UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
(Mark One)
| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For
the quarterly period ended
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:
(Exact name of registrant as specified in its charter)
(State or other jurisdiction of incorporation) |
(IRS Employer Identification No.) |
| (Address of Principal Executive Offices) | (Zip Code) |
Registrant’s
telephone number, including area code:
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 | ||
| 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.
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).
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 ☐ | |
| 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 May 10, 2024 was .
Table of Contents
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 continue as a going concern; | |
| ● | the consummation of the transactions contemplated by the Merger Agreement and documents related thereto; | |
| ● | 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 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; | |
| ● | 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 maintain the listing of our shares on the OTCQB® Venture Market; | |
| ● | 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; | |
| ● | the rate and degree of market acceptance of Phexxi; | |
| ● | our ability to successfully commercialize and distribute Phexxi and continue to develop our sales and marketing capabilities, particularly after any product rebrand; | |
| ● | our estimates regarding the effectiveness of our marketing campaigns; | |
| ● | our strategic plans for our business, including the commercialization of Phexxi; | |
| ● | 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 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 Phexxi 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 product; | |
| ● | our dependence on third parties for the manufacture of Phexxi; | |
| ● | 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. Phexxi is the first and only non-hormonal, prescription contraceptive gel that women only use when they have sex. Because Phexxi is a non-hormonal contraceptive, it is not associated with side effects 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 and cancer, or when they are breast feeding, have a BMI over 30, smoke, or have diabetes. 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 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 may “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.
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.
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®” and “Femidence™” 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 | ||||||||
| March 31, 2024 | December 31, 2023 | |||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Trade accounts receivable, net | ||||||||
| Inventories | ||||||||
| Prepaid and other current assets | ||||||||
| Total current assets | ||||||||
| Property and equipment, net | ||||||||
| Operating lease right-of-use assets | ||||||||
| Other noncurrent assets | ||||||||
| Total assets | $ | $ | ||||||
| Liabilities, convertible and redeemable preferred stock and stockholders’ deficit | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | $ | ||||||
| Notes - carried at fair value (Note 4) | ||||||||
| Convertible notes - Adjuvant (Note 4) | ||||||||
| Accrued expenses | ||||||||
| Accrued compensation | ||||||||
| Operating lease liabilities-current | ||||||||
| Derivative liabilities | ||||||||
| Other current liabilities | ||||||||
| Total current liabilities | ||||||||
| Operating lease liabilities- noncurrent | ||||||||
| Total liabilities | ||||||||
| Commitments and contingencies (Note 7) | ||||||||
| Convertible and redeemable preferred stock, $ par value, Senior to common stock | ||||||||
| Series E-1, and F-1 convertible preferred stock, and shares authorized; and shares of E-1 issued and outstanding at March 31, 2024 and December 31, 2023, respectively; shares of F-1 issued and outstanding at each of March 31, 2024 and December 31, 2023 | ||||||||
| Stockholders’ deficit: | ||||||||
| Preferred stock, $ par value; shares authorized; shares issued and outstanding at March 31, 2024 and December 31, 2023 | ||||||||
| Common Stock, $ par value; shares authorized; and shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively | ||||||||
| Additional paid-in capital | ||||||||
| Accumulated other comprehensive loss | ( | ) | ( | ) | ||||
| Accumulated deficit | ( | ) | ( | ) | ||||
| Total stockholders’ deficit | ( | ) | ( | ) | ||||
| Total liabilities, convertible and redeemable preferred stock and stockholders’ deficit | $ | $ | ||||||
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 March 31, | ||||||||
| 2024 | 2023 | |||||||
| Product sales, net | $ | $ | ||||||
| Operating Expenses: | ||||||||
| Cost of goods sold | ||||||||
| Research and development | ||||||||
| Selling and marketing | ||||||||
| General and administrative | ||||||||
| Total operating expenses | ||||||||
| Loss from operations | ( | ) | ( | ) | ||||
| Other income (expense): | ||||||||
| Interest income | ||||||||
| Other expense, net | ( | ) | ( | ) | ||||
| Loss on issuance of financial instruments (Note 8) | ( | ) | ( | ) | ||||
| Gain on debt extinguishment | ||||||||
| Change in fair value of financial instruments (Note 6) | ||||||||
| Total other income (expense), net | ( | ) | ||||||
| Loss before income tax | ( | ) | ( | ) | ||||
| Income tax expense | ( | ) | ||||||
Net loss | ( | ) | ( | ) | ||||
| Convertible preferred stock deemed dividends | ( | ) | ||||||
| Net loss attributable to common stockholders | $ | ( | ) | $ | ( | ) | ||
| Net loss per share attributable to common stockholders | ||||||||
| (basic and diluted): | $ | ) | $ | ) | ||||
| Weighted-average shares used to compute net | ||||||||
| loss per share attributable to common shareholders (basic and diluted): | ||||||||
See accompanying notes to condensed consolidated financial statements (unaudited).
| 4 |
EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE OPERATIONS
(Unaudited)
(In thousands, except share and per share data)
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Other comprehensive income: | ||||||||
| Change in fair value of financial instruments attributed to credit risk change (Note 4) | ||||||||
| Comprehensive income (loss) | $ | ( | ) | $ | ||||
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 | $ | $ | $ | | $ | $ | ( | ) | $ | ( | $ | ( | ||||||||||||||||||||||||||||
| Issuance of common stock upon exercise of warrants | - | - | ||||||||||||||||||||||||||||||||||||||
| Issuance of common stock upon noncash exercise of purchase rights | - | - | ||||||||||||||||||||||||||||||||||||||
Issuance of common stock upon conversion of notes | - | - | ||||||||||||||||||||||||||||||||||||||
| Stock-based compensation | - | - | - | |||||||||||||||||||||||||||||||||||||
| Change in fair value of financial instruments attributed to credit risk change (Note 4) | - | - | - | |||||||||||||||||||||||||||||||||||||
| Series E-1 shares dividends | - | - | ( | ) | ( | ) | ||||||||||||||||||||||||||||||||||
| Net loss | - | - | - | ( | ) | ( | ) | |||||||||||||||||||||||||||||||||
| Balance as of March 31, 2024 | $ | $ | $ | $ | $ | ( | ) | $ | ( | ) | $ | ( | ) | |||||||||||||||||||||||||||
| Common Stock | Additional Paid-in | Accumulated Other Comprehensive | Accumulated | Total Stockholders’ | ||||||||||||||||||||
| Shares | Amount | Capital | Income | Deficit | Deficit | |||||||||||||||||||
| Balance as of January 1, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
| Issuance of common stock upon cash exercise of warrants | ||||||||||||||||||||||||
| Issuance of common stock upon noncash exercise of Purchase Rights (Note 4) | ||||||||||||||||||||||||
| Issuance of SSNs (Note 4) | - | |||||||||||||||||||||||
| Change in fair value of financial instruments attributed to credit risk change (Note 4) | - | |||||||||||||||||||||||
| Stock-based compensation | - | |||||||||||||||||||||||
| Net loss | - | ( | ) | ( | ) | |||||||||||||||||||
| Balance as of March 31, 2023 | $ | $ | $ | $ | ( | ) | $ | ( | ) | |||||||||||||||
See accompanying notes to condensed consolidated financial statements (unaudited).
| 6 |
EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
| Three months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash flows from operating activities: | ||||||||
| Net loss | $ | ( | ) | $ | ( | ) | ||
| Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash provided by (used in) operating activities: | ||||||||
| Loss on issuance of financial instruments | ||||||||
| Change in fair value of financial instruments | ( | ) | ( | ) | ||||
| Gain on debt extinguishment | ( | ) | ||||||
| Stock-based compensation | ||||||||
| Depreciation | ||||||||
| Noncash interest expense | ||||||||
| Noncash right-of-use amortization | ||||||||
| Net loss on disposal of property and equipment | ||||||||
| Changes in operating assets and liabilities: | ||||||||
| Trade accounts receivable | ( | ) | ||||||
| Inventories | ( | ) | ||||||
| Prepaid and other assets | ||||||||
| Accounts payable | ( | ) | ||||||
| Accrued expenses and other liabilities | ( | ) | ||||||
| Accrued compensation | ( | ) | ||||||
| Operating lease liabilities | ( | ) | ( | ) | ||||
| Net cash and restricted cash provided by (used in) operating activities | ( | ) | ||||||
| Cash flows from investing activities: | ||||||||
| Purchases of property and equipment | ( | ) | ( | ) | ||||
| Net cash and restricted cash used in investing activities | ( | ) | ( | ) | ||||
| Cash flows from financing activities: | ||||||||
| Proceeds from issuance of common stock - exercise of warrants | ||||||||
| Borrowings under term notes | ||||||||
| Net cash and restricted cash provided by financing activities | ||||||||
| Net change in cash, cash equivalents and restricted cash | ( | ) | ||||||
| Cash, cash equivalents and restricted cash, beginning of period | ||||||||
| Cash, cash equivalents and restricted cash, end of period | $ | $ | ||||||
| Supplemental disclosure of noncash investing and financing activities: | ||||||||
| Issuance of common stock upon exercise of purchase rights | ||||||||
| Purchases of property and equipment included in accounts payable and accrued expenses | ||||||||
Series E-1 shares deemed dividends | ||||||||
| Issuance of common stock upon conversion of notes | ||||||||
| Issuance of common stock upon exercise of warrants | ||||||||
| Financing costs included in accounts payable and accrued expenses | ||||||||
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, commercial-stage biopharmaceutical company committed to 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, and is the first and only FDA-approved,
hormone-free, woman-controlled, on-demand prescription contraceptive gel for women. The Company commercially launched Phexxi in
September 2020. Phexxi net product sales were $
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), pursuant to which, and on the terms and subject to the conditions thereof, the Merger Sub was expected to merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Aditxt (the Merger). As discussed in Note 10 – Subsequent Events, on April 26, 2024, the Company delivered a termination notice to Aditxt notifying it that the Company was exercising its right to terminate the Merger Agreement in accordance with Section 8.1(f) of the Merger Agreement. As further described (and defined) in Note 10 – Subsequent Events, on May 2, 2024, the Company entered into the Reinstatement and Fourth Amendment to the Merger Agreement with Aditxt in order to reinstate and amend the Merger Agreement.
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 months ended March 31, 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.
| 8 |
Risks, Uncertainties and Going Concern
Any disruptions in the commercialization of Phexxi and/or its supply chain 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. Additional activities have included raising capital,
identifying alternative manufacturing to lower the cost of goods sold (COGS), seeking ex-U.S. licensing partners and product in-licensing/acquisition
opportunities to add non-dilutive capital to the balance sheet, 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 March 31, 2024, the Company a working capital deficit of $
Since October 3, 2022, the Company’s common stock has traded on the OTC Venture Market (the OTCQB) of the OTC Markets Group, Inc., a centralized electronic quotation service for over-the-counter securities, under the symbol “EVFM.” The OTCQB imposes, among other requirements, a minimum $ 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 $ per share to comply with the Bid Price Requirement for continued listing. As of May 10, 2024, the closing price was $.
Management’s plans to meet its cash flow needs in the next 12 months include generating recurring product revenue, restructuring 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 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 March 31, 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 in the U.S. or foreign markets, 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, 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.
| 9 |
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 and purchase rights issued; 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 other 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 March 31, 2024, based on the evaluation of these factors the Company did not record an allowance for doubtful accounts.
Phexxi is 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. They distribute Phexxi on demand as orders are received.
For the three months ended March 31, 2024, and 2023, the Company’s three largest customers
combined made up approximately
| 10 |
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.
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 quarter
ended March 31, 2023, the letters of credit of $
The following table provides a reconciliation of cash, cash equivalents and restricted cash, reported within the condensed consolidated statements of cash flows (in thousands):
| Three months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Cash and cash equivalents | $ | $ | ||||||
| Restricted cash | ||||||||
| Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows | $ | $ | ||||||
Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. The net 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 in the three months ended March 31, 2024 and 2023, respectively. Diluted net loss per share is computed by dividing the net 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 and therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2024 and 2023. 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 months ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Options to purchase common stock | ||||||||
| Warrants to purchase common stock | ||||||||
| Purchase rights to purchase common stock | ||||||||
| Convertible debt | ||||||||
| Series E-1 and F-1 preferred stock | ||||||||
| Total(1) | ||||||||
| (1) |
Recently Adopted Accounting Pronouncements
No significant new standards have been adopted during the three months ended March 31, 2024.
Recently Issued Accounting Pronouncements — Not Yet Adopted
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standards setting bodies that are adopted as of the specified effective date.
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.
3. Revenue
The Company recognizes revenue from the sale of Phexxi in accordance with Accounting Standards Codification (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
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 product 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.
| 11 |
Phexxi is 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) are able to purchase Phexxi 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.
| 12 |
Patient support programs – The Company offers a voluntary 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. 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 $
4. Debt
Convertible Notes
Baker Bros. Notes (temporarily owned by Aditxt from December 11, 2023 through February 26, 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 $
The
Baker Notes had a
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
The
Baker Notes were callable by the Company on
| 13 |
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) $
The
First Baker Amendment also extended, effective upon the Company’s achievement of the Financing Threshold, the affirmative
covenant to achieve $
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) $
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 $
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 $
| 14 |
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 $
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 waiving 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 an ex-U.S. license agreement 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 obtain $ |
The
outstanding balance of the Baker Notes will continue to accrue interest at
The Company was required to make a $
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 | $ | |
| September 9, 2024-September 8, 2025 | $ | |
| September 9, 2025-September 8, 2026 | $ | |
| September 9, 2026-September 8, 2027 | $ | |
| September 9, 2027-September 8, 2028 | $ |
| 15 |
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 $
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 this 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 $
As
of March 31, 2024, the Baker Notes are recorded at fair value in the condensed consolidated balance sheet as short-term convertible
notes payable with a total fair value of $
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 $
The
Adjuvant Notes have a 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
| 16 |
Interest expense for the Adjuvant Notes consist of the following, and is included in other expense, net on the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Coupon interest | $ | $ | ||||||
| Amortization of issuance costs | ||||||||
| Total | $ | $ | ||||||
The
Adjuvant Notes are convertible, subject to customary
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 $
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 $
| 17 |
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 $
The Company was in default of the Adjuvant Notes at 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 March 31, 2024, the Adjuvant Notes are recorded in the condensed consolidated balance sheet as short-term convertible notes
payable with a total balance of $
As
of March 31, 2024, and assuming the current conversion price of $
Term Notes
December 2022 and February, March, April, July, August, and September 2023 Notes (SSNs)
The
Company entered into eight similar Securities Purchase Agreements (SPAs) between December 2022 and September 2023 with certain investors.
Each of the agreements were 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
The
SSNs interest rates are subject to increase to
The Company evaluated the SSNs in accordance with ASC 480 and determined that the Notes were all liability instruments at issuance. The applicable Notes 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 Notes.
| 18 |
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 income 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
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 3/31/2023 | At 6/30/2023 | At 9/30/2023 | At 12/31/2023 | At 3/31/2024 | |||||||||||||||||||||||||||||||
| December 2022 Notes | $ | $ | - Series D | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||
| February 2023 Notes(1) | - | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| March 2023 Notes | - | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| March 2023 Notes(2) | - | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| April 2023 Notes | - | $ | N/A | $ | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| July 2023 Notes | - | $ | N/A | N/A | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| August 2023 Notes | - | $ | N/A | N/A | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| September 2023 Notes(3) | - | $ | N/A | N/A | $ | $ | $ | |||||||||||||||||||||||||||||||||||
| Total Offerings | $ | $ | ||||||||||||||||||||||||||||||||||||||||
| (1) | |
| (2) | |
| (3) |
| 19 |
5. Balance Sheet Details
Inventories
Inventories consist of the following (in thousands) for the period indicated:
| March 31, 2024 | December 31, 2023 | |||||||
| Raw materials (1) | $ | $ | ||||||
| Work in process | ||||||||
| Finished goods (1) | ||||||||
| Total | $ | $ | ||||||
| (1) |
Prepaid and Other Current Assets
Prepaid and other current assets consist of the following (in thousands):
| March 31, 2024 | December 31, 2023 | |||||||
| Insurance | $ | $ | ||||||
| Research & development | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
Property and Equipment, Net
Property and equipment, net, consists of the following (in thousands):
| Useful Life | March 31, 2024 | December 31, 2023 | ||||||||
| Research equipment | $ | $ | ||||||||
| Computer equipment and software | ||||||||||
| Construction in-process | - | |||||||||
| Less: accumulated depreciation | ( | ) | ( | ) | ||||||
| Total, net | $ | $ | ||||||||
Depreciation expense for property and equipment was immaterial and $
| 20 |
Accrued Expenses
Accrued expenses consist of the following (in thousands):
| March 31, 2024 | December 31, 2023 | |||||||
| Clinical trial related costs | $ | $ | ||||||
| Accrued royalty | ||||||||
| Other | ||||||||
| Total | $ | $ | ||||||
6. Fair Value of Financial Instruments
Fair Value of Financial Liabilities
The following tables summarize the Company’s convertible debt instruments as of March 31, 2024 and December 31, 2023, respectively (in thousands):
| Fair Value | ||||||||||||||||||||||||
| As of March 31, 2024 | Principal Amount | Unamortized Issuance Costs | Accrued Interest | Net Carrying Amount | Amount | Leveling | ||||||||||||||||||
| Baker Notes(1)(2) | $ | $ | $ | $ | $ | Level 3 | ||||||||||||||||||
| Adjuvant Notes(3) | N/A | |||||||||||||||||||||||
| December 2022 Notes(1) | Level 3 | |||||||||||||||||||||||
| February 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| March 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| April 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| July 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| August 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| September 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| Totals | $ | $ | $ | $ | $ | 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) | $ | $ | $ | $ | $ | Level 3 | ||||||||||||||||||
| Adjuvant Notes(3) | ( | ) | N/A | |||||||||||||||||||||
| December 2022 Notes(1) | Level 3 | |||||||||||||||||||||||
| February 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| March 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| April 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| July 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| August 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| September 2023 Notes (1) | Level 3 | |||||||||||||||||||||||
| Totals | $ | $ | ( | ) | $ | $ | $ | N/A | ||||||||||||||||
| (1) |
| (2) |
| (3) |
| 21 |
The following tables summarize the Company’s derivative liabilities as of March 31, 2024 and December 31, 2024 as discussed in Note 8 – Stockholders’ Deficit (in thousands):
| Fair Value | ||||||||||||
| March 31, 2024 | December 31, 2023 | Leveling | ||||||||||
| Purchase rights | $ | $ | Level 3 | |||||||||
| Total derivative liabilities | $ | $ | ||||||||||
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 months ended March 31, 2024 (in thousands):
| Baker Notes (Assigned to Aditxt; Reassigned Back to Baker; Note 4) | Total SSNs (Note 4) | Total | ||||||||||
| Balance at December 31, 2023 | $ | $ | $ | |||||||||
| Extinguishment/conversion | ( | ) | ( | ) | ( | ) | ||||||
| Balance at issuance | ||||||||||||
| Change in fair value presented in the Condensed Consolidated Statements of Comprehensive Operations | ( | ) | ( | ) | ( | ) | ||||||
| Balance at March 31, 2024 | $ | $ | $ | |||||||||
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 months ended March 31, 2023 (in thousands):
| Baker Notes | Total SSNs (Note 4) | Total | ||||||||||
| Balance at December 31, 2022 | $ | $ | $ | |||||||||
| Balance at issuance | ||||||||||||
| Change in fair value presented in the Condensed Consolidated Statements of Operations | ( | ) | ( | ) | ||||||||
| Change in fair value presented in the Condensed Consolidated Statements of Comprehensive Operations | ( | ) | ( | ) | ||||||||
| Balance at March 31, 2023 | $ | $ | $ | |||||||||
| 22 |
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 months ended March 31, 2024 (in thousands):
| Purchase Rights | Derivative Liabilities Total | |||||||
| Balance at December 31, 2023 | $ | $ | ||||||
| Balance at issuance | ||||||||
| Exercises | ( | ) | ( | ) | ||||
| Change in fair value presented in the Condensed Consolidated Statements of Operations | ( | ) | ( | ) | ||||
| Balance at March 31, 2024 | $ | $ | ||||||
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 months ended March 31, 2023 (in thousands):
| Derivative Liabilities Previously Classified as Equity Instruments | 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 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| Balance at issuance | ||||||||||||||||||||||||||||
| Exercises | ( | ) | ( | ) | ( | ) | ||||||||||||||||||||||
| Change in fair value presented in the Condensed Consolidated Statements of Operations | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ( | ) | ||||||||||||||||
| Balance at March 31, 2023 | $ | $ | $ | $ | $ | $ | $ | |||||||||||||||||||||
| 23 |
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, issued as described in Note 4 – Debt 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 (
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 value 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 months ended March 31, 2024 and 2023 were recorded as a $
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.
| 24 |
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, as 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.
7. Commitments and Contingencies
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
2020 Lease and the First Amendment
On
October 3, 2019, the Company entered into an office lease for approximately
On
April 14, 2020, the Company entered into the first amendment to the 2020 Lease for an additional
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 $
| 25 |
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
Supplemental Financial Statement Information
| Three Months Ended March 31, | ||||||||||
| Lease Cost (in thousands) | Classification | 2024 | 2023 | |||||||
| Operating lease expense | Research and development | $ | $ | |||||||
| Operating lease expense | Selling and marketing | |||||||||
| Operating lease expense | General and administrative | |||||||||
| Total | $ | $ | ||||||||
| Lease Term and Discount Rate | March 31, 2024 | December 31, 2023 | ||||||
| Weighted Average Remaining Lease Term (in years) | ||||||||
| Weighted Average Discount Rate | % | % | ||||||
| Maturity of Operating Lease Liabilities (in thousands) | March 31, 2024 | |||
| Remainder of 2024 (9 months) | $ | |||
| Year ending December 31, 2025 | ||||
| Total lease payments | ||||
| Less imputed interest | ( | ) | ||
| Total | $ | |||
| Three Months Ended March 31, | ||||||||
| Other information (in thousands) | 2024 | 2023 | ||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||
| Operating cash outflows in operating leases | $ | $ | ||||||
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
| 26 |
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.
During the year ended December 31, 2023, the Company settled a portion of its trade payables with numerous vendors, which resulted in
a $
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 may need to be performed by July 2024.
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 $
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
| 27 |
In May 2022, the Company
completed an underwritten public offering (the May 2022 Public Offering) which included the issuance of common warrants to purchase
In
June 2022, as required by the Second Baker Amendment, the Company issued the June 2022 Baker Warrants to purchase up to
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
On December 21, 2023, warrants to purchase up to shares of the Company’s common stock were exchanged for shares of the Company’s Series F-1 Shares.
As
of March 31, 2024, warrants to purchase up to
| Type of Warrants | Underlying common stock to be Purchased | Exercise Price | Issue Date | Exercise Period | ||||||||||
| Common Warrants | $ | June 11, 2014 | ||||||||||||
| Common Warrants | $ | May 24, 2018 | ||||||||||||
| Common Warrants | $ | April 11, 2019 | ||||||||||||
| Common Warrants | $ | June 10, 2019 | ||||||||||||
| Common Warrants | $ | April 24, 2020 | ||||||||||||
| Common Warrants | $ | June 9, 2020 | ||||||||||||
| Common Warrants | $ | January 13, 2022 | ||||||||||||
| Common Warrants | $ | March 1, 2022 | ||||||||||||
| Common Warrants | $ | May 4, 2022 | ||||||||||||
| Common Warrants | $ | May 24, 2022 | ||||||||||||
| Common Warrants | $ | June 28, 2022 | ||||||||||||
| Common Warrants | $ | December 21, 2022 | ||||||||||||
| Common Warrants | $ | February 17, 2023 | ||||||||||||
| Common Warrants | $ | March 20, 2023 | ||||||||||||
| Common Warrants | $ | April 5, 2023 | ||||||||||||
| Common Warrants | $ | July 3, 2023 | ||||||||||||
| Common Warrants | $ | August 4, 2023 | ||||||||||||
| Common Warrants | $ | September 27, 2023 | ||||||||||||
| Prefunded Common Warrants | $ | September 27, 2023 | ||||||||||||
| Total | ||||||||||||||
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 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 $ per share.
| 28 |
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 $
per share (the Series E-1 Shares). An aggregate of
shares was authorized. The Series E-1 Shares are convertible into shares of common stock at a conversion price of $
On
August 7, 2023, certain investors party to the December 2022 Notes and the February 2023 Notes exchanged $
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 $ per share (the Series F-1 Shares). An aggregate of shares was authorized. The Series F-1 Shares are convertible
into shares of common stock at a conversion price of $
On
December 21, 2023, the Company issued a total of
Series F-1 Shares to certain investors, including
shares exchanged for warrants to purchase up to
| 29 |
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 $
per share (the Series D Preferred Shares). An aggregate of
shares was authorized; these shares were not convertible into shares of common stock, had limited voting rights equal to
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 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 shares of the Company’s common stock. The number of
right shares for each Purchase Right is 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 subsequently signed an additional
agreement with the holders of the Purchase Rights upon which the total aggregate value of the Purchase Rights is fixed at $
In
connection with the SSNs issuances, during the three months ended March 31, 2024 and 2023, the Company increased the number of
outstanding Purchase Rights by
The Company issued shares of common stock upon the exercise of certain Purchase Rights during the three months ended March 31, 2024. As of March 31, 2024, Purchase Rights of shares of the Company’s common stock remained outstanding.
| 30 |
Common Stock Reserved for Future Issuance
Common stock reserved for future issuance is as follows in common equivalent shares as of March 31, 2024:
| Common stock issuable upon the exercise of stock options outstanding | ||||
| Common stock issuable upon the exercise of common stock warrants | ||||
| Common stock available for future issuance under the 2019 ESPP | ||||
| Common stock available for future issuance under the Amended and Restated 2014 Plan | ||||
| Common stock available for future issuance under the Amended Inducement Plan | ||||
| Common stock reserved for the exercise of purchase rights | ||||
| Common stock reserved for the conversion of convertible notes | ||||
| Common stock reserved for the conversion of series E-1 preferred stock | ||||
| Total common stock reserved for future issuance(1) |
| (1) |
Equity Incentive Plans
| Three Months Ended March 31, | ||||||||
| 2024 | 2023 | |||||||
| Research and development | $ | $ | ||||||
| Selling and marketing | ||||||||
| General and administrative | ||||||||
| Total | $ | $ | ||||||
Stock Options
There were shares of stock options granted during the three months ended March 31, 2024 or 2023. As of March 31, 2024, unrecognized stock-based compensation expense for employee stock options was approximately $ million, which the Company expects to recognize over a weighted-average remaining period of years, assuming all unvested options become fully vested.
Employee Stock Purchase Plan
The
purchase price under the 2019 ESPP is %
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 $
Restricted Stock Awards
There were no shares of performance-based RSAs granted in 2023 to the Company’s executive management team.
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 March 31, 2024, there was unrecognized noncash stock-based compensation expense related to unvested RSAs.
| 31 |
10. Subsequent Events
Termination and Reinstatement of Merger Agreement
On April 26, 2024, the Company delivered a termination notice to Aditxt notifying it that the Company was exercising its right to terminate the Merger Agreement effective April 26, 2024 (the Termination Notice), in accordance with Section 8.1(f) of the Merger Agreement, as revised in the third amendment to the Merger Agreement, made on February 29, 2024.
Reinstatement and Amendment of Merger Agreement
On
May 2, 2024, the Company, the Merger Sub and Aditxt entered into the Reinstatement and Fourth Amendment to the Merger Agreement (the
“Fourth Amendment”) in order to waive and amend, among other things, several provisions. This Fourth Amendment
reinstates the Merger Agreement, as amended by the Fourth Amendment, as if never terminated. In consideration of the Fourth
Amendment, Aditxt agreed to pay the Company $
Conversion Price Reset
At
the close of market on April 19, 2024, the conversion price for certain outstanding financial instruments (as described
in Note 4 – Debt and Note 8 – Stockholders’ Deficit) was
adjusted to $
Warrants and Purchase Rights Exercises and Notes Conversions
Subsequent
to March 31, 2024, the Company Purchase
Rights were exercised in a cashless transaction for an equivalent number of shares of common stock. There were also cashless conversions whereby $
| 32 |
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 that women only use when they have sex. Because Phexxi is a non-hormonal contraceptive, it is not associated with side effects 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 and hormone-sensitive cancer, or those who are breast feeding, have a BMI over 30, smoke, or have diabetes. 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 may “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.
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. 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.
Recent Developments
Effective January 1, 2024, the Washington State Health Care Authority (HCA) removed the Prior Authorization requirement for Phexxi, facilitating Phexxi access for nearly 1.8 million covered Washingtonians on the state HCA’s Managed Medicaid and Fee for Service Medicaid plans. Phexxi continues to be included on the Washington State HCA Preferred Drug List.
On March 26, 2024 the USPTO issued to the Company a Notice of Allowance for patent application 17/823,020 entitled, “Compositions and Methods for Enhancing the Efficacy of Contraceptive Microbicides.” This Notice of Allowance is expected to result in the issuance of a U.S. patent once administrative processes are completed. The allowed claims cover methods of contraception with a composition that encompasses Phexxi vaginal gel. Evofem expects the resulting patent will be Orange Book-listable. The patent, when issued, will be Evofem’s fifth patent for Phexxi in the United States.
| 33 |
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. (f/k/a Adicure, 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). The Merger is expected to be closed in the second half of 2024; the accompanying condensed consolidated financial statements in this Quarterly Report do not reflect the potential impact of the Merger Agreement.
On January 10, 2024, the Company, Aditxt and Merger Sub entered into the first amendment to the Merger Agreement (the First Amendment) to change the filing date for the Joint Proxy Statement (as defined in the Merger Agreement) to February 14, 2024.
On January 30, 2024, the Company, Parent and Merger Sub entered into the second amendment to the Merger Agreement (the Second Amendment) to:
| (i) | Change the date of the Parent Loan (as defined in the Merger Agreement) to the Company to be February 29, 2024 | |
| (ii) | Change the date by which the Company may terminate the Merger Agreement for failure to receive the Loan from Parent to be February 29, 2024, and, | |
| (iii) | Change the filing date for the Joint Proxy Statement (as defined in the Merger Agreement) to April 1, 2024. |
On February 29, 2024, the parties entered into the third amendment to the Merger Agreement to:
| (i) | Amend and restate Section 6.10 in its entirety as follows: “Parent Equity Investment. On or prior to (a) April 1, 2024, Parent shall purchase 2,000 shares of the Company’s Series F-1 Preferred Shares, par value $0.0001 per share for an aggregate purchase price of $2.0 million (the Initial Parent Equity Investment) and (b) April 30, 2024, Parent shall purchase 1,500 shares of F-1 Preferred Shares for an aggregate purchase price of $1.5 million (the Subsequent Parent Equity Investment)”. | |
| (ii) | Delete in its entirety the provision in Section 6.16 | |
| (iii) | Extend the date to file a Joint Proxy Statement to April 30, 2024 | |
| (iv) | Add new Section 7.2(i) as follows “(i) Repurchase Price. No defaults shall have occurred and be continuing under the Loan Documents and the Outstanding Balance (as defined in the Securities Purchase Agreement) plus all accrued and unpaid interest thereon, in an amount not to exceed the Repurchase Price (as defined in the Securities Purchase Agreement) shall have been paid in full.” and | |
| (v) | Amend and restate Section 8.1(f) to allow for termination of the Merger Agreement by the Company is either (a) the Initial Parent Equity Investment has not been made by April 1, 2024, or (b) the Subsequent Parent Equity Investment has not been made by April 30, 2024. |
The aforementioned numbers of shares of F-1 Preferred Shares shall be equitably adjusted for any stock split, reverse stock split, stock dividend (including any dividend or other distribution of securities convertible into F-1 Preferred Shares), subdivision, reorganization, reclassification, recapitalization, combination, exchange of shares or other like change with respect to the number of shares of F-1 Preferred Shares outstanding after the date hereof and prior to the Effective Time or any change to the Stated Value thereof as set forth in that certain Certificate of Designations of Series F-1 Convertible Preferred Stock of the Company.
As consideration for the Merger, the Parent will (i) issue 610,000 shares of Parent common stock (Parent Common Stock) (ii) exchange the Company’s preferred stock for Parent preferred stock (Parent Preferred Stock and together with Parent Common Stock, the Merger Shares) (iii) execute an assignment agreement by and between Baker Brothers Life Sciences, L.P. and the Parent for the certain secured and unsecured promissory notes aggregately valued at $18.0 million. In addition, Parent has agreed to issue up to an aggregate of 89,126 shares of preferred stock to the holders of the Company’s currently outstanding unsecured notes, purchase rights, certain warrants, and preferred stock. The closing issuance of Merger Shares may be adjusted pursuant to procedures set forth in the Merger Agreement, in connection with the finalization of exchange ratio of the Company and Parent shares.
Each stock option of the Company that is outstanding and unexercised immediately prior to the effective time of the Merger (the Effective Time) will be cancelled as of the Effective Time without the right to receive any consideration.
| 34 |
The Merger Agreement is subject to certain closing conditions and contains customary representations, warranties and covenants including, (i) the Company and Parent Shareholder approval shall have 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) the registration statement on Form S-4 shall be declared effective by the U.S. Securities and Exchange Commission (SEC); (iv) a voting agreement shall have been executed and delivered by the parties thereto; (v) all Company preferred stock shall have been converted to Company common stock except for the Unconverted Company Preferred Stock (as defined by the Agreement); (vi) 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 551 shares of Parent Preferred Stock; (vii) 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 $0.2 million; (viii) 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 Merger Agreement; (ix) Parent shall have received a compliance certificate from the Company certifying Company complied with all its representations and warranties in the Merger Agreement; (x) 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©; (xi) Company shall have received from Parent a compliance certificate certifying that Parent has complied with all its representations and warranties in the Merger Agreement, that Parent Common Stock included in the Merger Shares have been approved for listing on the Nasdaq, and Parent shall have regained compliance with the stockholders equity requirement in Nasdaq listing rule 5550(b)(1).
The Company will prepare and file a proxy statement with the SEC and, subject to certain exceptions, the Company’s Board of Directors (the Board) will recommend that the 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, as applicable, are permitted to take certain actions which may, as more fully described in the Merger Agreement, include changing the Company Board Recommendation and entering into a definitive agreement with respect to a Company Superior Proposal (as defined in the Merger Agreement) if the 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 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. The Company would be required to pay the Parent a termination fee of $4.0 million in connection with the Company accepting a Company Superior Proposal.
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.
As discussed in Note 10 – Subsequent Events, on April 26, 2024, the Company delivered a termination notice to Aditxt notifying it that the Company was exercising its right to terminate the Merger Agreement effective April 26, 2024 (the Termination Notice), in accordance with Section 8.1(f) of the Merger Agreement, as revised in the third amendment to the Merger Agreement, made on February 29, 2024.
On May 2, 2024, the Company, the Merger Sub and Aditxt entered into the Reinstatement and Fourth Amendment to the Merger Agreement (the Fourth Amendment) in order to waive and amend, among other things, the several provisions listed below. In consideration of the Fourth Amendment, Aditxt agreed to pay the Company $1.0 million.
Amendments to Article VI: Covenants and Agreement
Article VI of the Merger Agreement was amended to:
| i. | reinstate the Merger Agreement, as amended by the Fourth Amendment, as if never terminated; | |
| ii. | reflect Aditxt’s payment to the Company, in the amount of $1.0 million (the Initial Payment), via wire initiated by May 2, 2024; | |
| iii. | delete Section 6.3, which effectively eliminates the “no shop” provision, and the several defined terms used therein; | |
| iv. | add a new defined term, “Company Change of Recommendation”; and | |
| v. | revise section 6.10 of the Merger Agreement such that, after the Initial Payment, and upon the closing of each subsequent capital raise by Aditxt (each a Parent Subsequent Capital Raise), Aditxt shall purchase that number of shares of the Company’s Series F-1 Preferred Stock, par value $0.0001 per share (the “Series F-1 Preferred Stock”), equal to forty percent (40%) of the gross proceeds of such Parent Subsequent Capital Raise divided by 1,000, up to a maximum aggregate amount of $2.5 million or 2,500 shares of Series F-1 Preferred Stock. A maximum of $1.5 million shall be raised prior to June 17, 2024 and $1.0 million prior to July 1, 2024 (the Parent Capital Raise). |
| 35 |
Amendments to Article VIII: Termination
Article VIII of the Merger Agreement is amended to:
| i. | extend the date after which either party may terminate from May 8, 2024 to July 15, 2024; | |||
| ii. | revise Section 8.1(d) in its entirety to allow Company to terminate at any time after there has been a Company Change of Recommendation, provided that Aditxt must receive ten day written notice and have the opportunity to negotiate a competing offer in good faith; and | |||
| iii. | amend and restate Section 8.1(f) in its entirety, granting the Company the right to terminate the agreement if: | |||
| (a) | the full $1.0 million Initial Payment required by the Fourth Amendment has not been paid in full by May 3, 2024 | |||
| (b) | $1.5 million of the Parent Capital Raise Amount has not been paid to the Company by June 17, 2024, | |||
| (c) | $1.0 million of the Parent Capital Raise Amount has not been paid to the Company by July 1, 2024, or, | |||
| (d) | Aditxt does not pay any portion of the Parent Equity Investment within five calendar days after each closing of a Parent Subsequent Capital Raise. | |||
The companies are working toward closing in the second half of 2024.
Phexxi as a Contraceptive; Commercial Strategies
In September 2020, we commercially launched Phexxi. 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, three business managers and a VP of sales, 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 the 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, 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 may “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 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 2023 and 2024 to-date included:
| - | New York Medicaid, the largest of all Commercial and Medicaid payers in New York, which transitioned to a single Preferred Drug List effective April 1, 2023, that includes no Prior Authorization requirement for Phexxi; | |
| - | Mississippi Medicaid; | |
| - | Indiana State Medicaid; | |
| - | Multiple Blue Cross Blue Shield plans; | |
| - | The largest commercial payer in Michigan; | |
| - | The removal of the Prior Authorization requirement for Phexxi by the Washington State Health Care Authority; and, | |
| - | The renegotiation of the Medi-Cal rebate, resulting in the Company paying a 7.4% lower rebate on Phexxi prescriptions effective July 1, 2024. |
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 August 2023, Medicaid provides health coverage to approximately 90 million members; an estimated 15.6 million of these are women 19-44 years of age.
Evofem had 73% coverage within its Commercial and Medicaid books of business as of October 2023, including 19.8 million lives covered at no out-of-pocket cost. Approximately 83% of commercial and Medicaid Phexxi prescriptions are being approved by payers.
| 36 |
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.
Our Pipeline
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 billion, in aggregate direct and indirect costs. There are no FDA-approved drugs to prevent these sexually transmitted diseases (STIs), and there is a clear need for new prophylactics given the rising incidence and increasing antibiotic resistance of gonorrhea. The FDA granted Fast Track Designation to EVO100 for the prevention of both chlamydia and gonorrhea, and designated EVO100 a Qualified Infectious Disease Product (QIDP) or the prevention of urogenital chlamydia infection in women and the prevention of urogenital gonorrhea infection in women.
The Phase 2B/3 trial (AMPREVENCE) achieved its primary and secondary endpoints, demonstrating statistically significant 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, 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.
| 37 |
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 were $0.2 million and immaterial for the three months ended March 31, 2024 and 2023, respectively, and were included in the costs of goods sold in the condensed consolidated financial statements.
| 38 |
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 March 31, | ||||||||
| 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 | 16 | 40 | ||||||
| Payroll related expenses | 370 | 313 | ||||||
| Outside services costs | 118 | 30 | ||||||
| Other | 90 | 64 | ||||||
| Total unallocated internal research and development expenses | 594 | 447 | ||||||
| Total research and development expenses | $ | 594 | $ | 540 | ||||
Selling and Marketing Expenses
Our selling and marketing expenses consist primarily of Phexxi 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 at or below 2023 levels in the current year.
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 on debt modification or extinguishment in the current period and loss on issuance of financial instruments in each of the presented periods.
| 39 |
Results of Operations
Three Months Ended March 31, 2024 Compared to Three Months Ended March 31, 2023 (in thousands):
Net Product Sales
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Product sales, net | $ | 3,603 | $ | 5,809 | $ | (2,206 | ) | (38 | )% | |||||||
The decrease in product sales, net, was primarily impacted by 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.
Additionally, the product sales, net in the current quarter reflect a slowdown of the dispensing process as a result of the negative impact of the cyberattack on Change Healthcare in mid February 2024, at which time Change Healthcare was the sole adjudicator (processor) used by the Company’s co-pay card vendor. In late April 2024, the Company’s co-pay card vendor was able to restore operations and we anticipate normalized prescription dispensing in the second quarter of 2024 and beyond.
Cost of Goods Sold
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Cost of goods sold | $ | 684 | $ | 1,376 | $ | (692 | ) | (50 | )% | |||||||
The decrease in cost of goods sold was primarily 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 were 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.
Research and Development Expenses
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Research and development | $ | 594 | $ | 540 | $ | 54 | 10 | % | ||||||||
The increase in research and development expenses was primarily due to an increase of approximately $0.1 million in facilities and outside services costs and an immaterial increase in personnel costs, partially offset by a decrease of approximately $0.1 million in clinical trial costs associated with EVOGUARD.
Selling and Marketing Expenses
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Selling and marketing | $ | 2,345 | $ | 3,854 | $ | (1,509 | ) | (39 | )% | |||||||
The decrease in selling and marketing expenses was primarily due to a $0.4 million decrease in marketing and DTC promotion costs, including media agency fees, a $0.8 million decrease in personnel costs due to reduced headcount and lower noncash stock-based compensation, and a $0.4 million decrease in facilities costs. The decreases were partially offset by an increase of approximately $0.1 million in outside services costs.
General and Administrative Expenses
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| General and administrative | $ | 2,824 | $ | 3,618 | $ | (794 | ) | (22 | )% | |||||||
The decrease in general and administrative expenses was primarily due to a $1.2 million decrease in facilities and outside services costs and a $0.6 million decrease in professional services fees related to legal and finance, partially offset by an increase of $1.0 million in personnel costs due to the Company cancelling the 2021 cash incentive bonus for named executives in the prior period quarter due to the Company’s financial constraints.
| 40 |
Total other income (expense), net
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Total other income (expense), net | $ | (1,965 | ) | $ | 1,228 | $ | (3,193 | ) | (260 | )% | ||||||
Total other income (expense), net, for the three months ended March 31, 2024 primarily included a loss on the issuance of financial instruments related to the anti-dilution adjustment for the purchase rights and $0.6 million interest expense related to the Adjuvant Note partially offset by gains related to the re-assignment of the Baker Notes of $1.1 million and $0.8 million from the change in fair value of financial instruments offset.
Total other income (expense), net, for the three months ended March 31, 2023, primarily included a $1.6 million gain from the change in fair value of financial instruments and $0.2 million gain from the disposal of our fleet cars, offset by $0.6 million of interest expense related to the Adjuvant Note.
Liquidity and Capital Resources
Overview
As of March 31, 2024, we had a working capital deficit of $67.3 million and an accumulated deficit of $893.6 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 March 31, 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 and cash equivalents include amounts held in checking accounts. Management believes that the Company’s cash and cash equivalents as of March 31, 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 will continue to focus on top-line growth and 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.
As of March 31, 2024, the Company’s significant commitments include the Baker Notes and Adjuvant Notes, as described in Note 4 - Debt and fleet leases and the Rush University 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 additional products, 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 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, 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.
| 41 |
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 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 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 March 31, 2024 and for the three months ended March 31, 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.
2023 Debt Financings
As described in Note 4 - Debt, we received gross proceeds of approximately $1.6 million, before issuance costs, from the sale of notes and warrants in three registered direct offerings in the first quarter of 2023.
Summary Statement 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):
| Three Months Ended March 31, | 2024 vs. 2023 | |||||||||||||||
| 2024 | 2023 | $ Change | % Change | |||||||||||||
| Net cash and restricted cash provided by (used in) operating activities | $ | 123 | $ | (4,940 | ) | $ | 5,063 | (102 | )% | |||||||
| Net cash and restricted cash used in investing activities | (14 | ) | (3 | ) | (11 | ) | 367 | % | ||||||||
| Net cash and restricted provided by financing activities | - | 1,701 | (1,701 | ) | (100 | )% | ||||||||||
| Net change in cash and restricted cash | $ | 109 | $ | (3,242 | ) | $ | 3,351 | (103 | )% | |||||||
Cash Flows from Operating Activities. During the three months ended March 31, 2024, the primary reason of net cash and restricted cash provided in operating activities was due to the limited spending in operations across all functions of the Company. During the three months ended March 31, 2023, the primary use of cash, cash equivalents and restricted cash was to fund the commercialization of Phexxi and to support general and administrative operations.
Cash Flows from Investing Activities. During the three months ended March 31, 2024, the primary use of cash, cash equivalents and restricted cash was the purchase of computer equipment for the sales force.
Cash Flows from Financing Activities. During the three months ended March 31, 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 $1.6 million, in aggregate, before the debt issuance costs.
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.
| 42 |
Contractual Obligations and Commitments
Operating Leases
Operating lease right-of-use assets and lease liabilities were $0.1 million each on both March 31, 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 no purchases under the supply and manufacturing agreement for the three months ended March 31, 2024 or 2023.
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 immaterial for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, approximately $1.3 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.
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.
| 43 |
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 March 31, 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.
| 44 |
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
There have not been any material changes to the risk factors disclosed in our Form 10-K for the year ended December 31, 2023, as filed with the SEC on April 27, 2023.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
As of the filing date, the Company does not have any defaults on any Senior Securities.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
None.
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
| * | Furnished herewith. This certification is being furnished solely to accompany this report pursuant to 18 U.S.C. 1350, and are 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 March 31, 2024 filed on May 15, 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. |
| 45 |
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: May 15, 2024 | By: | /s/ Ivy Zhang |
| Ivy Zhang | ||
Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer) | ||
| 46 |
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: | May 15, 2024 | By: | /s/ Saundra Pelletier |
| Saundra Pelletier | |||
| President, Chief Executive Officer, and Interim Chairperson of the Board | |||
| (Principal Executive Officer) |
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: | May 15, 2024 | By: | /s/ Ivy Zhang |
| Ivy Zhang | |||
| Chief Financial Officer and Secretary | |||
| (Principal Financial Officer and Principal Accounting Officer) |
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 March 31, 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: May 15, 2024 | By: | /s/ Saundra Pelletier |
| Saundra Pelletier | ||
| President, Chief Executive Officer, and Interim Chairperson of the Board | ||
| (Principal Executive Officer) |
| Date: May 15, 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.
Condensed Consolidated Statements of Comprehensive Operations (Unaudited) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Income Statement [Abstract] | ||
| Net loss | $ (4,809) | $ (2,354) |
| Other comprehensive income: | ||
| Change in fair value of financial instruments attributed to credit risk change (Note 4) | 324 | 15,460 |
| Comprehensive income (loss) | $ (4,485) | $ 13,106 |
Description of Business and Basis of Presentation |
3 Months Ended |
|---|---|
Mar. 31, 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, commercial-stage biopharmaceutical company committed to 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, and is the first and only FDA-approved, hormone-free, woman-controlled, on-demand prescription contraceptive gel for women. The Company commercially launched Phexxi in September 2020. 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), pursuant to which, and on the terms and subject to the conditions thereof, the Merger Sub was expected to merge with and into the Company, with the Company surviving as a wholly owned subsidiary of Aditxt (the Merger). As discussed in Note 10 – Subsequent Events, on April 26, 2024, the Company delivered a termination notice to Aditxt notifying it that the Company was exercising its right to terminate the Merger Agreement in accordance with Section 8.1(f) of the Merger Agreement. As further described (and defined) in Note 10 – Subsequent Events, on May 2, 2024, the Company entered into the Reinstatement and Fourth Amendment to the Merger Agreement with Aditxt in order to reinstate and amend the Merger Agreement.
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 months ended March 31, 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 and/or its supply chain 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. Additional activities have included raising capital, identifying alternative manufacturing to lower the cost of goods sold (COGS), seeking ex-U.S. licensing partners and product in-licensing/acquisition opportunities to add non-dilutive capital to the balance sheet, 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 March 31, 2024, the Company a working capital deficit of $67.3 million and an accumulated deficit of $893.6 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., a centralized electronic quotation service for over-the-counter securities, under the symbol “EVFM.” The OTCQB imposes, among other requirements, a minimum $ 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 $ per share to comply with the Bid Price Requirement for continued listing. As of May 10, 2024, the closing price was $.
Management’s plans to meet its cash flow needs in the next 12 months include generating recurring product revenue, restructuring 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 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 March 31, 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 in the U.S. or foreign markets, 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, 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.
|
Summary of Significant Accounting Policies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 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 and purchase rights issued; 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 other 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 March 31, 2024, based on the evaluation of these factors the Company did not record an allowance for doubtful accounts.
Phexxi is 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. They distribute Phexxi on demand as orders are received.
For the three months ended March 31, 2024, and 2023, the Company’s three largest customers combined made up approximately 82% and 86% of its gross product sales, respectively. As of March 31, 2024 and December 31, 2023, the Company’s three largest customers combined made up 89% 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.
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 quarter ended March 31, 2023, the letters of credit of $0.3 million for its fleet leases were released. 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. 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.
The following table provides a reconciliation of cash, cash equivalents and restricted cash, reported within the condensed consolidated statements of cash flows (in thousands):
Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. The net 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 in the three months ended March 31, 2024 and 2023, respectively. Diluted net loss per share is computed by dividing the net 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 and therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2024 and 2023. 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.
Recently Adopted Accounting Pronouncements
No significant new standards have been adopted during the three months ended March 31, 2024.
Recently Issued Accounting Pronouncements — Not Yet Adopted
From time to time, new accounting pronouncements are issued by the Financial Accounting Standards Board or other standards setting bodies that are adopted as of the specified effective date.
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.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenue |
3 Months Ended | ||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||
| Revenue | 3. Revenue
The Company recognizes revenue from the sale of Phexxi in accordance with Accounting Standards Codification (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 product 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.
Phexxi is 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:
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) are able to purchase Phexxi 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 offers a voluntary 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. 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 March 31, 2024 and December 31, 2023, respectively and $3.2 million in other current liabilities as of both March 31, 2024 and December 31, 2023.
|
Debt |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | 4. Debt
Convertible Notes
Baker Bros. Notes (temporarily owned by Aditxt from December 11, 2023 through February 26, 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 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 term with a cashless exercise provision and are immediately exercisable at any time from their respective issuance date.
The Baker Notes had a 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 months ended March 31, 2024 and 2023 was approximately $2.5 million and $1.4 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. The call price equals 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 also 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 – 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 and the exercise price as of March 31, 2024 was $ per share. Subsequent to March 31, 2024, the conversion price adjusted to $0.0154, as discussed in Note 10 – Subsequent Events.
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 has (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) the disclosure of top-line results from the EVOGUARD clinical trial (the Clinical Trial Milestone) by 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 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 (Baker 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:
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 was required to make a $1.0 million upfront payment by October 1, 2023 (which payment was made in late September 2023) as well as 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 such that if the global net revenue is less than or equal to $5.0 million, the Company will pay 3% of such global net revenues; if the global net revenue is over $5.0 million and less than or equal to $7.0 million, the Company will continue to pay 3% on net revenue up to $5.0 million and 4% on the net revenue over $5.0 million; and if the global net revenue is over $7.0 million, the Company will pay 3% on the net revenue up to $5.0 million, 4% on the net revenue over $5.0 million up to $7.0 million, and 5% on net revenue over $7.0 million. The cash payments were payable beginning in the fourth quarter of 2023. 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.
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:
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 issuance of financial instruments 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 this 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.
As of March 31, 2024, the Baker Notes are recorded at fair value in the condensed consolidated balance sheet as short-term convertible notes payable with a total fair value of $12.3 million, and the total outstanding balance including principal and accrued interest is $102.0 million.
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 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 three months ended March 31, 2024 was 8.8%.
Interest expense for the Adjuvant Notes consist of the following, and is included in other expense, net on the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):
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 $ 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 $ 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 has 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 $ 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 is initially fixed, but is subject to certain customary adjustments, and, until the second anniversary of issuance, adjustments for certain dilutive Company equity issuances. Refer to Note 8 - 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 March 31, 2024, all Adjuvant Purchase Rights remain outstanding. The conversion price of the Adjuvant Notes was reset during the quarter and was $0.0158 as of March 31, 2024. Subsequent to March 31, 2024, the conversion price adjusted to $0.0154, as discussed in Note 10 – Subsequent Events.
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 at 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 March 31, 2024, the Adjuvant Notes are recorded in the condensed consolidated balance sheet as short-term convertible notes payable with a total balance of $29.1 million. The balance is comprised of $22.5 million in principal, net of unamortized debt issuance costs, and $6.6 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.
As of March 31, 2024, and assuming the current conversion price of $0.0158 per share, the Adjuvant Notes could be converted into shares of common stock.
Term Notes
December 2022 and February, March, April, July, August, and September 2023 Notes (SSNs)
The Company entered into eight similar Securities Purchase Agreements (SPAs) between December 2022 and September 2023 with certain investors. Each of the agreements were 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, $ par value per share (including prefunded common stock Warrants as a part of the September 2023 SPA) (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 from and are convertible at the amounts listed below.
The SSNs interest rates are subject to increase to 12% upon an event of default and the Notes 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 notes at the respective premium rate tied to the occurrence of certain subsequent transactions, as well as require the Company to redeem the SSNs 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) less than the stated conversion rate and strike price at issuance. The strike prices adjusted as discussed in the table below. Additionally, subsequent to March 31, 2024, the conversion price of the SSNs was adjusted to $0.0154 per share due to the price reset requirements in the SPA.
The Company evaluated the SSNs in accordance with ASC 480 and determined that the Notes were all liability instruments at issuance. The applicable Notes 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 Notes.
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 income 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 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 to Aditxt series A-1 preferred stock and Series F-1 Shares were outstanding as of December 31, 2023 and held by Aditxt. The Series F-1 Shares were to be cancelled upon the consummation of the Merger. As discussed in Note 10 – Subsequent Events, on April 26, 2024, the Company terminated the Merger Agreement for non-performance under section 8.1(f) and without penalty.
Summary of SSNs and Warrants at Issuance (December 2022 to September 2023):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 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:
Prepaid and Other Current Assets
Prepaid and other current assets consist of the following (in thousands):
Property and Equipment, Net
Property and equipment, net, consists of the following (in thousands):
Depreciation expense for property and equipment was immaterial and $0.2 million in the three months ended March 31, 2024 and 2023, respectively.
Accrued Expenses
Accrued expenses consist of the following (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 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 March 31, 2024 and December 31, 2023, respectively (in thousands):
The following tables summarize the Company’s derivative liabilities as of March 31, 2024 and December 31, 2024 as discussed in Note 8 – Stockholders’ Deficit (in thousands):
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 months ended March 31, 2024 (in thousands):
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 months ended March 31, 2023 (in thousands):
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 months ended March 31, 2024 (in thousands):
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 months ended March 31, 2023 (in thousands):
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, issued as described in Note 4 – Debt 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 value 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 months ended March 31, 2024 and 2023 were recorded as a $0.2 million and a $1.6 million change in fair value of financial instruments attributed to credit risk change in the condensed consolidated comprehensive statement of operations.
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, as 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.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies | 7. Commitments and Contingencies
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 March 31, 2024, there were a total of 20 leased vehicles. The Company maintained a letter of credit as collateral in favor of the Lessor of $0.3 million included in restricted cash, which was released by the Lessor during the first quarter of 2023. 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 for an additional 12 months for the vehicles with a term of 24 months. The Company determined that such extension is accounted for as a modification, for which the Company reassessed the lease classification and the incremental borrowing rate on the modification date and accounted for 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. Gross sublease income was zero for the three months ended March 31, 2024 and $0.3 million for the three months ended March 31, 2023. The sublease was terminated along with the settlement of the 2020 Lease in June 2023.
Supplemental Financial Statement Information
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 no purchases under the supply and manufacturing agreement for the three months ended March 31, 2024 or 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. During the year ended December 31, 2023, the Company settled a portion of its trade payables with numerous vendors, which resulted in a $2.1 million reduction in trade payables. As of March 31, 2024, there were no other claims or actions pending against the Company which management believes has a probable, or reasonably possible, probability of an unfavorable outcome. However, the Company may receive trade payable demand letters from its vendors that could lead to potential litigation. As of March 31, 2024, approximately 94% 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 may need to be performed by July 2024.
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 immaterial for the three months ended March 31, 2024 and 2023, respectively. As of March 31, 2024 and December 31, 2023, approximately $1.3 million and $1.1 million were included in accrued expenses in the condensed consolidated balance sheets.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible and Redeemable Preferred Stock and Stockholders’ Deficit |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 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 reset to $0.0158 per share as of March 31, 2024. Subsequent to March 31, 2024, the conversion price adjusted to $0.0154, as discussed in Note 10 – Subsequent Events
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 term. Due to features in the May 2022 Common Stock Warrants, including dilution adjustments requiring strike price resets, there are 894,194 May 2022 Common Stock Warrants outstanding as of March 31, 2024 at an exercise price of $0.0158.
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, $ par value per share. The June 2022 Baker Warrants have an exercise price of $93.75 per share and a 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 had reset to $0.0158 per share as of March 31, 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 reset to $0.0158 per share as of March 31, 2024.
On December 21, 2023, warrants to purchase up to shares of the Company’s common stock were exchanged for shares of the Company’s Series F-1 Shares.
As of March 31, 2024, warrants to purchase up to 20,807,543 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 three months ended March 31, 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:
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 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 $ 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 $ per share (the Series E-1 Shares). An aggregate of 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 counted toward quorum on the basis of and have voting rights equal to the number of shares of common stock into which the Series E-1 Shares are then convertible. 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 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 March 31, 2024 was adjusted to $0.0158 per share. 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. During the three months ended March 31, 2024, an immaterial 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 $ per share (the Series F-1 Shares). An aggregate of 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.
On December 21, 2023, the Company issued a total of Series F-1 Shares to certain investors, including shares exchanged for warrants to purchase up to 9,972,074 shares of the Company’s common stock and 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. As discussed in Note 10 – Subsequent Events, on April 26, 2024, the Company terminated the Merger Agreement but entered into the Reinstatement and Fourth Amendment to the Merger Agreement on May 2, 2024.
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 $ per share (the Series D Preferred Shares). An aggregate of 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 shareholders approved a reverse split, as described in the D Certificate of Designation. All 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 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 shares of the Company’s common stock. The number of right shares for each Purchase Right is 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 subsequently signed an additional agreement with the holders of the Purchase Rights upon which the total aggregate value of the Purchase Rights is fixed at $24.7 million, to be paid in a variable number of shares based on the current exercise price. On December 21, 2023, the Company issued shares of the Series F-1 Shares in exchange for a partial value of certain purchase rights, as described above.
In connection with the SSNs issuances, during the three months ended March 31, 2024 and 2023, the Company increased the number of outstanding Purchase Rights by 1,145,333,158 and 10,467,332, respectively, due to the reset of their exercise price. This was recorded as a loss on issuance of financial instruments in the amount of $3.3 million and $0.1 million in the condensed consolidated statements of operations for the respective periods. The exercise price will be further adjusted if any other convertible instruments have price resets.
The Company issued shares of common stock upon the exercise of certain Purchase Rights during the three months ended March 31, 2024. As of March 31, 2024, Purchase Rights of 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 March 31, 2024:
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Stock-based Compensation |
Equity Incentive Plans
Stock Options
There were shares of stock options granted during the three months ended March 31, 2024 or 2023. As of March 31, 2024, unrecognized stock-based compensation expense for employee stock options was approximately $ million, which the Company expects to recognize over a weighted-average remaining period of years, assuming all unvested options become fully vested.
Employee Stock Purchase Plan
The purchase price under the 2019 ESPP is % 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 in 2023 to the Company’s executive management team.
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 March 31, 2024, there was unrecognized noncash stock-based compensation expense related to unvested RSAs.
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Subsequent Events |
3 Months Ended |
|---|---|
Mar. 31, 2024 | |
| Subsequent Events [Abstract] | |
| Subsequent Events | 10. Subsequent Events
Termination and Reinstatement of Merger Agreement
On April 26, 2024, the Company delivered a termination notice to Aditxt notifying it that the Company was exercising its right to terminate the Merger Agreement effective April 26, 2024 (the Termination Notice), in accordance with Section 8.1(f) of the Merger Agreement, as revised in the third amendment to the Merger Agreement, made on February 29, 2024.
Reinstatement and Amendment of Merger Agreement
On May 2, 2024, the Company, the Merger Sub and Aditxt entered into the Reinstatement and Fourth Amendment to the Merger Agreement (the “Fourth Amendment”) in order to waive and amend, among other things, several provisions. This Fourth Amendment reinstates the Merger Agreement, as amended by the Fourth Amendment, as if never terminated. In consideration of the Fourth Amendment, Aditxt agreed to pay the Company $1.0 million (the Initial Payment). The key financial terms in the Fourth Amendment were to revise section 6.10 of the Merger Agreement such that, after the Initial Payment, and upon the closing of each subsequent capital raise by Aditxt (each a Parent Subsequent Capital Raise), Aditxt shall purchase that number of shares of the Company’s Series F-1 Preferred Stock, par value $ per share (the Series F-1 Preferred Stock), equal to forty percent (40%) of the gross proceeds of such Parent Subsequent Capital Raise divided by , up to a maximum aggregate amount of $2.5 million or shares of Series F-1 Preferred Stock. A maximum of $1.5 million shall be invested in Evofem prior to June 17, 2024 and $1.0 million prior to July 1, 2024.
Conversion Price Reset
At the close of market on April 19, 2024, the conversion price for certain outstanding financial instruments (as described in Note 4 – Debt and Note 8 – Stockholders’ Deficit) was adjusted to $0.0154 as per provisions in their underlying agreements.
Warrants and Purchase Rights Exercises and Notes Conversions
Subsequent to March 31, 2024, the Company Purchase Rights were exercised in a cashless transaction for an equivalent number of shares of common stock. There were also cashless conversions whereby $0.1 million in convertible notes were converted to shares of common stock. |
Summary of Significant Accounting Policies (Policies) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 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 and purchase rights issued; 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 other 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 March 31, 2024, based on the evaluation of these factors the Company did not record an allowance for doubtful accounts.
Phexxi is 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. They distribute Phexxi on demand as orders are received.
For the three months ended March 31, 2024, and 2023, the Company’s three largest customers combined made up approximately 82% and 86% of its gross product sales, respectively. As of March 31, 2024 and December 31, 2023, the Company’s three largest customers combined made up 89% 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.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 quarter ended March 31, 2023, the letters of credit of $0.3 million for its fleet leases were released. 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. 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.
The following table provides a reconciliation of cash, cash equivalents and restricted cash, reported within the condensed consolidated statements of cash flows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Net Loss Per Share |
Basic net loss per share attributable to common stockholders is calculated by dividing the net loss by the weighted-average number of common shares outstanding during the period, without consideration for potentially dilutive securities. The net 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 in the three months ended March 31, 2024 and 2023, respectively. Diluted net loss per share is computed by dividing the net 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 and therefore, basic and diluted net loss per share were the same for the three months ended March 31, 2024 and 2023. 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.
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Recently Adopted Accounting Pronouncements | Recently Adopted Accounting Pronouncements
No significant new standards have been adopted during the three months ended March 31, 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 or other standards setting bodies that are adopted as of the specified effective date.
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. |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Summary of Significant Accounting Policies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Reconciliation of Cash and Restricted Cash | The following table provides a reconciliation of cash, cash equivalents and restricted cash, reported within the condensed consolidated statements of cash flows (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Potentially Dilutive Securities Excluded from Calculation of Diluted Net Loss Per Share |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Debt (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Interest Expense | Interest expense for the Adjuvant Notes consist of the following, and is included in other expense, net on the condensed consolidated statements of operations for the three months ended March 31, 2024 and 2023 (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of SSNs and Warrants | Summary of SSNs and Warrants at Issuance (December 2022 to September 2023):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Balance Sheet Details (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Inventories | Inventories consist of the following (in thousands) for the period indicated:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Prepaid and Other Current Assets | Prepaid and other current assets consist of the following (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Property and Equipment Net | Property and equipment, net, consists of the following (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Accrued Expenses | Accrued expenses consist of the following (in thousands):
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Fair Value of Financial Instruments (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Fair Value of Financial Liabilities | The following tables summarize the Company’s derivative liabilities as of March 31, 2024 and December 31, 2024 as discussed in Note 8 – Stockholders’ Deficit (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 months ended March 31, 2024 (in thousands):
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 months ended March 31, 2023 (in thousands):
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 months ended March 31, 2024 (in thousands):
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 months ended March 31, 2023 (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 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 March 31, 2024 and December 31, 2023, respectively (in thousands):
The following tables summarize the Company’s derivative liabilities as of March 31, 2024 and December 31, 2024 as discussed in Note 8 – Stockholders’ Deficit (in thousands):
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Commitments and Contingencies (Tables) |
3 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Commitments and Contingencies Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Lease Cost |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Lease Term and Discount Rate |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Operating Lease Maturities |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Supplement Cash Outflows in Operating Leases |
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Equity [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Warrants |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Common Stock Reserved for Future Issuance | Common stock reserved for future issuance is as follows in common equivalent shares as of March 31, 2024:
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Stock-based Compensation (Tables) |
3 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Stock-based Compensation Expense Related to Stock Options |
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Description of Business and Basis of Presentation (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | 12 Months Ended | ||||
|---|---|---|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Dec. 31, 2022 |
May 10, 2024 |
Oct. 03, 2022 |
|
| Product Information [Line Items] | ||||||
| Revenue from product sales | $ 3,603 | $ 5,809 | ||||
| Working capital deficit | 67,300 | |||||
| Accumulated deficit | $ 893,555 | $ 888,699 | ||||
| Share price | $ 0.01 | |||||
| Subsequent Event [Member] | ||||||
| Product Information [Line Items] | ||||||
| Share price | $ 0.0136 | |||||
| Phexxi [Member] | ||||||
| Product Information [Line Items] | ||||||
| Revenue from product sales | $ 18,200 | $ 16,800 | ||||
Schedule of Reconciliation of Cash and Restricted Cash (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
Dec. 31, 2022 |
|---|---|---|---|---|
| Accounting Policies [Abstract] | ||||
| Cash and cash equivalents | $ 639 | |||
| Restricted cash | 689 | 580 | 895 | |
| Total cash, cash equivalents and restricted cash presented in the condensed consolidated statements of cash flows | $ 689 | $ 580 | $ 1,534 | $ 4,776 |
Summary of Significant Accounting Policies (Details Narrative) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended | |
|---|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
|
| Product Information [Line Items] | |||
| Proceeds from issuancde of notes | $ 25.0 | ||
| Warrant, Down Round Feature, Decrease in Net Income to Common Shareholder, Amount | 0.0 | ||
| Building and Building Improvements [Member] | |||
| Product Information [Line Items] | |||
| Letters of credit | 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 | 82.00% | 86.00% | |
| Accounts Receivable [Member] | Four Largest Customers Combined [Member] | Customer Concentration Risk [Member] | |||
| Product Information [Line Items] | |||
| Concentration Risk, Percentage | 89.00% | 87.00% | |
Revenue (Details Narrative) - USD ($) $ in Millions |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Trade accounts receivable | $ 0.2 | $ 0.3 |
| Other liabilities, current | $ 3.2 | $ 3.2 |
| Minimum [Member] | ||
| Payment term | 31 days | |
| Maximum [Member] | ||
| Payment term | 66 days |
Schedule of Repurchase Price Reduction (Details) - Baker Notes [Member] $ in Thousands |
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 |
Schedule of Interest Expense (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Debt Disclosure [Abstract] | ||
| Coupon interest | $ 536 | $ 497 |
| Amortization of issuance costs | 28 | 68 |
| Total | $ 564 | $ 565 |
Schedule of SSNs and Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands |
3 Months Ended | ||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
Sep. 30, 2023 |
Jun. 30, 2023 |
Mar. 31, 2023 |
Sep. 30, 2022 |
||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Preferred Shares | 0 | 0 | |||||||||||||||
| December 2022 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | $ 2,308 | ||||||||||||||||
| Gross proceeds before issuance costs | $ 1,500 | ||||||||||||||||
| Warrants at issued (common stock) | 369,230 | ||||||||||||||||
| Preferred Shares | 70 | ||||||||||||||||
| Maturity Date | Dec. 21, 2025 | ||||||||||||||||
| Conversion price | $ 0.0158 | $ 0.0615 | $ 0.0845 | $ 0.8125 | $ 1.625 | $ 6.25 | |||||||||||
| February 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | [1] | $ 1,385 | |||||||||||||||
| Gross proceeds before issuance costs | [1] | $ 900 | |||||||||||||||
| Warrants at issued (common stock) | [1] | 653,538,000 | |||||||||||||||
| Maturity Date | [1] | Feb. 17, 2026 | |||||||||||||||
| Conversion price | [1] | $ 0.0158 | 0.0615 | 0.0845 | 0.8125 | 1.625 | 2.50 | ||||||||||
| March 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | $ 600 | ||||||||||||||||
| Gross proceeds before issuance costs | $ 390 | ||||||||||||||||
| Warrants at issued (common stock) | 240,000 | ||||||||||||||||
| Maturity Date | Mar. 17, 2026 | ||||||||||||||||
| Conversion price | $ 0.0158 | 0.0615 | 0.0845 | 0.8125 | 1.625 | 2.50 | |||||||||||
| March Two 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | [2] | $ 538 | |||||||||||||||
| Gross proceeds before issuance costs | [2] | $ 350 | |||||||||||||||
| Warrants at issued (common stock) | [2] | 258,584 | |||||||||||||||
| Maturity Date | [2] | Mar. 20, 2026 | |||||||||||||||
| Conversion price | $ 1.625 | [2] | 0.0615 | [2] | 0.0845 | 0.8125 | [2] | 0.0158 | [2] | 2.50 | [2] | ||||||
| April 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | $ 769 | ||||||||||||||||
| Gross proceeds before issuance costs | $ 500 | ||||||||||||||||
| Warrants at issued (common stock) | 615,384 | ||||||||||||||||
| Maturity Date | Mar. 06, 2026 | ||||||||||||||||
| Conversion price | 0.0615 | 0.0845 | $ 0.8125 | 0.0158 | [2] | 1.25 | |||||||||||
| July 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | $ 1,500 | ||||||||||||||||
| Gross proceeds before issuance costs | $ 975 | ||||||||||||||||
| Warrants at issued (common stock) | 1,200,000 | ||||||||||||||||
| Maturity Date | Mar. 06, 2026 | ||||||||||||||||
| Conversion price | 0.0615 | 0.0845 | 0.0158 | [2] | 1.25 | ||||||||||||
| August 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | $ 1,000 | ||||||||||||||||
| Gross proceeds before issuance costs | $ 650 | ||||||||||||||||
| Warrants at issued (common stock) | 799,999 | ||||||||||||||||
| Maturity Date | Aug. 04, 2026 | ||||||||||||||||
| Conversion price | 0.0615 | 0.0845 | $ 0.0158 | [2] | 1.25 | ||||||||||||
| September 2023 Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | [3] | $ 2,885 | |||||||||||||||
| Gross proceeds before issuance costs | [3] | $ 1,875 | |||||||||||||||
| Warrants at issued (common stock) | [3] | 26,997,041 | |||||||||||||||
| Maturity Date | [3] | Sep. 26, 2026 | |||||||||||||||
| Conversion price | [3] | $ 0.0158 | $ 0.0615 | $ 0.13 | $ 0.13 | ||||||||||||
| Senior Subordinated Notes [Member] | |||||||||||||||||
| Short-Term Debt [Line Items] | |||||||||||||||||
| Principal at issuance | $ 10,985 | ||||||||||||||||
| Gross proceeds before issuance costs | $ 7,140 | ||||||||||||||||
| Warrants at issued (common stock) | 31,133,776 | ||||||||||||||||
| |||||||||||||||||
Schedule of SSNs and Warrants (Details) (Parenthetical) - $ / shares |
Mar. 31, 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 |
Debt (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Oct. 01, 2023 |
Sep. 08, 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 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Dec. 31, 2023 |
Apr. 19, 2024 |
Feb. 26, 2024 |
Dec. 21, 2023 |
Aug. 07, 2023 |
Jun. 30, 2023 |
Dec. 31, 2022 |
Sep. 30, 2022 |
May 31, 2022 |
Apr. 23, 2020 |
|
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Warrant exercise price per share | $ 2.42 | |||||||||||||||||||||||
| Interest expense | $ 564 | $ 565 | ||||||||||||||||||||||
| Proceeds from issuance of sale of equity | $ 50,000 | |||||||||||||||||||||||
| Debt covenant, cumulative net sales requirement | $ 100,000 | |||||||||||||||||||||||
| Exercise price | $ 0.0158 | |||||||||||||||||||||||
| Debt instrument periodic payment | $ 92,700 | |||||||||||||||||||||||
| Cumulative net sales | $ 100,000 | |||||||||||||||||||||||
| Accrued interest percentage | 10.00% | |||||||||||||||||||||||
| Interest revenue expenses net | $ 1,000 | |||||||||||||||||||||||
| Debt and interest payment description | The cash payments will be determined based upon the quarterly global net revenue of Phexxi such that if the global net revenue is less than or equal to $5.0 million, the Company will pay 3% of such global net revenues; if the global net revenue is over $5.0 million and less than or equal to $7.0 million, the Company will continue to pay 3% on net revenue up to $5.0 million and 4% on the net revenue over $5.0 million; and if the global net revenue is over $7.0 million, the Company will pay 3% on the net revenue up to $5.0 million, 4% on the net revenue over $5.0 million up to $7.0 million, and 5% on net revenue over $7.0 million. The cash payments were payable beginning in the fourth quarter of 2023. 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. | |||||||||||||||||||||||
| Gain on extinguishment of debt | $ 1,120 | $ 75,300 | ||||||||||||||||||||||
| Revalued amount extinguishment of debt amount | $ 73,200 | |||||||||||||||||||||||
| Common stock, par value (in usd per share) | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||||||||||
| [custom:DebtInstrumentRedemptionPremiumInEventOfDefault-0] | 25.00% | |||||||||||||||||||||||
| Warrants to purchase up | 894,194 | |||||||||||||||||||||||
| Series F One Shares [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Warrants outstanding | 22,280 | |||||||||||||||||||||||
| Common Stock [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Warrants to purchase up | 9,972,074 | |||||||||||||||||||||||
| Warrants outstanding | 613 | |||||||||||||||||||||||
| Subsequent Event [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Conversion price | $ 0.0154 | |||||||||||||||||||||||
| 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 | $ 0.0158 | |||||||||||||||||||||||
| Baker Bros. Notes [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| [custom:ClassOfWarrantOrRightVestingTerm] | 5 years | |||||||||||||||||||||||
| Debt instrument, term | 2 years | |||||||||||||||||||||||
| Conversion price | $ 4,575 | |||||||||||||||||||||||
| Conversion price as a percentage of lowest stock price | 115.00% | |||||||||||||||||||||||
| Conversion price threshold percentage | 100.00% | |||||||||||||||||||||||
| Short-term convertible notes payable | $ 12,500 | $ 13,252 | $ 14,731 | $ 13,500 | ||||||||||||||||||||
| Accrued interest | 102,000 | |||||||||||||||||||||||
| Baker Bros. Notes [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Debt instrument, face amount | $ 25,000 | |||||||||||||||||||||||
| Debt instrument, term | 5 years | |||||||||||||||||||||||
| Debt instrument conversion rate | 10.00% | |||||||||||||||||||||||
| Debt instrument interest rate effective percent | 10.00% | |||||||||||||||||||||||
| Interest expense | 2,500 | $ 1,400 | ||||||||||||||||||||||
| Written notice period | 10 days | |||||||||||||||||||||||
| Debt instrument, benchmark price per share | $ 9,356.25 | |||||||||||||||||||||||
| Conversion price | $ 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] | ||||||||||||||||||||||||
| Debt instrument, face amount | $ 25,000 | |||||||||||||||||||||||
| Warrants purchase | 2,731 | |||||||||||||||||||||||
| Warrant exercise price per share | $ 4,575 | |||||||||||||||||||||||
| Second Baker Amendment [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Conversion price | $ 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] | ||||||||||||||||||||||||
| Conversion price | $ 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] | ||||||||||||||||||||||||
| Short-term convertible notes payable | $ 12,300 | |||||||||||||||||||||||
| Adjuvant Notes [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Debt instrument interest rate effective percent | 8.80% | |||||||||||||||||||||||
| Conversion price | $ 678.49 | $ 0.0158 | ||||||||||||||||||||||
| Conversion price as a percentage of lowest stock price | 100.00% | |||||||||||||||||||||||
| Short-term convertible notes payable | $ 29,101 | 28,537 | ||||||||||||||||||||||
| Debt conversion, converted instrument shares issued | 1,842,275,987 | |||||||||||||||||||||||
| Adjuvant Notes [Member] | Convertible Notes Payable [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Debt instrument, face amount | $ 25,000 | |||||||||||||||||||||||
| Debt instrument, term | 5 years | |||||||||||||||||||||||
| Debt instrument conversion rate | 7.50% | |||||||||||||||||||||||
| Conversion price | $ 26.25 | $ 6,843.75 | ||||||||||||||||||||||
| Debt covenant, cumulative net sales requirement | $ 100,000 | |||||||||||||||||||||||
| Beneficial ownership limitation percentage | 4.99% | |||||||||||||||||||||||
| Beneficial ownership limitation percentage | 19.99% | |||||||||||||||||||||||
| Common stock, par value (in usd per share) | $ 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 | |||||||||||||||||||||||
| Debt conversion converted instrument amount | 109,842 | |||||||||||||||||||||||
| Restricted Cash | $ 25,000 | |||||||||||||||||||||||
| Convertible debt | $ 29,100 | 28,500 | ||||||||||||||||||||||
| Convertible debt, current principal amount | 22,500 | $ 22,500 | ||||||||||||||||||||||
| Convertible debt, current, accrued interest | $ 6,600 | $ 6,100 | ||||||||||||||||||||||
| 8.0% Senior Subordinated Notes Due 2025 Issued December 2022 [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| [custom:DebtInstrumentRedemptionPremiumInEventOfDefault-0] | 32.50% | |||||||||||||||||||||||
| 8.0% Senior Subordinated Notes Due 2025 Issued December 2022 [Member] | Unsecured Debt [Member] | ||||||||||||||||||||||||
| Debt Instrument [Line Items] | ||||||||||||||||||||||||
| Debt instrument interest rate stated percent | 8.00% | |||||||||||||||||||||||
| [custom:DebtInstrumentInterestRateInEventOfDefault-0] | 12.00% | |||||||||||||||||||||||
Schedule of Inventories (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
||
|---|---|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
| Raw materials | [1] | $ 526 | $ 520 | |
| Work in process | 386 | |||
| Finished goods | [1] | 780 | 791 | |
| Total | $ 1,306 | $ 1,697 | ||
| ||||
Schedule of Inventories (Details) (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2023 |
Mar. 31, 2024 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Inventory adjustments | $ 0.3 | $ 0.2 |
| Inventory write-down | $ 1.3 |
Schedule of Prepaid and Other Current Assets (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Insurance | $ 314 | $ 777 |
| Research & development | 13 | 13 |
| Other | 295 | 405 |
| Total | $ 622 | $ 1,195 |
Schedule of Property and Equipment Net (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment gross | $ 1,889 | $ 2,389 |
| Less: accumulated depreciation | (689) | (1,186) |
| Total, net | 1,200 | 1,203 |
| Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment gross | $ 586 | 586 |
| Useful Life | 5 years | |
| Computer Equipment [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment gross | $ 151 | 647 |
| Computer Equipment and Software [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Useful Life | 3 years | |
| Construction in Progress [Member] | ||
| Property, Plant and Equipment [Line Items] | ||
| Property and equipment gross | $ 1,152 | $ 1,156 |
Schedule of Accrued Expenses (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
|---|---|---|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Clinical trial related costs | $ 2,498 | $ 2,498 |
| Accrued royalty | 1,336 | 1,146 |
| Other | 741 | 583 |
| Total | $ 4,575 | $ 4,227 |
Balance Sheet Details (Details Narrative) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||
| Depreciation expense | $ 12 | $ 245 |
Schedule of Fair Value of Financial Liabilities (Details) - USD ($) $ in Thousands |
Mar. 31, 2024 |
Dec. 31, 2023 |
Mar. 31, 2023 |
||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||
| Derivative liabilities | $ 4,310 | $ 1,926 | |||||||||||
| Fair Value, Inputs, Level 3 [Member] | |||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||
| Derivative liabilities | 4,310 | 1,926 | |||||||||||
| Convertible Debt [Member] | |||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||
| Principal Amount | 133,771 | 131,337 | |||||||||||
| Unamortized Issuance Costs | (27) | ||||||||||||
| Accrued Interest | 6,601 | 6,064 | |||||||||||
| Net carrying amount | 140,372 | 137,374 | |||||||||||
| Fair value amount | 13,252 | 14,731 | |||||||||||
| Unamortized Issuance Costs | 27 | ||||||||||||
| 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] | 101,974 | 99,460 | ||||||||||
| Unamortized Issuance Costs | [1],[2] | ||||||||||||
| Accrued Interest | [1],[2] | ||||||||||||
| Net carrying amount | [1],[2] | 101,974 | 99,460 | ||||||||||
| Fair value amount | [1],[2] | 12,260 | 13,510 | ||||||||||
| Unamortized Issuance Costs | [1],[2] | ||||||||||||
| Adjuvant Notes [Member] | Convertible Debt [Member] | |||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||
| Unamortized Issuance Costs | [3] | (27) | |||||||||||
| Accrued Interest | [3] | 6,601 | 6,064 | ||||||||||
| Unamortized Issuance Costs | [3] | 27 | |||||||||||
| 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] | 29,101 | 28,537 | ||||||||||
| Adjuvant Notes [Member] | Convertible Debt [Member] | Estimate of Fair Value Measurement [Member] | |||||||||||||
| Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||||||||||
| Fair value amount | [3] | ||||||||||||
| Adjuvant 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] | 22,500 | |||||||||||
| Fair value amount | [1],[2] | 22,500 | |||||||||||
| 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] | 959 | 940 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 959 | 940 | ||||||||||
| Fair value amount | [2] | 103 | 118 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| 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] | 924 | 905 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 924 | 905 | ||||||||||
| Fair value amount | [2] | 99 | 118 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| 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] | 1,189 | 1,204 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 1,189 | 1,204 | ||||||||||
| Fair value amount | [2] | 127 | 157 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| 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] | 832 | 816 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 832 | 816 | ||||||||||
| Fair value amount | [2] | 89 | 106 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| 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] | 1,335 | 1,534 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 1,335 | 1,534 | ||||||||||
| Fair value amount | [2] | 142 | 202 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| 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] | 1,054 | 1,033 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 1,054 | 1,033 | ||||||||||
| Fair value amount | [2] | 112 | 136 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| 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] | 3,004 | 2,945 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| Accrued Interest | [2] | ||||||||||||
| Net carrying amount | [2] | 3,004 | 2,945 | ||||||||||
| Fair value amount | [2] | 320 | 384 | ||||||||||
| Unamortized Issuance Costs | [2] | ||||||||||||
| |||||||||||||
Schedule of Fair Value of Financial Liabilities (Details) (Parenthetical) - USD ($) $ in Millions |
3 Months Ended | 12 Months Ended |
|---|---|---|
Mar. 31, 2024 |
Dec. 31, 2023 |
|
| Baker Notes [Member] | Convertible Debt [Member] | ||
| Short-Term Debt [Line Items] | ||
| Interest paid in kind | $ 16.9 | $ 13.7 |
Schedule of Change in Fair Value of Level 3 Financial Liabilities (Details) - Fair Value, Inputs, Level 3 [Member] - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Long-Term Debt [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | $ 14,731 | $ 39,416 |
| Extinguishment/conversion | (13,545) | |
| Initial liability at issuance | 12,390 | 12 |
| Change in fair value presented in the consolidated statements of operations | (324) | (15,460) |
| Ending balance | 13,252 | 23,807 |
| Change in fair value presented in the consolidated statements of operations | (161) | |
| Long-Term Debt [Member] | Baker Notes Assigned To Aditxt Notes [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 13,510 | 39,260 |
| Extinguishment/conversion | (13,510) | |
| Initial liability at issuance | 12,390 | |
| Change in fair value presented in the consolidated statements of operations | (130) | (15,460) |
| Ending balance | 12,260 | 23,800 |
| Change in fair value presented in the consolidated statements of operations | ||
| Long-Term Debt [Member] | Total Offerings [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 1,221 | 156 |
| Extinguishment/conversion | (35) | |
| Initial liability at issuance | 12 | |
| Change in fair value presented in the consolidated statements of operations | (194) | |
| Ending balance | 992 | 7 |
| Change in fair value presented in the consolidated statements of operations | (161) | |
| Derivative Financial Instruments, Liabilities [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 1,926 | 1,676 |
| Initial liability at issuance | 3,275 | 83 |
| Change in fair value presented in the consolidated statements of operations | (802) | (1,451) |
| Ending balance | 4,310 | 122 |
| Exercises | (89) | (186) |
| Derivative Financial Instruments, Liabilities [Member] | Rights [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 1,926 | 1,095 |
| Initial liability at issuance | 3,275 | 77 |
| Change in fair value presented in the consolidated statements of operations | (802) | (886) |
| Ending balance | 4,310 | 106 |
| Exercises | (89) | (180) |
| Derivative Financial Instruments, Liabilities [Member] | Derivative Liability Convertible Preferred Stock [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 1 | |
| Initial liability at issuance | ||
| Change in fair value presented in the consolidated statements of operations | (1) | |
| Ending balance | ||
| Exercises | ||
| Derivative Financial Instruments, Liabilities [Member] | May 2022 Public Offering Warrants [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 303 | |
| Initial liability at issuance | ||
| Change in fair value presented in the consolidated statements of operations | (291) | |
| Ending balance | 6 | |
| Exercises | (6) | |
| Derivative Financial Instruments, Liabilities [Member] | June 2022 Baker Warrants [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 170 | |
| Initial liability at issuance | ||
| Change in fair value presented in the consolidated statements of operations | (167) | |
| Ending balance | 3 | |
| Exercises | ||
| Derivative Financial Instruments, Liabilities [Member] | December 2022 Warrants [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | 107 | |
| Initial liability at issuance | ||
| Change in fair value presented in the consolidated statements of operations | (106) | |
| Ending balance | ||
| Exercises | ||
| Derivative Financial Instruments, Liabilities [Member] | February and March 2023 Notes [Member] | ||
| Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | ||
| Beginning balance | ||
| Initial liability at issuance | 6 | |
| Change in fair value presented in the consolidated statements of operations | ||
| Ending balance | 6 | |
| Exercises | ||
Fair Value of Financial Instruments (Details Narrative) $ in Millions |
3 Months Ended | |
|---|---|---|
|
Mar. 31, 2024
USD ($)
|
Mar. 31, 2023
USD ($)
|
|
| Baker Bros. Notes [Member] | Measurement Input Royalty Rate [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Debt instrument, measurement input | 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 | |
| Senior Subordinated Notes [Member] | ||
| Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
| Change in fair value of financial instruments | $ 0.2 | $ 1.6 |
Schedule of Lease Cost (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Loss Contingencies [Line Items] | ||
| Operating lease expense | $ 56 | $ 456 |
| Research and Development Expense [Member] | ||
| Loss Contingencies [Line Items] | ||
| Operating lease expense | 1 | 66 |
| Selling and Marketing Expense [Member] | ||
| Loss Contingencies [Line Items] | ||
| Operating lease expense | 52 | 159 |
| General and Administrative Expense [Member] | ||
| Loss Contingencies [Line Items] | ||
| Operating lease expense | $ 3 | $ 231 |
Schedule of Lease Term and Discount Rate (Details) |
Mar. 31, 2024 |
Mar. 31, 2023 |
|---|---|---|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Weighted Average Remaining Lease Term (in years) | 7 months 24 days | 9 months |
| Weighted Average Discount Rate | 12.00% | 12.00% |
Schedule of Operating Lease Maturities (Details) $ in Thousands |
Mar. 31, 2024
USD ($)
|
|---|---|
| Commitments and Contingencies Disclosure [Abstract] | |
| Remainder of 2024 (9 months) | $ 56 |
| Year ending December 31, 2025 | 11 |
| Total lease payments | 67 |
| Less imputed interest | (8) |
| Total | $ 59 |
Schedule of Supplement Cash Outflows in Operating Leases (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Commitments and Contingencies Disclosure [Abstract] | ||
| Operating cash outflows in operating leases | $ 64 | $ 610 |
Commitments and Contingencies (Details Narrative) |
1 Months Ended | 3 Months Ended | |||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
|
May 27, 2022
USD ($)
ft²
|
Jan. 01, 2021
USD ($)
|
Jun. 30, 2023
USD ($)
|
Sep. 30, 2022 |
Mar. 31, 2024
USD ($)
Integer
|
Mar. 31, 2023
USD ($)
|
Dec. 31, 2023
USD ($)
|
Mar. 20, 2023
USD ($)
|
Apr. 14, 2020
USD ($)
ft²
|
Dec. 31, 2019 |
Oct. 03, 2019
USD ($)
ft²
|
|
| Loss Contingencies [Line Items] | |||||||||||
| Number of leased vehicles | Integer | 20 | ||||||||||
| Restricted cash | $ 689,000 | $ 895,000 | $ 580,000 | ||||||||
| Square footage | ft² | 8,816 | 24,474 | |||||||||
| Operating lease right-of-use assets | 59,000 | 106,000 | $ 3,300,000 | ||||||||
| Operating lease liabilities | 4,000 | 8,000 | 4,200,000 | ||||||||
| Gain on termination of lease | $ 200,000 | ||||||||||
| Company area (in square feet) | ft² | 16,637 | ||||||||||
| Lease expenses | $ 100,000 | ||||||||||
| Lease percentage | 3.50% | ||||||||||
| Sublease gross income | 300,000 | ||||||||||
| Purchase obligation, purchases during the period | $ 0 | 0 | |||||||||
| Accounts payable, trade | 2,100,000 | ||||||||||
| Percentage of accounts payable trade | 94.00% | ||||||||||
| Accrued expenses | $ 4,575,000 | 4,227,000 | |||||||||
| Rush License Agreement [Member] | |||||||||||
| Loss Contingencies [Line Items] | |||||||||||
| Royalty cost | 200,000 | $ 200,000 | |||||||||
| Accrued expenses | 1,300,000 | $ 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 | ||||||||||
| Letter of Credit [Member] | |||||||||||
| Loss Contingencies [Line Items] | |||||||||||
| Security deposit | $ 50,000.00 | $ 800,000 | |||||||||
| Vehicles [Member] | Securities Deposit [Member] | |||||||||||
| Loss Contingencies [Line Items] | |||||||||||
| Restricted cash | $ 300,000 | ||||||||||
| 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 | 24 months | ||||||||||
| Lessee operating lease extended lease term | 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 | ||||||||||
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 |
Jun. 11, 2014 |
Mar. 31, 2024 |
Apr. 08, 2023 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
| Class of warrant or right outstanding | 20,807,543,000 | |||||||||||||||||||
| Exercise price | $ 2.42 | |||||||||||||||||||
| Common Warrants [Member] | ||||||||||||||||||||
| Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||||||||||||
| Class of warrant or right outstanding | 12,721,893 | 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 | 4 | 615,384 | ||
| Exercise price | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 0.0158 | $ 309.56 | $ 897.56 | $ 735.00 | $ 0.0158 | $ 0.0158 | $ 11,962.50 | $ 11,962.50 | $ 14,062.50 | $ 6,918.75 | ||
| 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 | June 11, 2014 to June 11, 2024 | ||
| 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 |
Summary of Common Stock Reserved for Future Issuance (Details) |
Mar. 31, 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 | 10,598,205 | |||
| Common stock reserved for the exercise of purchase rights | 722,646,377 | |||
| Common stock reserved for conversion of convertible notes | 148,541,458 | |||
| Number of shares available for grant | 33,750,860 | |||
| Common stock capital shares reserved for future issuance | 915,547,554 | [1] | ||
| Employee Stock Purchase Plan 2019 [Member] | ||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
| Number of shares available for grant | 509 | |||
| Amended and Restated 2014 Plan [Member] | ||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
| Number of shares available for grant | 5,789 | |||
| Inducement Plan [Member] | ||||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||||
| Number of shares available for grant | 609 | |||
| ||||
Convertible and Redeemable Preferred Stock and Stockholders’ Deficit (Details Narrative) $ / shares in Units, $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Aug. 07, 2023
USD ($)
$ / shares
shares
|
Sep. 15, 2022
USD ($)
shares
|
Jun. 30, 2022
$ / shares
shares
|
Mar. 31, 2024
USD ($)
Integer
$ / shares
shares
|
Mar. 31, 2023
USD ($)
Integer
shares
|
Dec. 31, 2023
USD ($)
$ / shares
shares
|
Apr. 19, 2024
$ / shares
|
Dec. 21, 2023
shares
|
Dec. 11, 2023
$ / shares
shares
|
Dec. 31, 2022
$ / shares
|
Dec. 16, 2022
$ / shares
shares
|
May 31, 2022
$ / shares
shares
|
Dec. 15, 2021
$ / shares
shares
|
Apr. 30, 2020
$ / shares
shares
|
|||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants exercise price | $ / shares | $ 2.42 | |||||||||||||||
| Common stock warrant outstanding | 894,194 | |||||||||||||||
| Common stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | $ 0.0001 | |||||||||||||
| Class of warrant or right, number of securities called by warrants or rights | 20,807,543,000 | |||||||||||||||
| Common stock shares | 9,972,074 | |||||||||||||||
| Preferred stock, shares authorized | 5,000,000 | 5,000,000 | 5,000,000 | |||||||||||||
| Preferred stock, par value | $ / shares | $ 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 | $ | $ 1.8 | |||||||||||||||
| Warrants to purchase up | 10,598,205 | |||||||||||||||
| Preferred stock, shares issued | 0 | 0 | ||||||||||||||
| Common stock, shares authorized | 3,000,000,000 | 3,000,000,000 | 3,000,000,000 | |||||||||||||
| Common stock capital share reserved for future issuance | 722,646,377 | |||||||||||||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | [1] | 5,513,316,258 | 35,466,940 | |||||||||||||
| Rights [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Antidilutive Securities Excluded from Computation of Earnings Per Share, Amount | 1,530,645,242 | 14,238,827 | ||||||||||||||
| Adjuvant and May 2022 Notes [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Aggregate purchase rights | 942,080 | |||||||||||||||
| Purchase rights | $ | $ 24.7 | |||||||||||||||
| 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] | ||||||||||||||||
| Conversion price | $ / shares | $ 0.40 | $ 0.0158 | $ 0.0635 | |||||||||||||
| Preferred stock, shares authorized | 95,000 | |||||||||||||||
| Preferred stock, par value | $ / shares | $ 0.0001 | $ 0.0001 | ||||||||||||||
| Debt Conversion, Converted Instrument, Amount | $ | $ 1.8 | |||||||||||||||
| Series F One Shares [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants outstanding | 22,280 | |||||||||||||||
| Series F-1 Common Stock [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants to purchase up | 9,972,074 | |||||||||||||||
| Series F-1 Convertible and Redeemable Preferred Stock [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Temporary Equity, Shares Outstanding | 22,280 | 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 voting right power percentage | 1.00% | |||||||||||||||
| Preferred stock, shares issued | 70 | |||||||||||||||
| Warrant [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants exercise price | $ / shares | $ 0.0158 | |||||||||||||||
| Common Stock [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Common stock warrant outstanding | 9,972,074 | |||||||||||||||
| Warrants outstanding | 613 | |||||||||||||||
| Common Stock [Member] | Minimum [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants exercise price | $ / shares | 0.13 | |||||||||||||||
| Common Stock [Member] | Maximum [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants exercise price | $ / shares | $ 1.25 | |||||||||||||||
| 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 | 22,280 | 22,280 | ||||||||||||||
| Underwritten Public Offering [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Number of shares to purchase capital stock | 362,640 | |||||||||||||||
| Warrants exercise price | $ / shares | $ 93.75 | |||||||||||||||
| IPO [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Number of shares to purchase capital stock | 205,360 | |||||||||||||||
| Warrants exercise price | $ / shares | $ 93.63 | |||||||||||||||
| Subsequent Event [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Conversion price | $ / shares | $ 0.0154 | |||||||||||||||
| Baker Warrants [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants exercise price | $ / shares | $ 0.0158 | |||||||||||||||
| June 2022 Baker Warrants [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Number of shares to purchase capital stock | 582,886 | |||||||||||||||
| Warrants exercise price | $ / shares | $ 93.75 | $ 0.0158 | ||||||||||||||
| 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] | ||||||||||||||||
| Number of shares to purchase capital stock | 2,732 | |||||||||||||||
| Warrants exercise price | $ / shares | $ 4,575 | |||||||||||||||
| Security Purchase Agreement [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Number of shares to purchase capital stock | 1,152,122 | |||||||||||||||
| Warrants exercise price | $ / shares | $ 2.50 | |||||||||||||||
| Class of warrant or right, number of securities called by warrants or rights | 20,807,543 | |||||||||||||||
| Security Purchase Agreement [Member] | Warrant [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Warrants exercise price | $ / shares | $ 0.0158 | |||||||||||||||
| Security Purchase Agreement [Member] | Common Stock [Member] | Minimum [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Class of warrant or right, number of securities called by warrants or rights | 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 | |||||||||||||||
| Exchange Agreements [Member] | ||||||||||||||||
| Class of Warrant or Right [Line Items] | ||||||||||||||||
| Debt Instrument, Convertible, Number of Equity Instruments | Integer | 1,145,333,158 | 10,467,332 | ||||||||||||||
| Loss on issuance of financial instruments | $ | $ 3.3 | $ 0.1 | ||||||||||||||
| Common stock capital share reserved for future issuance | 17,725,000 | |||||||||||||||
| ||||||||||||||||
Schedule of Stock-based Compensation Expense Related to Stock Options (Details) - USD ($) $ in Thousands |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 2023 |
|
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
| Total | $ 237 | $ 417 |
| Research and Development Expense [Member] | ||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
| Total | 16 | 40 |
| Selling and Marketing Expense [Member] | ||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
| Total | 35 | 57 |
| General and Administrative Expense [Member] | ||
| Share-Based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
| Total | $ 186 | $ 320 |
Stock-based Compensation (Details Narrative) - USD ($) |
3 Months Ended | |
|---|---|---|
Mar. 31, 2024 |
Mar. 31, 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 |
| Employee Benefits and Share-Based Compensation | $ 900,000 | |
| Share-Based Payment Arrangement, Nonvested Award, Cost Not yet Recognized, Period for Recognition | 1 year 4 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 Common Stock, Percent | 85.00% | |
| [custom:EmployeeStockPurchasePlanMaximumStockValueAvailableForPurchaseDenominator-0] | $ 25,000 | |
| Restricted Stock [Member] | ||
| Share-Based Compensation Arrangement by Share-Based Payment Award [Line Items] | ||
| Stock-based compensation expense | $ 0 | |
Subsequent Events (Details Narrative) - USD ($) $ / shares in Units, $ in Thousands |
1 Months Ended | 3 Months Ended | |||||||
|---|---|---|---|---|---|---|---|---|---|
Jul. 01, 2024 |
Jun. 17, 2024 |
May 02, 2024 |
May 15, 2024 |
Mar. 31, 2024 |
Mar. 31, 2023 |
Apr. 19, 2024 |
Dec. 31, 2023 |
Dec. 15, 2021 |
|
| Subsequent Event [Line Items] | |||||||||
| Preferred stock, par value | $ 0.0001 | $ 0.0001 | $ 0.0001 | ||||||
| Number of shares, value | $ 89 | $ 180 | |||||||
| Stock issued during period value conversion of convertible securities | $ 35 | ||||||||
| Subsequent Event [Member] | |||||||||
| Subsequent Event [Line Items] | |||||||||
| Conversion price | $ 0.0154 | ||||||||
| Equity instrument consideration shares issued | 6,150,000 | ||||||||
| Stock issued during period value conversion of convertible securities | $ 100 | ||||||||
| Stock issued during period shares conversion of convertible securities | 7,200,000 | ||||||||
| Subsequent Event [Member] | Series F 1 Preferred Stock [Member] | |||||||||
| Subsequent Event [Line Items] | |||||||||
| Preferred stock, par value | $ 0.0001 | ||||||||
| Number of shares issued | 1,000 | ||||||||
| Number of shares issued | 2,500,000,000 | ||||||||
| Parent capital raise | $ 1,000 | ||||||||
| Subsequent Event [Member] | Series F 1 Preferred Stock [Member] | Maximum [Member] | |||||||||
| Subsequent Event [Line Items] | |||||||||
| Number of shares, value | $ 2,500 | ||||||||
| Parent capital raise | $ 1,500 | ||||||||
| Fourth Amendment Merger Agreement [Member] | Subsequent Event [Member] | |||||||||
| Subsequent Event [Line Items] | |||||||||
| Initial payment | $ 1,000 | ||||||||