common stock (or with respect to securities convertible into common stock, 100% of the applicable conversion price) sold in any equity financing until the Company met the Qualified Financing Threshold. Effective as of the Company’s achievement of the Qualified Financing Threshold, the automatic conversion provisions in the Agreement were further amended to provide that the Adjuvant Notes will automatically convert into shares of the Company’s common stock at the Conversion Price immediately following the earliest of the time at which the (i) 30-day value-weighted average price of the Company’s common stock is $18,750 per share, or (ii) the Company achieves cumulative net sales of Phexxi of $100.0 million, provided such net sales were achieved prior to July 1, 2023.

The Adjuvant Notes contain various customary affirmative and negative covenants agreed to by the Company. On September 12, 2022, the Company was in default of the Adjuvant Notes due to the default with the Baker Notes under the cross-default provision. On September 15, 2022, the Company entered into a Forbearance Agreement (the Adjuvant Forbearance Agreement) with the Adjuvant Purchasers, pursuant to which the Adjuvant Purchasers agreed to forbear from exercising any of their rights and remedies during the Forbearance Period as defined in therein, but solely with respect to the specified events of default provided under the Adjuvant Forbearance Agreement.

On September 15, 2022, the Company also entered into the second amendment to the Adjuvant Purchase Agreement (the Second Adjuvant Amendment), pursuant to which the conversion price per share was reduced to $26.25, subject to adjustment for certain dilutive Company equity issuance adjustments for a two-year period. In addition, the Company entered into an exchange agreement, pursuant to which the Adjuvant Purchasers agreed to exchange 10% of the outstanding amount of the Adjuvant Notes as of September 15, 2022 (or $2.9 million) for rights to receive 109,842 shares of common stock (the Adjuvant Purchase Rights). The number of shares for each Adjuvant Purchase Right was initially fixed, but is subject to certain customary adjustments, and, until the second anniversary of issuance (i.e., October 14, 2022), adjustments for certain dilutive Company equity issuances. Refer to Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit for discussion regarding additional issuances of purchase rights under this provision. The Adjuvant Purchase Rights expire on June 28, 2027 and do not have an exercise price per share and, therefore, will not result in cash proceeds to the Company. As of September 30, 2024, all Adjuvant Purchase Rights remain outstanding. The conversion price of the Adjuvant Notes was $0.0154 as of September 30, 2024. Assuming this conversion price per share, the Adjuvant Notes could be converted into 1,961,188,772 shares of common stock.

The Adjuvant Notes are accounted for in accordance with authoritative guidance for convertible debt instruments and are classified as current liabilities in the condensed consolidated balance sheets. The aggregate proceeds of $25.0 million were initially classified as restricted cash for financial reporting purposes due to contractual stipulations that specify the types of expenses the money can be spent on and how it must be allocated. The conversion feature was required to be bifurcated as an embedded derivative because the Company did not have a sufficient number of shares reserved upon conversion as of March 31, 2023; however, the fair value of such feature was immaterial as of such date. As of June 30, 2023, the Company had a sufficient number of shares reserved and the conversion feature was reclassified to stockholders’ deficit in accordance with ASC 815, Derivatives and Hedging (ASC 815) at that time. See Note 6 - Fair Value of Financial Instruments for a description of the accounting treatment for the Adjuvant Purchase Rights.

The Company was in default of the Adjuvant Notes as of September 30, 2023, due to the failure to meet the cumulative net sales requirement. However, Adjuvant forbore such default in October 2023 and therefore the Company is no longer in default.

As of September 30, 2024, the Adjuvant Notes are recorded in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $30.2 million. The balance is comprised of $22.5 million in principal, net of unamortized debt issuance costs, and $7.7 million in accrued interest. As of December 31, 2023, the Adjuvant Notes were recorded in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $28.5 million. The balance was comprised of $22.5 million in principal, net of unamortized debt issuance costs, and $6.1 million in accrued interest.

Term Notes

December 2022 and February, March, April, July, August, and September 2023 Notes (SSNs)

The Company entered into eight Securities Purchase Agreements (SPAs) between December 2022 and September 2023 with certain investors. Each of the agreements was materially similar. The variable details of each SPA, such as the principal amount of each note offering, net proceeds, and maturity date, are outlined in the table below. Pursuant to each SPA, the Company agreed to sell in a registered direct offering (i) unsecured 8.0% senior subordinated notes with the maturity dates and aggregate issue prices (ii) warrants to purchase the listed number of shares of the Company’s common stock, $0.0001 par value per share (including prefunded common stock Warrants as a part of the September 2023 SPA) and (iii) Series D Preferred Stock (the Preferred Shares; December 2022 SPA only) (collectively, the Senior Subordinated Notes, or SSNs). The SSNs had net proceeds to the Company, and are convertible at, the amounts listed below. Assuming the applicable conversion price per share, the SSNs could be converted into 615,861,541 shares of common stock as of September 30, 2024.

The SSNs’ interest rates are subject to increase to 12% upon an event of default and the SSNs have no Company right to prepayment prior to maturity; however, the Company has the option to redeem the respective SSNs at a redemption premium of 32.5%. The Purchasers can also require the Company to redeem their respective SSNs a) at the respective premium rate tied to the occurrence of certain subsequent transactions, and b) in the event of subsequent placements (as defined). Also, pursuant to the terms of the SPAs, Purchasers have certain rights to participate in subsequent issuances of the Company’s securities, subject to certain exceptions. Additionally, the conversion rate and warrant strike price are subject to adjustment upon the issuance of other securities (as defined) below the stated conversion rate and strike price at issuance. The strike prices adjusted as discussed in the table below.

The Company evaluated the SSNs in accordance with ASC 480 and determined that the Notes were all liability instruments at issuance. The applicable SSNs were then evaluated in accordance with the requirements of ASC 825 and the Company concluded that they were not precluded from electing the fair value option for the applicable SSNs.

The Company also evaluated the Warrants in accordance with ASC 480 and determined that the Warrants issued before the Reverse Stock Split in May 2023 were required to be recorded as liabilities at fair value in the Company’s condensed consolidated balance sheets. The applicable SSNs were marked-to-market at each reporting date with changes in fair value recognized in the condensed consolidated statement of operations, unless the change is concluded to be related to changes in the Company’s credit rating, in which case the change was recognized as a component of accumulated other comprehensive loss in the condensed consolidated balance sheets. As a result of the Reverse Stock Split, the Company had sufficient shares available for issuance to cover the potential exercises; therefore, the Warrants that were previously classified as liabilities were marked-to-market and reclassified to equity in May 2023. For the Warrants issued after the Reverse Stock Split, the Company determined they were required to be recorded in equity.

On December 21, 2023, warrants to purchase up to 9,972,074 shares of the Company’s common stock were exchanged for 613 shares of the Company’s series F-1 convertible and redeemable preferred stock (Series F-1 Shares, as defined below). The Series F-1 Shares, some of which were also issued based on the partial value of certain purchase rights, as described above, were immediately exchanged for Aditxt series A-1 preferred stock; 22,280 and 23,540 Series F-1 Shares were outstanding as of December 31, 2023 and September 30, 2024, respectively, and held by Aditxt. The Series F-1 Shares are to be cancelled, without the right to receive compensation, upon the consummation of the Merger.

Summary of SSNs and Warrants at Issuance (December 2022 to September 2023):

										Conversion Price
Notes	Principal At Issuance (in Thousands)		Net Proceeds Before Issuance Costs (in Thousands)		Common Warrants		Preferred Shares		Maturity Date	At Issuance		At 9/30/2023		At 12/31/2023		At 3/31/2024		At 6/30/2024		At 9/30/2024
December 2022 Notes	$	2,308	$	1,500		369,230		70 - Series D	12/21/2025	$	6.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
February 2023 Notes(1)		1,385		900		653,538		-	2/17/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
March 2023 Notes		600		390		240,000		-	3/17/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
March 2023 Notes(2)		538		350		258,584		-	3/20/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
April 2023 Notes		769		500		615,384		-	3/6/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
July 2023 Notes		1,500		975		1,200,000		-	3/6/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
August 2023 Notes		1,000		650		799,999		-	8/4/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
September 2023 Notes(3)		2,885		1,875		26,997,041		-	9/26/2026	$	0.13	$	0.13	$	0.0615	$	0.0158	$	0.0154	$	0.0154
Total Offerings	$	10,985	$	7,140		31,133,776

(1)	Warrants include 99,692 issued to the placement agent.
(2)	Warrants include 43,200 issued to the placement agent.
(3)	Warrants include 22,189,349 common warrants at $0.13 per share and 4,807,692 pre-funded warrants exercisable at $0.001 per share.

Short-term Debt

Insurance Premium Finance Agreement

In June 2024, the Company entered into an insurance premium finance agreement with First Insurance Funding (FIF) to finance a portion of its current policy year’s Directors and Officers (D&O) and general insurance policies. The total amount financed was $0.4 million at an annual interest rate of 8.57%. The Company will make nine equal payments, which commenced in July 2024. The Company recorded the total financed amount as a Short-term debt on the condensed consolidated balance sheet. The interest expense, included in Other expense, net, in the condensed consolidated statement of operations, was immaterial for the three and nine months ended September 30, 2024.

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Balance Sheet Details

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Balance Sheet Details

5. Balance Sheet Details

Inventories

Inventories consist of the following (in thousands) for the period indicated:

	September 30, 2024		December 31, 2023
Raw materials (1)	$	423	$	520
Work in process		863		386
Finished goods (1)(2)		177		791
Total	$	1,463	$	1,697

(1)

The raw materials and finished goods balances include a combined estimated reserve on obsolescence and excess inventory which might not be sold prior to its expiration of $0.3 million as of both September 30, 2024 and December 31, 2023. These estimates are based upon assumptions about future manufacturing needs and gross sales of Phexxi. Inventory associated with the additional write-down of $1.3 million recorded during the year ended December 31, 2023, was disposed and no longer in the inventory balance as of December 31, 2023.

(2)

The finished goods balance as of September 30, 2024 includes an immaterial amount of SOLOSEC finished goods inventory. No such inventory existed at December 31, 2023. None of the reserve on obsolescence and excess inventory was related to SOLOSEC product.

Prepaid and Other Current Assets

Prepaid and other current assets consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Insurance	$	627	$	777
Research & development		23		13
Short-term deposits		202		76
Other		147		329
Total	$	999	$	1,195

Property and Equipment, Net

Property and equipment, net, consists of the following (in thousands):

	Useful Life		September 30, 2024			December 31, 2023
Research equipment		5 years	$	585		$	586
Computer equipment and software		3 years		145			647
Construction in-process		-		1,146			1,156
				1,876			2,389
Less: accumulated depreciation				(695	)		(1,186	)
Total, net			$	1,181		$	1,203

Depreciation expense for property and equipment was immaterial in both the three and nine months ended September 30, 2024. Depreciation expense for property and equipment was immaterial and $0.5 million in the three and nine months ended September 30, 2023, respectively.

Intangible Asset, Net

Intangible asset, net, consists of the following (in thousands):

	Useful Life	September 30, 2024			December 31, 2023
Intellectual property	11 years	$	14,322		$	-
Less: accumulated amortization			(301	)		-
Total, net		$	14,021		$	-

The intangible asset relates entirely to the asset acquired with the SOLOSEC asset acquisition and as described further in Note 7 – Commitments and Contingencies, the useful life is based on the SOLOSEC IP patent expiration. Additional acquired intellectual property could have a different useful life. Amortization expense was $0.3 million in both the three and nine months ended September 30, 2024. Amortization expense is expected to be approximately $0.3 million in the three months ended December 31, 2024 and approximately $1.3 million in each year thereafter until the intangible asset is fully amortized. As described in Note 2 – Summary of Significant Accounting Policies, the intangible asset value is adjusted at each reporting date in conjunction with the mark-to-market adjustment of the contingent liabilities, which could impact the expected amortization.

Accrued Expenses

Accrued expenses consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Clinical trial related costs	$	2,498	$	2,498
Accrued royalty		1,723		1,146
Other		903		583
Total	$	5,124	$	4,227

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Fair Value of Financial Instruments

9 Months Ended

Sep. 30, 2024

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

6. Fair Value of Financial Instruments

Fair Value of Financial Liabilities

The following tables summarize the Company’s convertible debt instruments as of September 30, 2024 and December 31, 2023, respectively (in thousands):

									Fair Value
As of September 30, 2024	Principal Amount		Unamortized Issuance Costs		Accrued Interest		Net Carrying Amount		Amount		Leveling
Baker Notes(1)(2)	$	106,869	$	-	$	-	$	106,869	$	13,876	Level 3
Adjuvant Notes(3)		22,500		-		7,702		30,202		N/A	N/A
December 2022 Notes(1)		953		-		-		953		31	Level 3
February 2023 Notes (1)		961		-		-		961		31	Level 3
March 2023 Notes (1)		1,185		-		-		1,185		38	Level 3
April 2023 Notes (1)		866		-		-		866		28	Level 3
July 2023 Notes (1)		1,296		-		-		1,296		42	Level 3
August 2023 Notes (1)		1,097		-		-		1,097		36	Level 3
September 2023 Notes (1)		3,126		-		-		3,126		101	Level 3
Totals	$	138,853	$	-	$	7,702	$	146,555	$	14,183	N/A

										Fair Value
As of December 31, 2023	Principal Amount		Unamortized Issuance Costs			Accrued Interest		Net Carrying Amount		Amount		Leveling
Baker Notes(1)(2)	$	99,460	$	-		$	-	$	99,460	$	13,510	Level 3
Adjuvant Notes(3)		22,500		(27	)		6,064		28,537		N/A	N/A
December 2022 Notes(1)		940		-			-		940		118	Level 3
February 2023 Notes (1)		905		-			-		905		118	Level 3
March 2023 Notes (1)		1,204		-			-		1,204		157	Level 3
April 2023 Notes (1)		816		-			-		816		106	Level 3
July 2023 Notes (1)		1,534		-			-		1,534		202	Level 3
August 2023 Notes (1)		1,033		-			-		1,033		136	Level 3
September 2023 Notes (1)		2,945		-			-		2,945		384	Level 3
Totals	$	131,337	$	(27	)	$	6,064	$	137,374	$	14,731	N/A

(1) These liabilities are/were carried at fair value in the condensed consolidated balance sheets. As such, the principal and accrued interest was included in the determination of fair value. The related debt issuance costs were expensed.

(2) The Baker Notes principal amount includes $22.2 million and $13.7 million of interest paid in-kind as of September 30, 2024, and December 31, 2023, respectively.

(3) The Adjuvant Notes are recorded in the condensed consolidated balance sheets at their net carrying amount which includes principal and accrued interest, net of unamortized issuance costs.

The following tables summarize the Company’s derivative liabilities as of September 30, 2024 and December 31, 2023 as discussed in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (in thousands):

	Fair Value
	September 30, 2024		December 31, 2023		Leveling
Purchase rights	$	162	$	1,926		Level 3
Total derivative liabilities	$	162	$	1,926

Change in Fair Value of Level 3 Financial Liabilities

The following table summarizes the changes in Level 3 financial liabilities related to Baker Notes and SSNs measured at fair value on a recurring basis for the three and nine months ended September 30, 2024 (in thousands):

	Baker Notes (Assigned to Future Pak; Note 4)			Total SSNs (Note 4)			Total
Balance at June 30, 2024	$	12,280		$	959		$	13,239
Balance at issuance		12,280			-			12,280
Extinguishment/conversion		(12,280	)		-			(12,280	)
Payments		(125	)		-			(125	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		1,721			(652	)		1,069
Balance at September 30, 2024	$	13,876		$	307		$	14,183

	Baker Notes (Assigned to Future Pak; Note 4)			Total SSNs (Note 4)			Total
Balance at December 31, 2023	$	13,510		$	1,221		$	14,731
Balance at issuance		24,670			-			24,670
Extinguishment/conversion		(25,790	)		(51	)		(25,841	)
Payments		(378	)		-			(378	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		1,864			(863	)		1,001
Balance at September 30, 2024	$	13,876		$	307		$	14,183

The following table summarizes the changes in Level 3 financial liabilities related to Baker Notes and SSNs measured at fair value on a recurring basis for the three and nine months ended September 30, 2023 (in thousands):

	Baker Notes			Total SSNs (Note 4)		Total
Balance at June 30, 2023	$	15,600		$	-	$	15,600
Balance at issuance		13,450			208		13,658
Debt repayment		(1,000	)		-		(1,000	)
Extinguishment		(15,600	)		-		(15,600	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		-			452		452
Balance at September 30, 2023	$	12,450		$	660	$	13,110

	Baker Notes			Total SSNs (Note 4)		Total
Balance at December 31, 2022	$	39,260		$	156	$	39,416
Balance at issuance		13,450			220		13,670
Debt repayment		(1,000	)		-		(1,000	)
Extinguishment		(13,450	)		-		(15,600	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		(23,660	)		284		(23,376	)
Balance at September 30, 2023	$	12,450		$	660	$	13,110

The following table summarizes the changes in Level 3 financial liabilities related to derivative liabilities measured at fair value on a recurring basis for the three and nine months ended September 30, 2024 (in thousands):

	Purchase Rights			Derivative Liabilities Total
Balance at June 30, 2024	$	942		$	942
Exercises		(11	)		(11	)
Change in fair value presented in the condensed consolidated statements of operations		(769	)		(769	)
Balance at September 30, 2024	$	162		$	162

	Purchase Rights			Derivative Liabilities Total
Balance at December 31, 2023	$	1,926		$	1,926
Balance at issuance		3,300			3,300
Exercises		(168	)		(168	)
Change in fair value presented in the condensed consolidated statements of operations		(4,896	)		(4,896	)
Balance at September 30, 2024	$	162		$	162

The following tables summarize the changes in Level 3 financial liabilities related to derivative liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2023 (in thousands). There was no such activity for the three months ended September 30, 2023.

	April and June 2020 Baker Warrants			May 2022 Public Offering Common Warrants			June 2022 Baker Warrants			December 2022 Warrants			February and March 2023 Warrants			Purchase Rights			Derivative Liabilities Total
Balance at December 31, 2022	$	1		$	303		$	170		$	107		$	-		$	1,095		$	1,676
Balance at issuance		-			-			-			-			6			105			111
Exercises		-			(7	)		-			-			-			(186	)		(193	)
Change in fair value presented in the condensed consolidated statements of operations		(1	)		(295	)		(169	)		(107	)		(6	)		(961	)		(1,539	)
Reclassified to equity		-			(1	)		(1	)		-			-			(53	)		(55	)
Balance at September 30, 2023	$	-		$	-		$	-		$	-		$	-		$	-		$	-

Valuation Methodology

From the third quarter of 2022 through the second quarter of 2023, the fair value of the Baker Notes issued, as described in Note 4 – Debt, and subsequent changes in fair value recorded at each reporting date, was determined by estimating the fair value of the Market Value of Invested Capital (MVIC) of the Company. This was estimated using forms of the cost and market approaches. In the Cost approach, an adjusted net asset value method was used to determine the net recoverable value of the Company, including an estimate of the fair of the Company’s intellectual property. The estimated fair value of the Company’s intellectual property was valued using a relief from royalty method which required management to make significant estimates and assumptions related to forecasts of future revenue, and the selection of the royalty and discount rates. The guideline public company method served as another valuation indicator. In this form of the Market approach, comparable market revenue multiples were selected and applied to the Company’s forward revenue forecast to ultimately derive a MVIC indication. If the resulting fair value from these approaches was not estimated as greater than the contractual payout, the fair value of the Baker Notes became only the Company MVIC available for distribution to this first lien note holder.

Starting in the third quarter of 2023, the fair value of the Baker Notes is determined using a Monte Carlo simulation-based model. The Monte Carlo simulation was used to take into account several embedded features and factors, including the exercise of the repurchase right, the Company’s future revenues, meeting certain debt covenants, the maturity term of the note and dissolution. For the dissolution scenario, the cost approach, an adjusted net asset value method was used to determine the net recoverable value of the Company, including an estimate of the fair value of the Company’s intellectual property. The estimated fair value of the Company’s intellectual property was valued using a relief from royalty method which required management to make significant estimates and assumptions related to forecasts of future revenue, and the selection of the royalty (5.0%) and discount (15.0%) rates.

The fair value of the Baker Notes is subject to uncertainty due to the assumptions that are used in the Monte Carlo simulation-based model. These factors include but are not limited to the Company’s future revenue, and the probability and timing of the exercise of the repurchase right. The fair value of the Baker Notes is sensitive to these estimated inputs made by management that are used in the calculation.

SSNs

The fair values of the SSNs issued, as described in Note 4 – Debt, were determined using the methods described above in Valuation Methodology using the residual value of the Company after the fair value of the Baker Notes. The quarterly valuation adjustments for the three and nine months ended September 30, 2024 were respectively recorded as a $0.7 million and a $0.9 million change in fair value of financial instruments attributed to credit risk change in the condensed consolidated comprehensive statements of income (loss). The quarterly valuation adjustments for the three and nine months ended September 30, 2023 were recorded as a $0.5 million and a $0.3 million change in fair value of financial instruments attributed to credit risk change in the condensed consolidated comprehensive statements of income (loss).

Purchase Rights

The Adjuvant Purchase Rights and the May Note Purchase Rights (collectively Purchase Rights) are recorded as derivative liabilities in the condensed consolidated balance sheets. The Purchase Rights are valued using an OPM, like a Black-Scholes Methodology, with changes in the fair value being recorded in the condensed consolidated statements of operations. The assumptions used in the OPM are considered level 3 assumptions and include, but are not limited to, the market value of invested capital, the cumulative equity value of the Company as a proxy for the exercise price and the expected term the Purchase Rights will be held prior to exercise and a risk-free interest rate.

Warrants

Warrants previously classified as liabilities were reclassified as equity instruments during the second quarter of 2023 as a result of the Reverse Stock Split. The Company will continue to re-evaluate the classification of its warrants at the close of each reporting period to determine their proper balance sheet classification. The warrants are valued using an OPM based on the applicable assumptions, which include the exercise price of the warrants, time to expiration, expected volatility of our peer group, risk-free interest rate, and expected dividends. The assumptions used in the OPM are considered level 3 assumptions and include, but are not limited to, the market value of invested capital, the cumulative equity value of the Company as a proxy for the exercise price, the expected term the warrants will be held prior to exercise, a risk-free interest rate, and probability of change of control event. Additionally, because the warrants are re-priced under certain provisions in the agreements, at each re-pricing event the Company must value the warrants using a Black-Scholes model immediately prior to and immediately following the re-pricing event. The incremental fair value is recorded as an increase to accumulated deficit and additional paid-in-capital, in accordance with ASC 470.

SOLOSEC Asset Acquisition Intangible Asset and Contingent Liabilities

The total consideration for the SOLOSEC asset acquisition included an up-front payment (paid at closing), sales-based payments to be paid over the next 15 years (the Earnout Term) in each year in which SOLOSEC adjusted net revenue is over a specified threshold, a $10.0 million one-time payment once the cumulative SOLOSEC adjusted net revenues reach $100 million, and assumption of quarterly royalty payments based on SOLOSEC net revenue. As discussed in Note 7 – Commitments and Contingencies, the fair value of the consideration is attributed to the SOLOSEC product line and was therefore recorded as an intangible asset.

The fair value of the total consideration, including cash paid and future sales-based payments, is determined using a Monte Carlo simulation model, which assumes the Company’s revenue follows a geometric Brownian motion. Using specific revenue factors, including expected growth, risk adjustments, and revenue volatility, future revenues were simulated through the Earnout Term to assess whether sales-based payments would be triggered in each relevant period, as stipulated by the SOLOSEC Asset Purchase Agreement. The average output of the Monte Carlo simulations for each period provides the expected payment value, which is then discounted to its present value to derive the fair value of future sales-based payments and recorded as contingent liabilities. The discount rate is based on (i) the risk-free rate, plus (ii) a credit spread reflecting the Company’s interest-bearing debt, (iii) an additional spread to account for credit migration as of the valuation date, and (iv) a further incremental spread to reflect that the contingent liabilities is subordinated obligations relative to the Company’s other debt obligations.

The fair value of the SOLOSEC contingent liabilities is subject to uncertainty due to the assumptions made by management that are used in the Monte Carlo simulation-based model. These factors include the estimated future SOLOSEC net revenue, the risk-neutral revenue calculation and simulation assumptions, payment timing, and the discount rate.

The fair value of the SOLOSEC contingent liabilities will be updated at each reporting period using the methodology described above. Any changes to the fair value will be recorded as an adjustment to the carrying value of both the contingent liabilities and the SOLOSEC IP intangible asset as per ASC 323, Investments – Equity Method and Joint Ventures (ASC 323). Periodic intangible amortization will also be updated based on the new fair value of the SOLOSEC IP.

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Commitments and Contingencies

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

7. Commitments and Contingencies

Asset Acquisition and Contingent Liabilities

SOLOSEC

The Company reviewed the SOLOSEC acquisition in accordance with ASC 805, Business Combinations (ASC 805), including applying the screen test, and determined that it was out of scope of the ASC 805 because the acquired asset did not constitute a business or nonprofit activity. In accordance with ASC 805, the Company engaged a third-party valuation specialist to provide a fair value for the SOLOSEC IP as well as for the total consideration. Per the valuation, the fair value of the SOLOSEC IP exceeded 90% of the total consideration, which indicates that the screen test failed. Further, the Company did not acquire any substantive processes, which indicates that the acquisition is an asset acquisition rather than a business combination. The Company recorded the fair value of the future sales-based payments as contingent liabilities in accordance with ASC 450, Contingencies (ASC 450) and the fair value of the total consideration plus the transaction costs as an intangible asset in accordance with ASC 350, Intangibles (ASC 350). The total intangible asset will be amortized over the expected remaining useful life of the assets, which is 11 years.

Per the Transition Services Agreement (TSA) entered into in conjunction with the SOLOSEC asset acquisition, the Company is committed to purchasing finished goods inventory from the seller through a transition period ending in November 2026 at a pre-defined unit price. The total expected commitment is approximately $3.5 million; however, the quantities purchased can be negotiated if both parties agree. The Company concluded that the inventory purchase commitment does not meet the definition of derivatives under ASC 815. During the three and nine months ended September 30, 2024, there were approximately $0.1 million in purchases under this commitment. The Company expects to purchase approximately $0.2 million under this commitment for the remainder of 2024, $1.3 million in the year ended December 31, 2025, and $1.9 million in the year ended December 2026. The TSA also requires the seller to provide transitional support services until the Company can fully establish SOLOSEC operations; the Company is obligated to pay an immaterial amount quarterly for these services.

The Company is also obligated to pay a quarterly royalty in amounts equal to a certain percentage of the SOLOSEC net revenue, beginning July 14, 2024. There are no minimum quarterly or annual royalty payment amounts. Such royalty costs were immaterial for the three and nine months ended September 30, 2024. As of September 30, 2024, an immaterial amount related to the SOLOSEC royalty was included in contingent liabilities in the condensed consolidated balance sheet.

Operating Leases

Fleet Lease

In December 2019, the Company and Enterprise FM Trust (the Lessor) entered into a Master Equity Lease Agreement whereby the Company leases vehicles to be delivered by the Lessor from time to time with various monthly costs depending on whether the vehicles are delivered for a term of 24 or 36 months, commencing on each corresponding delivery date. The leased vehicles are for use by eligible employees of the Company’s commercial operations team. As of September 30, 2024, there were a total of 19 leased vehicles. The Company determined that the leased vehicles are accounted for as operating leases under ASC 842, Leases (ASC 842).

In September 2022, the Company extended the lease term of the vehicles with a term of 24 months by an additional 12 months. In May and June 2024, the Company again extended the lease term by an additional 12 months for vehicles with initial terms of 24 months. In both instances, the Company determined that such extensions are accounted for as modifications; the Company reassessed the lease classification and the incremental borrowing rate on the modification dates and accounted for these modifications accordingly.

2020 Lease and the First Amendment

On October 3, 2019, the Company entered into an office lease for approximately 24,474 square feet (the High Bluff Premises) pursuant to a non-cancelable lease agreement (the 2020 Lease). The 2020 Lease commenced on April 1, 2020 with an expiry of September 30, 2025, unless terminated earlier in accordance with its terms. The Company provided the landlord with a $0.8 million security deposit in the form of a letter of credit for the High Bluff Premises.

On April 14, 2020, the Company entered into the first amendment to the 2020 Lease for an additional 8,816 rentable square feet of the same office location (the Expansion Premises), which commenced on September 1, 2020 with an expiry of September 30, 2025. The Company provided an additional $0.05 million in a letter of credit for the Expansion Premises.

On March 20, 2023, the Company received a notice of default from its landlord for failing to timely pay March 2023 rent, resulting in a breach under the agreement. As a result, the Company’s letter of credit in the amount of $0.8 million, in restricted cash, was recovered by the landlord. In June 2023, the Company reached a settlement with the landlord. As a result of such settlement, the Company reversed its associated remaining ROU assets of $3.3 million and lease liabilities of $4.2 million and recognized a gain of $0.2 million.

2022 Sublease

On May 27, 2022, the Company entered into a sublease agreement with AMN Healthcare, Inc. (AMN), pursuant to which the Company agreed to sublease 16,637 rentable square feet of the High Bluff Premises to AMN for a term commencing on June 15, 2022 and ending coterminous with the 2020 Lease on September 30, 2025, in exchange for the sum of approximately $0.1 million per month, subject to an annual 3.5% increase each year. The sublease was terminated along with the settlement of the 2020 Lease in June 2023. Gross sublease income was zero and $0.3 million for the three and nine months ended September 30, 2023, respectively.

Supplemental Financial Statement Information

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost (in thousands)	Classification	2024		2023		2024		2023
Operating lease expense	Research and development	$	-	$	1	$	2	$	126
Operating lease expense	Selling and marketing		40		55		135		302
Operating lease expense	General and administrative		3		2		8		336
Total		$	43	$	58	$	145	$	764

Lease Term and Discount Rate	September 30, 2024			December 31, 2023
Weighted Average Remaining Lease Term (in years)		0.97			0.75
Weighted Average Discount Rate		12	%		12	%

Maturity of Operating Lease Liabilities (in thousands)	September 30, 2024
Remainder of 2024 (3 months)	$	39
Year ending December 31, 2025		86
Year ending December 31, 2026		8
Total lease payments		133
Less imputed interest		(7	)
Total	$	126

	Nine Months Ended September 30,
Other information (in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows in operating leases	$	218	$	1,470

Other Contractual Commitments

In November 2019, the Company entered into a supply and manufacturing agreement with a third-party to manufacture Phexxi, with potential to manufacture other product candidates, in accordance with all applicable current good manufacturing practice regulations. There were approximately $0.8 million and $1.0 million in purchases under the supply and manufacturing agreement for the three and nine months ended September 30, 2024, and no such purchases during the three and nine months ended September 30, 2023.

Contingencies

From time to time the Company may be involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business. As of September 30, 2024, there were no other claims or actions pending against the Company which management believes have a probable, or a reasonably possible, probability of an unfavorable outcome other than the TherapeuticsMD dispute as described below.

During the nine months ended September 30, 2023, the Company settled a portion of its trade payables with numerous vendors, which resulted in a $1.5 million reduction in trade payables. However, the Company may receive trade payable demand letters from its vendors that could lead to potential litigation. As of September 30, 2024, approximately 87% of our trade payables were greater than 90 days past due.

On December 14, 2020, a trademark dispute captioned TherapeuticsMD, Inc. v Evofem Biosciences, Inc., was filed in the U.S. District Court for the Southern District of Florida against the Company, alleging trademark infringement of certain trademarks owned by TherapeuticsMD under federal and state law (Case No. 9:20-cv-82296). On July 18, 2022, the Company settled the lawsuit with TherapeuticsMD, with certain requirements which were required to be performed by July 2024 (the Settlement Timeline), including changing the name of Phexxi. The Company failed to meet the terms of the settlement agreement by the Settlement Timeline. As a result, the Company is currently working with TherapeuticsMD on resolution of this issue. In accordance with ASC 450, the Company has accrued $0.8 million, the present value of the probable settlement amounts payable over the next several years, as a component of contingent liabilities in the condensed consolidated balance sheet.

As of November 13, 2024, the Company has received five letters from purported Company stockholders demanding that the Company’s board of directors take action on behalf of the Company to remedy allegations regarding the Company’s disclosures to shareholders with respect to various alleged omissions of material information in its preliminary proxy statement filed September 23, 2024 relating to the Amended and Restated Merger Agreement, as amended, and one demand made under Section 220 of the DGCL for books and records related to the transaction and disclosures in the proxy statement. The Company believes all such demands are without merit.

On September 27, 2024, Future Pak, LLC, a Michigan limited liability company, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended (SPA), by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a Purchaser and collectively Purchasers). The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA. According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to approximately $106.8 million. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Notice of Default which adds additional claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Securities Purchase and Security Agreement dated April 23, 2020, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (the Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024. The Company strongly disagrees with the Designated Agent’s claim that any Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

On November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment.

Intellectual Property Rights

In 2014, the Company entered into an amended and restated license agreement (the Rush License Agreement) with Rush University Medical Center (Rush University) pursuant to which Rush University granted the Company an exclusive, worldwide license of certain patents and know-how related to its multipurpose vaginal pH modulator technology. For the U.S. patent that the Company licensed from Rush University, multiple Orders Granting Interim Extension (OGIEs) have been received from the United States Patent and Trademark Office (USPTO), currently extending the expiration of this patent to March 2025. Pursuant to the Rush License Agreement, the Company is obligated to pay Rush University an earned royalty based upon a percentage of net sales in the range of mid-single digits until the expiration of this patent. In September 2020, the Company entered into the first amendment to the Rush License Agreement, pursuant to which the Company is also obligated to pay a minimum annual royalty amount of $0.1 million to the extent the earned royalties do not equal or exceed $0.1 million commencing January 1, 2021. Such royalty costs, included in cost of goods sold, were $0.2 million and $0.6 million for the three and nine months ended September 30, 2024, respectively, and $0.2 million and $0.4 million, respectively, for the three and nine months ended September 30, 2023, respectively. As of September 30, 2024 and December 31, 2023, approximately $1.7 million and $1.1 million, respectively, were included in accrued expenses in the condensed consolidated balance sheets.

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Convertible and Redeemable Preferred Stock and Stockholders’ Deficit

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Convertible and Redeemable Preferred Stock and Stockholders’ Deficit

8. Convertible and Redeemable Preferred Stock and Stockholders’ Deficit

Warrants

In April and June 2020, pursuant to the Baker Bros. Purchase Agreement, as discussed in Note 4 – Debt, the Company issued warrants to purchase up to 2,732 shares of common stock in a private placement at an exercise price of $4,575 per share. The Second Baker Amendment provides that the exercise price of the Baker Warrants will equal the conversion price of the Baker Notes. The exercise price of the Baker warrants was $0.0154 per share as of September 30, 2024.

In May 2022, the Company completed an underwritten public offering (the May 2022 Public Offering) which included the issuance of common warrants to purchase 362,640 shares of common stock at a price to the public of $93.75 and the issuance of common warrants to purchase 205,360 shares of common stock at a price to the public of $93.63 (the May 2022 Common Stock Warrants). The May 2022 Common Stock Warrants were exercisable beginning on May 24, 2022 and have a five-year term. Due to features in the May 2022 Common Stock Warrants, including dilution adjustments requiring strike price resets, as of September 30, 2024 there were 894,194 May 2022 Common Stock Warrants outstanding with an exercise price of $0.0154.

In June 2022, as required by the Second Baker Amendment, the Company issued the June 2022 Baker Warrants to purchase up to 582,886 shares of the Company’s common stock, $0.0001 par value per share. The June 2022 Baker Warrants have an exercise price of $93.75 per share and a five-year term and were exercisable beginning June 28, 2022. The June 2022 Baker Warrants also contain customary 4.99% and 19.99% limitations on exercise provisions. The exercise price and number of shares issuable upon exercise of the June 2022 Baker Warrants is subject to adjustment for certain dilutive issuances, stock splits and similar recapitalization transactions. The exercise price of these warrants was $0.0154 per share as of September 30, 2024.

In February, March, April, July, August, and September 2023, pursuant to the SSNs as discussed in Note 4 – Debt, the Company issued warrants to purchase up to 1,152,122 shares of the Company’s common stock at an exercise price of $2.50 per share, up to 2,615,383 shares of the Company’s common stock at an exercise price of $1.25 per share, and up to 22,189,349 shares of the Company’s common stock at an exercise price of $0.13 per share. The exercise price of these warrants was $0.0154 per share as of September 30, 2024.

On December 21, 2023, warrants to purchase up to 9,972,074 shares of the Company’s common stock were exchanged for 613 shares of the Company’s Series F-1 Shares.

As of September 30, 2024, warrants to purchase up to 20,807,539 shares of the Company’s common stock remain outstanding at a weighted average exercise price of $2.42 per share. In accordance with ASC 815, certain warrants previously classified as equity instruments were determined to be liability classified (the Reclassified Warrants) due to the Company having an insufficient number of authorized shares as of December 31, 2022; however, the impacted warrants were reclassified back to as equity instruments during the second quarter of 2023 as a result of the May 2023 Reverse Stock Split. During the first quarter of 2024, the Company obtained waivers from a majority of the convertible instrument holders, removing the requirement for shares to be reserved for conversion of their instruments, which will prevent the instruments from needing to be liability classified due to an insufficient number of authorized shares going forward. The Company will continue to re-evaluate the classification of its warrants at the close of each reporting period to determine the proper balance sheet classification for them. These warrants are summarized below:

Type of Warrants	Underlying common stock to be Purchased		Exercise Price		Issue Date	Exercise Period
Common Warrants		451	$	14,062.50	May 24, 2018	May 24, 2018 to May 24 2025
Common Warrants		888	$	11,962.50	April 11, 2019	October 11, 2019 to April 11, 2026
Common Warrants		1,480	$	11,962.50	June 10, 2019	December 10, 2019 to June 10, 2026
Common Warrants		1,639	$	0.0154	April 24, 2020	April 24, 2020 to April 24, 2025
Common Warrants		1,092	$	0.0154	June 9, 2020	June 9, 2020 to June 9, 2025
Common Warrants		8,003	$	735.00	January 13, 2022	March 1, 2022 to March 1, 2027
Common Warrants		8,303	$	897.56	March 1, 2022	March 1, 2022 to March 1, 2027
Common Warrants		6,666	$	309.56	May 4, 2022	May 4, 2022 to May 4, 2027
Common Warrants		894,194	$	0.0154	May 24, 2022	May 24, 2022 to May 24, 2027
Common Warrants		582,886	$	0.0154	June 28, 2022	May 24, 2022 to June 28, 2027
Common Warrants		49,227	$	0.0154	December 21, 2022	December 21, 2022 to December 21, 2027
Common Warrants		130,461	$	0.0154	February 17, 2023	February 17, 2023 to February 17, 2028
Common Warrants		258,584	$	0.0154	March 20, 2023	March 20, 2023 to March 20, 2028
Common Warrants		369,231	$	0.0154	April 5, 2023	April 5, 2023 to April 5, 2028
Common Warrants		349,463	$	0.0154	July 3, 2023	July 3, 2023 to July 3, 2028
Common Warrants		615,384	$	0.0154	August 4, 2023	August 4, 2023 to August 4, 2028
Common Warrants		12,721,893	$	0.0154	September 27, 2023	September 27, 2023 to September 27, 2028
Prefunded Common Warrants		4,807,694	$	0.0010	September 27, 2023	September 27, 2023 to September 27, 2028
Total		20,807,539

Preferred Stock

Effective December 15, 2021, the Company amended and restated its certificate of incorporation, under which the Company is currently authorized to issue up to 5,000,000 shares of total preferred stock, including the authorized convertible and redeemable preferred stock designated for Series B-1 and B-2, Series C, Series E-1, and Series F-1, and nonconvertible and redeemable preferred stock (Series D), par value $0.0001 per share.

Convertible and Redeemable Preferred Stock

On August 7, 2023, the Company filed a Certificate of Designation of Series E-1 Convertible Preferred Stock (E-1 Certificate of Designation), par value $0.0001 per share (the Series E-1 Shares). An aggregate of 2,300 shares was authorized. The Series E-1 Shares are convertible into shares of common stock at a conversion price of $0.40 per share and are both a) counted toward quorum on the basis of and b) have voting rights equal to the number of shares of common stock into which the Series E-1 Shares are then convertible, subject to standard 4.99% or 9.99% beneficial ownership limitations. The Series E-1 Shares are senior to all common stock with respect to preferences as to dividends, distributions, and payments upon a dissolution event. In the event of a liquidation event, the Series E-1 Shares are entitled to receive an amount per share equal to the Black Scholes Value as of the liquidation event plus the greater of 125% of the conversion amount (as defined in the Certificate of Designation) and the amount the holder of the Series E-1 Shares would receive if the shares were converted into common stock immediately prior to the liquidation event. If the funds available for liquidation are insufficient to pay the full amount due to the holders of the Series E-1 Shares, each holder will receive a percentage payout. The Series E-1 Shares are entitled to dividends at a rate of 10% per annum or 12% upon a triggering event. Dividends are payable in shares of common stock and may, at the Company’s election, be capitalized and added to the principal monthly. The Series E-1 Shares also have a provision that allows them to be converted to common stock at a conversion rate equal to the Alternate Conversion Price (as defined in the E-1 Certificate of Designation) times the number of shares subject to conversion times the 25% redemption premium in the event of a Triggering Event (as defined in the E-1 Certificate of Designation) such as in a liquidation event. The Series E-1 Shares are mandatorily redeemable in the event of bankruptcy.

On August 7, 2023, certain investors party to the December 2022 Notes and the February 2023 Notes exchanged $1.8 million total in principal and accrued interest under the outstanding convertible promissory notes for 1,800 shares of Series E-1 Shares (the August 2023 Preferred Stock Transaction). Per the E-1 Certificate of Designation, the conversion rate can also be adjusted in several future circumstances, such as on certain dates after the exchange date and upon the issuance of additional convertible securities with a lower conversion rate or in the instance of a Triggering Event. As such, the conversion price as of June 30, 2024 was adjusted to $0.0154 per share and the price has not been adjusted since. The Series E-1 Shares are classified as mezzanine equity within the condensed consolidated balance sheets in accordance with ASC 480 because of a fixed 25% redemption premium upon a Triggering Event and no mandatory redemption feature. During the year ended December 31, 2023, $1.8 million was recorded as an increase to additional paid-in-capital for the preferred shares in the condensed consolidated statement of convertible and redeemable preferred stock and stockholders’ deficit related to the August 2023 Preferred Stock Transaction. For the three and nine months ended September 30, 2024, an immaterial and $0.1 million deemed dividend was recorded as an increase to the number of Series E-1 Shares outstanding.

On December 11, 2023, the Company filed a Certificate of Designation of Series F-1 Convertible Preferred Stock (F-1 Certificate of Designation), par value $0.0001 per share (the Series F-1 Shares). An aggregate of 95,000 shares was authorized. The Series F-1 Shares are convertible into shares of common stock at a conversion price of $0.0635 per share and do not have the right to vote on any matters presented to the holders of the Company’s common stock. The Series F-1 Shares are senior to all common stock and subordinate to the Series E-1 Shares with respect to preferences as to distributions and payments upon a dissolution event. In the event of a liquidation event, the Series F-1 Shares are entitled to receive an amount per share equal to the Black Scholes Value as of the liquidation event plus the greater of 125% of the conversion amount (as defined in the F-1 Certificate of Designation) and the amount the holder of the Series F-1 Shares would receive if the shares were converted into common stock immediately prior to the liquidation event. If the funds available for liquidation are insufficient to pay the full amount due to the holders of the Series F-1 Shares, each holder will receive a percentage payout. The Series F-1 Shares are not entitled to dividends. The Series F-1 Shares also have a provision that allows them to be converted to common stock at a conversion rate equal to the Alternate Conversion Price (as defined in the F-1 Certificate of Designation) times the number of shares subject to conversion times the 25% redemption premium in the event of a Triggering Event (as defined in the F-1 Certificate of Designation) such as in a liquidation event. The Series F-1 Shares are mandatorily redeemable in the event of bankruptcy. In June 2024, the Required Holders, as defined in the F-1 Certificate of Designation, approved an amended and restated certificate of designation (the Amended F-1 Certificate of Designation) to the Company’s certificate of designation designating the rights, preferences and limitations of the Company’s Series F-1 Shares. The Amended F-1 Certificate of Designation provides for the removal of the conversion price adjustment provisions previously included and changed the conversion price to $0.0154.

On December 21, 2023, the Company issued a total of 22,280 Series F-1 Shares to certain investors, including 613 shares exchanged for warrants to purchase up to 9,972,074 shares of the Company’s common stock and 21,667 shares to exchange a partial value of the outstanding purchase rights. The holders of the Series F-1 Shares immediately exchanged their Series F-1 Shares into Aditxt’s Series A-1 preferred stock and, as a result, Aditxt currently holds all outstanding Series F-1 Shares. The Series F-1 Shares are to be cancelled upon the consummation of the Merger.

During the third quarter of 2024, as part of the funding requirement by Aditxt pursuant to the A&R Merger Agreement, the Company issued a total of 1,260 Series F-1 Shares to Aditxt for an aggregate purchase price of approximately $1.3 million. These shares were recorded at fair value with the variance between the immaterial fair value and the $1.3 million cash received being recorded as additional paid-in-capital in the condensed consolidated balance sheet as of September 30, 2024. As discussed in Note 10 - Subsequent events, subsequent to September 30, 2024, the Company issued a total of 2,740 Series F-1 Shares to Aditxt for an aggregate purchase price of $2.7 million.

Nonconvertible and Redeemable Preferred Stock

On December 16, 2022, the Company filed a Certificate of Designation of Series D Non-Convertible Preferred Stock (the D Certificate of Designation), par value $0.0001 per share (the Series D Preferred Shares). An aggregate of 70 shares was authorized; these shares were not convertible into shares of common stock, had limited voting rights equal to 1% of the total voting power of the then-outstanding shares of common stock entitled to vote, were not entitled to dividends, and were required to be redeemed by the Company once its stockholders approved a reverse split, as described in the D Certificate of Designation. All 70 shares of the Series D Preferred were subsequently issued in connection with the December 2022 Securities Purchase Agreement as discussed in Note 4 – Debt. The Series D Preferred Shares were redeemed in July 2023.

Common Stock

Effective September 14, 2023, the Company further amended its amended and restated certificate of incorporation to increase the number of authorized shares of common stock to 3,000,000,000 shares.

Purchase Rights

On September 15, 2022, the Company entered into certain exchange agreements with the Adjuvant Purchasers and the May 2022 Notes Purchasers to exchange, upon request, the Purchase Rights for an aggregate of 942,080 shares of the Company’s common stock. The number of right shares for each Purchase Right was initially fixed at issuance, but subject to certain customary adjustments for certain dilutive Company equity issuances until the second anniversary of issuance. These Purchase Rights expire on June 28, 2027. Refer to Note 6 – Fair Value of Financial Instruments for the accounting treatment of the Purchase Rights.

In 2023, the Company signed an additional agreement with the holders of the Purchase Rights which fixed the total aggregate value of the Purchase Rights at $24.7 million, to be paid in a variable number of shares based on the then current exercise price. On December 21, 2023, the Company issued 21,667 of the Series F-1 Shares in exchange for a partial value of certain purchase rights, as described above.

In connection with the issuance of the SSNs, during the three and nine months ended September 30, 2024, the number of outstanding Purchase Rights increased by zero and 1,161,636,815, respectively, and increased by 262,221,766 and 283,747,468, respectively, during the three and nine months ended September 30, 2023, due to the reset of their exercise price. This was recorded as a loss on issuance of financial instruments in an immaterial amount in the condensed consolidated statements of operations for the nine months ended September 30, 2024. The reset of the exercise price resulted in a loss on issuance of financial instruments of $4.9 million in both the three and nine months ended September 30, 2023. The exercise price will be further adjusted if any other convertible instruments have price resets.

During the three and nine months ended September 30, 2024, the Company issued 17,500,000 and 59,575,000 shares of common stock upon the exercise of certain Purchase Rights, respectively. During the three and nine months ended September 30, 2023, the Company issued 2,767,332 and 4,018,256 shares of common stock upon the exercise of certain Purchase Rights, respectively. As of September 30, 2024, Purchase Rights of 1,529,448,899 shares of the Company’s common stock remained outstanding.

Common Stock Reserved for Future Issuance

Common stock reserved for future issuance is as follows in common equivalent shares as of September 30, 2024:

Common stock issuable upon the exercise of stock options outstanding	3,747
Common stock issuable upon the exercise of common stock warrants	10,598,201
Common stock available for future issuance under the 2019 ESPP	509
Common stock available for future issuance under the Amended and Restated 2014 Plan	5,789
Common stock available for future issuance under the Amended Inducement Plan	609
Common stock reserved for the exercise of purchase rights	741,490,642
Common stock reserved for the conversion of convertible notes	158,598,174
Common stock reserved for the conversion of series E-1 preferred stock	40,991,761
Total common stock reserved for future issuance (1)	951,689,432

(1) The potentially dilutive securities in Note 2 – Summary of Significant Accounting Policies includes all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in the table above includes the shares that must legally be reserved based on the applicable instruments’ agreements.

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Stock-based Compensation

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

9. Stock-based Compensation

Equity Incentive Plans

The following table summarizes stock-based compensation expense related to stock options granted to employees, non-employee directors and consultants included in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	5	$	30	$	31	$	99
Selling and marketing		18		42		77		146
General and administrative		180		186		551		698
Total	$	203	$	258	$	659	$	943

Stock Options

There were no stock options granted during the three or nine months ended September 30, 2024 or 2023. As of September 30, 2024, unrecognized stock-based compensation expense for employee stock options was approximately $0.4 million, which the Company expects to recognize over a weighted-average remaining period of 0.9 years, assuming all unvested options become fully vested.

Employee Stock Purchase Plan

The purchase price under the 2019 ESPP is 85% of the lesser of the fair market value of the common stock on the first or the last business day of an offering period. The maximum number of shares of common stock that may be purchased by any participant during an offering period is equal to $25,000 divided by the fair market value of the common stock on the first business day of an offering period. In October 2022, the Board suspended future offering periods.

Restricted Stock Awards

There were no shares of performance-based RSAs granted to the Company’s executive management team in any period presented.

For performance-based RSAs, (i) the fair value of the award is determined on the grant date; (ii) the Company assesses the probability of achieving each individual milestone associated with the award using reasonable assumptions based on the Company’s operation performance towards each milestone; (iii) the fair value of the shares subject to the milestone is expensed over the implicit service period commencing once management believes the performance criteria is probable of being met; and (iv) the Company reassesses the probability of achieving each individual milestone at each reporting date, and any change in estimate is accounted for through a cumulative adjustment in the period when the change in estimate occurs. Non-performance based RSAs are valued at the fair value on the grant date and the associated expenses will be recognized over the vesting period.

As of September 30, 2024, there was no unrecognized noncash stock-based compensation expense related to unvested RSAs.

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Subsequent Events

9 Months Ended

Sep. 30, 2024

Subsequent Events [Abstract]

Subsequent Events

10. Subsequent Events

Notes Conversions

Subsequent to September 30, 2024, 2,727,668 common shares were issued for conversion of $0.04 million of convertible notes.

Notice of Default and Termination of Forbearance Agreement

On September 27, 2024, Future Pak, LLC, a Michigan limited liability company, as agent for the Purchasers (in such capacity, the Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Securities Purchase and Security Agreement dated April 23, 2020, as amended (SPA), by and among the Company, Designated Agent, as certain guarantors and the purchasers (each a “Purchaser” and collectively Purchasers). The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the SPA.

According to the Notice of Default, the Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Securities Purchase Agreement. If all Purchasers exercise the Section 5.7 Option (as defined below), the repurchase price would be equal to approximately $106.8 million. Pursuant to Section 5.7(b) of the SPA, upon the occurrence of an Event of Default, each Purchaser may elect, at its option, to require the Company to repurchase the Note held by such Purchaser (or any portion thereof) at a repurchase price equal to two times the sum of the outstanding principal balance and all accrued and unpaid interest thereon, due within three business days after such Purchaser delivers a notice of such election (the Section 5.7 Option).

On October 27, 2024, the Designated Agent sent an amended and supplemented notice to the Notice of Default which adds additional claims of default based on the Company’s current repayment agreements of existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Securities Purchase and Security Agreement dated April 23, 2020, as amended. Furthermore, the Amended Notice stated that, because the events of default described in the Amended Notice of Default are not the certain prior events of default listed in the Forbearance Agreement (the Specified Defaults), the Designated Agent and the holders of the senior secured promissory notes described in the SPA thereby provided notice to the Company that the Forbearance Agreement is terminated as of October 27, 2024.

Subsequently, on November 8, 2024, the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment.

The Company strongly disagrees with the Designated Agent’s claim that any Event of Default has occurred. The Company intends to vigorously contest any attempt by the Designated Agent and the Purchasers to exercise their default rights and remedies under the SPA.

Third Amendment to the A&R Merger Agreement and F-1 Issuance

On October 2, 2024, the Company, Aditxt and Merger Sub entered into the third amendment to the A&R Merger Agreement (the Third Amendment), to (i) change the date of the Third Parent Equity Investment Date (as defined in the A&R Merger Agreement) from September 30, 2024 to October 2, 2024, (ii) change the Third Parent Equity Investment from 1,500 shares of Series F-1 Preferred Shares to 720 shares of Series F-1 Preferred Shares, and (iii) amend the Fourth Parent Equity Investment (as defined in the A&R Merger Agreement) from 1,500 shares of Series F-1 Preferred Shares to 2,280. Pursuant to the Third Amendment to the A&R Merger Agreement, Aditxt purchased an aggregate of 2,740 shares of Series F-1 Preferred Shares for an aggregate $2.7 million subsequent to September 30, 2024.

Support Agreements

Between October 28 and October 31, 2024, the Company entered into support agreements (each a Support Agreement) with some of its investors (the Investors and each an Investor) pursuant to which the Investors agreed (i) to vote all Subject Shares (as defined in the Support Agreement) that an Investor is entitled to vote at the time any vote to approve and adopt the A&R Merger Agreement and the Merger at any meeting of the stockholders of the Company, and at any adjournment thereof, at which the A&R Merger Agreement is submitted for consideration and vote of the stockholders of the Company, and (ii) that he or it will not vote any Subject Shares in favor of, and will vote such Subject Shares against the approval of, any Company Acquisition Proposal (as defined in the Support Agreement). Each Investor also revoked any and all previous proxies granted with respect to the Subject Shares. The Investors agreed that all shares of Company Capital Stock (as defined in the Support Agreement) that each Investor purchases, acquires the right to vote, or otherwise acquires beneficial ownership of, after the execution of the Support Agreement and prior to the Expiration Date (as defined below) shall be subject to the terms and conditions of the Support Agreement.

Furthermore, the Investors agreed not to sell or transfer any of such Subject Shares until: (a) the A&R Merger Agreement shall have been terminated for any reason; (b) the Merger shall become effective in accordance with the terms and provisions of the A&R Merger Agreement; (c) the acquisition by Aditxt of all Subject Shares of the Investors, whether pursuant to the Merger or otherwise; (d) any amendment, change or waiver to the A&R Merger Agreement as in effect on the date hereof, without each Investor’s consent, that (1) decreases the amount, or changes the form or timing (except with respect to extensions of time of the offer in accordance with the terms of the A&R Merger Agreement) of consideration payable to the Investors pursuant to the terms of the A&R Merger Agreement as in effect on the date hereof or (2) materially and adversely affects such Investor; or (e) is agreed to in writing by Aditxt and each Investor (collectively the Expiration date).

The Investors own collectively an aggregate of 1,468 shares of Company preferred stock, 364,539,337 shares of common stock issuable upon the conversion of convertible notes, 9,549,716 shares of common stock issuable upon exercise of warrants, and 788,983,896 shares of Company common stock issuable upon any other instrument convertible into Company common stock.

Employment Agreements

On November 8, 2024, the company entered into amended and restated employment agreements with Ms. Pelletier and Ms. Zhang. If Ms. Pelletier is terminated other than for cause or Ms. Pelletier resigns for good reason, then pursuant to her amended employment agreement, the Company will pay and provide to Ms. Pelletier: (i) an amount equal to her target bonus for the year in which the termination occurs and (ii) an amount equal to thirty-six months of her then-current base salary in a lump sum. If Ms. Zhang is terminated other than for cause or Ms. Zhang resigns for good reason, then pursuant to her amended employment agreement, the Company will pay and provide to Ms. Zhang: (i) an amount equal to her target bonus (such bonus percentage was updated to 75%) for the year in which the termination occurs and (ii) an amount equal to twenty-four months of her then-current base salary in a lump sum. The employment agreement is further described under Item 5 of this Quarterly Report on form 10-Q.

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Summary of Significant Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Use of Estimates

Use of Estimates

The preparation of condensed consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed consolidated financial statements and the notes thereto.

Significant estimates affecting amounts reported or disclosed in the condensed consolidated financial statements include, but are not limited to: the assumptions used in measuring the revenue gross-to-net variable consideration items; the trade accounts receivable credit loss reserve estimate; the assumptions used in estimating the fair value of convertible notes, preferred stock, warrants, purchase rights issued, asset acquisition intangible asset, and contingent liabilities; the assumptions used in the valuation of inventory; the useful lives of property and equipment; the recoverability of long-lived assets; and the valuation of deferred tax assets. These assumptions are more fully described in Note 3 – Revenue, Note 4 – Debt, Note 6 - Fair Value of Financial Instruments, Note 7 - Commitments and Contingencies, and Note 9 - Stock-based Compensation. The Company bases its estimates on historical experience and market-specific or other relevant assumptions that it believes to be reasonable under the circumstances and adjusts when facts and circumstances dictate. The estimates are the basis for making judgments about the carrying values of assets, liabilities and recorded expenses that are not readily apparent from other sources. As future events and their effects cannot be determined with precision, actual results may materially differ from those estimates or assumptions.

Segment Reporting

Segment Reporting

Operating segments are identified as components of an enterprise about which separate discrete financial information is available for evaluation by the chief operating decision-maker, the Chief Executive Officer of the Company, in making decisions regarding resource allocation and assessing performance. The Company views its operations and manages its business in one operating segment.

Concentrations of Credit Risk

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to significant concentrations of credit risk consist primarily of cash, cash equivalents and restricted cash. Deposits in the Company’s checking, time deposit and investment accounts are maintained in federally insured financial institutions and are subject to federally insured limits or limits set by Securities Investor Protection Corporation. The Company invests in funds through a major U.S. bank and is exposed to credit risk in the event of default to the extent of amounts recorded on the condensed consolidated balance sheets.

The Company has not experienced any losses in such accounts and believes it is not exposed to significant concentrations of credit risk on its cash, cash equivalents and restricted cash balances on amounts in excess of federally insured limits due to the financial position of the depository institutions in which these deposits are held.

The Company is also subject to credit risk related to its trade accounts receivable from product sales. Its customers are located in the U.S. and consist of wholesale distributors, retail pharmacies, and mail-order specialty pharmacies. The Company extends credit to its customers in the normal course of business after evaluating their overall financial condition and evaluates the collectability of its accounts receivable by periodically reviewing the age of the receivables, the financial condition of its customers, and its past collection experience. Historically, the Company has not experienced any credit losses. As of September 30, 2024, based on the evaluation of these factors the Company did not record a reserve for expected credit loss.

Products are distributed primarily through three major distributors and mail-order pharmacies, who receive service fees calculated as a percentage of the gross sales, and a fee-per-unit shipped, respectively. These entities are not obligated to purchase any set number of units and distribute products on demand as orders are received.

For the three and nine months ended September 30, 2024, the Company’s three largest customers combined made up approximately 80% and 79% of its gross product sales, respectively. For the three and nine months ended September 30, 2023, the Company’s three largest customers combined made up approximately 86% and 85% of its gross product sales, respectively. As of September 30, 2024 and December 31, 2023, the Company’s three largest customers combined made up 90% and 87%, respectively, of its trade accounts receivable balance.

Significant Accounting Policies

Significant Accounting Policies

There have been no changes to the significant accounting policies that were described in Note 2 – Summary of Significant Accounting Policies of the 2023 Audited Financial Statements in the Company’s Annual Report, other than the addition of policies on intangibles and contingent liabilities due to the SOLOSEC asset acquisition; see below.

Intangible Assets

Intangible Assets

Finite lived intangible assets, including the SOLOSEC IP acquired as part of the SOLOSEC asset acquisition as described further in Note 6 – Fair Value of Financial Instruments and Note 7 – Commitments and Contingencies, are amortized on a straight-line basis over their estimated useful lives. Intangible assets are typically only recognized when an asset is acquired as part of a business combination or asset acquisition and the initial value is based on the fair value of the asset as determined by a third-party valuation. In the case of intangible assets acquired through an asset acquisition, the initial value includes the fair value of the intangible plus any direct acquisition related expenses. For intangible assets acquired in an asset acquisition with contingent liabilities as part of the consideration, the Company will adjust the carrying value of the intangible assets as part of the quarterly adjustment to bring the contingent consideration to fair value. Additionally, the Company reviews the carrying amount of its amortizing intangible assets for possible impairment whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. When testing for impairment, the Company compares the undiscounted cash flows of the asset or asset group to its carrying value. If the estimated undiscounted cash flows exceed the carrying value, no impairment is recorded. If the undiscounted cash flows do not exceed the carrying value, an impairment is recorded to bring the carrying value of the asset down to its fair value.

Cash, Cash Equivalents and Restricted Cash

Cash, Cash Equivalents and Restricted Cash

Cash and cash equivalents consist of readily available cash in checking accounts and money market funds. Restricted cash consists of cash held in monthly time deposit accounts and letters of credit as described in Note 7- Commitments and Contingencies. During the nine months ended September 30, 2023, the letters of credit of $0.3 million for the Company’s fleet leases were released. Upon receipt of a notice of default from its landlord on March 20, 2023, for failing to pay March 2023 rent timely resulting in a breach under the office lease agreement, the Company’s letter of credit in the amount of $0.8 million in restricted cash was recovered by the landlord.

Additionally, the remaining funds of the $25.0 million received from the issuance of Adjuvant Notes (as defined below) in the fourth quarter of 2020 are classified as restricted cash since the Company is contractually obligated to use these funds for specific purposes.

For the nine months ended September 30, 2024 and 2023, the Company’s cash, cash equivalents, and restricted cash reported within the condensed consolidated statements of cash flows include restricted cash only.

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic net income (loss) per share attributable to common stockholders is calculated by dividing the net income (loss) by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. The net income (loss) available to common stockholders is adjusted for amounts in accumulated deficit related to the deemed dividends triggered for certain financial instruments. Such adjustment was immaterial and $0.1 million in the three and nine months ended September 30, 2024, respectively and zero in each of the three and nine months ended September 30, 2023. Diluted net income (loss) per share is computed by dividing the net income (loss) by the weighted-average number of common shares and potentially dilutive securities outstanding for the period determined using the treasury-stock and if-converted methods. For purposes of the diluted net loss per share calculation, potentially dilutive securities are excluded from the calculation of diluted net loss per share because their effect would be anti-dilutive; therefore, basic and diluted net loss per share were the same for the three and nine months ended September 30, 2024. Potentially dilutive securities excluded from the calculation of diluted net loss per share are summarized in the table below. Common shares were calculated for the convertible preferred stock and the convertible debt using the if-converted method.

	Three and Nine months ended September 30,
	2024
Options to purchase common stock		3,747
Warrants to purchase common stock		20,807,539
Purchase rights to purchase common stock		1,529,448,899
Convertible debt		2,577,050,313
Series E-1 and F-1 preferred stock		1,659,594,703
Total (1)		5,786,905,201

(1) The potentially dilutive securities in the table above include all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit includes the shares that must legally be reserved based on the applicable instruments’ agreements.

The following table sets forth the computation of net income attributable to common stockholders, weighted average common shares outstanding for diluted net income per share, and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2023 (in thousands, except share and per share amounts).

	Three months ended September 30,		Nine months ended September 30,
	2023		2023
Numerator:
Net income attributable to common stockholders	$	66,005	$	55,093
Adjustments:
Change in fair value of purchase rights		4,904		5,008
Noncash interest expense on convertible debt, net of tax		361		1,064
Net loss attributable to common stockholders	$	71,270	$	61,165
Denominator:
Weighted average shares used to compute net loss attributable to common stockholder, basic		4,236,477		2,524,302
Add:
Pro forma adjustments to reflect assumed conversion of convertible debt		402,509,558		376,225,027
Pro forma adjustments to reflect assumed exercise of outstanding warrants and purchase rights		311,456,630		311,456,630
Pro forma adjustments to reflect the assumed conversion of Series E-1 Convertible Preferred Shares		12,925,778		4,355,940
Weighted average shares used to compute net loss attributable to common stockholder, diluted		731,128,443		694,561,899
Net loss per share attributable to common stockholders, diluted	$	0.10	$	0.09

Recently Adopted Accounting Pronouncements

Recently Adopted Accounting Pronouncements

No significant new standards were adopted during the nine months ended September 30, 2024.

Recently Issued Accounting Pronouncements — Not Yet Adopted

Recently Issued Accounting Pronouncements — Not Yet Adopted

From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board (FASB) or other standards setting bodies that are adopted as of the specified effective date.

In October 2023, the FASB issued ASU No. 2023-06, Disclosure Improvements: Codification Amendments in Response to the SEC’s Disclosure Update and Simplification Initiative, designed to clarify or improve disclosure and presentation requirements on a variety of topics and align the requirements in the FASB Accounting Standards Codification (ASC) with the SEC regulations. This guidance is effective for the Company no later than June 30, 2027. The Company will adopt ASU No. 2023-06 by complying with the various disclosure requirements but does not expect the requirements to have a material impact on the consolidated financial statements.

In November 2023, the FASB issued ASU No. 2023-07, Improvements to Reportable Segment Disclosures, designed to improve financial reporting by requiring disclosure of incremental segment information to enable investors to develop more decision-useful financial analyses. ASU No. 2023-07 will be effective for the Company beginning with the annual filing for the period ended December 31, 2024 and will require retroactive application to comparison periods presented. For Companies that have only one reportable segment (such as the Company), all the requirements of ASU No. 2023-07 will be required to be disclosed regarding the one reportable segment. The Company is still evaluating the impact of ASU No. 2023-07 on the consolidated financial statements.

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes: Improvements to Income Tax Disclosures addressing income tax disclosures, requiring entities to annually disclose specific categories in the rate reconciliation and provide additional information for certain reconciling items and categories. ASU No. 2023-09 will be effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024. The Company will adopt ASU No. 2023-09 by adding the required disclosures for the December 31, 2024 Annual Report.

The Company does not believe the impact of any other recently issued standards and any issued but not yet effective standards will have a material impact on its condensed consolidated financial statements upon adoption.

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Summary of Significant Accounting Policies (Tables)

9 Months Ended

Sep. 30, 2024

Accounting Policies [Abstract]

Schedule of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share

	Three and Nine months ended September 30,
	2024
Options to purchase common stock		3,747
Warrants to purchase common stock		20,807,539
Purchase rights to purchase common stock		1,529,448,899
Convertible debt		2,577,050,313
Series E-1 and F-1 preferred stock		1,659,594,703
Total (1)		5,786,905,201

Schedule of Weighed Average Common Shares Outstanding for Diluted Net Loss Per Share

The following table sets forth the computation of net income attributable to common stockholders, weighted average common shares outstanding for diluted net income per share, and diluted net income per share attributable to common stockholders for the three and nine months ended September 30, 2023 (in thousands, except share and per share amounts).

	Three months ended September 30,		Nine months ended September 30,
	2023		2023
Numerator:
Net income attributable to common stockholders	$	66,005	$	55,093
Adjustments:
Change in fair value of purchase rights		4,904		5,008
Noncash interest expense on convertible debt, net of tax		361		1,064
Net loss attributable to common stockholders	$	71,270	$	61,165
Denominator:
Weighted average shares used to compute net loss attributable to common stockholder, basic		4,236,477		2,524,302
Add:
Pro forma adjustments to reflect assumed conversion of convertible debt		402,509,558		376,225,027
Pro forma adjustments to reflect assumed exercise of outstanding warrants and purchase rights		311,456,630		311,456,630
Pro forma adjustments to reflect the assumed conversion of Series E-1 Convertible Preferred Shares		12,925,778		4,355,940
Weighted average shares used to compute net loss attributable to common stockholder, diluted		731,128,443		694,561,899
Net loss per share attributable to common stockholders, diluted	$	0.10	$	0.09

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Debt (Tables)

9 Months Ended

Sep. 30, 2024

Debt Disclosure [Abstract]

Schedule of Cash payments Determined based Upon the Quarterly Global Net Revenue

Quarterly global net revenue	Quarterly cash payment
≤ $5.0 million	3% of such global net revenues
>$5.0 million and ≤ $7.0 million	3% on net revenue ≤ $5.0 million; 4% on the net revenue over $5.0 million
Greater than $7.0 million	3% on the net revenue ≤ $5.0 million; 4% on the net revenue over $5.0 million and up to $7.0 million; 5% on net revenue over $7.0 million

Schedule of Repurchase Price Reduction

The Fourth Amendment also granted the Company the ability to repurchase the principal amount and accrued and unpaid interest of the Baker Notes for up to a five-year period for the one-time Repurchase Price designated below:

Date of Notes’ Repurchase	Repurchase Price
On or prior to September 8, 2024	$14,000,000 (less Applicable Reductions)
September 9, 2024-September 8, 2025	$16,750,000 (less Applicable Reductions)
September 9, 2025-September 8, 2026	$19,500,000 (less Applicable Reductions)
September 9, 2026-September 8, 2027	$22,250,000 (less Applicable Reductions)
September 9, 2027-September 8, 2028	$25,000,000 (less Applicable Reductions)

Schedule of Interest Expense

Interest expense for the Adjuvant Notes consists of the following, and is included in other expense, net on the condensed consolidated statements of operations for the three and nine months ended September 30, 2024 and 2023 (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Coupon interest	$	556	$	516	$	1,637	$	1,520
Amortization of issuance costs		-		51		28		179
Total	$	556	$	567	$	1,665	$	1,699

Schedule of SSNs and Warrants

Summary of SSNs and Warrants at Issuance (December 2022 to September 2023):

										Conversion Price
Notes	Principal At Issuance (in Thousands)		Net Proceeds Before Issuance Costs (in Thousands)		Common Warrants		Preferred Shares		Maturity Date	At Issuance		At 9/30/2023		At 12/31/2023		At 3/31/2024		At 6/30/2024		At 9/30/2024
December 2022 Notes	$	2,308	$	1,500		369,230		70 - Series D	12/21/2025	$	6.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
February 2023 Notes(1)		1,385		900		653,538		-	2/17/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
March 2023 Notes		600		390		240,000		-	3/17/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
March 2023 Notes(2)		538		350		258,584		-	3/20/2026	$	2.50	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
April 2023 Notes		769		500		615,384		-	3/6/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
July 2023 Notes		1,500		975		1,200,000		-	3/6/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
August 2023 Notes		1,000		650		799,999		-	8/4/2026	$	1.25	$	0.0845	$	0.0615	$	0.0158	$	0.0154	$	0.0154
September 2023 Notes(3)		2,885		1,875		26,997,041		-	9/26/2026	$	0.13	$	0.13	$	0.0615	$	0.0158	$	0.0154	$	0.0154
Total Offerings	$	10,985	$	7,140		31,133,776

(1)	Warrants include 99,692 issued to the placement agent.
(2)	Warrants include 43,200 issued to the placement agent.
(3)	Warrants include 22,189,349 common warrants at $0.13 per share and 4,807,692 pre-funded warrants exercisable at $0.001 per share.

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Balance Sheet Details (Tables)

9 Months Ended

Sep. 30, 2024

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Schedule of Inventories

Inventories consist of the following (in thousands) for the period indicated:

	September 30, 2024		December 31, 2023
Raw materials (1)	$	423	$	520
Work in process		863		386
Finished goods (1)(2)		177		791
Total	$	1,463	$	1,697

(1)

The raw materials and finished goods balances include a combined estimated reserve on obsolescence and excess inventory which might not be sold prior to its expiration of $0.3 million as of both September 30, 2024 and December 31, 2023. These estimates are based upon assumptions about future manufacturing needs and gross sales of Phexxi. Inventory associated with the additional write-down of $1.3 million recorded during the year ended December 31, 2023, was disposed and no longer in the inventory balance as of December 31, 2023.

(2)

The finished goods balance as of September 30, 2024 includes an immaterial amount of SOLOSEC finished goods inventory. No such inventory existed at December 31, 2023. None of the reserve on obsolescence and excess inventory was related to SOLOSEC product.

Schedule of Prepaid and Other Current Assets

Prepaid and other current assets consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Insurance	$	627	$	777
Research & development		23		13
Short-term deposits		202		76
Other		147		329
Total	$	999	$	1,195

Schedule of Property and Equipment Net

Property and equipment, net, consists of the following (in thousands):

	Useful Life		September 30, 2024			December 31, 2023
Research equipment		5 years	$	585		$	586
Computer equipment and software		3 years		145			647
Construction in-process		-		1,146			1,156
				1,876			2,389
Less: accumulated depreciation				(695	)		(1,186	)
Total, net			$	1,181		$	1,203

Schedule of Intangible Assets, Net

	Useful Life	September 30, 2024			December 31, 2023
Intellectual property	11 years	$	14,322		$	-
Less: accumulated amortization			(301	)		-
Total, net		$	14,021		$	-

Schedule of Accrued Expenses

Accrued expenses consist of the following (in thousands):

	September 30, 2024		December 31, 2023
Clinical trial related costs	$	2,498	$	2,498
Accrued royalty		1,723		1,146
Other		903		583
Total	$	5,124	$	4,227

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Fair Value of Financial Instruments (Tables)

9 Months Ended

Sep. 30, 2024

Short-Term Debt [Line Items]

Schedule of Fair Value of Financial Liabilities

The following tables summarize the Company’s derivative liabilities as of September 30, 2024 and December 31, 2023 as discussed in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (in thousands):

	Fair Value
	September 30, 2024		December 31, 2023		Leveling
Purchase rights	$	162	$	1,926		Level 3
Total derivative liabilities	$	162	$	1,926

Schedule of Change in Fair Value of Level 3 Financial Liabilities

The following table summarizes the changes in Level 3 financial liabilities related to Baker Notes and SSNs measured at fair value on a recurring basis for the three and nine months ended September 30, 2024 (in thousands):

	Baker Notes (Assigned to Future Pak; Note 4)			Total SSNs (Note 4)			Total
Balance at June 30, 2024	$	12,280		$	959		$	13,239
Balance at issuance		12,280			-			12,280
Extinguishment/conversion		(12,280	)		-			(12,280	)
Payments		(125	)		-			(125	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		1,721			(652	)		1,069
Balance at September 30, 2024	$	13,876		$	307		$	14,183

	Baker Notes (Assigned to Future Pak; Note 4)			Total SSNs (Note 4)			Total
Balance at December 31, 2023	$	13,510		$	1,221		$	14,731
Balance at issuance		24,670			-			24,670
Extinguishment/conversion		(25,790	)		(51	)		(25,841	)
Payments		(378	)		-			(378	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		1,864			(863	)		1,001
Balance at September 30, 2024	$	13,876		$	307		$	14,183

The following table summarizes the changes in Level 3 financial liabilities related to Baker Notes and SSNs measured at fair value on a recurring basis for the three and nine months ended September 30, 2023 (in thousands):

	Baker Notes			Total SSNs (Note 4)		Total
Balance at June 30, 2023	$	15,600		$	-	$	15,600
Balance at issuance		13,450			208		13,658
Debt repayment		(1,000	)		-		(1,000	)
Extinguishment		(15,600	)		-		(15,600	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		-			452		452
Balance at September 30, 2023	$	12,450		$	660	$	13,110

	Baker Notes			Total SSNs (Note 4)		Total
Balance at December 31, 2022	$	39,260		$	156	$	39,416
Balance at issuance		13,450			220		13,670
Debt repayment		(1,000	)		-		(1,000	)
Extinguishment		(13,450	)		-		(15,600	)
Change in fair value presented in the condensed consolidated statements of comprehensive income (loss)		(23,660	)		284		(23,376	)
Balance at September 30, 2023	$	12,450		$	660	$	13,110

The following table summarizes the changes in Level 3 financial liabilities related to derivative liabilities measured at fair value on a recurring basis for the three and nine months ended September 30, 2024 (in thousands):

	Purchase Rights			Derivative Liabilities Total
Balance at June 30, 2024	$	942		$	942
Exercises		(11	)		(11	)
Change in fair value presented in the condensed consolidated statements of operations		(769	)		(769	)
Balance at September 30, 2024	$	162		$	162

	Purchase Rights			Derivative Liabilities Total
Balance at December 31, 2023	$	1,926		$	1,926
Balance at issuance		3,300			3,300
Exercises		(168	)		(168	)
Change in fair value presented in the condensed consolidated statements of operations		(4,896	)		(4,896	)
Balance at September 30, 2024	$	162		$	162

The following tables summarize the changes in Level 3 financial liabilities related to derivative liabilities measured at fair value on a recurring basis for the nine months ended September 30, 2023 (in thousands). There was no such activity for the three months ended September 30, 2023.

	April and June 2020 Baker Warrants			May 2022 Public Offering Common Warrants			June 2022 Baker Warrants			December 2022 Warrants			February and March 2023 Warrants			Purchase Rights			Derivative Liabilities Total
Balance at December 31, 2022	$	1		$	303		$	170		$	107		$	-		$	1,095		$	1,676
Balance at issuance		-			-			-			-			6			105			111
Exercises		-			(7	)		-			-			-			(186	)		(193	)
Change in fair value presented in the condensed consolidated statements of operations		(1	)		(295	)		(169	)		(107	)		(6	)		(961	)		(1,539	)
Reclassified to equity		-			(1	)		(1	)		-			-			(53	)		(55	)
Balance at September 30, 2023	$	-		$	-		$	-		$	-		$	-		$	-		$	-

Convertible Debt [Member]

Short-Term Debt [Line Items]

Schedule of Fair Value of Financial Liabilities

The following tables summarize the Company’s convertible debt instruments as of September 30, 2024 and December 31, 2023, respectively (in thousands):

									Fair Value
As of September 30, 2024	Principal Amount		Unamortized Issuance Costs		Accrued Interest		Net Carrying Amount		Amount		Leveling
Baker Notes(1)(2)	$	106,869	$	-	$	-	$	106,869	$	13,876	Level 3
Adjuvant Notes(3)		22,500		-		7,702		30,202		N/A	N/A
December 2022 Notes(1)		953		-		-		953		31	Level 3
February 2023 Notes (1)		961		-		-		961		31	Level 3
March 2023 Notes (1)		1,185		-		-		1,185		38	Level 3
April 2023 Notes (1)		866		-		-		866		28	Level 3
July 2023 Notes (1)		1,296		-		-		1,296		42	Level 3
August 2023 Notes (1)		1,097		-		-		1,097		36	Level 3
September 2023 Notes (1)		3,126		-		-		3,126		101	Level 3
Totals	$	138,853	$	-	$	7,702	$	146,555	$	14,183	N/A

										Fair Value
As of December 31, 2023	Principal Amount		Unamortized Issuance Costs			Accrued Interest		Net Carrying Amount		Amount		Leveling
Baker Notes(1)(2)	$	99,460	$	-		$	-	$	99,460	$	13,510	Level 3
Adjuvant Notes(3)		22,500		(27	)		6,064		28,537		N/A	N/A
December 2022 Notes(1)		940		-			-		940		118	Level 3
February 2023 Notes (1)		905		-			-		905		118	Level 3
March 2023 Notes (1)		1,204		-			-		1,204		157	Level 3
April 2023 Notes (1)		816		-			-		816		106	Level 3
July 2023 Notes (1)		1,534		-			-		1,534		202	Level 3
August 2023 Notes (1)		1,033		-			-		1,033		136	Level 3
September 2023 Notes (1)		2,945		-			-		2,945		384	Level 3
Totals	$	131,337	$	(27	)	$	6,064	$	137,374	$	14,731	N/A

(1) These liabilities are/were carried at fair value in the condensed consolidated balance sheets. As such, the principal and accrued interest was included in the determination of fair value. The related debt issuance costs were expensed.

(2) The Baker Notes principal amount includes $22.2 million and $13.7 million of interest paid in-kind as of September 30, 2024, and December 31, 2023, respectively.

(3) The Adjuvant Notes are recorded in the condensed consolidated balance sheets at their net carrying amount which includes principal and accrued interest, net of unamortized issuance costs.

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Commitments and Contingencies (Tables)

9 Months Ended

Sep. 30, 2024

Commitments and Contingencies Disclosure [Abstract]

Schedule of Lease Cost

		Three Months Ended September 30,				Nine Months Ended September 30,
Lease Cost (in thousands)	Classification	2024		2023		2024		2023
Operating lease expense	Research and development	$	-	$	1	$	2	$	126
Operating lease expense	Selling and marketing		40		55		135		302
Operating lease expense	General and administrative		3		2		8		336
Total		$	43	$	58	$	145	$	764

Schedule of Lease Term and Discount Rate

Lease Term and Discount Rate	September 30, 2024			December 31, 2023
Weighted Average Remaining Lease Term (in years)		0.97			0.75
Weighted Average Discount Rate		12	%		12	%

Schedule of Operating Lease Maturities

Maturity of Operating Lease Liabilities (in thousands)	September 30, 2024
Remainder of 2024 (3 months)	$	39
Year ending December 31, 2025		86
Year ending December 31, 2026		8
Total lease payments		133
Less imputed interest		(7	)
Total	$	126

Schedule of Supplement Cash Outflows in Operating Leases

	Nine Months Ended September 30,
Other information (in thousands)	2024		2023
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash outflows in operating leases	$	218	$	1,470

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Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (Tables)

9 Months Ended

Sep. 30, 2024

Equity [Abstract]

Schedule of Warrants

Type of Warrants	Underlying common stock to be Purchased		Exercise Price		Issue Date	Exercise Period
Common Warrants		451	$	14,062.50	May 24, 2018	May 24, 2018 to May 24 2025
Common Warrants		888	$	11,962.50	April 11, 2019	October 11, 2019 to April 11, 2026
Common Warrants		1,480	$	11,962.50	June 10, 2019	December 10, 2019 to June 10, 2026
Common Warrants		1,639	$	0.0154	April 24, 2020	April 24, 2020 to April 24, 2025
Common Warrants		1,092	$	0.0154	June 9, 2020	June 9, 2020 to June 9, 2025
Common Warrants		8,003	$	735.00	January 13, 2022	March 1, 2022 to March 1, 2027
Common Warrants		8,303	$	897.56	March 1, 2022	March 1, 2022 to March 1, 2027
Common Warrants		6,666	$	309.56	May 4, 2022	May 4, 2022 to May 4, 2027
Common Warrants		894,194	$	0.0154	May 24, 2022	May 24, 2022 to May 24, 2027
Common Warrants		582,886	$	0.0154	June 28, 2022	May 24, 2022 to June 28, 2027
Common Warrants		49,227	$	0.0154	December 21, 2022	December 21, 2022 to December 21, 2027
Common Warrants		130,461	$	0.0154	February 17, 2023	February 17, 2023 to February 17, 2028
Common Warrants		258,584	$	0.0154	March 20, 2023	March 20, 2023 to March 20, 2028
Common Warrants		369,231	$	0.0154	April 5, 2023	April 5, 2023 to April 5, 2028
Common Warrants		349,463	$	0.0154	July 3, 2023	July 3, 2023 to July 3, 2028
Common Warrants		615,384	$	0.0154	August 4, 2023	August 4, 2023 to August 4, 2028
Common Warrants		12,721,893	$	0.0154	September 27, 2023	September 27, 2023 to September 27, 2028
Prefunded Common Warrants		4,807,694	$	0.0010	September 27, 2023	September 27, 2023 to September 27, 2028
Total		20,807,539

Summary of Common Stock Reserved for Future Issuance

Common stock reserved for future issuance is as follows in common equivalent shares as of September 30, 2024:

Common stock issuable upon the exercise of stock options outstanding	3,747
Common stock issuable upon the exercise of common stock warrants	10,598,201
Common stock available for future issuance under the 2019 ESPP	509
Common stock available for future issuance under the Amended and Restated 2014 Plan	5,789
Common stock available for future issuance under the Amended Inducement Plan	609
Common stock reserved for the exercise of purchase rights	741,490,642
Common stock reserved for the conversion of convertible notes	158,598,174
Common stock reserved for the conversion of series E-1 preferred stock	40,991,761
Total common stock reserved for future issuance (1)	951,689,432

(1) The potentially dilutive securities in Note 2 – Summary of Significant Accounting Policies includes all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in the table above includes the shares that must legally be reserved based on the applicable instruments’ agreements.

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Stock-based Compensation (Tables)

9 Months Ended

Sep. 30, 2024

Share-Based Payment Arrangement [Abstract]

Schedule of Stock-based Compensation Expense Related to Stock Options

The following table summarizes stock-based compensation expense related to stock options granted to employees, non-employee directors and consultants included in the condensed consolidated statements of operations as follows (in thousands):

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
Research and development	$	5	$	30	$	31	$	99
Selling and marketing		18		42		77		146
General and administrative		180		186		551		698
Total	$	203	$	258	$	659	$	943

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Description of Business and Basis of Presentation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Dec. 31, 2022	Nov. 10, 2024	Aug. 28, 2024	Oct. 03, 2022
Product Information [Line Items]
Revenue from product sales	$ 4,496	$ 5,112	$ 12,259	$ 13,379
Working capital deficit	67,700		67,700
Accumulated deficit	$ 894,621		$ 894,621		$ 888,699
Share price								$ 0.01	$ 0.01
Subsequent Event [Member]
Product Information [Line Items]
Share price							$ 0.0116
Phexxi [Member]
Product Information [Line Items]
Revenue from product sales					$ 18,200	$ 16,800

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Schedule of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share (Details) - shares	3 Months Ended	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2024
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	5,786,905,201	5,786,905,201
Share-Based Payment Arrangement, Option [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	3,747	3,747
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	20,807,539	20,807,539
Rights [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,529,448,899	1,529,448,899
Convertible Debt Securities [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	2,577,050,313	2,577,050,313
Series E-1 and F-1 Preferred Stock [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Total	1,659,594,703	1,659,594,703

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Schedule of Weighed Average Common Shares Outstanding for Diluted Net Loss Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Net income attributable to common stockholders	$ (2,370)	$ 66,005	$ (5,922)	$ 55,093
Change in fair value of purchase rights		4,904		5,008
Noncash interest expense on convertible debt, net of tax		361		1,064
Net loss attributable to common stockholders		$ 71,270		$ 61,165
Weighted average shares used to compute net loss attributable to common stockholder, basic	96,459,121	4,236,477	64,924,454	2,524,302
Weighted average shares used to compute net loss attributable to common stockholder, diluted		731,128,443		694,561,899
Net loss per share attributable to common stockholders, diluted	$ (0.02)	$ 0.10	$ (0.09)	$ 0.09
Convertible Debt [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Pro forma adjustments		402,509,558		376,225,027
Warrant [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Pro forma adjustments		311,456,630		311,456,630
Series E-1 Convertible Preferred Shares [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Pro forma adjustments		12,925,778		4,355,940

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Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Millions	3 Months Ended		9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Product Information [Line Items]
Proceeds from issuancde of notes			$ 25.0
Down round feature, decrease in net income (loss) to common shareholder, amount	$ 0.1		0.1
Building and Building Improvements [Member]
Product Information [Line Items]
Letters of credit		$ 0.3		$ 0.3
Building and Building Improvements [Member] | Letter of Credit [Member]
Product Information [Line Items]
Letter of credit, breach of contract			$ 0.8
Revenue Benchmark [Member] | Three Largest Customers Combined [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage	80.00%	86.00%	79.00%	85.00%
Accounts Receivable [Member] | Three Largest Customers Combined [Member] | Customer Concentration Risk [Member]
Product Information [Line Items]
Concentration risk percentage			90.00%		87.00%

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Revenue (Details Narrative) - USD ($) $ in Millions	Sep. 30, 2024	Dec. 31, 2023
Revenue from Contract with Customer [Abstract]
Trade accounts receivable	$ 0.2	$ 0.3
Other liabilities, current	$ 4.5	$ 3.2

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Schedule of Cash payments Determined based Upon the Quarterly Global Net Revenue (Details)	1 Months Ended
	Sep. 30, 2023
Quarterly Global Net Revenue One [Member]
Short-Term Debt [Line Items]
Quarterly cash payment	3% of such global net revenues
Quarterly Global Net Revenue Two [Member]
Short-Term Debt [Line Items]
Quarterly cash payment	3% on net revenue ≤ $5.0 million
Quarterly Global Net Revenue Three [Member]
Short-Term Debt [Line Items]
Quarterly cash payment	3% on the net revenue ≤ $5.0 million

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Schedule of Repurchase Price Reduction (Details) - Baker Notes [Member]	Sep. 08, 2023 USD ($)
Prior To September 8, 2024 [Member]
Debt Instrument [Line Items]
Debt instrument, repurchase amount	$ 14,000,000
September 9, 2024 - September 8, 2025 [Member]
Debt Instrument [Line Items]
Debt instrument, repurchase amount	16,750,000
September 9, 2025 - September 8, 2026 [Member]
Debt Instrument [Line Items]
Debt instrument, repurchase amount	19,500,000
September 9, 2026 - September 8, 2027 [Member]
Debt Instrument [Line Items]
Debt instrument, repurchase amount	22,250,000
September 9, 2027 - September 8, 2028 [Member]
Debt Instrument [Line Items]
Debt instrument, repurchase amount	$ 25,000,000

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Schedule of Interest Expense (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Debt Disclosure [Abstract]
Coupon interest	$ 556	$ 516	$ 1,637	$ 1,520
Amortization of issuance costs		51	28	179
Total	$ 556	$ 567	$ 1,665	$ 1,699

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Schedule of SSNs and Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands		9 Months Ended
		Sep. 30, 2024		Jun. 30, 2024		Mar. 31, 2024		Dec. 31, 2023		Sep. 30, 2023		Dec. 31, 2022
Short-Term Debt [Line Items]
Preferred Shares		0						0
December 2022 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance		$ 2,308
Net Proceeds Before Issuance Costs		$ 1,500
Common Warrants		369,230
Preferred Shares		70
Maturity Date		Dec. 21, 2025
Conversion price		$ 0.0154		$ 0.0154		$ 0.0158		$ 0.0615		$ 0.0845		$ 6.25
February 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance	[1]	$ 1,385
Net Proceeds Before Issuance Costs	[1]	$ 900
Common Warrants	[1]	653,538
Maturity Date	[1]	Feb. 17, 2026
Conversion price	[1]	$ 0.0154		0.0154		0.0158		0.0615		0.0845		2.50
March 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance		$ 600
Net Proceeds Before Issuance Costs		$ 390
Common Warrants		240,000
Maturity Date		Mar. 17, 2026
Conversion price		$ 0.0154		0.0154		0.0158		0.0615		0.0845		2.50
March Two 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance	[2]	$ 538
Net Proceeds Before Issuance Costs	[2]	$ 350
Common Warrants	[2]	258,584
Maturity Date	[2]	Mar. 20, 2026
Conversion price	[2]	$ 0.0154		0.0154		0.0158		0.0615		0.0845		2.50
April 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance		$ 769
Net Proceeds Before Issuance Costs		$ 500
Common Warrants		615,384
Maturity Date		Mar. 06, 2026
Conversion price		$ 0.0154		0.0154		0.0158		0.0615		0.0845		1.25
July 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance		$ 1,500
Net Proceeds Before Issuance Costs		$ 975
Common Warrants		1,200,000
Maturity Date		Mar. 06, 2026
Conversion price		$ 0.0154		0.0154		0.0158		0.0615		0.0845		1.25
August 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance		$ 1,000
Net Proceeds Before Issuance Costs		$ 650
Common Warrants		799,999
Maturity Date		Aug. 04, 2026
Conversion price		$ 0.0154	[2]	0.0154		0.0158		0.0615		0.0845		1.25
September 2023 Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance	[3]	$ 2,885
Net Proceeds Before Issuance Costs	[3]	$ 1,875
Common Warrants	[3]	26,997,041
Maturity Date	[3]	Sep. 26, 2026
Conversion price		$ 0.0154	[3]	$ 0.0154	[3]	$ 0.0158	[3]	$ 0.0615	[3]	$ 0.13	[3]	$ 0.13
Senior Subordinated Notes [Member]
Short-Term Debt [Line Items]
Principal At Issuance		$ 10,985
Net Proceeds Before Issuance Costs		$ 7,140
Common Warrants		31,133,776

[1] Warrants include 99,692 issued to the placement agent.

[2] Warrants include 43,200 issued to the placement agent.

[3] Warrants include 22,189,349 common warrants at $0.13 per share and 4,807,692 pre-funded warrants exercisable at $0.001 per share.

XML

Schedule of SSNs and Warrants (Details) (Parenthetical) - $ / shares	Sep. 30, 2024	Sep. 30, 2023	Mar. 31, 2023	Feb. 28, 2023	May 31, 2022
Short-Term Debt [Line Items]
Warrants					894,194
Warrants exercise price	$ 2.42
Placement Agent [Member] | December Two Thousand Twenty Two To September Two Thousand Twenty Three [Member]
Short-Term Debt [Line Items]
Number of shares to purchase capital stock			43,200	99,692
Placement Agent [Member] | December Two Thousand Twenty Two To September Two Thousand Twenty Three [Member] | Series A Preferred Stock [Member]
Short-Term Debt [Line Items]
Warrants		22,189,349
Warrants exercise price		$ 0.13
Placement Agent [Member] | December Two Thousand Twenty Two To September Two Thousand Twenty Three [Member] | Series B Preferred Stock [Member]
Short-Term Debt [Line Items]
Warrants		4,807,692
Warrants exercise price		$ 0.001

XML

Debt (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands															1 Months Ended	3 Months Ended		9 Months Ended		12 Months Ended
	Nov. 08, 2024	Jul. 23, 2024	Oct. 01, 2023	Sep. 08, 2023	Aug. 07, 2023	Mar. 07, 2023	Dec. 19, 2022	Sep. 15, 2022	Apr. 04, 2022	Mar. 21, 2022	Nov. 20, 2021	Oct. 14, 2020	Jun. 09, 2020	Apr. 24, 2020	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023	Oct. 02, 2024	Sep. 08, 2024	Jun. 30, 2024	Feb. 26, 2024	Dec. 21, 2023	Jun. 30, 2023	Dec. 31, 2022	Sep. 30, 2022	Jun. 30, 2022	May 31, 2022	Apr. 23, 2020
Debt Instrument [Line Items]
Warrant exercise price per share																$ 2.42		$ 2.42
Interest expense																		$ 1,673	$ 1,702
Proceeds from issuance of sale of equity											$ 50,000
Debt covenant, cumulative net sales requirement																										$ 100,000
Exercise price																$ 0.0154		$ 0.0154
Debt instrument periodic payment						$ 92,700
Cumulative net sales				$ 100,000
Accrued interest percentage				10.00%
Interest revenue expenses net			$ 1,000												$ 1,000
Interest amount			$ 500
Gain on extinguishment of debt																$ (143)	$ 75,337	$ 977	75,337	$ 75,300
Revalued amount extinguishment of debt amount																				$ 73,200
Comprehensive income net of tax																(3,291)	(7,637)	(6,681)	5,279
Extinguishment of debt amount																143	73,187
Repayments of Debt																$ 100		$ 400
Common stock, par value																$ 0.0001		$ 0.0001		$ 0.0001							$ 0.0001
Conversion shares																		615,861,541
Redemption premium percentage					25.00%
Warrants to purchase up																														894,194
Finance Agreement [Member]
Debt Instrument [Line Items]
Principal amount																							$ 400
Interest rate																							8.57%
Series F-1 Shares [Member]
Debt Instrument [Line Items]
Warrants outstanding																23,540		23,540		22,280					22,280
Common Stock [Member]
Debt Instrument [Line Items]
Extinguishment of debt amount
Warrants to purchase up																									9,972,074
Conversion of redeemable preferred stock, shares																									613
Minimum [Member] | Common Stock [Member]
Debt Instrument [Line Items]
Warrant exercise price per share																$ 0.13		$ 0.13
Maximum [Member] | Common Stock [Member]
Debt Instrument [Line Items]
Warrant exercise price per share																1.25		1.25
Subsequent Event [Member]
Debt Instrument [Line Items]
Description of debt notice of default	the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment
Subsequent Event [Member] | Common Stock [Member]
Debt Instrument [Line Items]
Conversion of redeemable preferred stock, shares																					9,549,716
June 2022 Baker Warrants [Member]
Debt Instrument [Line Items]
Warrants purchase											582,886
Warrant exercise price per share											$ 93.75
Baker Warrants [Member]
Debt Instrument [Line Items]
Warrant exercise price per share																$ 0.0154		$ 0.0154
Baker Bros. Notes [Member]
Debt Instrument [Line Items]
Warrants term													5 years
Debt instrument, term								2 years
Debt instrument conversion price per share											$ 4,575
Conversion price as a percentage of lowest stock price											115.00%
Conversion price threshold percentage										100.00%
Convertible note payable		$ 12,300		$ 12,500												$ 14,183		$ 14,183		$ 14,731		$ 14,000		$ 13,500
Comprehensive income net of tax		100
Extinguishment of debt amount		$ 100
Interest Payable																106,900		106,900
Baker Bros. Notes [Member] | Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Principal amount																															$ 25,000
Debt instrument, term														5 years
Debt instrument conversion rate														10.00%
Debt instrument interest rate effective percent														10.00%
Interest expense																2,700	$ 2,400	7,800	$ 6,200
Written notice period														10 days
Debt instrument, benchmark price per share														$ 9,356.25
Debt instrument conversion price per share														$ 4,575
Baker Bros. Notes [Member] | Convertible Notes Payable [Member] | Debt Instrument, Redemption, Period Two [Member]
Debt Instrument [Line Items]
Debt instrument, redemption price, percentage														100.00%
Baker Bros. Notes [Member] | Convertible Notes Payable [Member] | Debt Instrument, Redemption, Period One [Member]
Debt Instrument [Line Items]
Debt instrument, redemption price, percentage														110.00%
Baker Bros. Notes [Member] | Baker Second Closing Notes [Member]
Debt Instrument [Line Items]
Principal amount													$ 25,000
Warrants purchase													2,731
Warrant exercise price per share													$ 4,575
Second Baker Amendment [Member]
Debt Instrument [Line Items]
Debt instrument conversion price per share										$ 725.81
Debt covenant, cumulative net sales requirement																										100,000
Conversion price threshold percentage										100.00%
Proceeds from issuance of common stock										$ 20,000
Second Baker Amendment [Member] | Baker Warrants [Member]
Debt Instrument [Line Items]
Warrant exercise price per share																												$ 93.75
Third Baker Amendment [Member]
Debt Instrument [Line Items]
Debt instrument conversion price per share								$ 26.25
Secured Creditor Forbearance Agreement [Member]
Debt Instrument [Line Items]
Debt instrument indebtedness amount							$ 5,000
Old Baker Notes [Member]
Debt Instrument [Line Items]
Notes payable fair value																				15,600
Accumulated other comprehensive income																				73,200
Short Term Convertible Notes [Member]
Debt Instrument [Line Items]
Convertible note payable																$ 13,900		$ 13,900
Interest Payable																				99,500
Convertible debt																				13,500
Adjuvant Notes [Member]
Debt Instrument [Line Items]
Debt instrument interest rate effective percent																7.50%		7.50%
Debt instrument conversion price per share									$ 678.49							$ 0.0154		$ 0.0154
Conversion price as a percentage of lowest stock price									100.00%
Convertible note payable																$ 30,202		$ 30,202		28,537
Conversion shares																		1,961,188,772
Restricted cash																25,000		$ 25,000
Adjuvant Notes [Member] | Convertible Notes Payable [Member]
Debt Instrument [Line Items]
Principal amount												$ 25,000
Debt instrument, term												5 years
Debt instrument conversion rate																		7.50%
Debt instrument conversion price per share								$ 26.25				$ 6,843.75
Debt covenant, cumulative net sales requirement																										$ 100,000			$ 100,000
Convertible debt																30,200		$ 30,200		28,500
Common stock, par value												0.0001
Debt instrument weighted average price per share									$ 18,750			$ 18,750
Debt instrument weighted average period									30 days
Debt instrument convertible exchange percentage								10.00%
Debt conversion converted instrument amount								$ 2,900
Shares issuable upon debt conversion								109,842
Convertible debt, current principal amount																22,500		22,500		22,500
Convertible debt, current, accrued interest																$ 7,700		$ 7,700		$ 6,100
Adjuvant Notes [Member] | Convertible Notes Payable [Member] | Minimum [Member]
Debt Instrument [Line Items]
Beneficial ownership limitation percentage					4.99%							4.99%
Adjuvant Notes [Member] | Convertible Notes Payable [Member] | Maximum [Member]
Debt Instrument [Line Items]
Beneficial ownership limitation percentage					9.99%							19.99%
8.0% Senior Subordinated Notes Due 2025 Issued December 2022 [Member]
Debt Instrument [Line Items]
Redemption premium percentage																											32.50%
8.0% Senior Subordinated Notes Due 2025 Issued December 2022 [Member] | Unsecured Debt [Member]
Debt Instrument [Line Items]
Interest rate																											8.00%
Interest rate increase																											12.00%

XML

Schedule of Inventories (Details) - USD ($) $ in Thousands		Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Raw materials	[1]	$ 423	$ 520
Work in process		863	386
Finished goods	[1],[2]	177	791
Total		$ 1,463	$ 1,697

[1] The raw materials and finished goods balances include a combined estimated reserve on obsolescence and excess inventory which might not be sold prior to its expiration of $0.3 million as of both September 30, 2024 and December 31, 2023. These estimates are based upon assumptions about future manufacturing needs and gross sales of Phexxi. Inventory associated with the additional write-down of $1.3 million recorded during the year ended December 31, 2023, was disposed and no longer in the inventory balance as of December 31, 2023.

[2] The finished goods balance as of September 30, 2024 includes an immaterial amount of SOLOSEC finished goods inventory. No such inventory existed at December 31, 2023. None of the reserve on obsolescence and excess inventory was related to SOLOSEC product.

XML

Schedule of Inventories (Details) (Parenthetical) - USD ($) $ in Thousands	9 Months Ended		12 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Inventory adjustments	$ 300		$ 300
Inventory write-down		$ 1,505	$ 1,300

XML

Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Insurance	$ 627	$ 777
Research & development	23	13
Short-term deposits	202	76
Other	147	329
Total	$ 999	$ 1,195

XML

Schedule of Property and Equipment Net (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 1,876	$ 2,389
Less: accumulated depreciation	(695)	(1,186)
Total, net	1,181	1,203
Equipment [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 585	586
Useful Life	5 years
Computer Equipment and Software [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 145	647
Useful Life	3 years
Construction in Progress [Member]
Property, Plant and Equipment [Line Items]
Property and equipment gross	$ 1,146	$ 1,156

XML

Schedule of Intangible Assets, Net (Details) - USD ($) $ in Thousands	Dec. 31, 2024	Sep. 30, 2024	Dec. 31, 2023
Finite-Lived Intangible Assets [Line Items]
Intellectual Property useful life		11 years
Less: accumulated amortization		$ (301)
Total, net		14,021
Intellectual Property [Member]
Finite-Lived Intangible Assets [Line Items]
Intellectual property		$ 14,322
Intellectual Property useful life		11 years

XML

Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands	Sep. 30, 2024	Dec. 31, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Clinical trial related costs	$ 2,498	$ 2,498
Accrued royalty	1,723	1,146
Other	903	583
Total	$ 5,124	$ 4,227

XML

Balance Sheet Details (Details Narrative) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Depreciation expense		$ 500	$ 25	$ 455
Amortization expense	$ 301		301
Finite-lived intangible asset, expected amortization, three months ending December 31, 2024	300		300
Finite-lived intangible asset, expected amortization, December 31, 2025	1,300		1,300
Finite-lived intangible asset, expected amortization, December 31, 2026	1,300		1,300
Finite-lived intangible asset, expected amortization, December 31, 2027	1,300		1,300
Finite-lived intangible asset, expected amortization, December 31, 2028	1,300		1,300
Finite-lived intangible asset, expected amortization, Thereafter	$ 1,300		$ 1,300

XML

Schedule of Fair Value of Financial Liabilities (Details) - USD ($) $ in Thousands		Sep. 30, 2024	Dec. 31, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities		$ 162	$ 1,926
Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Derivative liabilities		162	1,926
Convertible Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount		138,853	131,337
Unamortized Issuance Costs			(27)
Accrued Interest		7,702	6,064
Net Carrying Amount		146,555	137,374
Fair Value Amount		14,183	14,731
Baker Bros. Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[1],[2]	106,869	99,460
Unamortized Issuance Costs	[1],[2]
Accrued Interest	[1],[2]
Net Carrying Amount	[1],[2]	106,869	99,460
Fair Value Amount	[1],[2]	13,876	13,510
Adjuvant Notes [Member] | Convertible Debt [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[3]	22,500
Unamortized Issuance Costs	[3]		(27)
Accrued Interest	[3]	7,702	6,064
Fair Value Amount	[3]		22,500
Adjuvant Notes [Member] | Convertible Debt [Member] | Reported Value Measurement [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Net Carrying Amount	[3]	30,202	28,537
December 2022 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount		2,308
December 2022 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	953	940
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	953	940
Fair Value Amount	[2]	31	118
February 2023 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[4]	1,385
February 2023 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	961	905
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	961	905
Fair Value Amount	[2]	31	118
March 2023 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount		600
March 2023 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	1,185	1,204
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	1,185	1,204
Fair Value Amount	[2]	38	157
April 2023 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount		769
April 2023 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	866	816
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	866	816
Fair Value Amount	[2]	28	106
July 2023 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount		1,500
July 2023 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	1,296	1,534
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	1,296	1,534
Fair Value Amount	[2]	42	202
August 2023 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount		1,000
August 2023 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	1,097	1,033
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	1,097	1,033
Fair Value Amount	[2]	36	136
September 2023 Notes [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[5]	2,885
September 2023 Notes [Member] | Convertible Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Principal Amount	[2]	3,126	2,945
Unamortized Issuance Costs	[2]
Accrued Interest	[2]
Net Carrying Amount	[2]	3,126	2,945
Fair Value Amount	[2]	$ 101	$ 384

[1] The Baker Notes principal amount includes $22.2 million and $13.7 million of interest paid in-kind as of September 30, 2024, and December 31, 2023, respectively.

[2] These liabilities are/were carried at fair value in the condensed consolidated balance sheets. As such, the principal and accrued interest was included in the determination of fair value. The related debt issuance costs were expensed.

[3] The Adjuvant Notes are recorded in the condensed consolidated balance sheets at their net carrying amount which includes principal and accrued interest, net of unamortized issuance costs.

[4] Warrants include 99,692 issued to the placement agent.

[5] Warrants include 22,189,349 common warrants at $0.13 per share and 4,807,692 pre-funded warrants exercisable at $0.001 per share.

XML

Schedule of Fair Value of Financial Liabilities (Details) (Parenthetical) - USD ($) $ in Millions	9 Months Ended	12 Months Ended
	Sep. 30, 2024	Dec. 31, 2023
Baker Notes [Member] | Convertible Debt [Member]
Short-Term Debt [Line Items]
Interest paid in kind	$ 22.2	$ 13.7

XML

Schedule of Change in Fair Value of Level 3 Financial Liabilities (Details) - USD ($) $ in Thousands	3 Months Ended			9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Jun. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Reclassified to equity			$ 53
Long-Term Debt [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	$ 13,239	$ 15,600		$ 14,731	$ 39,416
Balance at issuance	12,280	13,658		24,670	13,670
Extinguishment	(12,280)	(15,600)		(25,841)	(15,600)
Debt repayment	(125)	(1,000)		(378)	(1,000)
Change in fair value presented in the Condensed Consolidated Statements of Operations	1,069	452		1,001	(23,376)
Ending balance	14,183	13,110	15,600	14,183	13,110
Long-Term Debt [Member] | Baker Notes Assigned To Aditxt Notes [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	12,280	15,600		13,510	39,260
Balance at issuance	12,280	13,450		24,670	13,450
Extinguishment	(12,280)	(15,600)		(25,790)	(13,450)
Debt repayment	(125)	(1,000)		(378)	(1,000)
Change in fair value presented in the Condensed Consolidated Statements of Operations	1,721			1,864	(23,660)
Ending balance	13,876	12,450	15,600	13,876	12,450
Long-Term Debt [Member] | Total Offerings [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	959			1,221	156
Balance at issuance		208			220
Extinguishment				(51)
Debt repayment
Change in fair value presented in the Condensed Consolidated Statements of Operations	(652)	452		(863)	284
Ending balance	307	660		307	660
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	942			1,926	1,676
Balance at issuance				3,300	111
Change in fair value presented in the Condensed Consolidated Statements of Operations	(769)			(4,896)	(1,539)
Ending balance	162			162
Exercises	(11)			(168)	(193)
Reclassified to equity					(55)
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | Rights [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance	942			1,926	1,095
Balance at issuance				3,300	105
Change in fair value presented in the Condensed Consolidated Statements of Operations	(769)			(4,896)	(961)
Ending balance	162			162
Exercises	$ (11)			$ (168)	(186)
Reclassified to equity					(53)
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | Derivative Liability Convertible Preferred Stock [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance					1
Balance at issuance
Change in fair value presented in the Condensed Consolidated Statements of Operations					(1)
Ending balance
Exercises
Reclassified to equity
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | May 2022 Public Offering Warrants [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance					303
Balance at issuance
Change in fair value presented in the Condensed Consolidated Statements of Operations					(295)
Ending balance
Exercises					(7)
Reclassified to equity					(1)
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | June 2022 Baker Warrants [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance					170
Balance at issuance
Change in fair value presented in the Condensed Consolidated Statements of Operations					(169)
Ending balance
Exercises
Reclassified to equity					(1)
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | December 2022 Warrants [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance					107
Balance at issuance
Change in fair value presented in the Condensed Consolidated Statements of Operations					(107)
Ending balance
Exercises
Reclassified to equity
Derivative Financial Instruments, Liabilities [Member] | Fair Value, Inputs, Level 3 [Member] | February and March 2023 Notes [Member]
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items]
Beginning balance
Balance at issuance					6
Change in fair value presented in the Condensed Consolidated Statements of Operations					(6)
Ending balance
Exercises
Reclassified to equity

XML

Fair Value of Financial Instruments (Details Narrative) $ in Millions		3 Months Ended		9 Months Ended
	Sep. 08, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
cumulative net sales	$ 10.0
cumulative net sales	$ 100.0
Baker Bros. Notes [Member] | Measurement Input Royalty Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt instrument, measurement input		0.050		0.050
Baker Bros. Notes [Member] | Measurement Input, Discount Rate [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Debt instrument, measurement input		0.150		0.150
Senior Subordinated Notes [Member]
Fair Value Measurement Inputs and Valuation Techniques [Line Items]
Change in fair value of financial instruments		$ 0.7	$ 0.5	$ 0.9	$ 0.3

XML

Schedule of Lease Cost (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Loss Contingencies [Line Items]
Operating lease expense	$ 43	$ 58	$ 145	$ 764
Research and Development Expense [Member]
Loss Contingencies [Line Items]
Operating lease expense		1	2	126
Selling and Marketing Expense [Member]
Loss Contingencies [Line Items]
Operating lease expense	40	55	135	302
General and Administrative Expense [Member]
Loss Contingencies [Line Items]
Operating lease expense	$ 3	$ 2	$ 8	$ 336

XML

Schedule of Lease Term and Discount Rate (Details)	Sep. 30, 2024	Dec. 31, 2023
Commitments and Contingencies Disclosure [Abstract]
Weighted Average Remaining Lease Term (in years)	11 months 19 days	9 months
Weighted Average Discount Rate	12.00%	12.00%

XML

Schedule of Operating Lease Maturities (Details) $ in Thousands	Sep. 30, 2024 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Remainder of 2024 (3 months)	$ 39
Year ending December 31, 2025	86
Year ending December 31, 2026	8
Total lease payments	133
Less imputed interest	(7)
Total	$ 126

XML

Schedule of Supplement Cash Outflows in Operating Leases (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023
Commitments and Contingencies Disclosure [Abstract]
Operating cash outflows in operating leases	$ 218	$ 1,470

XML

Commitments and Contingencies (Details Narrative)					1 Months Ended		2 Months Ended	3 Months Ended		9 Months Ended
	Nov. 08, 2024	Sep. 27, 2024 USD ($)	May 27, 2022 USD ($) ft²	Jan. 01, 2021 USD ($)	Jun. 30, 2023 USD ($)	Sep. 30, 2022	Jun. 30, 2024	Sep. 30, 2024 USD ($)	Sep. 30, 2023 USD ($)	Sep. 30, 2024 USD ($) Integer	Sep. 30, 2023 USD ($)	Dec. 31, 2023 USD ($)	Mar. 20, 2023 USD ($)	Jul. 18, 2022 USD ($)	Apr. 14, 2020 USD ($) ft²	Dec. 31, 2019	Oct. 03, 2019 USD ($) ft²
Loss Contingencies [Line Items]
Intangible assets expected remaining useful life								11 years		11 years
[custom:LongTermPurchaseCommitmentExpectedAmount]										$ 3,500,000
Long-Term Purchase Commitment, Amount								$ 100,000		100,000
Remainder of 2024								200,000		200,000
December 31, 2025								1,300,000		1,300,000
December, 2026								1,900,000		1,900,000
Royalty cost								0		$ 0
Number of leased vehicles | Integer										19
Square footage | ft²															8,816		24,474
Restricted cash								722,000		$ 722,000		$ 580,000
Operating lease right-of-use assets								127,000		127,000		106,000	$ 3,300,000
Operating lease liabilities								10,000		10,000		8,000	4,200,000
Gain on termination of lease					$ 200,000						$ 466,000
Company area (in square feet) | ft²			16,637
Lease expenses			$ 100,000
Lease percentage			3.50%
Sublease gross income								300,000		300,000
Purchase obligation, purchases during the period								$ 800,000	$ 0	$ 1,000,000.0	0
Accounts payable, trade									1,500,000		1,500,000
Percentage of accounts payable trade								87.00%		87.00%
[custom:ContingentLiabilitiesCurrent-0]								$ 808,000		$ 808,000				$ 800,000
Accrued expenses								5,124,000		5,124,000		4,227,000
Rush License Agreement [Member]
Loss Contingencies [Line Items]
Royalty cost								200,000	$ 200,000	600,000	$ 400,000
Accrued expenses								$ 1,700,000		$ 1,700,000		$ 1,100,000
Rush License Agreement [Member] | Minimum [Member]
Loss Contingencies [Line Items]
Royalty cost				$ 100,000
Rush License Agreement [Member] | Maximum [Member]
Loss Contingencies [Line Items]
Royalty cost				$ 100,000
Subsequent Event [Member]
Loss Contingencies [Line Items]
Description of debt notice of default	the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment
Future Pak LLC [Member]
Loss Contingencies [Line Items]
Stock repurchase		$ 106,800,000
Letter of Credit [Member]
Loss Contingencies [Line Items]
Security deposit															$ 50,000.00		$ 800,000
Building and Building Improvements [Member] | Letter of Credit [Member]
Loss Contingencies [Line Items]
Restricted cash													$ 800,000
Lease Contract Term One [Member]
Loss Contingencies [Line Items]
Lessee, Operating Lease, Term of Contract						12 months		24 months		24 months
Lessee operating lease extended lease term						24 months	12 months
Lease Contract Term One [Member] | Vehicles [Member]
Loss Contingencies [Line Items]
Lessee, Operating Lease, Term of Contract																24 months
Lease Contract Term [Member] | Vehicles [Member]
Loss Contingencies [Line Items]
Lessee, Operating Lease, Term of Contract																36 months

XML

Schedule of Warrants (Details) - $ / shares	Sep. 27, 2023	Aug. 04, 2023	Jul. 03, 2023	Apr. 05, 2023	Mar. 20, 2023	Feb. 17, 2023	Dec. 21, 2022	Jun. 28, 2022	May 24, 2022	May 04, 2022	Mar. 01, 2022	Jan. 13, 2022	Jun. 09, 2020	Apr. 24, 2020	Jun. 10, 2019	Apr. 11, 2019	May 24, 2018	Sep. 30, 2024
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrant or right outstanding																		20,807,539
Exercise price																		$ 2.42
Common Warrants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrant or right outstanding	12,721,893	615,384	349,463	369,231	258,584	130,461	49,227	582,886	894,194	6,666	8,303	8,003	1,092	1,639	1,480	888	451
Exercise price	$ 0.0154	$ 0.0154	$ 0.0154	$ 0.0154	$ 0.0154	$ 0.0154	$ 0.0154	$ 0.0154	$ 0.0154	$ 309.56	$ 897.56	$ 735.00	$ 0.0154	$ 0.0154	$ 11,962.50	$ 11,962.50	$ 14,062.50
Warrants exercise period	September 27, 2023 to September 27, 2028	August 4, 2023 to August 4, 2028	July 3, 2023 to July 3, 2028	April 5, 2023 to April 5, 2028	March 20, 2023 to March 20, 2028	February 17, 2023 to February 17, 2028	December 21, 2022 to December 21, 2027	May 24, 2022 to June 28, 2027	May 24, 2022 to May 24, 2027	May 4, 2022 to May 4, 2027	March 1, 2022 to March 1, 2027	March 1, 2022 to March 1, 2027	June 9, 2020 to June 9, 2025	April 24, 2020 to April 24, 2025	December 10, 2019 to June 10, 2026	October 11, 2019 to April 11, 2026	May 24, 2018 to May 24 2025
Prefunded Common Warrants [Member]
Accumulated Other Comprehensive Income (Loss) [Line Items]
Class of warrant or right outstanding	4,807,694
Exercise price	$ 0.0010
Warrants exercise period	September 27, 2023 to September 27, 2028

XML

Summary of Common Stock Reserved for Future Issuance (Details)	Sep. 30, 2024 shares
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock reserved upon exercise of stock options outstanding	3,747
Common stock reserved upon exercise of common stock warrants	10,598,201
Common stock reserved for the exercise of purchase rights	741,490,642
Common stock reserved for the conversion of convertible notes	158,598,174
Common stock reserved for the conversion of series E-1 preferred stock	40,991,761
Total common stock reserved for future issuance	951,689,432	[1]
Employee Stock Purchase Plan 2019 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock available for future issuance under the Amended Inducement Plan	509
Amended and Restated 2014 Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock available for future issuance under the Amended Inducement Plan	5,789
Inducement Plan [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Common stock available for future issuance under the Amended Inducement Plan	609

[1] The potentially dilutive securities in Note 2 – Summary of Significant Accounting Policies includes all potentially dilutive securities that are not included in the diluted EPS as per U.S. GAAP, whereas the total common stock reserved for future issuance in the table above includes the shares that must legally be reserved based on the applicable instruments’ agreements.

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Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (Details Narrative) $ / shares in Units, $ in Thousands							1 Months Ended		3 Months Ended						9 Months Ended		12 Months Ended
	Nov. 14, 2024 USD ($) shares	Oct. 02, 2024 shares	Aug. 07, 2023 USD ($) $ / shares shares	Sep. 15, 2022 USD ($) $ / shares shares	Sep. 15, 2022 USD ($) $ / shares	Oct. 14, 2020 $ / shares	Nov. 14, 2024 USD ($) shares	Jun. 30, 2022 $ / shares shares	Sep. 30, 2024 USD ($) Integer $ / shares shares	Jun. 30, 2024 $ / shares shares	Mar. 31, 2024 shares	Sep. 30, 2023 USD ($) Integer shares	Jun. 30, 2023 USD ($) shares	Mar. 31, 2023 shares	Sep. 30, 2024 USD ($) Integer $ / shares shares	Sep. 30, 2023 USD ($) Integer	Dec. 31, 2023 USD ($) $ / shares shares	Nov. 10, 2024 $ / shares	Sep. 14, 2024 $ / shares	Aug. 28, 2024 $ / shares	Dec. 21, 2023 shares	Dec. 11, 2023 $ / shares shares	Sep. 14, 2023 shares	Dec. 31, 2022 $ / shares	Dec. 16, 2022 $ / shares shares	Oct. 03, 2022 $ / shares	May 31, 2022 $ / shares shares	Apr. 04, 2022 $ / shares	Dec. 15, 2021 $ / shares shares	Jun. 30, 2020 $ / shares shares	Apr. 30, 2020 $ / shares shares
Class of Warrant or Right [Line Items]
Warrants exercise price | $ / shares									$ 2.42						$ 2.42
Common stock warrant outstanding																											894,194
Common stock, par value | $ / shares									$ 0.0001						$ 0.0001		$ 0.0001							$ 0.0001
Exercise price | $ / shares																				$ 0.01						$ 0.01
Class of warrant or right, number of securities called by warrants or rights									20,807,539						20,807,539
Common stock shares																					9,972,074
Preferred stock, shares authorized									5,000,000						5,000,000		5,000,000												5,000,000
Preferred stock, par value | $ / shares									$ 0.0001						$ 0.0001		$ 0.0001												$ 0.0001
Shares authorized			2,300
Redemption premium percentage			25.00%
Adjustments to Additional Paid in Capital, Increase in Carrying Amount of Redeemable Preferred Stock | $																	$ 1,800
Share conversion price | $ / shares																			$ 0.04
Warrants to purchase									10,598,201						10,598,201
Preferred stock, shares issued									0						0		0
Adjustments to additional paid in capital other | $													$ 53
Common stock, shares authorized									3,000,000,000						3,000,000,000		3,000,000,000						3,000,000,000
Number of Equity Instruments | $												$ (5,175)			$ (3,300)	$ (5,286)
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount									5,786,905,201						5,786,905,201
Rights [Member]
Class of Warrant or Right [Line Items]
Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount									1,529,448,899						1,529,448,899
Subsequent Event [Member]
Class of Warrant or Right [Line Items]
Exercise price | $ / shares																		$ 0.0116
Adjuvant Notes [Member]
Class of Warrant or Right [Line Items]
Conversion price | $ / shares									$ 0.0154						$ 0.0154													$ 678.49
Adjuvant Notes [Member] | Convertible Notes Payable [Member]
Class of Warrant or Right [Line Items]
Common stock, par value | $ / shares						$ 0.0001
Conversion price | $ / shares				$ 26.25	$ 26.25	$ 6,843.75
Debt Conversion, Converted Instrument, Amount | $					$ 2,900
Adjuvant and May 2022 Notes [Member]
Class of Warrant or Right [Line Items]
Aggregate purchase rights				942,080
Purchase rights | $				$ 24,700
Series F-1 [Member]
Class of Warrant or Right [Line Items]
Common stock shares																					613
Series E1 Convertible Preferred Stock [Member]
Class of Warrant or Right [Line Items]
Preferred stock, par value | $ / shares			$ 0.0001
Conversion price | $ / shares			$ 0.40							$ 0.0154
Debt Conversion, Converted Instrument, Amount | $			$ 1,800
Dividend | $															$ 100
Series F1 Preferred Stock [Member]
Class of Warrant or Right [Line Items]
Preferred stock, shares authorized																						95,000
Preferred stock, par value | $ / shares																						$ 0.0001
Conversion price | $ / shares																						$ 0.0635
Share conversion price | $ / shares									$ 0.0154						$ 0.0154
Series F-1 Shares [Member]
Class of Warrant or Right [Line Items]
Warrants outstanding									23,540						23,540		22,280				22,280
Series F-1 Common Stock [Member]
Class of Warrant or Right [Line Items]
Warrants to purchase																					9,972,074
Series F-1 Convertible and Redeemable Preferred Stock [Member]
Class of Warrant or Right [Line Items]
Temporary Equity, Shares Outstanding									23,540						23,540		22,280
Preferred stock, convertible shares issuable																					21,667
Series D Non-Convertible Preferred Stock [Member]
Class of Warrant or Right [Line Items]
Preferred stock, shares authorized																									70
Preferred stock, par value | $ / shares																									$ 0.0001
Preferred stock, shares issued																									70
Preferred stock voting right power percentage																									1.00%
Minimum [Member] | Adjuvant Notes [Member] | Convertible Notes Payable [Member]
Class of Warrant or Right [Line Items]
Beneficial ownership limitation percentage			4.99%			4.99%
Maximum [Member] | Adjuvant Notes [Member] | Convertible Notes Payable [Member]
Class of Warrant or Right [Line Items]
Beneficial ownership limitation percentage			9.99%			19.99%
Warrant [Member]
Class of Warrant or Right [Line Items]
Warrants exercise price | $ / shares									$ 0.0154						$ 0.0154
Common Stock [Member]
Class of Warrant or Right [Line Items]
Common stock warrant outstanding																					9,972,074
Adjustments to additional paid in capital other | $
common stock upon exercise									17,500,000	24,350,000	17,725,000	2,767,332	673,820	718,704
Common Stock [Member] | Subsequent Event [Member]
Class of Warrant or Right [Line Items]
common stock upon exercise		788,983,896
Common Stock [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Warrants exercise price | $ / shares									$ 0.13						0.13
Common Stock [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Warrants exercise price | $ / shares									$ 1.25						$ 1.25
Preferred Stock [Member] | Subsequent Event [Member]
Class of Warrant or Right [Line Items]
common stock upon exercise		364,539,337
Preferred Stock [Member] | Series E1 Convertible Preferred Stock [Member]
Class of Warrant or Right [Line Items]
Temporary Equity, Shares Outstanding			1,800
Preferred Stock [Member] | Series F-1 Convertible and Redeemable Preferred Stock [Member]
Class of Warrant or Right [Line Items]
Temporary Equity, Shares Outstanding									23,540	22,280	22,280				23,540		22,280
Underwritten Public Offering [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights																											362,640
Warrants exercise price | $ / shares																											$ 93.75
IPO [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights																											205,360
Warrants exercise price | $ / shares																											$ 93.63
Baker Warrants [Member]
Class of Warrant or Right [Line Items]
Warrants exercise price | $ / shares									$ 0.0154						$ 0.0154
June 2022 Baker Warrants [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights								582,886
Warrants exercise price | $ / shares								$ 93.75	$ 0.0154						$ 0.0154
Warrants and rights outstanding, term								5 years																			5 years
Common stock, par value | $ / shares								$ 0.0001
June 2022 Baker Warrants [Member] | Minimum [Member]
Class of Warrant or Right [Line Items]
Beneficial ownership limitation percentage								4.99%
June 2022 Baker Warrants [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Beneficial ownership limitation percentage								19.99%
Baker Bros Purchase Agreement [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights																														2,732	2,732
Warrants exercise price | $ / shares																														$ 4,575	$ 4,575
Security Purchase Agreement [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights									1,152,122						1,152,122
Exercise price | $ / shares									$ 2.50						$ 2.50
Class of warrant or right, number of securities called by warrants or rights									20,807,539						20,807,539
Security Purchase Agreement [Member] | Warrant [Member]
Class of Warrant or Right [Line Items]
Warrants exercise price | $ / shares									$ 0.0154						$ 0.0154
Security Purchase Agreement [Member] | Common Stock [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights									22,189,349						22,189,349
Security Purchase Agreement [Member] | Common Stock [Member] | Maximum [Member]
Class of Warrant or Right [Line Items]
Class of warrant or right, number of securities called by warrants or rights									2,615,383						2,615,383
A&R Merger Agreement [Member] | Series F-1 Shares [Member]
Class of Warrant or Right [Line Items]
Preferred stock, shares issued									1,260						1,260
Proceeds from Divestiture of Businesses | $							$ 2,700								$ 1,300
Adjustments to additional paid in capital other | $															$ 1,300
A&R Merger Agreement [Member] | Series F-1 Shares [Member] | Subsequent Event [Member]
Class of Warrant or Right [Line Items]
Preferred stock, shares issued	2,740						2,740
Proceeds from Divestiture of Businesses | $	$ 2,700
Exchange Agreements [Member]
Class of Warrant or Right [Line Items]
Debt Instrument, Convertible, Number of Equity Instruments | Integer									0			262,221,766			1,161,636,815	283,747,468
Number of Equity Instruments | $									$ 4,900						$ 4,900
Common stock capital share reserved for future issuance									17,500,000						59,575,000
common stock upon exercise									2,767,332						4,018,256

XML

Schedule of Stock-based Compensation Expense Related to Stock Options (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 203	$ 258	$ 659	$ 943
Research and Development Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	5	30	31	99
Selling and Marketing Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	18	42	77	146
General and Administrative Expense [Member]
Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items]
Total	$ 180	$ 186	$ 551	$ 698

XML

Stock-based Compensation (Details Narrative) - USD ($)	3 Months Ended		9 Months Ended
	Sep. 30, 2024	Sep. 30, 2023	Sep. 30, 2024	Sep. 30, 2023
Share-Based Payment Arrangement, Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Grants in Period, Gross	0	0	0	0
Employee Benefits and Share-Based Compensation			$ 400,000
Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition			10 months 24 days
Employee Stock [Member] | Employee Stock Purchase Plan 2019 [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Share-based compensation arrangement by share-based payment award, purchase price of commonscStock, percent			85.00%
Employee stock purchase plan maximum stock value available for purchase denominator	$ 25,000		$ 25,000
Restricted Stock [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items]
Stock-based compensation expense	$ 0		$ 0

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Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Millions						1 Months Ended	3 Months Ended						9 Months Ended
	Nov. 14, 2024	Nov. 08, 2024	Oct. 02, 2024	Sep. 27, 2024	Sep. 14, 2024	Nov. 14, 2024	Sep. 30, 2024	Jun. 30, 2024	Mar. 31, 2024	Sep. 30, 2023	Jun. 30, 2023	Mar. 31, 2023	Sep. 30, 2024	Dec. 31, 2023	Dec. 21, 2023
Subsequent Event [Line Items]
Stock Issued During Period, Shares, Conversion of Units					2,727,668
Conversion price					$ 0.04
Preferred Stock, Shares Issued							0						0	0
Common Stock [Member]
Subsequent Event [Line Items]
Number of shares issued							17,500,000	24,350,000	17,725,000	2,767,332	673,820	718,704
Conversion of convertible shares notes															613
A&R Merger Agreement [Member] | Series F-1 Shares [Member]
Subsequent Event [Line Items]
Preferred Stock, Shares Issued							1,260						1,260
Proceeds from Divestiture of Businesses						$ 2.7							$ 1.3
Subsequent Event [Member]
Subsequent Event [Line Items]
Description of debt notice of default		the Designated Agent sent an amended and supplemented notice to the Notices (the Third Amended Notice of Default) which adds new claims of default based on (i) the Company’s failure to maintain a cash position of $1.0 million or greater, as required under Section 5(b) of the Forbearance Agreement (ii) the Company’s failure to deliver financial and operating reports in accordance with the timeline required under the Section 8.1(n) of the Baker Stock Purchase Agreement, and (iii) to clarify the outstanding balance under the notes of the Baker Stock Purchase Agreement plus all accrued and unpaid interest thereon, in the sum of approximately is $107.0 million as opposed to the Repurchase Price as defined in the Fourth Amendment
Subsequent Event [Member] | Preferred Stock [Member]
Subsequent Event [Line Items]
Investors own shares			1,468
Number of shares issued			364,539,337
Subsequent Event [Member] | Common Stock [Member]
Subsequent Event [Line Items]
Number of shares issued			788,983,896
Conversion of convertible shares notes			9,549,716
Subsequent Event [Member] | A&R Merger Agreement [Member] | Series F-1 Shares [Member]
Subsequent Event [Line Items]
Preferred Stock, Shares Issued	2,740					2,740
Proceeds from Divestiture of Businesses	$ 2.7
Subsequent Event [Member] | A&R Merger Agreement [Member] | Series F-1 Shares [Member] | Third Parent Equity Investment [Member]
Subsequent Event [Line Items]
Stock Repurchased During Period, Shares	720		1,500
Subsequent Event [Member] | A&R Merger Agreement [Member] | Series F-1 Shares [Member] | Fourth Parent Equity Investment [Member]
Subsequent Event [Line Items]
Stock Repurchased During Period, Shares	2,280		1,500
Future Pak LLC [Member]
Subsequent Event [Line Items]
Stock repurchase				$ 106.8