What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-08-12 compared with 2025-05-13 · 173 added, 104 removed, 324 unchanged (46% of the section changed)

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

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, primarily collecting

royalties from our licensees.

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, primarily collecting royalties from our licensees.

We are no longer engaged in research and development or commercial operations.

On December 30, 2022

(the “Closing Date”), we completed a transaction (the “Mayne Transaction”) with Mayne Pharma LLC, a Delaware

limited liability company (“Mayne Pharma”) and subsidiary of Mayne Pharma Group Limited, an Australian public company

(“Mayne Pharma Group”), pursuant to which we (i) granted Mayne Pharma an exclusive license to commercialize IMVEXXY,

BIJUVA and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands (collectively, the “Licensed

Products”) in the 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.

On December 30, 2022 (the “Closing Date”),

we completed a transaction (the “Mayne Transaction”) with Mayne Pharma LLC, a Delaware limited liability company (“Mayne

Pharma”) and subsidiary of Mayne Pharma Group Limited, an Australian public company (“Mayne Pharma Group”), pursuant

to which we (i) granted Mayne Pharma an exclusive license to commercialize IMVEXXY, BIJUVA and prescription prenatal vitamin products

sold under the BocaGreenMD and vitaMedMD brands (collectively, the “Licensed Products”) in the United States and its possessions

and territories, (ii) assigned to Mayne Pharma our exclusive license to commercialize ANNOVERA (together with the Licensed Products, collectively,

the “Products”) in the United States and its possessions and territories, and (iii) sold certain other assets to Mayne Pharma

in connection therewith.

Pursuant to a License Agreement, dated December 4, 2022, between TherapeuticsMD

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

all results associated with former commercial operations have been reflected as discontinued operations in our consolidated financial

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

in our consolidated balance sheets.

See Note 2 – Discontinued Operations to the condensed consolidated financial statements included

in this Quarterly Report on Form 10-Q for further details.

all results associated with former commercial operations 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 consolidated balance sheets.

See Note 2 – Discontinued Operations to the condensed consolidated financial statements

included in this Quarterly Report on Form 10-Q for further details.

We also have license agreements with strategic partners to commercialize

IMVEXXY and BIJUVA outside of the U.S.

July 2018, we entered into the “Knight License Agreement” with Knight pursuant to which we granted Knight an exclusive license

to commercialize IMVEXXY and BIJUVA in Canada and Israel.

Knight obtained regulatory approval for IMVEXXY and BIJUVA and began commercialization

efforts in 2024.

In July 2018, we entered into the “Knight License Agreement” with Knight pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel.

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

In 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.

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of the allowance.

On April 8, 2025, the Company filed a lawsuit against Mayne Pharma

in the United States District Court for the District of Delaware (the “Mayne Lawsuit”) seeking damages for breach of contract,

breach of the implied covenant of good faith and fair dealing, fraudulent inducement, and unjust enrichment related to Mayne Pharma’s

actions in relation to the License Agreement and the Transaction Agreement, primarily relating to the net working capital allowances and

certain actions or inactions by Mayne Pharma relating thereto.

On April 8, 2025, the Company filed a lawsuit against Mayne

Pharma in the United States District Court for the District of Delaware (the “Mayne Lawsuit”) seeking damages for breach

of contract, breach of the implied covenant of good faith and fair dealing, fraudulent inducement, and unjust enrichment related to

Mayne Pharma’s actions in relation to the License Agreement and the Transaction Agreement, primarily relating to the net

working capital allowances and certain actions or inactions by Mayne Pharma relating thereto.

On June 20, 2025, the Company

filed an amended complaint against Mayne Pharma and on July 22, 2025, Mayne Pharma filed a motion to dismiss the Mayne Lawsuit.

On May 30, 2025, Mayne Pharma filed a lawsuit against the Company in

the United States District Court for the District of Delaware (the “Mayne Countersuit” and, together with the Mayne Lawsuit,

the “Mayne Lawsuits”) seeking damages for breach of contract and fraudulent inducement related to the Transaction Agreement.

On July 28, 2025, the Company filed a motion to dismiss the Mayne Countersuit.

As of June 30, 2025, the Company believed no additional

accrual was required for such claims, as the Company could not reasonably estimate a range of loss.

The outcome of this matter is uncertain at this point.

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the outcome of this matter to be intertwined with the resolution of the net working capital allowance for returns.

As of March 31, 2025, the Company also believes no additional accrual

As of June 30, 2025, the Company also believes no additional accrual

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

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

Mayne Pharma has also made certain indemnification demands under the

Transaction Agreement, which the Company disputes.

As of March 31, 2025, the Company believed no additional accrual was required for such

claims, as the Company could not reasonably estimate a range of loss.

Mayne Pharma has also made certain indemnification

demands under the Transaction Agreement, which the Company disputes.

As of June 30, 2025, the Company believed no additional accrual was

required for such claims, as the Company could not reasonably estimate a range of loss.

If Mayne Pharma’s sales of Licensed

Products grow more slowly than expected or decline, including as a result of Mayne Pharma Group’s pending sale to Cosette Pharmaceuticals,

(“Cosette”), if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than

our current estimates, if we are unsuccessful with future financings or the supply chains related to the third-party contract manufacturers

are worse than we anticipate, our existing cash reserves may be insufficient to satisfy our liquidity requirements.

The potential impact

of these factors in conjunction with the uncertainty of the capital markets raises substantial doubt about our ability to continue as

a going concern for the next twelve months from the issuance of these financial statements.

The accompanying consolidated financial statements

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

Products grow more slowly than expected or decline, including as a result of Mayne Pharma Group’s potential sale to Cosette Pharmaceuticals,

Inc., if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than our current estimates, if

the outcome of the Mayne Lawsuits is worse than we anticipate, if we are unsuccessful with future financings or the supply chains related

to the third-party contract manufacturers are worse than we anticipate, our existing cash reserves may be insufficient to satisfy our

liquidity requirements.

The potential impact of these factors in conjunction with the uncertainty of the capital markets raises substantial

doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

The accompanying condensed consolidated financial

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

Portfolio of our royalty-bearing products

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

Three months ended March 31, 2025 compared with three months ended

March 31, 2024

Three months ended June 30, 2025 compared with three months ended

June 30, 2024

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

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Selling, general and administrative

Impairment of long-lived assets (Note 4)

Depreciation and amortization

Total operating expenses

Loss from operations

Other income (expense):

Interest expense and other financing costs

Sublease income

Miscellaneous income

Total other income, net

Income (loss) from continuing operations before income taxes

Income tax benefit

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

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

Net income (loss)

We recorded $952 thousand in license revenue for the

second quarter of 2025, primarily from the Mayne License Agreement, an increase of $718 thousand, compared to $234 thousand in license

revenue for the second quarter of 2024.

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

Selling, general and administrative.

Selling, general and administrative expenses were $1,551 thousand for

the second quarter of 2025, a decrease of $31 thousand, reflecting minimal change from the second quarter of 2024.

Depreciation & amortization.

Depreciation and amortization

expense was $96 thousand for the second quarter of 2025, a decrease of $84 thousand, or 46.7%, compared to the second quarter of 2024.

This balance is entirely comprised of amortization of license rights and intangible assets.

Operating expenses .

Total operating expenses for the second quarter of 2025 were $1,647

thousand, a decrease of $1,376 thousand, or 45.5%, compared to the second quarter of 2024.

The change is primarily due to the impairment

recognized in the second quarter of 2024.

Loss from operations.

In the second quarter of 2025, we had a loss from operations of $695

thousand, as compared to a loss from operations of $2,789 thousand for the second quarter of 2024.

This change reflects the increase in

license revenues and the impairment recognized in 2024.

Other income,

During the second quarter of 2025, we had other income of $1,240 thousand compared

to other income of $1,739 thousand in the second quarter of 2024.

This change is primarily due to the gain on an early termination of

a sublease we recognized in 2024 partially offset by higher other income pertaining to Mayne’s royalty sales of ANNOVERA and amounts

received pursuant to a settlement pertaining to trademark infringement by a third party of certain trademarks owned by us.

to the settlement, we received a payment of $413 thousand in May 2025.

Net income (loss) from continuing operations .

For the second

quarter of 2025, we had net income of $551 thousand, or $0.05 per basic and diluted common share, compared to a net loss of $1,050 thousand,

or $0.09 per basic and diluted common share, for the second quarter of 2024.

Discontinued Operations – Net income from discontinued

operations was $6 thousand for the second quarter of 2025, compared to net loss from discontinued operations of $40 thousand for the second

quarter of 2024.

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

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

Six months ended June 30, 2025 compared with six months ended June

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

Six Months Ended

License revenue

Operating expenses:

Selling, general and administrative

Impairment of long-lived assets (Note 4)

Write-off of patents and trademarks

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Interest expense and other financing costs

Sublease income

Miscellaneous income

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(Loss) income from discontinued operations, net of income taxes

As part of our transformation and the Mayne License

Agreement, all results associated with former commercial operations have been reflected as discontinued operations in the condensed consolidated

financial statements for all periods presented.

We recorded $393 thousand in license revenue for the first quarter

of 2025, primarily from the Mayne License Agreement, an increase of $80 thousand, compared to $313 thousand in license revenue for the

first quarter of 2024.

We recorded $1,345 thousand in license revenue for

the first six months of 2025, primarily from the Mayne License Agreement, an increase of $798 thousand, compared to $547 thousand in license

revenue for the first six months of 2024.

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

Selling, general and administrative.

Selling, general and administrative

expenses were $1,081 thousand for the first quarter of 2025, a decrease of $241 thousand, or 18.2%, compared to the first quarter of 2024.

The change is due to the increased efficiencies realized as a royalty-based business.

Selling, general and administrative expenses were $3,042 thousand for

the first six months of 2025, a decrease of $257 thousand, or 7.8%, compared to the first six months of 2024.

The change is primarily

due to the final vesting of outstanding restricted stock units under our share-based compensation plans.

Depreciation & amortization.

Depreciation and amortization

expense was $95 thousand for the first quarter of 2025, a decrease of $38 thousand, or 28.6%, compared to the first quarter of 2024.

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

expense was $191 thousand for the first six months of 2025, a decrease of $122 thousand, or 39.0%, compared to the first six months of

This balance is entirely comprised of amortization of license rights and intangible assets.

Operating expenses .

Total operating expenses for the first quarter

of 2025 were $1,264 thousand, a decrease of $191 thousand, or 13.1%, compared to the first quarter of 2024.

The change is due to the increased

efficiencies realized as a royalty-based business.

Total operating expenses for the first six months of 2025 were $3,321

thousand, a decrease of $1,552 thousand, or 31.8%, compared to the first six months of 2024.

The change is primarily due to the impairment

recognized in 2024 and the final vesting of outstanding restricted stock units under our share-based compensation plans.

Loss from operations.

In the first quarter of 2025, we had a

loss from operations of $871 thousand, as compared to a loss from operations of $1,142 thousand for the first quarter of 2024.

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

Other income, net.

During the first quarter of 2025, we had

other income of $203 thousand compared to other income of $333 thousand in the first quarter of 2024.

The decrease was primarily attributable

to a decrease in royalty revenue from the licensing of Annovera to Mayne Pharma.

In the first six months of 2025, we had a loss from operations of $1,976

thousand, as compared to a loss from operations of $4,326 thousand for the first six months of 2024.

This change reflects the increase

in license revenues in 2025 and the impairment recognized in 2024.

Other income,

During the first six months of 2025, we had other income of $1,853

thousand compared to other income of $2,467 thousand in the first six months of 2024.

This change is primarily due to the gain on

an early termination of a sublease we recognized in 2024 partially offset by higher other income pertaining to Mayne’s royalty sales

of ANNOVERA, and amounts received pursuant to a settlement pertaining to trademark infringement by a third party of certain trademarks

Income tax benefit .

During the first quarter of 2025, we recorded

income tax benefit of $32 thousand for continuing operations, which is a result of refunds received from certain state tax filings.

the first quarter of 2024, we recorded no benefit for income taxes for continuing operations.

During the first six months of 2025, we

recorded income tax benefit of $32 thousand for continuing operations, which is a result of refunds received from certain state tax filings.

During the first six months of 2024, we recorded no benefit for income taxes for continuing operations.

Net loss from continuing operations .

For the first quarter of

2025, we had a net loss of $636 thousand, or $0.06 per basic and diluted common share, compared to a net loss of $809 thousand, or $0.07

per basic and diluted common share, for the first quarter of 2024.

For the first six

months of 2025, we had a net loss of $91 thousand, or $0.01 per basic and diluted common share, compared to a net loss of $1,859

thousand, or $0.16 per basic and diluted common share, for the first six months of 2024.

Discontinued Operations – Net loss from discontinued operations

was $17 thousand for the first quarter of 2025, compared to net income from discontinued operations of $75 thousand for the first quarter

was $11 thousand for the first six months of 2025, compared to net income from discontinued operations of $35 thousand for the first six

months of 2024.

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

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the transactions with Mayne Pharma.

As of March 31, 2025, we had cash and cash equivalents totaling $5,745 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.

As of June 30, 2025, we had cash and cash equivalents totaling $6,069 thousand.

We maintain cash at

financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured limits of $250 thousand per bank.

have never experienced any losses related to these funds.

Mayne Pharma License Agreement

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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 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.

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 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.

There were no drawdowns in the first quarter of 2025 and

There were no drawdowns in the first six months of 2025

See “Going Concern” above for further discussion related

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each of the periods (in thousands).

Three Months Ended

Net cash provided by (used in) continuing operating activities

Net cash (used in) provided by discontinued operations

Six Months Ended

Net cash provided by continuing operating activities

Net cash used in discontinued operations

Net increase in cash

Operating Activities from continuing operations .

For the first three months of 2025, net cash provided by operating

activities was $699 thousand, compared to net cash used in operating activities of $229 thousand for the first three months of 2024.

change reflects the increased efficiencies realized as a royalty-based business.

Net cash (used in) provided by discontinued operations.

cash used in operating activities from discontinued operations for the first three months of 2025 was $13 thousand as compared to net

cash provided by operating activities from discontinued operations of $240 thousand for the first three months of 2024.

This change relates

primarily to a decreased level of activities associated with our discontinued operations.

For the first

six months of 2025, net cash provided by operating activities was $1,080 thousand, compared to net cash provided by operating activities

of $1,224 thousand for the first six months of 2024.

The decrease was primarily driven by lower non-cash adjustments, notably the absence

of impairment charges on long-lived assets and reduced depreciation, amortization, and share-based compensation expense in 2025, which

is partially offset by the improvement in net loss from continuing operations.

Net cash used in discontinued operations.

Net cash used in operating

activities from discontinued operations for the first six months of 2025 was $70 thousand as compared to net cash used in operating activities

from discontinued operations of $319 thousand for the first six months of 2024.

This change relates primarily to a decreased level of

activities associated with our discontinued operations.

For additional details, see the condensed consolidated statements of

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

March 31, 2025, we had a royalty receivable of $2,777 thousand relating to the short-term portion of receivable from Mayne Pharma and

June 30, 2025, we had a royalty receivable of $3,433 thousand relating to the short-term portion of receivable from Mayne Pharma and $14,840

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

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Accordingly, we had no liabilities recorded for these provisions

as of March 31, 2025 and December 31, 2024.

as of June 30, 2025 and December 31, 2024.

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

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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