TherapeuticsMD(TXMD) - 2025 Q1 - Quarterly Report

Business Transition and Licensing - TherapeuticsMD transitioned to a pharmaceutical royalty company in December 2022, focusing on collecting royalties from licensed products[98] - The company granted Mayne Pharma an exclusive license for IMVEXXY, BIJUVA, and prescription prenatal vitamins, with a total consideration of $140 million at closing[101] - The Mayne License Agreement included a cash payment of $140 million at closing and additional payments based on sales milestones[143] - 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[99] - The company has license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside the U.S.[105] Financial Performance - License revenue for Q1 2025 was $393 thousand, an increase of $80 thousand or 25.6% compared to $313 thousand in Q1 2024[132] - Total operating expenses for Q1 2025 were $1,264 thousand, a decrease of $191 thousand or 13.1% compared to $1,455 thousand in Q1 2024[135] - Loss from operations for Q1 2025 was $871 thousand, an improvement from a loss of $1,142 thousand in Q1 2024[136] - Net loss from continuing operations for Q1 2025 was $636 thousand, or $0.06 per share, compared to a net loss of $809 thousand, or $0.07 per share, in Q1 2024[140] - Discontinued operations reported a net loss of $17 thousand in Q1 2025, compared to a net income of $75 thousand in Q1 2024[140] Cash Flow and Liquidity - Cash and cash equivalents as of March 31, 2025, totaled $5,745 thousand[142] - Net cash provided by continuing operating activities for Q1 2025 was $699 thousand, compared to net cash used of $229 thousand in Q1 2024[149] - As of March 31, 2025, the company expressed concerns about liquidity, indicating potential insufficiency of cash reserves to meet operational needs[118] Legal and Regulatory Matters - The company is currently involved in a lawsuit against Mayne Pharma regarding breach of contract and disputes over net working capital allowances[114] - The company may face contingent liabilities related to lawsuits, claims, and regulatory actions, which are assessed with appropriate experts[155] Accounting and Reporting - Financial statements are prepared in accordance with U.S. GAAP and SEC regulations, with critical accounting policies disclosed in the 2024 10-K Report[156] - As a "smaller reporting company," the company is not required to provide quantitative and qualitative disclosures about market risk[157] Operational Adjustments - The company revised its working capital adjustment accrual from $3.5 million to $5.5 million in September 2023, reflecting anticipated obligations under the Transaction Agreement[111] - The company has classified all results from former commercial operations as discontinued operations in its financial statements[103] Royalty Structure - The royalty rate for net sales in the U.S. is set at 8% for the first $80 million and 7.5% for sales above that, with a minimum annual royalty of $3 million for 12 years[99] - Mayne Pharma will pay royalties of 8.0% on the first $80 million in annual net sales and 7.5% on sales above that threshold for 20 years[144] - The company recorded a royalty receivable of $2,777 thousand in the short term and $15,427 thousand in the long term from Mayne Pharma as of March 31, 2025[152]