What changed in this filing

/stocks — the workspaceLOADING

Item 7. Management’s Discussion and Analysis

2025-03-27 compared with 2024-03-29 · 408 added, 581 removed, 30 unchanged (97% of the section changed)

Management’s discussion and

analysis of financial condition and results of operations

You should read the following discussion and

analysis in conjunction with the information set forth under our consolidated financial statements and the notes to those financial statements

included elsewhere in this 2023 10-K Report.

This discussion contains forward-looking statements based upon current expectations that

involve risks and uncertainties.

See “Statement Regarding Forward-Looking Information.” Our actual results may differ materially

from those contained in or implied by any forward-looking statements as a result of various factors, including, but not limited to, the

risks and uncertainties described under “Risk Factors” elsewhere in this 2023 10-K Report.

Certain amounts in the Management’s discussion

and analysis of financial condition and results of operations may not add due to rounding, and all percentages have been calculated using

unrounded amounts.

Business overview

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 relevant territories.

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 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 $80.0 million in annual net sales and 7.5% on annual net sales above $80.0 million,

Management’s discussion and analysis of financial condition and results of operations

read the following discussion and analysis in conjunction with the information set forth under our consolidated financial statements

and the notes to those financial statements included elsewhere in this 2024 10-K Report.

This discussion contains forward-looking statements

based upon current expectations that involve risks and uncertainties.

See “Statement Regarding Forward-Looking Information.”

Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various

factors, including, but not limited to, the risks and uncertainties described under “Risk Factors” elsewhere in this 2024

Certain amounts

in the Management’s discussion and analysis of financial condition and results of operations may not add due to rounding, and all

percentages have been calculated using unrounded amounts.

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 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 (“Mayne Pharma Group”), 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.

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.

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 $80.0 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 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.

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.

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 under the Transaction Agreement and the grant 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 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

On the Closing Date, TherapeuticsMD and Mayne Pharma entered into Amendment

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 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 Mayne Pharma settled the $1.5 million of consideration due to Mayne for the assumed obligations under a

long-term services agreement (see the section entitled “vitaCare divestiture” below for a discussion of the long-term services

agreement), including our minimum payment obligations thereunder.

As the parties agreed, during the second quarter of 2023, Mayne Parma

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

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 consolidated financial statements.

Assets and liabilities associated with the commercial business are classified as assets and liabilities

of discontinued operations in our consolidated balance sheets.

Additional disclosures regarding discontinued operations are provided in

Note 2 of our consolidated financial statements.

The Company also has license agreements with

strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

● In July 2018, we entered into the “Knight License Agreement”

with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel.

● In June 2019, we entered into the “Theramex License

Agreement” with 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 were paid

in accordance with their employment agreements and separation agreements as previously disclosed.

As of December 31, 2023,

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

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 and Accounting 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.

Ziegler succeeded Mr.

Donegan as Principal Financial and Accounting Officer as of the date of Mr.

Donegan’s resignation.

vitaCare divestiture

On April 14, 2022, we completed the divestiture of vitaCare Prescription

Services, Inc.

(“vitaCare”) with the sale of all vitaCare’s issued and outstanding capital stock (the “vitaCare

Divestiture”).

We received net proceeds of $142.6 million, net of transaction costs of $7.2 million, and we recognized

a gain on sale of business of $143.4 million.

Included in the net proceeds amount was $11.3 million of customary holdbacks as

provided in the stock purchase agreement between us and GoodRx, Inc.

(the “Purchase Agreement”), which was recorded as restricted

cash in the consolidated balance sheets until the cash was released to us.

The restricted cash was held by an escrow agent and was released

to us in March 2023.

Additionally, we may receive up to an additional $7.0 million in earn-out consideration, contingent upon vitaCare’s

financial performance through 2023 as determined in accordance with the terms of the Purchase Agreement, however we do not believe this

earnout will be realized.

We will record the contingent consideration at the settlement amount when the consideration is realized or realizable.

The Purchase Agreement contains customary representations and warranties,

covenants, and indemnities of the parties thereto.

Our commitments under a long-term services agreement related to vitaCare were transferred

to Mayne Pharma as part of the Mayne Transaction.

In addition, under the Mayne License Agreement Amendment, we owed Mayne Pharma $1.5

million payable from one royalty payment.

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.

The pre-divesture operations

of vitaCare were reclassified to discontinued operations in December 2022 when we transitioned to becoming a royalty company and licensed

our products to Mayne Pharma.

Portfolio of our licensed 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

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.

As part of the FDA’s approval of IMVEXXY, we committed to conduct a post-approval observational study to evaluate the risk of endometrial

cancer in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed by a progestogen.

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 agreements 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 granted 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 December 31, 2023, no IMVEXXY

sales had been made through the Theramex and Knight licensing agreements.

The FDA has also asked the sponsors of other

vaginal estrogen products to participate in the observational study.

In connection with the observational study, we would have been required

to provide progress reports to the FDA on an annual basis.

The obligation to conduct this study was transferred to Mayne Pharma as part

of the Mayne License Agreement.

BIJUVA (estradiol and progesterone) capsules,

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 which 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.

As part of the approval of ANNOVERA, the FDA has required a post-approval observational study be performed

to measure the risk of venous thromboembolism.

We agreed to perform and pay the costs and expenses associated with this post-approval

study, provided that if the costs and expenses associated with such post-approval study exceed $20.0 million, half of such excess

will offset against royalties or other payments owed by us under the Population Council License Agreement.

In August 2021, we filed a

supplemental New Drug Application (“NDA”) with the FDA to modify the testing specifications for ANNOVERA to allow increased

consistency of supply of ANNOVERA.

In May 2022, the FDA approved the supplemental NDA for ANNOVERA.

Our obligations to perform the post-approval

study have been transferred to Mayne Pharma as part of the Mayne 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

In December 2022, we granted an exclusive license

to commercialize our IMVEXXY, BIJUVA, and prescription prenatal vitamin products and assigned our exclusive license to commercialize

ANNOVERA to Mayne Pharma, which resulted in a business shift that had a major effect on our operations and financial results.

As part of the transformation that included the Mayne License Agreement,

historical results of commercial operations have been reflected as discontinued operations in the Company’s 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 the Company’s consolidated balance sheets.

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.

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.

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

consideration from Mayne Pharma to TherapeuticsMD for the purchase of the Transferred Assets under the Transaction Agreement and the

grant 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 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

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 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 Mayne Pharma settled

the $1.5 million of consideration due to Mayne 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 Parma 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.

the transformation that included the Mayne License Agreement, all results associated with former commercial operations have been reflected

as discontinued operations in our consolidated financial statements.

Assets and liabilities associated with the commercial business are

classified as assets and liabilities of discontinued operations in our consolidated balance sheets.

Additional disclosures regarding

discontinued operations are provided in Note 2 to the consolidated financial statements included in this 2023 10-K Report.

The following table sets forth the results of

our operations (in thousands):

Years ended December 31,

discontinued operations are provided in Note 2 of our consolidated financial statements.

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

In July 2018, we entered into the “Knight License Agreement” with 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 June 2019, we entered into the “Theramex License Agreement” with 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 December 2024, we transferred the right to commercialize IMVEXXY and BIJUVA in Israel from Knight to Theramex.

As of December 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, IT, 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 serves as our Principal Financial

and Accounting Officer.

of our licensed products

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.

(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.

As part of the FDA’s approval of IMVEXXY, we committed to conduct a post-approval observational

study to evaluate the risk of endometrial cancer in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed

by a progestogen.

30, 2022, we granted an exclusive license to commercialize IMVEXXY in the United States and its possessions and territories to Mayne

We also have entered into licensing agreements 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 granted Knight an exclusive license to commercialize IMVEXXY in Canada

We entered into the Theramex License Agreement with 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.

In December 2024, we transferred the right to

commercialize IMVEXXY in Israel from Knight to Theramex.

also asked the sponsors of other vaginal estrogen products to participate in the observational study.

In connection with the observational

study, we would have been required to provide progress reports to the FDA on an annual basis.

The obligation to conduct this study was

transferred to Mayne Pharma as part of the Mayne License Agreement.

(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

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 which 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.

In December 2024, we transferred

the right to commercialize BIJUVA in Israel from Knight to Theramex.

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

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).

30, 2022, we assigned our exclusive license to commercialize ANNOVERA in the United States and its possessions and territories to Mayne

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.

of operations

the transformation that included the Mayne License Agreement, all results associated with former commercial operations have been reflected

as discontinued operations in the Company’s consolidated financial statements for all periods prior to the Closing Date.

and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations in the Company’s

consolidated balance sheets.

Additional disclosures regarding discontinued operations are provided in Note 2 to the consolidated financial

statements included in this 2024 10-K Report.

The following

table sets forth the results of our operations (in thousands):

ended December 31,

Revenue, net:

License and service revenue

Total revenue, net

Cost of revenue

and service revenue

general and administrative

of long-lived assets (Note 4)

& amortization

operating expenses

from operations

income (expense):

Miscellaneous

from continuing operations before income taxes

for income taxes

from continuing operations

(loss) from discontinued operations, net of income taxes

As part of our transformation and the Mayne License Agreement, all results associated with former commercial operations have been

reflected as discontinued operations in the Company’s consolidated financial statements for all periods presented.

We recorded $1,761 thousand in license revenue during the year ended

December 31, 2024 primarily from the Mayne License Agreement, an increase of $459 thousand, or 35.3%, compared to $1,302 thousand in license

revenue during the year ended December 31, 2023.

The increase is primarily attributable to changes in sales of licensed products.

Selling, general and administrative.

Selling, general and

administrative expenses for 2024 were $4,744 thousand, a decrease of $4,159 thousand, or 46.7%, compared to the $8,903 thousand we had

This decrease was due to the increased efficiencies realized year over year and continued transition from a commercial business

to a royalty-based business.

Impairment of long-lived assets .

We recognized an impairment

loss of $1,268 thousand related to abandoned patents and applications, which is classified as an impairment of long-lived assets

on the Company’s consolidated statements of operations for the twelve months ended December 31, 2024.

We did not impair any

of our long-lived assets during the year ended December 31, 2023.

Depreciation & amortization.

Restructuring

Total operating expenses

Income (loss) from operations

Other income (expense):

Miscellaneous income (expense)

Total other income (loss), net

Income (loss) from continuing operations before income taxes

Benefit (provision) for income

Net income (loss) from continuing operations

Income (loss) from discontinued operations, net of income taxes

Net income (loss)

As part of our transformation

and the Mayne License Agreement, historical results of commercial operations have been reflected as discontinued operations in the Company’s

consolidated financial statements for all periods presented.

We recorded $1.3 million in license revenue during the year ended December

31, 2023 primarily from the Mayne License Agreement, a decrease of $68.7 million, compared to $70.0 million in license revenue recorded

for the allocation of the initial upfront payment and guaranteed minimum royalties from the Mayne License Agreement during the year ended

December 31, 2022.

Gross profit.

Our gross profit for 2023 was $1.3 million, a decrease

of $67.3 million, compared to $68.6 million for 2022.

This decrease in our gross profit was primarily a result of the license revenue

related to the initial upfront payment and guaranteed minimums from the Mayne Transaction that was recognized during the year ended December

Depreciation and amortization

expense for 2024 was $509 thousand, a decrease of $413 thousand, or 44.8%, compared to the $922 thousand we had for 2023.

period, this balance is entirely comprised of amortization of license rights and intangible assets.

Operating expenses.

Total operating expenses for 2024 were $6,521

million, a decrease of $57.6 million, compared to the $67.4 million we had for 2022.

Total operating expenses decreased primarily due

to lower general and administrative expenses due to the transition of our business from a manufacturing and commercialization business

to a royalty- based business with limited infrastructure.

Income (loss) from operations.

thousand, a decrease of $3,304 thousand, or 33.6%, compared to the $9,825 thousand we had for 2023.

This decrease was due to the further

optimization of our business through the reduction of costs and continued transition from a commercial business to a royalty-based business.

Loss from operations.

For 2024, we had a loss from operations

of $8.5 million, a decrease of $9.7 million, compared to income from operations of $1.2 million for 2022.

This change was primarily attributable

to the transition of our business from a manufacturing and commercialization business to a royalty-based business and the revenue related

to the allocation of the initial upfront payment and guaranteed minimum royalties from the Mayne License Agreement during the year ended

December 31, 2022.

Other income (expense), net.

In 2023, we had other income of

$0.8 million, an increase of $0.9 million, compared to other expense of $0.1 million in 2022.

Other income (expense), net represents interest

income from bank accounts as well the present value of the minimum royalty receivables recorded compared to actual minimum royalties received

and other miscellaneous items.

The year ended December 31, 2023 also includes $0.5 million in other income pertaining to royalty sales

Benefit (provision) for income taxes .

of $4,760 thousand, a decrease of $3,763 thousand, or 44.2%, compared to loss from operations of $8,523 thousand for 2023.

reflects the increase in sales from licensed products and the increased efficiencies realized as a royalty-based business.

Other income.

In 2024, we had other income of $2,417 thousand,

an increase of $1,636 thousand, compared to other income of $781 thousand in 2023.

The difference is mainly due to a $1,250 thousand one-time

payment the Company received from its sublessee on its early termination on the sublease, which was recognized in the second quarter of

2024 and an increase in royalties reported as other income for intellectual property licensed by us totaling approximately $1,083 thousand

The year ended December 31, 2023 also includes $490 thousand in other income pertaining to royalty sales of ANNOVERA.

for income taxes .

For 2024, we recorded $31 thousand of income tax benefits from continuing operations.

In 2023, the Company recognized

an immaterial benefit for income taxes from continuing operations, while no provision for income taxes was recognized in 2022 from continuing

Net income (loss) from continuing operations .

For 2023, we had net

loss from continuing operations of $7.7 million, or $0.74 per basic and diluted common share, a decrease of $8.8 million, compared to

net income from continuing operations of $1.1 million, or $0.12 per basic and $0.11 per diluted common share, for 2022.

Discontinued Operations — For 2023 revenues from discontinued

operations were $(0.8) million, a decrease of $81.5 million, as compared to $80.7 million in 2022.

Revenue in 2023 reflected adjustments

to earnings under the Mayne Agreement.

In 2023, operating expenses from discontinued operations were $0.5 million, a decrease of $97.1

million, compared to $97.6 million in 2022.

For 2023, net loss from discontinued operations was $2.6 million, a decrease of $113.5 million,

compared to net income from discontinued operations of $110.9 million for 2022.

$43 thousand of income tax benefits from continuing operations.

from continuing operations .

For 2024, we had net loss from continuing operations of $2,312 thousand, or $0.20 per basic and diluted

common share, a decrease of $5,387 thousand, compared to net loss from continuing operations of $7,699 thousand, or $0.74 per basic and

diluted common share, for 2023.

Discontinued Operations.

For 2024, net income from discontinued

operations was $131 thousand, an increase of $2,710 thousand, compared to net loss from discontinued operations of $2,579 thousand for

For additional information, see “Note 2 – Discontinued

Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 2024 10-K Report.

Liquidity and capital resources

Our primary use of cash is to fund our continuing

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.

and capital resources

use of cash is to fund our continuing operations.

We have funded our operations primarily through revenue from licensed royalties, public

offerings of our common stock and private placements of equity and debt securities, and the transactions with Mayne Pharma.

As of December

we had cash and cash equivalents totaling $4.3 million.

We maintain cash at financial institutions that at times may exceed the Federal

Deposit Insurance Corporation insured limits of $0.25 million per bank.

We have never experienced any losses related to these funds.

vitaCare Divestiture

On April 14, 2022, we completed the vitaCare

We may receive up to an additional $7.0 million in earn-out consideration, contingent upon vitaCare’s financial performance

through 2023 as determined in accordance with the terms of the Purchase Agreement, however we do not believe this earnout will be realized.

We utilized $120.0 million of net proceeds from the vitaCare Divestiture to make a prepayment of the loans under the Financing Agreement.

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, 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 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.

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.

Mayne Pharma paid us approximately $12.1 million at closing on the Closing Date for the acquisition of net working capital, subject to certain adjustments as determined in accordance with the Transaction

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

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 believes its estimated allowances for payer rebates and wholesale distributor fees are

reasonable and intends to resolve this matter through the process outlined in the Transaction Agreement.

Given the recent receipt of

Mayne Pharma’s allowance calculation and the nature of the estimates involved, the outcome of this matter is uncertain at this

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

As of December 31, 2023, 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 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 that may be material.

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

On November 15, 2023 Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761.

31, 2024, we had cash and cash equivalents totaling $5,059 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

Pharma License Agreement

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.

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, 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.

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.

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.

Agreement with Rubric Capital Management LP

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 drawdowns

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”).

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.

received gross proceeds of $1.15 million from the drawdown, before expenses.

Going concern

On the Closing Date of the

Mayne Transaction, we repaid all obligations under the Financing Agreement, dated as of April 24, 2019, as amended, with Sixth Street

Specialty Lending, Inc., as administrative agent, the various lenders from time-to-time party thereto, and certain of our subsidiaries

party thereto from time to time as guarantors (the “Financing Agreement”) and the Financing Agreement was terminated.

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

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 at a

purchase price of the five-day volume-weighted average price of the Common Stock at the time of the sale of such shares of Common

Stock, at an aggregate purchase price of up to $5,000,000.

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

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 believes its estimated allowances for payer rebates

and wholesale distributor fees are reasonable and intends to resolve this matter through the process outlined in the Transaction

Given the recent receipt of Mayne Pharma’s allowance calculation and the nature of the estimates involved, 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.

As of December 31, 2023, 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

The accompanying consolidated financial statements

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

The following table reflects the major categories

of cash flows from continuing operations for each of the periods (in thousands).

Years ended December 31,

There were no draw downs in 2024.

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 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 the financial statements included in this 2024 10-K Report.

The following

table reflects the major categories of cash flows from continuing operations for each of the periods (in thousands).

ended December 31,

Cash flow from continuing operations

Net cash provided by (used in) operating activities

Net cash (used in) investing activities

Net cash provided by (used in) financing activities

Net cash provided by (used in) discontinued operations

Net decrease in cash

Operating Activities from continuing operations.

Net cash used

in operating activities in 2023 was $23.1 million, a decrease of $32.4 million, compared to net cash provided by operating activities

of $9.4 million for 2022.

This change was due our transition from a manufacturing and commercialization business to a royalty-based business.

Cash outflows in 2023 primarily related to maintaining our operating activities as a royalty company and paying down commercial amounts

accrued for at December 31, 2022.

Investing Activities from continuing operations.

Net cash used

in investing activities for 2023 was $0.0 million, a decrease of $0.4 million, compared to net cash used in investing activities of

$0.4 million for 2022.

This change was due our transition from a manufacturing and commercialization business to a royalty-based

Financing Activities from continuing operations.

Net cash provided

by financing activities for 2023 was $3.2 million, a decrease of $238.4 million, compared to net cash used by financing activities of

$235.2 million for 2022.

Cash proceeds in 2023 are from stock sales to Rubric Capital Management and cash outflows during 2022 reflect

our paydowns of debt.

Discontinued operations.

Net cash used in discontinued operations

for 2023 was $25.1 million, a decrease of $235.5 million, as compared to net cash provided by discontinued operations of $210.4 million

This change was due to our transition from a manufacturing and commercialization business to a royalty-based business as well

as proceeds from the divesture of vitaCare of $142.6 million and proceeds from the sale of ANNOVERA of $81.2 million which occurred during

For additional details, see the consolidated statements of

cash flows included in our consolidated financial statements in this 2023 10-K Report.

Other liquidity measure

On December 30, 2022, Mayne Pharma acquired our accounts receivable balance of approximately $29.3 million which is subject

to certain working capital adjustments.

As of December 31, 2023, we had a royalty receivable of $3.1 million relating to the short-term

portion of receivable from Mayne Pharma and $18.5 million relating to the long-term portion of royalty receivable which includes royalties

recognized from the Minimum Annual Royalty.

See Note 1 Business, basis of presentation, new accounting standards and summary of significant

accounting policies (Revenue Recognition) to the consolidated financial statements included in this 2023 10-K Report.

Contractual obligations, off-balance sheet

arrangements, purchase commitments and employment agreements

Our contractual obligations and off-balance sheet arrangements are

discussed below.

For additional information on any of the following and other obligations and arrangements, see “Note 8.

and Contingencies” to the consolidated financial statements included in this 2023 10-K Report.

cash provided by (used in) operating activities

provided by financing activities

cash used in discontinued operations

increase (decrease) in cash

Activities from continuing operations.

Net cash provided by operating activities in 2024 was $1,170 thousand, an increase of $24,251

thousand, compared to net cash used in operating activities of $23,081 thousand for 2023.

This change was primarily due to a $5,387 thousand

decrease in our net loss from continuing operations combined with the pay-down of current liabilities in the prior-year period.

Activities from continuing operations.

For 2024, there was no cash received from financing activities, compared to net cash received

from financing activities of $3,151 thousand for 2023, reflecting the sale of common stock during 2023.

Net cash used in discontinued operations for 2024 was $438 thousand, a decrease of $24,622 thousand, as compared to net

cash used in discontinued operations of $25,060 thousand for 2023.

This change relates primarily to a decrease in expenses incurred and

the payment of current liabilities associated with our transition from a manufacturing and commercialization business to a royalty-based

For additional

details, see the consolidated statements of cash flows included in our consolidated financial statements in this 2024 10-K Report.

liquidity measure

Receivable from Mayne Pharma.

On December 30, 2022, Mayne Pharma

acquired our accounts receivable balance of approximately $29.3 million which is subject to certain working capital adjustments.

December 31, 2024, and 2023, we had a royalty receivable of $3,562 thousand and $3,090 thousand, respectively, relating to the short-term

portion of receivable from Mayne Pharma and $16,010 thousand and $18,484 thousand, respectively, relating to the long-term portion of

royalty receivable which includes royalties recognized from the Minimum Annual Royalty.

See “Note 1 Business, basis of presentation,

new accounting standards and summary of significant accounting policies (Revenue Recognition)” to the consolidated financial statements

included in this 2024 10-K Report.

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

Our contractual

obligations and off-balance sheet arrangements are discussed below.

For additional information on any of the following and other obligations

and arrangements, see “Note 7.

Commitments and Contingencies” to the consolidated financial statements included in this 2024

In the normal course of business, we may be confronted with issues

4 unchanged sentences

If, in our opinion, we have incurred

a probable loss as set forth by U.S.

GAAP, an estimate is made of the loss and the appropriate accounting entries are reflected in our

consolidated financial statements.

Information regarding commitments is in “Note

Commitments and contingencies” to the consolidated financial statements included in this 2023 10-K Report.

Employment agreements

Information regarding employment agreements

is in “Note 8.

Commitments and contingencies” to the consolidated financial statements included in this 2023 10-K Report.

Critical accounting policies and estimates

Management’s discussion and analysis of our

financial condition and results of operations are based upon our consolidated financial statements included elsewhere in this 2023 10-K

Report, which has been prepared in accordance with U.S.

a probable loss as set forth by accounting principles generally accepted in the United States of America (“U.S.

estimate is made of the loss and the appropriate accounting entries are reflected in our consolidated financial statements.

regarding commitments is in “Note 7.

Commitments and contingencies” to the consolidated financial statements included in

this 2024 10-K Report.

regarding employment agreements is in “Note 7.

Commitments and contingencies” to the consolidated financial statements included

in this 2024 10-K Report.

accounting policies and estimates

discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included

elsewhere in this 2024 10-K Report, which has been prepared in accordance with U.S.

The preparation of these financial statements

1 unchanged sentence

related disclosure of contingent assets and liabilities.

On an ongoing basis, we evaluate our estimates, including those related to unbilled

revenue, identifiable intangible assets, certain accrued liabilities, and income taxes.

We base our estimates on historical experience

and on other assumptions that are believed to be reasonable under the circumstances, 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 from

these estimates under different assumptions or conditions.

We have identified the areas described below

as critical to our business operations and the understanding of our results of operations given the uncertainties associated with the

assumptions underlying each estimate.

For a detailed discussion on the application of these and other significant accounting policies,

Basis of presentation, new accounting standards and summary of significant accounting policies” to the consolidated

financial statements included in this 2023 10-K Report.

Discontinued Operations

Discontinued operations comprise activities

that were disposed of at the end of the period, represent a separate major line of business that can be clearly distinguished for operational

and financial reporting purposes and represent a business shift having a major effect on the Company’s operations and financial

results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements.

An adjustment

has been made to the consolidated statements of operations for the twelve months ended December 31, 2023 and 2022 to reclassify commercial

activities and vitaCare activities to discontinued operations as the cessation of these operations, in the aggregate, represented a business

shift that will have a major effect on the Company’s operations and financial results.

On an ongoing basis, we evaluate our estimates, including those related to identifiable

intangible assets, certain accrued liabilities, and income taxes.

We base our estimates on historical experience and on other assumptions

that are believed to be reasonable under the circumstances, 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 from these estimates under

different assumptions or conditions.

We have identified

the areas described below as critical to our business operations and the understanding of our results of operations given the uncertainties

associated with the assumptions underlying each estimate.

For a detailed discussion on the application of these and other significant

accounting policies, see “Note 1.

Basis of presentation, new accounting standards and summary of significant accounting policies”

to the consolidated financial statements included in this 2024 10-K Report.

Discontinued operations comprise activities that were disposed of at

the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting

purposes and represent a business shift having a major effect on the Company’s operations and financial results according to Accounting

Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements.

In 2022, we started classifying commercial

activities as discontinued operations due to the cessation of these operations.

For additional information, see “Note 2 –

Discontinued Operations, in the notes to the consolidated financial statements appearing elsewhere in this Report.

Loss contingencies –

In determining whether an accrual for a loss contingency is required,

we first assess the likelihood of occurrence of the future event or events that will confirm the loss.

When a loss is probable (the future

event or events are likely to occur) and the amount of the loss can be reasonably estimated, the estimated loss is accrued.

If the reasonable

estimate of the loss is a range and an amount within the range appears to be a better estimate than any other amount within the range,

that amount should be accrued.

However, if no amount within the range is a better estimate, the minimum amount in the range should be

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 believes its estimated allowances for payer rebates and wholesale distributor fees are

reasonable and intends to resolve this matter through the process outlined in the Transaction Agreement.

Given the recent receipt of

Mayne Pharma’s allowance calculation and the nature of the estimates involved, the outcome of this matter is uncertain at this

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

The Company believes no additional accrual is required for amounts

that may be owed for the allowance for returns.

Discontinued Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 2024 10-K Report.

contingencies – Mayne Pharma

In determining

whether an accrual for a loss contingency is required, we first assess the likelihood of occurrence of the future event or events that

will confirm the loss.

When a loss is probable (the future event or events are likely to occur) and the amount of the loss can be reasonably

estimated, the estimated loss is accrued.

If the reasonable estimate of the loss is a range and an amount within the range appears to

be a better estimate than any other amount within the range, that amount should be accrued.

However, if no amount within the range is

a better estimate, the minimum amount in the range should be accrued.

In February 2024, the Company received Mayne Pharma’s calculation

of the net working capital allowances 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 continues to believe its estimated allowances for payer

rebates and wholesale distributor fees are reasonable and intends to resolve this matter through the processes permitted in the Transaction

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, particularly as the Company believes the outcome of this matter to be intertwined with the resolution

of the net working capital allowance for returns.

In August 2024, the Company received information from Mayne Pharma

pertaining to the net working capital allowance for returns that differs significantly from the Company’s estimate of the allowance.

As of December 31, 2024, the Company believed no additional accrual was 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 that may be material.

License revenue

License arrangements may consist of non-refundable

upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones

and future product royalty payments.

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.

has also made certain indemnification demands under the Transaction Agreement, which the Company disputes.

As of December 31, 2024, the

Company believed no additional accrual was required for such claims, as the Company could not reasonably estimate a range of loss.

License arrangements

may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance

or sales milestones and future product royalty payments.

Some of these arrangements may include multiple performance obligations.

Non-refundable up-front

fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized as

revenue when the right to use functional intellectual property is transferred to the customer.

On December 30, 2022, we closed a License Agreement with Mayne Pharma

pursuant to which we sold to Mayne Pharma the exclusive license rights in our product ANNOVERA and granted an exclusive license in other

products, including IMVEXXY and BIJUVA.

Under the terms of the License Agreement, we received $140 million at closing and we are eligible

to receive additional payments in the aggregate of up to an additional $30 million based on the achievement of sales milestones (collectively,

Non-refundable

up-front fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized

as revenue when the right to use functional intellectual property is transferred to the customer.

30, 2022, we closed a License Agreement with Mayne Pharma pursuant to which we sold to Mayne Pharma the exclusive license rights in our

product ANNOVERA and granted an exclusive license in other products, including IMVEXXY and BIJUVA.

Under the terms of the License Agreement,

we received $140 million at closing and we are eligible to receive additional payments in the aggregate of up to an additional $30 million

based on the achievement of sales milestones (collectively, the “Milestone Amounts”).

The proceeds at closing were allocated

between consideration for the sale of ANNOVERA and the initial license fee for the Licensed Products, as the sale of ANNOVERA was accounted

for under ASC 610-20, Gains and Losses from Derecognition of Nonfinancial Assets in arriving at the gain on disposal (see Note 2 to the

consolidated financial statements included in this 2024 10-K Report), while the license grant of the other products were recognized under

the provisions of ASC 606, Revenue from Contracts with Customers, as a license of functional intellectual asset.

The proceeds were allocated

among the Licensed Products on the relative net present value of forecasted future product sales from those products.

The Milestone Amounts

The proceeds at closing were allocated between consideration for the sale of ANNOVERA and the initial

license fee for the Licensed Products, as the sale of ANNOVERA was accounted for under ASC 610-20, Gains and Losses from Derecognition

of Nonfinancial Assets in arriving at the gain on disposal (see Note 2 to the consolidated financial statements included in this 2023

10-K Report), while the license grant of the other products were recognized under the provisions of ASC 606, Revenue from Contracts with

Customers, as a license of functional intellectual asset.

The proceeds were allocated among the Licensed Products on the relative net

present value of forecasted future product sales from those products.

The Milestone Amounts will be recognized, as applicable, in subsequent

periods based on actual product sales that exceed the respective net sales milestones as such variable consideration is constrained by

the occurrence of the subsequent sales.

Our royalty revenue recognized in 2023 primarily related to royalties

provided for under the Mayne License Agreement based on Mayne Pharma’s sales of the Licensed Products subject to that agreement.

Under the Mayne License Agreement, the Company is entitled to earn royalties on net sales of all of the Licensed Products at a royalty

rate of (i) 8% on the first $80 million of net sales of the Licensed Products and (ii) 7.5% on net sales of all of the Licensed Products

after the first $80 million of net sales.

The royalty rate is subject to a 2% reduction upon the earlier to occur of (i) the expiration

or revocation of the last valid claim covering a Licensed Product, and (ii) a generic product launch (a “LOE”).

We are entitled

to minimum annual royalties beginning with the year ending December 31, 2023 ($3 million annual minimum) and continuing with 3% annual

increases through the year ending December 31, 2034 (the “Minimum Annual Royalty”).

The Minimum Annual Royalty originally

totaled $42.6 million, and this total amount was allocated among the Licensed Products on the relative net present value of forecasted

future product sales from those products.

The portion allocated to consideration for the sale of ANNOVERA was attributed towards the gain

on disposal of that asset.

For the remaining portion allocated to the license grants for the other products, we determined that the minimum

guarantee underlying the Minimum Annual Royalty should be treated as fixed consideration and recognized under ASC 606 at the point in

time when the license was transferred.

Since the Minimum Annual Royalty will be received in annual installments through 2034, we determined

the transaction price allocated under ASC 606 contained a significant financing component, and we therefore determined the initial royalty

revenue and corresponding receivable based on the present value of the allocated Minimum Annual Royalty.

The present value was calculated

using a discount rate of 10.45%, based on the credit characteristics of Mayne Pharma and the timing of future payments, and the value

will be accreted to full value through the earlier of January 1, 2034 or a LOE.

This royalty receivable is a contract asset as of December

31, 2023, and is further subject to offset by Mayne Pharma.

Royalty revenue earned in excess of the Minimum

Annual Royalty will be recognized under ASC 606, which provides revenue recognition constraints by requiring the recognition of revenue

at the later of the following:

1) when the subsequent sale occurs or 2) when the performance obligation to which some or all of the sales-based

royalty has been allocated has been satisfied (or partially satisfied).

We applied the royalty recognition constraint required under

the guidance for sales-based royalties, which requires a sales-based royalty to be recorded no sooner than the underlying sale.

royalties on sales of products commercialized by Mayne Pharma will be recognized in the subsequent periods that the Licensed Products

For additional discussion on revenue, see “J.

will be recognized, as applicable, in subsequent periods based on actual product sales that exceed the respective net sales milestones

as such variable consideration is constrained by the occurrence of the subsequent sales.

revenue recognized in 2024 and 2023 primarily related to royalties provided for under the Mayne License Agreement based on Mayne Pharma’s

sales of the Licensed Products subject to that agreement.

Under the Mayne License Agreement, the Company is entitled to earn royalties

on net sales of all of the Licensed Products at a royalty rate of (i) 8% on the first $80 million of net sales of the Licensed Products

and (ii) 7.5% on net sales of all of the Licensed Products after the first $80 million of net sales.

The royalty rate is subject to a

2% reduction upon the earlier to occur of (i) the expiration or revocation of the last valid claim covering a Licensed Product, and (ii)

a generic product launch (a “LOE”).

We are entitled to minimum annual royalties beginning with the year ending December 31,

2023 ($3 million annual minimum) and continuing with 3% annual increases through the year ending December 31, 2034 (the “Minimum

Annual Royalty”).

The Minimum Annual Royalty originally totaled $42.6 million, and this total amount was allocated among the Licensed

Products on the relative net present value of forecasted future product sales from those products.

The portion allocated to consideration

for the sale of ANNOVERA was attributed towards the gain on disposal of that asset.

For the remaining portion allocated to the license

grants for the other products, we determined that the minimum guarantee underlying the Minimum Annual Royalty should be treated as fixed

consideration and recognized under ASC 606 at the point in time when the license was transferred.

Since the Minimum Annual Royalty will

be received in annual installments through 2034, we determined the transaction price allocated under ASC 606 contained a significant

financing component, and we therefore determined the initial royalty revenue and corresponding receivable based on the present value

of the allocated Minimum Annual Royalty.

The present value was calculated using a discount rate of 10.45%, based on the credit characteristics

of Mayne Pharma and the timing of future payments, and the value will be accreted to full value through the earlier of January 1, 2034

This royalty receivable is a contract asset as of December 31, 2024, and is further subject to offset by Mayne Pharma.

Royalty revenue

earned in excess of the Minimum Annual Royalty will be recognized under ASC 606, which provides revenue recognition constraints by requiring

the recognition of revenue at the later of the following:

1) when the subsequent sale occurs or 2) when the performance obligation to

which some or all of the sales-based royalty has been allocated has been satisfied (or partially satisfied).

We applied the royalty recognition

constraint required under the guidance for sales-based royalties, which requires a sales-based royalty to be recorded no sooner than

the underlying sale.

Therefore, royalties on sales of products commercialized by Mayne Pharma will be recognized in the subsequent periods

that the Licensed Products are sold.

For additional

discussion on revenue, see “I.

Revenue recognition” in Note 1.

Basis of presentation, new accounting standards and summary of significant accounting policies

to the consolidated financial statements included in this 2023 10-K Report.

Restructuring Costs.

Our restructuring costs consist primarily of severance, employee termination

costs, contract termination costs, and write off of fixed assets related to restructuring activities.

Recent accounting pronouncements

Information regarding accounting standards issued

or effective in 2023 is included in “Note 1.

Basis of Presentation, New Accounting Standards and Significant Accounting Policies”

to the consolidated financial statements.

Quantitative and qualitative disclosures

about market risk

As 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 required to provide this information.

Basis of presentation, new accounting standards and summary

of significant accounting policies to the consolidated financial statements included in this 2024 10-K Report.

accounting pronouncements

regarding accounting standards issued or effective in 2024 is included in “Note 1.

Basis of Presentation, New Accounting Standards

and Significant Accounting Policies” to the consolidated financial statements.

Quantitative and qualitative disclosures about market risk

As 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 required to provide this information.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 7. Management’s Discussion and Analysis