TherapeuticsMD(TXMD) - 2025 Q3 - Quarterly Report

Company Transition and Strategy - TherapeuticsMD transitioned to a pharmaceutical royalty company, ceasing research and development operations as of December 2022[105]. - The company is exploring various strategic alternatives, including potential acquisitions or mergers, but has not set a timetable for these efforts[113]. - The company may need to raise additional capital to achieve cash flow positivity, exploring equity and debt financing options[114]. Financial Transactions and Agreements - The company completed the Mayne Transaction, receiving $140 million in cash at closing and additional payments based on product sales milestones[108]. - The total consideration from Mayne Pharma for the acquisition of net working capital was approximately $12.1 million, subject to adjustments[117]. - The Mayne License Agreement included a cash payment of $140 million at closing and additional payments totaling approximately $13.1 million for net working capital and prepaid royalties[155]. - Mayne Pharma will pay 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[106]. - Mayne Pharma will make 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[156]. - 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% for sales above that, with a minimum annual royalty of $3.0 million for 12 years, adjusted for 3% inflation[156]. Financial Performance - License revenue for Q3 2025 was $784 thousand, an increase of $237 thousand (43.3%) compared to $547 thousand in Q3 2024, primarily due to changes in sales of licensed products[139]. - Total operating expenses for Q3 2025 were $1,646 thousand, a decrease of $35 thousand (2.1%) from $1,681 thousand in Q3 2024[141]. - Net income for Q3 2025 was $152 thousand, compared to a net loss of $609 thousand in Q3 2024, reflecting improved financial performance[139]. - License revenue for the first nine months of 2025 was $2,129 thousand, an increase of $1,035 thousand (94.5%) compared to $1,094 thousand in the same period of 2024[146]. - Total operating expenses for the first nine months of 2025 were $4,967 thousand, a decrease of $1,587 thousand (24.2%) from $6,554 thousand in the first nine months of 2024[149]. - Loss from operations for the first nine months of 2025 was $2,838 thousand, a significant improvement from a loss of $5,460 thousand in the same period of 2024[150]. - Cash and cash equivalents as of September 30, 2025, totaled $7,115 thousand, indicating a stable liquidity position[154]. - Income from discontinued operations for Q3 2025 was $102 thousand, compared to a loss of $42 thousand in Q3 2024, showing a positive shift[143]. - Income tax benefit of $32 thousand was recorded for continuing operations in the first nine months of 2025, compared to no benefit in the same period of 2024[152]. - For the first nine months of 2025, net cash provided by continuing operating activities was $2,079 thousand, an increase from $1,153 thousand in the same period of 2024[161]. - Net cash used in discontinued operations decreased to $23 thousand in the first nine months of 2025 from $433 thousand in the same period of 2024[162]. - As of September 30, 2025, the company had a royalty receivable of $3,164 thousand (short-term) and $14,269 thousand (long-term) from Mayne Pharma[164]. Legal and Compliance Matters - The company has ongoing litigation with Mayne Pharma regarding contract disputes, with no additional accruals recorded for potential losses as of September 30, 2025[121][125]. - The company has no recorded liabilities for indemnification provisions as of September 30, 2025, indicating minimal estimated fair value of such liabilities[166]. - The company is not required to provide quantitative and qualitative disclosures about market risk as a "smaller reporting company" under the Exchange Act[169]. Capital Raising Activities - As of September 30, 2023, the company raised $1.15 million from the sale of 312,525 shares and $2 million from the sale of 877,192 shares under a Subscription Agreement[116]. - The initial drawdown from the Subscription Agreement with Rubric Capital Management LP resulted in gross proceeds of $1.15 million from the sale of 312,525 shares at $3.6797 per share[158]. - An additional drawdown on November 15, 2023, generated gross proceeds of $2.0 million from the sale of 877,192 shares at $2.2761 per share[158]. Going Concern - There is substantial doubt about the company's ability to continue as a going concern for the next twelve months from the issuance of the financial statements[159]. - 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[118].