What changed in this filing

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Item 1. Financial Statements

2024-05-10 compared with 2023-11-14 · 490 added, 401 removed, 129 unchanged (87% of the section changed)

Financial statements

TherapeuticsMD, Inc.

TherapeuticsMD,

and Subsidiaries

Condensed Consolidated Balance Sheets

(in thousands, except share data)

September 30, 2023

December 31, 2022

Consolidated Balance Sheets

(in thousands, except per share

Current assets:

Cash and cash equivalents

Restricted cash

Royalty receivable, current portion

Prepaid and other current assets

Current assets of discontinued operations

Total current assets

Fixed assets, net

License rights and other intangible assets, net

1 unchanged sentence

Royalty receivable, long term

Other non-current

Other non-current assets

Liabilities and stockholders’ equity:

5 unchanged sentences

Operating lease liabilities

Other non-current

Other non-current liabilities

Total liabilities

Commitments and contingencies (Note 6)

Stockholders’ equity (deficit):

Stockholders’ equity:

Common stock, par value $ 0.001 ;

32,000 and 12,000 shares authorized, 10,575 and 9,498 shares

issued and outstanding as of September 30, 2023 and December 31, 2022, respectively

Additional paid-in

32,000 shares authorized, 11,532 issued and outstanding as of March 31, 2024 and December 31, 2023, respectively

Additional paid-in capital

Accumulated deficit

1 unchanged sentence

Total liabilities and stockholders’ equity

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

TherapeuticsMD, Inc.

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

TherapeuticsMD,

and Subsidiaries

Condensed Consolidated Statements of Comprehensive Income

(Unaudited - in thousands, except per share data)

Three Months Ended September 30,

Nine Months Ended September 30,

Consolidated Statements of Operations

- in thousands, except per share data)

Three Months Ended

Revenue, net:

License and service revenue

Cost of revenue

Gross profit (loss)

Operating expenses:

3 unchanged sentences

Loss from operations

Other (expense) income:

Other income (expense) :

Interest expense and other financing costs

Miscellaneous income (expense)

Total other income (loss), net

Miscellaneous income

Total other income, net

Loss from continuing operations before income taxes

Provision for income taxes

Loss from continuing operations, net of income taxes

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

Net income (loss)

Income (loss) per common share, basic and diluted:

1 unchanged sentence

Discontinued operations, net

Net income (loss) per common share, basic and diluted

Net loss per common share, basic and diluted

Weighted average common shares, basic

Weighted average common shares, diluted

Net income (loss)

Other comprehensive income

Comprehensive income (loss):

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

TherapeuticsMD, Inc.

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

TherapeuticsMD,

and Subsidiaries

Condensed Consolidated Statements of Stockholders’ Equity (Deficit)

(Unaudited - in thousands)

Consolidated Statements of Stockholders’ Equity

- in thousands)

Additional Paid in

Balance, January 1, 2024

Shares issued for vested restricted stock units

$ ( 949,641 )

Share-based compensation

Balance, March 31, 2024

Shares issued for vested restricted stock units

Shares issued for sale of common stock related to private placement sale

Share-based compensation

Balance, June 30, 2023

Share-based compensation

Balance, September 30, 2023

$ ( 950,375 )

Balance, January 1, 2023

$ ( 939,363 )

Shares issued for vested restricted stock units

1 unchanged sentence

Balance, March 31, 2023

Shares issued for rounding up of fractional shares in connection with the reverse stock split

Shares issued for vested restricted stock units

Shares issued for sale of common stock related to employee stock purchase plan

Share-based compensation

Balance, June 30, 2022

Sale of common stock, net of costs

Shares issued for vested restricted stock units

Share-based compensation

Balance, September 30, 2022

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

TherapeuticsMD, Inc.

$ ( 942,966 )

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

TherapeuticsMD,

and Subsidiaries

Condensed Consolidated Statements of Cash Flows

(Unaudited - in thousands)

Nine Months Ended September 30,

Consolidated Statements of Cash Flows

- in thousands)

Three Months Ended

Cash flows from operating activities:

Net income (loss)

income (loss) from discontinued operations, net of tax

Net loss from continuing operations

Adjustments to reconcile net loss to net cash used in operating activities:

Adjustments to reconcile net loss to net cash used in operating activities of continuing operations:

Depreciation and amortization

of patents and trademarks

Write-off of patents and trademarks

Share-based compensation

4 unchanged sentences

Lease liabilities

Other non-current

Other non-current liabilities

Total adjustments

Net cash used in continuing operating activities

Cash flows from investing activities:

Payment of patent related costs

Purchase of fixed assets

Net cash used in continuing investing activities

Cash flows from financing activities:

Proceeds from sale of common stock, net of costs

Proceeds from exercise of options and warrants

Repayments of debt

Payment of debt financing fees

Net cash provided by (used in) continuing financing activities

Discontinued operations:

Net cash provided by (used in) operating activities

Net cash provided by investing activities

Net cash provided by financing activities

Net cash provided by (used in) discontinued operations

Net decrease in cash

Cash, cash equivalents and restricted cash - continuing operations, beginning of period

Cash, cash equivalents and restricted cash - discontinued operations, beginning of period

Total cash and restricted cash, end of period

Supplemental disclosure of cash flow information:

Interest paid

Supplemental disclosure of noncash financing activities:

Paid in kind (“PIK”) interest with corresponding increase in debt

PIK debt financing fees with corresponding increase in debt

Issue of warrants to lenders related to debt financing fees

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

TherapeuticsMD, Inc.

Net increase (decrease) in cash

Cash and cash equivalents, beginning of period

Total cash and cash equivalents, end of period

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

TherapeuticsMD,

and Subsidiaries

Notes to the Condensed Consolidated Financial Statements

to the Condensed Consolidated Financial Statements

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

TherapeuticsMD, Inc.

(the “Company”), a Nevada corporation, and its condensed consolidated subsidiaries are referred to collectively in this Quarterly Report on Form 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 ®

, vitaCare TM

, and BIJUVA ®

, which are protected under applicable intellectual property laws and are the property of, or 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 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.

TherapeuticsMD,

(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 licensed by

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 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

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.

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.

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 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.

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 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 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 will reduce 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 is 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 Pharma held back our royalty payment and we funded an additional

$ 0.9 million in August 2023 to settle the original

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.

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

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 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,

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.

Mayne 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 classified as 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.

We 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.

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.

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 classified as 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

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.

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.

Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

connection with our transformation into a pharmaceutical royalty company, the termination of our executive management team (except for

Marlan Walker, our former General Counsel and current Chief Executive Officer) and all other employees was completed by December

Severance obligations for all employees other than executive officers were paid in full in January 2023 and severance obligations for terminated executive officers are paid in accordance with their employment agreements and separation agreements as previously disclosed.

As of December 31, 2022 and September 30, 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 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.

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

As of December 31, 2023 and March 31, 2024, we employed one full-time employee primarily engaged in an executive position.

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.

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 our former subsidiary vitaCare Prescription Services, Inc.

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

We received net proceeds of $ 142.6 million, after deducting 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 (the “Purchase Agreement”) which we received in 2023.

Additionally, the Purchase Agreement provides that 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 if and when the consideration is realized or realizable.

The Purchase Agreement contains customary representations and warranties, covenants, and indemnities of the parties thereto.

The 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 and we funded an additional $ 0.9 million in August 2023 to settle the original $ 1.5 million payable.

The divestiture of vitaCare was determined to be a component of discontinued operations in December 2022, when we changed our business by becoming a royalty company and as a result vitaCare activities were reclassified to discontinued operations for the nine months ended September 30, 2023 and 2022.

With multiple variant strains of the SARS-Cov-2

virus and the COVID-19

disease that it causes (collectively, “COVID-19”)

still circulating, we continue to be subject to risks and uncertainties in connection with the COVID-19

The extent of the future impact of the COVID-19

pandemic on our business continues to be highly uncertain and difficult to predict.

As of the date of issuance of these condensed consolidated financial statements, the future extent to which the COVID-19

pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain and difficult to predict.

Even after the COVID-19

pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

Going concern

On December 4, 2022, we entered into agreements with Mayne Pharma pursuant to which we granted Mayne Pharma an exclusive license to commercialize IMVEXXY, BIJUVA, and prescription prenatal vitamin products (in the United States and its possessions and territories), (ii) assign to Mayne Pharma our exclusive license to commercialize ANNOVERA in the United States and its possessions and territories, and (iii) sell certain other assets to Mayne Pharma.

The total consideration from Mayne Pharma to TherapeuticsMD for the purchase of the Transferred Assets and the grant of the licenses 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 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.

On the Closing Date, 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 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.

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.

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.

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.

The Common Stock issued pursuant to the Subscription Agreement was sold and issued without registration under the Securities Act of 1933, as amended (the “Securities Act”), in reliance on the exemptions provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and Rule 5-06

of Regulation D promulgated under the Securities Act as sales to accredited investors, and in reliance on similar exemptions under applicable state laws.

If Mayne Pharma’s sales of IMVEXXY, BIJUVA, or ANNOVERA 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 if the continued impact of the COVID-19

pandemic on us or the third-parties we or our licensees rely on 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 condensed consolidated financial statements do not include any adjustments that might be necessary if we are unable to continue as a going concern.

Basis of 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.

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.

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.

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.

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

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

a going concern.

of presentation

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.

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 2022 Annual Report on Form 10-K

(the “2022 10-K

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 sheet.

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

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”).

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

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 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 consolidated financial statements and accompanying notes included in our 2022 10-K

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

New accounting standards or “ ASU

s” were assessed and determined to be either not applicable or did not have a material impact on our condensed consolidated financial statements or processes.

Common stock reverse stock split

On May 6, 2022, we completed a reverse stock split of our Common Stock.

As a result, shares of our outstanding Common Stock were split at a ratio of 50-for-1

(the “Reverse Stock Split”) with any fractional shares resulting from the Reserve Stock Split rounded up to the next whole share of Common Stock.

The number of authorized shares of Common Stock was also correspondingly reduced from 600.0 million shares to 12.0 million shares to give effect to the Reverse Stock Split.

Additionally, all rights to receive shares of Common Stock under outstanding warrants, options, restricted stock units (“RSUs”) and performance stock units (“PSUs”) were adjusted to give effect to the Reverse Stock Split.

Furthermore, remaining shares of Common Stock available for future issuance under share-based payment award plans and our employee stock purchase plan were adjusted to give effect to the Reverse Stock Split.

Pursuant to Section 78.209 of the Nevada Revised Statutes, the approval of our stockholders was not required for our Board of Directors to effectuate the Reverse Stock Split.

All historical numbers of shares of Common Stock and per share data have been adjusted to give effect to the Reverse Stock Split.

Additionally, since the Common Stock par value was unchanged, historical amounts for Common Stock and additional paid-in

capital have been adjusted to give effect to the Reverse Stock Split.

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 number of authorized shares of Common Stock from 12 million shares to 32 million shares.

Estimates and assumptions

The preparation of our condensed consolidated financial statements in conformity 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 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.

The information

included in this 10-Q Report should be read in conjunction with the consolidated financial statements and accompanying notes 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.

accounting standards

of new accounting standards

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 and will be

applied on a prospective basis.

However, retrospective application is permitted.

Early adoption is also permitted.

The Company is evaluating

the impact of ASU 2023-09 on the Company’s income tax disclosures and on its consolidated financial statements.

of authorized shares

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 number of authorized shares of Common Stock from 12 million shares to 32 million shares.

and assumptions

preparation of our condensed consolidated financial statements in conformity 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

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 policies

The significant accounting policies we use for quarterly financial reporting are disclosed in Note 1 of the accompanying notes to the consolidated financial statements included in our 2022 10-K

report and in the section below.

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.

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 and 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 results.

Upon our conversion from a commercial pharmaceutical company to a licensing only company with the consummation of the Mayne Transaction, we classified all direct revenues, costs and expenses related to commercial operations, within income (loss) from discontinued operations, net of tax, in the condensed consolidated statements of comprehensive income for all periods

We have no t allocated any amounts for shared general and administrative operating support expense to discontinued operations.

As required by the terms of the Financing Agreement, proceeds from the Mayne Transaction and the VitaCare Divestiture were used to fully repay our outstanding debt borrowings, and as a result interest expense and amortization of deferred financing costs as well as expense for accretion of Series A Preferred Stock and loss on extinguishment of debt are included within income (loss) from discontinued operations, net of tax (as disclosed below).

Additionally, the related assets and liabilities have been reported as assets and liabilities of discontinued operations in our condensed consolidated balance sheets as of September 30, 2023 and December 31, 2022.

The total consideration from Mayne Pharma consisted of (i) a cash payment of $ 140.0 million at closing, (ii) a cash payment of $ 12.1 million for the acquisition of net working capital subject to certain adjustments, (iii) a cash payment of approximately $ 1.0 million 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.

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.

The determination of net working capital includes significant estimates which could change materially for a period of up to two years following the Closing Date.

On March 29, 2023, we received Mayne Pharma’s closing net working capital calculation which differed significantly from our estimate of closing net working capital.

We believe that our estimate of net working capital is reasonable and intend to resolve this matter through the process outlined in the Transaction Agreement.

During the three months ended September 30, 2023, we revised certain estimates pertaining to contracts we were a party to when we were an operating company.

These included an incremental accrual of approximately

$ 2 million for net working capital adjustments related to the Transaction Agreement .

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

Three months ended September 30,

Nine Months Ended September 30,

Product revenue, net

Cost of goods sold

Operating expenses:

Selling and marketing

General and administrative

Research and development

Depreciation & amortization

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 and 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 results.

Upon our conversion from a commercial pharmaceutical company to a

licensing only company with the consummation of the Mayne Transaction, we classified all direct revenues, costs and expenses related to

commercial operations, within income (loss) from discontinued operations, net of tax, in the condensed 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 condensed 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 further discussion of net working capital contingencies.

The following table presents

results of discontinued operations (in thousands):

Three Months Ended

General and administrative expenses

Total operating expenses

2 unchanged sentences

Total other income (expense), net

Net income (loss) from discontinued operations

The following table presents the carrying amounts of the classes of assets and liabilities of discontinued operations as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023

December 31, 2022

Current liabilities:

Accounts payable

Income (loss) from discontinued operations, net

The following table presents

the carrying amounts of the classes of assets and liabilities of discontinued operations as of March 31, 2024 and December 31, 2023 (in

Accounts receivable

Accrued expenses and other current liabilities

Total current liabilities

Prepaid and other current assets

Our prepaid and other current assets consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023

December 31, 2022

Rent receivable

Prepaid and other current

Our prepaid and other current

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

Capitalized legal

Prepaid and other current assets

Our fixed assets, net consisted of the following as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023

December 31, 2022

Furniture and fixtures

Computer and office equipment

Computer software

Leasehold improvements

accumulated depreciation and amortization

Fixed assets, net

We recorded, in continuing operations, depreciation expense of $ 0.0 million and $ 0.2 million for the three months ended September 30, 2023 and 2022, respectively, and depreciation expense of $ 0.0 million and $ 0.4 million for the nine months ended September 30

, 2023 and 2022, respectively.

Licensed rights and other intangible assets

The following provides information about our license rights and other intangible assets, net as of September 30, 2023 and December 31, 2022 (in thousands):

September 30, 2023

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

Intangible assets subject to amortization:

5 unchanged sentences

License rights and other intangible assets, net

We recorded, in continuing operations, amortization expense related to patents of $ 0.1 million and $ 0.1 million for the three months ended September 30, 2023 and 2022 ,

respectively, and amortization expense related to patents of $ 0.2 million and $ 0.4 million for the nine months ended September 30, 2023 and 2022 ,

respectively.

Our intangible assets subject to amortization are expected to be amortized as follows (in thousands):

We recorded, in continuing operations,

amortization expense related to patents of $ 133 thousand and $ 7 thousand for the three months ended March 31, 2024 and 2023, respectively.

Our intangible assets subject

to amortization are expected to be amortized as follows (in thousands):

Year ending December 31,

Accrued expenses and other current liabilities

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

September 30, 2023

December 31, 2022

Accrued expenses and other

current liabilities

Other accrued expenses and other

current liabilities consisted of the following (in thousands):

Payroll and related costs

Accrued contract termination costs

Research and development expenses

Professional fees

Operating lease liabilities

Prepaid royalty

Other accrued expenses and current liabilities

2 unchanged sentences

Mayne Pharma Agreement

Mayne Pharma paid us approximately $ 12.1 million at closing on December 30, 2022, for the acquisition of net working capital, as determined in accordance with the Transaction Agreement, and such payment is subject to certain adjustments for a period of up to two years following the Closing Date.

During the three months ended September 30, 2023, we revised certain estimates;

including an incremental accrual of approximately

million for net working capital adjustments related to the Transaction Agreement .

Pursuant to the Mayne License Agreement Amendment, Mayne Pharma also paid us approximately $ 1.0 million in prepaid royalties on the Closing Date.

The prepaid royalties will reduce the first four quarterly payments that would have otherwise been payable pursuant to the Mayne License Agreement by an amount equal to $ 257,250 per quarterly royalty payment plus interest calculated at 19 % per annum accruing from the Closing Date until the date such quarterly royalty payment is paid to us.

Additionally, 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 and we funded an additional

million in August 2023 to settle the original

$ 1.5 million payable.

We recognized $( 0.1 ) million and $ 0.8 million in royalty revenues from Mayne Pharma during the three and nine months ended September 30, 2023, respectively.

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.

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

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 increased certain accrual estimates including

increasing our working capital adjustment accrual by $ 2.0 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.

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 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.

Population Council License

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.

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 Abbreviated New Drug Application (“ANDA”) submitted to the FDA by Teva Pharmaceuticals USA, Inc.

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.

In February 2020, we received

a Paragraph IV certification notice letter (the “IMVEXXY Notice Letter”) regarding an Abbreviated New Drug Application (“ANDA”)

submitted to the FDA by Teva Pharmaceuticals USA, Inc.

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 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

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 order provides that the statutory stay that prevents the FDA from granting final approval of the ANDA for 30 months from the date of the IMVEXXY Notice Letter will be extended for the number of days that the stay of the IMVEXXY litigation is in place.

In April 2020, we filed a complaint for 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.

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

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 order provides that the statutory stay that prevents the FDA from granting

final approval of the ANDA for 30 months from the date of the IMVEXXY Notice Letter will be extended 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 $ 2.3 million in prepaid expenses and other current assets as of September 30, 2023, 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 December 30, 2022 and per the Mayne License Agreement, Mayne Pharma is responsible for all enforcement of our patents, including the litigation discussed above with respect to Teva.

In September 2023, one of our former contractors retained to market Annovera under Title X, filed a lawsuit that accused us of breach of contract.

We answered their complaint and filed breach of contract counterclaims.

From time to time, we are involved in other litigations and proceedings in the ordinary course of business.

We are currently not involved in any other litigations and proceedings that we believe would have a material effect on our condensed consolidated financial condition, results of operations, or cash flows.

sheet arrangements

As of September 30, 2023 and December 31, 2022 we had 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.

incurred and recorded legal costs amounting to $ 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 December 30, 2022

and per the Mayne 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 proceedings in the ordinary course of business.

We are currently not involved in any other litigations and proceedings

that we believe would have a material effect on our condensed consolidated financial condition, results of operations, or cash flows.

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 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 30, 2022.

Severance obligations for all employees other than executive officers were paid in full in the first quarter of 2023.

As of September 30, 2023, we employ one full-time employee primarily engaged in an executive position.

The separation of our former Interim Co-Chief

Executive Officers, former Interim Chief Financial Officer and other executives from TherapeuticsMD was each a termination without “Good Cause,” as defined in their respective employment agreements.

In the aggregate, as of September 30, 2023, we have accrued severance liabilities for executive termination obligations of $ 1.6 million.

Stockholders’ equity (deficit)

As of September 30, 2023, the following table summarizes the status of our outstanding and exercisable warrants and related transactions since December 31, 2022 (in thousands, except weighted average exercise price and weighted average remaining contractual life data):

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 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.

the aggregate, as of March 31, 2024, we have accrued severance liabilities for executive termination obligations of $ 169 thousand.

Stockholders’ equity

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

Weighted Average

Exercise Price

Aggregate Intrinsic Value

Weighted Average

Remaining Contractual

Life (in Years)

Average Exercise

Contractual Life

As of January 1, 2024

As of September 30, 2023

Share-based compensation payment plans

As of September 30, 2023, 382,207 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).

As of September 30, 2023, 392,504 shares of common stock were available for future grants of share-based payment awards under the TherapeuticsMD, Inc.

As of March 31, 2024

Share-based compensation payment

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).

As of March 31, 2024, 394,669 shares of common stock were available for future grants of share-based

payment awards under the TherapeuticsMD, Inc.

2019 Stock Incentive Plan.

The following table summarizes the status of our outstanding and exercisable options and related transactions (each adjusted to account for the Reverse Stock Split) since December 31, 2022 (in thousands, except weighed average exercise price and weighted average remaining contractual life data):

The following table summarizes

the status of our outstanding and exercisable options and related transactions since December 31, 2023 (in thousands, except weighted

average exercise price and weighted average remaining contractual life data):

As of January 1, 2024

Cancelled/Forfeited

As of September 30, 2023

The following table summarizes the status of our RSUs and related transactions (each adjusted to account for the Reverse Stock Split) since December 31, 2022 (in thousands, except weighed average grant date fair value):

As of March 31, 2024

The following table summarizes

the status of our RSUs and related transactions since December 31, 2023 (in thousands, except weighted average grant date fair value):

RSUs awards outstanding

As of January 1, 2024

Cancelled/Forfeited

Unvested as of September 30, 2023

The following table summarizes the status of our PSUs and related transactions for each for the following years (each adjusted to account for the Reverse Stock Split) since December 31, 2022 (in thousands, except weighed average grant date fair value):

As of March 31, 2024

The following table summarizes

the status of our PSUs and related transactions since December 31, 2023 (in thousands, except weighted average grant date fair value):

Unvested, as of January 1, 2024

Cancelled/Forfeited

Unvested, as of September 30, 2023

Unvested, as of March 31, 2024

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

Share-based payment compensation cost

Share-based payment compensation expense for PSUs is based on 100 % vesting which was a part of the termination benefits for all employees who were terminated in 2022.

We recorded share-based payment award compensation costs related to previously issued options, RSU and PSUs, as well as shares of common stock issued under our employee stock purchase plan (“ESPP”)

totaling $ 0.2 million and $ 4.3 million for the three months ended September 30, 2023 and 2022 ,

respectively, and $ 1.2 million and $ 8.5 million for the nine months ended September 30, 2023 and 2022 ,

respectively.

As of September 30, 2023, we had $ 0.4 million of unrecognized share-based payment award compensation cost related to unvested options, RSUs and PSUs as well as shares issuable under our ESPP, which may be adjusted for future changes in forfeitures and is included as additional paid-in

capital in the accompanying condensed consolidated balance sheets.

Share-based payment compensation

expense for PSUs is based on 100 % vesting which was a part of the termination benefits for all employees who were terminated in 2022.

We recorded share-based payment award compensation costs related to previously issued options, RSU and PSUs, as well as shares of common

stock issued under our employee stock purchase plan (“ESPP”) totaling $ 111 thousand and $ 483 thousand for the three months

ended March 31, 2024 and 2023, respectively.

As of March 31, 2024, we had $ 177 thousand of unrecognized share-based

payment award compensation cost related to unvested options, RSUs and PSUs as well as shares issuable under our ESPP, which may be adjusted

for future changes in forfeitures and is included as additional paid-in capital in the accompanying condensed consolidated balance sheets.

No tax benefit was realized due to a continued pattern of net losses.

The unrecognized compensation cost as of September 30, 2023 of $ 0.4 million is expected to be recognized as share-based payment award compensation over a weighted average period of 0.6 years.

Pursuant 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 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 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 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.

Pursuant 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 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 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 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 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

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 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.

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.

We reported revenue of ($ 0.1 ) million in the third quarter of 2023 due to changes in estimates of revenue amounting to ($ 0.3 ) million subject to royalty due to TXMD by Mayne.

Additionally, a portion of this adjustment is due to reallocations of revenue to other income (expense).

On a quarterly basis, we reallocate royalty revenue proportionately between operating revenue for the amounts related to our licensed intellectual property and other income for royalties related to intellectual property we sold.

We do not expect to pay any significant federal or state income taxes as a result of (i) the losses recorded during the nine months ended September 30, 2023 and 2022, (ii) additional losses expected for the remainder of 2023 or losses recorded in 2022, or (iii) net operating losses carry forwards from prior years.

We recorded a full valuation allowance of the net operating losses for the nine months ended September 30, 2023 and 2022.

Accordingly, there were no provisions for income taxes for the nine months ended September 30, 2023 and 2022.

Additionally, as of September 30, 2023 and December 31, 2022, we maintain a full valuation allowance for all deferred tax assets.

Income (Loss) per common share

The following table sets forth the computation of basic and diluted (loss) per common share (each adjusted to account for the Reverse Stock Split) for the periods presented (in thousands, except per share amounts):

Three Months Ended September 30,

Nine Months Ended September 30,

Net income (loss) from continuing operations

Net income (loss) from discontinued operations

Net income (loss)

We do not expect to pay any significant

federal or state income taxes as a result of (i) the losses recorded during the three months ended March 31, 2024 and 2023, (ii) additional

losses expected for the remainder of 2024 or losses recorded in 2023, or (iii) net operating losses carry forwards from prior years.

We recorded a full valuation

allowance of the net 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 March 31, 2024 and December 31, 2023, we maintain a full

valuation allowance for all deferred tax assets.

Income (Loss) per common

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

Net loss from continuing operations

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

Weighted average common shares for basic loss per common share

3 unchanged sentences

Income (loss) per common share, discontinued operations

Since we reported a net loss from continuing operations for the nine months ended September 30, 2023 and 2022, our potentially dilutive securities are deemed to be anti-dilutive, accordingly, there was no effect 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 the nine months ended September 30, 2023 and 2022.

The following table sets forth the outstanding securities as of the periods presented which were not included in the calculation of diluted earnings per common share during the respective nine months ended September 30, 2023 and 2022 (in thousands):

September 30, 2023

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 effect 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 the three months ended March 31, 2024 and 2023.

The following table sets forth

the outstanding securities as of the 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,

Stock options

Related parties

On August 23, 2022, we appointed Mr.

On August 23, 2022, we appointed

Justin Roberts as a director to fill a newly created vacancy on our Board of Directors.

Roberts was elected to serve as a director at our combined 2022 and 2023 Annual Meeting held on June 26, 2023.

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.

Roberts was elected to serve as a director

at our combined 2022 and 2023 Annual Meeting held on June 26, 2023.

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, 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, 2022, filed with the Securities and Exchange Commission on May 1, 2023, but he has elected not to receive any compensation for his service as a non-employee

director at this time.

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.

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.

also paid certain affiliates of Rubric approximately $ 3.0 million as a make-whole payment pursuant to the subscription agreements previously entered into between 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 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 subscription agreements

previously entered into between 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.

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.

Business concentrations

Assets and liabilities associated with the commercial business are classified as assets and liabilities of discontinued operations in our condensed consolidated balance sheets.

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.

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 classified as assets and liabilities of discontinued operations in our condensed consolidated

balance sheets.

Additional disclosures regarding discontinued operations are provided in Note 2.

For the three and nine months ended September 30, 2023, 100 % of license revenue related to Mayne Pharma and Theramex.

As of September 30, 2023, we had a royalty receivable of $ 2.7 million relating to the short-term portion of receivable from Mayne Pharma and Theramex and $ 19.1 million relating to the long-term portion of royalty receivable which includes royalties recognized from the minimum annual royalty that Mayne Pharma is obligated to pay to us under the Mayne License Agreement.

Subsequent events

On November 10, 2023, we delivered a drawdown notice (the “Notice”) to Rubric under the terms of the Subscription Agreement.

Pursuant to the Notice, we agreed to sell 877,192 shares of Common Stock to Rubric at a price per share of $ 2.28 , for total gross proceeds of approximately $ 2.0 million.

The settlement of the transaction is expected to occur on the third trading day following the delivery of the Notice in accordance with the terms of the Subscription Agreement.

For the three months ended March

31, 2024, 100 % of license revenue related to Mayne Pharma, Theramex and Knight.

As of March 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 annual royalty that

Mayne Pharma is obligated to pay to us under the Mayne License Agreement.

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-Q

Item 1. Financial Statements