TherapeuticsMD(TXMD) - 2024 Q3 - Quarterly Report

Business Transition - TherapeuticsMD transitioned to a pharmaceutical royalty company, ceasing research and development and commercial operations as of December 30, 2022[91]. - The company transitioned from a manufacturing and commercialization business to a royalty-based business, contributing to a decrease in net loss from continuing operations by $3,732 thousand[147]. Licensing and Royalties - The company granted Mayne Pharma an exclusive license for IMVEXXY, BIJUVA, and ANNOVERA, with potential milestone payments of$30 million based on annual net sales reaching $100 million,$200 million, and $300 million respectively[93]. - Mayne Pharma will pay royalties of 8.0$80 million in annual net sales and 7.5% on sales above that, with a minimum annual royalty of $3.0 million for 12 years[93]. - The Mayne License Agreement included a total consideration of$140 million in cash at closing, along with additional payments for net working capital and prepaid royalties[142]. - Mayne Pharma will pay one-time milestone payments of $5.0 million,$10.0 million, and $15.0 million based on aggregate net sales of all Products in the U.S. reaching$100.0 million, $200.0 million, and$300.0 million respectively[143]. - The royalty rate on net sales of all Products in the U.S. is set at 8.0% for the first $80 million and 7.5$3.0 million for 12 years, adjusted for inflation at 3%[143]. - As of September 30, 2024, the company had a royalty receivable of $3,160 thousand (short-term) and$16,610 thousand (long-term) from Mayne Pharma, related to the Minimum Annual Royalty[152]. - Mayne Pharma acquired the company's accounts receivable balance of approximately $29.3 million, subject to working capital adjustments[152]. Financial Performance - The company recorded$547 thousand in license revenue for Q3 2024, an increase of $600 thousand compared to$(53) thousand in Q3 2023, primarily due to changes in sales of licensed products[123]. - Total operating expenses for Q3 2024 were $1,406 thousand, a decrease of$314 thousand, or 18.3%, compared to Q3 2023, attributed to cost optimization following the transition to a royalty-based business[124]. - Selling, general and administrative expenses were $1,310 thousand for Q3 2024, a decrease of$280 thousand, or 17.6%, compared to Q3 2023, reflecting increased efficiencies[125]. - The company reported a loss from operations of $859 thousand in Q3 2024, improved from a loss of$1,773 thousand in Q3 2023, indicating enhanced operational efficiency[127]. - For the first nine months of 2024, license revenue was $1,094 thousand, an increase of$294 thousand, or 36.8%, compared to $800 thousand in the same period of 2023[132]. - Total operating expenses for the first nine months of 2024 were$5,535 thousand, a decrease of $2,177 thousand, or 28.2$3,865 thousand, a decrease of $3,562 thousand, or 48.0$2,426 thousand for the first nine months of 2024, compared to a net loss of $6,158 thousand for the same period in 2023[139]. - As of September 30, 2024, the company had cash and cash equivalents totaling$5,047 thousand, ensuring liquidity for continued operations[141]. - For the first nine months of 2024, net cash provided by operating activities was $1,153 thousand, a significant improvement of$19,274 thousand compared to net cash used of $18,121 thousand in the same period of 2023[147]. - Net cash used in discontinued operations decreased to$433 thousand in the first nine months of 2024 from $22,179 thousand in the same period of 2023, reflecting reduced expenses and liability payments[150]. Operational Support and Employment - As of September 30, 2024, the company employed one full-time employee and engaged external consultants for operational support[101]. Capital and Liquidity Concerns - There is uncertainty regarding the allowance for payer rebates and wholesale distributor fees, which may impact liquidity requirements[111]. - The company may need to raise additional capital to fund operations until cash flow becomes positive, potentially diluting existing stockholders[102]. - The company faces substantial doubt about its ability to continue as a going concern for the next twelve months due to potential liquidity issues[111]. - The company has substantial doubt about its ability to continue as a going concern for the next twelve months from the issuance of the financial statements[145]. Share Issuance - In 2023, the company issued 312,525 shares at$3.6797 and 877,192 shares at $2.2761, raising gross proceeds of$1.15 million and $2.0 million respectively[104]. - The company received gross proceeds of$1.15 million from the initial drawdown of 312,525 shares sold at $3.6797 per share on June 29, 2023, and$2.0 million from the sale of 877,192 shares at $2.2761 per share on November 15, 2023[144]. Managed Services Agreement - The Managed Client Agreement with IWG involves managed services for flexible workspaces covering 21,330 square feet of office space[145].