7. Commitments and Contingencies

SOLOSEC Asset Acquisition and Contingent Liabilities

 The Company reviewed the SOLOSEC acquisition in accordance with ASC 805, Business Combinations (ASC 805), including applying the screen test. In accordance with ASC 805, the Company engaged a third-party valuation specialist to estimate the fair value for the SOLOSEC IP as well as for the total consideration. Per the valuation, the fair value of the SOLOSEC IP exceeded 90% of the total consideration, which indicates that the screen test failed. Further, the Company did not acquire any substantive processes, which indicates that the acquisition is an asset acquisition rather than a business combination. The Company recorded the fair value of the future sales-based payments as contingent liabilities in accordance with ASC 450, Contingencies (ASC 450) and the fair value of the total consideration plus the transaction costs as an intangible asset in accordance with ASC 350, Intangibles (ASC 350).

Per the Transition Services Agreement (TSA) entered into in conjunction with the SOLOSEC asset acquisition, the Company expected to purchase finished goods inventory from the seller at a pre-defined price through the earlier of November 2026 or when the Company provides a 10 business days notice of termination. The total expected purchase was approximately $3.7 million; however, the quantities to be purchased could be negotiated if both parties agree or should the Company provide a 10 business days notice of termination. The Company concluded that the inventory purchase commitment did not meet the definition of a derivative under ASC 815. During the three months ended March 31, 2026 and 2025, there were approximately $0.5 million and $0.1 million in purchases under this commitment, respectively.

As of December 31, 2025, the Company expected to purchase up to approximately $2.1 million of finished goods during the year ending December 31, 2026 under this commitment. The Company evaluated this purchase commitment to determine whether a loss existed based on the difference between the contractual purchase price and the estimated net realizable value of the inventory expected to be purchased. Based on this assessment, the Company recorded a $0.3 million loss on purchase commitment for the amounts that the Company had submitted for purchase as of the date of filing the 2025 Annual Report, which was included in cost of goods sold in the condensed consolidated statement of operations for the year ended December 31, 2025, with a corresponding liability recorded in the other current liabilities in the condensed consolidated balance sheet as of December 31, 2025. The remaining $1.8 million of potential purchases under the TSA did not meet the definition of a firm purchase commitment as the Company had the ability to negotiate the purchase amount or terminate the TSA as discussed above. The Company provided a 10 business days termination notice to the seller on March 13, 2026 effective on March 26, 2026, which released the Company’s purchase commitment for the remainder of 2026 beyond the effective date.

The TSA also required the seller to provide transitional support services until the Company fully established SOLOSEC operations; the Company was obligated to pay an immaterial amount quarterly for these services. The Company is also obligated to pay a quarterly royalty, in amounts equal to a certain percentage of the SOLOSEC net revenue from U.S. sales, beginning July 14, 2024. There are no minimum quarterly or annual royalty payment amounts. Such royalty costs were immaterial in each of the three months ended March 31, 2026 and 2025. As of March 31, 2026, $0.1 million and $1.1 million for the future payments that could become due related to the SOLOSEC acquisition, including sales-based payments, one-time payment, and quarterly royalty payments, was included in contingent liabilities – current and contingent liabilities – noncurrent, respectively, in the condensed consolidated balance sheet. Such amounts were $0.1 million and $4.6 million, respectively, as of December 31, 2025.

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, 2026, there were a total of 19 leased vehicles.

The Company determined that the leased vehicles are accounted for as operating leases under ASC 842, Leases (ASC 842).

Supplemental financial statement information is disclosed in the tables below:

 Schedule of Lease Cost

 Schedule of Lease Term and Discount Rate

 Schedule of Operating Lease Maturities

 Schedule of Supplement Cash Outflows in Operating Leases

Related Party Transactions

Windtree

On March 20, 2025, Windtree Therapeutics, Inc. (Windtree) and the Company entered into a License and Supply Agreement, as amended on March 28, 2025 (collectively, the Windtree License and Supply Agreement), wherein Windtree agreed to become a manufacturer and supplier of PHEXX. The Company will not have any financial obligations until submitting a binding forecast six months prior to the scheduled manufacturing date. Because Saundra Pelletier, the Company’s CEO, is also on the board of Windtree, the Company evaluated the relationship between the entities and determined that Windtree is a related party of the Company.

On March 13, 2026, the Company and Windtree entered into a Termination Agreement (the Termination Agreement) pursuant to which the parties mutually consented to the termination of the Agreement, effective as of such date. No transactions occurred under the agreement. There is no termination or any other fees payable in connection with the termination of the Agreement. Certain customary provisions of the Agreement that by their terms survive termination remain in effect.

Aditxt Merger, Notes, and Warrants

Because Aditxt could have significant voting power if their Series F-1 Shares and/or Aditxt Notes were converted, the Company evaluated the relationship between the entities and determined that Aditxt is a related party of the Company. The Company also initially considered that Saundra Pelletier, the Company’s Chief Executive Officer, served as a member of Aditxt’s Board of Directors from June 9, 2025 until September 23, 2025. Ms. Pelletier’s term expired on that date and as such this is no longer a factor.

On July 14, 2024, the Company entered into an Amended and Restated Agreement and Plan of Merger (the A&R Merger Agreement) with Aditxt, Inc. (Aditxt), pursuant to which Aditxt was expected to acquire the Company in an all-stock transaction. The A&R Merger Agreement was amended several times, including the Sixth Amendment to the A&R Merger Agreement, entered into on August 26, 2025 (the Sixth Amendment). The Sixth Amendment was entered into to (i) amend section 1.5 and 3.1(b)(ii) to update the definition of “Unconverted Company Preferred Stock” to include Series G-1 Shares; (ii) amend section 1.6 to update the definition of “Company Shareholder Approval” to include the outstanding shares of Company Common Stock (including all of the Company’s Preferred Stock, on the basis and to the extent it is permitted to so vote) entitled to vote thereon and each series of the Unconverted Company Preferred Stock; (iii) amend section 6.23 to clarify that the Company will assist in obtaining Exchange Agreements (as defined in the A&R Merger Agreement, as amended) to exchange Company convertible notes and purchase rights for an aggregate of not more than 89,021 shares of Parent Preferred Stock from the applicable Company shareholders; (iv) amend section 7.2(j) to change the number of dissenting shares to no more than 5,932,818 shares of Common Stock or 202 shares of Preferred Stock; (v) add a new section 7.2(k) to require waivers from each holder of the Company’s E-1 Convertible Preferred Stock, with respect to the last sentence of Section 2, the entirety of Section 6, any price adjustment provisions that may be triggered under Section 8(a)(ii), Section 12(c), and Section 12(d) of the Series E-1 Certificate of Designations; and (vi) to replace, in its entirety, the Certificate of Designations for Exchanged Parent Preferred Stock included as Exhibit C to the A&R Merger Agreement.

On October 20, 2025, the Company terminated the A&R Merger Agreement after the proposed merger was not approved by the Company’s stockholders. No termination fee or other cash consideration was paid by either party, and no further obligations remain under the agreement.

As discussed in Note 4 – Debt, on April 8, 2025 and June 26, 2025, the Company entered into two securities purchase agreements with Aditxt (the Aditxt April Note and the Aditxt June Note). Under these agreements the Company issued senior subordinated convertible notes in the aggregate original principal amount of $3.7 million and warrants to purchase up to 242,257,742 shares of the Company’s Common Stock. The notes bear interest at 8%, mature three years from issuance, and were issued at a discount of $650 per $1,000 of principal. Net cash proceeds to the Company were approximately $2.4 million. The warrants have an exercise price of $0.0154 per share.

Adjuvant

Because Adjuvant has significant voting power due to its increased beneficial ownership limitation, the Company evaluated the relationship between the entities and determined that Adjuvant is a related party of the Company. Except for the exchange from the Adjuvant Notes to Series G-1 Shares as described in Note 8 – Convertible and Redeemable Preferred Stock and Stockholders’ Deficit, the Adjuvant Third Amendment as described and defined in Note 4 – Debt, and the Adjuvant Fourth Amendment as described and defined in Note 10 – Subsequent events, no other transactions occurred between the two entities in 2025 or through March 31, 2026.

Contingencies

From time to time the Company may be involved in various lawsuits, legal proceedings, or claims that arise in the ordinary course of business. As of March 31, 2026, there were no other claims or actions pending against the Company which management believes have a probable, or a reasonably possible, probability of a significant unfavorable outcome other than the TherapeuticsMD, Inc. (TherapeuticsMD) dispute as described below.

During the three months ended March 31, 2025, the Company settled a portion of its trade payables with vendors, which resulted in a $3.1 million reduction in trade payables and a $2.5 million reduction in accrued expenses. However, the Company may receive trade payable demand letters from other vendors that could lead to potential litigation. As of March 31, 2026, approximately 85% of the Company’s trade payables were greater than 90 days past due.

On December 14, 2020, a trademark dispute captioned TherapeuticsMD, Inc. v Evofem Biosciences, Inc., was filed in the U.S. District Court for the Southern District of Florida against the Company, alleging trademark infringement of certain trademarks owned by TherapeuticsMD under federal and state law (Case No. 9:20-cv-82296). On July 18, 2022, the Company settled the lawsuit with TherapeuticsMD, with certain requirements which were required to be performed by July 2024 (the Settlement Timeline), including changing the name of PHEXXI. The Company failed to meet the terms of the settlement agreement by the Settlement Timeline. As a result, the Company is currently working with TherapeuticsMD on resolution of this issue. In September 2024, the Company filed an application for a new name – PHEXX – which was approved by the FDA in April 2025. In accordance with ASC 450, the Company has accrued the present value of the probable settlement amounts remaining payable over the next several years, which was $0.4 million as of both March 31, 2026 and December 31, 2025, as a component of contingent liabilities in the condensed consolidated balance sheets.

As of March 31, 2026, the Company has received multiple letters from purported Company stockholders demanding that the Company’s board of directors take action on behalf of the Company to remedy allegations regarding the Company’s disclosures to shareholders with respect to various alleged omissions of material information in both its preliminary proxy statement filed September 23, 2024 and definitive proxy statement filed September 8, 2025 relating to the A&R Merger Agreement, as amended, and demands made under Section 220 of the DGCL for books and records related to the transaction and disclosures in the proxy statement. The Company believes all such demands are without merit.

On October 20, 2025, the Company held a Special Meeting of Stockholders. After the Company’s stockholders did not approve the transactions contemplated by the A&R Merger Agreement, the Company delivered a notice of termination to Aditxt notifying it that the Company was exercising its right to terminate the A&R Merger Agreement effective October 20, 2025. The termination was in accordance with (i) Section 8.1(b)(ii), which allows either party to terminate the A&R Merger Agreement if the Merger shall not have been consummated on or before 5:00 p.m. Eastern Time, on September 30, 2025, and (ii) as per Section 8.1(b)(iv), which allows either party to terminate the A&R Merger Agreement if the Company Shareholder Approval shall not have been obtained at a duly held Company Shareholders Meeting at which a vote was taken on the approval of the Agreement and the Transactions, including the Merger.

As a result of the termination of the A&R Merger Agreement, all other ancillary agreements related to the A&R Merger Agreement, with the exception of the obligations under the Non-Disclosure Agreement, entered into by and between the Company and Aditxt, as of October 23, 2023, terminated concurrently with the termination of the A&R Merger Agreement. No consideration was paid in connection with the termination.

On September 27, 2024, Future Pak, LLC, as agent for the purchasers (in such capacity, the Future Pak Designated Agent) provided a Notice of Event of Default and Reservation of Rights (the Notice of Default) relating to the Baker Bros. Purchase Agreement, as amended, by and among the Company, Designated Agent, as certain guarantors, and the purchasers. The Notice of Default claims that by entering into arrangements to repay certain existing obligations, including obligations owed to the U.S. Department of Health and Human Services, an Event of Default has occurred under Section 9.1(e) of the Baker Bros. Purchase Agreement. According to the Notice of Default, the Future Pak Designated Agent has accelerated repayment of the outstanding principal balance owed by the Company under the Baker Bros. Purchase Agreement. If all purchasers exercise the Section 5.7 Option, the repurchase price would be equal to $106.8 million.

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

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

The Company strongly disagrees with the Future Pak Designated Agent’s claim that any Event of Default has occurred. The Company intends to vigorously contest any attempt by the Future Pak Designated Agent and the purchasers to exercise their default rights and remedies under the Baker Bros. Purchase Agreement.

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 a patent and certain know-how related to its vaginal pH modulator technology (US6706276, the Rush Patent). Pursuant to the Rush License Agreement, until the expiration of the Rush Patent, the Company was obligated to pay Rush University an earned royalty during the patent term, calculated as a mid-single digit percentage of PHEXX net sales (the Rush Royalty). In September 2020, the Company entered into the first amendment to the Rush License Agreement, pursuant to which the Company agreed to pay a minimum annual royalty amount of $0.1 million to the extent the earned royalties did not equal or exceed $0.1 million commencing January 1, 2021 until the expiration of the patent, including any granted Patent Term Extensions (PTEs).

The Rush Patent would expire on March 6, 2021 (the Original Expiration Date) if no PTE was obtained. Rush University filed an application for PTE in July 2020, which would extend the expiration date of the Rush Patent to March 6, 2026 if granted. Multiple Orders Granting Interim Extension (OGIEs) were received from the U.S. Patent and Trademark Office (USPTO) while the PTE was under evaluation. The last OGIE expired on March 6, 2025.

Because the USPTO had granted multiple OGIEs to Rush University, between the date of the original PTE application (July 2020) and the final OGIE expiration (March 2025), the Company determined it was probable that the PTE extending the expiration to March 6, 2026 would be granted. Therefore, the Company accrued a total of $2.8 million related to the Rush Royalty as a contingent liability after the Original Expiration Date in accordance with ASC 450, of which $0.9 million was paid in good faith and $1.9 million was unpaid and was included in accrued expenses in the condensed consolidated balance sheet as of December 31, 2024.

During the first quarter of 2025, the Company’s legal counsel ascertained that no further OGIEs were granted after March 6, 2025 and the PTE had also still not been granted. The Company discontinued accruing the Rush Royalty since, based on the new information, the Company deemed it remote that the PTE would ultimately be granted. Amounts previously accrued under the rush License Agreement were still being assessed at that time and as such, no adjustments were made. No royalty costs were recorded for the three months ended March 31, 2026 or 2025.

Furthermore, in August 2025 the FDA confirmed that the relevant active ingredient covered by the Rush Patent had previously been used in other FDA-approved products and, as such, no PTE should be granted. The Company and its legal counsel determined that the Rush Patent expired on the Original Expiration Date and as such it is no longer probable that the Company will be required to pay any expenses related to the Rush Royalty accrued after that date. The Company reversed the outstanding accrued Rush Royalty contingent liability of $1.9 million during the year ended December 31, 2025.

If the Company determines to pursue a refund of the estimated royalties paid but not earned per its current analysis, it could potentially receive a refund of $0.9 million from Rush University (the amount paid for royalties accrued after the Original Expiration Date). Conversely, if Rush University pursues payment of the amounts accrued but not paid for the time covered by the OGIEs, the maximum liability that the Company could incur is approximately $2.3 million. Based on the current analysis, the Company could have an additional gain of up to $0.9 million or a loss of up to $2.3 million.

Our vaginal pH modulator (PHEXX) remains protected in the U.S. by four Orange Book patents which are solely-owned by Evofem.

Other Contractual Commitments

In November 2019, the Company entered into a supply and manufacturing agreement with a third-party to manufacture PHEXX, with potential to manufacture other product candidates, in accordance with all applicable current good manufacturing practice regulations. There were approximately $0.9 million and $0.8 million in purchases under the supply and manufacturing agreement for the three months ended March 31, 2026 and 2025, respectively.