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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 June 30, 2022

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 other jurisdiction

(I.R.S. Employer Identification No.)

of incorporation or organization)

 

 

 

951 Yamato Road, Suite 220

 

Boca Raton, Florida

33431

(Address of principal executive offices)

(Zip Code)

 

561-961-1900

(Registrant’s telephone number, including area code)

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

Trading

 

Title of Each Class

symbol

Name of each exchange on which registered

Common Stock, par value $0.001 per share

TXMD

The Nasdaq Stock Market LLC

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes No

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit such files). Yes No

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

 

Large Accelerated Filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

Emerging growth company

 

 

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.

Indicate by check mark whether the Registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No

As of August 8, 2022, there were 9,424,892 shares of the registrant’s common stock, par value $0.001 per share, outstanding.

 

 


 

Table of Contents

 

Part I – Financial Information

Page

Item. 1.

Financial statements (unaudited)

 

 

Consolidated Balance Sheets

1

 

Consolidated Statements of Operations

2

 

Consolidated Statements of Stockholders’ Deficit

3

 

Consolidated Statements of Cash Flows

4

 

Notes to Unaudited Consolidated Financial Statements

5

Item 2.

Management's discussion and analysis of financial condition and results of operations

19

Item 3.

Quantitative and qualitative disclosures about market risk

28

Item 4.

Controls and procedures

28

Part II – Other Information

 

Item 1.

Legal proceedings

28

Item 1A.

Risk factors

28

Item 2.

Unregistered sales of equity securities and use of proceeds

30

Item 3.

Defaults upon senior securities

30

Item 4.

Mine safety disclosures

30

Item 5.

Other information

30

Item 6.

Exhibits

31

Signatures

32

 

 

 


 

 

Part I – Financial Information

Item 1.

Financial statements

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited - in thousands, except per share data)

 

 

 

June 30, 2022

 

 

December 31, 2021

 

Assets:

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

26,303

 

 

$

65,122

 

Restricted cash

 

 

11,250

 

 

 

 

Accounts receivable, net of allowance for credit losses of $1,587 and

    $1,334 as of June 30, 2022 and December 31, 2021, respectively

 

 

45,804

 

 

 

36,176

 

Inventory

 

 

6,150

 

 

 

7,622

 

Prepaid and other current assets

 

 

9,096

 

 

 

10,548

 

Total current assets

 

 

98,603

 

 

 

119,468

 

Fixed assets, net

 

 

710

 

 

 

1,199

 

License rights and other intangible assets, net

 

 

38,721

 

 

 

40,318

 

Right of use assets

 

 

7,914

 

 

 

8,234

 

Other non-current assets

 

 

254

 

 

 

253

 

Total assets

 

$

146,202

 

 

$

169,472

 

Liabilities and stockholders' deficit:

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Current maturities of debt

 

$

90,780

 

 

$

188,269

 

Accounts payable

 

 

13,978

 

 

 

20,318

 

Accrued expenses and other current liabilities

 

 

59,228

 

 

 

44,304

 

Total current liabilities

 

 

163,986

 

 

 

252,891

 

Operating lease liabilities

 

 

7,728

 

 

 

8,063

 

Other non-current liabilities

 

 

554

 

 

 

2,139

 

Total liabilities

 

 

172,268

 

 

 

263,093

 

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; 12,000 shares authorized, 8,860 and 8,598

   (adjusted for the 50-for-1 reverse stock split) shares issued and outstanding

   as of June 30, 2022 and December 31, 2021, respectively

 

 

9

 

 

 

9

 

Additional paid-in capital

 

 

962,025

 

 

 

957,730

 

Accumulated deficit

 

 

(988,100

)

 

 

(1,051,360

)

Total stockholders' deficit

 

 

(26,066

)

 

 

(93,621

)

Total liabilities and stockholders' deficit

 

$

146,202

 

 

$

169,472

 

 

The accompanying notes are an integral part of these consolidated financial statements.

1


 

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Statements of Operations

(Unaudited - in thousands, except per share data)

 

 

 

Three Months Ended June 30,

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

28,496

 

 

$

22,951

 

 

$

47,410

 

 

$

42,583

 

License and service

 

 

65

 

 

 

50

 

 

 

484

 

 

 

284

 

Total revenue, net

 

 

28,561

 

 

 

23,001

 

 

 

47,894

 

 

 

42,867

 

Cost of goods sold

 

 

4,740

 

 

 

4,132

 

 

 

9,600

 

 

 

8,819

 

Total gross profit

 

 

23,821

 

 

 

18,869

 

 

 

38,294

 

 

 

34,048

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

23,679

 

 

 

32,164

 

 

 

42,574

 

 

 

56,188

 

General and administrative

 

 

17,403

 

 

 

19,873

 

 

 

37,810

 

 

 

38,256

 

Research and development

 

 

1,580

 

 

 

2,011

 

 

 

2,980

 

 

 

4,061

 

Total operating expenses

 

 

42,662

 

 

 

54,048

 

 

 

83,364

 

 

 

98,505

 

Loss from operations

 

 

(18,841

)

 

 

(35,179

)

 

 

(45,070

)

 

 

(64,457

)

Other income (expense):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of business

 

 

143,384

 

 

 

 

 

 

143,384

 

 

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(8,380

)

 

 

 

Interest expense and other financing costs

 

 

(11,696

)

 

 

(7,596

)

 

 

(26,108

)

 

 

(17,823

)

Other income, net

 

 

(16

)

 

 

123

 

 

 

(16

)

 

 

245

 

Total other income (expense), net

 

 

131,672

 

 

 

(7,473

)

 

 

108,880

 

 

 

(17,578

)

Income (loss) before income taxes

 

 

112,831

 

 

 

(42,652

)

 

 

63,810

 

 

 

(82,035

)

Provision for income taxes

 

 

550

 

 

 

 

 

 

550

 

 

 

 

Net income (loss)

 

$

112,281

 

 

$

(42,652

)

 

$

63,260

 

 

$

(82,035

)

Earnings (loss) per common share, basic

 

$

12.83

 

 

$

(5.41

)

 

$

7.29

 

 

$

(11.06

)

Weighted average common shares, basic

 

 

8,750

 

 

 

7,881

 

 

 

8,682

 

 

 

7,416

 

Earnings (loss) per common share, diluted

 

$

12.39

 

 

$

(5.41

)

 

$

7.05

 

 

$

(11.06

)

Weighted average common shares, diluted

 

 

9,059

 

 

 

7,881

 

 

 

8,971

 

 

 

7,416

 

Comprehensive income (loss):

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income (loss)

 

$

112,281

 

 

$

(42,652

)

 

$

63,260

 

 

$

(82,035

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive income (loss)

 

$

112,281

 

 

$

(42,652

)

 

$

63,260

 

 

$

(82,035

)

 

 

The accompanying notes are an integral part of these consolidated financial statements.

2


 

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Deficit

(Unaudited - in thousands)

 

 

 

 

 

 

 

 

 

 

 

Additional

 

 

 

 

 

 

 

 

 

 

 

Common Stock

 

 

Paid in

 

 

Accumulated

 

 

 

 

 

 

 

Shares

 

 

Amount

 

 

Capital

 

 

Deficit

 

 

Total

 

Balance, January 1, 2022

 

 

8,598

 

 

$

9

 

 

$

957,730

 

 

$

(1,051,360

)

 

$

(93,621

)

Shares issued for vested restricted stock units

 

 

71

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

2,062

 

 

 

 

 

 

2,062

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(49,021

)

 

 

(49,021

)

Balance, March 31, 2022

 

 

8,669

 

 

 

9

 

 

 

959,792

 

 

 

(1,100,381

)

 

 

(140,580

)

Shares issued for rounding up of fractional shares in

  connection with the reverse stock split

 

 

142

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for vested restricted stock units

 

 

44

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for sale of common stock related to

  employee stock purchase plan

 

 

5

 

 

 

 

 

 

14

 

 

 

 

 

 

14

 

Share-based compensation

 

 

 

 

 

 

 

 

2,219

 

 

 

 

 

 

2,219

 

Net income

 

 

 

 

 

 

 

 

 

 

 

112,281

 

 

 

112,281

 

Balance, June 30, 2022

 

 

8,860

 

 

$

9

 

 

$

962,025

 

 

$

(988,100

)

 

$

(26,066

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2021

 

 

5,996

 

 

$

6

 

 

$

754,938

 

 

$

(878,945

)

 

$

(124,001

)

Shares issued for sale of common stock, net of cost

 

 

1,857

 

 

 

2

 

 

 

150,897

 

 

 

 

 

 

150,899

 

Shares issued for exercise of warrants, net of

  cashless exercises

 

 

10

 

 

 

 

 

 

50

 

 

 

 

 

 

50

 

Shares issued for vested restricted stock units

 

 

1

 

 

 

 

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

 

 

 

2,957

 

 

 

 

 

 

2,957

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(39,383

)

 

 

(39,383

)

Balance, March 31, 2021

 

 

7,864

 

 

 

8

 

 

 

908,842

 

 

 

(918,328

)

 

 

(9,478

)

Shares issued for sale of common stock, net of cost

 

 

3

 

 

 

 

 

 

163

 

 

 

 

 

 

163

 

Shares issued for exercise of warrants

 

 

12

 

 

 

 

 

 

228

 

 

 

 

 

 

228

 

Shares issued for exercise of options

 

 

1

 

 

 

 

 

 

21

 

 

 

 

 

 

21

 

Shares issued for vested restricted stock units

 

 

19

 

 

 

 

 

 

 

 

 

 

 

 

 

Shares issued for sale of common stock related to

  employee stock purchase plan

 

 

3

 

 

 

 

 

 

134

 

 

 

 

 

 

134

 

Share-based compensation

 

 

 

 

 

 

 

 

2,510

 

 

 

 

 

 

2,510

 

Net loss

 

 

 

 

 

 

 

 

 

 

 

(42,652

)

 

 

(42,652

)

Balance, June 30, 2021

 

 

7,902

 

 

$

8

 

 

$

911,898

 

 

$

(960,980

)

 

$

(49,074

)

 

The accompanying notes are an integral part of these consolidated financial statements.

3


 

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited - in thousands)

 

 

 

Six Months Ended June 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

63,260

 

 

$

(82,035

)

Adjustments to reconcile net income (loss) to net cash used in operating activities:

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

2,146

 

 

 

2,061

 

Charges (credits) to provision for doubtful accounts

 

 

542

 

 

 

445

 

Inventory charge

 

 

73

 

 

 

502

 

Debt financing fees

 

 

16,971

 

 

 

2,681

 

Share-based compensation

 

 

4,281

 

 

 

5,467

 

Gain on sale of business

 

 

(143,384

)

 

 

 

Loss on extinguishment of debt

 

 

8,380

 

 

 

 

Other

 

 

(15

)

 

 

434

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

(10,603

)

 

 

(1,544

)

Inventory

 

 

1,399

 

 

 

(83

)

Prepaid and other current assets

 

 

1,373

 

 

 

365

 

Accounts payable

 

 

(5,591

)

 

 

(6,503

)

Accrued expenses and other current liabilities

 

 

16,913

 

 

 

12,940

 

Other non-current liabilities

 

 

(675

)

 

 

358

 

Total adjustments

 

 

(108,190

)

 

 

17,123

 

Net cash used in operating activities

 

 

(44,930

)

 

 

(64,912

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of business, net of transaction costs

 

 

142,634

 

 

 

 

Payment of patent related costs

 

 

(267

)

 

 

(423

)

Purchase of fixed assets

 

 

(20

)

 

 

(104

)

Net cash provided by (used in) investing activities

 

 

142,347

 

 

 

(527

)

Cash flows from financing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of common stock, net of costs

 

 

 

 

 

151,062

 

Proceeds from exercise of options and warrants

 

 

 

 

 

299

 

Proceeds from sale of common stock related to employee stock purchase plan

 

 

14

 

 

 

134

 

Repayments of debt

 

 

(125,000

)

 

 

(50,000

)

Payment of debt financing fees

 

 

 

 

 

(5,118

)

Net cash (used in) provided by financing activities

 

 

(124,986

)

 

 

96,377

 

Net (decrease) increase in cash and restricted cash

 

 

(27,569

)

 

 

30,938

 

Cash and restricted cash, beginning of period

 

 

65,122

 

 

 

80,486

 

Cash and restricted cash, end of period

 

$

37,553

 

 

$

111,424

 

Supplemental disclosure of cash flow information:

 

 

 

 

 

 

 

 

Interest paid

 

$

9,137

 

 

$

14,284

 

Supplemental disclosure of noncash financing activities: