evfm-20210331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_____________________________________________________

FORM 10-Q

____________________________________________________

(Mark One)


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

For the quarterly period ended March 31, 2021


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

For the transition period from to

Commission File Number: 001-36754

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EVOFEM BIOSCIENCES, INC.

(Exact name of registrant as specified in its charter)

___________________________________________________


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


12400 High Bluff Drive, Suite 600 San Diego, CA (Address of Principal Executive Offices)						92130 (Zip Code)

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

Not applicable.

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

____________________________________________________

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


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, par value $0.0001 per share	EVFM	The Nasdaq Stock Market LLC (Nasdaq Capital Market)
Series A Preferred Stock Purchase Rights, par value $0.0001 per share	N/A	The Nasdaq Stock Market LLC (Nasdaq Capital Market)

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

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

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


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

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

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

The number of shares of the registrant’s common stock, $0.0001 par value per share, outstanding as of April 30, 2021 was 102,835,674

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		Page
	FORWARD-LOOKING STATEMENTS	1
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements (Unaudited)	3
	Condensed Consolidated Balance Sheets	3
	Condensed Consolidated Statements of Operations	4
	Condensed Consolidated Statements of Stockholders’ Equity (Deficit)	5
	Condensed Consolidated Statements of Cash Flows	6
	Notes to Unaudited Condensed Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	32
Item 4.	Controls and Procedures	32

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	32
Item 1A.	Risk Factors	32
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 3.	Defaults Upon Senior Securities	33
Item 4.	Mine Safety Disclosures	33
Item 5.	Other Information	33
Item 6.	Exhibits	34
Signatures		35

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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 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;

•the rate and degree of market acceptance of Phexxi® (lactic acid, citric acid, and potassium bitartrate) vaginal gel (Phexxi);

•our ability to successfully commercialize Phexxi and continue to develop our sales and marketing capabilities;

•our strategic plans for our business, including the commercialization of Phexxi;

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

•our ability to continue as a going concern;

•the impacts of the ongoing pandemic related to a novel strain of a virus named severe acute respiratory syndrome coronavirus 2 (SARS-CoV-2) (coronavirus), which causes coronavirus disease 2019 (COVID-19), including, without limitation, its impact on our business and commercialization of Phexxi;

•the potential for changes to current regulatory mandates requiring health insurance plans to cover United States (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 obtain the necessary regulatory approvals to market and commercialize EVO100 vaginal gel (EVO100) for prevention of urogenital transmission of Chlamydia trachomatis infection (chlamydia) and Neisseria gonorrhoeae infection (gonorrhea) in women, and any other product candidate we may seek to develop;

•the success, cost and timing of our clinical trials;

•our top-line or initial clinical trial data, which are subject to adjustment and revision;

•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 and product candidates;

•our dependence on third parties in the conduct of our clinical trials and for the manufacture of Phexxi and our product candidates;

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

•our ability to retain and attract key personnel.

To date, only one of our products, Phexxi vaginal gel, has been approved by the FDA for marketing in the United States. Our other current product candidates are investigational and have not been submitted to or approved by the FDA, and neither Phexxi nor our other product candidates have been approved by the European Medicines Agency or any other regulatory authority anywhere else in the world. This Quarterly Report also contains estimates and other statistical data made by independent parties and by us relating to market opportunity, growth and other data about our industry. These data and estimates involve a number of assumptions and limitations, and you are cautioned not to give undue weight to such estimates.

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. 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

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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.

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

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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)


	March 31, 2021		December 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	45,318	$	48,892
Restricted cash	18,975		22,559
Trade accounts receivable, net	2,914		1,067
Inventories	8,990		7,162
Prepaid and other current assets	4,138		18,050
Total current assets	80,335		97,730
Property and equipment, net	5,614		4,334
Operating lease right-of-use assets	6,493		6,856
Other noncurrent assets	1,022		1,048
Total assets	$	93,464	$	109,968
Liabilities and stockholders’ equity (deficit)
Current liabilities:
Accounts payable	$	6,501	$	10,641
Convertible notes payable (Note 5)	53,218		52,409
Accrued expenses	8,978		4,476
Accrued compensation	3,004		6,514
Operating lease liabilities – current	2,456		2,290
Other current liabilities	1,549		953
Total current liabilities	75,706		77,283
Operating lease liabilities – noncurrent	5,602		6,030
Long-term convertible notes payable (Note 5)	25,697		25,211
Other noncurrent liabilities	97		97

Total liabilities	107,102		108,621
Commitments and contingencies (Note 8)
Preferred stock, $0.0001 par value; 5,000,000 shares authorized; no shares issued and outstanding	—		—
Stockholders’ equity (deficit):
Common stock, $0.0001 par value; 300,000,000 shares authorized; 100,264,246 and 81,351,533 shares issued and outstanding at March 31, 2021 and December 31, 2020, respectively;	10		8
Additional paid-in capital	687,991		656,827
Accumulated deficit	(701,639)		(655,488)
Total stockholders’ equity (deficit)	(13,638)		1,347
Total liabilities and stockholders’ equity (deficit)	$	93,464	$	109,968

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

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EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited) (In thousands, except share and per share data)


	Three Months Ended March 31,
	2021		2020
Product sales, net	$	1,105	$	—

Operating expenses:
Cost of goods sold	506		—
Research and development	7,262		4,247
Selling and marketing	30,525		7,855
General and administrative	7,684		7,142
Total operating expenses	45,977		19,244
Loss from operations	(44,872)		(19,244)
Other income (expense):
Interest income	7		102
Other expense	(1,145)		(4)




Change in fair value of financial instruments	(142)		—
Total other (expense) income, net	(1,280)		98
Loss before income tax	(46,152)		(19,146)
Income tax expense	1		—
Net loss	$	(46,151)	$	(19,146)
Net loss per share, basic and diluted	$	(0.56)	$	(0.40)
Weighted-average shares used to compute net loss per share, basic and diluted	81,843,319		48,195,951

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

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EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) (Unaudited) (In thousands, except share data)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity (Deficit)
	Shares	Amount
Balance at December 31, 2020	81,351,533	$	8	$	656,827	$	(655,488)	$	1,347
Issuance of common stock in connection with the 2021 Public Offering (see Note 10)	17,142,857	2		27,707		—		27,709
Restricted stock awards issued	1,772,500	—		—		—		—
Shares withheld to cover taxes related to vesting of restricted stock awards	(2,644)	—		(7)		—		(7)
Stock-based compensation	—	—		3,464		—		3,464
Net loss	—	—		—		(46,151)		(46,151)
Balance at March 31, 2021	100,264,246	$	10	$	687,991	$	(701,639)	$	(13,638)


	Common Stock			Additional Paid-in Capital		Accumulated Deficit		Total Stockholders’ Equity
	Shares	Amount
Balance at December 31, 2019	48,137,880	$	5	$	528,810	$	(513,179)	$	15,636
Issuance of common stock in connection with ATM (see Note 10)	202,098	—		1,082		—		1,082
Issuance of common stock - exercise of stock options	19,708	—		73		—		73
Restricted stock awards issued/restricted stock units released	1,286,499	—		—		—		—
Shares withheld to cover taxes related to vesting of restricted stock awards	(4,088)	—		(25)		—		(25)
Stock-based compensation	—	—		3,401		—		3,401
Net loss	—	—		—		(19,146)		(19,146)
Balance at March 31, 2020	49,642,097	$	5	$	533,341	$	(532,325)	$	1,021

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

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EVOFEM BIOSCIENCES, INC. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (In thousands)


	Three Months Ended March 31,
	2021		2020
Cash flows from operating activities:
Net loss	$	(46,151)	$	(19,146)
Adjustments to reconcile net loss to net cash, cash equivalents and restricted cash used in operating activities:



Change in fair value of financial instruments	142		—
Stock-based compensation	3,464		3,401
Depreciation	195		69
Noncash lease expenses	330		164
Noncash interest expenses	1,152		—
Changes in operating assets and liabilities:
Accounts receivable	(1,847)		—
Inventories	(1,676)		—
Prepaid and other assets	13,606		(1,027)
Accounts payable	(4,647)		996
Accrued expenses and other liabilities	4,713		(205)
Accrued compensation	(3,510)		1,069
Operating lease liabilities	(229)		(197)
Net cash, cash equivalents and restricted cash used in operating activities	(34,458)		(14,876)
Cash flows from investing activities:
Proceeds from sale of Softcup line of business	250		250
Maturities of short-term investments	—		6,747
Purchases of property and equipment	(956)		(95)
Net cash, cash equivalents and restricted cash (used in) provided by investing activities	(706)		6,902
Cash flows from financing activities:
Proceeds from issuance of common stock, net of discounts and commissions - Public Offering	28,050		—
Proceeds from issuance of common stock, net of commissions - ATM transactions	—		1,424
Proceeds from issuance of common stock - ESPP and exercise of stock options	—		160

Cash paid for financing costs	(37)		(195)
Payments of tax withholdings related to vesting of restricted stock awards	(7)		(25)
Net cash, cash equivalents and restricted cash provided by financing activities	28,006		1,364
Net change in cash, cash equivalents and restricted cash	(7,158)		(6,610)
Cash, cash equivalents and restricted cash, beginning of period	72,251		16,625
Cash, cash equivalents and restricted cash, end of period	$	65,093	$	10,015
Supplemental disclosure of noncash investing and financing activities:
Right-of-use assets obtained in exchange for operating lease liabilities	$	—	$	266
Financing costs included in accounts payable and accrued expenses	$	304	$	13

Purchases of property and equipment included in accounts payable and accrued expenses	$	519	$	201

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

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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 developing and commercializing innovative products to address unmet needs in women’s sexual and reproductive health, including hormone-free, woman-controlled contraception and protection from certain sexually transmitted infections (STIs).

The Company’s first commercial product, Phexxi, was approved by the 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.

Evofem’s pipeline product candidate, EVO100, is being evaluated for the prevention of chlamydia and gonorrhea in women - two of the most pervasive STIs in the United States. Currently, there are no FDA-approved prescription products for the prevention of either of these dangerous infections.

SEC Form 10-Q filed by Evofem Biosciences, Inc.