TherapeuticsMD, Inc. 10-K

Item 9A. Controls and procedures Evaluation of disclosure controls and procedures Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this 2021 10-K Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure. Changes in internal control over financial reporting There was no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting. Inherent limitations on effectiveness of controls Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. Further, internal controls may become inadequate because of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures. Management’s report on internal control over financial reporting Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that: • pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of our assets; • provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors; and • provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of our assets that could have a material effect on the financial statements. Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control— Integrated Framework (2013). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on management’s assessment, we believe that our internal controls over financial reporting were effective as of December 31, 2021. This 2021 10-K Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the SEC that permit the Company to provide only management’s report in this 2021 10-K Report. 66 Item 9B. Other information 2022 executive retention and performance bonus plan On March 23, 2022, the Company entered into award agreements (the "Award Agreements") with each of Mr. Marlan D. Walker, the General Counsel of the Company, and Mr. Michael C. Donegan, the Vice President – Finance and Chief Accounting Officer of the Company who will become Interim Chief Financial Officer of the Company, under the Company’s 2022 Executive Retention and Performance Bonus Plan (the “ERB Plan”). Under the terms of the Award Agreements and the ERB Plan, each of Mr. Walker and Mr. Donegan was granted (i) a retention award of $207,500 and $87,000, respectively (each a “Retention Payment”), and (ii) a performance bonus award of $622,500 and $261,000, respectively (each a “Bonus Target”), based on the achievement of critical strategic, tactical and financial goals of the Company (each a “Performance Bonus Award”). If the employment of a participant under the ERB Plan is terminated by the Company for “cause” or by the participant other than for “good reason” (i) on or before July 1, 2022, the participant will be required to pay back 100% of the after-tax value of the Retention Payment, or (ii) after July 1, 2022, the participant will be required to pay back 50% of the after-tax value of the Retention Payment. The Performance Bonus Awards will be based on Company performance for four separate six-month performance periods from January 1, 2022 to December 31, 2023 based on performance targets approved by the Compensation Committee of the Board of Directors of the Company and will be payable at up to 150% of the Bonus Target. The foregoing description of the ERB Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the ERB Plan, which is attached hereto as Exhibit 10.55 and is incorporated herein by reference. Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections None. 67 PART III Item 10. Directors, executive officers, and corporate governance The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders. Item 11. Executive compensation The information required by this Item is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders. Item 12. Security ownership of certain beneficial owners and management and related stockholder matters The information required by this Item is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders. Item 13. Certain relationships and related transactions, and director independence The information required by this Item is incorporated herein by reference to the definitive Proxy Statements to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders. Item 14. Principal accountant fees and services The information required by this Item is incorporated herein by reference to the definitive Proxy Statements to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders. 68 PART IV Item 15. Exhibits and financial statement schedules (a) Financial statements and financial statements schedules (1) Financial Statements are listed in the Index to Financial Statements on page F-1 of this 2021 10-K Report. (2) No financial statement schedules are included because such schedules are not applicable, are not required, or because required information is included in the consolidated financial statements or notes thereto. (b) Exhibits Exhibit No. Description 2.1 Agreement and Plan of Reorganization, dated July 6, 2009, among Croff Enterprises, Inc., AMHN Acquisition Corp., America’s Minority Health Network, Inc., and the Major Shareholders (1) 2.2 Agreement and Plan of Reorganization, dated June 11, 2010, among AMHN, Inc., SHN Acquisition Corp., Spectrum Health Network, Inc., and the Sole Shareholder of Spectrum Health Network, Inc. (2) 2.3 Croff Enterprises, Inc. Plan of Corporate Division and Reorganization, dated October 25, 2007 (3) 2.4 Agreement and Plan of Merger, dated July 18, 2011, among vitaMedMD, LLC, AMHN, Inc., and vitaMed Acquisition, LLC (4) 2.5***+ Stock Purchase Agreement, dated March 6, 2022, by and between TherapeuticsMD, Inc. and GoodRx, Inc. (37) 3.1 Articles of Conversion of AMHN, Inc. filed in the State of Nevada, dated July 20, 2010 (5) 3.2 Articles of Incorporation of AMHN, Inc. filed in the State of Nevada, dated July 20, 2010 (5) 3.3 Composite Amended and Restated Articles of Incorporation of the Company, as amended (6) 3.4 Bylaws of the AMHN, Inc. (7) 3.1 First Amendment to Bylaws of the Company, dated December 17, 2015 (8) 4.1 Form of Certificate of Common Stock (9) 4.2 Description of Securities of the Company (10) 10.1 Form of Common Stock Purchase Warrant, dated ( 11) 10.2* Form of Non-Qualified Stock Option Agreement (11) 10.3* TherapeuticsMD, Inc. 2019 Stock Incentive Plan (12) 10.4* First Amendment to the TherapeuticsMD, Inc. 2019 Stock Incentive Plan (31) 10.5* Amended and Restated 2012 Stock Incentive Plan (13) 10.6* 2009 Long Term Incentive Compensation Plan, as amended (14) 10.7* TherapeuticsMD, Inc. 2020 Employee Stock Purchase Plan (15) 10.8 Common Stock Purchase Warrant to Lang Naturals, Inc., dated October 23, 2011 (16) 10.9 Form of Common Stock Purchase Warrant, dated February 24, 2012 (17) 10.10 Common Stock Purchase Warrant, issued to Plato & Associates, LLC, dated January 31, 2013 (18) 10.11 Form of Warrant to Purchase Common Stock, dated August 5, 2020 (6) 10.12 Amendment to Company Warrant issued by the Company to the Subscribers party to that certain Subscription Agreement, dated as of August 5, 2020, dated November 8, 2020 (19) 10.13 Second Amendment to Company Warrant issued by the Company to the Subscribers party to that certain Subscription Agreement, dated as of August 5, 2020 (20) 10.14 Warrant issued by the Company to Robert Finizio (20) 69 Exhibit No. Description 10.15 Amendment to Warrant issued by the Company to Robert Finizio (20) 10.16* Warrant issued by the Company to John C.K. Milligan, IV (20) 10.17* Amendment to Warrant issued by the Company to John C.K. Milligan, IV (20) 10.18*** Financing Agreement, dated April 24, 2019, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (21) 10.19 Amendment No. 1 to the Financing Agreement, dated December 27, 2019, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (11) 10.20 Amendment No. 2 to the Financing Agreement, dated April 17, 2020, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (6) 10.21 Amendment No. 3 to the Financing Agreement, dated May 1, 2020, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (6 ) 10.22 Amendment No. 4 to the Financing Agreement, dated May 13, 2020, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (6) 10.23 Amendment No. 5 to the Financing Agreement, dated August 5, 2020, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (6) 10.24 Amendment No. 6 to the Financing Agreement, dated November 8, 2020, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (19) 10.25 Amendment No. 7 to the Financing Agreement, dated January 13, 2021, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (2 0) 10.26*** Amendment No. 8 to the Financing Agreement, dated March 1, 2021, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (20) 10.27*** Amendment No. 9 to the Financing Agreement, dated March 8, 2022, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (37) 10.28 Pledge and Security Agreement, dated April 24, 2019, by and among TherapeuticsMD, Inc. as the Borrower, vitaMedMD, LLC, BocaGreenMD, Inc. and vitaCare Prescription Services, Inc. as the Guarantors, TPG Specialty Lending, Inc., Top IV Talents, LLC and Tao Talents, LLC as the Lenders (21) 10.29 Subscription Agreement, dated August 5, 2020, by and among TherapeuticsMD, Inc. and the Subscribers identified on the Schedule of Subscribers attached thereto (6) 10.30*** Commercial Supply Agreement, dated September 28, 2018, by and between TherapeuticsMD, Inc. and QPharma AB (22) 10.31** Softgel Commercial Supply Agreement, dated April 20, 2016, by and between TherapeuticsMD, Inc. and Catalent Pharma Solutions, LLC (23) 10.32*** Amendment No. 2 to the Commercial Supply Agreement, dated September 29, 2020, between TherapeuticsMD, Inc. and Catalent Pharma Solutions, LLC (19) 70 Exhibit No. Description 10.33** Softgel Commercial Supply Agreement, dated June 24, 2016, by and between TherapeuticsMD, Inc. and Catalent Pharma Solutions, LLC (24) 10.34*** Amendment No.1 to Softgel Commercial Supply Agreement, dated December 1, 2017, by and between TherapeuticsMD, Inc. and Catalent Pharma Solutions, LLC (19) 10.35*** Amendment No.2 to Softgel Commercial Supply Agreement, dated September 29, 2020, by and between TherapeuticsMD, Inc. and Catalent Pharma Solutions, LLC (19) 10.36*** License Agreement, dated July 30, 2018, by and between TherapeuticsMD, Inc. and The Population Council, Inc. (25) 10.37* Agreement to Forfeit Non-Qualified Stock Options, dated May 8, 2013, between the Company and Robert G. Finizio (26) 10.38*** Lease, dated October 5, 2018, by and between 951 Yamato Acquisition Company, LLC and TherapeuticsMD, Inc. (27) 10.39* Executive Employment Agreement, dated as of August 3, 2021, by and between TherapeuticsMD, Inc. and Hugh O’Dowd (32) 10.40* TherapeuticsMD, Inc. Inducement Grant Restricted Stock Unit Agreement, dated as of August 31, 2021, by and between TherapeuticsMD, Inc. and Hugh O’Dowd (33) 10.41* Employment Agreement, dated June 1, 2020, between the Company and James C. D’Arecca (6) 10.42* Amendment to Employment Agreement, dated October 15, 2021, between TherapeuticsMD, Inc. and James C. D’Arecca (34) 10.43* Executive Employment Agreement, dated October 15, 2021, by and between TherapeuticsMD, Inc. and Mark Glickman (35) 10.44* TherapeuticsMD, Inc. Inducement Grant Restricted Stock Unit Agreement, dated October 15, 2021, by and between TherapeuticsMD, Inc. and Mark Glickman (36) 10.45* Amended and Restated Employment Agreement, dated November 24, 2020, between the Company and Michael Donegan (28) 10.46* Amended and Restated Employment Agreement, dated November 24, 2020, between the Company and Robert G. Finizio (28) 10.47* Amended and Restated Employment Agreement, dated November 24, 2020, between the Company and John C.K. Milligan, IV (28) 10.48* Amendment, dated April 8, 2021, to the Amended and Restated Employment Agreement, dated as of November 24, 2020, by and between TherapeuticsMD, Inc. and John C.K. Milligan, IV (30) 10.49* Employment Agreement, October 30, 2019, between the Company and Edward J. Borkowski (20) 10.50* Amendment to Employment Agreement between the Company and Edward J. Borkowski (20) 10.51*** License and Supply Agreement, dated June 6, 2019, by and between TherapeuticsMD, Inc. and Theramex HQ UK Limited (21) 10.52* Form of Indemnification Agreement between TherapeuticsMD, Inc. and each of its executive officers and directors (19) 10.53 Controlled Equity Offering SM Sales Agreement, dated November 27, 2020, by and between TherapeuticsMD, Inc. and Cantor Fitzgerald & Co. (28) 10.54 Controlled Equity Offering SM Sales Agreement, dated March 3, 2021, by and between TherapeuticsMD, Inc. and Cantor Fitzgerald & Co. (29) 10.55*† 2022 Executive Retention and Performance Bonus Plan. (ERB-Plan) 21.1 Subsidiaries of the Company (10) 23.1† Consent of Grant Thornton LLP 31.1† Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) 31.2† Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) 32.1†† Section 1350 Certification of Chief Executive Officer 32.2†† Section 1350 Certification of Chief Financial Officer 71 Exhibit No. Description 101† Inline XBRL Document Set for the consolidated financial statements and accompanying notes in Part IV, Item 15(a), “Financial Statements and Financial Statements Schedules” of this Annual Report on Form 10-K 104† Inline XBRL for the cover page of this Annual Report on Form 10-K, included in the Exhibit 101 Inline XBRL Document Set * Indicates a contract with management or compensatory plan or arrangement. ** Certain confidential material contained in the document has been omitted and filed separately with the Securities and Exchange Commission. Confidential treatment has been granted with respect to this omitted information. *** Portions of this exhibit have been redacted in compliance with Regulation S-K Item 601(b)(2). The omitted information is not material and would likely cause competitive harm to the Company if publicly disclosed. + Certain of the exhibits and schedules to this exhibit have been omitted in accordance with Item 601(a)(5) of Regulation S-K. The Company agrees to furnish a copy of all omitted exhibits and schedules to the SEC upon its request. † Filed herewith. †† Furnished herewith. (1) Filed as an exhibit to Form 8-K filed with the Commission on July 10, 2009 and incorporated herein by reference (SEC File No. 000-16731). (2) Filed as an exhibit to Form 8-K filed with the Commission on June 14, 2010 and incorporated herein by reference (SEC File No. 000-16731). (3) Filed as an exhibit to Form 10-K for the year ended December 31, 2007 filed with the Commission on May 1, 2008 and incorporated herein by reference (SEC File No. 000-16731). (4) Filed as an exhibit to Form 8-K filed with the Commission on July 21, 2011 and incorporated herein by reference (SEC File No. 000-16731). (5) Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2010 filed with the Commission on August 3, 2010 and incorporated herein by reference (SEC File No. 000-16731). (6) Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2020 filed with the Commission on August 7, 2020 and incorporated herein by reference (SEC File No. 001-00100). (7) Filed as an exhibit to Definitive 14C Information Statement filed with the Commission on June 29, 2010 and incorporated herein by reference (SEC File No. 000-16731). (8) Filed as an exhibit to Form 8-K filed with the Commission on December 22, 2015 and incorporated herein by reference (SEC File No. 001-00100). (9) Filed as an exhibit to Form S-3 filed with the Commission on January 25, 2013 and incorporated hereby by reference (SEC File No. 333-186189). (10) Filed as an exhibit to Form 10-K for the year ended December 31, 2019 filed with the Commission on February 24, 2020 and incorporated herein by reference (SEC File No. 001-00100). (11) Filed as an exhibit to Form 8-K filed with the Commission on October 11, 2011 and incorporated herein by reference (SEC File No. 000-16731). (12) Filed as an exhibit to Form S-8 filed with the Commission on June 21, 2019 and incorporated herein by reference (SEC File No. 333-232268). (13) Filed as an exhibit to Form 8-K filed with the Commission on August 22, 2013 and incorporated herein by reference (SEC File No. 001-00100). (14) Filed as an exhibit to Registration Statement on Form S-8 filed with the Commission on October 15, 2013 and incorporated herein by reference (SEC File No. 333-191730). (15) Filed as an appendix to the Definitive Proxy Statement filed with the Commission on May 4, 2020 and incorporated herein by reference (SEC File No. 000-00100). (16) Filed as an exhibit to Form 8-K filed with the Commission on October 24, 2011 and incorporated herein by reference (SEC File No. 000-16731). 72 (17) Filed as an exhibit to Form 8-K filed with the Commission on February 24, 2012 and incorporated herein by reference (SEC File No. 000-16731). (18) Filed as an exhibit to Form 8-K filed with the Commission on February 6, 2013 and incorporated herein by reference (SEC File No. 000-16731). (19) Filed as an exhibit to Form 10-Q filed with the Commission on November 9, 2020 and incorporated herein by reference (SEC File No. 000-00100). (20) Filed as an exhibit to Form 10-K for the year ended December 31, 2020 filed with the Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 001-00100). (21) Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2019 filed with the Commission on August 9, 2019 and incorporated herein by reference (SEC File No. 001-00100). (22) Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2019 filed with the Commission on November 8, 2019 and incorporated herein by reference (SEC File No. 001-00100). (23) Filed as an exhibit to Form 10-Q for the quarter ended June 30, 2018 filed with the Commission on July 30, 2018 and incorporated herein by reference (SEC File No. 001-00100). (24) Filed as an exhibit to Form 10-K for the year ended December 31, 2018 filed with the Commission on February 27, 2019 and incorporated herein by reference (SEC File No. 001-00100). (25) Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2018 filed with the Commission on November 8, 2018 and incorporated herein by reference (SEC File No. 001-00100). (26) Filed as an exhibit to Form 10-Q for the quarter ended March 31, 2013 filed with the Commission on May 10, 2013 and incorporated herein by reference (SEC File No. 001-00100). (27) Filed as an exhibit to Form 10-Q for the quarter ended September 30, 2019 filed with the Commission on November 8, 2019 and incorporated herein by reference (SEC File No. 001-00100). (28) Filed as an exhibit to Form 8-K filed with the Commission on November 27, 2020 and incorporated herein by reference (SEC File No. 001-00100). (29) Filed as an exhibit to Registration Statement on Form S-3 filed with the Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 333-253851). (30) Filed as an exhibit to Form 8-K filed with the Commission on April 12, 2021 and incorporated herein by reference (File No. 001-00100). (31) Filed as an appendix to the Definitive Proxy Statement filed with the Commission on April 14, 2021 and incorporated herein by reference (File No. 001-00100). (32) Filed as an exhibit to Form 8-K filed with the Commission on August 9, 2021 and incorporated herein by reference (File No. 001-00100). (33) Filed as exhibit to Form S-8 filed with the Commission on August 31, 2021 and incorporated herein by reference (File No. 333-259221) (34) Filed as an exhibit to Form 10-Q for the quarterly period ended September 30, 2021 filed with the Commission on November 11, 2021 and incorporated herein by reference (SEC File No. 001-00100). (35) Filed as an exhibit to Form S-8 filed with the Commission on October 15, 2021 and incorporated herein by reference (File No. 333-260295). (36) Filed as an exhibit to Form S-8 filed with the Commission on October 15, 2021 and incorporated herein by reference (File No. 333-260295). (37) Filed as an exhibit to Form 8-K filed with the Commission on March 10, 2022 and incorporated herein by reference (File No. 001-00100). Item 16. Form 10-K summary None. 73 Signatures Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this 2021 10-K Report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 23, 2022 THERAPEUTICSMD, INC. /s/ Hugh O’Dowd Hugh O’Dowd Chief Executive Officer /s/ James C. D’Arecca James C. D’Arecca Chief Financial Officer Pursuant to the requirements of the Securities Exchange Act of 1934, this 2021 10-K Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated on March 23, 2022. Signature Title /s/ Hugh O’Dowd Chief Executive Officer and Director Hugh O’Dowd (Principal Executive Officer) /s/ James C. D’Arecca Chief Financial Officer James C. D’Arecca (Principal Financial Officer) /s/ Michael C. Donegan Chief Accounting Officer Michael C. Donegan (Principal Accounting Officer) /s/ Tommy G. Thompson Chairman Tommy G. Thompson /s/ Paul M. Bisaro Director Paul M. Bisaro /s/ Cooper C. Collins Director Cooper C. Collins /s/ Karen L. Ling Director Karen L. Ling /s/ Jules A. Musing Director Jules A. Musing /s/ Gail K. Naughton, Ph.D. Director Gail K. Naughton, Ph.D. /s/ Angus C. Russell Director Angus C. Russell 74 INDEX TO FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID Number 248 ) F-2 Consolidated Balance Sheets F-4 Consolidated Statements of Operations F-5 Consolidated Statements of Stockholders’ Deficit F-6 Consolidated Statements of Cash Flows F-7 Notes to Consolidated Financial Statements F-8 F-1 Report of Independent Registered Public Accounting Firm Board of Directors and Stockholders TherapeuticsMD, Inc. Opinion on the financial statements We have audited the accompanying consolidated balance sheets of TherapeuticsMD, Inc. (a Nevada corporation) and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America. Going concern The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred a net loss of $172.4 million during the year ended December 31, 2021, and as of that date, the Company’s current liabilities exceeded its current assets by $133.4 million and its total liabilities exceeded its total assets by $93.6 million. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Basis for opinion These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical audit matters The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate. Calculation of variable consideration related to rebates As described further in Note 1 to the financial statements, the transaction price of the Company’s prescription products is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. We identified the calculation of variable consideration related to rebates as a critical audit matter. F-2 The principal consideration for our determination that the calculation of variable consideration related to rebates was a critical audit matter is that auditing the estimation of variable consideration for rebates requires significant judgement and the amounts are material to the financial statements taken as a whole. These estimates require the consideration of the estimated level of inventory in the distribution channel, average rebate percentage, and expected insurance adjudication rate, all of which are key assumptions and have estimation uncertainty. Our audit procedures related to testing the calculation of variable consideration related to rebates included the following, among others: • We evaluated the design and tested the operating effectiveness of controls over management’s calculation and review of variable consideration related to rebates by verifying management’s controls over the completeness of the input data, mathematical accuracy of the calculations and evaluating the reasonableness of the estimated level of inventory in the distribution channel, average rebate percentage, and expected insurance adjudication rate. • We tested management’s rebate estimates by reviewing subsequent events or transactions. Our procedures included reviewing subsequent information related to rebate settlements. We also evaluated the average rebates by vouching a sample of transactions settled during the year to source documentation, agreeing rebate percentages to underlying contracts, and we performed a sensitivity analysis that considered the estimated level of inventory in the distribution channel, average rebate percentage and expected adjudication rate. /s/ GRANT THORNTON LLP We have served as the Company’s auditor since 2015. Miami, Florida March 23, 2022 F-3 TherapeuticsMD, Inc. and Subsidiaries Consolidated Balance Sheets (In thousands, except per share amounts) As of December 31, 2021 2020 Assets: Current assets: Cash $ 65,122 $ 80,486 Accounts receivable, net of allowance for credit losses of $ 1,334 and $ 1,118 as of December 31, 2021 and 2020, respectively 36,176 32,382 Inventory 7,622 7,993 Prepaid and other current assets 10,548 7,543 Total current assets 119,468 128,404 Fixed assets, net 1,199 1,942 License rights and other intangible assets, net 40,318 41,445 Right of use assets 8,234 9,566 Other non-current assets 253 253 Total assets $ 169,472 $ 181,610 Liabilities and stockholders' deficit: Current liabilities: Current maturities of long-term debt $ 188,269 $ — Accounts payable 20,318 21,068 Accrued expenses and other current liabilities 44,304 38,170 Total current liabilities 252,891 59,238 Long-term debt, net — 237,698 Operating lease liabilities, non-current 8,063 8,675 Other non-current liabilities 2,139 — Total liabilities 263,093 305,611 Commitments and contingencies (Note 9) Stockholders' deficit: Preferred stock, par value $ 0.001 ; 10,000 shares authorized, none issued — — Common stock, par value $ 0.001 ; 600,000 shares authorized, 429,886 and 299,765 issued and outstanding as of December 31, 2021 and 2020, respectively 430 300 Additional paid-in capital 957,309 754,644 Accumulated deficit ( 1,051,360 ) ( 878,945 ) Total stockholders' deficit ( 93,621 ) ( 124,001 ) Total liabilities and stockholders' deficit $ 169,472 $ 181,610 The accompanying notes are an integral part of these consolidated financial statements. F-4 TherapeuticsMD, Inc. and Subsidiaries Consolidated Statements of Operations (In thousands, except per share amounts) Year ended December 31, 2021 2020 2019 Revenue: Product revenue, net $ 85,780 $ 62,872 $ 34,141 License revenue 1,171 2,000 15,506 Total revenue, net 86,951 64,872 49,647 Cost of goods sold 18,838 15,975 6,335 Gross profit 68,113 48,897 43,312 Operating expenses: Selling and marketing 108,195 117,052 114,231 General and administrative 92,602 76,954 60,494 Research and development 7,086 10,432 19,792 Total operating expenses 207,883 204,438 194,517 Loss from operations ( 139,770 ) ( 155,541 ) ( 151,205 ) Other (expense) income: Loss on extinguishment of debt — — ( 10,058 ) Interest expense and other financing costs ( 32,917 ) ( 28,581 ) ( 17,382 ) Other income, net 272 598 2,500 Total other expense, net ( 32,645 ) ( 27,983 ) ( 24,940 ) Loss before income taxes ( 172,415 ) ( 183,524 ) ( 176,145 ) Provision for income taxes — — — Net loss $ ( 172,415 ) $ ( 183,524 ) $ ( 176,145 ) Loss per common share, basic and diluted $ ( 0.43 ) $ ( 0.67 ) $ ( 0.72 ) Weighted average common shares, basic and diluted 397,992 275,649 246,353 Comprehensive loss: Net loss $ ( 172,415 ) $ ( 183,524 ) $ ( 176,145 ) Other comprehensive income — — — Comprehensive loss $ ( 172,415 ) $ ( 183,524 ) $ ( 176,145 ) The accompanying notes are an integral part of these consolidated financial statements. F-5 TherapeuticsMD, Inc. and Subsidiaries Consolidated Statements of Stockholders' Deficit (In thousands) Common Stock Additional Paid in Accumulated Shares Amount Capital Deficit Total Balance, January 1, 2019 240,462 $ 240 $ 616,560 $ ( 519,276 ) $ 97,524 Shares issued for sale of common stock, net of cost 29,900 30 77,001 — 77,031 Shares issued for exercise of warrants, net of cashless exercises 471 1 ( 1 ) — — Shares issued for exercise of options 344 — 109 — 109 Share-based payment award compensation costs — — 10,682 — 10,682 Net loss — — — ( 176,145 ) ( 176,145 ) Balance, December 31, 2019 271,177 271 704,351 ( 695,421 ) 9,201 Shares issued for sale of common stock, net of cost 26,953 27 31,676 — 31,703 Shares issued for exercise of options 1,182 1 271 — 272 Shares issued for vested restricted and performance stock units 453 1 ( 1 ) — — Warrants issued in relation to debt financing agreement — — 7,668 — 7,668 Share-based payment award compensation costs — — 10,679 — 10,679 Net loss — — — ( 183,524 ) ( 183,524 ) Balance, December 31, 2020 299,765 300 754,644 ( 878,945 ) ( 124,001 ) Shares issued for sale of common stock, net of cost 121,765 122 183,993 — 184,115 Shares issued for exercise of warrants, net of cashless exercises 1,103 1 277 — 278 Shares issued for exercise of options 111 — 44 — 44 Shares issued for vested restricted and performance stock units 6,806 7 ( 7 ) — — Shares issued for sale of common stock related to employee stock purchase plan 336 — 233 — 233 Share-based payment award compensation costs — — 18,125 — 18,125 Net loss — — — ( 172,415 ) ( 172,415 ) Balance, December 31, 2021 429,886 $ 430 $ 957,309 $ ( 1,051,360 ) $ ( 93,621 ) The accompanying notes are an integral part of these consolidated financial statements. F-6 TherapeuticsMD, Inc. and Subsidiaries Consolidated Statements of Cash Flows (In thousands) Year ended December 31, 2021 2020 2019 Cash flows from operating activities: Net loss $ ( 172,415 ) $ ( 183,524 ) $ ( 176,145 ) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 4,093 4,067 1,392 Charges to provision for doubtful accounts 533 238 318 Inventory charge 1,082 7,205 — Debt financing fees 5,689 2,532 856 Share-based payment compensation costs 18,125 10,679 10,682 Write-off of patent and trademark — 1,132 79 Loss of extinguishment of debt — — 10,058 Other 720 1,541 1,074 Changes in operating assets and liabilities: Accounts receivable ( 4,327 ) ( 8,224 ) ( 13,651 ) Inventory ( 711 ) ( 3,337 ) ( 8,593 ) Prepaid and other current assets ( 3,005 ) 3,209 ( 1,734 ) Accounts payable ( 750 ) 1,887 ( 3,563 ) Accrued expenses and other current liabilities 6,134 2,904 13,675 Other non-current liabilities 2,139 220 ( 166 ) Total adjustments 29,722 24,053 10,427 Net cash used in operating activities ( 142,693 ) ( 159,471 ) ( 165,718 ) Cash flows from investing activities: Payment for patent related costs ( 2,189 ) ( 1,391 ) ( 1,442 ) Payment for intellectual property license — — ( 20,000 ) Purchase of fixed assets ( 34 ) ( 207 ) ( 2,450 ) Net cash used in investing activities ( 2,223 ) ( 1,598 ) ( 23,892 ) Cash flows from financing activities: Proceeds from sale of common stock, net of costs 184,115 31,703 77,031 Proceeds from exercise of options and warrants 322 272 109 Proceeds from sale of common stock related to employee stock purchase plan 233 — — Repayments of debt ( 50,000 ) — ( 81,661 ) Borrowings of debt — 50,000 200,000 Payment of debt financing fees ( 5,118 ) ( 1,250 ) ( 6,652 ) Net cash provided by financing activities 129,552 80,725 188,827 Net decrease in cash ( 15,364 ) ( 80,344 ) ( 783 ) Cash, beginning of period 80,486 160,830 161,613 Cash, end of period $ 65,122 $ 80,486 $ 160,830 Supplemental disclosure of cash flow information: Interest paid $ 25,068 $ 25,849 $ 17,788 Supplemental disclosure of noncash financing activities: Warrants issued in relation to debt financing agreement $ — $ 7,668 $ — The accompanying notes are an integral part of these consolidated financial statements. F-7 TherapeuticsMD, Inc. and Subsidiaries Notes to the Consolidated Financial Statements 1. Business, basis of presentation, new accounting standards and summary of significant accounting policies General TherapeuticsMD, Inc. (the “Company”), a Nevada corporation, and its consolidated subsidiaries are referred to collectively in this Annual Report on Form 10-K (“2021 10-K Report”) as “TherapeuticsMD,” “we,” “our” and “us.” This 2021 10-K 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 2021 10-K Report may appear without the ® , TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties. We are 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. At TherapeuticsMD, we combine entrepreneurial spirit, clinical expertise, and business leadership to develop and commercialize health solutions that enable new standards of care for women. Our solutions range from a patient-controlled, long-lasting contraceptive to advanced hormone therapy pharmaceutical products. We also have a portfolio of branded and generic prescription prenatal vitamins under the vitaMedMD and BocaGreenMD brands. Our portfolio of products focused on women’s health allows us to efficiently leverage our sales and marketing plan to grow our recently approved products. Beginning in 2018, the U.S. Food and Drug Administration (“FDA”) approval of our pharmaceutical products transitioned our company from predominately focused on conducting research and development to one focused on commercializing our pharmaceutical products. • In July 2018, we launched our FDA-approved product IMVEXXY (estradiol vaginal inserts) for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy, or VVA, due to menopause, which was approved by the FDA in May 2018. • In April 2019, we launched our FDA-approved product BIJUVA (estradiol and progesterone) capsules, our hormone therapy combination of bioidentical 17ß-estradiol and bio-identical progesterone in a single, oral softgel capsule, for the treatment of moderate-to-severe vasomotor symptoms, or VMS, due to menopause in women with a uterus, which was approved by the FDA in October 2018. • In October 2019, we began a “test and learn” market introduction for our FDA-approved product ANNOVERA (segesterone acetate and ethinyl estradiol vaginal system), the first and only annual patient-controlled, procedure-free, reversible prescription contraceptive option for women, which was approved by the FDA in August 2018 and which we have licensed for commercialization in the U.S. pursuant to an exclusive license agreement with the Population Council, Inc. (the “Population Council”), or the Population Council License Agreement. We paused the full commercial launch of ANNOVERA in March 2020 due to the impact of the COVID-19 pandemic and resumed this initiative in July 2020. We have also entered into license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S. • In July 2018, we entered into a license and supply agreement (the “Knight License Agreement”) with Knight Therapeutics Inc. (“Knight”) pursuant to which we granted Knight an exclusive license to commercialize IMVEXXY and BIJUVA in Canada and Israel. • In June 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. COVID-19 With multiple variant strains of the SARS-Cov-2 virus and the COVID-19 disease that it causes (collectively, “COVID-19”) still circulating, we continue to be subject to risks and uncertainties in connection with the COVID-19 pandemic. The extent of the future impact of the COVID-19 pandemic on our business continues to be highly uncertain and difficult to predict. 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. F-8 Since the early phase of the COVID-19 pandemic, we have been using substantial virtual options to ensure business continuity. We have also partnered with independent community pharmacies and multiple third-party online pharmacies and telemedicine providers that focus on contraception or menopause which provide patients real-time access to both diagnosis and treatment. We continue to support prescribers’ needs with samples and product materials through our sales force. If access is restricted, we have mailing options in place for these materials. We also have business continuity plans and infrastructure in place that allows for live virtual e-detailing of our products. As part of our response to the COVID-19 pandemic, we implemented measures to reduce marketing expenses for 2020 and we also implemented cost saving measures in 2020 and 2021, which included negotiating lower fees or suspending services from third-party vendors; implementing a company-wide hiring restriction; delaying or cancelling non-critical information technology projects; and eliminating non-essential travel, entertainment, meeting, and event expenses. In addition, we implemented 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 estimated annualized cost savings of approximately $ 20.0 million from, or the costs associated with the sale of vitaCare for which we signed a definitive agreement on March 6, 2022. See Note 17 – Subsequent events for a description of the vitaCare divestiture. The full impact of the COVID-19 pandemic continues to evolve. However, we remain committed to the execution of our corporate goals, despite the ongoing COVID-19 pandemic, as demonstrated in part by the increase in product revenue throughout 2021. As of the date of issuance of these consolidated financial statements, the future extent to which the COVID-19 pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain. We are continuing to assess the effect of the COVID-19 pandemic on our operations by monitoring the spread of COVID-19 and the various actions implemented to combat the pandemic throughout the world. 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 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 We incurred a net loss of $ 172.4 million during the year ended December 31, 2021, and as of that date, our current liabilities exceeded our current assets by $ 133.4 million and our total liabilities exceeded our total assets by $ 93.6 million. We will need to raise additional capital to repay the entire principal balance of our Financing Agreement, which matures on June 1, 2022, and to provide additional liquidity to fund our losses until our operations become cash flow positive. To address our capital needs, we are pursuing various equity and debt financing and other alternatives, including the sale of vitaCare for which we signed a definitive agreement on March 6, 2022. The equity financing alternatives may include the private placement of equity, equity-linked, or other similar instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions, including the market price of our common stock and the potential delisting of our common stock from the Nasdaq Global Select Market, and our available authorized shares. To the extent that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. If we are not successful in obtaining additional financing, we could be forced to discontinue or curtail our business operations, sell assets at unfavorable prices, or merge, consolidate, or combine with a company with greater financial resources in a transaction that might be unfavorable to us. 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 2021 10-K Report. 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. See “Inventory” in Note 3 for additional information regarding risks associated with our contract manufacturers, particularly for ANNOVERA. The presence of these projected factors in conjunction with F-9 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. The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern. A. Basis of presentation The consolidated financial statements and related notes include our parent company and all wholly-owned subsidiaries. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Our fiscal year-end is as of and for the year ended December 31st for each year presented. All intercompany transactions among our businesses have been eliminated. Certain amounts in the n otes to the consolidated financial statements may not add due to rounding, and all percentages have been calculated using unrounded amounts. B. New accounting standards Adoption of new accounting standards New accounting standards or accounting standards updates were assessed and determined to be either not applicable or did not have a material impact on the Company’s consolidated financial statements or processes. Accounting standards issued but not yet adopted Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and Scope. In March 2020 and January 2021, Accounting Standards Update (“ASU”) 2020-04 and ASU 2021-01 were issued, respectively. These ASUs provide optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as London Interbank Offered Rate (LIBOR). These ASUs include practical expedients for contract modifications due to reference rate reform. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. These ASUs were effective upon issuance and may be applied prospectively to contract modifications made or evaluated on or before December 31, 2022. Our debt agreements currently include the use of alternate rates when LIBOR is not available. We do not expect the change from LIBOR to an alternate rate will have a material impact to our financial statements and, to the extent we enter into modifications of agreements that are impacted by the LIBOR phase-out, we will apply such guidance to those contract modifications. Other recently issued accounting standards not yet adopted by us are not expected, upon adoption, to have a material impact on the Company’s consolidated financial statements or processes. C. Estimates and assumptions The preparation of consolidated financial statements in conformity to U.S. GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimated assumptions based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ, at times in material amounts, from these estimates under different assumptions or conditions. D . Cash We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits of $ 0.25 million per bank. We have never experienced any losses related to these funds. E . Accounts receivable and allowance for doubtful accounts Accounts receivable are customer obligations due under normal trade terms and are measured at amortized cost. We extend credit on an unsecured basis to most of our customers based on an evaluation of a customer’s financial condition, and collateral is not required. Our accounts receivable concentration of credit risk is primarily limited customers who are drug wholesalers and retail pharmacy distributors. We review accounts receivable for uncollectible and delinquent accounts and credit card chargebacks, and we provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, reasonable supportable F-10 forecasts, and existing economic conditions , and we record an allowance that presents the net amount expected to be collected. We write off uncollectible and delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required. Our exposure to credit losses may increase if our customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. Although we have historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables in the future. F . Inventories Inventories represent pharmaceutical products, packaged vitamins and raw materials which are valued at the lower of cost or net realizable value. Our pharmaceutical products are valued using first in first out method and our vitamins are valued using the average-cost method. We review inventories for excess and obsolescence, and we write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Obsolescence may occur due to product expiring, product improvements rendering previous versions obsolete, or decreases in demand for our products. G . Fair Value Measurements Fair value is the price to sell an asset or transfer a liability and therefore represents an exit price in the principal market (or in the absence of a principal market, the most advantageous market). It represents a market-based measurement that contemplates a hypothetical transaction between market participants at the measurement date. The unique characteristics of an asset or liability and the availability of observable prices affect the number of valuation approaches and/or techniques used in a fair value analysis. We measure fair value using observable and unobservable inputs. We give the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs). We apply the following fair value hierarchy: • Level 1 - Quoted prices (unadjusted) in active markets for identical assets and liabilities. • Level 2 - Quoted prices in non-active markets or in active markets for similar assets or liabilities, observable inputs other than quoted prices; and inputs that are not directly observable but are corroborated by observable market data. • Level 3 - Inputs that are unobservable. The carrying amount of our cash, accounts receivable, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments, which are considered Level 1 under the fair value hierarchy. The carrying amount of our debt approximates fair value since it bears interest either at variable rates or fixed rates which are not significantly different from market rates, which are considered Level 2 under the fair value hierarchy. H . Fixed assets Fixed assets are carried at cost less accumulated depreciation and amortization. We charge maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs to operating expenses as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years . Leasehold improvements are depreciated over the shorter of their useful life or the term of the lease. Long-lived assets held and used by us, including fixed assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. We capitalize software and software development costs incurred to create and acquire computer software for internal use, principally related to software coding and application development. We begin to capitalize software development costs when both the preliminary project stage is completed, and it is probable that the software will be used as intended. Capitalized software costs include only external direct costs and services utilized in developing or obtaining computer software. Capitalized software costs are amortized on a straight-line basis when placed into service over the estimated useful life, generally five to seven years . F-11 I. License rights and other intangibles assets We record license rights and other intangible assets at cost, which includes external costs, consisting primary of legal costs, incurred in securing our patents and trademarks. We started amortizing license rights cost once ANNOVERA became commercially available for use. License rights cost is amortized over the useful life over which the license rights will contribute directly or indirectly to our cash flows, which is estimated to be the remaining patent life of ANNOVERA, expiring in June 2039 . The cost is amortized using the straight-line method as the pattern of economic benefit cannot be reliably determined. Intangible assets subject to amortization, such as patents, are amortized over the useful life of the patent using the straight-line method. If the patent is not granted, we write-off any capitalized patent costs at that time. Intangible assets not subject to amortization, such as trademarks, are perpetual and have indefinite lives. We review license rights and other intangible assets subject to amortization on a periodic basis to determine whether events and circumstances would indicate impairment or warrant a revision to their remaining useful lives. We assess other intangible assets not subject to amortization for potential impairment at least annually during the fourth quarter of each year, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible assets below their carrying value. J. Segment reporting We manage and operate as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single executive leadership team, which is led by our chief executive officer. We do not operate separate lines of business with respect to any of our products, and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales within the United States. Accordingly, we view our business as one reportable operating segment. With one geographic location. K. Revenue recognition We determine the amount of revenue to be recognized through application of the following steps: • Identification of the contract with a customer; • Identification of the performance obligations in the contract; • Determination of the transaction price; • Allocation of the transaction price to the performance obligations in the contract; and • Recognition of revenue when or as we satisfy the performance obligations. Essentially all of our revenue is generated through contracts with our customers, who are primarily wholesale distributors and retail pharmacies. A performance obligation is a promise in a contract to transfer a product or service to a customer. A good or service is considered to be transferred when the customer receives the goods or service or obtains control, and we treat shipping as a fulfillment activity rather than as a separate obligation. We generally recognize revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. Revenue is recognized upon transfer of control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met. Prescription products Prescription products are sold at fixed wholesale acquisition cost, or WAC, determined based on our list price. However, the total transaction price is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. These estimates are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). To determine the transaction price, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract or each variable consideration. The estimated amount of variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative product revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In determining amounts of variable consideration to include in a contract’s transaction price, we F-12 rely on our historical experience and other evidence that supports our qualitative assessment of whether product revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a product revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such changes in estimates become known. We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months prior to and up to 12 months following product expiration. ANNOVERA cannot be returned before the expiration date and expired ANNOVERA can be returned up to 12 months past the expiration date. Our prescription vitamins, IMVEXXY and BIJUVA currently have a shelf life of 24 months from the date of manufacture and ANNOVERA currently has a shelf life of 18 months from the date of manufacture. We do not allow product returns for prescription products that have been dispensed to a patient. We estimate the amount of our product sales that may be returned by our customers and record this estimate as a reduction of product revenue in the period the related product revenue is recognized. Where historical rates of return exist, we use history as a basis to establish a returns reserve for products shipped to wholesalers. For our newly launched products, for which the right of return exists but for which we currently do not have history of product returns, we estimate returns based on available industry data, our own sales information and our visibility into the inventory remaining in the distribution channel. At the end of each reporting period, we may decide to constrain product revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of products currently being shipped, price changes of competitive products and any introductions of generic products. We recognize the amount of expected returns as a refund liability, representing the obligation to return the customer’s consideration. Since our returns primarily consist of expired and short dated products that will not be resold, we do not record a return asset for the right to recover the goods returned by the customer at the time of the initial sale (when recognition of product revenue is deferred due to the anticipated return). We offer various rebate and discount programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed and adjusted, if necessary, on a quarterly basis. We record distributor fees based on amounts stated in contracts. We estimate chargebacks based on number of units sold during the period taking into account prices stated in contracts and our historical experience. We provide discounts to our customers for prompt payment. Consumer rebates and coupons costs, distribution fees, chargebacks and discounts are deducted from gross product revenue at the time the product revenue is recognized. For our prescription products, we offer a co-pay assistance program for eligible enrolled patients whose out of pocket costs are reduced to a more affordable price. This allows patients to access the product at a reasonable cost and is in line with our responsible pricing approach. We reimburse pharmacies for this discount through third-party vendors. The variable consideration is estimated based on contract prices, the estimated percentage of patients that will utilize the copay assistance, the average assistance paid, the estimated levels of inventory in the distribution channel and the current level of prescriptions covered by patients’ insurance. Payers may change coverage levels for our prescription products positively or negatively, at any time up to the time that we have formally contracted coverage with the payer. As such, the net transaction price of our prescription products is susceptible to such changes in coverage levels, which are outside the influence of the Company. As a result, we constrain variable consideration for our prescription products to an amount that will not result in a significant product revenue reversal in future periods. Our ability to estimate the net transaction price for our prescription products is constrained by our estimates of the amount to be paid for the co-pay assistance program which is directly related to the level of prescriptions paid for by insurance. As such, we record an accrual to reduce gross sales for the estimated co-pay and other patient assistance based on currently available third-party data and our internal analyses. We re-evaluate variable consideration each reporting period. License revenue License arrangements may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product royalty payments. Some of these arrangements may include multiple performance obligations. Non-refundable up-front fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized as revenue when the right to use functional intellectual property is transferred to the customer. L. Cost of sales Cost of sales includes the cost of inventory, manufacturing, manufacturing overhead and supply chain costs and product shipping and handling costs. The Population Council License Agreement requires royalty payments based on our net sales of ANNOVERA, which are recorded as a component of cost of sales. Additionally, the amortization costs of license rights are recorded as a component of cost of sales. F-13 M. Research and development Research and development expenses include internal R&D activities, costs of services of third-party contract research organizations (“CROs”) and usage of their clinical research sites, manufacturing, scale-up and validation costs, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and share-based payment award compensation costs. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and other costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various FDA submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. These consulting expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions to expenses in the period in which the facts that give rise to the revision become known. N. Share-based payment awards We account for share-based payment awards on a fair value basis of the equity instrument issued. Under fair value accounting, the grant-date fair value of the share-based payment award is amortized as compensation expense, on a straight-line basis, over the service period (generally, the vesting period) for both graded and cliff vesting awards. We have elected to account for forfeitures as they occur. O. Income taxes Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and income tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recorded as a component of the income tax provision in the period that includes the enactment date. Regular assessments are made on the likelihood that our deferred tax assets will be recovered from our future taxable income. Our evaluation is based on estimates, assumptions, and includes an analysis of available positive and negative evidence, giving weight based on the evidence’s relative objectivity. Sources of positive evidence include estimates of future taxable income, future reversal of existing taxable temporary differences, taxable income in carryback years, and available tax planning strategies. Sources of negative evidence include current and cumulative losses in recent years, losses expected in early future years, any history of operating losses or tax credit carryforwards expiring unused, and unsettled circumstances that, if unfavorably resolved, would adversely affect future profit levels. The remaining carrying value of our deferred tax assets, after recording the valuation allowance on our deferred tax assets, is based on our present belief that it is more likely than not that we will be able to generate sufficient future taxable income to utilize such deferred tax assets. The amount of the remaining deferred tax assets considered recoverable could be adjusted if our estimates of future taxable income during the carryforward period change favorably or unfavorably. To the extent we believe that it is more likely than not that some or all the remaining deferred tax assets will not be realized, we must establish a valuation allowance against those deferred tax assets, resulting in additional income tax expense in the period such determination is made. To the extent a valuation allowance currently exists, we will continue to monitor all positive and negative evidence until we believe it is more likely than not that it is no longer necessary, resulting in an income tax benefit in the period such determination is made. Our policy is to recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. Significant judgment is required in evaluating our tax positions, and in determining our provisions for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We establish reserves when, despite our belief that the income tax return positions are fully supportable, certain positions are likely to be challenged and we may ultimately not prevail in defending those positions. F-14 P. Earnings per common share Basic earnings or loss per common share is computed by dividing net income or loss available to common stockholders by the sum of the weighted average number of shares of common stock. Diluted earnings per common share is computed by dividing net income available to common stockholders by the sum of the weighted average number of shares of common stock and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued. Potentially dilutive securities include awards of non-vested or vested and not settled restricted stock units, performance stock units where the performance requirements have been met and not settled, warrants and options. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method, except if its impact is anti-dilutive. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities. Q. Leases We adopted ASU 2016-02, Leases (Topic 842), including the related codification amendments, in 2019 utilizing the modified retrospective transition method and applying the transition provisions at the effective date. We determine if an arrangement is a lease at inception. Determining whether a contract contains a lease includes judgment regarding whether the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration. We account for our lease-related assets and liabilities based on their classification as operating leases or finance leases, following the relevant accounting guidance. For all the lessee arrangements, we have elected an accounting policy to combine non-lease components with the related-lease components and treat the combined items as a lease for accounting purposes. We measure lease related assets and liabilities based on the present value of lease payments, including in-substance fixed payments, variable payments that depend on an index or rate measured at the commencement date, and the amount we believe is probable we will pay the lessor under residual value guarantees when applicable. We discount lease payments based on our estimated incremental borrowing rate at lease commencement (or modification), which is primarily based on our estimated credit rating, the lease term at commencement, and the contract currency of the lease arrangement. We have elected to exclude short-term leases (leases with an original lease term less than one year) from the measurement of lease-related assets and liabilities. We test right-of-use asset in an operating or finance lease at the asset group level (because these assets are long-lived nonfinancial assets and should be accounted for the same way as other long-lived nonfinancial assets) whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable. R . Loss Contingencies In determining whether an accrual for a loss contingency is required, we first assess the likelihood of occurrence of the future event or events that will confirm the loss. When a loss is probable (the future event or events are likely to occur) and the amount of the loss can be reasonably estimated, the estimated loss is accrued. If the reasonable estimate of the loss is a range and an amount within the range appears to be a better estimate than any other amount within the range, that amount should be accrued. However, if no amount within the range is a better estimate, the minimum amount in the range should be accrued. When a loss is reasonably possible (the chance of the future event or events occurring is more than remote but less than likely), no accrual is recognized. 2. Accounts receivable The following sets forth activities in our allowance for credit losses (in thousands): 2021 2020 2019 Balance as of beginning of period $ 1,118 $ 904 $ 597 Charges to provision for credit losses 533 238 318 Write-off of uncollectible receivables ( 317 ) ( 24 ) ( 11 ) Balance as of end of period $ 1,334 $ 1,118 $ 904 F-15 3. Inventory 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 all 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 manufacturing of ANNOVERA, which has resulted in intermittent supply of ANNOVERA for commercial distribution. 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 (“NDA”) with the FDA to modify the testing specifications for ANNOVERA to allow increased consistency of supply of ANNOVERA. In December 2021, FDA determined that it could not approve supplemental NDA without additional information. In its complete response letter (“CRL”), the FDA provided recommendations and requested additional information that could support approval of revisions to certain testing specifications. In January 2022, we responded to the CRL, and provided the requested additional information to the FDA and modified the request for the manufacturing testing limits based on the FDA recommendations. We expect a response from the FDA by the end of second quarter of 2022. We will continue to manufacture and supply ANNOVERA under the existing specifications. In the meantime, our third-party contract manufacturer may not be able to supply us with sufficient ANNOVERA to adequately supply the market, which would have an adverse effect on our business, results of operations and financial condition. Additionally, we may incur increased write-offs of ANNOVERA products manufactured in 2022 that do not meet existing specifications. We have also experienced a greater than expected amount of raw materials for ANNOVERA being out of specification. 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, or if the manufacturing specification modifications that we have requested are not approved by the FDA, 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. Our inventory consisted of the following (in thousands): As of December 31, 2021 2020 Raw materials $ 3,042 $ 3,748 Work in process 1,642 895 Finished products 2,938 3,350 Inventory $ 7,622 $ 7,993 During 2021 and 2020, we recorded inventory charges of $ 1.1 million and $ 7.2 million, respectively. The charge recorded for 2020 was primarily a result of the impact of the COVID-19 pandemic on our business, which decreased demand for our products. No inventory charge was recorded for 2019. 4. Prepaid and other current assets Our prepaid and other current assets consisted of the following (in thousands): As of December 31, 2021 2020 Insurance $ 2,731 $ 2,568 Paragraph IV legal proceeding costs 2,304 — Other 5,513 4,975 Prepaid and other current assets $ 10,548 $ 7,543 F-16 5. Fixed assets Our fixed assets, net consisted of the following (in thousands): As of December 31, 2021 2020 Furniture and fixtures $ 1,407 $ 1,407 Computer and office equipment 1,855 1,784 Computer software 375 412 Leasehold improvements 80 80 Fixed assets 3,717 3,683 Less: accumulated depreciation and amortization 2,518 1,741 Fixed assets, net $ 1,199 $ 1,942 We recorded depreciation expense of $ 0.8 million for 2021 and 2020, and $ 0.4 million for 2019. 6. Licensed rights and other intangible assets The following provides information about our license rights and other intangible assets, net (in thousands): As of December 31, 2021 As of December 31, 2020 Gross Gross Carrying Accumulated Carrying Accumulated Amount Amortization Net Amount Amortization Net License rights and other intangible assets subject to amortization: License rights $ 40,000 $ 6,826 $ 33,174 $ 40,000 $ 3,803 $ 36,197 Hormone therapy drug patents 5,834 1,042 4,792 4,045 749 3,296 Hormone therapy drug patents applied and pending approval 2,020 — 2,020 1,629 — 1,629 License rights and other intangible assets subject to amortization 47,854 7,868 39,986 45,674 4,552 41,122 Intangible assets not subject to amortization: Trademarks/trade name rights 332 — 332 323 — 323 License rights and other intangible assets, net $ 48,186 $ 7,868 $ 40,318 $ 45,997 $ 4,552 $ 41,445 We recorded amortization expense related to the exclusive license rights agreement with Population Council of $ 3.0 million for 2021 and 2020, and $ 0.8 million for 2019. We recorded amortization expense related to patents of $ 0.3 million for 2021 and 2020, and $ 0.2 million for 2019. Our license rights and other intangible assets subject to amortization is expected to be amortized as follows (in thousands): Year ending December 31, 2022 $ 3,451 2023 3,445 2024 3,447 2025 3,445 2026 3,445 Thereafter 20,733 Total $ 37,966 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 December 31, 2021, therefore, no write downs were recorded to our licensed rights and other intangible assets for 2021. For 2020 and 2019, we wrote off $ 1.1 million and $ 0.1 million, respectively, in costs related to patents and trademarks , which were included in general and administrative expenses in the accompanying consolidated statements of operations. F-17 7. Accrued expenses and other current liabilities Other accrued expenses and other current liabilities consisted of the following (in thousands): As of December 31, 2021 2020 Payroll and related costs $ 13,764 $ 11,179 Rebates 11,010 11,011 Sales returns and coupons 2,422 7,057 Selling and marketing expenses 2,850 228 Research and development expenses 1,995 925 Wholesale distributor fees 3,614 2,632 Professional fees 2,571 925 Operating lease liabilities 1,361 2,254 Other 4,717 1,959 Accrued expenses and other current liabilities $ 44,304 $ 38,170 We expense advertising costs when incurred, which amounted to $ 39.7 million, $ 35.8 million and $ 9.0 million for 2021, 2020 and 2019, respectively. 8. Debt Our debt consisted of the following (in thousands): As of December 31, 2021 2020 Financing Agreement $ 200,000 $ 250,000 Less: deferred financing fees 11,731 12,302 Debt, net 188,269 237,698 Current maturities of long-term debt 188,269 — Long-term debt $ - $ 237,698 Financing agreement We are party to a Financing Agreement with Sixth Street Specialty Lending, Inc., as administrative agent (the “Administrative Agent”), various lenders from time-to-time party thereto, and certain of our subsidiaries party thereto from time to time as guarantors. In connection with the initial borrowing under the Financing Agreement, we paid, for the benefit of the lenders, a facility fee equal to 2.5 % of the initial amount borrowed and were required to pay such a facility fee in connection with subsequent borrowings under the Financing Agreement. Borrowings under the Financing Agreement accrue interest at either (i) 3-month LIBOR plus 7.75 %, subject to a LIBOR floor of 2.70 % or (ii) the prime rate plus 6.75 %, subject to a prime rate floor of 5.2 % as selected by us. As of December 31, 2021, our interest rate was 10.45 %. Interest on amounts borrowed under the Financing Agreement is due and payable quarterly in arrears. In addition, we are required to pay an annual administrative fee, and other fees and expense. We have the right to prepay borrowings under the Financing Agreement in whole or in part at any time, subject to a prepayment fee on the principal amount being prepaid. The Financing Agreement was entered into in April 2019, and it provided us with up to a $ 300.0 million first lien secured term loan credit facility. The credit facility provided for availability to us in three tranches: (i) $ 200.0 million was drawn upon entering into the Financing Agreement; (ii) $ 50.0 million was drawn in February 2020 and (iii) $ 50.0 million was previously available to us in the Administrative Agent’s sole and absolute discretion either contemporaneously with the delivery of our financial statements for the quarterly period ended June 30, 2020 or at such earlier date as the Administrative Agent may have consented to. In the third quarter of 2020, the Administrative terminated the undrawn $ 50.0 million tranche under the Financing Agreement, therefore, such amount was no longer available to us to borrow. In August 2020, we entered into Amendment No. 5 to the Financing Agreement (“Amendment No. 5”) pursuant to which, among other amendments, the covenant in the Financing Agreement regarding our achievement of minimum consolidated net revenue attributable to commercial sales of our IMVEXXY, BIJUVA and ANNOVERA products were adjusted in order to reflect the impact of COVID-19 on our business. In lieu of a cash amendment fee, we issued to the Administrative Agent and the lenders under the Financing Agreement warrants to purchase an aggregate of 4,752,116 shares of our common stock with an exercise price of $ 1.58 per share and a ten-year term (the “Lender Warrants”). The Lender Warrants were issued pursuant to an exemption from registration under the Securities Act of 1933, F-18 as amended, and no registration rights were issued. The estimated fair value of the Lender Warrants was $ 7.4 million, and was recorded as deferred financing cost since Amendment No. 5 was accounted for a s a debt modification . In November 2020, in connection with Amendment No. 6 to the Financing Agreement (“Amendment No. 6”), we amended the Lender Warrants to provide for an adjustment to the exercise price if we conduct certain dilutive issuances prior to December 31, 2020, or if the volume-weighted average price of our common stock for the fifteen trading days ending December 31, 2020 is lower than the then current exercise price. Also, in November 2020, we concluded an underwritten public offering of our common stock and received consideration of $ 1.19 per share, after deducting for underwriting discounts and commissions. This offering of our common stock automatically triggered the down round provision to the exercise price of the Lender Warrants, which lowered the exercise price from $ 1.58 to $ 1.19 per share. The estimated fair value of the adjustment to the exercise price of Lender Warrants was $ 0.2 million and was recorded as deferred financing cost since Amendment No. 6 was accounted for as a debt modification. No other amendment financing fees were paid. In January 2021, we entered into Amendment No. 7 to the Financing Agreement (“Amendment No. 7”) pursuant to which, among other amendments, the minimum quarterly product net revenue requirements attributable to commercial sales of IMVEXXY, BIJUVA, and ANNOVERA for the fiscal quarters ending March 31, 2021 and June 30, 2021 were reduced, and we paid amendment financing fees of $ 5.0 million, which was recorded as deferred financing fees since Amendment No 7 was accounted for as debt modification. Additionally, in connection with entering into Amendment No. 7, the warrants issued to the Administrative Agent and the lenders under the Financing Agreement in August 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 adjustments were made to the exercise price of these warrants prior to the expiration of such period. In March 2021, we entered into Amendment No. 8 to the Financing Agreement (“Amendment No. 8”) pursuant to which, among other amendments, the minimum quarterly product net revenue requirements attributable to commercial sales of IMVEXXY, BIJUVA, and ANNOVERA were revised, the amortization and prepayment terms of the borrowings under the Financing Agreement were revised, and the Administrative Agent consented to a framework for our potential disposition of our vitaCare business. In connection with Amendment No. 8, we (i) repaid $ 50.0 million in principal under the Financing Agreement during the three months ended March 31, 2021, plus a 5.0 % prepayment fee and (ii) agreed to make additional quarterly principal repayments plus the prepayment fees as follows: (a) $ 5.0 million due in March 2022, June 2022 and September 2022; (b) $ 10.0 million due in December 2022 and March 2023; and (c) $ 41.25 million due in June 2023, September 2023, December 2023 and March 2024. Additionally, the prepayment fees on principal amounts being prepaid under the Financing Agreement were revised as follows: (i) 30.0 % of the principal amount being repaid through March 31, 2022 (excluding the scheduled $5.0 million principal repayment on such date, which is subject to a 5.0 % prepayment fee); (ii) 5.0 % of the principal amount being repaid from April 2022 through March 2023; (iii) 3.0 % of the principal amount being repaid from April 2023 through March 2024; and (iv) thereafter, none, in each case subject to certain limited exceptions, including with respect to a repayment in full of the obligations under the Financing Agreement. Based on the contractual quarterly principal repayments in Amendment No. 8, as of December 31, 2021, we recorded an accrual of $ 2.2 million related to future prepayment fee obligations, of which $ 1.3 million is included in accrued expenses and other current liabilities and $ 0.9 million is included in other non-current liabilities in the accompanying consolidated balance sheets. In March 2022, we entered into Amendment No. 9 to the Financing Agreement (“Amendment No. 9”). See Note 17 – Subsequent events. In accordance with Amendment No. 9, the maturity date of the Financing Agreement was amended to June 1, 2022. Accordingly, the entire debt balance of $ 200.0 million as of December 31, 2021 will be due and payable in June 2022. The Financing Agreement also includes other representations, warranties, indemnities, restrictions on the payment of dividends, and events of default that are customary for financings of this type, including an event of default relating to a change of control of the Company. Upon or after an event of default, the Administrative Agent and the lenders may declare all or a portion of our obligations under the Financing Agreement to be immediately due and payable and exercise other rights and remedies provided for under the Financing Agreement. The obligations of our company and its subsidiaries under the Financing Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a first priority perfected security interest in all existing and after acquired assets of our company and its subsidiaries. The obligations under the Financing Agreement will be guaranteed by each of our future direct and indirect subsidiaries, subject to certain exceptions. Since the inception of the Financing Agreement, we have incurred a total of $ 18.8 million in deferred financing fees related to the Financing Agreement. As of December 31, 2021, our unamortized deferred financing fees was $ 11.7 million, which will be entirely amortized upon the maturity of the Financing Agreement in 2022. Additionally, in connection with Amendment No. 9, we will pay financing fees of $ 30.0 million, which will be paid in kind (“PIK”) by being added to the principal balance of the Financing Agreement, and future prepayment fees were waived. Of the total PIK financing fees, $ 16.0 million will be waived if one of the two milestones specified in Amendment No. 9 is achieved. F-19 Debt covenants The Financing Agreement contains customary restrictions and covenants applicable to us that are customary for financings of this type. Among other requirements, prior to execution of Amendment No. 9 in March 2022, we were required to achieve certain minimum quarterly consolidated net revenue amounts attributable to commercial sales of our IMVEXXY, BIJUVA and ANNOVERA products. We were not in compliance with our covenant to achieve certain minimum quarterly product net revenue requirements for the quarterly period ended December 31, 2021 of $ 26.5 million. In connection with Amendment No 9, this event of default was waived by the Administrative Agent and lenders, and the minimum product net revenue requirement for the quarterly period ending March 31, 2022, which is the final quarterly reporting period, was removed. The Financing Agreement also required us to maintain a minimum unrestricted cash balance. As of December 31, 2021, our cash balance was in excess of the required minimum balance. However, beginning on February 7, 2022, we did not maintain the required minimum unrestricted cash balance of $ 60.0 million. In connection with Amendment No. 9, this event of default was waived by the Administrative Agent and lenders, and the required minimum unrestricted cash balance was reduced. Credit agreement In April 2019, we terminated and repaid all amounts outstanding under a Credit and Security Agreement (the “Credit Agreement”), as amended, with MidCap Financial Trust, as agent and as lender and the additional lenders party thereto using a portion of the initial tranche of borrowing under the Financing Agreement. The aggregate amount paid of $ 81.7 million included a prepayment fee of 4 %, a repayment fee of 4 % and other fees and expenses payable to the lenders under the Credit Agreement. As a result of the termination of the Credit Agreement, we recorded a $ 10.1 million loss on extinguishment of debt in 2019. Interest and financing costs Interest expense and other financing costs consisted of the following (in thousands): 2021 2020 2019 Interest expense $ 22,568 $ 26,049 $ 16,526 Prepayment fees 4,660 — — Financing fees amortization 5,689 2,532 856 Interest expense and other financing costs $ 32,917 $ 28,581 $ 17,382 9. Commitments and contingencies Leases Substantially all of our leases are for rental of office space used to conduct our business. In October 2018, we entered into a lease for e xecutive, administrative, operations and sales offices in Boca Raton, Florida. The lease includes 56,212 rentable square feet, or the full premises, of which the lease on 7,561 square feet commenced in 2018 and the lease on the remaining 48,651 square feet commenced in August 2019, or the full premises commencement date. The lease will expire 11 years after the full premises commencement date, unless terminated earlier in accordance with the terms of the lease. We have the option to extend the term of the lease for two additional consecutive periods of five years . The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised. The term of the lease includes escalating rent and free rent periods. We are also responsible for certain other operating costs under the lease, including electricity and utility expenses. In June 2019, we entered into an agreement with the same lessors to lease additional 6,536 square feet of administrative office space in the same location, pursuant to an addendum to such lease, which commenced in May 2020. For 2021, operating lease expense related to our real estate leases was $ 2.1 million and variable lease expense was $ 0.7 million. For 2020, operating lease expense related to our real estate leases was $ 2.3 million and variable lease expense was $ 0.4 million. For 2019, operating lease expense related to our real estate leases was $ 1.6 million and variable lease expense was insignificant. F-20 As of December 31, 2021, our remaining lease payments were as follows (in thousands): Year ending December 31, 2022 $ 1,413 2023 1,443 2024 1,477 2025 1,513 2026 1,551 Thereafter 5,883 Total undiscounted lease payments 13,280 Less: imputed interest 3,856 Present value of lease payments $ 9,424 The following table sets forth supplemental balance sheet information related to leases (in thousands): As of December 31, 2021 2020 Assets: Operating lease right-of-use assets $ 8,234 $ 9,566 Liabilities: Operating lease liabilities current (included in accrued expenses and other current liabilities) $ 1,361 $ 2,254 Operating lease liabilities, non-current 8,063 8,675 Total operating lease liabilities $ 9,424 $ 10,929 The following table presents other information related to leases: 2021 2020 Weighted average remaining term (years) - operating leases 8.7 9.0 Weighted average discount rate - operating leases 8.3 % 8.3 % Cash paid for amounts included in the measurement of lease liabilities from operating lease (in thousands) $ 2,335 $ 1,618 Right-of-use assets obtained in exchange for new operating lease obligations (non-cash in thousands) $ — $ 999 Population Council license agreement Under the terms of the Population Council License Agreement, we paid the Population Council a milestone payment of $ 20.0 million in 2018, which was within 30 days following the approval by the FDA of the NDA for ANNOVERA, and $ 20.0 million in 2019 following the first commercial batch release of ANNOVERA. The aggregate $ 40.0 million of milestone payments were recorded as license rights, see “Note 6. License rights and other intangible assets” for additional information. The Population Council is also eligible to receive future payments upon the achievement of certain commercial sales milestones of ANNOVERA. We are required to pay the Population Council additional milestone payments of $ 40.0 million upon cumulative net sales of ANNOVERA in the U.S. by us and our affiliated and permitted sublicensees of each of $ 200.0 million, $ 400.0 million and $ 1.0 billion. We will record any future milestone payment as incremental license rights cost when incurred, and amortize such costs over the remaining useful life over which the license rights will contribute directly or indirectly to our cash flows based on when ANNOVERA became commercially available for use. Accordingly, if and when we incur the incremental license rights cost, we will immediately record an additional amortization amount that assumed the incremental cost was incurred when the first commercial batch of ANNOVERA was released in 2019. The Population Council has agreed to perform and pay the costs and expenses associated with four post-approval studies required by the FDA for ANNOVERA, and we have agreed to perform and pay the costs and expenses associated with a post approval study required by the FDA to measure risk for venous thromboembolism, provided that if the costs and expenses associated with such post-approval study exceed $ 20.0 million, half of such excess will be offset against royalties or other payments owed by us to the Population Council under the Population Council License Agreement. To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against us, as we hold the NDA for ANNOVERA. In July 2021, we received a letter from FDA indicating that the post-marketing commitment study being conducted by the Population Council for ANNOVERA to characterize the in vivo release rate of ANNOVERA was not fulfilled to FDA’s satisfaction. In addition, the final reports F-21 for the two post-marketing requirement studies being performed by the Population Council for ANNOVERA were not submitted by the initial listed submission deadline, which deadlines have since been extended by FDA. We are working with Population Council to complete the post-marketing commitment study to FDA’s satisfaction and reduce the delay in submitting the post-marketing requirement final reports. To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against us, as we hold the NDA for ANNOVERA. We and the Population Council have agreed to form a joint product committee responsible for overseeing activities under the Population Council License Agreement. We are responsible for all aspects of marketing, promotion, product positioning, pricing, education programs, publications, sales messages and any additional desired clinical studies for the one-year vaginal contraceptive system, subject to oversight and decisions made by the joint product committee. We are also required to pay the Population Council, on a quarterly basis, step-based royalty payments based on our annual net sales of ANNOVERA as follows: (i) if annual net sales are less than or equal to $ 50.0 million, a royalty of 5 % of net sales; (ii) for annual net sales greater than $ 50.0 million and less than or equal to $ 150.0 million, a royalty of 10 % of such net sales; and (iii) for net sales greater than $ 150.0 , a royalty of 15 % of such net sales. The annual royalty rate will be reduced to 50 % of the initial rate during the six-month period beginning on the date of the first arms-length commercial sale of a generic equivalent of the one-year vaginal contraceptive system that is launched by a third-party in the U.S., and thereafter will be reduced to 20 % of the initial rate. Unless earlier terminated, the Population Council License Agreement will remain in effect until the later of the expiration of the last-to-expire of the Population Council’s U.S. patents that are licensed to us, or the date following such expiration that follows a continuous period of six months during which we and our affiliates have not made a commercial sale of ANNOVERA in the U.S. The Population Council License Agreement may also be terminated for certain breach and bankruptcy-related events and by us on 180 days’ prior notice to the Population Council. Purchase commitments We have manufacturing and supply agreements whereby we are required to purchase from Catalent, Inc. (“Catalent”) a minimum number of units of BIJUVA and IMVEXXY softgels during each respective annual contract year. The annual contract period for BIJUVA and IMVEXXY ends each April and July, respectively. If the minimum order quantities of BIJUVA or IMVEXXY are not met, we are required to pay a minimum commitment fee equal to 50 % or 60 %, respectively, of the difference between the total amount we would have paid if the minimum requirement had been fulfilled and the total amount of purchases of BIJUVA or IMVEXXY during each product’s respective contract year. Our estimated minimum commitments for Catalent are as follows: $ 5.2 million for 2022, $ 3.9 million for 2023, $ 4.3 million for 2024, $ 4.7 million for 2025, $ 4.8 million for 2026, and $ 11.5 million thereafter. Additionally, with another third-party manufacturer, we have a manufacturing and supply agreement, renewable annually, whereby we are required to purchase a minimum number of units of ANNOVERA during a contract year. 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. Our estimated minimum commitment for ANNOVERA is $ 2.1 million for 2022. For each of the three annual contract years ending in 2021, we have met our minimum purchase number of units in all material respects. 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. 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. Legal proceedings In February 2020, we received a Paragraph IV certification notice letter (the “IMVEXXY Notice Letter”) regarding an Abbreviated New Drug Application (“ANDA”) submitted to FDA by Teva Pharmaceuticals USA, Inc. (“Teva”). The ANDA seeks approval from FDA to commercially manufacture, use, or sell a generic version of the 4 mcg and 10 mcg doses of IMVEXXY. In the IMVEXXY Notice Letter, Teva alleges that TherapeuticsMD patents listed in FDA’s Orange Book that claim compositions and methods of IMVEXXY (the “IMVEXXY Patents”), are invalid, unenforceable, and/or will not be infringed by Teva’s commercial manufacture, use, or sale of its proposed generic drug product. The IMVEXXY Patents identified in the IMVEXXY Notice Letter expire in 2032 or 2033. In April 2020, we filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva’s ANDA filing with the FDA. We are seeking, among other relief, an order that the effective date of any FDA approval of Teva’s ANDA would be a date no earlier than the expiration of the IMVEXXY Patents and equitable relief enjoining Teva from infringing the IMVEXXY Patents. Teva has filed its answer and counterclaim to the complaint, alleging that the IMVEXXY Patents are invalid and not infringed. In July 2021, following a proposal by Teva, the District Court entered an order temporarily staying all proceedings in the IMVEXXY litigation, which order was filed under seal. In September 2021, the District Court made available a public version of the F-22 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”). In April 2020, we filed a complaint for patent infringement against Amneal in the United States District Court for the District of New Jersey arising from Amneal’s ANDA filing with FDA. In December 2021, we entered into a settlement agreement (the “Settlement Agreement”) with Amneal Pharmaceuticals, Inc., Amneal Pharmaceuticals, LLC and Amneal Pharmaceuticals of New York LLC (collectively “Amneal”) to resolve the litigation over our patents listed in FDA’s Orange Book that claim compositions and methods of BIJUVA (the “BIJUVA Patents”). Under the terms of the Settlement Agreement, the parties filed a consent judgment with the U.S. District Court for the District of New Jersey that enjoins Amneal from marketing a generic version of BIJUVA (1 mg estradiol and 100 mg progesterone) before the expiration of the patents-in-suit, except as provided in the Settlement Agreement, and the Company granted Amneal a non-exclusive, non-transferable, royalty-free license to commercialize Amneal’s generic formulation of BIJUVA in the U.S. commencing in May 2032 (180 days before the current expiration date in November 2032 for the last to expire of our BIJUVA Patents), or earlier under certain circumstances customary for settlement agreements of this nature. As of December 31, 2021, for the IMVEXXY paragraph IV legal proceeding, we have incurred and recorded legal costs amounting to $ 2.3 million in prepaid expenses and other current assets since we believe that we will successfully prevail in this legal proceeding. Upon the successful conclusion of the legal proceeding, the related capitalized legal costs will be reclassified to patents, in license rights and other intangible assets, net, in the accompanying consolidated balance sheets, and such costs will be amortized over the remaining useful of the patent. If we are unsuccessful in this legal proceeding, then the related capitalized legal costs for this legal preceding and any unamortized IMVEXXY patent costs that were previously capitalized will be immediately expensed in the period in which we become aware of unsuccessful legal proceeding. From time to time, we are involved in other litigations and proceedings in the ordinary course of business. We are currently not involved in any other litigations and proceedings that we believe would have a material effect on our consolidated financial condition, results of operations, or cash flows. Off-balance sheet arrangements As of December 31, 2021, 2020 and 2019, we had no off-balance sheet arrangements that have had or are reasonably likely to have current or future effects on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors. Employment agreements We have entered into employment agreements with certain of our executives that provide for compensation and certain other benefits. Under certain circumstances, including a change in control, some of these agreements provide for severance or other payments, if those circumstances occur during the term of the employment agreement. In September 2021, our former Executive Vice President of Operations (“EVP of Operations”) and us mutually agreed that the EVP of Operations would separate from the company. The separation was for “Good Reason” under the employment agreement of the EVP of Operations; accordingly, he received the separation benefits provided therein. Then, i n December 2021, our Board of Directors (the “Board”) appointed our current Chief Executive Officer (“CEO”). Our former CEO’s separation as CEO was a termination without “Cause,” as defined in his employment agreement. Accordingly, our former CEO received the separation benefits provided therein. Additionally, in 2021, three other senior executives separated from the Company, and they received separation benefits provided by their respective employment agreements. In the aggregate, for 2021, we recorded executive officer severance expenses of $ 12.4 million, of which $ 8.0 million was related to share-based compensation recorded in connection with accelerated vesting of certain share-based payment awards for the former senior executives. Employee benefit plan We maintain a voluntary defined contribution 401(k) plan covering all eligible employees as defined in the plan documents. The plan provides for discretionary matching contribution, which is equal to up to four percent of each eligible contributing participant’s elective deferral not to exceed two thousand per year. Employees who elect to participate in the plan are generally fully vested in any existing F-23 matching contribution after five years of service with the Company. Contributions by the Company under the plan amounted to $ 0.6 million for 2021, and $ 0.5 million for each of 2020 and 2019. 10. Stockholders’ deficit 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. Sales of our common stock may be made from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary broker’s transactions on The Nasdaq Stock Market LLC (“Nasdaq”) 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. The sales agent will be entitled to compensation at a fixed commission rate of 3.0 % of the aggregate gross sales price per share sold. 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 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 December 31, 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 $ 39.4 million, after deducting discounts and commissions to the sales agent and estimated offering expenses. Subsequently, through the date of this 2021 10-K 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. 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 November 2020, we entered into an at-the-market offering program (the “2020 ATM Program”) relating to shares of our common stock. 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 Nasdaq 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. 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. For the 2020 ATM Program, we received net proceeds of $ 48.1 million, after deducting the discounts and commissions to the sales agent and estimated offering expenses . Also, in November 2020, we closed on an underwritten public offering of our common stock, pursuant to which we issued 26,953,125 shares of our common stock, which includes 3,515,625 shares issued for the exercise of an underwriter option, at an offering price of $ 1.28 per share, and we received net proceeds of $ 31.7 million, after deducting the underwriting discounts and commissions and estimated offering expenses. Also, in October 2019, we closed on an underwritten public offering of our common stock, pursuant to which we issued 29,900,000 shares of our common stock, which includes 3,900,000 shares issued for the exercise of an underwriter option, at an offering price of $ 2.75 per share, and we received net proceeds of $ 77.0 million, after deducting the underwriting discounts and commissions and estimated offering expenses. Warrants As disclosed in “Note 8. Debt”, in 2020, we issued to the Administrative Agent and the lenders under the Financing Agreement warrants to purchase an aggregate of 4,752,116 shares of our common stock. In 2019, we granted warrants to purchase an aggregate of 75,000 shares of our common stock to outside consultants. F-24 The following table summarizes the status of our outstanding and exercisable warrants and related for each of the following years (in thousands, except weighed average exercise price and weighted average remaining contractual life data): Warrants outstanding and exercisable Warrants Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (in Years) Balance, January 1, 2019 3,008 $ 2.78 $ 4,826 1.6 Issued/granted 75 5.63 Exercised ( 1,250 ) 3.20 2,263 Balance, December 31, 2019 1,833 2.62 2,448 2.0 Issued/granted 4,752 1.19 Cancelled/Forfeited ( 50 ) 6.35 Balance, December 31, 2020 6,535 1.55 1,041 7.3 Exercised ( 1,163 ) 0.31 1,146 Expired ( 245 ) 7.90 Balance, December 31, 2021 5,127 $ 1.52 $ — 8.3 We used the Black Scholes option pricing model to estimate the fair value of warrants issued. The weighted average fair value of the warrants issued in 2020 was $ 1.56 per warrant and the assumptions used to determine such fair value were as follows: expected term of 10 years, volatility of 68.8 %, dividend yields of 0 % and risk-free interest rates of 0.3 %. The weighted average fair value of the warrants granted in 2019 was $ 3.00 per warrant and the assumptions used to determine such fair value were as follows: expected term of 5 years, volatility of 60.8 %, dividend yields of 0 % and risk-free interest rates of 2.5 %. Share-based payment award plans Plan summary and description In June 2019, our stockholders approved the TherapeuticsMD, Inc. 2019 Stock Incentive Plan, as amended (the “2019 Plan”), which replaced our previously adopted 2012 Stock Incentive Plan, as amended, and the 2009 Long-Term Incentive Compensation Plan ( referred to collectively as the “ Prior Plans”). Outstanding awards granted under the Prior Plans will remain subject to the terms and conditions in the Prior Plans. The 2019 Plan is administered by the Compensation Committee of the Board. The purpose of the 2019 Plan is to provide a means for us and our subsidiaries and other designated affiliates (the “Related Entities”) to attract key personnel to provide services to us and the Related Entities, as well as to provide a means by which those key persons can acquire and maintain stock ownership, resulting in a strengthening of their commitment to our welfare and the welfare of the Related Entities and promoting the mutuality of interests between participants and our stockholders. A further purpose of the 2019 Stock Incentive Plan is to provide participants with additional incentive and reward opportunities designed to enhance our profitable growth and the profitable growth of the Related Entities, and provide participants with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The persons eligible to receive awards under the 2019 Plan are our employees, officers, members of the Board, and consultants who provide services to us or any subsidiary. The provisions of the 2019 Plan authorize the grant of (i) stock options, which can be “qualified” or “nonqualified” under the Internal Revenue Code of 1986, as amended, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units (“RSUs”), (v) performance shares and performance units, such as performance stock units (“PSUs”), and (vi) other share-based awards. The 2019 Plan will terminate at the earliest of (i) such time as no shares remain available for issuance under the 2019 Stock Plan, (ii) termination of the 2019 by the Board, or (iii) the tenth anniversary of the effective date of the 2019 Stock Incentive Plan. Awards outstanding upon termination of the 2019 Plan will remain in effect until they have been exercised or terminated, or have expired. The term and vesting period of awards granted under the 2019 Plan are established on a per grant basis, and option expiration date is generally ten years from the date of grant. Under the 2019 Plan, 37,475,000 shares of common stock are authorized for issuance, which includes 22,475,000 shares from the First Amendment to the 2019 Plan, which was approved by our stockholders in May 2021 plus any unallocated shares previously available for issuance under the Prior Plans that were not then subject to outstanding awards. Any shares subject to outstanding share-based payment awards under the 2019 Plan and Prior Plans that are forfeited, expire or otherwise terminate without issuance of the underlying F-25 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. In August 2021, the Company hired a new President, who became our CEO in December 2021, and granted an “inducement grant” under Listing Rule 5635(c)(4) of Nasdaq of 2,750,000 RSUs (designated as “Time-Based Units”) and 2,750,000 PSUs (designated as “Performance Units”). In October 2021, the Company appointed a new Chief Business Officer and granted an “inducement grant” under Listing Rule 5635(c)(4) of Nasdaq of 660,000 RSUs (designated as “Time-Based Units”) and 260,000 PSUs (designated as “Performance Units”) . 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. As of December 31, 2021, 39,440,678 shares of common stock were subject to outstanding awards under our share-based payment award plans and inducement grants (calculated using the base number of PSUs that may vest). If we assume the maximum achievement of performance goals for PSUs, then 42,925,277 shares of common stock will be subject to outstanding awards under our share-based payment award plans and inducement grants. The following table summarizes the outstanding awards issued pursuant to our share-based payment award plans and inducement grants as of December 31, 2021 and the remaining shares of common stock available for future issuance (in thousands): Plan Name Options RSUs PSUs (1) Remaining shares of common stock available for future issuance (2) 2019 Plan (3) 3,332 10,174 5,193 13,054 2012 Plan (4) 4,601 — — — 2009 Plan (5) 9,722 — — — 2021 Inducement Grants (6) — 3,410 3,010 — (1) 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 11,687,530 depending on the Company’s achievement of certain performance goals. (2) The number of remaining shares of common stock available for future issuance is based on an assumption that the maximu m performance goals for PSUs were achieved, where applicable. (3) As of December 31, 2021, outstanding options have exercise prices ranging from $ 1.07 to $ 2.73 and will expire between January 2022 and June 2030. Unvested RSUs will vest between January 2022 and December 2024. If and when certain performance goals are achieved, then unvested PSUs will vest between June 2022 and March 2024. (4) As of December 31, 2021, outstanding options have exercise prices ranging from $ 2.55 to $ 8.92 and will expire between March 2022 and February 2029. (5) As of December 31, 2021, outstanding options have exercise prices ranging from $ 1.80 to $ 8.92 and will expire between January 2022 and February 2029. (6) As of December 31, 2021, unvested RSUs will vest between August 2022 and October 2024 and unvested PSUs upon achievement of certain performance goals will vest between October 15, 2022 and August 2024. 2021 Exchange of eligible options for RSUs In May 2021, our stockholders approved an Offer to Exchange Eligible Options for 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 RSUs 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 in September 2022, subject to the terms and conditions of the 2019 Plan. F-26 Options The following table summarizes the status of our outstanding and exercisable options and related transactions, including the Exchange Offer, for each for the following years (in thousands, except weighed average exercise price and weighted average remaining contractual life data): Options awards outstanding Options awards exercisable Options Awards Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (in Years) Options Awards Weighted Average Exercise Price Aggregate Intrinsic Value Weighted Average Remaining Contractual Life (in Years) Balance, January 1, 2019 20,873 $ 4.93 $ 12,240 5.9 16,069 $ 4.61 $ 12,240 5.1 Granted 4,620 3.10 Exercised ( 344 ) 0.32 1,427 Cancelled/Forfeited ( 93 ) 5.16 Expired ( 26 ) 5.57 Balance, December 31, 2019 25,030 4.65 3,668 5.8 18,026 4.88 3,320 4.6 Granted 737 1.58 Exercised ( 1,182 ) 0.23 1,739 Cancelled/Forfeited ( 416 ) 3.80 Expired ( 387 ) 3.76 Balance, December 31, 2020 23,782 4.80 152 5.2 19,863 5.06 117 4.6 Granted 60 1.21 Exercised ( 111 ) 0.03 61 Cancelled/Forfeited ( 5,048 ) 6.01 Expired ( 1,028 ) 4.02 Balance, December 31, 2021 17,655 $ 4.52 $ — 3.8 16,776 $ 4.62 $ — 3.6 We used the Black Scholes option pricing model to estimate the fair value of options granted. The weighted average fair value of the options granted in 2021 was $ 0.77 per option, and the assumptions used to determine such fair value were as follows: expected term of 6.9 years, volatility of 67.6 %, dividend yields of 0 % and risk-free interest rates of 1.1 %. The weighted average fair value of the options granted in 2020 was $ 1.58 per option and the assumptions used to determine such fair value were as follows: expected term of 6.0 to 6.8 years , volatility of 63.5 % to 67.9 %, dividend yields of 0 % and risk-free interest rates of 0.3 % to 1.7 %. The weighted average fair value of the options granted in 2019 was $ 3.10 per option and the assumptions used to determine such fair value were as follows: expected term of 5.5 to 6.5 years , volatility of 61.3 % to 64.58 %, dividend yields of 0 % and risk-free interest rates of 1.6 % to 2.5 %. Restricted stock units The following table summarizes the status of our RSUs and related transactions, including the Exchange Offer, for each for the following years (in thousands, except weighed average grant date fair value): RSUs awards outstanding RSUs awards vested and not settled RSUs Weighted Average Grant Date Fair Value Aggregate Intrinsic Value RSUs Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Balance, January 1, 2019 1,040 $ 4.06 $ 3,962 — $ — $ — Granted 200 2.18 Balance, December 31, 2019 1,240 3.56 3,001 150 4.06 363 Granted 6,153 1.39 Vested and settled ( 301 ) 1.78 479 Cancelled/Forfeited ( 31 ) 1.07 Balance, December 31, 2020 7,061 1.76 8,544 — — — Granted 12,977 1.05 Vested and settled ( 5,126 ) 1.57 4,021 Cancelled/Forfeited ( 1,328 ) 1.47 Balance, December 31, 2021 13,584 $ 1.16 $ 4,890 1,573 $ 2.11 $ 566 F-27 Performance stock units The following table summarizes the status of our PSUs and related transactions for each for the following years (in thousands, except weighed average grant date fair value): PSUs awards outstanding PSUs awards vested and not settled PSUs Weighted Average Grant Date Fair Value Aggregate Intrinsic Value PSUs Weighted Average Grant Date Fair Value Aggregate Intrinsic Value Balance, January 1, 2019 — $ — $ — — $ — $ — Granted 2,586 1.08 Vested and settled ( 152 ) 1.14 226 Cancelled/Forfeited ( 30 ) 1.07 Balance, December 31, 2020 2,404 1.08 2,909 — — — Granted 7,597 1.04 Vested and settled ( 1,680 ) 1.16 1,057 Cancelled/Forfeited ( 118 ) 1.07 Balance, December 31, 2021 8,203 (1) $ 1.03 $ 2,953 1,968 $ 1.18 $ 709 (1) 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 11,687,530 depending on the Company’s achievement of certain performance goals. Employee stock purchase plan In June 2020, our stockholders approved the TherapeuticsMD, Inc. 2020 Employee Stock Purchase Plan (“ESPP”), which reserved 5,400,000 shares of our common stock for purchase by eligible employees. The ESPP permits eligible employees to purchase our common stock at a price per share which is equal to 85 % of the lesser of (i) the fair market value of the shares on the offering date of the offering period or (ii) the fair market value of the shares on the purchase date. In 2021, 336,056 shares were sold under the ESPP at an average sale price of $ 0.69 per share and we received proceeds of $ 0.2 million. Share-based payment compensation cost Share-based payment compensation expense for PSUs is based on our current assessment of the most likely probability of the Company’s achievement of certain performance goals. We recorded share-based payment award compensation costs related to previously issued options, RSU and PSUs, as well as shares of common stock issued under the ESPP totaling $ 18.1 million for 2021, and $ 10.7 million for 2020 and 2019. As of December 31, 2021, we had $ 16.2 million of unrecognized share-based payment award compensation cost related to unvested options, RSUs and PSUs as well as shares issuable under the ESPP, which may be adjusted if certain performance targets are achieved and for future changes in forfeitures and is included as additional paid-in capital in the accompanying consolidated balance sheets. No tax benefit was realized due to a continued pattern of net losses. The unrecognized compensation cost as of December 31, 2021is expected to be recognized as share-based payment award compensation over a weighted average period of 2.1 years as follows (in thousands): Year ending December 31, 2022 $ 8,646 2023 5,199 2024 2,355 $ 16,200 F-28 11. Revenue Disaggregated revenue The following table provides information about disaggregated revenue by product mix and service (in thousands): 2021 2020 2019 Product revenue: ANNOVERA $ 37,943 $ 19,611 $ 6,167 IMVEXXY 31,533 27,139 16,252 BIJUVA 10,579 6,354 1,836 Prescription vitamin 5,725 9,768 9,886 Product revenue, net 85,780 62,872 34,141 License revenue 1,171 2,000 15,506 Total revenue, net $ 86,951 $ 64,872 $ 49,647 License agreements with customers Knight license agreement Pursuant to the terms of the Knight License Agreement, in 2020, Knight paid us $ 2.0 million in milestone fees upon the first regulatory approval in Canada for IMVEXXY and BIJUVA, and is required to pay us sales milestone fees based upon certain aggregate annual sales in Canada and Israel of each of IMVEXXY and BIJUVA and royalties based on aggregate annual sales of each of IMVEXXY and BIJUVA in Canada and Israel. We may terminate the Knight License Agreement if Knight does not submit all regulatory applications, submissions and/or registrations required for regulatory approval to use and commercialize IMVEXXY and BIJUVA in Canada within certain specified time periods. We also may terminate the Knight License Agreement if Knight challenges our patents. Either party may terminate the Knight License Agreement for any material breach by the other party that is not cured within certain specified time periods or if the other party files for bankruptcy or other related matters. As part of the Knight License Agreement, Knight is prohibited from exporting IMVEXXY and BIJUVA to the United States. As of December 31, 2021, no IMVEXXY or BIJUVA sales have been made through the Knight License Agreement. Theramex license agreement Under the terms of the Theramex License Agreement, Theramex paid us EUR 14 million, or $ 15.5 million, in cash as an upfront fee in August 2019. Within thirty days of signing the Theramex License Agreement, we provided Theramex the regulatory materials and clinical data that were necessary for Theramex to obtain marketing authorizations and other applicable regulatory approvals for commercializing BIJUVA and IMVEXXY. In 2019, at a point in time when Theramex was able to use and benefit from the license which was when the knowledge transfer of regulatory documents occurred, we recognized the revenue related to the upfront fee, which was a non-refundable payment. In 2021, we received additional milestone payments comprised of an aggregate of EUR 1.0 million, or $ 1.2 million, in regulatory milestone payments based on regulatory approvals for BIJUVA in certain specified markets. Additionally, in December 2021, we received EUR 0.5 million, or $ 0.6 million, in additional upfront payments for the license grants of IMVEXXY in Brazil and Mexico. The additional upfront payment for the license grants of IMVEXXY in Brazil and Mexico may be returned to Theramex under certain conditions if IMVEXXY fails to obtain marketing authorization in one of Brazil or Mexico within a prespecified period. Accordingly, the additional upfront payment for the license grants of IMVEXXY in Brazil and Mexico was recorded as other non-current liabilities as of December 31, 2021 in the accompanying balance sheets. We are eligible to receive additional sales milestone payments up to an aggregate of EUR 27.5 million in sales milestone payments to be paid in escalating tranches based on Theramex first attaining certain aggregate annual net sales milestones of BIJUVA and IMVEXXY outside of the U.S., excluding Canada and Israel (collectively the “Theramex Territory”) ranging from EUR 25 million to EUR 100 million. We are also entitled to receive quarterly royalty payments at a rate of 5 % on net sales of BIJUVA and IMVEXXY in the Theramex Territory. Theramex is responsible for all regulatory and commercial activities for BIJUVA and IMVEXXY in the Theramex Territory. Theramex may sublicense its rights to commercialize BIJUVA and IMVEXXY in the Theramex Territory, except for certain specified markets. We may terminate the Theramex License Agreement if Theramex does not submit all regulatory applications, submissions F-29 and/or registrations required for regulatory approval to use and commercialize BIJUVA and IMVEXXY within certain specified time periods. We also may terminate the Theramex License Agreement if Theramex challenges our patents. Either party may terminate the Theramex License Agreement for any material breach by the other party that is not cured within certain specified time periods or if the other party files for bankruptcy or other related matters. In 2021, we recorded BIJUVA sales of $ 1.4 million made through the Theramex License Agreement. As of December 31, 2021, no IMVEXXY sales have been made through the either of the licensing agreements. 12. Income taxes Our loss before income taxes is as follows (in thousands): 2021 2020 2019 United States $ ( 172,415 ) $ ( 183,524 ) $ ( 176,145 ) For 2021, 2020 and 2019, there was no current or deferred provision for income taxes, current or deferred. As of December 31, 2021, we had a federal net operating loss (“NOL”) carryforwards of $ 885.1 million, which is available to offset future taxable income. Of the total NOL, $ 338.8 million can be carried forward for 20 years and will begin to expire in 2031 . The remaining $ 546.3 million can be carried forward indefinitely. In the event of future income, the NOL deduction arising from NOL generated in taxable years beginning in 2021 will be limited to 80 % of the excess taxable income. A reconciliation between taxes computed at the federal statutory rate and the consolidated effective tax rate is as follows: 2021 2020 2019 Federal statutory tax rate 21.0 % 21.0 % 21.0 % State tax rate, net of federal tax benefit 4.7 % 5.1 % 4.0 % Adjustment in valuation allowances ( 22.1 %) ( 27.0 %) ( 22.5 %) Excess stock benefits ( 1.5 %) 0.1 % 0.2 % Permanent and other differences ( 2.1 %) 0.8 % ( 2.7 %) Provision (benefit) for income taxes 0.0 % 0.0 % 0.0 % The components of the net deferred income tax asset as of December 31, 2021 and 2020 are as follows (in thousands): As of December 31, 2021 2020 Deferred income tax assets: Net operating loss $ 224,660 $ 195,008 Share-based payment compensation 17,698 17,252 Interest expense limitation 20,391 12,992 Accrual for sales returns and coupons 3,779 5,060 R&D credit 186 186 Other, net 1,674 ( 241 ) Deferred income tax asset 268,388 230,257 Valuation allowance ( 268,388 ) ( 230,257 ) Deferred income tax assets, net $ — $ — We believe that it is more likely than not that we will not generate sufficient future taxable income to realize the tax benefits related to the deferred tax assets on our balance sheet. Accordingly, a valuation allowance has been established against the deferred tax assets as of December 31, 2021 and 2020. Since our first year of operations in 2011, we generated net operating losses, and our U.S. federal and state tax returns remain open to examination. As of December 31, 2021 and 2020, we had no tax positions relating to open tax returns that were considered to be uncertain, and we had no unrecognized tax benefits. F-30 13. 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): 2021 2020 2019 Numerator: Net loss $ ( 172,415 ) $ ( 183,524 ) $ ( 176,145 ) Denominator: Weighted average common shares for basic loss per common share 397,992 275,649 246,353 Effect of dilutive securities — — — Weighted average common shares for diluted loss per common share 397,992 275,649 246,353 Loss per common share, basic and diluted $ ( 0.43 ) $ ( 0.67 ) $ ( 0.72 ) Since we reported a net loss for 2021, 2020 and 2019, 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 2021, 2020 and 2019. 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 2021, 2020 and 2019 (in thousands): As of December 31, 2021 2020 2019 Stock options 17,655 23,782 25,030 RSUs 13,584 7,061 1,240 PSUs 8,203 2,404 — Warrants 5,127 6,535 1,833 44,569 39,782 28,103 14. Related parties A former member of our Board, J. Martin Carrol, who resigned in December 2021, is also a director of Catalent. From time to time, we have entered into agreements with Catalent and its affiliates in the normal course of business. From July 2015 to December 2021, 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 $ 4.1 million, $ 3.0 million and $ 6.1 million for 2021, 2020 and 2019, respectively. As of December 31, 2021 and 2020, estimated amounts payable to Catalent was $ 0.9 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. In April 2020, Karen L. Ling was appointed to our Board, who was an executive vice president and chief human resources officer of American International Group, Inc. (“AIG”) until May 2021. From time to time, we have entered into agreements with AIG in the normal course of business. From April 2020 to May 2021, 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 and $ 0.2 million for 2021 and 2020, respectively. As of December 31, 2021 and 2020, we have no amounts payable to AIG. 15. Business concentrations We sell our products to wholesale distributors, specialty pharmacies, specialty distributors, and chain drug stores that generally sell products to retail pharmacies, hospitals, and other institutional customers. F-31 Customers with product revenue equal to or greater than 10 % of our total revenue for the periods indicated were as follows: 2021 2020 2019 Customer A 11 % 21 % 37 % Customer B 15 % 16 % 11 % Customer C 17 % 28 % 13 % Customer E 12 % * * Customer F * * 12 % * 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: As of December 31, 2021 2020 Customer A * 17 % Customer B 21 % 19 % Customer C 35 % 25 % Customer D 11 % 11 % * Balance was less than 10 % of accounts receivable, gross We rely on third parties for the manufacture and supply of our products, as well as third-party logistics providers. In instances where these parties fail to perform their obligations, we may be unable to find alternatives suppliers or satisfactorily deliver our products to our customers on time, if at all. Vendors with product purchases equal to or greater than 10 % of our total purchases for the periods indicated were as follows: 2021 2020 2019 Catalent 33 % 30 % 24 % Vendor A 36 % 25 % * Vendor B 27 % 36 % 27 % Vendor I * * 35 % * 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: As of December 31, 2021 2020 Vendor E 19 % 17 % Vendor F 20 % 16 % Vendor G * 10 % * Balance was less than 10 % of total accounts payable 16. Summary quarterly information (unaudited) The following table sets forth a summary of the unaudited quarterly results for 2021 and 2020 (in thousands, except per share amounts): March 31, June 30, September 30, December 31, 2021 2021 2021 (2) 2021 (3) Revenue, net $ 19,866 $ 23,001 $ 25,406 $ 18,678 Gross profit $ 15,179 $ 18,869 $ 20,124 $ 13,941 Loss from operations $ ( 29,278 ) $ ( 35,179 ) $ ( 39,921 ) $ ( 35,392 ) Net loss $ ( 39,383 ) $ ( 42,652 ) $ ( 47,420 ) $ ( 42,960 ) Loss per common share, basic and diluted (1) $ ( 0.11 ) $ ( 0.11 ) $ ( 0.11 ) $ ( 0.10 ) F-32 March 31, June 30, September 30, December 31, 2020 2020 2020 (4) 2020 (5) Revenue, net $ 12,251 $ 10,701 $ 19,342 $ 22,578 Gross profit $ 9,536 $ 6,301 $ 16,063 $ 16,997 Loss from operations $ ( 50,922 ) $ ( 45,038 ) $ ( 24,974 ) $ ( 34,607 ) Net loss $ ( 56,849 ) $ ( 51,976 ) $ ( 32,612 ) $ ( 42,087 ) Loss per common share, basic and diluted (1) $ ( 0.21 ) $ ( 0.19 ) $ ( 0.12 ) $ ( 0.15 ) (1) Basic and diluted loss per common share are computed independently for each quarter and the full year based upon respective weighted average shares outstanding. Therefore, the sum of the quarterly basic and diluted earnings per share amounts may not equal the annual basic and diluted earnings per share amounts reported. (2) Included $ 7.3 million in senior executive severances, which included our former EVP of Operations. (3) Included $ 5.1 million in senior executive severances, which included our former CEO. (4) Included (i) $ 2.0 million in license revenue related to the Knight License Agreement, (ii) $ 5.7 million in inventory charge, primarily related to BIJUVA, and (iii) $ 0.6 million in write off of certain costs related to trademarks and patents. (5) Included $ 0.5 million in write off of certain costs related to trademarks and patents. 17. Subsequent events vitaCare divestiture On March 6, 2022, we entered into a stock purchase agreement (the “Purchase Agreement”) with GoodRx, Inc. (“GoodRx”). which provides for the sale of all of the issued and outstanding capital stock of vitaCare to GoodRx (the “vitaCare Divestiture”). Under the terms of the Purchase Agreement, upon the closing of the vitaCare divesture (the “Closing”), we will receive a cash payment of $ 150.0 million, subject to adjustment as provided in the Purchase Agreement and customary holdbacks. In addition, we may receive up to an additional of $ 7.0 million in earn-out consideration (the “Earnout”), contingent upon vitaCare’s financial performance through 2023 as determined in accordance with the terms of the Purchase Agreement. The Earnout will be earned in two equal tranches of $ 3.5 million each, based on vitaCare’s revenue for 2022 and 2023. The Purchase Agreement contains customary representations and warranties, covenants and indemnities of the parties thereto. In addition, the Purchase Agreement provides that at the Closing: (i) we will enter into a long-term services agreement with vitaCare to continue utilization of the vitaCare platform with respect to our products; (ii) we and vitaCare will enter into a transition services agreement for us to provide certain transition services to vitaCare for up to 12 months following the Closing; and (iii) certain employees of ours and/or vitaCare will enter into employment agreements with GoodRx. The vitaCare Divestiture is expected to close in the second quarter of 2022, subject to the satisfaction or waiver of certain customary conditions, including the receipt of certain regulatory approvals . Amendment No. 9 to the Financing Agreement In March 2022, we entered into Amendment No. 9 pursuant to which, among other things, (i) the lenders waived various Company breaches of the Financing Agreement, including breaches of the $ 60.0 million minimum cash covenant and the minimum net revenue covenants for the fourth quarter of 2021; (ii) the Company and the lenders agreed to reduced minimum cash covenant and to the removal of the minimum net revenue covenant for the first quarter of 2022; (iii) the lenders waived the existing $ 60.0 million prepayment penalty under the Financing Agreement and the Company agreed to a paid in kind amendment fee of $ 30.0 million, which fee was added to the principal amount of the loans under the Financing Agreement, $ 16.0 million of which fee is waivable in certain conditions; and (iv) the maturity date of the Financing Agreement was am ended to June 1, 2022 . F-33