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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 September 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 November 11, 2022, there were 9,467,104 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

20

Item 3.

Quantitative and qualitative disclosures about market risk

29

Item 4.

Controls and procedures

29

Part II – Other Information

 

Item 1.

Legal proceedings

30

Item 1A.

Risk factors

30

Item 2.

Unregistered sales of equity securities and use of proceeds

31

Item 3.

Defaults upon senior securities

31

Item 4.

Mine safety disclosures

31

Item 5.

Other information

31

Item 6.

Exhibits

32

Signatures

33

 

 

 


 

 

Part I – Financial Information

Item 1.

Financial statements

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Balance Sheets

(Unaudited - in thousands, except per share data)

 

 

 

September 30, 2022

 

 

December 31, 2021

 

Assets:

 

 

 

 

 

 

 

 

Current assets:

 

 

 

 

 

 

 

 

Cash

 

$

27,080

 

 

$

65,122

 

Restricted cash

 

 

11,250

 

 

 

 

Accounts receivable, net of allowance for credit losses of $1,621 and

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

 

 

32,157

 

 

 

36,176

 

Inventory

 

 

6,701

 

 

 

7,622

 

Prepaid and other current assets

 

 

10,290

 

 

 

10,548

 

Total current assets

 

 

87,478

 

 

 

119,468

 

Fixed assets, net

 

 

551

 

 

 

1,199

 

License rights and other intangible assets, net

 

 

37,876

 

 

 

40,318

 

Right of use assets

 

 

7,749

 

 

 

8,234

 

Other non-current assets

 

 

253

 

 

 

253

 

Total assets

 

$

133,907

 

 

$

169,472

 

Liabilities and stockholders' deficit:

 

 

 

 

 

 

 

 

Current liabilities:

 

 

 

 

 

 

 

 

Debt, net

 

$

93,602

 

 

$

188,269

 

Lender Warrants derivative liability

 

 

2,058

 

 

 

 

Make-whole payment derivative liability

 

 

1,751

 

 

 

 

Mandatory Redeemable Preferred Stock

 

 

19,709

 

 

 

 

Accounts payable

 

 

13,383

 

 

 

20,318

 

Accrued expenses and other current liabilities

 

 

43,568

 

 

 

44,304

 

Total current liabilities

 

 

174,071

 

 

 

252,891

 

Operating lease liabilities

 

 

7,553

 

 

 

8,063

 

Other non-current liabilities

 

 

554

 

 

 

2,139

 

Total liabilities

 

 

182,178

 

 

 

263,093

 

Commitments and contingencies (Note 9)

 

 

 

 

 

 

 

 

Stockholders' deficit:

 

 

 

 

 

 

 

 

Preferred stock, par value $0.001; 10,000 shares authorized, 22 issued

 

 

 

 

 

 

 

 

    and included in liabilities due to their redemption provisions

 

 

 

 

 

 

Common stock, par value $0.001; 12,000 shares authorized, 9,467 and 8,598

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

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

 

 

9

 

 

 

9

 

Additional paid-in capital

 

 

968,785

 

 

 

957,730

 

Accumulated deficit

 

 

(1,017,065

)

 

 

(1,051,360

)

Total stockholders' deficit

 

 

(48,271

)

 

 

(93,621

)

Total liabilities and stockholders' deficit

 

$

133,907

 

 

$

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 September 30,

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

 

2022

 

 

2021

 

Revenue, net:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Product

 

$

20,917

 

 

$

24,456

 

 

$

68,327

 

 

$

67,039

 

License and service

 

 

 

 

 

950

 

 

 

484

 

 

 

1,234

 

Total revenue, net

 

 

20,917

 

 

 

25,406

 

 

 

68,811

 

 

 

68,273

 

Cost of goods sold

 

 

3,788

 

 

 

5,282

 

 

 

13,388

 

 

 

14,101

 

Total gross profit

 

 

17,129

 

 

 

20,124

 

 

 

55,423

 

 

 

54,172

 

Operating expenses:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling and marketing

 

 

19,129

 

 

 

30,005

 

 

 

61,703

 

 

 

86,193

 

General and administrative

 

 

17,635

 

 

 

28,435

 

 

 

55,445

 

 

 

66,691

 

Research and development

 

 

1,112

 

 

 

1,605

 

 

 

4,092

 

 

 

5,666

 

Total operating expenses

 

 

37,876

 

 

 

60,045

 

 

 

121,240

 

 

 

158,550

 

Loss from operations

 

 

(20,747

)

 

 

(39,921

)

 

 

(65,817

)

 

 

(104,378

)

Other (expense) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Gain on sale of business

 

 

 

 

 

 

 

 

143,384

 

 

 

 

Expense for accretion of Mandatory Redeemable Preferred Stock

 

 

(3,457

)

 

 

 

 

 

(3,457

)

 

 

 

Fair value loss on Lender Warrants derivative liability

 

 

(76

)

 

 

 

 

 

(76

)

 

 

 

Loss on extinguishment of debt

 

 

 

 

 

 

 

 

(8,380

)

 

 

 

Interest expense and other financing costs

 

 

(4,833

)

 

 

(7,518

)

 

 

(30,941

)

 

 

(25,341

)

Other (expense) income, net

 

 

(112

)

 

 

19

 

 

 

(128

)

 

 

264

 

Total other (expense) income, net

 

 

(8,478

)

 

 

(7,499

)

 

 

100,402

 

 

 

(25,077

)

(Loss) income before income taxes

 

 

(29,225

)

 

 

(47,420

)

 

 

34,585

 

 

 

(129,455

)

(Benefit) provision for income taxes

 

 

(260

)

 

 

 

 

 

290

 

 

 

 

Net (loss) income

 

$

(28,965

)

 

$

(47,420

)

 

$

34,295

 

 

$

(129,455

)

(Loss) earnings per common share, basic

 

$

(3.13

)

 

$

(5.62

)

 

$

3.86

 

 

$

(16.68

)

Weighted average common shares, basic

 

 

9,261

 

 

 

8,444

 

 

 

8,877

 

 

 

7,762

 

(Loss) earnings per common share, diluted

 

$

(3.13

)

 

$

(5.62

)

 

$

3.73

 

 

$

(16.68

)

Weighted average common shares, diluted

 

 

9,261

 

 

 

8,444

 

 

 

9,205

 

 

 

7,762

 

Comprehensive (loss) income:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net (loss) income

 

$

(28,965

)

 

$

(47,420

)

 

$

34,295

 

 

$

(129,455

)

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

Comprehensive (loss) income

 

$

(28,965

)

 

$

(47,420

)

 

$

34,295

 

 

$

(129,455

)

 

 

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

 

 

 

 

Total

 

 

Common Stock

 

Paid in

 

Accumulated

 

Stockholders'

 

 

Shares

 

Amount

 

Capital

 

Deficit

 

Deficit

 

Balance, January 1, 2022

 

8,598

 

$

9

 

$

957,730

 

$

(1,051,360

)

$

(93,621

)

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

)

Rounding up of fractional shares in

  connection with the reverse stock split

 

142

 

 

 

 

 

 

 

 

 

Vested restricted stock units

 

44

 

 

 

 

 

 

 

 

 

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

)

Sale of common stock, net of costs

 

565

 

 

 

 

2,454

 

 

 

 

2,454

 

Vested restricted stock units

 

42

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

4,306

 

 

 

 

4,306

 

Net loss

 

 

 

 

 

-

 

 

(28,965

)

 

(28,965

)

Balance, September 30, 2022

 

9,467

 

$

9

 

$

968,785

 

$

(1,017,065

)

$

(48,271

)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, January 1, 2021

 

5,996

 

$

6

 

$

754,938

 

$

(878,945

)

$

(124,001

)

Sale of common stock, net of costs

 

1,857

 

 

2

 

 

150,897

 

 

 

 

150,899

 

Exercise of warrants, net of

  cashless exercises

 

10

 

 

 

 

50

 

 

 

 

50

 

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

)

Sale of common stock, net of costs

 

3

 

 

 

 

163

 

 

 

 

163

 

Exercise of warrants and options

 

13

 

 

 

 

249

 

 

 

 

249

 

Vested restricted stock units

 

19

 

 

 

 

 

 

 

 

 

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

)

Sale of common stock, net of costs

 

575

 

 

1

 

 

31,818

 

 

 

 

31,819

 

Exercise of options

 

 

 

 

 

3

 

 

 

 

3

 

Vested restricted stock units

 

21

 

 

 

 

 

 

 

 

 

Share-based compensation

 

 

 

 

 

7,312

 

 

 

 

7,312

 

Net loss

 

 

 

 

 

 

 

(47,420

)

 

(47,420

)

Balance, September 30, 2021

 

8,498

 

$

9

 

$

951,031

 

$

(1,008,400

)

$

(57,360

)

 

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)

 

 

 

Nine Months Ended September 30,

 

 

 

2022

 

 

2021

 

Cash flows from operating activities:

 

 

 

 

 

 

 

 

Net income (loss)

 

$

34,295

 

 

$

(129,455

)

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

 

 

 

 

 

 

 

 

Depreciation and amortization

 

 

3,181

 

 

 

3,091

 

Charges to provision for doubtful accounts

 

 

542

 

 

 

540

 

Inventory charge

 

 

73

 

 

 

1,082

 

Debt financing fees

 

 

20,053

 

 

 

4,158

 

Share-based compensation

 

 

8,587

 

 

 

12,779

 

Gain on sale of business

 

 

(143,384

)

 

 

 

Expense for accretion of Mandatory Redeemable Preferred Stock

 

 

3,457

 

 

 

 

Loss on extinguishment of debt

 

 

8,380

 

 

 

 

Other

 

 

50

 

 

 

726

 

Changes in operating assets and liabilities:

 

 

 

 

 

 

 

 

Accounts receivable

 

 

3,044

 

 

 

(5,560

)

Inventory

 

 

848

 

 

 

(451

)

Prepaid and other current assets

 

 

180

 

 

 

(2,831

)

Accounts payable

 

 

(6,186

)

 

 

(1,476

)

Accrued expenses and other current liabilities

 

 

3,705

 

 

 

13,504

 

Other non-current liabilities

 

 

(675

)

 

 

758

 

Total adjustments

 

 

(98,145

)

 

 

26,320

 

Net cash used in operating activities

 

 

(63,850

)

 

 

(103,135

)

Cash flows from investing activities:

 

 

 

 

 

 

 

 

Proceeds from sale of business, net of transaction costs

 

 

142,634

 

 

 

 

Payment of patent related costs

 

 

(297

)

 

 

(675

)

Purchase of fixed assets

 

 

(21

)

 

 

(34

)

Net cash provided by (used in) investing activities

 

 

142,316

 

 

 

(709

)