What changed in this filing

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Item 2. Management’s Discussion and Analysis

2024-11-12 compared with 2024-08-12 · 182 added, 174 removed, 327 unchanged (52% of the section changed)

Management’s discussion and analysis of financial

condition and results of operations

Management’s discussion and analysis of

financial condition and results of operations

The following discussion should be read in conjunction with our 2023

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Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of our 2023

10-K Report under the heading “Risk Factors.” We assume no obligation to revise or update any forward-looking statements

for any reason, except as required by law.

10-K Report under the heading “Risk Factors.” We assume no obligation to revise or update any forward-looking statements for

any reason, except as required by law.

Certain amounts in the following discussion may not add due to rounding,

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For example, statements regarding our operations, financial position, debt position, liquidity, business strategy, and other plans and

objectives for future operations, and assumptions and predictions about future cost reduction strategies, expenses and royalties are

all forward-looking statements.

objectives for future operations, and assumptions and predictions about future cost reduction strategies, expenses and royalties are all

forward-looking statements.

These statements are generally accompanied by words such as “intend,” “anticipate,”

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and are subject to risks and uncertainties, many of which are outside of our control.

Factors that could cause or contribute to such

differences include, but are not limited to, our liquidity requirements, supply chain issues, management transitions, risks related to

our licensing agreements, market and general economic factors, and the other risks discussed in Part I, Item 1A of our 2023 10-K Report,

as updated and supplemented by Part II, Item 1A of this 10-Q Report.

Factors that could cause or contribute to such differences

include, but are not limited to, our liquidity requirements, supply chain issues, management transitions, risks related to our licensing

agreements, market and general economic factors, and the other risks discussed in Part I, Item 1A of our 2023 10-K Report, as updated

and supplemented by Part II, Item 1A of this 10-Q Report.

TherapeuticsMD was previously a women’s healthcare company with

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certain further adjustments, including as described below (the “Minimum Annual Royalty”).

Upon the expiry of the 20-year

royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license

for the Licensed Products.

Upon the expiry of the 20-year royalty

term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for

the Licensed Products.

Pursuant to a Transaction Agreement, dated December 4, 2022, between

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the Transferred Assets 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.

(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

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, 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.

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.

This action represented a shift in our business and therefore, the

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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.

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 July 2018, we entered into a license and supply agreement (the “Knight License Agreement”) with Knight Therapeutics Inc.

(“Knight”) pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel.

Knight obtained regulatory approval for IMVEXXY and BIJUVA and began commercialization efforts in 2024.

In September 2019, we entered into an exclusive license and supply agreement (the “Theramex License Agreement”) with Theramex HQ UK Limited (“Theramex”) to commercialize IMVEXXY and BIJUVA outside of the U.S., excluding Canada and Israel.

In 2021, Theramex secured regulatory approval for BIJUVA in certain European countries and began commercialization efforts in those countries.

In connection with our transformation into a pharmaceutical royalty

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

As of December 31, 2023 and June 30, 2024,

As of December 31, 2023 and September 30,

2024, we employed one full-time employee primarily engaged in an executive position.

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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,

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.

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under the Transaction Agreement.

In September 2023, we revised certain accrual estimates including

increasing our working capital adjustment accrual from $3.5 million to $5.5 million for amounts anticipated to be owed under

the Transaction Agreement.

In December 2023, we made a $5.5 million payment to Mayne Pharma to settle certain working capital amounts

that were required to be trued-up shortly after the Closing Date, excluding the allowance for returns, allowance for payer rebates, and

allowance for wholesale distributor fees.

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

In December 2023, we made a $5.5 million payment to Mayne Pharma to settle certain working capital amounts that were required

to be trued-up shortly after the Closing Date, excluding the allowance for returns, allowance for payer rebates, and allowance for wholesale

distributor fees.

The Company’s estimate of the allowance for payer rebates and

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distributor fees which differed significantly from the Company’s estimate of the allowances.

The Company and Mayne Pharma intend

The Company intends

to resolve this matter through the dispute resolution process outlined in the Transaction Agreement.

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associated with Mayne Pharma’s allowance calculation for payer rebates and wholesale distributor fees.

As of June 30, 2024, the Company believes no additional accrual is

required for amounts that may be owed for the allowance for returns under the Transaction Agreement.

The Company has not recorded any

contingent gains or receivables for any such allowances.

Management continues to monitor the unresolved and pending net working capital

items as changes to estimated amounts owed or amounts due from Mayne Pharma may be material.

In addition, the Company has received information from Mayne

Pharma pertaining to the allowance for returns that differs from the Company’s estimate of the allowance.

As of September 30,

2024, the Company believes no additional accrual is required for amounts that may be owed for the allowance for returns under the

Transaction Agreement, as the Company cannot reasonably estimate a range of loss.

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

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.

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.

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human use outside of the U.S., except for Canada and Israel.

As of June 30, 2024, no IMVEXXY sales had been made through the Theramex

As of September 30, 2024, no IMVEXXY sales had been made through the Theramex

licensing agreement.

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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

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).

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are based on, and relate to, our continuing operations.

Three months ended June 30, 2024 compared with three months ended

June 30, 2023

The following table sets forth the results of our operations

(in thousands):

Three months ended September 30, 2024 compared with three months

ended September 30, 2023

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

Three Months Ended

September 30,

License and service revenue

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statements for all periods presented.

We recorded $234 thousand in license revenue for the second quarter

of 2024, primarily from the Mayne License Agreement, a decrease of $203 thousand, or 46.5%, compared to $437 thousand in license

revenue for the second quarter of 2023.

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

We recorded $547 thousand in license revenue for the third quarter of

2024, primarily from the Mayne License Agreement, an increase of $600 thousand, compared to $(53) thousand in license revenue for

the third quarter of 2023.

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

Reported negative license

revenue of ($53) thousand in the third quarter of 2023 was due to product sales adjustments reported by our licensees.

Operating expenses .

Total operating expenses for the second

quarter of 2024 were $2,674 thousand, a decrease of $235 thousand, or 8.1%, compared to the second quarter of 2023.

This decrease was

due to the further optimization of our business through the reduction of costs following our transition to a royalty-based business, and

is partially off-set by the patent impairment recognized in the second quarter of 2024.

Total operating expenses for the third quarter

of 2024 were $1,406 thousand, a decrease of $314 thousand, or 18.3%, compared to the third quarter of 2023.

This decrease was due to the

further optimization of our business through the reduction of costs following our transition to a royalty-based business.

Selling, general and administrative.

Selling, general and administrative

expenses were $1,233 thousand for the second quarter of 2024, a decrease of $1,548 thousand, or 55.7%, compared to the second quarter

expenses were $1,310 thousand for the third quarter of 2024, a decrease of $280 thousand, or 17.6%, compared to the third quarter of 2023.

This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.

Depreciation & amortization.

Depreciation and amortization

expense was $180 thousand for the second quarter of 2024, an increase of $52 thousand, or 40.6%, compared to the second quarter of 2023.

Depreciation and

amortization expense was $96 thousand for the third quarter of 2024, a decrease of $34 thousand, or 26.2%, compared to the third

quarter of 2023.

In the 2024 period, this balance is entirely comprised of amortization of license rights and intangible assets.

Loss from operations.

In the second quarter of 2024, we had

a loss from operations of $2,440 thousand, as compared to a loss from operations of $2,472 thousand for the second quarter of 2023.

In the third quarter of 2024, we had a

loss from operations of $859 thousand, as compared to a loss from operations of $1,773 thousand for the third quarter of 2023.

change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.

Other income (expense), net .

During the second quarter of 2024,

we had other income of $1,390 thousand compared to other income of $58 thousand in the second quarter of 2023.

The difference is mainly

due to a $1,250 thousand one-time consideration the Company received from its sublessee on its early termination on the sublease, which

was recognized in the second quarter of 2024.

Royalties reported as other income for intellectual property licensed by us totaled approximately

$108 thousand in the second quarter of 2024.

During the third quarter of

2024, we had other income of $292 thousand compared to other income of $339 thousand in the third quarter of 2023.

Other income in

the 2024 period was mainly comprised of interest income, while other income in the prior year period was mainly comprised of

Provision for income taxes .

During the second quarter of 2024

During the third quarter of 2024

and 2023, we recorded no provision for income taxes for continuing operations.

Net loss from continuing operations .

For the second quarter

of 2024, we had a net loss of $1,050 thousand, or $0.09 per basic and diluted common share, compared to a net loss of $2,414 thousand,

or $0.24 per basic and diluted common share, for the second quarter of 2023.

For the third quarter of

2024, we had a net loss of $567 thousand, or $0.05 per basic and diluted common share,

compared to a net loss of $1,434 thousand, or $0.13 per basic and diluted common share, for the third quarter of 2023.

Discontinued Operations – Net loss from discontinued operations

was $40 thousand for the second quarter of 2024, compared to a net loss from discontinued operations of $0 thousand for the second quarter

Six months ended June 30, 2024 compared with six months ended June

was $42 thousand for the third quarter of 2024, compared to a net loss from discontinued operations of $1,944 thousand for the third quarter

Nine months ended September 30, 2024 compared with nine months ended

September 30, 2023

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

Six Months Ended

Nine Months Ended

September 30,

License and service revenue

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Net loss from continuing operations

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

Loss from discontinued operations, net of income taxes

As part of our transformation and the Mayne License

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statements for all periods presented.

We recorded $547 thousand in license revenue for the first six months

of 2024, primarily from the Mayne License Agreement, a decrease of $306 thousand, or 35.9%, compared to $853 thousand in license

revenue for the first six months of 2023.

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

We recorded $1,094 thousand in

license revenue for the first nine months of 2024, primarily from the Mayne License Agreement, an increase of $294

thousand, or 36.8%, compared to $800 thousand in license revenue for the first nine months of 2023.

The increase is primarily attributable

to changes in sales of licensed products.

Operating expenses .

Total operating expenses for the first

six months of 2024 were $4,129 thousand, a decrease of $1,863 thousand, or 31.1%, compared to the first six months of 2023.

Total operating expenses for the first nine

months of 2024 were $5,535 thousand, a decrease of $2,177 thousand, or 28.2 %, compared to the first nine months of 2023.

This decrease

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Selling, general and administrative

expenses were $2,555 thousand for the first six months of 2024, a decrease of $3,282 thousand, or 56.2%, compared to the first six months

expenses were $3,865 thousand for the first nine months of 2024, a decrease of $3,562 thousand, or 48.0%, compared to the first nine months

This decrease was due to the increased efficiencies realized following our transition to a royalty-based business.

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Depreciation and amortization

expense was $313 thousand for the first six months of 2024, an increase of $158 thousand, or 101.9%, compared to the first six months

expense was $409 thousand for the first nine months of 2024, an increase of $124 thousand, or 43.5%, compared to the first nine months

In the 2024 period, this balance is entirely comprised of amortization of license rights and intangible assets.

Loss from operations.

In the first six months of 2024, we had

a loss from operations of $3,582 thousand, as compared to a loss from operations of $5,139 thousand for the first six months of 2023.

In the first nine months of 2024, we had

a loss from operations of $4,441 thousand, as compared to a loss from operations of $6,912 thousand for the first nine months of 2023.

This change reflects the streamlining of our business and increased efficiencies realized as a royalty-based business.

Other income, net .

During the first six months of 2024, we had

other income of $1,723 thousand compared to other income of $415 thousand in the first six months of 2023.

The difference is mainly due

to a $1,250 thousand one-time consideration the Company received from its sublessee on its early termination on the sublease, which was

recognized in the second quarter of 2024.

Royalties reported as other income for intellectual property licensed by us totaled approximately

$404 thousand in the first six months of 2024.

During the first nine months of 2024, we

had other income of $2,015 thousand compared to other income of $754 thousand in the first nine months of 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.

Royalties reported as other income for intellectual

property licensed by us totaled approximately $660 thousand in the first nine months of 2024.

Provision for income taxes .

During the first six months of

During the first nine months of

2024 and 2023, we recorded no provision for income taxes for continuing operations.

Net loss from continuing operations .

For the first six months

of 2024, we had a net loss of $1,859 thousand, or $0.16 per basic and diluted common share, compared to a net loss of $4,724 thousand,

or $0.47 per basic and diluted common share, for the first six months of 2023.

Discontinued Operations - Net income from discontinued operations

was $35 thousand for the first six months of 2024, compared to a net loss from discontinued operations of $1,293 thousand for the first

six months of 2023.

For the first nine months

of 2024, we had a net loss of $2,426 thousand , or $0.21

per basic and diluted common share, compared to a net loss of $6,158 thousand, or $0.60 per basic and diluted common share, for

the first nine months of 2023.

Discontinued Operations - Net loss from discontinued operations

was $7 thousand for the first nine months of 2024, compared to a net loss from discontinued operations of $3,237 thousand for the first

nine months of 2023.

This change reflects the continued wind-down of our legacy business.

For additional information, see Note 2 - Discontinued Operations,

in the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

For additional information, see Note 2 - Discontinued Operations, in

the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report.

Liquidity and capital resources

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divestiture of our former subsidiary vitaCare, and the transactions with Mayne Pharma.

As of June 30, 2024, we had cash and cash equivalents

totaling $5,232 thousand.

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

insured limits of $250 thousand per bank.

As of September 30, 2024, we had cash and cash

equivalents totaling $5,047 thousand.

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

Corporation insured limits of $250 thousand per bank.

We have never experienced any losses related to these funds.

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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

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

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.

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.

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.

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.

Subscription Agreement with Rubric Capital Management LP

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We received gross proceeds of $2.0 million from the drawdown, before expenses.

Managed Client Agreement with IWG

On September 30, 2024 (the “Commencement Date”), we entered

into a Managed Client Agreement (the “Managed Client Agreement”) with RGN-MCA Florida VI, LLC (“IWG”) pursuant

to which IWG agreed to provide managed services for flexible workspaces under the “HQ” brand for 21,330 square feet of our

office spaces located at 951 Yamato Road, Boca Raton, Florida 33431 (the “Premises”).

The Managed Client Agreement is subject

to termination by us or IWG if either party does not approve the specification, plans and drawings for the fit out of the Premises on

or before the date that is 120 days after the Commencement Date.

See “Going Concern” above for further discussion related

to our ability to generate and obtain adequate amounts of cash to meet our liquidity needs and our plans for to satisfy our such needs

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 these financial statements.

As a result, there is substantial doubt about our ability to continue as a going concern for the

next twelve months from the issuance of these financial statements.

The following table reflects the major categories of cash flows for

each of the periods (in thousands).

Six Months Ended

Nine Months Ended

September 30,

Net cash provided by (used in) continuing operating activities

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For the first

six months of 2024, net cash provided by operating activities was $1,224 thousand, compared to net cash used in operating activities of

$12,093 thousand for the first six months of 2023.

This change of $13,317 thousand or 110.1%, was primarily due to a $2,865 thousand decrease

nine months of 2024, net cash provided by operating activities was $1,153 thousand, compared to net cash used in operating activities

of $18,121 thousand for the first nine months of 2023.

This change of $19,274 thousand was primarily due to a $3,732 thousand decrease

in our net loss from continuing operations following our transition from a manufacturing and commercialization business to a royalty-based

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Financing Activities from continuing operations.

first six months of 2024, there was no cash received from financing activities, compared to net cash received from financing activities

of $1,150 thousand for the first six months of 2023, reflecting the sale of common stock during the first six months of 2023.

first nine months of 2024, there was no cash received from financing activities, compared to net cash received from financing activities

of $1,149 thousand for the first nine months of 2023, reflecting the sale of common stock during the first nine months of 2023.

Net cash used in discontinued operations.

Net cash used in

operating activities from discontinued operations for the first six months of 2024 was $319 thousand as compared to net cash used in

operating activities of $24,645 thousand for the first six months of 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 condensed consolidated statements

of cash flows in Item 1, Financial Statements, appearing elsewhere in this 10-Q Report.

Net cash used in operating

activities from discontinued operations for the first nine months of 2024 was $433 thousand as compared to net cash used in operating

activities of $22,179 thousand for the first nine months of 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 condensed consolidated statements of

cash flows in Item 1, Financial Statements, appearing elsewhere in this 10-Q Report.

Other liquidity measures

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

As of June 30,

2024, we had a royalty receivable of $2,778 thousand relating to the short-term portion of receivable from Mayne Pharma and $17,224 thousand

relating to the long-term portion of royalty receivable which includes royalties recognized from the Minimum Annual Royalty.

1 Business, basis of presentation, new accounting standards and summary of significant accounting policies (Revenue Recognition) to the

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

On December 30, 2022, Mayne Pharma acquired our

inventory balance of approximately $6.6 million, which is subject to certain net working capital adjustments.

As of September

30, 2024, we had a royalty receivable of $3,160 thousand relating to the short-term portion

of receivable from Mayne Pharma and $16,610 thousand 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 our 2023 10-K Report.

On December 30, 2022, Mayne Pharma acquired our inventory

balance of approximately $6.6 million, which is subject to certain net working capital adjustments.

Contractual obligations, off-balance sheet arrangements and purchase

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Accordingly, we had no liabilities recorded for these provisions

as of June 30, 2024 and December 31, 2023.

as of September 30, 2024 and December 31, 2023.

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

or events that may result in contingent liability.

These generally relate to lawsuits, claims, environmental actions, or the actions

of various regulatory agencies.

These generally relate to lawsuits, claims, environmental actions, or the actions of

various regulatory agencies.

We consult with counsel and other appropriate experts to assess the claim.

If, in our opinion, we have

incurred a probable loss as set forth by U.S.

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

in our condensed consolidated financial statements.

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

condensed consolidated financial statements.

Critical accounting policies and estimates

11 unchanged sentences

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.

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-Q

Item 2. Management’s Discussion and Analysis