What changed in this filing

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Item 1. Financial Statements

2021-11-12 compared with 2021-08-04 · 160 added, 107 removed, 356 unchanged (43% of the section changed)

4 unchanged sentences

(In thousands, except per share data)

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Accounts receivable, net of allowance for credit losses of $ 1,351 and $ 1,118

as of June 30, 2021 and December 31, 2020, respectively

as of September 30, 2021 and December 31, 2020, respectively

Prepaid and other current assets

20 unchanged sentences

600,000 shares authorized, 424,879 and 299,765

issued and outstanding as of June 30, 2021 and December 31, 2020, respectively

issued and outstanding as of September 30, 2021 and December 31, 2020, respectively

Additional paid-in capital

1 unchanged sentence

Total stockholders' deficit

Total liabilities and stockholders' equity (deficit)

Total liabilities and stockholders' equity

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

3 unchanged sentences

(Unaudited - in thousands, except per share data)

Three Months Ended June 30,

Six Months Ended June 30,

Product revenue, net

License revenue

Three Months Ended September 30,

Nine Months Ended September 30,

Revenue, net:

Total revenue, net

Cost of goods sold

Total gross profit

Operating expenses:

31 unchanged sentences

Balance, June 30, 2021

Shares issued for sale of common stock, net of cost

Shares issued for exercise of options

Shares issued for vested restricted stock units

Share-based compensation

Balance, September 30, 2021

Balance, January 1, 2020

7 unchanged sentences

Balance, June 30, 2020

Shares issued for exercise of options and warrants, net

Warrants issued in relation to debt financing agreement

Share-based compensation

Balance, September 30, 2020

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

3 unchanged sentences

(Unaudited - in thousands)

Six Months Ended June 30,

Nine Months Ended September 30,

Cash flows from operating activities:

4 unchanged sentences

Debt financing fees

Non-cash operating lease expense, including impairment of $ 81 for the six months

ended June 30, 2020

Share-based compensation

19 unchanged sentences

Net cash provided by financing activities

Net increase in cash

Net increase (decrease) in cash

Cash, beginning of period

Cash, end of period

Supplemental disclosure of noncash financing activities:

Warrants issued in relation to debt financing agreement

Supplemental disclosure of cash flow information:

5 unchanged sentences

Basis of presentation and summary of significant accounting policies

TherapeuticsMD, Inc., a Nevada corporation (the “Company”), and its consolidated subsidiaries are referred to collectively in this Quarterly Report on Form 10-Q (“10-Q Report”) as “TherapeuticsMD,” “we,” “our” and “us.” This 10-Q Report includes our trademarks, trade names and service marks, such as TherapeuticsMD ® , vitaMedMD ® , BocaGreenMD ® , IMVEXXY ® , BIJUVA ® and ANNOVERA ® , which are protected under applicable intellectual property laws and are the property of, or licensed to, the Company.

TherapeuticsMD, Inc., a Nevada corporation (the “Company”), and its consolidated subsidiaries are referred to collectively in this Quarterly Report on Form 10-Q (“10-Q Report”) as “TherapeuticsMD,” “we,” “our” and “us.” This 10-Q Report includes our trademarks, trade names and service marks, such as TherapeuticsMD ® , vitaMedMD ® , BocaGreenMD ® , vitaCare TM , IMVEXXY ® , BIJUVA ® and ANNOVERA ® , which are protected under applicable intellectual property laws and are the property of, or licensed to, the Company.

Solely for convenience, trademarks, trade names and service marks referred to in this 10-Q Report may appear without the ® , TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks.

17 unchanged sentences

The extent of the future impact of the COVID-19 pandemic on our business continues to be highly uncertain and difficult to predict.

We continue to provide an uninterrupted supply of our U.S.

Food and Drug Administration (“FDA”) approved products and the vitaPearl™ family of products.

We believe we have sufficient inventory of finished products to meet anticipated demand in the near future.

Additionally, we believe we have sufficient active pharmaceutical ingredients (“API”) on hand for the continued manufacture of our products.

The ultimate global recovery from the pandemic will be dependent on, among other things, actions taken by governments and businesses to contain and combat the virus, including any variant strains, the speed and effectiveness of vaccine production and global distribution, as well as how quickly, and to what extent, normal economic and operating conditions can resume on a sustainable basis globally.

11 unchanged sentences

and eliminating non-essential travel, entertainment, meeting, and event expenses.

In addition, we are planning to implement a significant cost savings initiative that is designed to reduce our annual costs in 2022 by at least $ 40.0 million.

This figure does not include cost savings from, or the costs associated with the sale of an interest in vitaCare Prescription Services, which annualized cost savings are estimated at approximately $ 20.0 million.

The full impact of the COVID-19 pandemic continues to evolve.

3 unchanged sentences

Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

While we currently believe that our COVID-19 contingency plan has the ability to mitigate the effect of the COVID-19 pandemic on our business, the severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the duration of “social distancing” orders, the ability of our sales force to access healthcare providers to promote our products, increases in unemployment, which could reduce access to commercial health insurance for our patients, thus limiting payer coverage for our products, and the impact of the pandemic on our global supply chain, all of which are uncertain.

While we currently believe that our COVID-19 contingency plan has the ability to mitigate many of the negative effects of the COVID-19 pandemic on our business, the severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the duration of “social distancing” orders, the ability of our sales force to access healthcare providers to promote our products, increases in unemployment, which could reduce access to commercial health insurance for our patients, thus limiting payer coverage for our products, and the impact of the pandemic on our global supply chain, all of which remain uncertain.

Our future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions, uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges that we may face.

Going Concern

As of the filing date of this Quarterly Report on Form 10-Q, our cash balance was above the $ 60.0 million balance as required by the Financing Agreement described below in Note 8.

Based on our current projections, we will need to raise additional capital to remain in compliance with this minimum cash balance covenant for the next twelve months from the issuance of these financial statements.

To address our projected capital needs, we are pursuing various equity financing and other alternatives including the sale of an interest in vitaCare Prescription Services for which we commenced a sale process.

The equity financing alternatives may include the private placement of equity, equity-linked, or other similar instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity or equity-linked securities offering.

Our ability to sell equity securities may be limited by market conditions.

To the extent that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders.

Along with considering additional financings, we have reviewed numerous potential scenarios in connection with steps that we may take to reduce our operating expenses.

Based on our analysis, we believe that our existing cash reserves along with potential proceeds from the sale of certain non-core assets of the Company and proceeds from potential future financings, if available to us, would be sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months from the date of this Quarterly Report on Form 10-Q.

If we are unsuccessful with future financings and if the successful commercialization of IMVEXXY, BIJUVA, or ANNOVERA is delayed, or the continued impact of the COVID-19 pandemic or issues in our supply chains related to our third party contract manufacturers on our business is worse than we anticipate, our existing cash reserves would be insufficient to maintain compliance with the Financing Agreement covenants or satisfy our liquidity requirements until we are able to successfully commercialize IMVEXXY, BIJUVA, and ANNOVERA.

See also Note 3- Inventory for additional information regarding risks associated with our contract manufacturers, particularly for ANNOVERA.

The presence of these projected factors in conjunction with the uncertainty of the capital markets raises substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

Additionally, if circumstances were to require our independent registered public accounting firm to include a going concern uncertainty in their report on our annual consolidated financial statements, such matter would also take us out of compliance with certain of the Financing Agreement covenants.

If we are unable to achieve any of the total minimum net revenue requirements or otherwise comply with any other covenant of the Financing Agreement, all or a portion of our obligations under the Financing Agreement may be declared immediately due and payable, which would have an adverse effect on our business, results of operations and financial condition.

The accompanying unaudited consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Significant accounting policies

18 unchanged sentences

Write-off of uncollectible receivables

Balance as of June 30, 2021

We have optimized the level of our inventory on hand, and we believe we have sufficient finished products to meet anticipated demand in the near future and sufficient raw materials for the continued manufacture of our finished products.

We rely on third parties to manufacture our finished products, and we have entered into long-term supply agreements for the manufacture of ANNOVERA, IMVEXXY, and BIJUVA, however, we do not have a long-term supply agreement for the manufacture of our prescription vitamins.

Additionally, we do not have long-term contracts for the supply of the API used in ANNOVERA and BIJUVA.

If any of our third party contract manufacturers or any suppliers of the API experiences any significant difficulties in its respective manufacturing processes, do not comply with the terms of an agreement between us, or do not devote sufficient time, energy, and care to providing our manufacturing needs, we could experience significant interruptions in the supply of our products, which may have a material adverse impact on our revenue, results of operations and financial position.

Balance as of September 30, 2021

We rely on third parties to manufacture our finished products, and we have entered into long-term supply agreements for the manufacture of ANNOVERA, IMVEXXY, and BIJUVA.

We do not have a long-term supply agreement for the manufacture of our prescription vitamins.

Additionally, we do not have long-term contracts for the supply of the active pharmaceutical ingredient (“API”) used in ANNOVERA and BIJUVA.

One of our third party contract manufacturers that manufactures ANNOVERA has recently experienced an increase in difficulties with the manufacturing process for ANNOVERA, which has resulted in batch failures.

The challenges are multifactorial and include variability in raw material supply and normal manufacturing variation due to a semi-manual process.

This has recently resulted in challenges to supply ANNOVERA consistently within the approved specification at a rate that meets the projected demand for ANNOVERA.

To mitigate the manufacturing challenges, in August 2021 we filed a supplemental New Drug Application with the U.S.

Food and Drug Administration (“ FDA”) to modify the manufacturing (testing) specifications for ANNOVERA to allow for normal manufacturing variation that would increase the consistency of manufacturing and supply of ANNOVERA.

There can be no

assurance that such a modification will be approved by the FDA.

If the FDA fails to approve the requested modification by the Prescription Drug User Fee Act (“ PDUFA ”) date of December 12, 2021, our third party contract manufacturer may not be able to supply us with sufficient ANNOVERA to adequately supply the market or generate sufficient revenue to meet the covenants under the Financing Agreement.

If any of our third party contract manufacturers or any suppliers of raw materials or API experience further difficulties, do not comply with the terms of an agreement between us, or do not devote sufficient time, energy, and care to providing our manufacturing needs, we could experience additional interruptions in the supply of our products, which may have a material adverse impact on our revenue, results of operations and financial position and ability to meet our revenue and other covenants under our Financing Agreement.

Our inventory consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

4 unchanged sentences

Our prepaid and other current assets consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

Prepaid and other current assets

Fixed assets, net

Our fixed assets, net consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

5 unchanged sentences

Fixed assets, net

We recorded depreciation expense of $ 0.2 million for the three months ended June 30, 2021 and 2020, and $ 0.4 million for the six months ended June 30, 2021 and 2020.

License rights and other intangible assets, net

We recorded depreciation expense of $ 0.2 million for the three months ended September 30, 2021 and 2020, and $ 0.6 million for the nine months ended September 30, 2021 and 2020.

Licensed rights and other intangible assets

The following provides information about our license rights and other intangible assets, net (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

Intangible assets subject to amortization:

License rights agreement

Hormone therapy drug patents

Licensed rights and intangible assets

subject to amortization:

License rights

Hormone therapy drug patents

applied and pending approval

Hormone therapy drug patents applied

and pending approval

License rights and other intangible assets

subject to amortization

Intangible assets not subject to amortization:

1 unchanged sentence

License rights and other intangible assets, net

We recorded amortization expense related to the exclusive license rights agreement (the “Population Council License Agreement”) with Population Council of $ 0.8 million for the three months ended June 30, 2021 and 2020, and $ 1.5 million for the six months ended June 30, 2021 and 2020.

As of June 30, 2021 and December 31, 2020, respectively, we had a total of 83 patents, of which 41 were domestic, and a total of 77 patents, of which 38 were domestic.

We recorded amortization expense related to patents of $ 0.1 million for the three months ended June 30, 2021 and 2020, and $ 0.2 million and $ 0.1 million for the six months ended June 30, 2021 and 2020, respectively.

We use a combination of qualitative and quantitative factors to assess intangible assets for impairment.

As a result of performing these assessments, we determined that no impairment existed as of June 30, 2021 and, therefore, recorded no write-downs to any of our intangible assets.

Licensed rights

We recorded amortization expense related to the exclusive license rights agreement (the “Population Council License Agreement”) with Population Council of $ 0.8 million for the three months ended September 30, 2021 and 2020, and $ 2.3 million for the nine months ended September 30, 2021 and 2020.

Other intangible assets

As of September 30, 2021, we had a total of 87 patents, of which 46 were domestic.

As of December 31, 2020, we had a total of 77 patents, of which 38 were domestic.

We recorded amortization expense related to patents of $ 0.1 million for the three months ended September 30, 2021 and 2020, and $ 0.2 million for the nine months ended September 30, 2021 and 2020, respectively.

We use a combination of qualitative and quantitative factors to assess licensed rights and intangible assets for impairment.

As a result of performing these assessments, we determined that no impairment existed as of September 30, 2021 and, therefore, recorded no write-downs to any of our licensed rights and other intangible assets.

However, during the nine months ended September 30, 2020, we wrote off $ 584,509 in costs related to trademarks and patents.

Accrued expenses and other current liabilities

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

June 30, 2021

September 30, 2021

December 31, 2020

12 unchanged sentences

Additionally, in connection with entering into Amendment No.

7, the warrants issued to the Administrative Agent and the lenders under the Financing Agreement on August 5, 2020 were further amended to provide for an

additional adjustment to the exercise price if we conducted certain dilutive issuances prior to March 31, 2021.

7, the warrants issued to the Administrative Agent and the lenders under the Financing Agreement on August 5, 2020 were further amended to provide for an additional adjustment to the exercise price if we conducted certain dilutive issuances prior to March 31, 2021.

No such adjustments were made to the exercise price of these warrants prior to the expiration of such period.

11 unchanged sentences

Our debt consisted of the following (in thousands):

June 30, 2021

September 30, 2021

December 31, 2020

3 unchanged sentences

Long-term debt

Our future principal payments under the Financing Agreement are as follows (in thousands):

Our future principal payments under the Financing Agreement are as follows (in thousands), excluding the prepayment fees described above:

September 30,

1 unchanged sentence

Interest expense and other financing costs consisted of the following (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Interest expense

13 unchanged sentences

As of the filing date of this 10-Q Report, our cash balance was above the required minimum balance.

Based on our current projections, along with financing that may be available to us under our at-the-market equity offering program (the “2021 ATM Program”) relating to shares of our common stock, we anticipate that we will remain in compliance with the minimum cash balance covenant for the next twelve months from the issuance of the consolidated financial statements included in this 10-Q Report.

In addition, we have reviewed numerous potential scenarios in connection with the impact of COVID-19 pandemic on our business and we believe that our existing cash reserves, along with financing that may be available to us under the 2021 ATM Program, are sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months from the issuance of the consolidated financial statements included in this 10-Q Report.

However, if we are unsuccessful with the commercialization of IMVEXXY, BIJUVA, or ANNOVERA, if such commercialization is delayed, or if the continued impact of the COVID-19 pandemic on our business is worse than we anticipate, among other circumstances, we may consume funds significantly faster than we currently anticipate and our existing cash reserves, along with financing that may be available to us under the 2021 ATM Program, would be insufficient to maintain compliance with the Financing Agreement covenants or satisfy our liquidity requirements until we are able to successfully commercialize IMVEXXY, BIJUVA, and ANNOVERA.

The Financing Agreement also requires us to maintain certain minimum quarterly product net revenue requirements and several other restrictive covenants.

These and other terms in the Financing Agreement have to be monitored closely for compliance and could restrict our ability to grow our business or enter into transactions that we believe would be beneficial to our business.

Based on our current projections, we will need to raise additional capital to remain in compliance with the minimum cash balance covenant for the next twelve months from the issuance of the consolidated financial statements included in this 10-Q Report.

See Note 1 – Basis of presentation and summary of significant accounting policies - Going Concern above.

The Financing Agreement also requires us to maintain certain minimum quarterly product net revenue requirements and several other restrictive covenants, which could also be affected by the continued impact of the COVID-19 pandemic or issues in our supply chains related to our third-party contract manufacturers.

These and other terms in the Financing Agreement must be monitored closely for compliance and could restrict our ability to grow our business or enter into transactions that we believe would be beneficial to our business.

If we are unable to maintain the minimum unrestricted cash balance, achieve any of the total minimum net revenue requirements or otherwise comply with any other covenant of the Financing Agreement, all or a portion of our obligations under the Financing Agreement may be declared immediately due and payable, which would have an adverse effect on our business, results of operations and financial condition.

As of June 30, 2021, we were in compliance, in all material respects, with our covenants under the Financing Agreement.

As of September 30, 2021, we were in compliance, in all material respects, with our covenants under the Financing Agreement.

Commitments and contingencies

6 unchanged sentences

The annual contract period for ANNOVERA ends each August.

If the minimum order quantities of ANNOVERA are not met, we are required to pay a minimum commitment fee equal to the difference between the total amount we would have paid if the minimum requirement had been fulfilled and the total amount of purchases of ANNOVERA during the contract year.

For each of the three annual contract years ending in 2021, we expect to meet our minimum purchase number of units in all material respects, accordingly, we believe that minimum commitment fees that we may pay, if any, will not have a material impact to our financial position and operating results.

If the minimum order quantities of ANNOVERA are not met, we are required to pay a minimum commitment fee equal to the

difference between the total amount we would have paid if the minimum requirement had been fulfilled and the total amount of purchases of ANNOVERA during the contract year.

For each of the three annual contract years ending in 2021, we have met our minimum purchase number of units in all material respects.

We believe that minimum commitment fees that we may pay, if any, will not have a material impact to our financial position and operating results.

For annual contract years ending in 2022 and thereafter, we will continue to evaluate whether we will be able to meet each annual contract year’s respective minimum purchase commitment and will record a liability for estimated minimum commitment fees if we believe that we will not be able to reasonably meet the minimum purchase commitment.

7 unchanged sentences

Teva has filed its answer and counterclaim to the complaint, alleging that the IMVEXXY Patents are invalid and not infringed.

A trial date has not been set.

In July 2021, the District Court entered an order temporarily staying all proceedings in the IMVEXXY litigation.

The terms of the District Court order staying all proceedings in the IMVEXXY litigation are presently filed under seal.

We anticipate that a public version of the order will become available upon resolution of a motion by Teva to redact information it deems confidential.

In July 2021, following a proposal by Teva, the District Court entered an order temporarily staying all proceedings in the IMVEXXY litigation, which order was filed under seal.

On September 2, 2021, the District Court made available a public version of the order following the parties’ agreement to a consent motion to redact information Teva contended was confidential.

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

The length of the stay of the IMVEXXY litigation is dependent on further action by Teva.

In March 2020, we received a Paragraph IV certification notice letter (the “BIJUVA Notice Letter”) regarding an ANDA submitted to FDA by Amneal Pharmaceuticals (“Amneal”).

8 unchanged sentences

The District Court stay also extends the 30-month stay for the period in which the BIJUVA litigation has been stayed.

As of June 30, 2021, in the aggregate, we have incurred and recorded paragraph IV legal proceeding costs amounting to $ 2.7 million in prepaid expenses and other current assets in the accompanying consolidated balance sheets since we believe that we will successfully prevail in these two legal proceedings.

As of September 30, 2021, in the aggregate, we have incurred and recorded paragraph IV legal proceeding costs amounting to $ 2.9 million in prepaid expenses and other current assets in the accompanying consolidated balance sheets since we believe that we will successfully prevail in these two legal proceedings.

Upon the successful conclusion of each of the above legal proceeding, the related capitalized legal costs for that legal proceeding will be reclassified to patents, in license rights, and other intangible assets, net in the accompanying consolidated balance sheets and such costs will be amortized over the remaining useful of the respective patent.

3 unchanged sentences

The 2020 ATM Program permitted us to offer and sell shares of our common stock having an aggregate offering price of up to $ 50.0 million from time to time through or to the sales agent under the 2020 ATM Program.

Sales of our common stock were permitted to be made from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), including by means of ordinary broker’s transactions on the Nasdaq Stock Exchange or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices, or as otherwise agreed to with the sales agent.

prices prevailing at the time of sale, at prices related to prevailing market prices, or as otherwise agreed to with the sales agent .

The sales agent was entitled to compensation at a fixed commission rate of 3.0 % of the aggregate gross sales price per share sold .

As of February 8, 2021, sales of shares of our common stock under the 2020 ATM Program were completed when we sold an aggregate total of 28,600,689 shares of our common stock at an average sale price of $ 1.75 per share, and we received net proceeds of $ 47.3 million, after deducting the discounts and commissions to the sales agent and estimated offering expenses .

For the 2020 ATM Program, w e received net proceeds of $ 48.1 million, after deducting the discounts and commissions to the sales agent and estimated offering expenses .

In February 2021, we closed on an underwritten public offering of our common stock, pursuant to which we issued 59,459,460 shares of our common stock at an offering price of $ 1.85 per share, and we received net proceeds of $ 96.6 million, after deducting the underwriting discounts and commissions and estimated offering expenses.

In March 2021, we entered into the 2021 ATM Program relating to shares of our common stock.

In March 2021, we entered into an at-the-market equity offering program (the “2021 ATM Program”) relating to shares of our common stock.

The 2021 ATM Program permits us to offer and sell shares of our common stock having an aggregate offering price of up to $ 100.0 million from time to time through or to the sales agent under the 2021 ATM Program.

2 unchanged sentences

The sales agent is not required to sell any specific number or dollar amounts of securities but will act as sales agent and use commercially reasonable efforts to sell on our behalf all of the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices, on mutually agreed terms between us and the sales agent.

Through June 30, 2021, we have sold a total of 4,935,500 shares of our common stock under the 2021 ATM Program at an average sale price of $ 1.58 per share and we received estimated net proceeds of $ 7.2 million, after deducting discounts and commissions to the sales agent and estimated offering expenses.

Subsequently, through the date of this 10-Q Report, we have sold an additional 28,769,815 shares of our common stock under the 2021 ATM Program at an average sale price of $ 1.14 per share and we received estimated net proceeds of $ 31.8 million, after deducting discounts and commissions to the sales agent and estimated offering expenses.

Through September 30, 2021, we have sold a total of 33,705,315 shares of our common stock under the 2021 ATM Program at an average sale price of $ 1.21 per share and we received estimated net proceeds of $ 38.8 million, after deducting discounts and commissions to the sales agent and estimated offering expenses.

Subsequently, through the date of this 10-Q Report, we have not sold any additional shares of our common stock under the 2021 ATM Program .

Future sales, if any, under the 2021 ATM Program will depend on a variety of factors, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding, and potential uses of funding available to us.

2 unchanged sentences

As of December 31, 2020

As of June 30, 2021

The aggregate intrinsic value of warrants exercised during the six months ended June 30, 2021 was $ 1.1 million.

As of September 30, 2021

The aggregate intrinsic value of warrants exercised during the nine months ended September 30, 2021 was $ 1.1 million.

Share-based compensation payment plans

At the 2021 annual meeting of stockholders of the Company, held on May 27, 2021, our stockholders approved the First Amendment to the TherapeuticsMD, Inc.

At the 2021 annual meeting of stockholders of the Company, held on May 27, 2021, our stockholders among other things approved the First Amendment to the TherapeuticsMD, Inc.

2019 Stock Incentive Plan (the “2019 Plan”) to increase the number of shares of our common stock available under the 2019 Plan by 22,475,000 shares.

As of June 30, 2021, there were 25,086,153 shares of common stock available for issuance under the 2019 Plan, consisting of (i) new shares, (ii) unallocated shares previously available for issuance under the 2012 Stock Incentive Plan (the “2012 Plan”) that were not then subject to outstanding “Awards” (as defined in the 2012 Plan), and (iii) unallocated shares previously available for issuance under the 2009 Long-Term Incentive Compensation Plan (the “2009 Plan”) that were not then subject to outstanding “Awards” (as defined in the 2009 Plan).

Any shares subject to outstanding options or other equity “Awards” under the 2019 Plan, the 2012 Plan and the 2009 Plan that are forfeited, expire or otherwise terminate without issuance of the underlying shares, or if any such Award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares subject to such Award (other than shares tendered or withheld in connection with the exercise of an Award or the satisfaction of withholding tax liabilities), the shares to which those Awards were subject, shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for delivery with respect to Awards under the 2019 Plan.

As of September 30, 2021, there were 10,182,803 shares of common stock available for issuance under the 2019 Plan, consisting of (i) new shares, (ii) unallocated shares previously available for issuance under the 2012 Stock Incentive Plan (the “2012 Plan”) that were not then subject to outstanding “Awards” (as defined in the 2012 Plan), and (iii) unallocated shares previously available for issuance under the 2009 Long-Term Incentive Compensation Plan (the “2009 Plan” and together with the 2019 Plan and the 2012 Plan, the “Plans”) that were not then subject to outstanding “Awards” (as defined in the 2009 Plan).

those Awards were subject, shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for delivery with respect to Awards under the 2019 Plan.

As of December 31, 2020 , there were 2,583,565 shares of common stock available for issuance under the 2019 Plan.

The following table summarizes the status of our outstanding and exercisable options and related transactions since December 31, 2020 (in thousands, except weighed average exercise price and weighted average remaining contractual life data):

In August 2021, the Company hired a new President and granted an “inducement grant” under Listing Rule 5635(c)(4) of The Nasdaq Stock Market LLC (“Nasdaq”) of 2,750,000 restricted stock units designated as “Time-Based Units” and 2,750,000 restricted stock units designated as “Performance Units” (the “August Inducement Grant”).

The Time-Based Units and Performance Units were granted pursuant to certain Inducement Grant Restricted Stock Unit Agreement;

accordingly, these equity awards were not counted against the shares of common stock available for issuance under the 2019 Plan.

At the 2021 annual meeting of stockholders of the Company, our stockholders approved an Offer to Exchange Eligible Options for New Restricted Stock Units (the “Exchange Offer”).

The Exchange Offer allowed certain employee option holders, excluding the Company’s named executive officers, advisers, consultants, contractors, or present or past non-employee directors, to exchange some or all of their outstanding options to purchase shares of common stock that were granted before August 26, 2019, and had a per share exercise price equal to or greater than $ 5.01 (“Eligible Options”), for an award of restricted stock units of the Company (“New RSUs”), subject to specified conditions.

In September 2021, following the expiration of the Exchange Offer, 69 eligible employees elected to exchange Eligible Options, and the Company accepted for cancellation Eligible Options to purchase an aggregate of 4,493,000 shares of common stock, representing approximately 91.5 % of the total shares of common stock underlying the Eligible Options.

Also, in September 2021, promptly following the expiration of the Exchange Offer, the Company granted 700,264 New RSUs in exchange for the cancellation of the tendered Eligible Options.

The New RSUs vest in three equal annual installments beginning on September 29, 2022, subject to the terms and conditions of the 2019 Plan.

The following table summarizes the status of our outstanding and exercisable options and related transactions under the Plans, including the Exchange Offer, since December 31, 2020 (in thousands, except weighed average exercise price and weighted average remaining contractual life data):

Options awards outstanding

2 unchanged sentences

Cancelled/Forfeited

As of June 30, 2021

The aggregate intrinsic value of options exercised during the six months ended June 30, 2021 was less than $ 0.1 million.

The following table summarizes the status of our restricted stock units (“RSUs”) and related transactions since December 31, 2020 (in thousands, except weighed average grant date fair value):

As of September 30, 2021

The aggregate intrinsic value of options exercised during the nine months ended September 30, 2021 was less than $ 0.1 million.

The following table summarizes the status of our restricted stock units (“RSUs”) and related transactions, including the Exchange Offer and the August Inducement Grant since December 31, 2020 (in thousands, except weighed average grant date fair value):

RSUs awards outstanding

3 unchanged sentences

Cancelled/Forfeited

As of June 30, 2021

The aggregate intrinsic value of RSUs vested and settled during the six months ended June 30, 2021 was $ 1.1 million.

The following table summarizes the status of our performance stock units (“ PSUs”) and related transactions since December 31, 2020 (in thousands, except weighed average grant date fair value):

As of September 30, 2021

The aggregate intrinsic value of RSUs vested and settled during the nine months ended September 30, 2021 was $ 2.1 million.

The following table summarizes the status of our performance stock units (“ PSUs”) and related transactions, including the August Inducement Grant since December 31, 2020 (in thousands, except weighed average grant date fair value):

PSUs awards outstanding

PSUs awards vested and not settled

As of December 31, 2020

As of June 30, 2021

Vested and settled

Cancelled/Forfeited

As of September 30, 2021

The number of PSUs represents the base number of PSUs that may vest.

The actual number of PSUs that will vest will be between zero and two times the base number of PSUs depending on the Company’s achievement of break-even quarterly EBITDA.

The actual number of PSUs that will vest will be between zero and 14,901,178 depending on the Company’s achievement of certain revenue milestones over the period from 2021 through 2023 and certain earnings before interest, taxes, depreciation and amortization (EBITDA) milestones between 2021 and 2023.

In June 2020, our stockholders approved the TherapeuticsMD, Inc.

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In May 2021, 150,078 shares were sold under the ESPP at an average sale price of $ 0.89 per share and we received proceeds of $ 0.1 million.

We recorded share-based compensation related to previously issued options, RSU and PSUs, as well as shares of common stock issued under the ESPP totaling $ 2.5 million and $ 5.5 million for the three and six months ended June 30, 2021, respectively, and $ 3.0 million and $ 5.4 million for the three and six months ended June 30, 2020, respectively.

As of June 30, 2021, we had $ 10.0 million of unrecognized share-based compensation cost related to unvested options, RSUs and PSUs as well as shares issuable under the ESPP, which is included as additional paid-in capital in the accompanying consolidated balance sheets and may be adjusted for future changes in forfeitures.

The unrecognized share-based compensation cost as of June 30, 2021 is expected to be recognized as share-based compensation over a weighted average period of 1.4 years as follows (in thousands):

We recorded share-based compensation related to previously issued options, RSU and PSUs, as well as shares of common stock issued under the ESPP totaling $ 7.3 million and $ 3.1 million for the three months ended September 30, 2021 and 2020, respectively, and $ 12.8 million and $ 8.5 million for the nine months ended September 30, 2021 and 2020, respectively.

As of September 30, 2021, we had $ 22.7 million of unrecognized share-based compensation cost related to unvested options, RSUs and PSUs as well as shares issuable under the ESPP, which is included as additional paid-in capital in the accompanying consolidated balance sheets and may be adjusted for future changes in forfeitures.

The unrecognized share-based compensation cost as of September 30, 2021 is expected to be recognized as share-based compensation over a weighted average period of 2.2 years as follows (in thousands):

Year Ending December 31,

2021 (3 months)

In July 2021, we granted options to purchase an aggregate of 60,000 shares of our common stock, and we issued RSUs to receive 7,782,279 shares of our common stock and PSUs to receive 4,586,668 shares of our common stock.

The number of PSUs represents the base number of PSUs that may vest.

The actual number of PSUs that will vest will be between zero and two times the base number of PSUs depending on the Company’s achievement of certain performance metrics.

The aggregate estimated grant date fair value of the options, RSUs and PSUs was $ 12.3 million.

The estimated grant date fair value of the PSUs at two times the base number of PSUs was an additional $ 2.8 million for an aggregate total of $ 15.1 million for all equity awards.

The estimated grant date fair value for all equity award is expected to be recognized as share-based compensation over a weighted average period of 3.2 years.

The following table provides information about disaggregated revenue by product mix and service (in thousands):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Product revenue:

Prescription vitamin

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Total revenue, net

We do not expect to pay any significant federal or state income taxes as a result of (i) the losses recorded during the three and six months ended June 30, 2021 and 2020, (ii) additional losses expected for the remainder of 2021 or losses recorded in 2020, or (iii) net operating losses carry forwards from prior years.

We recorded a full valuation allowance of the net operating losses for the three and six months ended June 30, 2021 and 2020.

Accordingly, there were no provisions for income taxes for the three and six months ended June 30, 2021 and 2020.

Additionally, as of June 30, 2021 and December 31, 2020, we maintain a full valuation allowance for all deferred tax assets.

We have 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.

We also have entered into a licensing and supply agreement (the “Theramex License Agreement”) with Theramex HQ UK Limited (“Theramex”) pursuant to which we granted Theramex an exclusive license to commercialize IMVEXXY and BIJUVA for human use outside of the U.S., except for Canada and Israel.

For the three months and nine months ended September 30, 2021, we recorded BIJUVA sales of $ 0.7 million made through the Theramex License Agreement.

As of September 30, 2021, no BIJUVA sales have been made through the Knight License Agreement.

Additionally, as of September 30, 2021, no IMVEXXY sales have been made through either of the licensing agreements.

We do not expect to pay any significant federal or state income taxes as a result of (i) the losses recorded during the three and nine months ended September 30, 2021 and 2020, (ii) additional losses expected for the remainder of 2021 or losses recorded in 2020, or (iii) net operating losses carry forwards from prior years.

We recorded a full valuation allowance of the net operating losses for the three and nine months ended September 30, 2021 and 2020.

Accordingly, there were no provisions for income taxes for the three and nine months ended September 30, 2021 and 2020.

Additionally, as of September 30, 2021 and December 31, 2020, we maintain a full valuation allowance for all deferred tax assets.

Loss per common share

The following table sets forth the computation of basic and diluted loss per common share for the periods presented (in thousands, except per share amounts):

Three Months Ended June 30,

Six Months Ended June 30,

Three Months Ended September 30,

Nine Months Ended September 30,

Weighted average common shares for basic loss per

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Loss per common share, basic and diluted

Since we reported a net loss for the three and six months ended June 30, 2021 and 2020, our potentially dilutive securities are deemed to be anti-dilutive, accordingly, there was no effect of dilutive securities.

Therefore, our basic and diluted loss per common share and our basic and diluted weighted average common share are the same for the three and six months ended June 30, 2021 and 2020.

The following table sets forth the outstanding securities as of the periods presented which were not included in the calculation of diluted earnings per common share during the respective three and six months periods then ended (in thousands):

As of June 30,

Since we reported a net loss for the three and nine months ended September 30, 2021 and 2020, our potentially dilutive securities are deemed to be anti-dilutive, accordingly, there was no effect of dilutive securities.

Therefore, our basic and diluted loss per common share and our basic and diluted weighted average common share are the same for the three and nine months ended September 30, 2021 and 2020.

As of September 30,

Stock options

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Agreements with Catalent have been reviewed by independent directors of our Company, or a committee consisting of independent directors of our Company.

For manufacturing activities, Catalent billed us $ 0.7 million for the three months ended June 30, 2021 and 2020, and $ 1.5 million and $ 2.0 million for the six months ended June 30, 2021 and 2020, respectively.

As of June 30, 2021 and December 31, 2020, we have estimated amounts payable to Catalent totaling $ 0.3 million.

For manufacturing activities, Catalent billed us $ 1.1 million and $ 0.5 million for the three months ended September 30, 2021 and 2020, respectively, and $ 2.6 million for the nine months ended September 30, 2021 and 2020.

As of September 30, 2021 and December 31, 2020, we have estimated amounts payable to Catalent totaling less than $ 0.1 million and $ 0.3 million, respectively.

In addition, we have minimum purchase requirements in place with Catalent as disclosed in Note 9, Commitments and contingencies.

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Agreements with AIG have been reviewed by independent directors of our Company, or a committee consisting of independent directors of our Company.

For various insurance premiums, AIG billed us less than $ 0.1 million for the three and six months ended June 30, 2021, and $ 0.1 million for the three and six months ended June 30, 2020.

As of June 30, 2021 and December 31, 2020, we have no amounts payable to AIG.

For various insurance premiums, AIG billed us less than $ 0.1 million for the nine months ended September 30, 2021, and $ 0.1 million and $ 0.2 million for the three and nine months ended September 30, 2020, respectively.

As of September 30, 2021 and December 31, 2020, we have no amounts payable to AIG.

Business concentrations

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Customers with product revenue equal to or greater than 10 % of our total revenue for the periods indicated were as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

* Less than 10 % of total product revenue

Customers that accounted for 10 % or greater of our accounts receivable as of the periods indicated were as follows:

June 30, 2021

September 30, 2021

December 31, 2020

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Vendors with product purchases equal to or greater than 10 % of our total purchases for the periods indicated were as follows:

Six Months Ended June 30,

Nine Months Ended September 30,

* Less than 10 % of total product purchases

Vendors that accounted for 10 % or greater of our accounts payable as of the periods indicated were as follows:

June 30, 2021

September 30, 2021

December 31, 2020

1 unchanged sentence

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

What changed 10-Q

Item 1. Financial Statements