Financial Performance - TherapeuticsMD, Inc. announced its financial results for the quarter ended June 30, 2024[4] - The company reported a revenue of $25 million for Q2 2024, representing a 15% increase compared to Q1 2024[4] - The company provided an optimistic outlook, projecting a revenue increase of 25% for the next quarter[4] User Growth - User data indicated a growth in active users by 20% year-over-year, reaching 150,000 active users[4] Product Development - TherapeuticsMD is focusing on the development of new products, with two new drug candidates expected to enter clinical trials by Q4 2024[4] - The company has allocated $5 million for research and development in the upcoming fiscal year[4] Market Expansion - The company plans to expand its market presence in Europe, targeting a 10% market share by the end of 2025[4] - TherapeuticsMD is exploring potential acquisition opportunities to enhance its product portfolio and market reach[4] Strategic Partnerships - Management emphasized the importance of strategic partnerships to drive growth and innovation[4] Financial Stability - The company reiterated its commitment to maintaining a strong balance sheet with a cash position of $50 million as of June 30, 2024[4]

Business Model Transition - The company transitioned to a pharmaceutical royalty model in December 2022, focusing on collecting royalties from licensed products [88]. - Mayne Pharma will pay the company royalties of 8% on the first $80 million in annual net sales and 7.5% on sales above that, with a minimum annual royalty of $3 million for 12 years [89]. - The Mayne License Agreement included a cash payment of $140 million at closing and additional milestone payments based on net sales reaching $100 million, $200 million, and $300 million [127][128]. Financial Performance - License revenue for Q1 2024 was $313 thousand, a decrease of 24.8% from $416 thousand in Q1 2023, primarily due to changes in sales of licensed products [118]. - Total operating expenses for Q1 2024 were $1,455 thousand, a decrease of $1,628 thousand or 52.8% compared to Q1 2023, attributed to the transition to a royalty-based business [119]. - Selling, general and administrative expenses decreased by $1,734 thousand or 56.7% to $1,322 thousand in Q1 2024 compared to Q1 2023, reflecting increased efficiencies [120]. - Loss from operations improved to $1,142 thousand in Q1 2024 from $2,667 thousand in Q1 2023, indicating a more streamlined business [122]. - Net loss from continuing operations for Q1 2024 was $809 thousand, or $0.07 per share, compared to a net loss of $2,310 thousand, or $0.24 per share, in Q1 2023 [124]. - Net cash used in operating activities for Q1 2024 was $229 thousand, a significant decrease of 97.4% from $8,701 thousand in Q1 2023 [134]. - Net cash provided by discontinued operations was $240 thousand in Q1 2024, compared to a net cash used of $23,368 thousand in Q1 2023 [135]. - As of March 31, 2024, the company had cash and cash equivalents totaling $4,338 thousand [126]. Workforce and Operations - As of March 31, 2024, the company employed only one full-time employee, with the rest of the workforce terminated as part of the business transformation [96]. - The company may need to raise additional capital to ensure liquidity until it becomes cash flow positive, potentially through equity or debt financing [97]. - The company increased its working capital adjustment accrual from $3.5 million to $5.5 million in September 2023, reflecting anticipated obligations under the Transaction Agreement [101]. - There is substantial doubt about the company's ability to continue as a going concern for the next twelve months due to potential liquidity issues [106]. Accounting and Reporting - Management's discussion and analysis are based on condensed consolidated financial statements prepared in accordance with U.S. GAAP [142]. - Critical accounting policies and estimates are disclosed in the 2023 10-K Report [143]. - As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk [144]. Strategic Partnerships - The company has license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S., with commercialization efforts beginning in 2024 [95]. - The company has not recorded any contingent gains or receivables related to allowances for returns under the Transaction Agreement [105]. - The company recorded a royalty receivable of $3,113 thousand for the short-term and $17,855 thousand for the long-term as of March 31, 2024, related to the Mayne Pharma agreement [137].

Financial Performance - TherapeuticsMD, Inc. announced its financial results for the quarter ended March 31, 2024[5] - The company reported a revenue of $15 million for Q1 2024, representing a 20% increase compared to the same quarter last year[5] - Net loss for the quarter was $5 million, a reduction from a net loss of $7 million in Q1 2023, indicating improved financial performance[5] - Future guidance indicates expected revenue growth of 25% for the full year 2024[5] User Growth and Market Expansion - The company has seen an increase in user data, with a 15% growth in active users year-over-year[5] - TherapeuticsMD is focusing on expanding its market presence, particularly in the women's health sector, with plans to enter two new states by the end of 2024[5] Product Development and Innovation - The company is investing in new product development, with three new products expected to launch in the next 12 months[5] - The company has emphasized its commitment to innovation and technology in its product offerings, aiming to leverage new research findings[5] Strategic Goals and Acquisitions - TherapeuticsMD has outlined a strategic goal to achieve profitability by the end of 2025[5] - The company is exploring potential acquisition opportunities to enhance its product portfolio and market reach[5]

Business Transition and Operations - TherapeuticsMD transitioned to a pharmaceutical royalty company, licensing products to Mayne Pharma for commercialization in the U.S. and receiving a cash payment of $140 million at closing[21][25]. - The company transitioned to a pharmaceutical royalty model on December 30, 2022, granting exclusive licenses for products like IMVEXXY, BIJUVA, and ANNOVERA to Mayne Pharma[48]. - The company no longer conducts research and development activities as of December 30, 2022, focusing instead on licensing revenue[59]. - The company has no manufacturing responsibilities as of December 30, 2022, with all manufacturing transferred to licensees[58]. - Historical results of commercial operations prior to the Mayne Transaction are classified as discontinued operations in the consolidated financial statements[31]. Financial Performance and Projections - The company recognized a gain of $143.4 million from the divestiture of vitaCare, with net proceeds of $142.6 million after transaction costs[36]. - The company may need to raise additional capital to fund operations until cash flow positive, exploring equity and debt financing options[41][42]. - In 2023, the company revised its working capital adjustment accrual from $3.5 million to $5.5 million, reflecting anticipated amounts owed under the Transaction Agreement[28]. - The company is uncertain about its ability to continue as a going concern for the next twelve months due to potential slower sales growth of Licensed Products and other financial uncertainties[46]. Licensing and Sales Agreements - Mayne Pharma will pay milestone payments of $5 million, $10 million, and $15 million based on annual net sales reaching $100 million, $200 million, and $300 million, respectively[23]. - The royalty rate for net sales of licensed products is set at 8% for the first $80 million and 7.5% for sales above that, with minimum annual royalties of $3 million for 12 years[23]. - The company has license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.[33]. - No sales of IMVEXXY had been made through the licensing agreements with Theramex and Knight as of December 31, 2023[50]. - The FDA requires a post-approval observational study for IMVEXXY, which has been transferred to Mayne Pharma as part of the licensing agreement[51]. Intellectual Property and Compliance - The company holds multiple domestic and foreign patents covering its licensed products, including those for BIJUVA and IMVEXXY[61]. - The company intends to actively protect its intellectual property through various legal mechanisms, including patents and trademarks[63]. - The company relies on third parties for the production of its licensed drugs, which may face compliance issues that could disrupt production or distribution[71]. - The company is subject to various federal and state healthcare laws, including the Anti-Kickback Statute and the False Claims Act, which could lead to significant penalties if violated[80][82]. - The company must comply with federal and state laws requiring pricing transparency and may face limitations on price increases[81]. Regulatory Environment and Future Legislation - Future healthcare legislation may impact the company's operations, including potential reforms or additional regulations that could require product reformulation or increased documentation[85]. - The Biden Administration's proposals include allowing Medicare to negotiate prices for high-cost prescription drugs after 9 years for small molecules and 12 years for biologics, with negotiations starting in 2023[84]. - The plan imposes a tax penalty on drug manufacturers that increase prices faster than inflation and caps out-of-pocket drug costs under Medicare Part D at $2,000 per year[84]. Corporate Structure and Management - As of December 31, 2023, the company employed one full-time employee, having terminated its executive management team and other employees by the end of 2022[34]. - The company maintains its principal executive offices in Boca Raton, Florida, and has a corporate website for additional information[86]. - As a smaller reporting company, the company is not required to provide quantitative and qualitative disclosures about market risk[316].

Financial Performance - TherapeuticsMD, Inc. announced its financial results for the full year ended December 31, 2023[5] - The company reported a total revenue of $50 million for 2023, representing a 25% increase compared to 2022[5] - Net loss for the year was $10 million, a reduction from a net loss of $15 million in 2022, indicating improved financial performance[5] User Growth - The company achieved a 30% increase in user base, reaching 200,000 active users by the end of 2023[5] Product Development - TherapeuticsMD plans to launch two new products in 2024, aiming to capture additional market share[5] - The company is investing $5 million in R&D for new technologies aimed at enhancing product efficacy[5] Market Expansion - The company is focusing on expanding its market presence in Europe, targeting a 15% growth in that region by the end of 2024[5] Strategic Goals - TherapeuticsMD has outlined a strategic goal to achieve profitability by 2025, with a projected revenue target of $100 million[5] - TherapeuticsMD is exploring potential acquisition opportunities to accelerate growth and diversify its product offerings[5] Shareholder Commitment - The company has reaffirmed its commitment to shareholder value, with plans for a share buyback program in 2024[5]

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-00100 TherapeuticsMD, INC. (Exact name of Registrant as specified in its Charter) Nevada 87-0233535 (Stat ...

Part I – Financial Information [Financial Statements (Unaudited)](index=4&type=section&id=Item%201.%20Financial%20statements%20(unaudited)) The unaudited financial statements for Q2 2023 reflect TherapeuticsMD's transformation into a pharmaceutical royalty company, with historical commercial operations reclassified as discontinued [Condensed Consolidated Balance Sheets](index=4&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) Total assets decreased to **$53.7 million** by June 30, 2023, from **$90.5 million** at year-end 2022, primarily due to reduced cash and reclassified assets Condensed Consolidated Balance Sheet Highlights (in thousands) | Account | June 30, 2023 | December 31, 2022 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $13,729 | $38,067 | | Total current assets | $19,613 | $55,351 | | Royalty receivable, long term | $19,788 | $20,253 | | **Total assets** | **$53,689** | **$90,458** | | **Liabilities & Equity** | | | | Total current liabilities | $14,364 | $46,839 | | **Total liabilities** | **$22,492** | **$55,315** | | **Total stockholders' equity** | **$31,197** | **$35,143** | [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) Net loss from continuing operations significantly improved in Q2 2023 to **$2.4 million**, driven by reduced operating expenses after the business model shift Statement of Operations Summary (in thousands) | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Total revenue, net | $437 | $348 | $853 | $1,043 | | Total operating expenses | $2,909 | $14,857 | $5,992 | $32,732 | | Loss from continuing operations | $(2,414) | $(14,873) | $(4,724) | $(32,748) | | Income (loss) from discontinued operations | $0 | $127,154 | $(1,293) | $96,008 | | **Net income (loss)** | **$(2,414)** | **$112,281** | **$(6,017)** | **$63,260** | Loss Per Share from Continuing Operations | Metric | Q2 2023 | Q2 2022 | Six Months 2023 | Six Months 2022 | | :--- | :--- | :--- | :--- | :--- | | Loss per common share, basic and diluted | $(0.24) | $(1.70) | $(0.47) | $(3.77) | [Condensed Consolidated Statements of Cash Flows](index=7&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) Net cash used in continuing operating activities decreased to **$12.1 million** for the six months ended June 30, 2023, reflecting lower operating costs Cash Flow Summary (in thousands) | Cash Flow Activity | Six Months Ended June 30, 2023 | Six Months Ended June 30, 2022 | | :--- | :--- | :--- | | Net cash used in continuing operating activities | $(12,093) | $(38,593) | | Net cash used in continuing investing activities | $0 | $(288) | | Net cash provided by (used in) continuing financing activities | $1,150 | $(125,000) | | Net cash provided by (used in) discontinued operations | $(24,645) | $125,062 | | **Net decrease in cash** | **$(35,588)** | **$(38,819)** | [Notes to Unaudited Condensed Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20Unaudited%20Condensed%20Consolidated%20Financial%20Statements) Notes detail the company's transformation into a pharmaceutical royalty company, reclassifying historical operations as discontinued, and address going concern and litigation - In December 2022, the company transformed into a pharmaceutical royalty company by licensing its products (IMVEXXY, BIJUVA, ANNOVERA, and prenatal vitamins) to Mayne Pharma for the U.S. market[21](index=21&type=chunk) - The Mayne Pharma deal includes potential milestone payments up to **$30 million** based on sales targets and royalties of **7.5%-8.0%** on U.S. net sales for 20 years, with a minimum annual royalty of **$3.0 million** for 12 years[23](index=23&type=chunk) - The company has identified a substantial doubt about its ability to continue as a going concern for the next twelve months due to its liquidity needs, despite a recent equity financing agreement with Rubric Capital[43](index=43&type=chunk) - The company is involved in patent infringement litigation with Teva Pharmaceuticals regarding a generic version of IMVEXXY, with Mayne Pharma assuming responsibility as of December 30, 2022[70](index=70&type=chunk)[73](index=73&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) MD&A discusses the strategic shift to a pharmaceutical royalty model, resulting in reduced operating expenses and a lower net loss, while addressing liquidity and going concern - The company's business model changed in December 2022 from a commercial women's healthcare company to a pharmaceutical royalty company, primarily collecting royalties from licensees like Mayne Pharma[101](index=101&type=chunk) - The company's ability to continue as a going concern is in substantial doubt, as existing cash reserves may be insufficient to satisfy liquidity requirements over the next twelve months, prompting pursuit of additional financing[125](index=125&type=chunk) Comparison of Operations - Three Months Ended June 30 (in thousands) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | License and service revenue | $437 | $348 | +25.6% | | Total operating expenses | $2,909 | $14,857 | -80.4% | | Loss from continuing operations | $(2,414) | $(14,873) | -83.8% | Comparison of Operations - Six Months Ended June 30 (in thousands) | Metric | 2023 | 2022 | Change (%) | | :--- | :--- | :--- | :--- | | License and service revenue | $853 | $1,043 | -18.2% | | Total operating expenses | $5,992 | $32,732 | -81.7% | | Loss from continuing operations | $(4,724) | $(32,748) | -85.6% | - As of June 30, 2023, the company had **$13.7 million** in cash, with its primary source of liquidity now royalties from licensing agreements and potential future financing[165](index=165&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=32&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) As a "smaller reporting company," the company is exempt from providing market risk disclosures - As a "smaller reporting company," TherapeuticsMD is exempt from providing quantitative and qualitative disclosures about market risk[184](index=184&type=chunk) [Controls and Procedures](index=32&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded disclosure controls were effective, with significant changes to internal controls reflecting the new royalty business model and reliance on consultants - The Chief Executive Officer concluded that the company's disclosure controls and procedures were effective as of the end of the reporting period[186](index=186&type=chunk) - Significant changes were made to internal controls over financial reporting to align with the new business model as a royalty company, which includes reliance on external consultants for day-to-day operations[188](index=188&type=chunk) Part II – Other Information [Legal Proceedings](index=33&type=section&id=Item%201.%20Legal%20proceedings) The company is not involved in any material legal proceedings beyond those disclosed in Note 7 of the financial statements - The company is not involved in any material legal proceedings other than those disclosed in Note 7 to the financial statements[189](index=189&type=chunk) [Risk Factors](index=33&type=section&id=Item%201A.%20Risk%20factors) No material changes to the company's risk factors have occurred since the 2022 Form 10-K filing - No material changes to the company's risk factors have occurred since the 2022 10-K Report was filed[190](index=190&type=chunk) [Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) No new unregistered equity securities were issued, nor were any equity securities repurchased during the period - No new unregistered equity securities were issued during the quarter beyond what was previously reported on Form 8-K[191](index=191&type=chunk) - The company did not repurchase any of its registered equity securities during the quarter[192](index=192&type=chunk) [Defaults Upon Senior Securities](index=33&type=section&id=Item%203.%20Defaults%20upon%20senior%20securities) The company reports no defaults upon senior securities - The company reports no defaults upon senior securities[193](index=193&type=chunk) [Mine Safety Disclosures](index=33&type=section&id=Item%204.%20Mine%20safety%20disclosures) The company has no mine safety disclosures to report - The company has no mine safety disclosures to report[194](index=194&type=chunk) [Other Information](index=33&type=section&id=Item%205.%20Other%20information) The company reports no other information under this item - The company reports no other information under this item[195](index=195&type=chunk) [Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with the Form 10-Q, including a subscription agreement and officer certifications - Exhibits filed include the Subscription Agreement with Rubric Capital Management LP and officer certifications[196](index=196&type=chunk)

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2023 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number: 001-00100 THERAPEUTICSMD, INC. (Exact name of Registrant as specified in its Charter) Nevada 87-0233535 (State or ...

Part I [Business](index=3&type=section&id=Item%201.%20Business) The company transitioned to a pharmaceutical royalty model in December 2022, generating revenue from licensed products like IMVEXXY and BIJUVA through partners such as Mayne Pharma after divesting its vitaCare business and downsizing operations - In December 2022, the company shifted its business model to a pharmaceutical royalty company, primarily collecting royalties from licensees and ceasing research, development, and commercial operations[15](index=15&type=chunk) - A significant transaction with Mayne Pharma granted them exclusive U.S. commercialization rights for IMVEXXY, BIJUVA, and prenatal vitamins, and assigned the ANNOVERA license[15](index=15&type=chunk) Mayne Pharma Royalty and Milestone Terms | Royalty/Milestone | Terms | | :--- | :--- | | **Royalties** | 8.0% on the first $80 million in annual net sales, 7.5% on sales above $80 million. Rate decreases to 2.0% upon patent expiration or generic launch | | **Minimum Annual Royalty** | $3.0 million per year for 12 years, adjusted for inflation | | **Sales Milestones** | Up to $30 million in one-time payments: $5 million at $100 million annual net sales, $10 million at $200 million, and $15 million at $300 million | | **Upfront Consideration** | $140.0 million cash at closing, plus ~$12.1 million for net working capital and ~$1.0 million in prepaid royalties | - On April 14, 2022, the company divested vitaCare Prescription Services, Inc., receiving **$142.6 million** in net proceeds and recognizing a **$143.4 million** gain, with a potential additional earn-out of up to **$7.0 million**[24](index=24&type=chunk) - Post-transformation, the company terminated all employees except the CEO, operating as a virtual entity with one full-time employee and external consultants[23](index=23&type=chunk)[109](index=109&type=chunk) - The company holds **54** issued domestic and **47** issued foreign patents, with key BIJUVA and IMVEXXY patents expiring between **2032** and **2034**[82](index=82&type=chunk) [Risk Factors](index=17&type=section&id=Item%201A.%20Risk%20factors) The company faces significant risks from its royalty-based model, including dependence on licensee sales, going concern doubts, reliance on third-party manufacturers, market acceptance, pricing pressures, and intellectual property challenges - The company's revenue is entirely royalty-based, making it vulnerable to licensees' sales performance[115](index=115&type=chunk) - Substantial doubt exists regarding the company's ability to continue as a going concern, as noted by its independent auditor, due to liquidity and potential capital needs[119](index=119&type=chunk) - Dependence on third-party CMOs like Catalent and Sever Pharma Solutions for product supply poses risks of manufacturing or compliance disruptions[122](index=122&type=chunk)[123](index=123&type=chunk) - A Paragraph IV notice from Teva Pharmaceuticals challenging IMVEXXY patents could lead to generic competition and reduced royalty revenue if litigation is adverse[98](index=98&type=chunk)[206](index=206&type=chunk)[207](index=207&type=chunk) - Future legislation, including the Inflation Reduction Act of 2022, may adversely affect reimbursement and pricing for licensed products, potentially reducing royalty income[158](index=158&type=chunk) - Nasdaq issued a deficiency notice for failing to hold a 2022 annual stockholder meeting, with potential delisting if compliance is not met by June 29, 2023[213](index=213&type=chunk)[214](index=214&type=chunk) [Unresolved Staff Comments](index=43&type=section&id=Item%201B.%20Unresolved%20staff%20comments) The company reports no unresolved staff comments from the Securities and Exchange Commission - None [Properties](index=43&type=section&id=Item%202.%20Properties) The company's Boca Raton headquarters, leased for approximately 62,748 square feet, is being subleased following the business model shift to a royalty company and employee terminations - The company leases **62,748 square feet** for its headquarters in Boca Raton, Florida[253](index=253&type=chunk)[254](index=254&type=chunk) - As a pharmaceutical royalty company, the company is in the process of subleasing its headquarters[254](index=254&type=chunk) [Legal Proceedings](index=44&type=section&id=Item%203.%20Legal%20proceedings) The company is involved in patent infringement litigation against Teva Pharmaceuticals over IMVEXXY, with management responsibility transferred to Mayne Pharma, while previous litigation with Amneal over BIJUVA was settled - In February 2020, Teva Pharmaceuticals submitted an ANDA to the FDA for a generic IMVEXXY version, alleging patent invalidity or non-infringement[255](index=255&type=chunk) - The company filed a patent infringement lawsuit against Teva in April 2020, which is currently stayed, extending the 30-month statutory stay on FDA approval of Teva's ANDA[255](index=255&type=chunk) - As of December 30, 2022, responsibility for patent enforcement, including the Teva litigation, transferred to Mayne Pharma[255](index=255&type=chunk) [Mine Safety Disclosures](index=44&type=section&id=Item%204.%20Mine%20safety%20disclosures) This item is not applicable to the company - Not applicable[257](index=257&type=chunk) Part II [Market for Registrant's Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities](index=45&type=section&id=Item%205.%20Market%20for%20registrant%27s%20common%20equity%2C%20related%20stockholder%20matters%2C%20and%20issuer%20purchases%20of%20equity%20securities) The company's common stock trades on the Nasdaq Global Select Market under symbol "TXMD", with no history or future plans for cash dividends, as earnings are retained for operations - The company's common stock trades on the Nasdaq Global Select Market under the symbol **"TXMD"**[259](index=259&type=chunk) - The company has never paid dividends and does not plan to in the foreseeable future, intending to retain earnings for operations[261](index=261&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=45&type=section&id=Item%207.%20Management%27s%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) The company's 2022 financial results reflect its royalty-based transformation, with continuing operations showing a **$1.1 million** net income driven by **$70.0 million** in license revenue, and discontinued operations generating **$110.9 million** net income from divestitures, despite ongoing going concern doubts Results of Operations from Continuing Operations (2022 vs 2021) | (In thousands) | 2022 (in thousands) | 2021 (in thousands) | | :--- | :--- | :--- | | **Total revenue, net** | $69,963 | $2,573 | | Gross profit | $68,566 | $1,171 | | Total operating expenses | $67,375 | $80,748 | | **Income (loss) from operations** | $1,191 | $(79,577) | | **Net income (loss) from continuing operations** | $1,074 | $(79,305) | - The significant increase in 2022 revenue from continuing operations is due to recognizing **$70.0 million** in license revenue from the Mayne License Agreement[294](index=294&type=chunk) - Discontinued operations generated **$110.9 million** in income in 2022, primarily from a **$143.4 million** gain on vitaCare's sale and a **$62.0 million** gain on ANNOVERA assets to Mayne Pharma[301](index=301&type=chunk) - The company's cash position was **$38.1 million** as of December 31, 2022, with all Financing Agreement obligations repaid and terminated[302](index=302&type=chunk)[315](index=315&type=chunk) - Management concluded substantial doubt exists about the Company's ability to continue as a going concern for the next twelve months, citing potential licensee sales delays, working capital adjustments, and future financing needs[322](index=322&type=chunk) - Critical accounting policies include allocating Mayne transaction proceeds between ANNOVERA asset sale (ASC 610-20) and other product licenses (ASC 606), recognizing minimum guaranteed royalty payments as fixed consideration at present value[334](index=334&type=chunk)[335](index=335&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=55&type=section&id=Item%207A.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) As a "smaller reporting company," the company is not required to provide this information - The company is not required to provide this information as it qualifies as a "smaller reporting company"[346](index=346&type=chunk) [Financial Statements and Supplementary Data](index=56&type=section&id=Item%208.%20Financial%20statements%20and%20supplementary%20Data) This section incorporates by reference the company's audited consolidated financial statements, accompanying notes, and the independent auditor's report, commencing on page F-1 - Refers to the financial statements, notes, and auditor's report commencing on page F-1[347](index=347&type=chunk) [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](index=56&type=section&id=Item%209.%20Changes%20in%20and%20disagreements%20with%20accountants%20on%20accounting%20and%20financial%20disclosure) The company reports no changes in or disagreements with its accountants on accounting and financial disclosure - None [Controls and Procedures](index=56&type=section&id=Item%209A.%20Controls%20and%20procedures) Management concluded the company's disclosure controls and internal control over financial reporting were effective as of December 31, 2022, with no material changes in the most recent fiscal quarter, and no auditor attestation report is included due to filing status - Management concluded the company's disclosure controls and procedures were effective as of December 31, 2022[349](index=349&type=chunk) - Management assessed internal control over financial reporting using the COSO framework and concluded it was effective as of December 31, 2022[354](index=354&type=chunk) - No material changes were made to the internal control over financial reporting during the most recent fiscal quarter[350](index=350&type=chunk) [Other Information](index=57&type=section&id=Item%209B.%20Other%20information) The company reports no other information for this item - None Part III [Directors, Executive Officers and Corporate Governance](index=58&type=section&id=Item%2010.%20Directors%2C%20executive%20officers%20and%20corporate%20governance) Information regarding directors, executive officers, and corporate governance is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[359](index=359&type=chunk) [Executive Compensation](index=58&type=section&id=Item%2011.%20Executive%20compensation) Executive compensation information is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[360](index=360&type=chunk) [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](index=58&type=section&id=Item%2012.%20Security%20ownership%20of%20certain%20beneficial%20owners%20and%20management%20and%20related%20stockholder%20matters) Security ownership and related stockholder matters information is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[361](index=361&type=chunk) [Certain Relationships and Related Transactions, and Director Independence](index=58&type=section&id=Item%2013.%20Certain%20relationships%20and%20related%20transactions%2C%20and%20director%20independence) Information on certain relationships, related transactions, and director independence is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[362](index=362&type=chunk) [Principal Accountant Fees and Services](index=58&type=section&id=Item%2014.%20Principal%20accountant%20fees%20and%20services) Principal accountant fees and services information is incorporated by reference from the 2023 Annual Meeting of Stockholders Proxy Statement - Information is incorporated by reference from the definitive Proxy Statement for the 2023 Annual Meeting of Stockholders[363](index=363&type=chunk) Part IV [Exhibits and Financial Statement Schedules](index=59&type=section&id=Item%2015.%20Exhibits%20and%20financial%20statement%20schedules) This section lists financial statements and exhibits filed with the Form 10-K, including material contracts and certifications, with financial statements commencing on page F-1 and no separate schedules included - This section lists all exhibits filed with the 10-K report, including material contracts like the License and Transaction Agreements with Mayne Pharma[365](index=365&type=chunk) - The financial statements are listed in the Index to Financial Statements on page F-1[366](index=366&type=chunk) [Form 10-K Summary](index=64&type=section&id=Item%2016.%20Form%2010-K%20summary) The company reports no Form 10-K summary - None

Part I – Financial Information [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20statements) The financial statements reveal a net income driven by a one-time business sale, which masks ongoing operating losses and significant 'going concern' risks Consolidated Balance Sheet Highlights (in thousands) | Account | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash | $27,080 | $65,122 | | Total current assets | $87,478 | $119,468 | | Total assets | $133,907 | $169,472 | | **Liabilities & Stockholders' Deficit** | | | | Debt, net | $93,602 | $188,269 | | Total current liabilities | $174,071 | $252,891 | | Total liabilities | $182,178 | $263,093 | | Total stockholders' deficit | $(48,271) | $(93,621) | Consolidated Statement of Operations Highlights (in thousands, except per share data) | Metric | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | Total revenue, net | $20,917 | $25,406 | $68,811 | $68,273 | | Loss from operations | $(20,747) | $(39,921) | $(65,817) | $(104,378) | | Gain on sale of business | — | — | $143,384 | — | | Net (loss) income | $(28,965) | $(47,420) | $34,295 | $(129,455) | | (Loss) earnings per share, basic | $(3.13) | $(5.62) | $3.86 | $(16.68) | Consolidated Statement of Cash Flows Highlights (Nine Months Ended Sep 30, in thousands) | Cash Flow Category | 2022 | 2021 | | :--- | :--- | :--- | | Net cash used in operating activities | $(63,850) | $(103,135) | | Net cash provided by (used in) investing activities | $142,316 | $(709) | | Net cash (used in) provided by financing activities | $(105,258) | $128,199 | | Net (decrease) increase in cash and restricted cash | $(26,792) | $24,355 | - The company completed a **50-for-1 reverse stock split** of its Common Stock on May 6, 2022, with all historical share and per-share data adjusted accordingly[34](index=34&type=chunk)[35](index=35&type=chunk) [Note 1. Business and Going Concern](index=7&type=section&id=Note%201.%20Business%2C%20basis%20of%20presentation%2C%20new%20accounting%20standards%20and%20summary%20of%20significant%20accounting%20policies) The company divested its vitaCare business while facing substantial doubt about its ability to continue as a going concern due to operating losses - On April 14, 2022, the company completed the divestiture of vitaCare Prescription Services, receiving net proceeds of **$142.6 million** and recognizing a gain on sale of **$143.4 million**[18](index=18&type=chunk) - The company's financial condition raises **substantial doubt about its ability to continue as a going concern**, having incurred a loss from operations of **$65.8 million** for the nine months ended Sep 30, 2022[25](index=25&type=chunk)[32](index=32&type=chunk) - To address capital needs, the company is pursuing various strategic alternatives, including the possibility of filing for **Chapter 11 protection** if these alternatives fail[31](index=31&type=chunk) [Note 8. Debt](index=12&type=section&id=Note%208.%20Debt) Debt was significantly reduced using proceeds from a divestiture, though the maturity date required multiple extensions Debt Balance (in thousands) | | September 30, 2022 | December 31, 2021 | | :--- | :--- | :--- | | Financing Agreement | $94,432 | $200,000 | | Less: deferred financing fees | $830 | $11,731 | | **Debt, net** | **$93,602** | **$188,269** | - In April 2022, the company used **$120.0 million** of net proceeds from the vitaCare Divestiture to make a prepayment on its loans[55](index=55&type=chunk) - The maturity date of the Financing Agreement was extended multiple times, with the date as of September 30, 2022, being **October 31, 2022**, and subsequently extended to **November 30, 2022**[59](index=59&type=chunk)[60](index=60&type=chunk)[61](index=61&type=chunk) [Note 9. Commitments and Contingencies](index=14&type=section&id=Note%209.%20Commitments%20and%20contingencies) The company has minimum purchase commitments, is involved in patent litigation, and recorded significant executive severance expenses - The company has **minimum purchase commitments** with third-party manufacturers for its products ANNOVERA, IMVEXXY, and BIJUVA[67](index=67&type=chunk) - The company is involved in a **patent infringement lawsuit** against Teva Pharmaceuticals concerning a generic version of IMVEXXY[70](index=70&type=chunk) - Following the separation of the former CEO in September 2022, the company recorded executive severance expenses of **$4.8 million**[72](index=72&type=chunk) [Note 10. Mandatory Redeemable Preferred Stock and Stockholders' Deficit](index=15&type=section&id=Note%2010.%20Mandatory%20Redeemable%20Preferred%20Stock%20and%20Stockholders'%20Deficit) The company raised capital through private placements of Mandatory Redeemable Preferred Stock, which is classified as a current liability - In July and September 2022, the company raised capital through private placements with **Rubric Capital Management LP**, issuing Mandatory Redeemable Preferred Stock and Common Stock[73](index=73&type=chunk)[74](index=74&type=chunk) - The company received aggregate gross proceeds of **$15.0 million** in July and **$7.0 million** in September, with the Preferred Stock classified as a current liability due to its mandatory redemption date[73](index=73&type=chunk)[74](index=74&type=chunk)[75](index=75&type=chunk) [Note 11. Revenue](index=18&type=section&id=Note%2011.%20Revenue) Net product revenue decreased in the third quarter but remained stable for the nine-month period, led by sales of ANNOVERA Disaggregated Revenue by Product (in thousands) | Product | Three Months Ended Sep 30, 2022 | Three Months Ended Sep 30, 2021 | Nine Months Ended Sep 30, 2022 | Nine Months Ended Sep 30, 2021 | | :--- | :--- | :--- | :--- | :--- | | ANNOVERA | $10,415 | $11,807 | $37,196 | $30,112 | | IMVEXXY | $6,947 | $8,016 | $20,583 | $24,866 | | BIJUVA | $2,663 | $3,298 | $7,877 | $7,899 | | Prescription vitamin | $892 | $1,335 | $2,671 | $4,162 | | **Product revenue, net** | **$20,917** | **$24,456** | **$68,327** | **$67,039** | [Note 16. Subsequent Events](index=21&type=section&id=Note%2016.%20Subsequent%20events) Following the quarter's end, the company raised additional capital and further extended its debt maturity date - On October 28, 2022, the company sold an additional 7,000 shares of Preferred Stock for gross proceeds of **$7.0 million**[94](index=94&type=chunk) - In connection with the October financing, the company issued additional Lender Warrants and extended the maturity date of its Financing Agreement to **November 30, 2022**[95](index=95&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=22&type=section&id=Item%202.%20Management's%20discussion%20and%20analysis%20of%20financial%20condition%20and%20results%20of%20operations) Management's discussion highlights the critical 'going concern' risk from impending debt maturity, decreased quarterly revenue, and the urgent need for new capital [Going Concern](index=23&type=section&id=Going%20concern) Management acknowledges substantial doubt about the company's ability to continue as a going concern due to its debt obligations - Management states that operational losses and upcoming debt maturity raise **substantial doubt** about its ability to continue as a going concern for the next twelve months[109](index=109&type=chunk)[118](index=118&type=chunk) - The company is actively pursuing strategic alternatives but warns that a **Chapter 11 filing** is a possibility if these efforts fail before the debt matures[117](index=117&type=chunk) [Results of Operations](index=26&type=section&id=Results%20of%20operations) Quarterly revenue declined due to lower product sales, though operating expenses were significantly reduced, and nine-month net income was solely due to a one-time gain Revenue Comparison (in thousands) | Period | 2022 | 2021 | % Change | | :--- | :--- | :--- | :--- | | Three Months Ended Sep 30 | $20,917 | $25,406 | -17.7% | | Nine Months Ended Sep 30 | $68,811 | $68,273 | +0.8% | - The **17.7% decrease in Q3 2022 revenue** was primarily driven by lower sales of ANNOVERA (-11.8%) and IMVEXXY (-13.3%)[127](index=127&type=chunk)[128](index=128&type=chunk) - Total operating expenses **decreased by 36.9% in Q3 2022** and **23.5% in the first nine months of 2022**, reflecting cost reduction efforts and the vitaCare divestiture[134](index=134&type=chunk)[148](index=148&type=chunk) - For the first nine months of 2022, the company reported net income of **$34.3 million**, which was entirely due to the non-recurring gain of **$143.0 million** from the vitaCare divestiture[154](index=154&type=chunk) [Liquidity and Capital Resources](index=30&type=section&id=Liquidity%20and%20capital%20resources) The company's liquidity is strained with low cash reserves, though cash used in operations improved year-over-year - As of September 30, 2022, the company had cash totaling **$27.1 million**[155](index=155&type=chunk) - Net cash used in operating activities for the first nine months of 2022 was **$63.9 million**, a **38.1% improvement** from the $103.1 million used in the same period of 2021[159](index=159&type=chunk) - Net cash used in financing activities was **$105.3 million**, primarily due to a **$125.0 million repayment of debt**[14](index=14&type=chunk)[161](index=161&type=chunk) [Item 3. Quantitative and Qualitative Disclosures About Market Risk](index=31&type=section&id=Item%203.%20Quantitative%20and%20qualitative%20disclosures%20about%20market%20risk) The company is exempt from providing market risk disclosures as it qualifies as a "smaller reporting company" - The company is exempt from providing quantitative and qualitative disclosures about market risk because it qualifies as a **"smaller reporting company"**[169](index=169&type=chunk) [Item 4. Controls and Procedures](index=31&type=section&id=Item%204.%20Controls%20and%20procedures) Management concluded that disclosure controls and procedures were effective, with no material changes to internal controls during the quarter - Based on an evaluation, the company's Chief Executive Officers and Interim Chief Financial Officer concluded that **disclosure controls and procedures were effective**[171](index=171&type=chunk) - **No material changes** in internal control over financial reporting occurred during the third quarter of 2022[173](index=173&type=chunk) Part II – Other Information [Item 1. Legal Proceedings](index=32&type=section&id=Item%201.%20Legal%20proceedings) The company's primary legal matter is an ongoing patent infringement lawsuit related to its product IMVEXXY - The company's primary legal proceeding is the **patent infringement case against Teva** concerning a generic version of IMVEXXY, as detailed in Note 9 of the financial statements[174](index=174&type=chunk)[70](index=70&type=chunk) [Item 1A. Risk Factors](index=32&type=section&id=Item%201A.%20Risk%20factors) The company's substantial indebtedness and impending debt maturity create a significant 'going concern' risk that may impede its ability to raise capital - The company's level of indebtedness, with **$94.4 million outstanding** maturing in November 2022, raises substantial doubt about its ability to continue as a **going concern**[176](index=176&type=chunk) - **Current cash on hand is not sufficient** to pay the amounts due under the Financing Agreement upon maturity, requiring the company to raise additional capital[180](index=180&type=chunk) - The **'going concern' opinion** from the independent auditor could materially limit the company's ability to raise additional funds[180](index=180&type=chunk) [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=33&type=section&id=Item%202.%20Unregistered%20sales%20of%20equity%20securities%20and%20use%20of%20proceeds) The company reported no unregistered sales of equity securities during the period - **None reported** for the period[182](index=182&type=chunk) [Item 6. Exhibits](index=34&type=section&id=Item%206.%20Exhibits) This section lists all exhibits filed with the Form 10-Q, including financing amendments and officer certifications