UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON,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

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

For the quarterly period ended September 30, 2017March 31, 2024

 

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

or

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

 

For the transition period from________ from to ___________

 

Commission File No.Number: 001-00100

001-001000TherapeuticsMD, Inc.

THERAPEUTICSMD, INC.

(Exact Namename of Registrant as Specifiedspecified in Itsits Charter)

Nevada87-0233535

(State or Other Jurisdictionother jurisdiction of Incorporation

incorporation or Organization)organization)

(I.R.S. Employer

Identification No.)

6800 Broken Sound Parkway NW, Third Floor, 951 Yamato Road, Suite 220

Boca Raton, FL 33487Florida

(561) 961-190033431
(Address of Principal Executive Offices)principal executive offices)(Issuer’s Telephone Number)Zip Code)

N/A561-961-1900

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)Registrant’s telephone number, including area code)

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

Title of Each Class

Trading

symbol

Name of each exchange

on which registered

Common Stock, par value $0.001 per shareTXMDThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: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 registrantRegistrant 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 and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted 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 registrantRegistrant was required to submit and post such files). Yes ☒ No ☐

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a 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 (Check one):Act:

Large accelerated filer ☒Accelerated FilerAccelerated filer
Non-accelerated filerSmaller reporting company
 (Do not check if a 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 registrantRegistrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

 

The numberAs of May 10, 2024, there were 11,532,443 shares outstanding of the registrant’s common stock, par value $0.001 per share, as of October 30, 2017 was 216,429,642.outstanding.

 

 

 

Table of Contents

THERAPEUTICSMD, INC. AND SUBSIDIARIESPage
INDEX

Part I - Financial InformationPage
PART I - FINANCIAL INFORMATION
Item 1.Financial statements (unaudited)
Item. 1Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 2017 (Unaudited) and December 31, 201631
Condensed Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2017 (Unaudited) and 2016 (Unaudited)42
Condensed Consolidated Statements of Stockholders’ Equity3
Condensed Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2017 (Unaudited) and 2016 (Unaudited)54
Notes to Unaudited Condensed Consolidated Financial Statements65
Item 2.Management’s Discussiondiscussion and Analysisanalysis of Financial Conditionfinancial condition and Resultsresults of Operationsoperations2116
Item 3.Quantitative and Qualitative Disclosuresqualitative disclosures about Market Risksmarket risk3624
Item 4.Controls and Proceduresprocedures3624
Part II - OTHER INFORMATIONOther Information
Item 1.Legal Proceedingsproceedings3725
Item 1A.Risk Factorsfactors3725
Item 2.Unregistered sales of equity securities and use of proceeds25
Item 3.Defaults upon senior securities25
Item 4.Mine safety disclosures25
Item 5.Other information25
Item 6.ExhibitsExhibits3726
Signatures27

THERAPEUTICSMD, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

i

 

  September 30, 2017  December 31, 2016 
  (Unaudited)    
       
ASSETS 
Current Assets:        
Cash $148,292,654  $131,534,101 
Accounts receivable, net of allowance for doubtful accounts of $377,929 and $376,374, respectively  4,392,635   4,500,699 
Inventory  1,293,517   1,076,321 
Other current assets  3,001,777   2,299,052 
Total current assets  156,980,583   139,410,173 
         
Fixed assets, net  448,066   516,839 
         
Other Assets:        
Intangible assets, net  2,793,421   2,405,972 
Security deposit  139,036   139,036 
Total other assets  2,932,457   2,545,008 
Total assets $160,361,106  $142,472,020 
         
 LIABILITIES AND STOCKHOLDERS’ EQUITY 
Current Liabilities:        
Accounts payable $4,199,369  $7,358,514 
Other current liabilities  6,677,232   7,624,085 
Total current liabilities  10,876,601   14,982,599 
         
Commitments and Contingencies - See Note 14        
         
Stockholders’ Equity:        
Preferred stock - par value $0.001; 10,000,000 shares authorized;  no shares issued and outstanding      
Common stock - par value $0.001; 350,000,000 shares authorized; 216,429,642 and 196,688,222 issued and outstanding, respectively  216,430   196,688 
Additional paid in capital  514,499,865   436,995,052 
Accumulated deficit  (365,231,790)  (309,702,319)
Total stockholders’ equity  149,484,505   127,489,421 
Total liabilities and stockholders’ equity $160,361,106  $142,472,020 

Part I - Financial Information

 

Item 1. Financial statements

TherapeuticsMD, Inc. and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except per share data)

  March 31,
2024
  December 31,
2023
 
  (Unaudited)    
Assets:      
Current assets:      
Cash and cash equivalents $4,338  $4,327 
Royalty receivable, current portion  3,222   3,090 
Prepaid and other current assets  3,869   4,035 
Current assets of discontinued operations  94   344 
Total current assets  11,523   11,796 
License rights and other intangible assets, net  5,965   6,098 
Right of use assets  6,687   6,873 
Royalty receivable, long term  17,855   18,484 
Other non-current assets  58   58 
Total assets $42,088  $43,309 
Liabilities and stockholders’ equity:        
Current liabilities:        
Accounts payable $139  $27 
Accrued expenses and other current liabilities  2,720   3,133 
Current liabilities of discontinued operations  3,609   3,694 
Total current liabilities  6,468   6,854 
Operating lease liabilities  6,319   6,532 
Other non-current liabilities  637   636 
Total liabilities  13,424   14,022 
Commitments and contingencies (Note 6)        
Stockholders’ equity:        
Common stock, par value $0.001; 32,000 shares authorized, 11,532 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively  11   11 
Additional paid-in capital  979,028   978,917 
Accumulated deficit  (950,375)  (949,641)
Total stockholders’ equity  28,664   29,287 
Total liabilities and stockholders’ equity $42,088  $43,309 

The accompanying footnotesnotes are an integral part of these condensed consolidated financial statements.


THERAPEUTICSMD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

  Three Months Ended  Nine Months Ended 
  September 30,  September 30, 
  2017  2016  2017  2016 
             
Revenues, net $4,417,598  $5,535,685  $12,653,495  $14,869,023 
                 
Cost of goods sold  700,814   1,237,446   2,042,174   3,475,997 
Gross profit  3,716,784   4,298,239   10,611,321   11,393,026 
                 
Operating expenses:                
Sales, general, and administration  12,057,868   14,721,710   43,524,412   35,019,268 
Research and development  6,436,802   14,664,123   22,878,037   43,602,333 
Depreciation and amortization  54,055   40,460   156,943   84,319 
Total operating expense  18,548,725   29,426,293   66,559,392   78,705,920 
                 
Operating loss  (14,831,941)  (25,128,054)  (55,948,071)  (67,312,894)
                 
Other income:                
Miscellaneous income  167,300   109,942   442,322   265,879 
Accreted interest     2,451   7,699   7,850 
Total other income  167,300   112,393   450,021   273,729 
                 
Loss before taxes  (14,664,641)  (25,015,661)  (55,498,050)  (67,039,165)
                 
Provision for income taxes            
                 
Net loss $(14,664,641) $(25,015,661) $(55,498,050) $(67,039,165)
                 
Net loss per share, basic and diluted $(0.07) $(0.13) $(0.27) $(0.34)
                 
Weighted average number of common shares outstanding  207,938,338   196,502,327   203,282,335   195,912,173 

TherapeuticsMD, Inc. and Subsidiaries

Condensed Consolidated Statements of Operations

(Unaudited - in thousands, except per share data)

  Three Months Ended
March 31,
 
  2024  2023 
Revenue, net:      
License and service revenue $313  $416 
Operating expenses:        
Selling, general and administrative  1,322   3,056 
Depreciation & amortization  133   27 
Total operating expenses  1,455   3,083 
Loss from operations  (1,142)  (2,667)
Other income (expense) :        
Interest expense and other financing costs     (50)
Miscellaneous income  333   407 
Total other income, net  333   357 
Loss from continuing operations before income taxes  (809)  (2,310)
Provision for income taxes      
Loss from continuing operations, net of income taxes  (809)  (2,310)
Income (loss) from discontinued operations, net of income taxes  75   (1,293)
Net loss $(734) $(3,603)
Income (loss) per common share, basic and diluted:        
Continuing operations $(0.07) $(0.24)
Discontinued operations, net  0.01   (0.13)
Net loss per common share, basic and diluted $(0.06) $(0.37)
         
Weighted average common shares, basic  11,532   9,754 
Weighted average common shares, diluted  11,532   9,754 

 

The accompanying footnotesnotes are an integral part of these condensed consolidated financial statements.


THERAPEUTICSMD, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 

  Nine Months Ended 
  September 30, 2017  September 30, 2016 
       
CASH FLOWS FROM OPERATING ACTIVITIES        
Net loss $(55,498,050) $(67,039,165)
Adjustments to reconcile net loss to net cash flows used in operating activities:        
Depreciation of fixed assets  104,622   45,759 
Amortization of intangible assets  52,321   38,560 
Provision for doubtful accounts  1,555   2,261,568 
Share-based compensation  5,037,783   13,385,215 
Changes in operating assets and liabilities:        
Accounts receivable  106,509   (4,245,151)
Inventory  (217,196)  (153,245)
Other current assets  (831,623)  379,930 
Accounts payable  (3,159,145)  1,098,245 
Other current liabilities  (946,853)  703,895 
Net cash used in operating activities  (55,350,077)  (53,524,389)
         
CASH FLOWS FROM INVESTING ACTIVITIES        
Patent costs  (439,770)  (541,686)
Purchase of fixed assets  (35,849)  (307,714)
Payment of security deposit     (14,036)
Net cash used in investing activities  (475,619)  (863,436)
         
CASH FLOWS FROM FINANCING ACTIVITIES        
Proceeds from sale of common stock, net of costs  68,572,635   134,863,475 
Proceeds from exercise of warrants  3,798,999   1,373,000 
Proceeds from exercise of options  212,615   979,060 
Net cash provided by financing activities  72,584,249   137,215,535 
         
Increase in cash  16,758,553   82,827,710 
Cash, beginning of period  131,534,101   64,706,355 
Cash, end of period $148,292,654  $147,534,065 

TherapeuticsMD, Inc. and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity

(Unaudited - in thousands)

 

  Common Stock  Additional Paid in  Accumulated    
  Shares  Amount  Capital  Deficit  Total 
Balance, January 1, 2024  11,532  $11  $978,917  $(949,641) $29,287 
Share-based compensation        111      111 
Net loss           (734)  (734)
Balance, March 31, 2024  11,532  $11  $979,028  $(950,375) $28,664 
                     
Balance, January 1, 2023  9,498  $9  $974,497  $(939,363) $35,143 
Shares issued for vested restricted stock units  455   1         1 
Share-based compensation        483      483 
Net loss           (3,603)  (3,603)
Balance, March 31, 2023  9,953  $10  $974,980  $(942,966) $32,024 

The accompanying footnotesnotes are an integral part of these condensed consolidated financial statements.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 

NOTE 1 – THE COMPANYTherapeuticsMD, 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 $(734) $(3,603)
Less: income (loss) from discontinued operations, net of tax  75   (1,293)
Net loss from continuing operations  (809)  (2,310)
Adjustments to reconcile net loss to net cash used in operating activities of continuing operations:        
Depreciation and amortization  133   27 
Write-off of patents and trademarks     59 
Share-based compensation  111   483 
Other  186   (60)
Changes in operating assets and liabilities:        
Other assets  629   (19)
Prepaid and other current assets  34   (1,453)
Accounts payable  112   164 
Accrued expenses and other current liabilities  (413)  (4,486)
Lease liabilities  (213)   
Other non-current liabilities  1   (1,106)
Total adjustments  580   (6,391)
Net cash used in continuing operating activities  (229)  (8,701)
Discontinued operations:        
   Net cash provided by (used in) operating activities  240   (24,474)
   Net cash provided by financing activities     1,106 
Net cash provided by (used in) discontinued operations  240   (23,368)
Net increase (decrease) in cash  11   (32,069)
Cash and cash equivalents, beginning of period  4,327   49,317 
Total cash and cash equivalents, end of period $4,338  $17,248 

The accompanying notes are an integral part of these condensed consolidated financial statements.


 

TherapeuticsMD, Inc. and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

(Unaudited)

1. Business, basis of presentation, new accounting standards and summary of significant accounting policies

General

TherapeuticsMD, Inc. (the “Company”), a Nevada corporation, and its condensed consolidated subsidiaries are referred to collectively in this Quarterly Report on Form 10-Q (“10-Q Report”) as “TherapeuticsMD,” “we,” “our” and “us.” This 10-Q Report includes trademarks, trade names and service marks, such as TherapeuticsMD®, vitaMedMD®, BocaGreenMD®, vitaCareTM, IMVEXXY®, and BIJUVA®, which are protected under applicable intellectual property laws and are the property of, or TherapeuticsMD,licensed by or to, us. Solely for convenience, trademarks, trade names and service marks referred to in this 10-Q Report may appear without the ®, TM 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 Company, has three wholly owned subsidiaries, vitaMedMD,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.

TherapeuticsMD was previously a women’s healthcare company with a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause. In December 2022, we changed our business to become a pharmaceutical royalty company, currently receiving royalties on products licensed to pharmaceutical organizations that possess commercial capabilities in the relevant territories. On December 30, 2022 (the “Closing Date”), we completed a transaction (the “Mayne Transaction”) with Mayne Pharma LLC, a Delaware limited liability company (“Mayne Pharma”) and subsidiary of Mayne Pharma Group Limited, an Australian public company, in which we and our subsidiaries (i) granted Mayne Pharma an exclusive license to commercialize our IMVEXXY, BIJUVA and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands (collectively, the “Licensed Products”) in the United States and its possessions and territories, (ii) assigned to Mayne Pharma our exclusive license to commercialize ANNOVERA® (together with the Licensed Products, collectively, the “Products”) in the United States and its possessions and territories, and (iii) sold certain other assets to Mayne Pharma in connection therewith.

In a License Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Mayne License Agreement”), we granted Mayne Pharma, on the Closing Date, (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories.

Under the Mayne License Agreement, Mayne Pharma will pay us milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma will pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80.0 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or VitaMed; BocaGreenMD, Inc.revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States. Mayne Pharma will pay us minimal annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below. Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a Nevada corporation, or BocaGreen;fully paid-up and VitaCare Prescription Services, Inc.royalty free license for the Licensed Products.  


Under the Transaction Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Transaction Agreement”), we sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize the Products in the United States, including, with the Population Council’s consent, our exclusive license from the Population Council to commercialize ANNOVERA (the “Transferred Assets”).

The total consideration from Mayne Pharma to TherapeuticsMD for the purchase of the Transferred Assets and the grant of the licenses under the Mayne Transaction Agreement was (i) a Florida corporation, or VitaCare. Unlesscash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the contextacquisition of net working capital as determined in accordance with the Transaction Agreement and subject to certain adjustments, (iii) a cash payment of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment (as defined below) and (iv) the right to receive the contingent consideration set forth in the Mayne License Agreement, as amended. The acquisition of net working capital was determined in accordance with the Transaction Agreement and included significant estimates which could change materially for a period of up to two years following the Closing Date.

On the Closing Date, TherapeuticsMD and Mayne Pharma entered into Amendment No. 1 to the Mayne License Agreement (the “Mayne License Agreement Amendment”). Pursuant to the Mayne License Agreement Amendment, Mayne Pharma agreed to pay us approximately $1.0 million in prepaid royalties on the Closing Date. The prepaid royalties reduced the first four quarterly payments that would have otherwise requires, TherapeuticsMD, VitaMed, BocaGreen,been payable pursuant to the Mayne License Agreement by an amount equal to $257 thousand per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty payment was paid to us. We and VitaCare collectivelyMayne Pharma settled the $1.5 million of consideration due to Mayne Pharma for the assumed obligations under a long-term services agreement, including our minimum payment obligations thereunder. As the parties agreed, during the second quarter of 2023 Mayne Pharma held back our royalty payment of $0.6 million and we funded an additional $0.9 million in August 2023 to settle the original $1.5 million payable.

As part of the transformation that included the Mayne License Agreement, historical results of commercial operations for all periods prior to the Closing Date have been reflected as discontinued operations in our condensed consolidated financial statements. Assets and liabilities associated with the commercial business are sometimes referred toclassified as “our company,” “we,” “our,” or “us.”assets and liabilities of discontinued operations in our condensed consolidated balance sheets. Additional disclosures regarding discontinued operations are provided in Note 2 of our condensed consolidated financial statements.

 

NatureWe also have license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of Businessthe U.S.  

In July 2018, we entered into a license and supply agreement (the “Knight License Agreement”) with Knight Therapeutics Inc. (“Knight”) pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel. Knight obtained regulatory approval for IMVEXXY and BIJUVA and began commercialization efforts in 2024.

In September 2019, we entered into an exclusive license and supply agreement (the “Theramex License Agreement”) with Theramex HQ UK Limited (“Theramex”) to commercialize IMVEXXY and BIJUVA outside of the U.S., excluding Canada and Israel. In 2021, Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

In connection with our transformation into a pharmaceutical royalty company, the termination of our executive management team (except for Mr. Marlan Walker, our former General Counsel and current Chief Executive Officer) and all other employees was completed by December 31, 2022. Severance obligations for all employees other than executive officers were paid in full in January 2023 and severance obligations for terminated executive officers have been paid in accordance with their employment agreements and separation agreements as previously disclosed. As of December 31, 2023 and March 31, 2024, we employed one full-time employee primarily engaged in an executive position.

We have engaged external consultants who support our relationship with current partners and assist with certain financial, legal, and regulatory matters and the continued wind-down of our historical business operations. On August 15, 2023, we entered into a master services agreement with JZ Advisory Group, pursuant to which Joseph Ziegler would serve as our Principal Financial Officer. On August 17, 2023 Michael C. Donegan notified us of his decision to resign from the positions of Principal Financial and Accounting Officer of our Company effective as of August 17, 2023. Mr. Ziegler succeeded Mr. Donegan as Principal Financial and Accounting Officer as of the date of Mr. Donegan’s resignation.   


Going concern

Following the transaction with Mayne Pharma, our primary source of revenue is from royalties on products licensed to pharmaceutical organizations that possess commercial capabilities in the relevant territories. We may need to raise additional capital to provide additional liquidity to fund our operations until we become cash flow positive. To address our capital needs, we may pursue various equity and debt financing and other alternatives. The equity financing alternatives may include the private placement of equity, equity-linked, or other similar instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions, including the market price of our common stock, and our available authorized shares.

To the extent that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. If we are not successful in obtaining additional financing, we could be forced to discontinue or curtail our business operations, sell assets at unfavorable prices, or merge, consolidate, or combine with a company with greater financial resources in a transaction that might be unfavorable to us.

On May 1, 2023, we entered into a Subscription Agreement (the “Subscription Agreement”) with Rubric Capital Management LP (“Rubric”), pursuant to which we agreed to sell to Rubric, or one or more of its affiliates, up to an aggregate of 5,000,000 shares of our common stock, par value $0.001 per share (our “Common Stock”), from time to time during the term of the Subscription Agreement in separate draw-downs at our election. On June 29, 2023, we issued and sold 312,525 shares of Common Stock at a price per share equal to $3.6797 pursuant to the Subscription Agreement. We received gross proceeds of $1.15 million from the draw down, before expenses. On November 15, 2023, Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761. We received gross proceeds of $2.0 million from the drawdown, before expenses.

In February 2024, the Company received Mayne Pharma’s calculation of allowance for payer rebates and wholesale distributor fees pursuant to the Transaction Agreement which differed significantly from the Company’s estimate of the allowances. The Company and Mayne Pharma intend to resolve this matter through the dispute resolution process outlined in the Transaction Agreement. The Company continues to believe its estimated allowances for payer rebates and wholesale distributor fees are reasonable. The outcome of this matter is uncertain at this point. As a result, the Company cannot reasonably estimate a range of loss, and accordingly, the Company has not accrued any additional liability associated with Mayne Pharma’s allowance calculation for payer rebates and wholesale distributor fees.

 

We are a women’s health care company focused on creatingAs of March 31, 2024, the Company believes no additional accrual is required for amounts that may be owed for the allowance for returns under the Transaction Agreement. The Company has not recorded any contingent gains or receivables for any such allowances. Management continues to monitor the unresolved and commercializing products targeted exclusively for women. Currently,pending net working capital items as changes to estimated amounts owed or amounts due from Mayne Pharma may be material.

If Mayne Pharma’s sales of Licensed Products grow more slowly than expected or decline, if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than our current estimates, if we are focused on pursuingunsuccessful with future financings or the regulatory approvals and pre-commercialization activities necessary for commercializationsupply chains related to the third-party contract manufacturers are worse than we anticipate, our existing cash reserves may be insufficient to satisfy our liquidity requirements. The potential impact of our advanced hormone therapy pharmaceutical products. Our drug candidates that have completed clinical trials are designed to alleviate the symptoms of and reduce the health risks resulting from menopause-related hormone deficiencies, including hot flashes, osteoporosis and vaginal discomfort. We are developing these hormone therapy drug candidates, which contain estradiol and progesterone alone orfactors in combination,conjunction with the aimuncertainty of demonstrating clinical efficacy at lower doses, thereby enabling an enhanced side effect profile compared with competing products. Withthe capital markets raises substantial doubt about our SYMBODA™ technology, we are developing advanced hormone therapy pharmaceutical productsability to enable deliverycontinue as a going concern for the next twelve months from the issuance of bio-identical hormones through a variety of dosage forms and administration routes. In addition, we manufacture and distribute branded and generic prescription prenatal vitamins, as well as over-the-counter, or OTC, iron supplements.these financial statements.

NOTE 2 – BASIS OF PRESENTATION AND RECENTLY ISSUED ACCOUNTING PRONOUNCEMENTS

Interim Financial Statements

The accompanying unaudited interim consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.


Basis of TherapeuticsMD, Inc.,presentation

We prepared the condensed consolidated financial statements included in this 10-Q Report following the requirements of the United States (“U.S.”) Securities and Exchange Commission (“SEC”) for interim reporting. As permitted under those rules, certain notes or other financial information that are normally required by accounting principles generally accepted in the U.S. (“U.S. GAAP”) for complete financial statements can be condensed or omitted. However, except as disclosed herein, there has been no material change in the information disclosed in the notes included in our 2023 Annual Report on Form 10-K (the “2023 10-K Report”).

As part of the transformation as a result of the Mayne Transaction, historical results of commercial operations for all periods prior to the Closing Date have been reflected as discontinued operations in the condensed consolidated financial statements. Assets and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations in the condensed consolidated balance sheets. Additional disclosures regarding discontinued operations are provided in Note 2 of the condensed consolidated financial statements.

Revenues, expenses, assets, liabilities, and equities can vary during each quarter of the year. Therefore, the results and trends in these interim financial statements may not be representative of those for the full year. In our opinion, all adjustments necessary for a fair presentation of the financial statements, which include our wholly owned subsidiaries,are of a normal and recurring nature, have been made for the interim periods reported. The information included in this 10-Q Report should be read in conjunction with the audited consolidated financial statements and accompanying notes thereto included in our 2023 10-K Report. Certain amounts in the consolidated financial statements and accompanying notes may not add due to rounding, and all percentages have been calculated using unrounded amounts. Certain prior period amounts have been reclassified to conform to current-period presentation.

New accounting standards

Adoption of new accounting standards

In December 2023, the Financial Accounting Standards Board (“FASB”) issued ASU 2023-09, “Income Taxes (Topic 740) - Improvements to Income Tax Disclosures.” ASU 2023-09 enhances the transparency and decision usefulness of income tax disclosures by requiring consistent categories and greater disaggregation of information in the rate reconciliation and income taxes paid disaggregated by jurisdiction. ASU 2023-09 will be effective for the Company in its income tax disclosure included in its 2025 Annual Report on Form 10-K forand will be applied on a prospective basis. However, retrospective application is permitted. Early adoption is also permitted. The Company is evaluating the year ended December 31, 2016, as filed withimpact of ASU 2023-09 on the SecuritiesCompany’s income tax disclosures and Exchange Commission, oron its consolidated financial statements.

Increase of authorized shares

On June 26, 2023, at our combined 2022 and 2023 Annual Meeting, our stockholders approved an amendment to our Amended and Restated Articles of Incorporation to increase the SEC,number of authorized shares of Common Stock from which we derived the accompanying consolidated balance sheet as12 million shares to 32 million shares.

Estimates and assumptions

The preparation of December 31, 2016. The accompanying unaudited interimour condensed consolidated financial statements have been prepared in accordanceconformity with U.S. GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the condensed consolidated financial statements and the reported amounts of revenue and expenses during the reporting periods. We evaluate our estimates and assumptions based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ, at times in material amounts, from these estimates under different assumptions or conditions.


Significant accounting principles generally acceptedpolicies

The significant accounting policies we use for quarterly financial reporting are disclosed in Note 1 of the notes to the consolidated financial statements included in our 2023 10-K report.

2. Discontinued Operations

As discussed in Note 1, we changed our business in 2022 by licensing our products to receive royalties and future sales related milestone payments, after granting an exclusive license to commercialize our IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands in the United States of America, or GAAP, for interimand assigning our exclusive license to commercialize ANNOVERA to Mayne Pharma.

This plan represented a strategic shift having a major effect on our operations and financial information andresults. Upon our conversion from a commercial pharmaceutical company to a licensing only company with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, since they are interim statements, the accompanying unaudited interim consolidated financial statements do not include allconsummation of the informationMayne Transaction, we classified all direct revenues, costs and notes required by GAAP for complete financial statements. The accompanying unaudited interim consolidated financial statements reflect all adjustments, consistingexpenses related to commercial operations, within income (loss) from discontinued operations, net of normal recurring adjustments, that are,tax, in the opinioncondensed consolidated statements of operations for all periods presented. We have not allocated any amounts for shared general and administrative operating support expense to discontinued operations.

Additionally, the related assets and liabilities have been reported as assets and liabilities of discontinued operations in our management, necessarycondensed consolidated balance sheets as of March 31, 2024 and December 31, 2023.

As described in Note 1, the acquisition of net working capital by Mayne Pharma was determined in accordance with the Transaction Agreement and included significant estimates which could change materially for a period of up to two years following the Closing Date. Our estimate of net working capital at closing was determined in accordance with the Transaction Agreement which establishes the process for the determination of final net working capital. Refer to Note 6 for a fair statementfurther discussion of net working capital contingencies.

The following table presents results of discontinued operations (in thousands):

  Three Months Ended
March 31,
 
  2024  2023 
General and administrative expenses $55  $335 
Total operating expenses  55   335 

Operating loss from discontinued operations

  (55)  (335)
Other income (expense), net  130   (958)
Total other income (expense), net  130   (958)
Income (loss) from discontinued operations, net $75  $(1,293)


The following table presents the carrying amounts of the resultsclasses of assets and liabilities of discontinued operations as of March 31, 2024 and December 31, 2023 (in thousands):

  March 31,
2024
  December 31,
2023
 
Assets:      
Accounts receivable $94  $344 
Liabilities:        
Accrued expenses and other current liabilities $3,609  $3,694 

3. Prepaid and other current assets

Our prepaid and other current assets consisted of the following as of March 31, 2024 and December 31, 2023 (in thousands):

  March 31,
2024
  December 31,
2023
 
Insurance $231  $253 
Capitalized legal  2,334   2,334 
Other  1,304   1,448 
Prepaid and other current assets $3,869  $4,035 

4. Licensed rights and other intangible assets

The following provides information about our license rights and other intangible assets, net as of March 31, 2024 and December 31, 2023 (in thousands):

  March 31, 2024  December 31, 2023 
  Gross Carrying
Amount
  Accumulated
Amortization
  Net  Gross Carrying
Amount
  Accumulated
Amortization
  Net 
Intangible assets subject to amortization:                  
Hormone therapy drug patents $6,819  $2,004  $4,815  $6,818  $1,871  $4,947 
Hormone therapy drug patents applied and pending approval  841      841   842      842 
Intangible assets subject to amortization  7,660   2,004   5,656   7,660   1,871   5,789 
Intangible assets not subject to amortization:                        
Trademarks/trade name rights  309      309   309      309 
License rights and other intangible assets, net $7,969  $2,004  $5,965  $7,969  $1,871  $6,098 

We recorded, in continuing operations, amortization expense related to patents of $133 thousand and $7 thousand for the interim periods presented. Interim resultsthree months ended March 31, 2024 and 2023, respectively.


Our intangible assets subject to amortization are not necessarily indicativeexpected to be amortized as follows (in thousands):

Year ending December 31,
2024 $400 
2025  445 
2026  445 
2027  445 
2028  446 
Thereafter  2,634 
Total $4,815 

5. Accrued expenses and other current liabilities

Other accrued expenses and other current liabilities consisted of resultsthe following (in thousands):

  March 31,
2024
  December 31,
2023
 
Payroll and related costs $538  $762 
Professional fees  325   489 
Operating lease liabilities  1,483   1,473 
Other accrued expenses and current liabilities  374   409 
Accrued expenses and other current liabilities $2,720  $3,133 

6. Commitments and contingencies

Mayne Pharma Agreement

Mayne Pharma paid us approximately $12.1 million at closing on December 30, 2022, for the acquisition of net working capital, subject to certain adjustments as determined in accordance with the Transaction Agreement. While the Transaction Agreement calls for much of the net working capital to be trued-up shortly after the Closing Date in 2023, for a fullperiod of one year or any other interim periodfollowing the Closing Date in the future.

Recently Issued Accounting Pronouncementscase of payer rebates and wholesale distributor fees and two years following the Closing Date in the case for allowance for returns, net working capital amounts will be adjusted to arrive at final net working capital under the Transaction Agreement.

 

In May 2017,September 2023, we increased certain accrual estimates including increasing our working capital adjustment accrual by $2.0 million for amounts anticipated to be owed under the Financial Accounting Standards Board,Transaction Agreement. In December 2023, we made a $5.5 million payment to Mayne Pharma to settle certain working capital amounts that were required to be trued-up shortly after the Closing Date, excluding the allowance for returns, allowance for payer rebates, and allowance for wholesale distributor fees. Of the $5.5 million, $2.0 million increased the allowance for net working capital allowances remaining to be trued up.

The Company’s estimate of the allowance for payer rebates and wholesale distributor fees was determined in accordance with the Transaction Agreement which establishes the process for the determination of net working capital. In February 2024, the Company received Mayne Pharma’s calculation of allowance for payer rebates and wholesale distributor fees which differed significantly from the Company’s estimate of the allowances. The Company and Mayne Pharma intend to resolve this matter through the dispute resolution process outlined in the Transaction Agreement.

The Company believes its estimated allowances for payer rebates and wholesale distributor fees are reasonable. The timing and outcome of this matter is uncertain at this point. As a result, the Company cannot reasonably estimate a range of loss, and accordingly, the Company has not accrued any additional liability associated with Mayne Pharma’s allowance calculation for payer rebates and wholesale distributor fees.

As of March 31, 2024, the Company believes no additional accrual is required for amounts that may be owed for the allowance for returns. The Company has not recorded any contingent gains or FASB, issued an Accounting Standards Update, or ASU, that clarifies whenreceivables for any such allowances. Management continues to monitor the unresolved and pending net working capital items as changes to the termsestimated amounts owed or conditions of a share-based payment award mustamounts due from Mayne Pharma that may be accounted for as modifications. The new guidance will reduce diversity in practice and result in fewer changes tomaterial.


Population Council License Agreement

Under the terms of our license agreement with the Population Council, Inc. (the “Population Council License Agreement”), we paid the Population Council a milestone payment of $20.0 million in 2018, which was within 30 days following the approval by the FDA of the New Drug Application (“NDA”) for ANNOVERA, and $20.0 million in 2019 following the first commercial batch release of ANNOVERA. The aggregate $40.0 million of milestone payments were recorded as license rights. The Population Council was also eligible to receive future payments upon the achievement of certain commercial sales milestones of ANNOVERA. On December 30, 2022, we assigned the ANNOVERA license to Mayne Pharma. Our rights and obligations under the Population Council License Agreement have been transferred to Mayne Pharma and may revert back to us upon the occurrence of certain events.

Legal proceedings

In February 2020, we received a Paragraph IV certification notice letter (the “IMVEXXY Notice Letter”) regarding an award being accountedAbbreviated New Drug Application (“ANDA”) submitted to the FDA by Teva Pharmaceuticals USA, Inc. (“Teva”). The ANDA seeks approval from the FDA to commercially manufacture, use, or sell a generic version of the 4 mcg and 10 mcg doses of IMVEXXY. In the IMVEXXY Notice Letter, Teva alleges that TherapeuticsMD patents listed in the FDA’s Orange Book that claim compositions and methods of IMVEXXY (the “IMVEXXY Patents”) are invalid, unenforceable, and/or will not be infringed by Teva’s commercial manufacture, use, or sale of its proposed generic drug product. The IMVEXXY Patents identified in the IMVEXXY Notice Letter expire in 2032 or 2033. In April 2020, we filed a complaint for as modifications.patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva’s ANDA filing with the FDA. We are seeking, among other relief, an order that the effective date of any FDA approval of Teva’s ANDA would be a date no earlier than the expiration of the IMVEXXY Patents and equitable relief enjoining Teva from infringing the IMVEXXY Patents. Teva has filed its answer and counterclaim to the complaint, alleging that the IMVEXXY Patents are invalid and not infringed. In July 2021, following a proposal by Teva, the District Court entered an order temporarily staying all proceedings in the IMVEXXY litigation, which order was filed under seal. In September 2021, the District Court made available a public version of the order following the parties’ agreement to a consent motion to redact information Teva contended was confidential. The new guidance will allow companies to make certain changes to awards without accountingorder provides that the statutory stay that prevents the FDA from granting final approval of the ANDA for them as modifications. This guidance does not change30 months from the accounting for modifications. The guidancedate of the IMVEXXY Notice Letter will be applied prospectivelyextended for the number of days that the stay of the IMVEXXY litigation is in place. The length of the stay of the IMVEXXY litigation is dependent on further action by Teva. We have incurred and recorded legal costs amounting to awards modified$2,334 thousand in prepaid expenses and other current assets as of March 31, 2024, for the IMVEXXY Paragraph IV legal proceeding since we believe that we will successfully prevail in this legal proceeding. Upon the successful conclusion of the legal proceeding, the related capitalized legal costs will be reclassified to patents, in license rights and other intangible assets, net, in the accompanying condensed consolidated balance sheets, and such costs will be amortized over the remaining useful life of the patents. If we are unsuccessful in this legal proceeding, then the related capitalized legal costs for this legal preceding and any unamortized IMVEXXY patent costs that were previously capitalized will be immediately expensed in the period in which we become aware of an unsuccessful legal proceeding.

Beginning on or afterDecember 30, 2022 and per the adoption dateMayne License Agreement, Mayne Pharma is responsible for all enforcement of our patents, including the litigation discussed above with respect to Teva.

From time to time, we are involved in other litigations and is effective for annual periods,proceedings in the ordinary course of business. We are currently not involved in any other litigations and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, including in an interim period. We do not expectproceedings that adoption of this guidance willwe believe would have a material effect on our condensed consolidated financial statements.


THERAPEUTICSMD, INC. AND SUBSIDIARIEScondition, results of operations, or cash flows.

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Off-balance sheet arrangements

As of March 31, 2024 and December 31, 2023 there were no off-balance sheet arrangements that have had or are reasonably likely to have current or future effects on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that we consider material.

Employment agreements

 

In August 2016,connection with our transformation into a pharmaceutical royalty company, the FASB issued ASU 2016-15, Statementtermination of Cash Flows (Topic 230)our executive management team (except for Mr. Marlan Walker, our former General Counsel and current Chief Executive Officer) and all other employees was completed by December 30, 2022. Severance obligations for all employees other than executive officers were paid in full in the first quarter of 2023. As of March 31, 2024, we employ one full-time employee primarily engaged in an executive position. We have engaged external consultants who support our relationship with current partners and assist with certain financial, legal, and regulatory matters and the continued wind-down of our historical business operations. In the aggregate, as of March 31, 2024, we have accrued severance liabilities for executive termination obligations of $169 thousand.


7. Stockholders’ equity

Warrants

As of March 31, 2024, the following table summarizes the status of our outstanding and exercisable warrants and related transactions since December 31, 2023 (in thousands, except weighted average exercise price and weighted average remaining contractual life data):

  Warrants Outstanding and exercisable 
  Warrants  Weighted
Average Exercise
Price
  Aggregate
Intrinsic
Value
  Weighted
Average
Remaining
Contractual Life
(in Years)
 
As of January 1, 2024  99  $66.61  $    —   6.5 
As of March 31, 2024  99  $66.61  $   6.3 

Share-based compensation payment plans

As of March 31, 2024, 112,699 shares of common stock were subject to outstanding awards under our share-based payment award plans and inducement grants (calculated using the base number of PSUs that may vest). ASU 2016-15 is intended to reduceAs of March 31, 2024, 394,669 shares of common stock were available for future grants of share-based payment awards under the diversity in practice regarding how certainTherapeuticsMD, Inc. 2019 Stock Incentive Plan.

The following table summarizes the status of our outstanding and exercisable options and related transactions are classified withinsince December 31, 2023 (in thousands, except weighted average exercise price and weighted average remaining contractual life data):

  Outstanding  Exercisable 
  Options
Awards
  Weighted
Average
Exercise
Price
  Aggregate
Intrinsic
Value
  Weighted
Average
Remaining
Contractual
Life
(in Years)
  Options
Awards
  Weighted
Average
Exercise
Price
  Aggregate
Intrinsic
Value
  Weighted
Average
Remaining
Contractual
Life
(in Years)
 
As of January 1, 2024  72  $258.55  $   3.0   73  $258.46  $   3.0 
Expired  (3)  252.50                   
As of March 31, 2024  69  $258.80  $   2.9   70  $258.69  $   2.9 

The following table summarizes the statementstatus of cash flows. ASU 2016-15 is effective for public business entities for annual periods beginning afterour RSUs and related transactions since December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted with retrospective application. We do not expect that adoption31, 2023 (in thousands, except weighted average grant date fair value):

  RSUs awards outstanding 
  RSUs  Weighted
Average
Grant Date
Fair Value
  Aggregate
Intrinsic
Value
 
As of January 1, 2024  40  $9.67  $89.60 
Vested  (2)  23.42    
As of March 31, 2024  38  $9.01  $86.39 

The following table summarizes the status of this guidance will have a material effect on our consolidated financial statements.PSUs and related transactions since December 31, 2023 (in thousands, except weighted average grant date fair value):

  Outstanding 
  PSUs (1)  Weighted
Average
Grant Date
Fair Value
  Aggregate
Intrinsic
Value
 
Unvested, as of January 1, 2024  14  $50.87  $32.57 
Vested  (7)  60.50   16.16 
Cancelled/Forfeited  (2)  58.68    
Unvested, as of March 31, 2024  5  $34.50  $11.92 

(1)The number of PSUs represents the base number of PSUs that may vest.


Share-based payment compensation cost

 

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This guidance simplifies several aspectsShare-based payment compensation expense for PSUs is based on 100% vesting which was a part of the accountingtermination benefits for employeeall employees who were terminated in 2022. We recorded share-based payment transactions for both publicaward compensation costs related to previously issued options, RSU and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements,PSUs, as well as classification in the statementshares of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016,common stock issued under our employee stock purchase plan (“ESPP”) totaling $111 thousand and interim periods within those fiscal years. We adopted ASU 2016-09 effective January 1, 2017, electing to account for forfeitures when they occur. The impact from adoption of the provisions related to forfeiture rates was reflected in our consolidated financial statements on a modified retrospective basis, resulting in an adjustment of approximately $31,000 to retained earnings. The impact from adoption of the provisions related to excess tax benefits or deficiencies in the provision for income taxes rather than paid-in capital was adopted on a modified retrospective basis. Since we have a full valuation allowance on our net deferred tax assets, an amount equal to the cumulative adjustment made to retained earnings to recognize the previously unrecognized net operating losses from prior periods was made to the valuation allowance through retained earnings for the first quarter financial statements. Adoption of all other changes did not have an impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. This guidance requires lessees to record most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteria and the accounting for sales-type and direct financing leases. The standard is effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. We are in the process of analyzing the quantitative impact of this guidance on our results of operations and financial position. While we are continuing to assess all potential impacts of the standard, we currently believe the impact of this standard will be primarily related to the accounting for our operating lease.

In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under previous guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In July 2015, the FASB approved the proposal to defer the effective date of ASU 2014-09 standard by one year. Early adoption is permitted after December 15, 2016, and the standard is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations (ASU 2016-08), accounting for licenses of intellectual property and identifying performance obligations (ASU 2016-10), narrow-scope improvements and practical expedients (ASU 2016-12) and technical corrections and improvements to topic 606 (ASU 2016-20) in its new revenue standard. We have performed a preliminary review of the requirements of the new revenue standard and are monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. We have reviewed customer contracts and applied the five-step model of the new standard to our contracts as well as compared the results to our current accounting practices. We are currently in the process of drafting disclosures required by the new standard. At this point of our analysis, we do not believe that the adoption of this standard will have a material effect on our financial statements but will potentially expand our disclosures related to contracts with customers.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 3 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Fair Value of Financial Instruments

Our financial instruments consist primarily of cash, accounts receivable, accounts payable and accrued expenses. The carrying amount of cash, accounts receivable, accounts payable and accrued expenses approximates their fair value because of the short-term maturity of such instruments, which are considered Level 1 assets under the fair value hierarchy.

We categorize our assets and liabilities that are valued at fair value on a recurring basis into a three-level fair value hierarchy as defined by Accounting Standards Codification, or ASC, 820, Fair Value Measurements. The fair value hierarchy gives the highest priority to quoted prices in active markets for identical assets and liabilities (Level 1) and lowest priority to unobservable inputs (Level 3). Assets and liabilities recorded in the consolidated balance sheet at fair value are categorized based on a hierarchy of inputs, as follows:

Level 1unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2quoted prices for similar assets or liabilities in active markets or inputs that are observable for the asset or liability, either directly or indirectly through market corroboration, for substantially the full term of the financial instrument; and
Level 3unobservable inputs for the asset or liability.

At September 30, 2017 and 2016, we had no assets or liabilities that were valued at fair value on a recurring basis. The fair value of indefinite-lived assets or long-lived assets is measured on a non-recurring basis using significant unobservable inputs (Level 3) in connection with our impairment test. There was no impairment of intangible assets or long-lived assets during the three and nine months ended September 30, 2017 and 2016.

Trade Accounts Receivable and Allowance for Doubtful Accounts

Trade accounts receivable are customer obligations due under normal trade terms. We review accounts receivable for uncollectible accounts and credit card charge-backs and provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, and existing economic conditions. We consider trade accounts receivable past due for more than 90 days to be delinquent. We write off delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required.

Revenue Recognition

We recognize revenue on arrangements in accordance with ASC 605, Revenue Recognition. We recognize revenue only when the price is fixed or determinable, persuasive evidence of an arrangement exists, the service is performed, and collectability is reasonably assured.

8

THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Our OTC and prescription prenatal vitamin products are generally variations of the same product with slight modifications in formulation and marketing. The primary difference between our OTC and prescription prenatal vitamin products is the source of payment. Purchasers of our OTC prenatal vitamin products pay for the product directly while purchasers of our prescription prenatal vitamin products pay for the product primarily via third-party payers. Both OTC and prescription prenatal vitamin products share the same marketing support team utilizing similar marketing techniques. As of January 1, 2017, we ceased manufacturing and distributing our OTC product lines, except for Iron 21/7, which have declined steadily over time resulting in immaterial sales. The revenue that is generated by us from major customers is all generated from sales of our prescription prenatal vitamin products which is disclosed in Note 13. There are no major customers for our OTC prenatal vitamin or other products.

Over-the-Counter Products

We generate OTC revenue from product sales primarily to retail consumers. We recognize revenue from product sales upon shipment, when the rights of ownership and risk of loss have passed to the consumer. We include outbound shipping and handling fees, if any, in revenues, net, and bill them upon shipment. We include shipping expenses in cost of goods sold. A majority of our OTC customers pay for our products with credit cards, and we usually receive the cash settlement in two to three banking days. Credit card sales minimize accounts receivable balances relative to OTC sales (Iron 21/7). We provide an unconditional 30-day money-back return policy under which we accept product returns from our retail and eCommerce OTC customers. We recognize revenue from OTC sales, net of estimated returns and sales discounts. As of January 1, 2017, we ceased manufacturing and distributing our OTC product lines, except for Iron 21/7, which have declined steadily over time resulting in immaterial sales.

Prescription Products

We sell our name brand and generic prescription products primarily through wholesale distributors and retail pharmacy distributors. We recognize revenue from prescription product sales, net of sales discounts, chargebacks, wholesaler fees, customer rebates and estimated returns.

Revenue related to prescription products sold through wholesale distributors is recognized when the prescription products are shipped to the distributors and the control of the products passes to each distributor. We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months prior to and up to 12 months following product expiration. Our prescription products currently have a shelf life of 24 months from the date of manufacture.

Prior to September 1, 2016, we recognized revenue related to prescription products sold through retail pharmacy distributors when the product was dispensed by the retail pharmacy distributor, at which point all revenue and discounts related to such product were known or determinable and there was no right of return with respect to such product. On September 1, 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and mitigate exposure to any one retail pharmacy. Beginning on September 1, 2016, all of our prescription products are distributed under the wholesale distributor model described above.

We offer various rebate programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed, and adjusted if necessary, on a quarterly basis. We record distributor fees based on amounts stated in contracts and estimate chargebacks based on the number of units sold each period.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Share-Based Compensation

We measure the compensation costs of share-based compensation arrangements based on the grant-date fair value and recognize the costs in the financial statements over the period during which employees are required to provide services. Share-based compensation arrangements may include options, restricted stock, restricted stock units, performance-based awards, and share appreciation rights. We amortize such compensation amounts, if any, over the respective service periods of the award. We use the Black-Scholes-Merton option pricing model, or the Black-Scholes Model, an acceptable model in accordance with ASC 718, Compensation-Stock Compensation, to value options. Option valuation models require the input of assumptions, including the expected life of the stock-based awards, the estimated stock price volatility, the risk-free interest rate, and the expected dividend yield. The risk-free interest rate assumption is based upon observed interest rates on zero coupon U.S. Treasury bonds whose maturity period is appropriate for the term of the instrument. Estimated volatility is a measure of the amount by which our stock price is expected to fluctuate each year during the term of the award. Prior to January 1, 2017, the expected volatility of share options was estimated based on a historical volatility analysis of peer entities whose stock prices were publicly available that were similar to our company with respect to industry, stage of life cycle, market capitalization, and financial leverage. On January 1, 2017, we started using our own stock price in our volatility calculation along with two other peer entities whose stock prices were publicly available that were similar to our company. Our calculation of estimated volatility is based on historical stock prices over a period equal to the expected term of the awards. The average expected life of warrants is based on the contractual terms of the awards. The average expected life of options is based on the contractual terms of the stock option using the simplified method. We utilize a dividend yield of zero based on the fact that we have never paid cash dividends and have no current intention to pay cash dividends. Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, estimates of expected life of the share-based award, stock price volatility and risk-free interest rates. The assumptions used in calculating the fair value of share-based awards represent our best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, if factors change and we use different assumptions, our share-based compensation expense could be materially different in the future.

Equity instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments, as required by ASC 505, Equity - Based Payments to Non-Employees, or ASC 505. ASC 505 defines the measurement date and recognition period for such instruments. In general, the measurement date is when either (a) a performance commitment, as defined, is reached or (b) the earlier of (i) the non-employee performance is complete or (ii) the instruments are vested. The estimated expense is recognized each period based on the current fair value of the award. As a result, the amount of expense related to awards to non-employees can fluctuate significantly during the period from the date of the grant through the final measurement date. The measured value related to the instruments is recognized over a period based on the facts and circumstances of each particular grant as defined in ASC 505.

We recognize the compensation expense for all share-based compensation granted based on the grant date fair value estimated in accordance with ASC 718. We generally recognize the compensation expense on a straight-line basis over the employee’s requisite service period.We adopted ASU 2016-09, effective January 1, 2017, electing to account for forfeitures when they occur. Prior to that,we estimated the forfeiture rate based on our historical experience of forfeitures.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Research and Development Expenses

Research and development, or R&D, expenses include internal R&D activities, services of external contract research organizations, or CROs, costs of their clinical research sites, manufacturing, laboratory supplies, scale-up and validation costs, and other activities. Internal R&D activity expenses include salaries, benefits, and non-cash share-based compensation expenses. Advance payments to be expensed in future research and development activities are capitalized, and were $0 at September 30, 2017 and $228,933 at December 31, 2016, all of which were included in other current assets on the accompanying consolidated balance sheets. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and legal fees and costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various U.S. Food and Drug Administration, or the FDA, submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. Legal activities include professional research and advice regarding R&D, patents and regulatory matters. These consulting and legal expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions expense in the period in which the facts that give rise to the revision become known.

Segment Reporting

We are managed and operated as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single management team that reports to the President of our company. We do not operate separate lines of business with respect to any of our products and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales in the United States. Accordingly, we view our business as one reportable operating segment.

NOTE 4 – INVENTORY

Inventory consists of the following:

  

September 30,

2017

  

December 31,

2016

 
Finished product $1,293,517  $1,062,285 
Raw material     14,036 
TOTAL INVENTORY $1,293,517  $1,076,321 

NOTE 5 – OTHER CURRENT ASSETS

Other current assets consist of the following:

  

September 30,

2017

  

December 31,

2016

 
Prepaid manufacturing costs $999,508  $991,809 
Prepaid sales and marketing costs  535,936    
Prepaid insurance  953,792   628,039 
Prepaid research and development costs     100,035 
Prepaid consulting     128,898 
Prepaid vendor deposits  5,000   44,311 
Other prepaid costs  507,541   405,960 
TOTAL OTHER CURRENT ASSETS $3,001,777  $2,299,052 

THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 6 – FIXED ASSETS

Fixed assets consist of the following:

  

September 30,

2017

  

December 31,

2016

 
Accounting system $301,096  $301,096 
Equipment  247,568   215,182 
Computer hardware  80,211   80,211 
Furniture and fixtures  116,542   113,079 
Leasehold improvements  37,888   37,888 
   783,305   747,456 
Accumulated depreciation  (335,239)  (230,617)
TOTAL FIXED ASSETS $448,066  $516,839 

Depreciation expense$483 thousand for the three months ended September 30, 2017March 31, 2024 and 2016 was $35,622 and $26,543 respectively, and $104,622 and $45,759 for the nine months ended September 30, 2017 and 2016,2023, respectively.

NOTE 7 – INTANGIBLE ASSETS

The following table sets forth the gross carrying amount and accumulated amortization of our intangible assets as of September 30, 2017 and December 31, 2016:

  September 30, 2017 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net

Amount

  

Weighted- Average

Remaining Amortization
Period (yrs.)

 
Amortizing intangible assets:                
OPERA®software patent $31,951  $(7,988) $23,963   12 
Development costs of corporate website  91,743   (91,743)     n/a 
Approved hormone therapy drug candidate patents  1,247,181   (153,216)  1,093,965   15.25 
Hormone therapy drug candidate patents (pending)  1,474,061      1,474,061   n/a 
Non-amortizing intangible assets:                
Multiple trademarks  201,432      201,432   indefinite 
Total $3,046,368  $(252,947) $2,793,421     

THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

  December 31, 2016 
  

Gross Carrying Amount

  

Accumulated Amortization

  

Net

Amount

  

Weighted- Average

Remaining Amortization
Period (yrs.)

 
Amortizing intangible assets:                
OPERA®software patent $31,951  $(6,490) $25,461   12.75 
Development costs of corporate website  91,743   (91,743)     n/a 
Approved hormone therapy drug candidate patents  1,093,452   (102,393)  991,059   16 
Hormone therapy drug candidate patents (pending)  1,203,987      1,203,987   n/a 
Non-amortizing intangible assets:                
Multiple trademarks  185,465      185,465   indefinite 
Total $2,606,598  $(200,626) $2,405,972     

We capitalize external costs, consisting primarily of legal costs, related to securing our patents and trademarks. Once a patent is granted, we amortize the approved hormone therapy drug candidate patents using the straight-line method over the estimated useful life of approximately 20 years, which is the life of intellectual property patents. If the patent is not granted, we write-off any capitalized patent costs at that time. Trademarks are perpetual and are not amortized. During the nine months ended September 30, 2017 and year ended December 31, 2016, there was no impairment recognized related to intangible assets.

In addition to numerous pending patent applications, as of September 30, 2017, we had 17 issued patents, including:

13 utility patents that relate to our combination progesterone and estradiol product candidates, which are owned by us and are U.S. jurisdiction patents with expiration dates in 2032. We have pending patent applications with respect to certain of these patents in Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea.
two utility patents that relate to TX-004HR, our applicator-free vaginal estradiol softgel product candidate, which establishes an important intellectual property foundation for TX-004HR, which are owned by us and are U.S. jurisdiction patents with an expiration date in 2033.  We have pending patent applications with respect to certain of these patents in Argentina, Australia, Brazil, Canada, Europe, Israel, Japan, Mexico, Russia, South Africa, and South Korea.
one utility patent that relates to a pipeline transdermal patch technology, which is owned by us and is a U.S. jurisdiction patent with an expiration in 2032. We have pending patent application with respect to this patent in Australia, Brazil, Canada, Europe, Mexico, and Japan.
one utility patent that relates to our OPERA® information technology platform, which is owned by us and is a U.S. jurisdiction patent with an expiration date in 2029.

THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

Amortization expense was $18,433 and $13,917 for the three months ended September 30, 2017 and 2016, respectively, and $52,321 and $38,560 for the nine months ended September 30, 2017 and 2016, respectively. Estimated amortization expense for the next five years for the patent cost currently being amortized is as follows:

Year Ending
December 31,
  Estimated
Amortization
 
 2017(3 months)  $18,433 
 2018  $73,732 
 2019  $73,732 
 2020  $73,732 
 2021  $73,732 
 Thereafter  $804,567 

NOTE 8 – OTHER CURRENT LIABILITIES

Other current liabilities consist of the following:

  

September 30,

2017

  

December 31,

2016

 
Accrued clinical trial costs $556,048  $1,281,080 
Accrued payroll, bonuses and commission costs  2,662,359   3,531,440 
Accrued compensated absences  952,587   665,561 
Accrued legal and accounting expense  366,828   176,518 
Accrued sales and marketing costs  69,041   665,773 
Other accrued expenses  319,015   224,865 
Allowance for wholesale distributor fees  145,563   76,510 
Accrued royalties  93,870   26,507 
Allowance for coupons and returns  1,218,249   794,816 
Accrued rent  293,672   181,015 
TOTAL OTHER CURRENT LIABILITIES $6,677,232  $7,624,085 

NOTE 9 – NET LOSS PER SHARE

We calculate earnings per share, or EPS, in accordance with ASC 260, Earnings Per Share, which requires the computation and disclosure of two EPS amounts: basic and diluted. We compute basic EPS based on the weighted-average number of shares of common stock, par value $0.001 per share, or Common Stock, outstanding during the period. We compute diluted EPS based on the weighted-average number of shares of Common Stock outstanding plus all potentially dilutive shares of Common Stock outstanding during the period. Such potentially dilutive shares of Common Stock consist of options and warrants and were excluded from the calculation of diluted earnings per share because their effect would have been anti-dilutive due to the net loss reported by us. The table below presents potentially dilutive securities that could affect our calculation of diluted net loss per share allocable to common stockholders for the periods presented.

  Nine Months Ended
September 30,
 
  2017  2016 
Stock options  23,383,100   20,705,923 
Warrants  3,115,905   12,060,571 
   26,499,005   32,766,494 

THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 10 – STOCKHOLDERS’ EQUITY

Preferred Stock

At September 30, 2017, we had 10,000,000 shares of preferred stock, par value $0.001, authorized for issuance, of which no shares of preferred stock were issued or outstanding.

Common Stock

At September 30, 2017, we had 350,000,000 shares of Common Stock authorized for issuance, of which 216,429,642 shares of Common Stock were issued and outstanding.

Issuances During 2017

On September 25, 2017, we entered into an underwriting agreement with J.P. Morgan Securities LLC relating to an underwritten public offering of 12,400,000 shares of our Common Stock at a price of $5.55 per share. The net proceeds to us from the offering were approximately $68,573,000, after deducting estimated offering expenses payable by us. The offering closed on September 28, 2017 and we issued 12,400,000 shares of Common Stock.

During the three months ended September 30, 2017, certain individuals exercised stock options to purchase 2,500 shares of Common Stock for $255 in cash. During the nine months ended September 30, 2017, certain individuals exercised stock options to purchase 102,546 shares of Common Stock for $212,615 in cash.

Issuances During 2016

On January 6, 2016, we entered into an underwriting agreement with Goldman Sachs & Co. and Cowen and Company, LLC, as the representatives of the several underwriters, or the Underwriters, relating to an underwritten public offering of 15,151,515 shares of Common Stock at a public offering price of $8.25 per share. Under the terms of the underwriting agreement, we granted the Underwriters a 30-day option to purchase up to an aggregate of 2,272,727 additional shares of Common Stock, which option was exercised in full. The net proceeds to us from the offering were approximately $134,864,000, after deducting underwriting discounts and commissions and other estimated offering expenses payable by us. The offering closed on January 12, 2016 and we issued 17,424,242 shares of Common Stock.

During the three months ended September 30, 2016, certain individuals exercised stock options to purchase 127,109 shares of Common Stock. Stock options to purchase shares of Common Stock were exercised as follows: (i) 10,000 options for $1,018 in cash and (ii) 117,109 options, pursuant to the stock options’ cashless provision, wherein 78,017 shares of Common Stock were issued. During the nine months ended September 30, 2016, certain individuals exercised stock options to purchase 544,277 shares of Common Stock. Stock options to purchase shares of Common Stock were exercised as follows: (i) 427,168 options for $979,060 in cash and (ii) 117,109 options, pursuant to the stock options’ cashless provision, wherein 78,017 shares of Common Stock were issued.

Warrants to Purchase Common Stock

 

As of September 30, 2017,March 31, 2024, we had warrants outstanding to purchase an aggregate$177 thousand of 3,115,905 shares of Common Stock with a weighted-average contractual remaining life of approximately 2.08 years, and exercise prices ranging from $0.24 to $8.20 per share, resulting in a weighted average exercise price of $2.58 per share.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

The valuation methodology used to determine the fair value of our warrants is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions, including volatility of the stock price, the risk-free interest rate and the term of the warrant. During the nine months ended September 30, 2017, we granted warrants to purchase 125,000 shares of Common Stock to outside consultants at an exercise price of $6.83 per share. The fair value for these warrants was determined by using the Black-Scholes Model on the date of the grant using a term of five years; volatility of 63.24%; risk free rate of 1.47%; and dividend yield of 0%. The grant date fair value of the warrants was $3.67 per share. The warrants are vesting ratably over a 12-month period and have an expiration date of March 15, 2022. During the nine months ended September 30, 2016, we granted warrants to purchase 245,000 shares of Common Stock to outside consultants at a weighted average exercise price of $7.90 per share. The weighted average grant date fair value of these warrants was $4.78 per share. The fair value for these warrants was determined by using the Black-Scholes Model on the date of the grant using a term of five years; volatility of 74.10%-74.15%; risk free rate of 1.04%-1.28%; and dividend yield of 0%. These warrants vest and have expiration dates as follows: warrants to purchase 75,000 shares of Common Stock vested on April 21, 2016 and have an expiration date of April 21, 2021, warrants to purchase 50,000 shares of Common Stock vest ratably over a 24-month period and have an expiration date of April 21, 2021, and warrants to purchase 120,000 shares of Common Stock vest ratable over a 12-month period and have an expiration date of January 21, 2021.

During the three months ended September 30, 2017 and 2016, we recorded $101,376 and $137,161, respectively, and during the nine months ended September 30, 2017 and 2016 we recorded $217,150 and $820,751, respectively, asunrecognized share-based payment award compensation expense in the accompanying consolidated financial statements related to warrants. As of September 30, 2017, unamortized costs associated with these warrants totaled approximately $279,000.

In May 2013, we entered into a consulting agreement with Sancilio and Company, Inc., or SCI, to develop drug platforms to be used in our hormone replacement drug candidates. These services include support of our efforts to successfully obtain FDA approval for our drug candidates, including a vaginal capsule for the treatment of vulvar and vaginal atrophy, or VVA. In connection with the agreement, SCI agreed to forfeit its rights to receive warrants to purchase 833,000 shares of Common Stock that were to be granted pursuant to the terms of a prior consulting agreement dated May 17, 2012. As consideration under the agreement, we agreed to issue to SCI a warrant to purchase 850,000 shares of Common Stock at $2.01 per share that has vested or will vest, as applicable, as follows:

1.283,333 shares were earned on May 11, 2013 upon acceptance of an Investigational New Drug application by the FDA for an estradiol based drug candidate in a softgel vaginal capsule for the treatment of VVA; however, pursuant to the terms of the consulting agreement, the shares did not vest until June 30, 2013. The fair value of $405,066 for the shares vested on June 30, 2013 was determined by using the Black-Scholes Model on the date of vesting using a term of 5 years; a volatility of 45.89%; risk free rate of 1.12%; and a dividend yield of 0%. We recorded the entire $405,066 as non-cash compensation as of June 30, 2013;
2.283,333 shares vested on June 30, 2013. The fair value of $462,196 for these shares was determined by using the Black-Scholes Model on the date of vesting using a term of 5 years; a volatility of 45.84%; risk free rate of 1.41%; and a dividend yield of 0%. During both the three months ended September 30, 2017 and 2016, we did not record any non-cash compensation related to this warrant in the accompanying consolidated financial statements. During the nine months ended September 30, 2017 and 2016, we recorded $0 and $77,026, respectively, as non-cash compensation in the accompanying consolidated financial statements related to this warrant. As of June 30, 2016, this warrant was fully amortized; and
3.283,334 shares will vest upon the receipt by us of any final FDA approval of a drug candidate that SCI helped us design. It is anticipated that this event will occur in the near future.

THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

In May 2012, we issued warrants to purchase an aggregate of 1,300,000 shares of Common Stock to SCI for services to be rendered over approximately five years beginning in May 2012. The warrants vested upon issuance. Services provided are to include (a) services in support of our drug development efforts, including services in support of our ongoing and future drug development and commercialization efforts, regulatory approval efforts, third-party investment and financing efforts, marketing efforts, chemistry, manufacturing and controls efforts, drug launch and post-approval activities, and other intellectual property and know-how transfer associated therewith; (b) services in support of our efforts to successfully obtain New Drug Approval; and (c) other consulting services as mutually agreed upon from time to time in relation to new drug development opportunities. The warrants were valued at $1,532,228 on the date of the issuance using an exercise price of $2.57; a term of five years; a volatility of 44.71%; risk free rate of 0.74%; and a dividend yield of 0%. During the three months ended September 30, 2017 and 2016, we recorded $0 and $64,449, respectively, and during the nine months ended September 30, 2017 and 2016, we recorded $128,898 and $193,347, respectively, as non-cash compensation expense with respect to these warrants in the accompanying consolidated statements of operations. The contract will expire upon the commercial manufacture of a drug product. As of September 30, 2017, the SCI warrants issued in 2013 and 2012 were fully amortized.

During both the three months ended September 30, 2017 and 2016, no warrants were exercised. During the nine months ended September 30, 2017, certain individuals exercised warrants to purchase 2,476,666 shares of Common Stock for $3,798,999 in cash. In addition, during the nine months ended September 30, 2017, certain individuals exercised warrants to purchase 6,590,000 shares of Common Stock pursuant to the warrants’ cashless exercise provisions, wherein 4,762,208 shares of Common Stock were issued. During the nine months ended September 30, 2016, certain individuals exercised warrants to purchase 722,744 shares of Common Stock for $1,373,000 in cash.

Options to Purchase Common Stock

In 2009, we adopted the 2009 Long Term Incentive Compensation Plan, or the 2009 Plan, to provide financial incentives to employees, directors, advisers, and consultants of our company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives, or the Awards. The Awards available under the 2009 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2009 Plan. There are 25,000,000 shares authorized for issuance thereunder. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. As of September 30, 2017, there were non-qualified stock options to purchase 18,592,959 shares of Common Stock outstanding under the 2009 Plan. As of September 30, 2017, there were 2,156,003 shares of Common Stock available to be issued under the 2009 Plan.

In 2012, we adopted the 2012 Stock Incentive Plan, or the 2012 Plan, a non-qualified plan that was amended in August 2013. The 2012 Plan was designed to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. The Awards available under the 2012 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2012 Plan. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. There are 10,000,000 shares of Common Stock authorized for issuance thereunder. As of September 30, 2017, there were non-qualified stock options to purchase 4,790,141 shares of Common Stock outstanding under the 2012 Plan. As of September 30, 2017, there were 5,128,333 shares of Common Stock available to be issued under the 2012 Plan.

The valuation methodology used to determine the fair value of stock options is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life of the stock options. The assumptions used in the Black-Scholes Model for options granted during the nine months ended September 30, 2017 and 2016 are set forth in the table below.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

 Nine Months Ended
 September 30,
2017
 September 30,
2016
Risk-free interest rate1.84-2.01% 1.13-1.70%
Volatility61.56-63.95% 70.26-71.22%
Term (in years)5.5-6.25 6.00-6.25
Dividend yield0.00% 0.00%

A summary of activity under the 2009 and 2012 Plans and related information follows:

  Number of Shares Underlying Stock Options  Weighted Average Exercise Price  Weighted
Average
Remaining
Contractual
Life in Years
  Aggregate
Intrinsic Value
 
Balance at December 31, 2016  21,767,854  $3.56   5.8  $60,495,730 
Granted  2,184,500  $6.61         
Exercised  (102,546) $2.07      $452,287 
Expired/Forfeited  (466,708) $6.52         
Balance at September 30, 2017  23,383,100  $3.79   5.4  $52,467,444 
Vested and Exercisable at September 30, 2017  18,883,183  $3.15   4.6  $52,059,288 
Unvested at September 30, 2017  4,499,917  $6.46   8.6  $408,156 

At September 30, 2017, our outstanding stock options had exercise prices ranging from $0.10 to $8.92 per share. The weighted average grant date fair value per share of options granted was $3.82 and $4.70 during the nine months ended September 30, 2017 and 2016, respectively. Share-based compensation expense for options recognized in our results of operations is based on vested awards. Share-based compensation expense related to options for the three months ended September 30, 2017 and 2016 was $1,885,050 and $3,982,759, respectively, and for the nine months ended September 30, 2017 and 2016 was $4,691,735 and $12,294,089, respectively. At September 30, 2017, total unrecognized estimated compensation expensecost related to unvested options, granted prior to that date was approximately $12,419,000. This costRSUs and PSUs as well as shares issuable under our ESPP, which may be adjusted for future changes in forfeitures and is expected to be recognized over a weighted-average period of 2.2 years.included as additional paid-in capital in the accompanying condensed consolidated balance sheets. No tax benefit was realized due to a continued pattern of operatingnet losses.

 

The unrecognized compensation cost as of March 31, 2024 of $177 thousand is expected to be recognized as share-based payment award compensation over a weighted average period of 0.7 years.

NOTE 11 – INCOME TAXES8. Revenue

 

Deferred income tax assetsPursuant to the Mayne License Agreement, the Company granted Mayne Pharma, on the Closing Date, (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and liabilities are determined basedcommercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories.

Pursuant to the Mayne License Agreement, Mayne Pharma will make one-time, milestone payments to the Company of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma will pay to the Company royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon differences between the financial reportingearlier to occur of (i) the expiration or revocation of the last patent covering a Product and tax basis(ii) a generic version of assetsa Product launching in the United States. Mayne Pharma will pay to the Company minimal annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below. Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and liabilities and are measured usingroyalty free license for the enacted tax rates and laws that will be in effect when the differences are expected to reverse. Licensed Products.

9. Income taxes

We do not expect to pay any significant federal or state income tax for 2017taxes as a result of (a)(i) the losses recorded during the ninethree months ended September 30, 2017, (b)March 31, 2024 and 2023, (ii) additional losses expected for the remainder of 2017, and/2024 or (c)losses recorded in 2023, or (iii) net operating losslosses carry forwards from prior years. Accounting standards require the consideration of

We recorded a full valuation allowance for deferred tax assets if it is “more likely than not” that some component or all of the benefitsnet operating losses for the three months ended March 31, 2024 and 2023. Accordingly, there were no provisions for income taxes for the three months ended March 31, 2024 and 2023. Additionally, as of deferred tax assets will not be realized. As of September 30, 2017,March 31, 2024 and December 31, 2023, we maintain a full valuation allowance for all deferred tax assets. Based on these requirements,

10. Income (Loss) per common share

The following table sets forth the computation of basic and diluted (loss) per common share for the periods presented (in thousands, except per share amounts):

  Three Months Ended
March 31,
 
  2024  2023 
Numerator:      
Net loss from continuing operations $(809) $(2,310)
Income (loss) from discontinued operations, net of income taxes  75   (1,293)
Net loss $(734) $(3,603)
Denominator:        
Weighted average common shares for  basic loss per common share  11,532   9,754 
Effect of dilutive securities      
Weighted average common shares for diluted loss per common share  11,532   9,754 
         
Income (loss) per common share, continuing operations        
Basic $(0.07) $(0.24)
Diluted $(0.07) $(0.24)
Income (loss) per common share, discontinued operations        
Basic $0.01  $(0.13)
Diluted $0.01  $(0.13)


Since we reported a net loss from continuing operations for the three months ended March 31, 2024 and 2023, our potentially dilutive securities are deemed to be anti-dilutive, accordingly, there was no provision or benefiteffect of dilutive securities. Therefore, our basic and diluted loss per common share and our basic and diluted weighted average common shares are the same for income taxes has been recorded. There were no recorded unrecognized tax benefits at the endthree months ended March 31, 2024 and 2023.

The following table sets forth the outstanding securities as of the reporting period.periods presented which were not included in the calculation of diluted earnings per common share during the respective three months ended March 31, 2024 and 2023 (in thousands):

  As of March 31, 
  2024  2023 
Stock options  69   103 
RSUs  38   177 
PSUs  5   19 
Warrants  99   225 
   211   524 


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS11. Related parties

 

NOTE 12 – RELATED PARTIES

In July 2015, J. Martin Carroll,On August 23, 2022, we appointed Mr. Justin Roberts as a director to fill a newly created vacancy on our Board of Directors. Mr. Roberts was elected to serve as a director at our combined 2022 and 2023 Annual Meeting held on June 26, 2023. Mr. Roberts will serve until our next Annual Meeting of Stockholders or until his successor is duly elected or appointed or his earlier death or resignation. As a director of our company, was appointedCompany, Mr. Roberts is entitled to receive compensation in the same manner as our other non-employee directors, described in the section entitled “Director Compensation” in our Amendment No. 1 to Form 10-K for the fiscal year ended December 31, 2023, filed with the Securities and Exchange Commission on April 29, 2024, but he has elected not to receive any compensation for his service as a non-employee director at this time. Mr. Roberts currently serves as a Partner of Rubric. On July 29, 2022, September 30, 2022, October 28, 2022, and May 1, 2023, we entered into subscription agreements with Rubric. On December 30, 2022, in accordance with the terms of the Certificate of Designation, we redeemed all 29,000 outstanding shares of Series A Preferred Stock previously issued to affiliates of Rubric at a purchase price of $1,333 per share and also paid certain affiliates of Rubric approximately $3.0 million as a make-whole payment pursuant to the board of directors of Catalent, Inc. From time to time, we havesubscription agreements previously entered into agreementsbetween us and Rubric. On June 29, 2023, we issued and sold 312,525 shares of Common Stock to Rubric at a price per share equal to $3.6797 pursuant to the Subscription Agreement and received gross proceeds of $1.15 million, before expenses. On November 15, 2023 Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761. We received gross proceeds of $2.0 million from the drawdown, before expenses.

12. Business concentrations

TherapeuticsMD was previously a women’s healthcare company with Catalent, Inc.a mission of creating and its affiliates, or Catalent,commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause. In December 2022, we changed our business to become a pharmaceutical royalty company, currently receiving royalties on products licensed to pharmaceutical organizations that possess commercial capabilities in the normal courserelevant territories. As part of business. Agreements with Catalentthe transformation that included the Mayne License Agreement, historical results of commercial operations for all periods prior to the Closing Date have been reviewed by independent directorsreflected as discontinued operations in our condensed consolidated financial statements. Assets and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations in our company or a committee consisting of independent directors of our company since July 2015. Duringcondensed consolidated balance sheets. Additional disclosures regarding discontinued operations are provided in Note 2.

For the three months ended September 30, 2017 and 2016, we were billed by Catalent approximately $186,000 and $828,000, respectively, for manufacturing activitiesMarch 31, 2024, 100% of license revenue related to our clinical trials, scale-up, registration batches, stabilityMayne Pharma, Theramex and validation testing. During the nine months ended September 30, 2017 and 2016, we were billed by Catalent approximately $2,646,000 and $2,907,000, respectively, for manufacturing activities related to our clinical trials, scale-up, registration batches, stability and validation testing. As of September 30, 2017 and December 31, 2016, there were amounts due to Catalent of approximately $26,000 and $57,000, respectively.

NOTE 13 - BUSINESS CONCENTRATIONS

We purchase our products from several suppliers with approximately 100% and 97% of our purchases supplied from one vendor for both the three and nine months ended September 30, 2017 and 2016, respectively.

We sell our prescription prenatal vitamin products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. As a result of developments in the pharmaceutical industry that negatively affected independent pharmacies, including such pharmacies’ reliance on third-party payors, in 2016, we identified that payment periods for our retail pharmacy distributors were becoming longer than in prior years. As a result, during the third quarter of 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and minimize business risk exposure to any one retail pharmacy. During the third quarter of 2016, we entered into new distribution agreements with our retail pharmacy distributors to effectuate this centralization which were effective September 1, 2016.

During both the nine months ended September 30, 2017 and 2016, four customers each generated more than 10% of our total revenue. Revenue generated from four major customers combined accounted for approximately 60% of our revenue for both the nine months ended September 30, 2017 and 2016. During the nine months ended September 30, 2017, Pharmacy Innovations PA generated approximately $2,715,000 of our revenue, AmerisourceBergen generated approximately $1,716,000 of our revenue, Cardinal Health generated approximately $1,764,000 of our revenue and McKesson Corporation generated approximately $1,458,000 of our revenue. During the nine months ended September 30, 2016, Woodstock Pharmaceutical and Compounding generated approximately $2,247,000 of our revenue, Medical Center Pharmacy generated approximately $2,683,000 of our revenue, Due West Pharmacy generated approximately $1,890,000 of our revenue and Pharmacy Innovations generated approximately $2,113,000 of our revenue.


THERAPEUTICSMD, INC. AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 14– COMMITMENTS AND CONTINGENCIES

Operating Lease

We lease administrative office space in Boca Raton, Florida pursuant to a non-cancelable operating lease that commenced on July 1, 2013 and originally provided for a 63-month term. On February 18, 2015, we entered into an agreement with the same lessors to lease additional administrative office space in the same location, pursuant to an addendum to such lease. In addition, on April 26, 2016, we entered into an agreement with the same lessors to lease additional administrative office space in the same location. This agreement was effective beginning May 1, 2016 and extended the original expiration of the lease term to October 31, 2021. On October 4, 2016, we entered into an agreement with the same lessors to lease additional administrative office space in the same location, pursuant to an addendum to such lease. This addendum is effective beginning November 1, 2016.

The rental expense related to our current lease during the three months ended September 30, 2017 and 2016 was approximately $257,000 and $182,000, respectively. The rental expense related to our current lease during the nine months ended September 30, 2017 and 2016 was approximately $772,000 and $482,000, respectively.Knight.

 

As of September 30, 2017, futureMarch 31, 2024, we had a royalty receivable of $3,222 thousand relating to the short-term portion of receivable from Mayne Pharma, Theramex and Knight and $17,855 thousand relating to the long-term portion of royalty receivable which includes royalties recognized from the minimum rental payments on non-cancelable operating leases are as follows:annual royalty that Mayne Pharma is obligated to pay to us under the Mayne License Agreement.

  

Years Ending December 31,    
2017 (3 months)  $224,632 
2018   951,194 
2019   1,094,116 
2020   1,113,069 
2021   943,127 
Total minimum lease payments  $4,326,138 


 

Legal Proceedings

 

On April 17, 2017, a securities class action lawsuit was filed against our company and certain of our officers and directors in the U.S. District Court for the Southern District of Florida (Case No. 9:17-cv-80473-RLR) that purported to state a claim for alleged violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934, as amended, and Rule 10b-5 promulgated thereunder, based on statements made by the defendants concerning the NDA for TX-004HR. The complaint sought unspecified damages, interest, attorneys’ fees and other costs. On July 18, 2017, the complaint was voluntarily dismissed by the lead plaintiff without prejudice. We and certain of our officers and directors were are also subject to two shareholder derivative lawsuits regarding the NDA for TX-004HR, one filed in the U.S. District Court for the Southern District of Florida on May 30, 2017 (Case No. 9:17-cv-80686-RLR) and one filed in Florida state court in Palm Beach County on June 5, 2017 (Case No. 502017CA006289XXXXMB). These complaints were both voluntarily dismissed by the lead plaintiffs without prejudice on August 14, 2017.


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

General

The following discussion and analysis provides information that we believe to be relevant to an assessmentof financial condition and understanding of our results of operations and financial condition for the periods described. This

The following discussion should be read togetherin conjunction with our 2023 Annual Report on Form 10-K (“2023 10-K Report”), and the condensed consolidated financial statements and therelated notes to the financial statements, which are includedin Item 1, Financial Statements, appearing elsewhere in this Quarterly Report on Form 10-Q. This information should also be read in conjunction with the information contained in our Annual Report on Form 10-K for the year ended December 31, 2016 filed with the Securities and Exchange Commission, or the SEC, on February 28, 2017, or the Annual Report, including the audited financial10-Q (“10-Q Report”). The following discussion may contain forward-looking statements, and notes included therein. The reportedour actual results will not necessarily reflect futuremay differ materially from the results of operations or financial condition.

In addition, this Quarterly Report on Form 10-Q containssuggested by these forward-looking statementsstatements. Factors that involve substantial risks and uncertainties. Forward-looking statements maymight cause such differences include, but are not limited to, those discussed in Part I, Item 1A of our 2023 10-K Report under the heading “Risk Factors.” We assume no obligation to revise or update any forward-looking statements relatingfor any reason, except as required by law.

Certain amounts in the following discussion may not add due to rounding, and all percentages have been calculated using unrounded amounts.

Forward-looking statements

This 10-Q Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These forward-looking statements involve substantial risks and uncertainties. For example, statements regarding our objectives,operations, financial position, debt position, liquidity, business strategy, and other plans and objectives for future operations, and assumptions and predictions about future cost reduction strategies, as well as statements, other than historical facts, that address activities, events or developments that we intend, expect, project, believe or anticipate will or may occur in the future.expenses and royalties are all forward-looking statements. These statements are often characterizedgenerally accompanied by terminologywords such as “believes,“intend,“hopes,“anticipate,” “believe,” “estimate,” “potential(ly),” “continue,” “forecast,” “predict,” “plan,” “may,” “anticipates,“will,” “could,” “would,” “should,” “intends,“expect,“plans,” “will,” “expects,” “estimates,” “projects,” “positioned,” “strategy”or the negative of such terms or other comparable terminology.

We have based these forward-looking statements on our current expectations and similar expressionsprojections about future events. We believe that the assumptions and expectations reflected in such forward-looking statements are reasonable, based on assumptions and assessments made in light of management’s experience and perception of historical trends, current conditions, expected future developments and other factors believedinformation available to be appropriate. Forward-looking statements are made as ofus on the date of this Quarterly10-Q Report, on Form 10-Q and we cannot assure you that these assumptions and expectations will prove to have been correct or that we will take any action that we may presently be planning. These forward-looking statements are inherently subject to known and unknown risks and uncertainties. Actual results or experience may differ materially from those expected or anticipated in the forward-looking statements. We do not undertake no duty to update any forward-looking statements or reviseto publicly announce the results of any suchrevisions to any statements whether as a result ofto reflect new information or future events or otherwise. developments, except as required by law or by the rules and regulations of the SEC.

Forward-looking statements are not guarantees of future performance and are subject to risks and uncertainties, many of which are outside of our control. Important factorsFactors that could cause actual results, developmentsor contribute to such differences include, but are not limited to, our liquidity requirements, supply chain issues, management transitions, risks related to our licensing agreements, market and general economic factors, and the other risks discussed in Part I, Item 1A of our 2023 10-K Report, as updated and supplemented by Part II, Item 1A of this 10-Q Report.

Our company

TherapeuticsMD was previously a women’s healthcare company with a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause. In December 2022, we changed our business decisions to differ materiallybecome a pharmaceutical royalty company, primarily collecting royalties from forward-looking statementsour licensees. We are describedno longer engaged in research and development or commercial operations. On December 30, 2022 (the “Closing Date”), we completed a transaction (the “Mayne Transaction”) with Mayne Pharma LLC, a Delaware limited liability company (“Mayne Pharma”) and subsidiary of Mayne Pharma Group Limited, an Australian public company, pursuant to which we (i) granted Mayne Pharma an exclusive license to commercialize IMVEXXY, BIJUVA and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands (collectively, the “Licensed Products”) in the sections titled “Risk Factors”United States and its possessions and territories, (ii) assigned to Mayne Pharma our exclusive license to commercialize ANNOVERA (together with the Licensed Products, collectively, the “Products”) in the United States and its possessions and territories, and (iii) sold certain other assets to Mayne Pharma in connection therewith.


Pursuant to a License Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Mayne License Agreement”), we granted Mayne Pharma, on the Closing Date, (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories. Pursuant to the Mayne License Agreement, Mayne Pharma will pay us one-time, milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma will pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States. Mayne Pharma will pay us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below (the “Minimum Annual Royalty”). Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

Pursuant to a Transaction Agreement, dated December 4, 2022, between TherapeuticsMD and Mayne Pharma (the “Transaction Agreement”), we sold to Mayne Pharma, at closing, certain assets for Mayne Pharma to commercialize the Products in the United States, including our Annual Report, and includeexclusive license from the following: our abilityPopulation Council to resolvecommercialize ANNOVERA (the “Transferred Assets”).

The total consideration from Mayne Pharma to us for the deficiencies identified bypurchase of the U.S. Food and Drug Administration, or FDA, in our new drug application, or NDA, for our TX-004HR product candidateTransferred Assets and the time frame associatedgrant of the licenses under the Mayne License Agreement was (i) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition of net working capital as determined in accordance with such resolution; whether we will be ablethe Transaction Agreement and subject to prepare an amended NDAcertain adjustments, (iii) a cash payment of approximately $1.0 million at closing for our TX-004HR product candidate and, if prepared, whether the FDA will accept and approve the NDA; our ability to maintain or increase sales of our products; our ability to develop and commercialize our hormone therapy drug candidates and obtain additional financing necessary therefor; whether we will be able to prepare an NDA for our TX-001HR product candidate and, if prepared, whether the FDA will accept and approve the NDA; the length, cost and uncertain results of our clinical trials, including any additional clinical trials that the FDA may requireprepaid royalties in connection with TX-004HR; the potentialMayne License Agreement Amendment (as defined below) and (iv) the right to receive the contingent consideration set forth in the Mayne License Agreement, as amended. The acquisition of adverse side effects or other safety risksnet working capital was determined in accordance with the Transaction Agreement and included significant estimates which could change materially for a period of up to two years following the Closing Date.

On the Closing Date, TherapeuticsMD and Mayne Pharma entered into Amendment No. 1 to the Mayne License Agreement (the “Mayne License Agreement Amendment”). Pursuant to the Mayne License Agreement Amendment, Mayne Pharma agreed to pay us approximately $1.0 million in prepaid royalties on the Closing Date. The prepaid royalties reduced the first four quarterly payments that could precludewould have otherwise been payable pursuant to the approvalMayne License Agreement by an amount equal to $257 thousand per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty payment was paid to us. We and Mayne Pharma settled the $1.5 million of consideration due to Mayne for the assumed obligations under a long-term services agreement, including our hormone therapy drug candidates;minimum payment obligations thereunder. As the parties agreed, during the second quarter of 2023, Mayne Parma held back our relianceroyalty payment of $0.6 million and we funded an additional $0.9 million in August 2023 to settle the original $1.5 million payable.

This action represented a shift in our business and therefore, the related assets and liabilities associated with commercial operations are classified as discontinued operations on third parties to conduct our clinical trials, research and development and manufacturing; the availability of reimbursement from government authorities and health insurance companies for our products; the impact of product liability lawsuits;condensed consolidated balance sheets and the influenceresults of extensive and costly government regulation.

Throughoutoperations have been presented as discontinued operations within our condensed consolidated statements of operations for all periods presented. See Note 2 – Discontinued Operations to the condensed consolidated financial statements included in this Quarterly Report on Form 10-Q the terms “we,” “us,” “our,” “TherapeuticsMD,” or “our company” refer to TherapeuticsMD, Inc., a Nevada corporation, and unless specified otherwise, include our wholly owned subsidiaries, vitaMedMD, LLC, a Delaware limited liability company, or VitaMed; BocaGreenMD, Inc., a Nevada corporation, or BocaGreen; and VitaCare Prescription Services, Inc., a Florida corporation, or VitaCare.for further details.

 

OverviewWe also have license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

 

In July 2018, we entered into a license and supply agreement (the “Knight License Agreement”) with Knight Therapeutics Inc. (“Knight”) pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel. Knight obtained regulatory approval for IMVEXXY and BIJUVA and began commercialization efforts in 2024.

We are

In September 2019, we entered into an exclusive license and supply agreement (the “Theramex License Agreement”) with Theramex HQ UK Limited (“Theramex”) to commercialize IMVEXXY and BIJUVA outside of the U.S., excluding Canada and Israel. In 2021, Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.


In connection with our transformation into a women’s health carepharmaceutical royalty company, focused on creating and commercializing products targeted exclusively for women. Currently, we are focused on pursuing the regulatory approvals and pre-commercialization activities necessary for commercializationtermination of our advanced hormone therapy pharmaceutical products. Our drug candidates thatexecutive management team (except for Mr. Marlan Walker, our former General Counsel and current Chief Executive Officer) and all other employees was completed by December 31, 2022. Severance obligations for all employees other than executive officers were paid in full in the first quarter of 2023 and severance obligations for terminated executive officers have completed clinical trials are designed to alleviate the symptomsbeen paid in accordance with their employment agreements and separation agreements as previously disclosed. As of December 31, 2023 and reduce the health risks resulting from menopause-related hormone deficiencies, including hot flashes, osteoporosis and vaginal discomfort. We are developing these hormone therapy drug candidates, which contain estradiol and progesterone alone orMarch 31, 2024, we employed one full-time employee primarily engaged in combination, with the aim of demonstrating clinical efficacy at lower doses, thereby enabling an enhanced side effect profile compared with competing products. With our SYMBODA™ technology, we are developing advanced hormone therapy pharmaceutical products to enable delivery of bio-identical hormones through a variety of dosage forms and administration routes. In addition, we manufacture and distribute branded and generic prescription prenatal vitamins, as well as over-the-counter, or OTC, iron supplements.


Our common stock, par value $0.001 per share, or the Common Stock, has been listed on the Nasdaq Global Select Market of The Nasdaq Stock Market LLC since October 9, 2017. Our Common Stock was previously listed on the NYSE American, LLC. We maintain websites at www.therapeuticsmd.com, www.vitamedmd.com, www.vitamedmdrx.com, and www.bocagreenmd.com. The information contained on our websites or that can be accessed through our websites does not constitute part of this Quarterly Report on Form 10-Q.

Research and Development

executive position. We have obtained FDA acceptanceengaged external consultants, including certain former members of our Investigational New Drug, or IND, applications to conduct clinical trials for fivemanagement team, who support our relationship with current partners and assist with certain financial, legal and regulatory matters and the continued wind-down of our proposed hormone therapy drug products: TX-001HR,historical business operations.

Going concern

Following the transaction with Mayne Pharma, our oral combinationprimary source of progesterone and estradiol; TX-002HR, our oral progesterone alone; TX-003HR, our oral estradiol alone; and TX-004HR, our applicator-free vaginal estradiol softgel with estradiol alone and TX-006HR our combination estradiol and progesterone product in a topical cream form. Our IND applications for TX-002HR and TX-003HR are currently inactive.

In December 2016, we announced positive top-line resultsrevenue is from the recently completed the REPLENISH Trial, our phase 3 clinical trial of TX-001HR, our bio-identical hormone therapy combination of 17ß- estradiol and progesterone in a single, oral softgel drug candidate, for the treatment of moderateroyalties on products licensed to severe vasomotor symptoms, or VMS, due to menopause in post-menopausal women with an intact uterus. In December 2015, we completed the REJOICE Trial, our phase 3 clinical of TX-004HR, our applicator-free vaginal estradiol softgel drug candidate for the treatment of moderate to severe dyspareunia (vaginal pain during sexual intercourse), a symptom of vulvar and vaginal atrophy, or VVA, in post-menopausal women with vaginal liningspharmaceutical organizations that do not receive enough estrogen. In the fourth quarter of 2016 we submitted an IND application for TX-006HR, our combination estradiol and progesterone drug candidate in a topical cream form, and intend to commence phase 1 clinical trials of this drug candidate as early as 2018. In July 2014, we suspended enrollmentpossess commercial capabilities in the SPRY Trial, our phase 3 clinical trial for TX-002HR, our oral progesterone alone drug candidate, and, in October 2014, we stopped the trial in order to update the phase 3 protocol based on discussions with the FDA.relevant territories. We have currently suspended further development of this drug candidate to prioritize our leading drug candidates. Our IND is currently in inactive status.We have no current plans to conduct clinical trials for TX-003HR, our oral estradiol alone drug candidate, and the IND application for this drug candidate is currently inactive.

TX-001HR

TX-001HR is our bio-identical hormone therapy combination of 17ß- estradiol and progesterone in a single, oral softgel drug candidate for the treatment of moderate to severe VMS due to menopause, including hot flashes, night sweats and sleep disturbances in post-menopausal women with an intact uterus. The hormone therapy drug candidate is bioidentical to – or having the same chemical and molecular structure as - the hormones that naturally occur in a woman’s body, namely estradiol and progesterone, and is being studied as a continuous-combined regimen, in which the combination of estrogen and progesterone are taken together in one product daily. If approved by the FDA, we believe this would represent the first time a combination product of estradiol and progesterone bioidentical to the estradiol and progesterone produced by the ovaries would be approved for use in a single combined product.


On September 5, 2013, we began enrollment in the REPLENISH Trial, a multicenter, double-blind, placebo-controlled, phase 3 clinical trial of TX-001HR in postmenopausal women with an intact uterus. The trial was designed to evaluate the efficacy of TX-001HR for the treatment of moderate to severe VMS due to menopause and the endometrial safety of TX-001HR. Patients were assigned to one of five arms, four active and one placebo, and received study medication for 12 months. The primary endpoint for the reduction of endometrial hyperplasia was an incidence of endometrial hyperplasia of less than 1% at 12 months, as determined by endometrial biopsy. The primary endpoint for the treatment of moderate to severe VMS was the mean change of frequency and severity of moderate to severe VMS at weeks four and 12 compared to placebo, as measured by the number and severity of hot flashes. Only subjects experiencing a minimum daily frequency of seven moderate to severe hot flashes at screening were included in the VMS analysis, while all subjects were included in the endometrial hyperplasia analysis. The secondary endpoints included reduction in sleep disturbances and improvement in quality of life measures, night sweats and vaginal dryness, measured at 12 weeks, six months and 12 months. The trial evaluated 1,835 patients between 40 and 65 years old at 111 sites. On December 5, 2016, we announced positive topline data for the REPLENISH Trial.

The REPLENISH Trial evaluated four doses of TX-001HR and placebo; the doses studied were:

17ß-estradiol 1 mg/progesterone 100 mg (n = 416)

17ß-estradiol 0.5 mg/progesterone 100 mg (n = 423)

17ß-estradiol 0.5 mg/progesterone 50 mg (n = 421)

17ß-estradiol 0.25 mg/progesterone 50 mg (n = 424)

Placebo (n = 151)

The REPLENISH Trial results demonstrated:

● TX-001HR estradiol 1 mg/progesterone 100 mg and TX-001HR estradiol 0.5 mg/progesterone 100 mg both achieved all four of the co-primary efficacy endpoints and the primary safety endpoint.

● TX-001HR estradiol 1 mg/progesterone 100 mg and TX-001HR estradiol 0.5 mg/progesterone 100 mg both demonstrated a statistically significant and clinically meaningful reduction from baseline in both the frequency and severity of hot flashes compared to placebo.

● TX-001HR estradiol 0.5 mg/progesterone 50 mg and TX-001HR estradiol 0.25 mg/progesterone 50 mg were not statistically significant at all of the co-primary efficacy endpoints. The estradiol 0.25 mg/progesterone 50 mg dose was included in the clinical trial as a non-effective dose to meet the recommendation of the FDA guidance to identify the lowest effective dose.

● The incidence of consensus endometrial hyperplasia or malignancy was 0 percent across all four TX-001HR doses, meeting the recommendations established by the FDA’s draft guidance.

As outlined in the FDA guidance, the co-primary efficacy endpoints in the REPLENISH Trial were the change from baseline in the number and severity of hot flashes at weeks four and 12 as compared to placebo. The primary safety endpoint was the incidence of endometrial hyperplasia with up to 12 months of treatment. General safety was also evaluated.


The results of the REPLENISH Trial are summarized in the table below (p-values of < 0.05 meet FDA guidance and support evidence of efficacy):

Replenish Trial Co-Primary Efficacy Endpoints: Mean Change in Frequency and Severity of Hot Flashes Per Week Versus Placebo at Weeks 4 and 12, VMS-MITT Population
      
      
Estradiol/Progesterone1 mg/100 mg0.5 mg/100 mg0.5 mg/50 mg0.25 mg/50 mgPlacebo
 (n = 141)(n = 149)(n = 147)(n = 154)(n = 135)
      
      
  Frequency   
      
Week 4 P-value versus placebo<0.0010.0130.1410.001
Week 12 P-value versus placebo<0.001<0.0010.002<0.001
      
  Severity   
      
Week 4 P-value versus placebo0.0310.0050.4010.100
Week 12 P-value versus placebo<0.001<0.0010.0180.096
      
Replenish Trial Primary Safety Endpoint: Incidence of Consensus Endometrial Hyperplasia or Malignancy up to 12 months, Endometrial Safety PopulationŦ
      
Endometrial Hyperplasia0% (0/280)0% (0/303)0% (0/306)0% (0/274)0% (0/92)

MITT = Modified intent to treat

ŦPer FDA, consensus hyperplasia refers to the concurrence of two of the three pathologists be accepted as the final diagnosis.

We had a pre-NDA meeting for TX-001HR with the FDA on August 28, 2017. We anticipate that we will submit an NDA for TX-001HR to the FDA in the fourth quarter of 2017. Assuming that the NDA is accepted 60 days thereafter and an FDA review period of ten months from the receipt date to the Prescription Drug User Fee Act, or PDUFA, date for a non-new molecular entity, the NDA for TX-001HR could be approved by the FDA as soon as the fourth quarter of 2018.

TX-002HR

TX-002HR is a natural progesterone formulation for the treatment of secondary amenorrhea without the potentially allergenic component of peanut oil. The hormone therapy drug candidate is bioidentical to – or having the same chemical and molecular structure as - the hormones that naturally occur in a woman’s body. We believe it will be similarly effective to traditional treatments, but may demonstrate efficacy at lower dosages. In January 2014, we began recruitment of patients in the SPRY Trial, a phase 3 clinical trial designed to measure the safety and effectiveness of TX-002HR in the treatment of secondary amenorrhea. During the first two quarters of 2014, the SPRY Trial encountered enrollment challenges because of Institutional Review Board approved clinical trial protocols and FDA inclusion and exclusion criteria. In July 2014, we suspended enrollment and in October 2014 we stopped the SPRY Trial in order to update the phase 3 protocol based on discussions with the FDA. Our IND is currently in inactive status. We are considering updating the phase 3 protocol to, among other things, target only those women with secondary amenorrhea due to polycystic ovarian syndrome and to amend the primary endpoint of the trial. We believe that the updated phase 3 protocol, if proposed by us and approved by the FDA, would allow us to mitigate the enrollment challenges in, and shorten the duration of, the SPRY Trial. However, there can be no assurance that the FDA will approve the updated phase 3 protocol if we propose it. We have currently suspended further development of this drug candidate to prioritize our leading drug candidates.


TX-004HR

TX-004HR is our applicator free vaginal estradiol softgel drug candidate for the treatment of VVA in post-menopausal women with vaginal linings that do not receive enough estrogen. We believe that our drug candidate will be at least as effective as the traditional treatments for VVA because of an early onset of action with less systemic exposure, inferring a greater probability of dose administration to the target tissue, and it will have an added advantage of being a simple, easier to use dosage form versus traditional VVA treatments. TX-004HR features our SYMBODATM technology. This allows for the production of cohesive, stable formulations and provides content uniformity and accuracy of dosing strengths for TX-004HR. We initiated the REJOICE Trial, a randomized, multicenter, double-blind, placebo-controlled phase 3 clinical trial during the third quarter of 2014 to assess the safety and efficacy of three doses – 25 mcg, 10 mcg and 4 mcg (compared to placebo) – of TX-004HR for the treatment of moderate to severe dyspareunia, or painful intercourse, as a symptom of VVA due to menopause.

On December 7, 2015, we announced positive top-line results from the REJOICE Trial. The pre-specified four co-primary efficacy endpoints were the changes from baseline to week 12 versus placebo in the percentage of vaginal superficial cells, percentage of vaginal parabasal cells, vaginal pH and severity of participants’ self-reported moderate to severe dyspareunia as the most bothersome symptom of VVA. The trial enrolled 764 postmenopausal women (40 to 75 years old) experiencing moderate to severe dyspareunia at approximately 89 sites across the United States and Canada. Trial participants were randomized to receive either TX-004HR at 25 mcg (n=190), 10 mcg (n=191), or 4 mcg (n=191) doses or placebo (n=192) for a total of 12 weeks, all administered once daily for two weeks and then twice weekly (approximately three to four days apart) for ten weeks. The 25 mcg dose of TX-004HR demonstrated highly statistically significant results at the p < 0.0001 level compared to placebo across all four co-primary endpoints. The 10 mcg dose of TX-004HR demonstrated highly statistically significant results at the p < 0.0001 level compared to placebo across all four co-primary endpoints. The 4 mcg dose of TX-004HR also demonstrated highly statistically significant results at the p < 0.0001 level compared to placebo for the endpoints of vaginal superficial cells, vaginal parabasal cells, and vaginal pH; the change from baseline compared to placebo in the severity of dyspareunia was statistically significant at the p = 0.0149 level. The FDA has previously indicated to us that in order to approve the drug based on a single trial, the trial would need to show statistical significance at the 0.01 level or lower for each endpoint, and that a trial that is merely statistically significant at a higher level may not provide sufficient evidence to support an NDA filing or approval of a drug candidate where the NDA relies on a single clinical trial. Statistical improvement over placebo was also observed for all three doses at the first assessment at week two and sustained through week 12. Vaginal dryness was a pre-specified key secondary endpoint. The 25 mcg and 10 mcg doses of TX-004HR demonstrated highly statistically significant results at the p < 0.0001 level compared to placebo for the endpoint of vaginal dryness. The 4 mcg dose of TX-004HR demonstrated statistically significant results at the p = 0.0014 level compared to placebo. The pharmacokinetic data for all three doses demonstrated negligible to very low systemic absorption of 17 beta estradiol, estrone and estrone conjugated, supporting the previous phase 1 trial data. TX-004HR was well tolerated, and there were no clinically significant differences compared to placebo-treated participants with respect to adverse events. There were no drug-related serious adverse events reported.

We submitted the NDA for TX-004HR with the FDA on July 7, 2016. The FDA determined that the NDA was sufficiently complete to permit a substantive review and accepted the NDA for filing with the PDUFA target action date for the completion of the FDA’s review of May 7, 2017. The NDA submission was supported by the complete TX-004HR clinical program, including positive results of the phase 3 REJOICE Trial. The NDA submission included all three doses of TX-004HR (4 mcg, 10 mcg and 25 mcg) that were evaluated in the REJOICE Trial. If approved, the 4 mcg formulation would represent a lower effective dose than the currently available VVA therapies approved by the FDA.

On May 5, 2017, we received a Complete Response Letter, or CRL, from the FDA regarding the NDA for TX-004HR. In the CRL, the only approvability concern raised by the FDA was the lack of long-term safety data for TX-004HR beyond the 12-weeks studied in the phase 3 REJOICE Trial. The CRL did not identify any issues related to the efficacy of TX-004HR and did not identify any approvability issues related to chemistry, manufacturing and controls. We believe that the NDA was approvable as filed and have been engaged in discussions with the FDA to address the concerns raised by the FDA in the CRL.


On June 14, 2017, we participated in a Type A Post-Action Meeting with the Division of Bone, Reproductive, and Urologic Products (DBRUP) of the FDA to discuss the CRL. The meeting enabled us to present new information that we believe could address concerns raised by the FDA in the CRL and positively affect the status of the NDA for TX-004HR. We have received the minutes of the meeting and, per the FDA’s request, on July 5, 2017 formally submitted the new information for consideration related to the NDA for TX-004HR.

On August 3, 2017, we received a formal General Advice Letter from the FDA stating that an initial review of this information has been completed and requesting that we submit the additional endometrial safety information to the NDA for TX-004HR on or before September 18, 2017. On September 14, 2017, we submitted the additional endometrial safety information that was requested by the FDA in the General Advice Letter to the NDA for TX-004HR. The submission includes a comprehensive, systematic review of the medical literature on the use of vaginal estrogen products and the risk of endometrial hyperplasia or cancer, including the safety data from the recently published Women’s Health Initiative Observational Study, or WHI Study, of vaginal estrogen use in postmenopausal women and information on the relevance of the first uterine pass effect for low-dose vaginal estrogen products. The WHI Study demonstrated no significant difference in the risk of invasive breast cancer, stroke, colorectal cancer, endometrial cancer and venous thromboembolism in vaginal estrogen users versus non-users. The WHI Study also shows that, among women with an intact uterus, there was a decreased risk of cardiovascular disease, hip fracture and all-cause mortality in vaginal estrogen users versus non-users. The WHI Study evaluated over 4,000 women who used vaginal estrogens for a median duration of two to three years.

On November 3, 2017, we participated in an in-person meeting with DBRUP.  At the meeting, DBRUP agreed to the resubmission of the NDA for the 4 mcg and 10 mcg doses of TX-004HR without the need for an additional pre-approval study.  We will commit to conduct a post-approval observational study.  We believe that we will be in a position to resubmit the NDA for TX-004HR within the coming weeks, with a potential approval of the NDA within two to six months after resubmission, depending on the classification of the review of the NDA.

As of September 30, 2017, we had 17 issued patents, which included 13 utility patents that relate to our combination progesterone and estradiol formulations, two utility patents that relate to TX-004HR, which establish an important intellectual property foundation for TX-004HR, one utility patent that relates to a pipeline transdermal patch technology, and one utility patent that relates to our OPERA® information technology platform.

Research and Development Expenses

A significant portion of our operating expenses to date have been incurred in research and development activities. Research and development expenses relate primarily to the discovery and development of our drug candidates. Our business model is dependent upon our company continuing to conduct a significant amount of research and development. Our research and development expenses consist primarily of expenses incurred under agreements with contract research organizations, or CROs, investigative sites and consultants that conduct our clinical trials and a substantial portion of our preclinical studies; employee-related expenses, which include salaries and benefits, and non-cash share-based compensation; the cost of developing our chemistry, manufacturing and controls capabilities, and acquiring clinical trial materials; and costs associated with other research activities and regulatory approvals. Other research and development costs listed below consist of costs incurred with respect to drug candidates that have not received IND application approval from the FDA.


We make payments to the CROs based on agreed upon terms that may include payments in advance of a study starting date. Nonrefundable advance payments for goods and services that will be used in future research and development activities are expensed when the activity has been performed or when the goods have been received rather than when the payment is made. Advance payments to be expensed in future research and development activities are capitalized, and were $0 at September 30, 2017 and $228,933 at December 31, 2016 which were included in other current assets on the accompanying consolidated balance sheets. CRO activity expenses include preclinical laboratory experiments and clinical trial studies.

The following table indicates our research and development expense by project/category for the periods indicated:

  Three Months Ended
September 30,
  Nine Months Ended
September 30,
 
  2017  

2016

  2017  2016 
  (000s)  (000s) 
TX 001-HR $3,066  $7,751  $11,971  $25,101 
TX 002-HR            
TX 004-HR  1,580   2,611   6,292   7,724 
Other research and development  1,791   4,302   4,615   10,777 
Total $6,437  $14,664  $22,878  $43,602 
                 

Research and development expenditures will continue to be incurred as we continue development of our drug candidates and advance the development of our proprietary pipeline of novel drug candidates. We expect to incur ongoing research and development costs as we develop our drug pipeline, continue stability testing and validation on our drug candidates, prepare regulatory submissions and work with regulatory authorities on existing submissions.

The costs of clinical trials may vary significantly over the life of a project owing to factors that include, but are not limited to, the following: per patient trial costs; the number of patients that participate in the trials; the number of sites included in the trials; the length of time each patient is enrolled in the trial; the number of doses that patients receive; the drop-out or discontinuation rates of patients; the amount of time required to recruit patients for the trial; the duration of patient follow-up; and the efficacy and safety profile of the drug candidate. We base our expenses related to clinical trials on estimates that are based on our experience and estimates from CROs and other third parties. Research and development expenditures for the drug candidates will continue after the trial completes for on-going stability and laboratory testing, regulatory submission and response work.

Results of Operations

Three months ended September 30, 2017 compared with three months ended September 30, 2016

  Three Months Ended
September 30,
    
  2017  2016  Change 
  (000s) 
Revenues, net $4,417  $5,536  $(1,119)
Cost of goods sold  701   1,237   (536)
Operating expenses  18,548   29,427   (10,879)
Operating loss  (14,832)  (25,128)  (10,296)
Other income, net  167   113   54 
Net loss $(14,665) $(25,015) $(10,350)

Revenues and Cost of Goods Sold

Revenues for the three months ended September 30, 2017 decreased approximately $1,119,000, or 20%, to approximately $4,417,000, compared with approximately $5,536,000 for the three months ended September 30, 2016. This decrease was attributable to a decrease in the average net revenue per unit of our products and a slight decrease in the number of units sold. Cost of goods sold decreased approximately $536,000, or 43%, to approximately $701,000 for the three months ended September 30, 2017, compared with approximately $1,237,000 for the three months ended September 30, 2016. Our gross margin was approximately 84% and 78% for the three months ended September 30, 2017 and 2016, respectively. The increase in gross margin percentage was primarily attributable to the centralization of the distribution channel for both our retail pharmacy distributors and wholesale distributors, which, among other things, lowered the cost to package, prepare and deliver our products to customers.

Operating Expenses

Our principal operating costs include the following items as a percentage of total operating expenses.

  Three Months Ended
September 30,
 
  2017  2016 
Research and development costs  34.7%  49.8%
Human resource related costs including salaries, benefits and taxes  32.2%  20.3%
Sales and marketing costs, excluding human resource costs  17.0%  14.3%
Professional fees for legal, accounting and consulting  6.9%  4.9%
Other operating expenses  9.2%  10.7%

Operating expenses decreased by approximately $10,879,000, or 37%, to approximately $18,548,000 for the three months ended September 30, 2017, from approximately $29,427,000 for the three months ended September 30, 2016 as a result of the following items:

  Three Months Ended
September 30,
    
  2017  2016  Change 
  (000s) 
Research and development costs $6,437  $14,664  $(8,227)
Human resources related costs, including salaries, benefits and taxes  5,966   5,965   1 
Sales and marketing, excluding human resource costs  3,163   4,201   (1,038)
Professional fees for legal, accounting and consulting  1,271   1,450   (179)
Other operating expenses  1,711   3,147   (1,436)
Total operating expenses $18,548  $29,427  $(10,879)

Research and development costs for the three months ended September 30, 2017 decreased by approximately $8,227,000, or 56%, to approximately $6,437,000, compared with $14,664,000 for the three months ended September 30, 2016. Research and development costs include costs related to clinical trials as well as salaries, wages, non-cash compensation and benefits of personnel involved in research and development activities. Research and development costs decreased as a direct result of the completion of the REPLENISH Trial for TX-001HR, our combination estradiol and progesterone drug candidate. Research and developments costs during the three months ended September 30, 2017 included the following research and development projects.

During the three months ended September 30, 2017 and the period from February 2013 (project inception) through September 30, 2017, we have incurred approximately $3,066,000 and $107,987,000, respectively, in research and development costs with respect to TX-001HR, our combination estradiol and progesterone drug candidate.


During the three months ended September 30, 2017 and the period April 2013 (project inception) through September 30, 2017, we have incurred approximately $0 and $2,525,000, respectively, in research and development costs with respect to TX-002HR, our progesterone only drug candidate.

During the three months ended September 30, 2017 and the period from August 2014 (project inception) through September 30, 2017, we have incurred approximately $1,580,000 and $39,098,000, respectively, in research and development costs with respect to TX-004HR, our applicator-free vaginal estradiol softgel drug candidate.

For a discussion of the nature of efforts and steps necessary to complete these projects, see “Item 1. Business — Pharmaceutical Regulation” in our Annual Report and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Research and Development” above. For a discussion of the risks and uncertainties associated with completing development of our products, see “Item 1A. Risk Factors — Risks Related to Our Business” in our Annual Report. For a discussion of the extent and nature of additional resources that we may need to obtain ifraise additional capital to provide additional liquidity to fund our current liquidity is not expected to be sufficient to complete these projects, see “— Liquidity and Capital Resources” below. For a discussion as to whether a future milestone such as completion of a development phase, date of filing an NDA with a regulatory agency or approval from a regulatory agency can be reliably determined, see “Item 1. Business — Our Hormone Therapy Drug Candidates,” and “Item 1. Business — Pharmaceutical Regulation” inoperations until we become cash flow positive. To address our Annual Report. Future milestones, including NDA submission dates and potential approval dates, are not easily determinable as such milestones are dependent on various factors related to our clinical trials, scale-up and manufacturing activities.

Human resource costs, including salaries, benefits and taxes, for the three months ended September 30, 2017 increased by approximately $1,000, or less than 1%, to approximately $5,966,000, compared with approximately $5,965,000 for the three months ended September 30, 2016, primarily as a result of a an increase of approximately $1,042,000 in personnel costs in sales, marketing and regulatory areas to support commercialization of our hormone therapy drug candidates partially offset by a decrease of approximately $1,041,000 in non-cash compensation expense included in this category related to employee stock option amortization.

Sales and marketing costs for the three months ended September 30, 2017 decreased by approximately $1,038,000, or 25%, to approximately $3,163,000, compared with approximately $4,201,000 for the three months ended September 30, 2016, primarily as a result reduced spending associated with sales and marketing efforts to support commercialization of our hormone therapy drug candidates, partially offset by higher costs related to outsourced sales personnel and their related expenses together with an increase in employee incentives.

Professional fees for the three months ended September 30, 2017 decreased by approximately $179,000, or 12%, to approximately $1,271,000, compared with approximately $1,450,000 for the three months ended September 30, 2016, primarily as a result of decreased consulting expenses partially offset by a slight increase in legal expenses.

Other operating expense for the three months ended September 30, 2017 decreased by approximately $1,436,000, or 46%, to approximately $1,711,000, compared with approximately $3,147,000 for the three months ended September 30, 2016, as a result of decrease in bad debt expense, partially offset by increased rent, information technology and other office expenses.

Operating Loss

As a result of the foregoing, our operating loss decreased approximately $10,296,000, or 41%, to approximately $14,832,000 for the three months ended September 30, 2017, compared with approximately $25,128,000 for the three months ended September 30, 2016, primarily as a result of decreased research and development costs and reduced spending associated with sales and marketing efforts to support commercialization of our hormone therapy drug candidates, partially offset by higher costs related to outsourced sales personnel and their related expenses, professional fees, and other operating expenses, as well a decrease in revenue.


As a result of the continued development of our hormone therapy drug candidates, we anticipate that we will continue to have operating losses for the near future until our hormone therapy drug candidates are approved by the FDA and brought to market, although there is no assurance that we will attain such approvals or that any marketing of our hormone therapy drug candidates, if approved, will be successful.

Other Income

Other non-operating income increased by approximately $54,000, or 48%, to approximately $167,000 for the three months ended September 30, 2017 compared with approximately $113,000 for the comparable period in 2016, primarily as a result of increased interest income.

Net Loss

As a result of the net effects of the foregoing, net loss decreased approximately $10,350,000, or 41%, to approximately $14,665,000 for the three months ended September 30, 2017, compared with approximately $25,015,000 for the three months ended September 30, 2016. Net loss per share of Common Stock, basic and diluted, was ($0.07) for the three months ended September 30, 2017, compared with ($0.13) for the three months ended September 30, 2016.

Nine months ended September 30, 2017 compared with nine months ended September 30, 2016

  

Nine Months Ended 

September 30, 

    
  2017  2016  Change 
  (000s) 
Revenues, net $12,653  $14,869  $(2,216)
Cost of goods sold  2,042   3,476   (1,434)
Operating expenses  66,559   78,706   (12,147)
     Operating loss  (55,948)  (67,313)  (11,365)
Other income, net  450   274   176 
Net loss $(55,498) $(67,039) $(11,541)

Revenues and Cost of Goods Sold

Revenues for the nine months ended September 30, 2017 decreased approximately $2,216,000, or 15%, to approximately $12,653,000, compared with approximately $14,869,000 for the nine months ended September 30, 2016. This decrease was attributable to a decrease in the average net revenue per unit of our products, primarily related to higher estimates related to discounts and returns in 2017, partially offset by a slight increase in the number of units sold. Cost of goods sold decreased approximately $1,434,000, or 41%, to approximately $2,042,000 for the nine months ended September 30, 2017, compared with approximately $3,476,000 for the nine months ended September 30, 2016. Our gross margin was approximately 84% and 77% for the nine months ended September 30, 2017 and 2016, respectively. The increase in gross margin percentage was primarily attributable to the centralization of the distribution channel for both our retail pharmacy distributors and wholesale distributors which, among other things, lowered the cost to package, prepare and deliver our products to customers.


Operating Expenses

Our principal operating costs include the following items as a percentage of total operating expenses.

  Nine Months Ended 
September 30,
 
  2017  2016 
Research and development costs  34.4%  55.4%
Human resource related costs, including salaries, benefits and taxes  26.2%  22.0%
Sales and marketing costs, excluding human resource costs  24.9%  9.9%
Professional fees for legal, accounting and consulting  6.1%  4.6%
Other operating expenses  8.4%  8.1%

Operating expenses decreased by approximately $12,147,000, or 15%, to approximately $66,559,000 for the nine months ended September 30, 2017, from approximately $78,706,000 for the nine months ended September 30, 2016 as a result of the following items:

  

Nine Months Ended 

September 30, 

    
  2017  2016  Change 
  (000s) 
Research and development costs $22,878  $43,602  $(20,724)
Human resources related costs, including salaries, benefits and taxes  17,415   17,309   106 
Sales and marketing costs, excluding human resource costs  16,590   7,796   8,794 
Professional fees for legal, accounting and consulting  4,062   3,615   447 
Other operating expenses  5,614   6,384   (770)
Total operating expenses $66,559  $78,706  $(12,147)

Research and development costs for the nine months ended September 30, 2017 decreased by approximately $20,724,000, or 48%, to approximately $22,878,000, compared with $43,602,000 for the nine months ended September 30, 2016. Research and development costs include costs related to clinical trials as well as salaries, wages, non-cash compensation and benefits of personnel involved in research and development activities. Research and development costs decreased as a direct result of the completion of the REPLENISH Trial for TX-001HR, our combination estradiol and progesterone drug candidate. Research and developments costs during the nine months ended September 30, 2017 included the following research and development projects.

During the nine months ended September 30, 2017 and the period from February 2013 (project inception) through September 30, 2017, we have incurred approximately $11,971,000 and $107,987,000, respectively, in research and development costs with respect to TX-001HR, our combination estradiol and progesterone drug candidate.

During the nine months ended September 30, 2017 and the period April 2013 (project inception) through September 30, 2017, we have incurred approximately $0 and $2,525,000, respectively, in research and development costs with respect to TX-002HR, our progesterone only drug candidate.

During the nine months ended September 30, 2017 and the period from August 2014 (project inception) through September 30, 2017, we have incurred approximately $6,292,000 and $39,098,000, respectively, in research and development costs with respect to TX-004HR, our applicator-free vaginal estradiol softgel drug candidate.


For a discussion of the nature of efforts and steps necessary to complete these projects, see “Item 1. Business — Pharmaceutical Regulation” in our Annual Report and “Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations – Overview – Research and Development” above. For a discussion of the risks and uncertainties associated with completing development of our products, see “Item 1A. Risk Factors — Risks Related to Our Business” in our Annual Report. For a discussion of the extent and nature of additional resources thatcapital needs, we may need to obtain if our current liquidity is not expected to be sufficient to complete these projects, see “— Liquidity and Capital Resources” below. For a discussion as to whether a future milestone such as completion of a development phase, date of filing an NDA with a regulatory agency or approval from a regulatory agency can be reliably determined, see “Item 1. Business — Our Hormone Therapy Drug Candidates,” and “Item 1. Business — Pharmaceutical Regulation” in our Annual Report. Future milestones, including NDA submission dates and potential approval dates, are not easily determinable as such milestones are dependent onpursue various factors related to our clinical trials, scale-up and manufacturing activities.

Human resource costs, including salaries, benefits and taxes, for the nine months ended September 30, 2017 increased by approximately $106,000, or less than 1%, to approximately $17,415,000, compared with approximately $17,309,000 for the nine months ended September 30, 2016, primarily as a result of an increase of approximately $4,636,000 in personnel costs in sales, marketing and regulatory areas to support commercialization of our hormone therapy drug candidates partially offset by a decrease of approximately $4,530,000 in non-cash compensation expense included in this category related to employee stock option amortization.

Sales and marketing costs for the nine months ended September 30, 2017 increased by approximately $8,794,000, or 113%, to approximately $16,590,000, compared with approximately $7,796,000 for the nine months ended September 30, 2016, primarily as a result of increased expenses in the first half of 2017 associated with sales and marketing efforts to support commercialization of our hormone therapy drug candidates, which were curtailed in the third quarter of 2017 due to the status of the NDA for TX-004HR, higher costs related to outsourced sales personnel and their related expenses which started in the fourth quarter of 2016, together with an increase in employee incentives.

Professional fees for the nine months ended September 30, 2017 increased by approximately $447,000, or 12%, to approximately $4,062,000, compared with approximately $3,615,000 for the nine months ended September 30, 2016, primarily as a result of increased legal and other professional expenses, partially offset by a decrease in consulting expenses.

Other operating expense for the nine months ended September 30, 2017 decreased by approximately $770,000, or 12%, to approximately $5,614,000, compared with approximately $6,384,000 for the nine months ended September 30, 2016, as a result of a decrease in bad debt expense as well as decreased investor relations expenses, partially offset by increased rent, information technology and other office expenses.

Operating Loss

As a result of the foregoing, our operating loss decreased approximately $11,365,000, or 17%, to approximately $55,948,000 for the nine months ended September 30, 2017, compared with approximately $67,313,000 for the nine months ended September 30, 2016, primarily as a result of decreased research and development costs and other operating expenses, partially offset by increased personnel costs, sales and marketing expenses to support commercialization of our hormone therapy drug candidates, higher costs related to outsourced sales personnel and their related expenses and professional fees as well a decrease in revenue.

As a result of the continued development of our hormone therapy drug candidates, we anticipate that we will continue to have operating losses for the near future until our hormone therapy drug candidates are approved by the FDA and brought to market, although there is no assurance that we will attain such approvals or that any marketing of our hormone therapy drug candidates, if approved, will be successful.


Other Income

Other non-operating income increased by approximately $176,000, or 64%, to approximately $450,000 for the nine months ended September 30, 2017, compared with approximately $274,000 for the comparable period in 2016, primarily as a result of increased interest income.

Net Loss

As a result of the net effects of the foregoing, net loss decreased approximately $11,541,000, or 17%, to approximately $55,498,000 for the nine months ended September 30, 2017, compared with approximately $67,039,000 for the nine months ended September 30, 2016. Net loss per share of Common Stock, basic and diluted, was ($0.27) for the nine months ended September 30, 2017, compared with ($0.34) for the nine months ended September 30, 2016.

Liquidity and Capital Resources

We have funded our operations primarily through public offerings of our Common Stock and private placements of equity and debt securities. Since 2014, we received approximately $337,582,000 in net proceeds fromfinancing and other alternatives. The equity financing alternatives may include the issuanceprivate placement of shares of Common Stock. As of September 30, 2017, we had cash and cash equivalents totaling approximately $148,293,000, however, changing circumstances may cause us to consume funds significantly faster than we currently anticipate, and we may need to spendequity, equity-linked, or other similar instruments or obligations with one or more money than currently expected because of circumstances beyond our control.

On September 25, 2017, we entered into an underwriting agreement with J.P. Morgan Securities LLC relating toinvestors, lenders, or other institutional counterparties or an underwritten public offering of 12,400,000 sharesequity or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions, including the market price of our Common Stockat a price of $5.55 per share. The net proceeds to us from the offering were approximately $68,573,000, after deducting estimated offering expenses payable by us. The offering closed on September 28, 2017common stock, and we issued 12,400,000 shares of our Common Stock. We intend to use a majority of the net proceeds from this offering to fund pre-commercialization and commercialization activities for our TX-004HR and TX-001HR drug candidates. We currently intend to fund the remainder of our pre-commercialization and commercialization expenses for our TX-004HR and TX-001HR drug candidates through debt financing and are currently engaged in discussions to secure debt financing commitments during the fourth quarter of 2017. If we are successful in obtaining these commitments, we currently anticipate we would begin to draw on them following approval of either TX-004HR or TX-001HR.

During the nine months ended September 30, 2017, certain individuals exercised warrants to purchase 2,476,666 shares of Common Stock for $3,798,999 in cash. During the nine months ended September 30, 2017, certain individuals exercised stock options to purchase 102,546 shares of Common Stock for $212,615 in cash.

As a result of developments in the pharmaceutical industry that negatively affected independent pharmacies, including such pharmacies’ reliance on third party payors, in 2016, we identified that payment periods for our retail pharmacy distributors were becoming longer than in prior years. As a result, during the third quarter of 2016, we centralized the distribution channel for both our retail pharmacy distributors and wholesale distributors, in order to facilitate sales to a broader population of retail pharmacies and minimize business risk exposure to any one retail pharmacy. During the third quarter of 2016, we entered into new distribution agreements with our retail pharmacy distributors to effectuate this centralization which were effective September 1, 2016.

For the three months ended September 30, 2017, our days sales outstanding, or DSO, was 91 days compared to 92 days for the year ended December 31, 2016. We anticipate that our DSO will fluctuate in the future based upon a variety of factors, including longer payment terms associated with the centralization of the distribution channel for both our retail pharmacy distributors and wholesale distributors in September 2016, as compared to the terms previously provided to our retail pharmacy distributors, changes in the healthcare industry and specific terms that may be extended in connection with the launch of our hormone therapy drug candidates, if approved.


We believe that our existing cash will allow us to fund our operating plan through at least the next 12 months from the date of this quarterly report. However, if the commercialization of our hormone therapy drug candidates is delayed, our existing cash may be insufficient to satisfy our liquidity requirements until we are able to commercialize our hormone therapy drug candidates.  If our available cash is insufficient to satisfy our liquidity requirements, we may curtail our sales, marketing and other pre-commercialization efforts and we may seek to sell additional equity or debt securities or obtain a credit facility. Debt financing, if available, may involve agreements that include covenants limiting or restricting our ability to take specific actions, such as incurring additional debt, making capital expenditures, or declaring dividends. authorized shares.

To the extent that we raise additional capital through the sale of equity or convertible debtsuch securities, the ownership interests of our existing shareholdersstockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing shareholders.stockholders. If we raiseare not successful in obtaining additional fundsfinancing, we could be forced to discontinue or curtail our business operations, sell assets at unfavorable prices, or merge, consolidate, or combine with a company with greater financial resources in a transaction that might be unfavorable to us.

On May 1, 2023, we entered into a Subscription Agreement (the “Subscription Agreement”) with Rubric Capital Management LP (“Rubric”), pursuant to which we agreed to sell to Rubric, or one or more of its affiliates, up to an aggregate of 5,000,000 shares of our common stock, par value $0.001 per share (our “Common Stock”), from time to time during the term of the Subscription Agreement in separate draw-downs at our election. On June 29, 2023, we issued and sold 312,525 shares of Common Stock at a price per share equal to $3.6797 pursuant to the Subscription Agreement. We received gross proceeds of $1.15 million from the draw down, before expenses. On November 15, 2023 Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761. We received gross proceeds of $2.0 million from the drawdown, before expenses.

Mayne Pharma paid us approximately $12.1 million at closing on December 30, 2022, for the acquisition of net working capital, subject to certain adjustments as determined in accordance with the Transaction Agreement. While the Transaction Agreement calls for much of the net working capital to be trued-up shortly after the Closing Date in 2023, for a period of one year following the Closing Date in the case of payer rebates and wholesale distributor fees and two years following the Closing Date in the case for allowance for returns, net working capital amounts will be adjusted to arrive at final net working capital under the Transaction Agreement.

In September 2023, we revised certain accrual estimates including increasing our working capital adjustment accrual from $3.5 million to $5.5 million for amounts anticipated to be owed under the Transaction Agreement. In December 2023, we made a $5.5 million payment to Mayne Pharma to settle certain working capital amounts that were required to be trued-up shortly after the Closing Date, excluding the allowance for returns, allowance for payer rebates, and allowance for wholesale distributor fees.


The Company’s estimate of the allowance for payer rebates and wholesale distributor fees was determined in accordance with the Transaction Agreement which establishes the process for the determination of net working capital. In February 2024, the Company received Mayne Pharma’s calculation of allowance for payer rebates and wholesale distributor fees which differed significantly from the Company’s estimate of the allowances. The Company and Mayne Pharma intend to resolve this matter through collaborations, strategic alliances,the dispute resolution process outlined in the Transaction Agreement.

The Company believes its estimated allowances for payer rebates and wholesale distributor fees are reasonable. The timing and outcome of this matter is uncertain at this point. As a result, the Company cannot reasonably estimate a range of loss, and accordingly, the Company has not accrued any additional liability associated with Mayne Pharma’s allowance calculation for payer rebates and wholesale distributor fees.

As of March 31, 2024, the Company believes no additional accrual is required for amounts that may be owed for the allowance for returns under the Transaction Agreement. The Company has not recorded any contingent gains or receivables for any such allowances. Management continues to monitor the unresolved and pending net working capital items as changes to estimated amounts owed or amounts due from Mayne Pharma may be material.

If Mayne Pharma’s sales of Licensed Products grow more slowly than expected or decline, if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than our current estimates, if we are unsuccessful with future financings or the supply chains related to the third-party contract manufacturers are worse than we anticipate, our existing cash reserves may be insufficient to satisfy our liquidity requirements. The potential impact of these factors in conjunction with the uncertainty of the capital markets raises substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Portfolio of our royalty-bearing products

In December 2022, we changed our business to become a pharmaceutical royalty company, currently receiving royalties on products licensed to pharmaceutical organizations that possess commercial capabilities in the relevant territories. On December 30, 2022, we granted an exclusive license to commercialize IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands and assigning our exclusive license to commercialize ANNOVERA to Mayne Pharma.

IMVEXXY (estradiol vaginal inserts), 4-µg and 10-µg 

This pharmaceutical product is for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy due to menopause.

On December 30, 2022, we granted an exclusive license to commercialize IMVEXXY in the United States and its possessions and territories to Mayne Pharma. We also have entered into licensing arrangementsagreements with third parties to market and sell IMVEXXY outside of the U.S. We entered into the Knight License Agreement, with Knight pursuant to which, we maygranted Knight an exclusive license to commercialize IMVEXXY in Canada and Israel. We entered into the Theramex License Agreement with Theramex HQ UK Limited (“Theramex”) pursuant to which we granted Theramex an exclusive license to commercialize IMVEXXY for human use outside of the U.S., except for Canada and Israel. As of March 31, 2024, no IMVEXXY sales had been made through the Theramex licensing agreement.

BIJUVA (estradiol and progesterone) capsules, 1 mg/100 mg

This pharmaceutical product is the first and only FDA approved bioidentical hormone therapy combination of estradiol and progesterone in a single, oral capsule for the treatment of moderate-to-severe vasomotor symptoms (commonly known as hot flashes or flushes) due to menopause in women with a uterus.


On December 30, 2022, we granted an exclusive license to commercialize BIJUVA in the United States and its possessions and territories to Mayne Pharma. We also have entered into the Knight License Agreement with Knight pursuant to relinquish valuable rightswhich we granted Knight an exclusive license to commercialize BIJUVA in Canada and Israel. We have entered into the Theramex License Agreement with Theramex pursuant to which we granted Theramex an exclusive license to commercialize BIJUVA for human use outside of the U.S., except for Canada and Israel.

ANNOVERA (segesterone acetate (“SA”) and ethinyl estradiol (“EE”) vaginal system)

On December 30, 2022, we assigned our exclusive license to commercialize ANNOVERA to Mayne Pharma. This pharmaceutical product is a one-year ring-shaped contraceptive vaginal system (“CVS”) and the first and only patient-controlled, procedure-free, reversible prescription contraceptive that can prevent pregnancy for up to a total of 13 cycles (one year). ANNOVERA is commercially sold in the U.S. pursuant to the terms of the Population Council License Agreement.

Prenatal vitamin products

On December 30, 2022, we granted an exclusive license to commercialize, in the United States and its possessions and territories, our prescription prenatal vitamin product lines under our vitaMedMD brand name and authorized generic formulations of some of our prescription prenatal vitamin products under our BocaGreenMD Prenatal name to Mayne Pharma.

Results of operations

Three months ended March 31, 2024 compared with three months ended March 31, 2023

As part of the transformation that included the Mayne License Agreement, historical results of commercial operations have been reflected as discontinued operations in our condensed consolidated financial statements for all periods prior to the Closing Date. Assets and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets. Additional disclosures regarding discontinued operations are provided in Note 2 to the condensed consolidated financial statements included in this Quarterly Report.

The discussion below, and the revenues and expenses discussed below, are based on and relate to our technologies, future revenue streams, research programs, or proposed products. Additionally, we may have to grant licenses on terms that may not be favorable to us.continuing operations.

 

We need substantial amounts of cash to complete the clinical development of and commercialize of our hormone therapy drug candidates. The following table sets forth the results of our operations (in thousands):

  Three Months Ended
March 31,
 
  2024  2023 
Revenue:      
License and service revenue $313  $416 
Operating expenses:        
Selling, general and administrative  1,322   3,056 
Depreciation and amortization  133   27 
Total operating expenses  1,455   3,083 
Loss from operations  (1,142)  (2,667)
Other income (expense):        
Interest expense and other financing costs     (50)
Miscellaneous income (expense)  333   407 
Total other income, net  333   357 
Loss from continuing operations before income taxes  (809)  (2,310)
Provision for income taxes      
Net loss from continuing operations  (809)  (2,310)
Income (loss) from discontinued operations, net of income taxes  75   (1,293)
Net loss $(734) $(3,603)


Revenue. As part of our transformation and the Mayne License Agreement, historical results of commercial operations have been reflected as discontinued operations in the condensed consolidated financial statements for all periods presented.

We recorded $313 thousand in license revenue for the first quarter of 2024, primarily from the Mayne License Agreement, compared to $416 thousand in license revenue from the Mayne License Agreement for the first quarter of 2023. The decrease is primarily attributable to changes in sales of licensed products.

Operating expenses. Total operating expenses for the first quarter of 2024 were $1,455 thousand, a decrease of $1,628 thousand, or 52.8%, compared to the first quarter of 2023. This decrease was due to the down-sizing of our business following our transition to a royalty-based business.

Selling, general and administrative. Selling, general and administrative expenses were $1,322 thousand for the first quarter of 2024, a decrease of $1,734 thousand, or 56.7%, compared to the first quarter of 2023. This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.

Depreciation & amortization. Depreciation and amortization expense was $133 thousand for the first quarter of 2024, an increase of $106 thousand, or 392.6%, compared to the first quarter of 2023. In 2024, this balance is entirely comprised of amortization of license rights and intangible assets.

Loss from operations. In the first quarter of 2024, we had a loss from operations of $1,142 thousand, as compared to a loss from operations of $2,667 thousand for the first quarter of 2023. This change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.

Other income (expense), net. During the first quarter of 2024, we had other income of $333 thousand compared to other income of $357 thousand in the first quarter of 2023. This change reflects our transition to a royalty-based business. Royalties reported as other income for intellectual property licensed by us totaled approximately $295 thousand in the first quarter of 2024.

Provision for income taxes. During the first quarter of 2024 and 2023, we recorded no provision for income taxes for continuing operations.

Net loss from continuing operations. For the first quarter of 2024, we had a net loss of $809 thousand, or $0.07 per basic and diluted common share, compared to a net loss of $2,310 thousand, or $0.24 per basic and diluted common share, for the first quarter of 2023. 

Discontinued Operations - Net income from discontinued operations was $75 thousand for the first quarter of 2024, compared to a net loss from discontinued operations of $1,293 thousand for the first quarter of 2023. This change reflects the continued wind-down of our legacy business.

For additional information, see Note 2 - Discontinued Operations, in the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report.


Liquidity and capital resources

Our primary sources and usesuse of cash is to fund our continued operations. We have funded our operations primarily through public offerings of our common stock and private placements of equity and debt securities, the divestiture of our former subsidiary vitaCare, and the transactions with Mayne Pharma. As of March 31, 2024, we had cash and cash equivalents totaling $4,338 thousand. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured limits of $250 thousand per bank. We have never experienced any losses related to these funds.

Mayne Pharma License Agreement

On December 30, 2022, we granted Mayne Pharma (i) an exclusive, sublicensable, perpetual, irrevocable license to research, develop, register, manufacture, have manufactured, market, sell, use, and commercialize the Licensed Products in the United States and its possessions and territories and (ii) an exclusive, sublicensable, perpetual, irrevocable license to manufacture, have manufactured, import and have imported the Licensed Products outside the United States for commercialization in the United States and its possessions and territories. The total consideration from Mayne Pharma to us under the Mayne License Agreement consisted of (i) a cash payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition of net working capital as determined in accordance with the transaction agreement dated December 4, 2022, and subject to certain adjustments, (iii) a cash payment of approximately $1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment and (iv) the right to receive the contingent consideration set forth in the Mayne License Agreement, as amended.

Pursuant to the Mayne License Agreement, Mayne Pharma will pay us one-time, milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma will pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States. Mayne Pharma will pay us minimal annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below. Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

Subscription Agreement with Rubric Capital Management LP

On May 1, 2023, we entered into the Subscription Agreement with Rubric, pursuant to which we agreed to sell to Rubric, or one or more of its affiliates, up to an aggregate of 5,000,000 shares of Common Stock, from time to time during the term of the Subscription Agreement in separate draw downs at our election, at a purchase price of the five-day volume-weighted average price of our common stock at the time of the sale of such shares, at an aggregate purchase price of up to $5,000,000 (collectively, the “Private Placement”).

The initial draw down occurred on June 29, 2023 consisting of a sale of 312,525 shares of Common Stock at a price per share equal to $3.6797. We received gross proceeds of $1.15 million from the drawdown, before expenses. On November 15, 2023 Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761. We received gross proceeds of $2.0 million from the drawdown, before expenses.

See “Going Concern” above for further discussion related to our ability to generate and obtain adequate amounts of cash to meet our liquidity needs and our plans for to satisfy our such needs in the short-term and in the long-term. As a result, there is substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.


Cash flows

The following table reflects the major categories of cash flows for each of the periods set forth below:(in thousands).

 

Summary of (Uses) and Sources of Cash

  Three Months Ended
March 31,
 
  2024  2023 
Net cash used in operating activities $(229) $(8,701)
Net cash provided by (used in) discontinued operations  240   (23,368)
Net increase (decrease) in cash $11  $(32,069)

 

  Nine Months Ended 
September 30,
 
  2017  2016 
  (000s) 
Net cash used in operating activities $(55,350) $(53,524)
Net cash used in investing activities $(476) $(863)
Net cash provided by financing activities $72,584  $137,216 

Operating Activities from continuing operations

The principal use. For the first three months of cash in operating activities for the nine months ended September 30, 2017 was to fund our current expenses primarily related to supporting clinical development, scale-up and manufacturing activities and future commercial activities, adjusted for non-cash items. The increase of approximately $1,826,000 in2024, net cash used in operating activities for the nine months ended September 30, 2017was $229 thousand, compared with the comparable period in the prior year was due primarily to lower non-cash compensation expense coupled with changes in the components of working capital and decreased net loss.

Investing Activities

A decrease in spending on patent and trademarks and fixed assets resulted in a decrease in cash used in investingoperating activities of $8,701 thousand for the ninefirst three months ended September 30, 2017 comparedof 2023. This decrease of $8,472 thousand or 97.4%, was primarily due to a $1,501 thousand decrease in our net loss from continuing operations following our transition from a manufacturing and commercialization business to a royalty-based business combined with the same periodpay-down of current liabilities in 2016.

Financing Activities

Financing activities represent the principal source of our cash flow. Our financing activities for the nine months ended September 30, 2017 included approximately $68,573,000 in proceeds from the sale of Common Stock and approximately $4,011,000 in proceeds from the exercise of options and warrants. Theprior-year period.

Net cash provided by financing(used in) discontinued operations. Net cash provided by operating activities duringfrom discontinued operations for the ninefirst three months ended Septemberof 2024 was $240 thousand as compared to net cash used in operating activities of $23,368 thousand for the first three months of 2023. This change relates primarily to expenses incurred and the payment of current liabilities associated with our transition from a manufacturing and commercialization business to a royalty-based business.

For additional details, see the condensed consolidated statements of cash flows in Item 1, Financial Statements, appearing elsewhere in this 10-Q Report.

Other liquidity measures

Receivable from Mayne. On December 30, 2016, included2022, Mayne Pharma acquired our accounts receivable balance of approximately $134,864,000 in proceeds$29.3 million which is subject to certain working capital adjustments. As of March 31, 2024, we had a royalty receivable of $3,113 thousand relating to the short-term portion of receivable from Mayne Pharma and $17,855 thousand relating to the long-term portion of royalty receivable which includes royalties recognized from the saleMinimum Annual Royalty. See Note 1 Business, basis of Common Stockpresentation, new accounting standards and approximately $2,352,000 in proceeds from the exercisesummary of options and warrants.


Recently Issued Accounting Pronouncements

In May 2017, the Financial Accounting Standards Board, or FASB, issued an Accounting Standards Update, or ASU, that clarifies when changessignificant accounting policies (Revenue Recognition) to the termsconsolidated financial statements included in our 2023 10-K Report.

Inventory. On December 30, 2022, Mayne Pharma acquired our inventory balance of approximately $6.6 million, which is subject to certain net working capital adjustments.

Contractual obligations, off-balance sheet arrangements and purchase commitments and employment agreements

Our contractual obligations and off-balance sheet arrangements are set forth below. For additional information on any of the following and other obligations and arrangements, see “Note 6. Commitments and Contingencies” to the condensed consolidated financial statements included in this 10-Q Report.

In the ordinary course of business, we enter into agreements with third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry sector. Pursuant to these agreements, we generally agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or conditionsomitted by us. The maximum potential amount of future payments we could be required to make under these indemnification provisions is sometimes unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a share-based payment award mustresult, the estimated fair value of liabilities relating to these provisions is minimal. Accordingly, we had no liabilities recorded for these provisions as of March 31, 2024 and December 31, 2023.

In the normal course of business, we may be accounted for as modifications. The new guidance will reduce diversity in practice andconfronted with issues or events that may result in fewer changescontingent liability. These generally relate to lawsuits, claims, environmental actions, or the termsactions of various regulatory agencies. We consult with counsel and other appropriate experts to assess the claim. If, in our opinion, we have incurred a probable loss as set forth by U.S. GAAP, an award being accounted for as modifications. The new guidance will allow companies to make certain changes to awards withoutestimate is made of the loss and the appropriate accounting for them as modifications. This guidance does not change the accounting for modifications. The guidance will be applied prospectively to awards modified on or after the adoption date and is effective for annual periods, and interim periods within those annual periods, beginning after December 15, 2017. Early adoption is permitted, includingentries are reflected in an interim period. We do not expect that adoption of this guidance will have a material effect on our condensed consolidated financial statements.

 

In August 2016, the FASB issued ASU 2016-15, StatementCritical accounting policies and estimates

Management’s discussion and analysis of Cash Flows (Topic 230). ASU 2016-15 is intended to reduce the diversity in practice regarding how certain transactionsour financial condition and results of operations are classified within the statement of cash flows. ASU 2016-15 is effective for public business entities for annual periods beginning after December 15, 2017, including interim periods within those fiscal years. Early adoption is permitted with retrospective application. We do not expect that adoption of this guidance will have a material effect onbased upon our consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Compensation – Stock Compensation: Improvements to Employee Share-Based Payment Accounting. This guidance simplifies several aspects of the accounting for employee share-based payment transactions for both public and nonpublic entities, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. The guidance is effective for public business entities for fiscal years beginning after December 15, 2016, and interim periods within those fiscal years. We adopted ASU 2016-09 effective January 1, 2017, electing to account for forfeitures when they occur. The impact from adoption of the provisions related to forfeiture rates was reflected in ourcondensed consolidated financial statements included elsewhere in this 10-Q Report, which has been prepared in accordance with U.S. GAAP. We make estimates and assumptions that affect the reported amounts on a modified retrospective basis, resulting in an adjustment of approximately $31,000 to retained earnings. The impact from adoptionour condensed consolidated financial statements and accompanying notes as of the provisions related to excess tax benefits or deficiencies indate of the provision for income taxes rather than paid-in capital was adopted on a modified retrospective basis. Since we have a full valuation allowance on our net deferred tax assets, an amount equal to the cumulative adjustment made to retained earnings to recognize the previously unrecognized net operating losses from prior periods was made to the valuation allowance through retained earnings for the first quartercondensed consolidated financial statements. AdoptionThe critical accounting policies and estimates used are disclosed in Item 7 – Management’s discussion and analysis of all other changes did not have an impact on our consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases. This guidance requires lessees to record most leases on their balance sheets but recognize expenses on their income statements in a manner similar to current accounting. The guidance also eliminates current real estate-specific provisions for all entities. For lessors, the guidance modifies the classification criteriacondition and the accounting for sales-type and direct financing leases. The standard is effective for public business entities for annual periods beginning after December 15, 2018, and interim periods within those years. Early adoption is permitted for all entities. We are in the process of analyzing the quantitative impact of this guidance on our results of operations – Critical accounting policies and financial position. While we are continuing to assess all potential impacts of the standard, we currently believe the impact of this standard will be primarily related to the accounting forestimates in our operating lease.2023 10-K Report.


In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers (Topic 606). The standard’s core principle is that a company will recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. In doing so, companies will need to use more judgment and make more estimates than under previous guidance. This may include identifying performance obligations in the contract, estimating the amount of variable consideration to include in the transaction price and allocating the transaction price to each separate performance obligation. In July 2015, the FASB approved the proposal to defer the effective date of ASU 2014-09 standard by one year. Early adoption is permitted after December 15, 2016, and the standard is effective for public entities for annual reporting periods beginning after December 15, 2017 and interim periods therein. In 2016, the FASB issued final amendments to clarify the implementation guidance for principal versus agent considerations (ASU 2016-08), accounting for licenses of intellectual property and identifying performance obligations (ASU 2016-10), narrow-scope improvements and practical expedients (ASU 2016-12) and technical corrections and improvements to topic 606 (ASU 2016-20) in its new revenue standard. We have performed a preliminary review of the requirements of the new revenue standard and are monitoring the activity of the FASB and the transition resource group as it relates to specific interpretive guidance. We have reviewed customer contracts and applied the five-step model of the new standard to our contracts as well as compared the results to our current accounting practices. We are currently in the process of drafting disclosures required by the new standard. At this point of our analysis, we do not believe that the adoption of this standard will have a material effect on our financial statements but will potentially expand our disclosures related to contracts with customers.

Item 3. Quantitative and Qualitative Disclosuresqualitative disclosures about Market Riskmarket risk

 

Our market risk hasAs a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and pursuant to Instruction 6 to Item 201(e) of Regulation S-K, we are not changed materially from the interest rate risk disclosed in Item 7A of our Annual Report.required to provide this information.

Item 4. Controls and Proceduresprocedures

 

Management’s evaluation of disclosure controls and procedures

Disclosure Controls and Procedures

 

Disclosure controls and procedures are designed to ensure that information required to be disclosed in the reports filed or submitted under the Securities Exchange Act of 1934, as amended or the Exchange Act,(the “Exchange Act”), is recorded, processed, summarized and reported, within the time period specified in the SEC’s rules and forms and is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate, in order to allow timely decisions in connection withregarding required disclosure.

Evaluation of Disclosure Controls and Procedures

 

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer evaluated the effectiveness of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) as of the end of the period covered by this Quarterly Report on Form 10-Q.10-Q Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that our disclosure controls and procedures as of the end of the period covered by this Quarterly10-Q Report on Form 10-Q were effective in providing reasonable assurance that information required to be disclosed by us in reports that we file or submit under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and (ii) accumulated and communicated to our management, including our Chief Executive Officer and ChiefPrincipal Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

 

Our management, including our Chief Executive Officer and Chief Financial Officer does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. 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, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. Further, internal controls may become inadequate as a result of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.


Changes in Internal Controlsinternal controls over financial reporting

 

DuringIn connection with our transformation into a pharmaceutical royalty company, we terminated our executive management team and all other employees, except for our former General Counsel and current Chief Executive Officer. As of March 31, 2024, we employed one full-time employee primarily engaged in an executive position. We have engaged external consultants who support our relationship with current partners and assist with certain financial, legal and regulatory matters and the three months ended September 30, 2017, there were nocontinued wind-down of our historical commercial business operations. As a result of these changes, inwe have updated our risk assessment and design of internal controlcontrols over financial reporting that align with reduced transaction volume and reliance on external consultants to manage the day-to-day operations of the Company. The Company is and will continue to evaluate changes to processes, information technology systems and other components of internal controls over financial reporting as part of its ongoing business transformation activities, and as a result, controls may be periodically changed. The Company believes, however, that it will be able to maintain sufficient controls over its financial reporting throughout this transformation process.

During the first quarter of fiscal year 2024, we deployed a new ERP system which is anticipated to enhance our operating and financial processes over time. Processes and internal controls have materially affected, orbeen updated and are reasonably likely to materially affect,consistent with our internal control framework, and we have evaluated the operating effectiveness of related key controls. Control processes continue to be evaluated to give appropriate consideration of modifications needed to maintain the effectiveness of internal controls over financial reporting.

 


PART

Part II - OTHER INFORMATIONOther Information

Item 1. Legal Proceedingsproceedings

 

On April 17, 2017, a securities class action lawsuit was filed against our companyFrom time to time, we are involved in litigation and certainproceedings in the ordinary course of our officersbusiness. Other than the legal proceedings disclosed in Note 6, Commitments and directorscontingencies in the U.S. District Court for the Southern District of Florida (Case No. 9:17-cv-80473-RLR)Part I, Item 1, Financial Statements, appearing elsewhere in this 10-Q Report, we are not involved in any legal proceeding that purported to statewe believe would have a claim for alleged violations of Sections 10(b) and 20(a) of the Exchange Act and Rule 10b-5 promulgated thereunder, basedmaterial effect on statements made by the defendants concerning the NDA for TX-004HR. The complaint sought unspecified damages, interest, attorneys’ fees and other costs. On July 18, 2017, the complaint was voluntarily dismissed by the lead plaintiff without prejudice. We and certain of our officers and directors are also subject to two shareholder derivative lawsuits regarding the NDA for TX-004HR, one filed in the U.S. District Court for the Southern District of Florida on May 30, 2017 (Case No. 9:17-cv-80686-RLR) and one filed in Florida state court in Palm Beach County on June 5, 2017 (Case No. 502017CA006289XXXXMB). These complaints were both voluntarily dismissed by the lead plaintiffs without prejudice on August 14, 2017.business or financial condition.

Item 1A. Risk Factorsfactors

 

Our business, financial condition and operating results can be affected by a number of factors, whether currently known or unknown, including but not limited to those described in Part I, Item 1A of the 2023 10-K Report under the heading “Risk Factors,” any one or more of which could, directly or indirectly, cause our actual financial condition and operating results to vary materially from past, or from anticipated future, financial condition and operating results. Any of these factors, in whole or in part, could materially and adversely affect our business, financial condition, operating results and stock price. There have been no material changes to theour risk factors previously disclosedsince the 2023 10-K Report.

Item 2. Unregistered sales of equity securities and use of proceeds

None.

Item 3. Defaults upon senior securities

None.

Item 4. Mine safety disclosures

None.

Item 5. Other information

Rule 10b5-1 Trading Plans

During the three months ended March 31, 2024, none of the Company’s directors or officers adopted or terminated any Rule 10b5-1 trading arrangement or non-Rule 10b5-1 trading arrangement (as such terms are defined in our Annual Report.Item 408 of Regulation S-K).


Item 6. Exhibits

 

Exhibit
No.
 DateDescription
31.1† Description
10.1September 25, 2017Underwriting Agreement by and between the Company and J.P. Morgan Securities LLC(1)
31.1*November 7, 2017Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
31.2*
31.2† November 7, 2017Certification of ChiefPrincipal Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a)
32.1*
32.1†† November 7, 2017Section 1350 Certification of Chief Executive Officer
32.2*
32.2†† November 7, 2017Section 1350 Certification of ChiefPrincipal Financial Officer
101.INS*
101† n/aInline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q
104† Inline XBRL Instancefor the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document
101.SCH*n/aXBRL Taxonomy Extension Schema Document
101.CAL*n/aXBRL Taxonomy Extension Calculation Linkbase Document
101.DEF*n/aXBRL Taxonomy Extension Definition Linkbase Instance Document
101.LAB*n/aXBRL Taxonomy Extension Label Linkbase Instance Document
101.PRE*n/aXBRL Taxonomy Extension Presentation Linkbase Instance Document Set

 

1)Filed as Exhibit 1.1 to Form 8-K filed with the SEC on September 25, 2017 and incorporated herein by referenceherewith.

* Filed herewith.

††Furnished herewith.


SIGNATURES

 

Signatures

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

 

DATE: November 7, 2017

Date: May 10, 2024THERAPEUTICSMD, INC.TherapeuticsMD, Inc.
  
 By:

/s/ Robert G. FinizioMarlan D. Walker

      Robert G. FinizioMarlan D. Walker
 

Chief Executive Officer
(Principal Executive Officer)

     (Principal Executive Officer)
  
 By:

/s/ Daniel A. CartwrightJoseph Ziegler

      Daniel A. CartwrightJoseph Ziegler
      Chief Financial Officer
     (PrincipalPrincipal Financial and Accounting Officer)Officer

 

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