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Item 2. Management’s Discussion and Analysis

2026-05-12 compared with 2025-11-12 · 211 added, 251 removed, 253 unchanged (65% of the section changed)

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The following discussion should be read in conjunction with our 2025

Annual Report on Form 10-K (“2024 10-K Report”), and the condensed consolidated financial statements and related notes in

Item 1, Financial Statements, appearing elsewhere in this Quarterly Report on Form 10-Q (“10-Q Report”).

The following discussion

may contain forward-looking statements, and our actual results may differ materially from the results suggested by these forward-looking

Factors that might cause such differences include, but are not limited to, those discussed in Part I, Item 1A of our 2024

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.

Annual Report on Form 10-K/A, filed with the SEC on April 1, 2026 (“2025 10-K/A Report”), and the condensed consolidated financial

statements and related notes in Item 1, Financial Statements, appearing elsewhere in this Quarterly Report on Form 10-Q (“10-Q Report”).

The following discussion may contain forward-looking statements, and our actual results may differ materially from the results suggested

by these forward-looking statements.

Factors that might cause such differences include, but are not limited to, those discussed in Part

I, Item 1A of our 2025 10-K/A 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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agreements, risks related to the pursuit of strategic alternatives, market and general economic factors, and the other risks discussed

in Part I, Item 1A of our 2024 10-K Report, as updated and supplemented by Part II, Item 1A of this 10-Q Report.

in Part I, Item 1A of our 2025 10-K/A Report, as updated 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.

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.

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

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 (“Mayne Pharma Group”),

in which we and our subsidiaries (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.

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,

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in the United States and its possessions and territories.

Pursuant to the Mayne License Agreement, Mayne Pharma will pay us one-time,

Under the Mayne License Agreement, Mayne Pharma agreed to 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

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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

Mayne Pharma agreed to 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

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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 (the “Minimum Annual Royalty”).

Upon the expiry of the 20-year royalty

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

the Licensed Products.

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

TherapeuticsMD and Mayne Pharma (the “Transaction Agreement”), we sold to Mayne Pharma, at closing, certain assets for Mayne

Pharma to commercialize the Products in the United States, including our exclusive license from the Population Council to commercialize

ANNOVERA (the “Transferred Assets”).

agreed to pay us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject

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

Upon the expiry of the 20-year

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

for the Licensed Products.

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 us for the purchase of

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.

the Transferred Assets under the Transaction Agreement and the grant of the licenses under the Mayne License Agreement was (i) a cash

payment of $140.0 million at closing, (ii) a cash payment of approximately $12.1 million at closing for the acquisition of net working

capital as determined in accordance with the Transaction Agreement and subject to certain adjustments, (iii) a cash payment of approximately

$1.0 million at closing for prepaid royalties in connection with the Mayne License Agreement Amendment (as defined below) and (iv) the

right to receive the contingent consideration set forth in the Mayne License Agreement, as amended.

The acquisition of net working capital

was determined in accordance with the Transaction Agreement and included significant estimates which could change materially for a period

of up to two years following the Closing Date.

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

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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

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.

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financial statements.

Liabilities associated with the commercial business are classified as liabilities of discontinued operations

in our consolidated balance sheets.

Liabilities associated with the commercial business are classified as liabilities of discontinued operations in

our consolidated balance sheets.

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

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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.

December 2024, we transferred the right to commercialize IMVEXXY and BIJUVA in Israel from Knight to Theramex.

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 December 2024, we transferred the right to commercialize

IMVEXXY and BIJUVA in Israel from Knight to Theramex.

We continue to evaluate a variety of strategic alternatives that may

include, but not be limited to, an acquisition, merger, other business combination, sale of assets, or other strategic transactions.

we are exploring potential strategic alternatives, there can be no assurance of a transaction, a successful outcome of these efforts,

or the form or timing of any such outcome.

We have not set a timetable for completion of this exploration process and do not intend to

disclose further developments unless and until required by applicable laws or regulations or as otherwise deemed appropriate by our Board

of Directors or Chief Executive Officer.

Although we are exploring potential strategic alternatives, there can be no assurance of a transaction, a successful outcome of these

efforts, or the form or timing of any such outcome.

We have not set a timetable for completion of this exploration process and do not

intend to disclose further developments unless and until required by applicable laws or regulations or as otherwise deemed appropriate

by our Board of Directors or Chief Executive Officer.

Going concern

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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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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 drawdowns at our election.

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

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We received gross proceeds

of $1.15 million from the draw down, before expenses.

of $1.15 million from the drawdown, before expenses.

On November 15, 2023, Rubric drew down an additional 877,192 shares of Common Stock

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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

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 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.

Our 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, we received Mayne Pharma’s calculation of the net working capital allowances for payer rebates and wholesale distributor

fees pursuant to the Transaction Agreement, which differed significantly from our estimate of the allowances.

We continue to believe our

estimated allowances for payer rebates and wholesale distributor fees are reasonable.

In August 2024 and in February 2025, we also received

information from Mayne Pharma pertaining to the net working capital allowance for returns that differs significantly from our estimate

of the allowance.

On April 8, 2025, we 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, we 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 us 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,

we filed a motion to dismiss the Mayne Countersuit.

As of September 30, 2025, we believed no additional accrual was required for such

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

In February 2024, we received Mayne Pharma’s calculation of the net working capital allowances for payer rebates and wholesale

distributor fees pursuant to the Transaction Agreement, which differed significantly from our estimate of the allowances.

to believe our estimated allowances for payer rebates and wholesale distributor fees are reasonable.

In August 2024 and in February 2025,

we also received information from Mayne Pharma pertaining to the net working capital allowance for returns that differs significantly

from our estimate of the allowance.

On April 8, 2025, we 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, we filed an amended complaint against Mayne Pharma and on

July 22, 2025, Mayne Pharma filed a motion to dismiss the Mayne Lawsuit.

On March 23, 2026, a magistrate judge recommended that the court

grant-in-part and deny-in-part Mayne Pharma’s motion to dismiss.

The magistrate judge recommended granting Mayne’s motion

to dismiss our claims for breach of the covenant of good faith and fair dealing, certain of our breach of contract claims and our claim

for fraudulent inducement, but recommended the court grant us leave to amend the fraudulent inducement claim.

The magistrate judge recommended

denying Mayne’s motion to dismiss our other claims.

The magistrate judge further recommended the court stay the Mayne Lawsuit while

the parties submit the net working capital claims to a dispute resolution process.

On April 6, 2026, we filed objections to certain of

the magistrate judge’s recommendations.

On May 30, 2025, Mayne Pharma filed the Mayne Countersuit seeking damages

for breach of contract and fraudulent inducement related to the Transaction Agreement.

As part of the Mayne Countersuit, Mayne Pharma

also made certain indemnification demands under the Transaction Agreement, which we dispute.

On July 28, 2025, we filed a motion to dismiss

the fraudulent inducement claim in the Mayne Countersuit.

On March 23, 2026, a magistrate judge recommended that the court grant our motion

to dismiss Mayne Pharma’s claim for fraudulent inducement, but recommended the court deny our motion to dismiss Mayne Pharma’s

other claims.

As of March 31, 2026, we believed no additional accrual was required for such claims, as we could not reasonably estimate

a range of loss.

The outcome of this matter is uncertain at this point.

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with the resolution of the net working capital allowance for returns.

As of September 30, 2025, we also believed no additional accrual was

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

We have 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.

As of March 31, 2026, we also believed no additional accrual was required

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

We have 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.

Mayne Pharma has also made certain indemnification demands under the

Transaction Agreement, which we dispute.

As of September 30, 2025, we believed no additional accrual was required for such claims, as

we could not reasonably estimate a range of loss.

As of March 31, 2026, we believed no additional accrual was required for such claims, as we

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 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.

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 raise substantial

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dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy due to menopause.

As part of the FDA’s

approval of IMVEXXY, we committed to conduct a post-approval observational study to evaluate the risk of endometrial cancer in post-menopausal

women with a uterus who use a low-dose vaginal estrogen unopposed by a progestogen.

On December 30, 2022, we granted an exclusive license to commercialize

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we granted Knight an exclusive license to commercialize IMVEXXY in Canada and Israel.

We entered into the Theramex License Agreement with

Theramex pursuant to which we granted Theramex an exclusive license to commercialize IMVEXXY for human use outside of the U.S., except

for Canada and Israel.

We entered into the Theramex License Agreement

with Theramex pursuant to which we granted Theramex an exclusive license to commercialize IMVEXXY for human use outside of the U.S.,

except for Canada and Israel.

In December 2024, we transferred the right to commercialize IMVEXXY in Israel from Knight to Theramex.

As part of the FDA’s approval of IMVEXXY, we committed to conduct

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

vaginal estrogen unopposed by a progestogen.

The FDA has also asked the sponsors of other vaginal estrogen products

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liabilities of discontinued operations in our condensed consolidated balance sheets.

Additional disclosures regarding discontinued

operations are provided in Note 2 to the condensed consolidated financial statements included in this Quarterly Report.

Additional disclosures regarding discontinued operations

are provided in Note 2 to the condensed consolidated financial statements included in this Quarterly Report.

The discussion below, and the revenues and expenses discussed below,

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

Three months ended September 30, 2025 compared with three months

ended September 30, 2024

Three months ended March 31, 2026 compared with three months ended

March 31, 2025

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

Three Months Ended

September 30,

License revenue

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Loss from operations

Other income (expense) :

Interest expense and other financing costs

Other income:

Interest income, net

Sublease income

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

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

Loss from discontinued operations, net of income taxes

Net income (loss)

We recorded $784 thousand in license revenue for the

third quarter of 2025, primarily from the Mayne License Agreement, an increase of $237 thousand, compared to $547 thousand in license

revenue for the third quarter of 2024.

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

General and administrative.

General and administrative expenses

were $1,518 thousand for the third quarter of 2025, a decrease of $67 thousand, reflecting minimal change from the third quarter of 2024.

Depreciation and amortization.

Depreciation and amortization

expense was $96 thousand for the third quarter of 2025, consistent to the third quarter of 2024.

This balance is entirely comprised of

amortization of license rights and intangible assets.

Operating expenses .

Total operating expenses for the third quarter

of 2025 were $1,646 thousand, a decrease of $35 thousand, reflecting minimal change from the third quarter of 2024.

Loss from operations.

In the third quarter of 2025, we had a

loss from operations of $862 thousand, as compared to a loss from operations of $1,134 thousand for the third quarter of 2024.

reflects the increase in license revenues in 2025.

Other income, net.

During the third quarter of 2025, we had

other income of $912 thousand compared to other income of $567 thousand in the third quarter of 2024, reflecting an increase in sublease

income and higher other income pertaining to Mayne’s royalty sales of ANNOVERA in the third quarter of 2025.

Income (loss) from continuing operations .

For the third quarter

of 2025, we had net income of $50 thousand, compared to a net loss of $567 thousand for the third quarter of 2024.

Discontinued Operations – Income from discontinued operations

was $102 thousand for the third quarter of 2025, compared to a loss from discontinued operations of $42 thousand for the third quarter

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

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

Nine months ended September 30, 2025 compared with nine months ended

September 30, 2024

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

Nine Months Ended

September 30,

License revenue

Operating expenses:

We recorded $724 thousand in license revenue for the first quarter

of 2026, an increase of $331 thousand, compared to $393 thousand in license revenue for the first quarter of 2025.

The increase is attributable

to changes in sales of licensed products.

General and administrative.

Impairment of long-lived assets (Note 4)

General and administrative expenses were $1,353 thousand for the first

quarter of 2026, a decrease of $138 thousand or 9.3%, compared to $1,491 thousand for 2025.

The decrease is primarily attributable to

lower professional fees and share-based compensation costs.

Write-off of patents.

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

Loss from continuing operations before income taxes

Income tax benefit

Loss from continuing operations, net of income taxes

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

Net Income (loss)

We recorded $2,129 thousand in license revenue for

the first nine months of 2025, primarily from the Mayne License Agreement, an increase of $1,035 thousand, compared to $1,094 thousand

in license revenue for the first nine months of 2024.

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

General and administrative.

General and administrative expenses

were $4,560 thousand for the first nine months of 2025, a decrease of $324 thousand.

The change is primarily due to the final vesting

of outstanding restricted stock units under our share-based compensation plans.

We have no write-off for abandoned patents for the first quarter of

2026, compared to an $88 thousand written off for abandoned pending patents in the first quarter of 2025.

Depreciation and amortization.

Depreciation and amortization

expense was $287 thousand for the first nine months of 2025, a decrease of $122 thousand.

This balance is entirely comprised of amortization

of license rights and intangible assets.

expense was $94 thousand for the first quarter of 2026, compared to $95 thousand for the first quarter of 2025.

This balance is entirely

comprised of amortization of license rights and intangible assets.

Operating expenses .

Total operating expenses for the first nine

months of 2025 were $4,967 thousand, a decrease of $1,587 thousand.

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.

Total operating expenses for the first quarter

of 2026 were $1,447 thousand, a decrease of $227 thousand, or 13.6%, compared to $1,674 thousand for the first quarter of 2025.

is primarily attributable to the absence of write-off expense recognized in 2025 as well as lower professional fees and share-based compensation

Loss from operations.

In the first nine months of 2025, we had a loss from operations of

$2,838 thousand, as compared to a loss from operations of $5,460 thousand for the first nine months of 2024.

This change reflects the

increase in license revenues in 2025 and the absence of the impairment recognized in 2024.

In the first quarter of 2026, we had a

loss from operations of $723 thousand, as compared to a loss from operations of $1,281 thousand for the first quarter of 2025.

reflects the increase in revenue from licensed product sales, the absence of write-off expense recognized, and lower professional fees.

Other income, net.

During the first nine months of 2025, we

had other income of $2,765 thousand compared to other income of $3,034 thousand in the first nine months of 2024.

This change is

primarily due to higher other income pertaining to Mayne’s royalty sales of ANNOVERA in 2024.

Income tax benefit .

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

Loss from continuing operations .

For the first nine months of

2025, we had a loss of $73 thousand compared to a loss of $2,426 thousand for the first nine months of 2024.

Discontinued Operations –Income from discontinued operations

was $91 thousand for the first nine months of 2025, compared to a loss from discontinued operations of $7 thousand for the first nine

months 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.

During the first quarter of 2026, we had other income of $826 thousand compared

to other income of $613 thousand in the first quarter of 2025, reflecting an increase in sublease income and higher other income pertaining

to Mayne’s royalty sales of ANNOVERA in the first quarter of 2026.

Income (loss) from continuing operations .

For the first quarter

of 2026, we had net income of $103 thousand, compared to a net loss of $636 thousand for the first quarter of 2025.

Discontinued Operations – Net loss from discontinued

operations was $8 thousand for the first quarter of 2026, compared to a loss from discontinued operations of $17 thousand for the first

quarter of 2025.

For additional information, see Note 2 - Discontinued Operations,

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

Liquidity and capital resources

Our primary use of cash is to fund our continued operations.

funded our operations primarily through public offerings of our common stock and private placements of equity and debt securities, and

the transactions with Mayne Pharma.

As of September 30, 2025, we had cash and cash equivalents totaling $7,115 thousand.

We maintain cash

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

funded our operations primarily through revenue from licensed royalties, public offerings of our common stock and private placements of

equity and debt securities, and the transactions with Mayne Pharma.

As of March 31, 2026, we had cash and cash equivalents totaling $8,419

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 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 agreed to 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 agreed to 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 agreed to 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 nine months of 2025

There were no drawdowns in the first quarter of 2026 and

See “Going Concern” above for further discussion related

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each of the periods (in thousands).

Nine Months Ended

September 30,

Three Months Ended

Net cash provided by continuing operating activities

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Operating Activities from continuing operations .

For the first

nine months of 2025, net cash provided by operating activities was $2,079 thousand, compared to net cash provided by operating activities

of $1,153 thousand for the first nine months of 2024.

The increase was primarily driven by the significant reduction in loss from continuing

operations and favorable changes in accrued expenses and other current liabilities, partially offset by lower non-cash adjustments such

as decreased amortization and the absence of long-lived asset impairment charges in 2025.

For the first quarter of 2026, net cash provided by operating activities

was $944 thousand, compared to net cash provided by operating activities of $699 thousand for the first quarter of 2025.

was primarily driven by cash received from royalty receivable, partially offset by a larger use of cash for outstanding accounts payable,

and the absence of the prior-year write-off of abandoned patents.

Net cash used in discontinued operations .

Net cash used in

discontinued operations for the first nine months of 2025 was $23 thousand as compared to net cash used in operating activities from

discontinued operations of $433 thousand for the first nine months of 2024.

discontinued operations for the first three months of 2026 was $8 thousand as compared to net cash used in operating activities from

discontinued operations of $13 thousand for the first three months of 2025.

This change relates primarily to a decreased level of activities

associated with our discontinued operations.

For additional details, see the condensed consolidated statements of

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

For additional details, see the condensed consolidated statements

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

Other liquidity measures

Receivable from Mayne Pharma .

On December 30, 2022, Mayne Pharma

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

September 30, 2025, we had a royalty receivable of $3,164 thousand relating to the short-term portion of royalty receivable from Mayne

Pharma and $14,269 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 2024 10-K Report.

On December 30, 2022, Mayne Pharma acquired our accounts receivable

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

As of March 31, 2026, we had a royalty

receivable of $2,731 thousand relating to the short-term portion of royalty receivable from Mayne Pharma and $13,170 thousand relating

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

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

to the consolidated financial statements included in our 2025 10-K/A Report.

Contractual obligations, off-balance sheet arrangements and purchase

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and Contingencies” to the condensed consolidated financial statements included in this 10-Q Report.

In the ordinary course of business, we enter into agreements with third

parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry sector.

Pursuant to these agreements, we agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered, for which there

may or may not be limitations on potential damages.

The maximum potential amount of future payments we could be required to make under

these indemnification provisions is sometimes unlimited.

As a result, the estimated fair value of liabilities relating to these provisions

Accordingly, we had no liabilities recorded for these provisions as of September 30, 2025 and December 31, 2024.

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.

In the ordinary course of business, we enter into agreements with

third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry

Pursuant to these agreements, we agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered, for

which there may or may not be limitations on potential damages.

The maximum potential amount of future payments we could be required

to make under these indemnification provisions is sometimes unlimited.

As a result, the estimated fair value of liabilities relating

to these provisions is minimal.

Accordingly, we had no liabilities recorded for these provisions as of March 31, 2026 and December 31,

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.

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

opinion, we have incurred a probable loss and the amount of the loss can be reasonably estimated, as set forth by accounting

principles generally accepted in the United States of America (“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 and the amount of the loss can be reasonably estimated, as set forth by accounting principles generally accepted

in the United States of America (“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

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Management’s discussion and analysis of financial condition and results of operations – Critical accounting policies and estimates

in our 2024 10-K Report.

in our 2025 10-K/A Report.

Quantitative and qualitative disclosures about market

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