SEC Filing | TherapeuticsMD Inc

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txmd-10q_20220930.htm

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


☐	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.

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.

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.

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	)