Item 7.Management’s discussion and analysis of financial condition and results of operations

You should read the following discussion and analysis in conjunction with the information set forth under our consolidated financial statements and the notes to those financial statements included elsewhere in this 2021 10-K Report. This discussion contains forward-looking statements based upon current expectations that involve risks and uncertainties. See “Statement Regarding Forward-Looking Information.” Our actual results may differ materially from those contained in or implied by any forward-looking statements as a result of various factors, including, but not limited to, the risks and uncertainties described under “Risk Factors” elsewhere in this 2021 10-K Report.

Certain amounts in the Management’s discussion and analysis of financial condition and results of operations may not add due to rounding, and all percentages have been calculated using unrounded amounts.

Business overview

We are a women’s healthcare company with a mission of creating and commercializing innovative products to support the lifespan of women from pregnancy prevention through menopause. At TherapeuticsMD, we combine entrepreneurial spirit, clinical expertise, and business leadership to develop and commercialize health solutions that enable new standards of care for women. Our solutions range from a patient-controlled, long-lasting contraceptive to advanced hormone therapy pharmaceutical products. We also have a portfolio of branded and generic prescription prenatal vitamins under the vitaMedMD and BocaGreenMD brands that furthers our women’s healthcare focus.

During 2021, the recovery from the COVID-19 pandemic drove improved access to health-care providers for our sales force and increased consumer demand for our products, which had a positive impact on our net product revenue relating to ANNOVERA, IMVEXXY, and BIJUVA. We believe the growth in our net product revenue will continue to be affected by the pace of recovery from the COVID-19 pandemic.

vitaCare Divestiture

On March 6, 2022, we entered into a stock purchase agreement (the “Purchase Agreement”) with GoodRx, Inc. (“GoodRx”), a Delaware corporation and wholly-owned subsidiary of GoodRx Holdings, Inc. (“GoodRx Holdings”), which provides for the sale of all of the issued and outstanding capital stock of our vitaCare Prescription Services subsidiary (“vitaCare”) to GoodRx (the “vitaCare Divestiture”). Under the terms of the Purchase Agreement, upon the closing of the vitaCare Divestiture (the “Closing”), we will receive a cash payment of $150.0 million, subject to adjustment as provided in the Purchase Agreement and customary holdbacks. In addition,

we may receive up to an additional of $7.0 million in earn-out consideration, contingent upon vitaCare’s financial performance through 2023 as determined in accordance with the terms of the Purchase Agreement.

The Purchase Agreement contains customary representations and warranties, covenants and indemnities of the parties thereto. In addition, the Purchase Agreement provides that at the Closing: (i) we will enter into a long-term services agreement with vitaCare to continue utilization of the vitaCare platform with respect to our products; (ii) we and vitaCare will enter into a transition services agreement for us to provide certain transition services to vitaCare for up to 12 months following the Closing; and (iii) certain employees of ours and/or vitaCare will enter into employment agreements with GoodRx,

The vitaCare Divestiture is expected to close in the second quarter of 2022, subject to the satisfaction or waiver of certain customary conditions, including the receipt of certain regulatory approvals.

COVID-19

With multiple variant strains of the SARS-Cov-2 virus and the COVID-19 disease that it causes (collectively, “COVID-19”) still circulating, we continue to be subject to risks and uncertainties in connection with the COVID-19 pandemic. The extent of the future impact of the COVID-19 pandemic on our business continues to be highly uncertain and difficult to predict. The ultimate global recovery from the pandemic will be dependent on, among other things, actions taken by governments and businesses to contain and combat the virus, including any variant strains, the speed and effectiveness of vaccine production and global distribution, as well as how quickly, and to what extent, normal economic and operating conditions can resume on a sustainable basis globally.

As part of our response to the COVID-19 pandemic, we implemented measures to reduce marketing expenses for 2020 and we also implemented cost saving measures in 2020 and 2021, which included negotiating lower fees or suspending services from third-party vendors; implementing a company-wide hiring restriction; delaying or cancelling non-critical information technology projects; and eliminating non-essential travel, entertainment, meeting, and event expenses. In addition, we have implemented a significant cost savings initiative that is designed to reduce our annual costs in 2022 by at least $40.0 million. This figure does not include estimated annualized cost savings of approximately $20.0 million from, or the costs associated with the vitaCare Divestiture.

The full impact of the COVID-19 pandemic continues to evolve. However, we remain committed to the execution of our corporate goals, despite the ongoing COVID-19 pandemic, as demonstrated in part by the increase in product revenue throughout 2021. The future extent to which the COVID-19 pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain. We are continuing to assess the effect of the COVID-19 pandemic on our operations by monitoring the spread of COVID-19 and the various actions implemented to combat the pandemic throughout the world. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

While we currently believe that our COVID-19 contingency plan has the ability to mitigate many of the negative effects of the COVID-19 pandemic on our business, the severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the duration of any “social distancing” orders, the ability of our sales force to access healthcare providers to promote our products, increases in unemployment, which could reduce access to commercial health insurance for our patients, thus limiting payer coverage for our products, and the impact of the pandemic on our global supply chain, all of which remain uncertain. Our future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions, uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges that we may face.

Product portfolio

Our portfolio of products focused on women’s health allows us to efficiently leverage our sales and marketing plans to grow our pharmaceutical products. We are focused on activities necessary for the continued commercialization of IMVEXXY, commercially launched in the third quarter of 2018; BIJUVA, commercially launched in the third quarter of 2019; and ANNOVERA, which we started selling in the third quarter of 2019 and commercially launched in March 2020, which was subsequently paused because of the COVID-19 pandemic and relaunched in July 2020. We continue to manufacture and distribute our prescription prenatal vitamin product lines, consisting of branded prenatal vitamins under vitaMedMD and authorized generic formulations of some of our prescription prenatal vitamin products under BocaGreenMD.

IMVEXXY (estradiol vaginal inserts), 4-μg and 10-μg

This pharmaceutical product is for the treatment of moderate-to-severe dyspareunia (vaginal pain associated with sexual activity), a symptom of vulvar and vaginal atrophy due to menopause. As part of the FDA’s approval of IMVEXXY, we have committed to conduct a post-approval observational study to evaluate the risk of endometrial cancer in post-menopausal women with a uterus who use a low-dose vaginal estrogen unopposed by a progestogen. The FDA has also asked the sponsors of other vaginal estrogen products to participate in the observational study. In connection with the observational study, we will be required to provide progress reports to the FDA on an annual basis. The development of this method is underway, and we do not believe that the costs will be material on an annual basis.

We market and sell IMVEXXY in the U.S. and have entered into licensing agreements with third parties to market and sell IMVEXXY outside of the U.S. We have entered into a license and supply agreement (the “Knight License Agreement”), with Knight Therapeutics, Inc. (“Knight”) pursuant to which, we granted Knight an exclusive license to commercialize IMVEXXY in Canada and Israel. We have entered into a licensing and supply agreement (the “Theramex License Agreement”) with Theramex HQ UK Limited (“Theramex”) pursuant to which we granted Theramex an exclusive license to commercialize IMVEXXY for human use outside of the U.S., except for Canada and Israel. As of December 31, 2021, no IMVEXXY sales have been made through these licensing agreements.

BIJUVA (estradiol and progesterone) capsules, 1 mg/100 mg

This pharmaceutical product is the first and only FDA approved bioidentical hormone therapy combination of estradiol and progesterone in a single, oral capsule for the treatment of moderate-to-severe vasomotor symptoms (commonly known as hot flashes or flushes) due to menopause in women with a uterus. We market and sell BIJUVA in the U.S. and have entered into licensing agreements with third parties to market and sell BIJUVA outside of the U.S. We have entered into the Knight License Agreement with Knight pursuant to which we granted Knight an exclusive license to commercialize BIJUVA in Canada and Israel. We have entered into the Theramex License Agreement with Theramex pursuant to which we granted Theramex an exclusive license to commercialize BIJUVA for human use outside of the U.S., except for Canada and Israel. During 2021, we had BIJUVA sales of $1.4 million made through the Theramex License Agreement, and such sales were included as product revenue in the statements of operations. As of December 31, 2021, no BIJUVA sales have been made through the Knight License Agreement.

ANNOVERA (segesterone acetate (“SA”) and ethinyl estradiol (“EE”) vaginal system)

This pharmaceutical product is a one-year ring-shaped contraceptive vaginal system (“CVS”) and the first and only patient-controlled, procedure-free, reversible prescription contraceptive that can prevent pregnancy for up to a total of 13 cycles (one year). ANNOVERA is commercially sold by us in the U.S. pursuant to the terms of the Population Council License Agreement. As part of the approval of ANNOVERA, the FDA has required a post-approval observational study be performed to measure the risk of venous thromboembolism. We have agreed to perform and pay the costs and expenses associated with this post-approval study, provided that if the costs and expenses associated with such post-approval study exceed $20.0 million, half of such excess will offset against royalties or other payments owed by us under the Population Council License Agreement. Given the observational nature of the study, we do not believe that the costs of the study will be material on an annual basis.

We believe that the strong commercial net revenue per unit of ANNOVERA and commercial insurance adoption provide us with an opportunity to deploy additional financial resources to maximize ANNOVERA’s consumer-focused commercialization strategy and leverage the ability of doctor/patient choice of contraceptive to override insurance company formularies when necessary. As part of this strategy, we are pursuing distribution opportunities for ANNOVERA to provide women with additional access to ANNOVERA, particularly during the COVID-19 pandemic, with multiple telehealth platforms that extend the reach of ANNOVERA.

Prenatal vitamin products

We manufacture and distribute our prescription prenatal vitamin product lines under our vitaMedMD brand name and authorized generic formulations of some of our prescription prenatal vitamin products under our BocaGreenMD Prena1 name. We will continue to support the vitaMedMD and BocaGreenMD products as they are important products to our core customers and help provide us with continued access to sell our women’s health portfolio.

Results of operations

2021 compared to 2020

Revenue. Our total revenue 2021 was $87.0 million, an increase of $22.1 million, or 34.0%, compared to 2020.

The following table sets forth our revenue during these periods (in thousands):

Product revenue:

Our sales of ANNOVERA were $37.9 million for 2021, an increase of $18.3 million, or 93.5%, compared to 2020. This increase was primarily due to a 128.6% increase in sales volume, which was partially offset by a 15.4% decrease in the average sale price.

Our sales of IMVEXXY were $31.5 million for 2021, an increase of $4.4 million, or 16.2%, compared to 2020. This increase was primarily attributable to a 31.0% increase in the average sale price, which was partially offset by a 11.3% decrease in sales volume. Both the higher average sale price and lower sales volume was primarily a result of a change in the IMVEXXY copay assistance program to increase the price paid by the customer.

Our sales of BIJUVA were $10.6 million for 2021, an increase of $4.2 million, or 66.5%, compared to 2020. Included in our BIJUVA sales for 2021 was $1.4 million of sales made through the Theramex License Agreement. Without the sales made through the Theramex License Agreement, our sales of BIJUVA for 2021 were $9.2 million, an increase of $2.8 million, or 44.4%, compared to 2020. This increase was primarily attributable to a 43.0% increase in the average sale price and a 1.0% increase in sales volume. The higher average sale price reflects a change in the BIJUVA copay assistance program to increase the price paid by the customer.

Sales of our products utilize copay assistance programs that allow eligible enrolled patients to access the products at a reasonable cost regardless of insurance coverage. These programs may change from time to time, as shown above with a change in IMVEXXY and BIJUVA copay assistance program. We expect that our net product revenue will improve from changes in our copay card price in the long-term and increases in commercial and Medicare payer coverage when we fully complete the process needed to adjudicate ANNOVERA, IMVEXXY, and BIJUVA prescriptions at pharmacies.

Our prescription vitamin sales were $5.7 million for 2021, a decrease of $4.0 million, or 41.4%, compared to 2020. This decrease was primarily due to a 36.0% decrease in sales volume and an 8.5% decrease in the average sale price. The decrease in sales volume of our prescription vitamin reflects our sales focus to grow our contraceptive and menopause pharmaceutical products.

On a consolidated basis, our total product sales were $85.8 million for 2021, an increase of $22.9 million, or 36.4%, compared to 2020.

Our license revenue was $1.2 million for 2021, a decrease of $0.8 million, or 41.5%, compared to 2020. This decrease was entirely due to the timing of achieving previously established milestone payment targets.

Gross profit. Our gross profit for 2021 was $68.1 million, an increase of $19.2 million, or 39.3%, compared to 2020.

The following table sets forth our gross profit during these periods (in thousands):

The increase in our gross profit was primarily a result of an increase of 36.4% in product revenue and a 3.4% increase in our product gross margin from 74.6% for 2020 to 78.1% for 2021, partially offset by a decrease in license revenue of $0.8 million. The increase in product gross margins was mainly due to $3.0 million in lower inventory obsolescence charges in 2021 compared to 2020, partially offset by an overall decrease in profit margins of our products of 1.8%.

Operating expenses. Total operating expenses for 2021 were $207.9 million, an increase of $3.4 million, or 1.7%, compared to 2020. Our operating expenses for 2021 included $12.4 million of severances for former senior executives, including our former chief executive officer and former executive vice president of operations. Of the total severance amount, $8.1 million was related to share-based compensation recorded in connection with accelerated vesting of certain share-based payment awards for the former senior executives. Without such executive severances, our total operating expenses for 2021 would have been $195.5 million, a decrease of $8.9 million,

or 4.4%, compared to 2020. The type of operating expenses reported in prior years have been reclassified to conform to the current year’s presentation.

The following table sets forth our operating expense categories (in thousands):

Our selling and marketing costs were $108.2 million for 2021, a decrease of $8.9 million, or 7.6%, compared to 2020. This decrease was primarily due to $12.5 million in lower outsourced sales personnel costs mainly attributable to the onboarding of such sales personnel in the third quarter of 2020, $6.1 million in lower product sample costs mainly due to the write down of product samples in 2020, primarily related to BIJUVA, and $2.9 million in lower marketing costs primarily related to a national selling and marketing event that occurred during 2020 prior to the COVID-19 pandemic. These decreases were partially offset by $3.9 million in higher advertising expenditures in order to support the commercialization of our pharmaceutical products, $7.4 million in higher salaries and employee benefit costs to support the sales growth of our pharmaceutical products, reflecting the continued impact of our formerly outsourced sales personnel who were onboarded in the third quarter of 2020, and $1.6 million in higher costs related to physician education expenses and transportation expenses for traveling sales staff.

Our general and administrative costs were $92.6 million for 2021, an increase of $15.6 million, or 20.3%, compared to 2020. Of the total increase, $12.4 million was related to executive severances recorded in 2021. The remaining increase was $3.3 million, or 4.3%, compared to 2020. This increase was primarily attributable to $1.8 million in higher compensation and employee benefit costs, $0.8 million in higher insurance, and $2.6 million in higher professional fees, such as consulting, recruiting, legal, etc. Overall, these increases are in support of our efforts to expand the commercialization of our pharmaceutical products. These increases were partially offset by $1.5 million in lower expenditures attributable to information technology and dues and subscriptions, and $1.1 million in write-down of our patents and trademarks related to impairment in 2020.

Our R&D costs were $7.1 million for 2021, a decrease of $3.3 million, or 32.1%, compared to 2020. This decrease was primarily attributable to $2.0 million in lower research related costs, $1.0 million in lower compensation and employee benefit costs and $0.4 million in lower legal and professional fees. We have reduced our R&D expenditures since 2019 as we refocus our resources towards the continued commercialization of our pharmaceutical products. Accordingly, we continue to deploy limited resources in the development of new products, to perform stability testing and validation on our pharmaceutical products, to develop and validate secondary manufacturers, to prepare regulatory submissions, and work with regulatory authorities on existing submissions.

Loss from operations. For 2021, we had a loss from operations of $139.8 million, compared to $155.5 million for 2020. This $15.8 million improvement was attributable to $19.2 million in higher gross profit, partially offset by $3.4 million in higher operating expenses. Our loss from operations for 2021 included $12.4 million of severances for former senior executives. Without such executive severances, for 2021, we would have had a loss from operations of $127.4 million. We anticipate that we will continue to have operating losses for the near future until we are able to successfully commercialize IMVEXXY, BIJUVA, and ANNOVERA, although there is no assurance that our efforts will be successful.

Other expense, net. For 2021, our non-operating expenses were $32.6 million, compared to $28.0 million for 2020. This $4.7 million increase was primarily attributable to a $4.7 million increase in interest prepayment fees, including the recording of an $2.2 million accrual for interest prepayment fees for 2021 associated with our future debt service, and $3.2 million in higher amortization expense of deferred financing costs. These increases were partially offset by $3.5 million in lower interest expense due to overall lower average debt balance during 2021 compared to 2020.

Net Loss. For 2021, we had a net loss of $172.4 million, or $0.43 per basic and diluted common share, compared to $183.5 million, or $0.67 per basic and diluted common share, for 2020. Our net loss for 2021 included $12.4 million of executive severances recorded for former senior executives. Without such executive severances, for 2021, we would have had a net loss of $160.0 million, or $0.40 per basic and diluted common share.

2020 compared to 2019

Revenue. Our total revenue 2020 was $64.9 million, an increase of $15.2 million, or 30.7%, compared to 2019. Despite slower than anticipated growth of our product revenue due to the impact of COVID-19 pandemic, product revenue increased primarily due to continued ramping up of sales of ANNOVERA, IMVEXXY and BIJUVA for 2020, as compared to 2019, partially offset by a decrease in prenatal vitamins sales.

The following table sets forth our revenue during these periods (in thousands):

Product revenue:

Our sales of ANNOVERA were $19.6 million for 2020, an increase of $13.4 million, or 218.0%, compared to 2019. This increase was primarily due to a 107.9% increase in sales volume and a 53.0% increase in the average sale price.

Our sales of IMVEXXY were $27.1 million for 2020, an increase of $10.9 million, or 67.0%, compared to 2019. This increase was primarily attributable to an 80.2% increase in the average sale price, which was partially offset by a 7.3% decrease in sales volume.

Our sales of BIJUVA were $6.4 million for 2020, a decrease of $4.5 million, or 246.1%, compared to 2019. This increase was primarily attributable to a 181.3% increase in the average sale price and a 23.0% increase in sales volume.

Sales of our products utilize copay assistance programs that allow eligible enrolled patients to access the products at a reasonable cost regardless of insurance coverage. We expect that our net product revenue will improve from changes in our copay card price in the long-term and increases in commercial and Medicare payer coverage when we fully complete the process needed to adjudicate ANNOVERA, IMVEXXY, and BIJUVA prescriptions at pharmacies.

Our prescription vitamin sales were $9.8 million for 2020, a decrease of $0.1 million, or 1.2%, compared to 2019. This decrease was primarily due to a 14.7% decrease in sales volume, which was partially offset by a 15.9% increase in the average sale price.

On a consolidated basis, our total product sales were $62.9 million for 2020, an increase of $28.7 million, or 84.2%, compared to 2019.

Our license revenue was $2.0 million for 2020, a decrease of $13.5 million, or 87.1%, compared to 2019. This decrease was entirely due to the timing of achieving previously established milestone payment targets.

Gross profit. Our gross profit for 2020 was $48.9 million, an increase of $5.6 million, or 12.9%, compared to 2019.

The following table sets forth our gross profit during these periods (in thousands):

The increase in our gross profit was primarily a result of an increase of 84.2% in product revenue, partially offset by 6.9% decrease in our product gross margin from 81.4% for 2019 to 74.6% for 2020, and a decrease in license revenue of $13.5 million. The decrease in product gross margin was mainly due to $4.1 million in inventory obsolescence charges for 2020, which was primarily related to the impact of the COVID-19 pandemic on our business, resulting in decreased demand for our products.

Operating expenses. Total operating expenses for 2020 were $204.4 million, an increase of $9.9 million, or 5.1%, compared to 2019. The type of operating expenses reported in prior years have been reclassified to conform to the current year’s presentation.

The following table sets forth our operating expense categories (in thousands):

Our selling and marketing costs were $117.1 million for 2020, a decrease of $2.8 million, or 2.5%, compared to 2019. This increase was primarily due to $14.7 million in lower outsourced sales personnel costs mainly attributable to the onboarding of such sales personnel in the third quarter of 2020, $12.3 million in lower marketing costs, and $3.4 million in lower costs related to physician education expenses and transportation expenses for traveling sales staff. Overall, lower costs for marketing and traveling sales staff reflect our 2020 cost cutting initiatives put in place at the beginning of the COVID-19 pandemic. These decreases were partially offset by (i) $26.8 million in higher advertising expenditures in order to support the significant initiative related to the launch of ANNOVERA in March 2020, which was subsequently paused as a result of the COVID-19 pandemic and relaunched in July 2020, as well as continued support of the commercialization of BIJUVA and IMVEXXY, (ii) $5.0 million in higher product sample costs mainly due to the 2019 write down of product samples, primarily related to BIJUVA, and (iii) $1.4 million in higher salaries and employee benefit costs to support the sales growth of our pharmaceutical products, reflecting the continued impact of our formerly outsourced sales personnel who were onboarded in the third quarter of 2019.

Our general and administrative costs were $77.0 million for 2020, an increase of $16.5 million, or 27.2%, compared to 2019. This increase was primarily due to $12.4 million in higher compensation and employee benefit costs, $1.9 million in higher dues and subscriptions, $1.3 million increase in rent primarily due to our new leased offices, $1.4 million in higher insurance expenses, reflecting an overall increase in market insurance rates, and $1.1 million in write-down of our patents and trademarks related to impairment. Overall, higher costs for compensation and employee benefit, dues and subscriptions and rent were mainly in support of our efforts to expand the commercialization of our products. These increases were partially offset by $1.0 million in lower employee traveling costs, and $0.8 million in lower professional fees, such as consulting, recruiting, legal, etc.

Our R&D costs were $10.4 million for 2020, a decrease of $9.4 million, or 47.3%, compared to 2019. This decrease was primarily attributable to $4.2 million in lower research related costs, $3.5 million in lower compensation and employee benefit costs, $1.0 million in lower legal and professional fees, and $0.4 million in lower employee traveling costs. We have reduced our R&D expenditures since 2019 as we refocus our resources towards the continued commercialization of our pharmaceutical products. Accordingly, we continue to deploy limited resources in the development of new products, to perform stability testing and validation on our pharmaceutical products, to develop and validate secondary manufacturers, to prepare regulatory submissions, and work with regulatory authorities on existing submissions.

Loss from operations. For 2020, we had a loss from operations of $155.6 million, compared to $151.2 million for 2019. This $4.3 million of additional loss was attributable to $9.9 million in higher operating expenses, partially offset by $5.6 million in higher gross profit. We anticipate that we will continue to have operating losses for the near future until we are able to successfully commercialize IMVEXXY, BIJUVA, and ANNOVERA, although there is no assurance that our efforts will be successful.

Other expense, net. For 2020, our non-operating expenses were $28.0 million, compared to $24.9 million for 2019. This $3.1 million increase was primarily attributable to $9.5 million in higher interest expense primarily due to overall higher debt balance during 2020 compared to 2019, and $1.7 million in higher amortization expense of deferred financing costs.

Net Loss. For 2020, we had a net loss of $183.5 million, or $0.67 per basic and diluted common share, compared to $176.1 million, or $0.72 per basic and diluted common share, for 2019.

Liquidity and capital resources

Our primary use of cash is to fund the continued commercialization of our hormone therapy and contraceptive products. We have funded our operations primarily through public offerings of our common stock and private placements of equity and debt securities. As of December 31, 2021, we had cash totaling $65.1 million. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured limits of $0.25 million per bank. We have never experienced any losses related to these funds.

In November 2020, we entered into an at-the-market offering program (the “2020 ATM Program”) relating to shares of our common stock. The 2020 ATM Program permitted us to offer and sell shares of our common stock having an aggregate offering price of up to $50.0 million from time to time through or to the sales agent under the 2020 ATM Program. Sales of our common stock were permitted to be made from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act of 1933, as amended (the “Securities Act”), including by means of ordinary broker’s transactions on Nasdaq or otherwise at market prices prevailing at the time of sale, at

prices related to prevailing market prices, or as otherwise agreed to with the sales agent. The sales agent was entitled to compensation at a fixed commission rate of 3.0% of the aggregate gross sales price per share sold. As of February 8, 2021, sales of shares of our common stock under the 2020 ATM Program were completed when we sold an aggregate total of 28,600,689 shares of our common stock at an average sale price of $1.75 per share. For the 2020 ATM Program, we received net proceeds of $48.1 million, after deducting the discounts and commissions to the sales agent and estimated offering expenses.

In February 2021, we closed on an underwritten public offering of our common stock, pursuant to which we issued 59,459,460 shares of our common stock at an offering price of $1.85 per share, and we received net proceeds of $96.6 million, after deducting the underwriting discounts and commissions and estimated offering expenses.

In March 2021, we entered into an at-the-market offering program (the “2021 ATM Program”) relating to shares of our common stock. The 2021 ATM Program permits us to offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through or to the sales agent under the 2021 ATM Program. Sales of our common stock may be made from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary broker’s transactions on Nasdaq or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices, or as otherwise agreed to with the sales agent. The sales agent will be entitled to compensation at a fixed commission rate of 3.0% of the aggregate gross sales price per share sold. The sales agent is not required to sell any specific number or dollar amounts of securities but will act as sales agent and use commercially reasonable efforts to sell on our behalf all the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices, on mutually agreed terms between us and the sales agent. Through December 31, 2021, we have sold a total of 33,705,315 shares of our common stock under the 2021 ATM Program at an average sale price of $1.21 per share and we received estimated net proceeds of $39.4 million, after deducting discounts and commissions to the sales agent and estimated offering expenses. Subsequently, through the date of this 2021 10-K Report, we have not sold any additional shares of our common stock under the 2021 ATM Program. Future sales, if any, under the 2021 ATM Program will depend on a variety of factors, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding, and potential uses of funding available to us.

On March 6, 2022, we signed a definitive agreement for the vitaCare Divestiture, whichis expected to close in the second quarter of 2022, subject to the satisfaction or waiver of certain customary conditions, including the receipt of certain regulatory approvals. Upon the closing of the vitaCare Divestiture, we will receive a cash payment of $150.0 million, subject to adjustment and customary holdbacks. In addition, we may receive up to an additional of $7.0 million in earn-out consideration. We have agreed to utilize the first $120.0 million of net proceeds from the vitaCare Divestiture and all net proceeds of the vitaCare Divestiture in excess of $135.0 million pay to the Lenders as a prepayment of the loans under the Financing Agreement.

Cash flows

The principal use of cash in operating activities was to fund our current expenditures in support of our continued commercialization activities for IMVEXXY, BIJUVA, and ANNOVERA, sales, marketing, scale-up and manufacturing activities, adjusted for non-cash items. Financing activities currently represent the principal source of our cash flow. The following table reflects the major categories of cash flows for each of the periods (in thousands).

2021 compared to 2020

Operating Activities. Net cash used in operating activities in 2021 was $142.7 million, compared to net cash used in operating activities of $159.5 million for 2020. This decrease of $16.8 million or 10.5%, was primarily due to a $11.1 million decrease in our net loss, a $2.8 million decrease in cash usage related to changes in operating assets and liabilities, and a $2.8 million increase in non-cash expenditure adjustments.

Investing Activities. Net cash used in investing activities for 2021 was $2.2 million, compared to net cash used in investing activities of $1.6 million for 2020. This increase of $0.6 million, or 39.1%, was primarily due to higher patent related costs.

Financing Activities. Net cash provided by financing activities was for 2021 was $129.6 million, compared to net cash provided by financing activities of $80.7 million for 2020. This increase of $48.8 million, or 60.5%, was primarily related to a $152.4 million increase in proceeds from sale of common stock, partially offset by a $3.9 million increase in the payment of debt financing fees, a $50.0 million in repayment of debt in 2021, and a $50.0 million in borrowing of debt in 2020.

2020 compared to 2019

Operating Activities. Net cash used in operating activities in 2020 was $159.5 million, compared to net cash used in operating activities of $165.7 million for 2019. This decrease of $6.2 million or 3.8%, was primarily due to a $10.7 million decrease in cash usage related to changes in operating assets and liabilities, and a $2.9 million increase in non-cash expenditure adjustments, partially offset by a $7.4 million increase in our net loss.

Investing Activities. Net cash used in investing activities for 2020 was $1.6 million, compared to net cash used in investing activities of $23.9 million for 2019. This decrease of $22.3 million, or 93.3%, was primarily due to a payment for intellectual property license in 2019 and lower purchase of fixed assets.

Financing Activities. Net cash provided by financing activities was for 2020 was $80.7 million, compared to net cash provided by financing activities of $188.8 million for 2019. This decrease of $108.1 million, or 57.2%, was primarily related to a $150.0 million decrease in borrowings of debt and a $45.3 million decrease in proceeds from sale of common stock, partially offset by a $5.4 million increase in the payment of debt financing fees, and a $81.7 million in repayment of debt in 2019.

For additional details, see the consolidated statements of cash flows included in this 2021 10-K Report.

Other liquidity measures

Receivable. Our net days sales outstanding (“DSO”) is calculated by dividing average gross accounts receivable less the reserve for doubtful accounts, chargebacks, and payment discounts by the average daily net product revenue during the last four quarters for each respective quarterly period. As of December 31, 2021, our net DSO was 148 days, compared to 165 days as of December 31, 2020, respectively. Our gross DSO is calculated by dividing average gross accounts receivable by the average daily gross product revenue to distributors during the last four quarters for each respective quarterly period. As of December 31, 2021, our gross DSO was 72 days, compared to 67 days as of December 31, 2020. Our DSO have fluctuated and will continue to fluctuate in the future due to variety of factors, including longer payment terms associated with the continued commercialization of IMVEXXY, BIJUVA, and ANNOVERA and changes in the healthcare industry. Our exposure to credit losses may increase if our customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the COVID-19 pandemic, or other customer-specific factors. Although we have historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables in the future.

Inventory. We rely on third parties to manufacture our finished products, and we have entered into long-term supply agreements for the manufacture of ANNOVERA, IMVEXXY, and BIJUVA. We do not have a long-term supply agreement for the manufacture of our prescription vitamins. Additionally, we do not have long-term contracts for the supply of the active pharmaceutical ingredient (“API”) used in ANNOVERA and BIJUVA.

Debt. We had $200.0 million and $250.0 million in term loans outstanding under our Financing Agreement as of December 31, 2021 and 2020, respectively. In March 2022, we entered into Amendment No. 9 to the Financing Agreement (“Amendment No. 9”) pursuant to which, among other things: (i) the lenders waived various Company breaches of the Financing Agreement, including breaches of the $60 million minimum cash covenant and the minimum net revenue covenants for the fourth quarter of 2021, and removed the minimum net revenue covenant for the first quarter of 2022; (ii) the Company and the lenders agreed to reduced minimum cash covenants under the Financing Agreement; (iii) the lenders waived the existing $60.0 million prepayment penalty under the Financing Agreement and the Company agreed to a paid in kind amendment fee of $30.0 million, which fee was added to the principal amount of the loans under the Financing Agreement, $16.0 million of which fee is waivable in certain conditions; and (iv) the maturity date of the Financing Agreement was amended to June 1, 2022. The Financing Agreement contains customary restrictions and covenants applicable to us that are customary for financings of this type. Among other requirements, the Financing Agreement also requires us to maintain a minimum unrestricted cash balance. For additional information regarding our debt, see "Note 8. Debt" to the consolidated financial statements included in this 2021 10-K Report.

For additional information, see the discussion of our risks and uncertainties related to COVID-19 in Note 1. Basis of Presentation, new accounting standards and summary of significant accounting policies " to the consolidated financial statements included in "Part IV. Item 15. Exhibits and Financial Statement Schedules" of this 2021 10-K Report.

Going concern

liquidity to fund our losses until our operations become cash flow positive. To address our capital needs, we are pursuing various equity and debt financing and other alternatives, including the vitaCareDivestiture. The equity financing alternatives may include the private placement of equity, equity-linked, or other similar instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions,including the price of our common stock and the potential delisting of our common stock from Nasdaq, and our available authorized shares. To the extent that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. If we are not successful in obtaining additional financing, we could be forced to discontinue or curtail our business operations, sell assets at unfavorable prices, or merge, consolidate, or combine with a company with greater financial resources in a transaction that might be unfavorable to us.

Along with considering additional financings, we have reviewed numerous potential scenarios in connection with steps that we may take to reduce our operating expenses. Based on our analysis, we believe that our existing cash reserves along with potential proceeds from the sale of certain non-core assets of the Company and proceeds from potential future financings, if available to us, would be sufficient to meet our cash needs arising in the ordinary course of business for the next twelve months from the date of this 2021 10-K Report.

If we are unsuccessful with future financings and if the successful commercialization of IMVEXXY, BIJUVA, or ANNOVERA is delayed, or the continued impact of the COVID-19 pandemic or issues in our supply chains related to our third-party contract manufacturers on our business is worse than we anticipate, our existing cash reserves would be insufficient to maintain compliance with the Financing Agreement covenants or satisfy our liquidity requirements. See Item 1A. Risk Factors – “Our dependence upon third parties for the manufacture and supply of our existing women’s healthcare products may cause delays in, or prevent us from, successfully commercializing, and marketing our products” above for additional information regarding risks associated with our contract manufacturers, particularly for ANNOVERA. The presence of these projected factors in conjunction with the uncertainty of the capital markets raises substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

Contractual obligations, off-balance sheet arrangements, purchase commitments and employment agreements

Our contractual obligations and off-balance sheet arrangements are set forth below. For additional information on any of the following and other obligations and arrangements, see "Note 8. Debt" and "Note 9. Commitments and Contingencies" to the consolidated financial statements included in this 2021 10-K Report.

Contractual obligations

A summary of contractual obligations is as follows:

Total Year 1 Years 2-3 Years 4-5 > 5 years

In the ordinary course of business, we enter into agreements with third parties that include indemnification provisions, which, in our judgment, are normal and customary for companies in our industry sector. These agreements are typically with business partners, clinical sites, and suppliers. Pursuant to these agreements, we generally agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered or incurred by the indemnified parties with respect to our drugs or drug candidates, use of such drugs or drug candidates, or other actions taken or omitted by us. The maximum potential amount of future payments we could be required to make

under these indemnification provisions is sometimes unlimited. We have not incurred material costs to defend lawsuits or settle claims related to these indemnification provisions. As a result, the estimated fair value of liabilities relating to these provisions is minimal. Accordingly, we have no liabilities recorded for these provisions as of December 31, 2021 and 2020.

In the normal course of business, we may be confronted with issues or events that may result in a contingent liability. These generally relate to lawsuits, claims, environmental actions, or the actions of various regulatory agencies. We consult with counsel and other appropriate experts to assess the claim. If, in our opinion, we have incurred a probable loss as set forth by U.S. GAAP, an estimate is made of the loss and the appropriate accounting entries are reflected in our financial statements.

Purchase commitments

Information regarding purchase commitments is in "Note 9. Commitments and contingencies" to the consolidated financial statements included in this 2021 10-K Report.

Employment agreements

Information regarding employment agreements is in "Note 9. Commitments and contingencies" to the consolidated financial statements included in this 2021 10-K Report.

Critical accounting policies and estimates

Management's discussion and analysis of our financial condition and results of operations are based upon our consolidated financial statements included elsewhere in this 2021 10‐K Report, which has been prepared in accordance with U.S. GAAP (“U.S. GAAP”). The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates, including those related to unbilled revenue and associated costs of sales, allowance for credit losses, goodwill and identifiable intangible assets, certain accrued liabilities, and income taxes. We base our estimates on historical experience and on other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates under different assumptions or conditions.

We have identified the areas described below as critical to our business operations and the understanding of our results of operations given the uncertainties associated with the assumptions underlying each estimate. For a detailed discussion on the application of these and other significant accounting policies, see “Note 1. Basis of presentation, new accounting standards and summary of significant accounting policies” to the consolidated financial statements included in this 2021 10-K Report.

Segment reporting

We manage and operate as one business, which is focused on creating and commercializing products targeted exclusively for women. Our business operations are managed by a single executive leadership team, which is led by our chief executive officer. We do not operate separate lines of business with respect to any of our products, and we do not prepare discrete financial information with respect to separate products. All product sales are derived from sales within the United States. Accordingly, we view our business as one reportable operating segment.

Revenue recognition

We determine the amount of revenue to be recognized through application of the following steps:

• Identification of the contract with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Recognition of revenue when or as we satisfy the performance obligations.

that reflects the consideration we expect to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met.

For additional discussion on prescription products and license revenue, see “K. Revenue recognition” in Note 1. Basis of presentation, new accounting standards and summary of significant accounting policies to the consolidated financial statements included in this 2021 10-K Report.

Share-based payment awards

We account for share-based payment awards on a fair value basis of the equity instrument issued. Under fair value accounting, the grant-date fair value of the share-based payment award is amortized as compensation expense, on a straight-line basis, over the service period (generally, the vesting period) for both graded and cliff vesting awards. We have elected to account for forfeitures as they occur.

Income taxes

Income taxes are accounted for under the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and operating loss and income tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted income tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in income tax rates is recorded as a component of the income tax provision in the period that includes the enactment date.

Regular assessments are made on the likelihood that our deferred tax assets will be recovered from our future taxable income. Our evaluation is based on estimates, assumptions, and includes an analysis of available positive and negative evidence, giving weight based on the evidence’s relative objectivity. Sources of positive evidence include estimates of future taxable income, future reversal of existing taxable temporary differences, taxable income in carryback years, and available tax planning strategies. Sources of negative evidence include current and cumulative losses in recent years, losses expected in early future years, any history of operating losses or tax credit carryforwards expiring unused, and unsettled circumstances that, if unfavorably resolved, would adversely affect future profit levels.

The remaining carrying value of our deferred tax assets, after recording the valuation allowance on our deferred tax assets, is based on our present belief that it is more likely than not that we will be able to generate sufficient future taxable income to utilize such deferred tax assets. The amount of the remaining deferred tax assets considered recoverable could be adjusted if our estimates of future taxable income during the carryforward period change favorably or unfavorably. To the extent we believe that it is more likely than not that some or all the remaining deferred tax assets will not be realized, we must establish a valuation allowance against those deferred tax assets, resulting in additional income tax expense in the period such determination is made. To the extent a valuation allowance currently exists, we will continue to monitor all positive and negative evidence until we believe it is more likely than not that it is no longer necessary, resulting in an income tax benefit in the period such determination is made.

Our policy is to recognize both interest and penalties related to uncertain tax positions as part of the income tax provision. Significant judgment is required in evaluating our tax positions, and in determining our provisions for income taxes, our deferred tax assets and liabilities and any valuation allowance recorded against our net deferred tax assets. We establish reserves when, despite our belief that the income tax return positions are fully supportable, certain positions are likely to be challenged and we may ultimately not prevail in defending those positions.

Recent accounting pronouncements

Information regarding accounting standards adopted during 2021 is included in "Note 1. Basis of Presentation, New Accounting Standards and Significant Accounting Policies" to the consolidated financial statements.

Item 7A. Quantitative and qualitative disclosures about market risk

As a “smaller reporting company,” as defined by Rule 12b-2 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and pursuant to Instruction 6 to Item 201(e) of Regulation S-K, we are not required to provide this information.

Item 8. Financial statements and supplementary data

Reference is made to the financial statements, the notes thereto, and the reports thereon, commencing on page F-1 of this 2021 10-K Report, which financial statements, notes, and reports are incorporated herein by reference.

Item 9. Change in and disagreements with accountants on accounting and financial disclosure

None.

Item 9A. Controls and procedures

Evaluation of disclosure controls and procedures

Our management, with the participation of our Chief Executive Officer and our Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures (as defined in the Securities Exchange Act of 1934 Rules 13a-15(e) or 15d-15(e)) as of the end of the period covered by this 2021 10-K Report. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of December 31, 2021, our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is (i) recorded, processed, summarized, and reported within the time periods specified in the SEC rules and forms, and (ii) is accumulated and communicated to our management, including our Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosure.

Changes in internal control over financial reporting

There was no change in our internal control over financial reporting during our most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Inherent limitations on effectiveness of controls

Our management, including our Chief Executive Officer and Chief Financial Officer, does not expect that our disclosure controls and procedures or our internal controls will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Further, the design of a control system must reflect the fact that there are resource constraints, and the benefit of controls must be considered relative to their costs. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues, misstatements, errors, and instances of fraud, if any, within our company have been or will be prevented or detected. Further, internal controls may become inadequate because of changes in conditions, or through the deterioration of the degree of compliance with policies or procedures.

Management’s report on internal control over financial reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined under Exchange Act Rules 13a-15(f) and 15d-15(f). Our internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with U.S. GAAP. Internal control over financial reporting includes those policies and procedures that:

Our management assessed the effectiveness of our internal control over financial reporting as of December 31, 2021. In making this assessment, our management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in Internal Control— Integrated Framework (2013). Management’s assessment included an evaluation of the design of our internal control over financial reporting and testing of the operational effectiveness of its internal control over financial reporting. Based on management’s assessment, we believe that our internal controls over financial reporting were effective as of December 31, 2021.

This 2021 10-K Report does not include an attestation report of the Company’s registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by the Company’s registered public accounting firm pursuant to the rules of the SEC that permit the Company to provide only management’s report in this 2021 10-K Report.

Item 9B.Other information

2022 executive retention and performance bonus plan

On March 23, 2022, the Company entered into award agreements (the "Award Agreements") with each of Mr. Marlan D. Walker, the General Counsel of the Company, and Mr. Michael C. Donegan, the Vice President – Finance and Chief Accounting Officer of the Company who will become Interim Chief Financial Officer of the Company, under the Company’s 2022 Executive Retention and Performance Bonus Plan (the “ERB Plan”).

Under the terms of the Award Agreements and the ERB Plan, each of Mr. Walker and Mr. Donegan was granted (i) a retention award of $207,500 and $87,000, respectively (each a “Retention Payment”), and (ii) a performance bonus award of $622,500 and $261,000, respectively (each a “Bonus Target”), based on the achievement of critical strategic, tactical and financial goals of the Company (each a “Performance Bonus Award”).

If the employment of a participant under the ERB Plan is terminated by the Company for “cause” or by the participant other than for “good reason” (i) on or before July 1, 2022, the participant will be required to pay back 100% of the after-tax value of the Retention Payment, or (ii) after July 1, 2022, the participant will be required to pay back 50% of the after-tax value of the Retention Payment.

The Performance Bonus Awards will be based on Company performance for four separate six-month performance periods from January 1, 2022 to December 31, 2023 based on performance targets approved by the Compensation Committee of the Board of Directors of the Company and will be payable at up to 150% of the Bonus Target.

The foregoing description of the ERB Plan does not purport to be complete and is qualified in its entirety by reference to the full text of the ERB Plan, which is attached hereto as Exhibit 10.55 and is incorporated herein by reference.

Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections

None.

PART III

Item 10. Directors, executive officers, and corporate governance

The information required by this Item relating to our directors and corporate governance is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders.

Item 11. Executive compensation

The information required by this Item is incorporated herein by reference to the definitive Proxy Statement to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders.

Item 12. Security ownership of certain beneficial owners and management and related stockholder matters

Item 13. Certain relationships and related transactions, and director independence

The information required by this Item is incorporated herein by reference to the definitive Proxy Statements to be filed pursuant to Regulation 14A of the Exchange Act for our 2022 Annual Meeting of Stockholders.

Item 14. Principal accountant fees and services

PART IV

Item 15. Exhibits and financial statement schedules

(a) Financial statements and financial statements schedules

(b) Exhibits

Exhibit No. Description

3.4 Bylaws of the AMHN, Inc.(7)

3.1 First Amendment to Bylaws of the Company, dated December 17, 2015(8)

4.1 Form of Certificate of Common Stock(9)

4.2 Description of Securities of the Company(10)

10.1 Form of Common Stock Purchase Warrant, dated(11)

10.2* Form of Non-Qualified Stock Option Agreement(11)

10.3* TherapeuticsMD, Inc. 2019 Stock Incentive Plan(12)

10.4* First Amendment to the TherapeuticsMD, Inc. 2019 Stock Incentive Plan(31)

10.5* Amended and Restated 2012 Stock Incentive Plan(13)

10.6* 2009 Long Term Incentive Compensation Plan, as amended(14)

10.7* TherapeuticsMD, Inc. 2020 Employee Stock Purchase Plan(15)

10.9 Form of Common Stock Purchase Warrant, dated February 24, 2012(17)

10.11 Form of Warrant to Purchase Common Stock, dated August 5, 2020(6)

10.14 Warrant issued by the Company to Robert Finizio(20)

Exhibit No. Description

10.15 Amendment to Warrant issued by the Company to Robert Finizio(20)

10.16* Warrant issued by the Company to John C.K. Milligan, IV(20)

10.17* Amendment to Warrant issued by the Company to John C.K. Milligan, IV(20)

Exhibit No. Description

10.55*† 2022 Executive Retention and Performance Bonus Plan. (ERB-Plan)

21.1 Subsidiaries of the Company(10)

23.1† Consent of Grant Thornton LLP

32.1†† Section 1350 Certification of Chief Executive Officer

32.2†† Section 1350 Certification of Chief Financial Officer

Exhibit No. Description

* Indicates a contract with management or compensatory plan or arrangement.

† Filed herewith.

†† Furnished herewith.

Item 16.Form 10-K summary

None.

Signatures

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this 2021 10-K Report to be signed on its behalf by the undersigned, thereunto duly authorized, on March 23, 2022

THERAPEUTICSMD, INC.

/s/ Hugh O’Dowd

Hugh O’Dowd

Chief Executive Officer

/s/ James C. D’Arecca

James C. D’Arecca

Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this 2021 10-K Report has been signed below by the following persons on behalf of the registrant and in the capacities and on the date indicated on March 23, 2022.

Signature Title

/s/ Hugh O’Dowd Chief Executive Officer and Director

Hugh O’Dowd (Principal Executive Officer)

/s/ James C. D’Arecca Chief Financial Officer

James C. D’Arecca (Principal Financial Officer)

/s/ Michael C. Donegan Chief Accounting Officer

Michael C. Donegan (Principal Accounting Officer)

/s/ Tommy G. Thompson Chairman

Tommy G. Thompson

/s/ Paul M. Bisaro Director

Paul M. Bisaro

/s/ Cooper C. Collins Director

Cooper C. Collins

/s/ Karen L. Ling Director

Karen L. Ling

/s/ Jules A. Musing Director

Jules A. Musing

/s/ Gail K. Naughton, Ph.D. Director

Gail K. Naughton, Ph.D.

/s/ Angus C. Russell Director

Angus C. Russell

INDEX TO FINANCIAL STATEMENTS

Page

Consolidated Balance Sheets F-4

Consolidated Statements of Operations F-5

Consolidated Statements of Stockholders’ Deficit F-6

Consolidated Statements of Cash Flows F-7

Notes to Consolidated Financial Statements F-8

F-1

Report of Independent Registered Public Accounting Firm

Board of Directors and Stockholders

TherapeuticsMD, Inc.

Opinion on the financial statements

We have audited the accompanying consolidated balance sheets of TherapeuticsMD, Inc. (a Nevada corporation) and subsidiaries (the “Company”) as of December 31, 2021 and 2020, the related consolidated statements of operations, stockholders’ deficit, and cash flows for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Companyas of December 31, 2021 and 2020, and the results of itsoperations and itscash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

Going concern

The accompanying consolidated financial statements have been prepared assuming that the Company will continue as a going concern. As discussed in Note 1 to the financial statements, the Company incurred a net loss of $172.4 million during the year ended December 31, 2021, and as of that date, the Company’s current liabilities exceeded its current assets by $133.4 million and its total liabilities exceeded its total assets by $93.6 million. These conditions, along with other matters as set forth in Note 1, raise substantial doubt about the Company’s ability to continue as a going concern. Management’s plans in regard to these matters are also described in Note 1. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Basis for opinion

These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on the Company’s financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical audit matters

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Calculation of variable consideration related to rebates

As described further in Note 1 to the financial statements, the transaction price of the Company’s prescription products is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. We identified the calculation of variable consideration related to rebates as a critical audit matter.

F-2

The principal consideration for our determination that the calculation of variable consideration related to rebates was a critical audit matter is that auditing the estimation of variable consideration for rebates requires significant judgement and the amounts are material to the financial statements taken as a whole. These estimates require the consideration of the estimated level of inventory in the distribution channel, average rebate percentage, and expected insurance adjudication rate, all of which are key assumptions and have estimation uncertainty.

Our audit procedures related to testing the calculation of variable consideration related to rebates included the following, among others:

/s/ GRANT THORNTON LLP

We have served as the Company’s auditor since 2015.

Miami, Florida

March 23, 2022

F-3

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Balance Sheets

(In thousands, except per share amounts)

As of December 31,

Assets:

Current assets:

License rights and other intangible assets, net 40,318 41,445

Other non-current assets 253 253

Liabilities and stockholders' deficit:

Current liabilities:

Current maturities of long-term debt $ 188,269 $ —

Accrued expenses and other current liabilities 44,304 38,170

Operating lease liabilities, non-current 8,063 8,675

Other non-current liabilities 2,139 —

Commitments and contingencies (Note 9)

Stockholders' deficit:

Preferred stock, par value $0.001; 10,000 shares authorized, none issued — —

Total liabilities and stockholders' deficit $ 169,472 $ 181,610

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

F-4

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Statements of Operations

(In thousands, except per share amounts)

Year ended December 31,

Revenue:

Operating expenses:

Other (expense) income:

Loss on extinguishment of debt — — (10,058 )

Provision for income taxes — — —

Loss per common share, basic and diluted $ (0.43 ) $ (0.67 ) $ (0.72 )

Comprehensive loss:

Other comprehensive income — — —

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

F-5

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Statements of Stockholders' Deficit

(In thousands)

Common Stock Additional Paid in Accumulated

Shares Amount Capital Deficit Total

Shares issued for exercise of warrants, net of cashless exercises 471 1 (1 ) — —

Shares issued for exercise of options 344 — 109 — 109

Share-based payment award compensation costs — — 10,682 — 10,682

Shares issued for vested restricted and performance stock units 453 1 (1 ) — —

Warrants issued in relation to debt financing agreement — — 7,668 — 7,668

Share-based payment award compensation costs — — 10,679 — 10,679

Shares issued for exercise of options 111 — 44 — 44

Shares issued for vested restricted and performance stock units 6,806 7 (7 ) — —

Share-based payment award compensation costs — — 18,125 — 18,125

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

F-6

TherapeuticsMD, Inc. and Subsidiaries

Consolidated Statements of Cash Flows

(In thousands)

Year ended December 31,

Cash flows from operating activities:

Adjustments to reconcile net loss to net cash used in operating activities:

Charges to provision for doubtful accounts 533 238 318

Write-off of patent and trademark — 1,132 79

Loss of extinguishment of debt — — 10,058

Changes in operating assets and liabilities:

Cash flows from investing activities:

Payment for intellectual property license — — (20,000 )

Purchase of fixed assets (34 ) (207 ) (2,450 )

Cash flows from financing activities:

Proceeds from exercise of options and warrants 322 272 109

Supplemental disclosure of cash flow information:

Supplemental disclosure of noncash financing activities:

Warrants issued in relation to debt financing agreement $ — $ 7,668 $ —

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

F-7

TherapeuticsMD, Inc. and Subsidiaries

Notes to the Consolidated Financial Statements

General

TherapeuticsMD, Inc. (the “Company”), a Nevada corporation, and its consolidated subsidiaries are referred to collectively in this Annual Report on Form 10-K (“2021 10-K Report”) as “TherapeuticsMD,” “we,” “our” and “us.” This 2021 10-K Report includes our trademarks, trade names and service marks, such as TherapeuticsMD®, vitaMedMD®, BocaGreenMD®, vitaCareTM, IMVEXXY®, BIJUVA® and ANNOVERA®, which are protected under applicable intellectual property laws and are the property of, or licensed to, the Company. Solely for convenience, trademarks, trade names and service marks referred to in this 2021 10-K Report may appear without the ®, TM or SM symbols, but such references are not intended to indicate, in any way, that we will not assert, to the fullest extent under applicable law, our rights or the right of the applicable licensor to these trademarks, trade names and service marks. We do not intend our use or display of other parties’ trademarks, trade names or service marks to imply, and such use or display should not be construed to imply a relationship with, or endorsement or sponsorship of us by, these other parties.

Beginning in 2018, the U.S. Food and Drug Administration (“FDA”) approval of our pharmaceutical products transitioned our company from predominately focused on conducting research and development to one focused on commercializing our pharmaceutical products.

We have also entered into license agreements with strategic partners to commercialize IMVEXXY and BIJUVA outside of the U.S.

COVID-19

F-8

Since the early phase of the COVID-19 pandemic, we have been using substantial virtual options to ensure business continuity.We have also partnered with independent community pharmacies and multiple third-party online pharmacies and telemedicine providers that focus on contraception or menopause which provide patients real-time access to both diagnosis and treatment. We continue to support prescribers’ needs with samples and product materials through our sales force. If access is restricted, we have mailing options in place for these materials. We also have business continuity plans and infrastructure in place that allows for live virtual e-detailing of our products.

As part of our response to the COVID-19 pandemic, we implemented measures to reduce marketing expenses for 2020 and we also implemented cost saving measures in 2020 and 2021, which included negotiating lower fees or suspending services from third-party vendors; implementing a company-wide hiring restriction; delaying or cancelling non-critical information technology projects; and eliminating non-essential travel, entertainment, meeting, and event expenses. In addition, we implemented a significant cost savings initiative that is designed to reduce our annual costs in 2022 by at least $40.0 million. This figure does not include estimated annualized cost savings of approximately $20.0 million from, or the costs associated with the sale of vitaCare for which we signed a definitive agreement on March 6, 2022. See Note 17 – Subsequent events for a description of the vitaCare divestiture.

The full impact of the COVID-19 pandemic continues to evolve. However, we remain committed to the execution of our corporate goals, despite the ongoing COVID-19 pandemic, as demonstrated in part by the increase in product revenue throughout 2021. As of the date of issuance of these consolidated financial statements, the future extent to which the COVID-19 pandemic may continue to materially impact our financial condition, liquidity, or results of operations remains uncertain. We are continuing to assess the effect of the COVID-19 pandemic on our operations by monitoring the spread of COVID-19 and the various actions implemented to combat the pandemic throughout the world. Even after the COVID-19 pandemic has subsided, we may continue to experience adverse impacts to our business as a result of any economic recession or depression that has occurred or may occur in the future.

While we currently believe that our COVID-19 contingency plan has the ability to mitigate many of the negative effects of the COVID-19 pandemic on our business, the severity of the impact of the COVID-19 pandemic on our business will depend on a number of factors, including, but not limited to, the duration and severity of the pandemic, the duration of “social distancing” orders, the ability of our sales force to access healthcare providers to promote our products, increases in unemployment, which could reduce access to commercial health insurance for our patients, thus limiting payer coverage for our products, and the impact of the pandemic on our global supply chain, all of which remain uncertain. Our future results of operations and liquidity could be materially adversely affected by delays in payments of outstanding receivable amounts beyond normal payment terms, supply chain disruptions, uncertain demand, and the impact of any initiatives or programs that we may undertake to address financial and operations challenges that we may face.

Going Concern

We incurred a net loss of $172.4 million during the year ended December 31, 2021, and as of that date, our current liabilities exceeded our current assets by $133.4 million and our total liabilities exceeded our total assets by $93.6 million.We will need to raise additional capital to repay the entire principal balance of our Financing Agreement, which matures on June 1, 2022, and to provide additional liquidity to fund our losses until our operations become cash flow positive. To address our capital needs, we are pursuing various equity and debt financing and other alternatives, including the sale of vitaCare for which we signed a definitive agreement on March 6, 2022. The equity financing alternatives may include the private placement of equity, equity-linked, or other similar instruments or obligations with one or more investors, lenders, or other institutional counterparties or an underwritten public equity or equity-linked securities offering. Our ability to sell equity securities may be limited by market conditions, including the market price of our common stock and the potential delisting of our common stock from the Nasdaq Global Select Market, and our available authorized shares. To the extent that we raise additional capital through the sale of such securities, the ownership interests of our existing stockholders will be diluted, and the terms of these new securities may include liquidation or other preferences that adversely affect the rights of our existing stockholders. If we are not successful in obtaining additional financing, we could be forced to discontinue or curtail our business operations, sell assets at unfavorable prices, or merge, consolidate, or combine with a company with greater financial resources in a transaction that might be unfavorable to us.

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the uncertainty of the capital markets raises substantial doubt about the Company's ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

The accompanying consolidated financial statements do not include any adjustments that might be necessary if the Company is unable to continue as a going concern.

A. Basis of presentation

The consolidated financial statements and related notes include our parent company and all wholly-owned subsidiaries. The consolidated financial statements are prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Our fiscal year-end is as of and for the year ended December 31st for each year presented. All intercompany transactions among our businesses have been eliminated.

Certain amounts in the notes to the consolidated financial statements may not add due to rounding, and all percentages have been calculated using unrounded amounts.

B. New accounting standards

Adoption of new accounting standards

New accounting standards or accounting standards updates were assessed and determined to be either not applicable or did not have a material impact on the Company’s consolidated financial statements or processes.

Accounting standards issued but not yet adopted

Reference Rate Reform (Topic 848): Facilitation of the Effects of Reference Rate Reform on Financial Reporting and Scope. In March 2020 and January 2021, Accounting Standards Update (“ASU”) 2020-04 and ASU 2021-01 were issued, respectively. These ASUs provide optional guidance for a limited period of time to ease potential accounting impacts associated with transitioning away from reference rates that are expected to be discontinued, such as London Interbank Offered Rate (LIBOR). These ASUs include practical expedients for contract modifications due to reference rate reform. Generally, contract modifications related to reference rate reform may be considered an event that does not require remeasurement or reassessment of a previous accounting determination at the modification date. These ASUs were effective upon issuance and may be applied prospectively to contract modifications made or evaluated on or before December 31, 2022. Our debt agreements currently include the use of alternate rates when LIBOR is not available. We do not expect the change from LIBOR to an alternate rate will have a material impact to our financial statements and, to the extent we enter into modifications of agreements that are impacted by the LIBOR phase-out, we will apply such guidance to those contract modifications.

Other recently issued accounting standards not yet adopted by us are not expected, upon adoption, to have a material impact on the Company’s consolidated financial statements or processes.

C. Estimates and assumptions

The preparation of consolidated financial statements in conformity to U.S. GAAP requires us to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. We evaluate our estimated assumptions based on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ, at times in material amounts, from these estimates under different assumptions or conditions.

D. Cash

We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation (“FDIC”) insured limits of $0.25 million per bank. We have never experienced any losses related to these funds.

E. Accounts receivable and allowance for doubtful accounts

Accounts receivable are customer obligations due under normal trade terms and are measured at amortized cost. We extend credit on an unsecured basis to most of our customers based on an evaluation of a customer’s financial condition, and collateral is not required. Our accounts receivable concentration of credit risk is primarily limited customers who are drug wholesalers and retail pharmacy distributors.

We review accounts receivable for uncollectible and delinquent accounts and credit card chargebacks, and we provide an allowance for doubtful accounts, which is based upon a review of outstanding receivables, historical collection information, reasonable supportable

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forecasts, and existing economic conditions, and we record an allowance that presents the net amount expected to be collected. We write off uncollectible and delinquent receivables against our allowance for doubtful accounts based on individual credit evaluations, the results of collection efforts, and specific circumstances of customers. We record recoveries of accounts previously written off when received as an increase in the allowance for doubtful accounts. To the extent data we use to calculate these estimates does not accurately reflect bad debts, adjustments to these reserves may be required. Our exposure to credit losses may increase if our customers are adversely affected by changes in healthcare laws, coverage, and reimbursement, economic pressures or uncertainty associated with local or global economic recessions, disruption associated with the current COVID-19 pandemic, or other customer-specific factors. Although we have historically not experienced significant credit losses, it is possible that there could be a material adverse impact from potential adjustments of the carrying amount of trade receivables in the future.

F. Inventories

Inventories represent pharmaceutical products, packaged vitamins and raw materials which are valued at the lower of cost or net realizable value. Our pharmaceutical products are valued using first in first out method and our vitamins are valued using the average-cost method. We review inventories for excess and obsolescence, and we write-down obsolete or otherwise unmarketable inventory to its estimated net realizable value. Obsolescence may occur due to product expiring, product improvements rendering previous versions obsolete, or decreases in demand for our products.

G. Fair Value Measurements

Fair value is the price to sell an asset or transfer a liability and therefore represents an exit price in the principal market (or in the absence of a principal market, the most advantageous market). It represents a market-based measurement that contemplates a hypothetical transaction between market participants at the measurement date.

The unique characteristics of an asset or liability and the availability of observable prices affect the number of valuation approaches and/or techniques used in a fair value analysis. We measure fair value using observable and unobservable inputs. We give the highest priority to quoted prices (unadjusted) in active markets for identical assets or liabilities (Level 1 inputs) and the lowest priority to unobservable inputs (Level 3 inputs).

We apply the following fair value hierarchy:

• Level 3 - Inputs that are unobservable.

The carrying amount of our cash, accounts receivable, accounts payable and accrued expenses approximate their fair value because of the short-term maturity of such instruments, which are considered Level 1 under the fair value hierarchy. The carrying amount of our debt approximates fair value since it bears interest either at variable rates or fixed rates which are not significantly different from market rates, which are considered Level 2 under the fair value hierarchy.

H. Fixed assets

Fixed assets are carried at cost less accumulated depreciation and amortization. We charge maintenance costs, which do not significantly extend the useful lives of the respective assets, and repair costs to operating expenses as incurred. We compute depreciation using the straight-line method over the estimated useful lives of the related assets, which range from three to seven years. Leasehold improvements are depreciated over the shorter of their useful life or the term of the lease. Long-lived assets held and used by us, including fixed assets, are assessed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

We capitalize software and software development costs incurred to create and acquire computer software for internal use, principally related to software coding and application development. We begin to capitalize software development costs when both the preliminary project stage is completed, and it is probable that the software will be used as intended. Capitalized software costs include only external direct costs and services utilized in developing or obtaining computer software. Capitalized software costs are amortized on a straight-line basis when placed into service over the estimated useful life, generally five to seven years.

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I. License rights and other intangibles assets

We record license rights and other intangible assets at cost, which includes external costs, consisting primary of legal costs, incurred in securing our patents and trademarks.

We started amortizing license rights cost once ANNOVERA became commercially available for use. License rights cost is amortized over the useful life over which the license rights will contribute directly or indirectly to our cash flows, which is estimated to be the remaining patent life of ANNOVERA, expiring in June 2039. The cost is amortized using the straight-line method as the pattern of economic benefit cannot be reliably determined.

Intangible assets subject to amortization, such as patents, are amortized over the useful life of the patent using the straight-line method. If the patent is not granted, we write-off any capitalized patent costs at that time. Intangible assets not subject to amortization, such as trademarks, are perpetual and have indefinite lives.

We review license rights and other intangible assets subject to amortization on a periodic basis to determine whether events and circumstances would indicate impairment or warrant a revision to their remaining useful lives. We assess other intangible assets not subject to amortization for potential impairment at least annually during the fourth quarter of each year, or more frequently if events occur or circumstances change that would more likely than not reduce the fair value of the intangible assets below their carrying value.

J. Segment reporting

K. Revenue recognition

We determine the amount of revenue to be recognized through application of the following steps:

• Identification of the contract with a customer;

• Identification of the performance obligations in the contract;

• Determination of the transaction price;

• Recognition of revenue when or as we satisfy the performance obligations.

Essentially all of our revenue is generated through contracts with our customers, who are primarily wholesale distributors and retail pharmacies. A performance obligation is a promise in a contract to transfer a product or service to a customer. A good or service is considered to be transferred when the customer receives the goods or service or obtains control, and we treat shipping as a fulfillment activity rather than as a separate obligation. We generally recognize revenue at a point in time when all of our performance obligations under the terms of a contract are satisfied. Revenue is recognized upon transfer of control of promised products or services in an amount that reflects the consideration we expect to receive in exchange for those products or services. The collectability of consideration on the contract is reasonably assured before revenue is recognized. To the extent that customer payment has been received before all recognition criteria are met, these revenues are initially deferred in other accruals on the balance sheet and the revenue is recognized in the period that all recognition criteria have been met.

Prescription products

Prescription products are sold at fixed wholesale acquisition cost, or WAC, determined based on our list price. However, the total transaction price is variable as it is calculated net of estimated product returns, chargebacks, rebates, coupons, discounts and wholesaler fees. These estimates are based on the amounts earned or to be claimed on the related sales and are classified as reductions of accounts receivable (if the amount is payable to the customer) or a current liability (if the amount is payable to a party other than a customer). To determine the transaction price, we estimate the amount of variable consideration at the outset of the contract either utilizing the expected value or most likely amount method, depending on the facts and circumstances relative to the contract or each variable consideration. The estimated amount of variable consideration is included in the transaction price only to the extent that it is probable that a significant reversal in the amount of cumulative product revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. In determining amounts of variable consideration to include in a contract’s transaction price, we

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rely on our historical experience and other evidence that supports our qualitative assessment of whether product revenue would be subject to a significant reversal. We consider all the facts and circumstances associated with both the risk of a product revenue reversal arising from an uncertain future event and the magnitude of the reversal if that uncertain event were to occur. Actual amounts of consideration ultimately received may differ from our estimates. If actual results in the future vary from our original estimates, we will adjust these estimates, which would affect net product revenue and earnings in the period such changes in estimates become known.

We accept returns of unsalable prescription products sold through wholesale distributors within a return period of six months prior to and up to 12 months following product expiration. ANNOVERA cannot be returned before the expiration date and expired ANNOVERA can be returned up to 12 months past the expiration date. Our prescription vitamins, IMVEXXY and BIJUVA currently have a shelf life of 24 months from the date of manufacture and ANNOVERA currently has a shelf life of 18 months from the date of manufacture. We do not allow product returns for prescription products that have been dispensed to a patient. We estimate the amount of our product sales that may be returned by our customers and record this estimate as a reduction of product revenue in the period the related product revenue is recognized. Where historical rates of return exist, we use history as a basis to establish a returns reserve for products shipped to wholesalers. For our newly launched products, for which the right of return exists but for which we currently do not have history of product returns, we estimate returns based on available industry data, our own sales information and our visibility into the inventory remaining in the distribution channel. At the end of each reporting period, we may decide to constrain product revenue for product returns based on information from various sources, including channel inventory levels and dating and sell-through data, the expiration dates of products currently being shipped, price changes of competitive products and any introductions of generic products. We recognize the amount of expected returns as a refund liability, representing the obligation to return the customer’s consideration. Since our returns primarily consist of expired and short dated products that will not be resold, we do not record a return asset for the right to recover the goods returned by the customer at the time of the initial sale (when recognition of product revenue is deferred due to the anticipated return).

We offer various rebate and discount programs in an effort to maintain a competitive position in the marketplace and to promote sales and customer loyalty. We estimate the allowance for consumer rebates and coupons that we have offered based on our experience and industry averages, which is reviewed and adjusted, if necessary, on a quarterly basis. We record distributor fees based on amounts stated in contracts. We estimate chargebacks based on number of units sold during the period taking into account prices stated in contracts and our historical experience. We provide discounts to our customers for prompt payment. Consumer rebates and coupons costs, distribution fees, chargebacks and discounts are deducted from gross product revenue at the time the product revenue is recognized.

For our prescription products, we offer a co-pay assistance program for eligible enrolled patients whose out of pocket costs are reduced to a more affordable price. This allows patients to access the product at a reasonable cost and is in line with our responsible pricing approach. We reimburse pharmacies for this discount through third-party vendors. The variable consideration is estimated based on contract prices, the estimated percentage of patients that will utilize the copay assistance, the average assistance paid, the estimated levels of inventory in the distribution channel and the current level of prescriptions covered by patients’ insurance. Payers may change coverage levels for our prescription products positively or negatively, at any time up to the time that we have formally contracted coverage with the payer. As such, the net transaction price of our prescription products is susceptible to such changes in coverage levels, which are outside the influence of the Company. As a result, we constrain variable consideration for our prescription products to an amount that will not result in a significant product revenue reversal in future periods. Our ability to estimate the net transaction price for our prescription products is constrained by our estimates of the amount to be paid for the co-pay assistance program which is directly related to the level of prescriptions paid for by insurance. As such, we record an accrual to reduce gross sales for the estimated co-pay and other patient assistance based on currently available third-party data and our internal analyses. We re-evaluate variable consideration each reporting period.

License revenue

License arrangements may consist of non-refundable upfront license fees, exclusive licensed rights to patented or patent pending technology, and various performance or sales milestones and future product royalty payments. Some of these arrangements may include multiple performance obligations. Non-refundable up-front fees that are not contingent on any future performance by us, and do not require continuing involvement on our part, are recognized as revenue when the right to use functional intellectual property is transferred to the customer.

L. Cost of sales

Cost of sales includes the cost of inventory, manufacturing, manufacturing overhead and supply chain costs and product shipping and handling costs. The Population Council License Agreement requires royalty payments based on our net sales of ANNOVERA, which are recorded as a component of cost of sales. Additionally, the amortization costs of license rights are recorded as a component of cost of sales.

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M. Research and development

Research and development expenses include internal R&D activities, costs of services of third-party contract research organizations (“CROs”) and usage of their clinical research sites, manufacturing, scale-up and validation costs, and other activities. Internal R&D activity expenses include laboratory supplies, salaries, benefits, and share-based payment award compensation costs. CRO activity expenses include preclinical laboratory experiments and clinical trial studies. Other activity expenses include regulatory consulting and other costs. The activities undertaken by our regulatory consultants that were classified as R&D expenses include assisting, consulting with, and advising our in-house staff with respect to various FDA submission processes, clinical trial processes, and scientific writing matters, including preparing protocols and FDA submissions. These consulting expenses were direct costs associated with preparing, reviewing, and undertaking work for our clinical trials and investigative drugs. We charge internal R&D activities and other activity expenses to operations as incurred. We make payments to CROs based on agreed-upon terms, which may include payments in advance of a study starting date. We expense nonrefundable advance payments for goods and services that will be used in future R&D activities when the activity has been performed or when the goods have been received rather than when the payment is made. We review and accrue CRO expenses and clinical trial study expenses based on services performed and rely on estimates of those costs applicable to the completion stage of a study as provided by CROs. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. We charge revisions to expenses in the period in which the facts that give rise to the revision become known.

N. Share-based payment awards

O. Income taxes

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P. Earnings per common share

Basic earnings or loss per common share is computed by dividing net income or loss available to common stockholders by the sum of the weighted average number of shares of common stock. Diluted earnings per common share is computed by dividing net income available to common stockholders by the sum of the weighted average number of shares of common stock and the number of additional shares of common stock that would have been outstanding if our outstanding potentially dilutive securities had been issued. Potentially dilutive securities include awards of non-vested or vested and not settled restricted stock units, performance stock units where the performance requirements have been met and not settled, warrants and options. The dilutive effect of potentially dilutive securities is reflected in diluted earnings per common share by application of the treasury stock method, except if its impact is anti-dilutive. Under the treasury stock method, an increase in the fair market value of our common stock can result in a greater dilutive effect from potentially dilutive securities.

Q. Leases

We adopted ASU 2016-02, Leases (Topic 842), including the related codification amendments, in 2019 utilizing the modified retrospective transition method and applying the transition provisions at the effective date.

We determine if an arrangement is a lease at inception. Determining whether a contract contains a lease includes judgment regarding whether the contract conveys the right to control the use of identified property or equipment for a period of time in exchange for consideration.

We account for our lease-related assets and liabilities based on their classification as operating leases or finance leases, following the relevant accounting guidance. For all the lessee arrangements, we have elected an accounting policy to combine non-lease components with the related-lease components and treat the combined items as a lease for accounting purposes. We measure lease related assets and liabilities based on the present value of lease payments, including in-substance fixed payments, variable payments that depend on an index or rate measured at the commencement date, and the amount we believe is probable we will pay the lessor under residual value guarantees when applicable. We discount lease payments based on our estimated incremental borrowing rate at lease commencement (or modification), which is primarily based on our estimated credit rating, the lease term at commencement, and the contract currency of the lease arrangement. We have elected to exclude short-term leases (leases with an original lease term less than one year) from the measurement of lease-related assets and liabilities.

We test right-of-use asset in an operating or finance lease at the asset group level (because these assets are long-lived nonfinancial assets and should be accounted for the same way as other long-lived nonfinancial assets) whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.

R. Loss Contingencies

In determining whether an accrual for a loss contingency is required, we first assess the likelihood of occurrence of the future event or events that will confirm the loss. When a loss is probable (the future event or events are likely to occur) and the amount of the loss can be reasonably estimated, the estimated loss is accrued. If the reasonable estimate of the loss is a range and an amount within the range appears to be a better estimate than any other amount within the range, that amount should be accrued. However, if no amount within the range is a better estimate, the minimum amount in the range should be accrued.

When a loss is reasonably possible (the chance of the future event or events occurring is more than remote but less than likely), no accrual is recognized.

2. Accounts receivable

The following sets forth activities in our allowance for credit losses (in thousands):

Balance as of beginning of period $ 1,118 $ 904 $ 597

Charges to provision for credit losses 533 238 318

Write-off of uncollectible receivables (317 ) (24 ) (11 )

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3. Inventory

We rely on third parties to manufacture our finished products, and we have entered into long-term supply agreements for the manufacture of ANNOVERA, IMVEXXY, and BIJUVA. We do not have a long-term supply agreement for the manufacture of our prescription vitamins. Additionally, we do not have long-term contracts for the supply of all the active pharmaceutical ingredient (“API”) used in ANNOVERA and BIJUVA.

One of our third-party contract manufacturers that manufactures ANNOVERA has recently experienced an increase in difficulties with manufacturing of ANNOVERA, which has resulted in intermittent supply of ANNOVERA for commercial distribution. The challenges are multifactorial and include variability in raw material supply and normal manufacturing variation due to a semi-manual process. This has recently resulted in challenges to supply ANNOVERA consistently within the approved specification at a rate that meets the projected demand for ANNOVERA. To mitigate the manufacturing challenges, in August 2021, we filed a supplemental New Drug Application (“NDA”) with the FDA to modify the testing specifications for ANNOVERA to allow increased consistency of supply of ANNOVERA. In December 2021, FDA determined that it could not approve supplemental NDA without additional information. In its complete response letter (“CRL”), the FDA provided recommendations and requested additional information that could support approval of revisions to certain testing specifications. In January 2022, we responded to the CRL, and provided the requested additional information to the FDA and modified the request for the manufacturing testing limits based on the FDA recommendations. We expect a response from the FDA by the end of second quarter of 2022. We will continue to manufacture and supply ANNOVERA under the existing specifications. In the meantime, our third-party contract manufacturer may not be able to supply us with sufficient ANNOVERA to adequately supply the market, which would have an adverse effect on our business, results of operations and financial condition. Additionally, we may incur increased write-offs of ANNOVERA products manufactured in 2022 that do not meet existing specifications.

We have also experienced a greater than expected amount of raw materials for ANNOVERA being out of specification. If any of our third-party contract manufacturers or any suppliers of raw materials or API experience further difficulties, do not comply with the terms of an agreement between us, or do not devote sufficient time, energy, and care to providing our manufacturing needs, or if the manufacturing specification modifications that we have requested are not approved by the FDA, we could experience additional interruptions in the supply of our products, which may have a material adverse impact on our revenue, results of operations and financial position.

Our inventory consisted of the following (in thousands):

As of December 31,

During 2021 and 2020, we recorded inventory charges of $1.1 million and $7.2 million, respectively. The charge recorded for 2020 was primarily a result of the impact of the COVID-19 pandemic on our business, which decreased demand for our products. No inventory charge was recorded for 2019.

4. Prepaid and other current assets

Our prepaid and other current assets consisted of the following (in thousands):

As of December 31,

Paragraph IV legal proceeding costs 2,304 —

Prepaid and other current assets $ 10,548 $ 7,543

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5. Fixed assets

Our fixed assets, net consisted of the following (in thousands):

As of December 31,

Computer and office equipment 1,855 1,784

Leasehold improvements 80 80

Less: accumulated depreciation and amortization 2,518 1,741

We recorded depreciation expense of $0.8 million for 2021 and 2020, and $0.4 million for 2019.

6. Licensed rights and other intangible assets

The following provides information about our license rights and other intangible assets, net (in thousands):

Gross Gross

Carrying Accumulated Carrying Accumulated

Amount Amortization Net Amount Amortization Net

License rights and other intangible assets subject to amortization:

Intangible assets not subject to amortization:

We recorded amortization expense related to the exclusive license rights agreement with Population Council of $3.0 million for 2021 and 2020, and $0.8 million for 2019. We recorded amortization expense related to patents of $0.3 million for 2021 and 2020, and $0.2 million for 2019.

Our license rights and other intangible assets subject to amortization is expected to be amortized as follows (in thousands):

Year ending December 31,

We use a combination of qualitative and quantitative factors to assess licensed rights and intangible assets for impairment. As a result of performing these assessments, we determined that no impairment existed as of December 31, 2021, therefore, no write downs were recorded to our licensed rights and other intangible assets for 2021. For 2020 and 2019, we wrote off $1.1 million and $0.1 million, respectively, in costs related to patents and trademarks, which were included in general and administrative expenses in the accompanying consolidated statements of operations.

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7. Accrued expenses and other current liabilities

Other accrued expenses and other current liabilities consisted of the following (in thousands):

As of December 31,

Selling and marketing expenses 2,850 228

Research and development expenses 1,995 925

Accrued expenses and other current liabilities $ 44,304 $ 38,170

We expense advertising costs when incurred, which amounted to $39.7 million, $35.8 million and $9.0 million for 2021, 2020 and 2019, respectively.

8. Debt

Our debt consisted of the following (in thousands):

As of December 31,

Current maturities of long-term debt 188,269 —

Financing agreement

We are party to a Financing Agreement with Sixth Street Specialty Lending, Inc., as administrative agent (the “Administrative Agent”), various lenders from time-to-time party thereto, and certain of our subsidiaries party thereto from time to time as guarantors. In connection with the initial borrowing under the Financing Agreement, we paid, for the benefit of the lenders, a facility fee equal to 2.5% of the initial amount borrowed and were required to pay such a facility fee in connection with subsequent borrowings under the Financing Agreement. Borrowings under the Financing Agreement accrue interest at either (i) 3-month LIBOR plus 7.75%, subject to a LIBOR floor of 2.70% or (ii) the prime rate plus 6.75%, subject to a prime rate floor of 5.2% as selected by us. As of December 31, 2021, our interest rate was 10.45%. Interest on amounts borrowed under the Financing Agreement is due and payable quarterly in arrears. In addition, we are required to pay an annual administrative fee, and other fees and expense. We have the right to prepay borrowings under the Financing Agreement in whole or in part at any time, subject to a prepayment fee on the principal amount being prepaid.

The Financing Agreement was entered into in April 2019, and it provided us with up to a $300.0 million first lien secured term loan credit facility. The credit facility provided for availability to us in three tranches: (i) $200.0 million was drawn upon entering into the Financing Agreement; (ii) $50.0 million was drawn in February 2020 and (iii) $50.0 million was previously available to us in the Administrative Agent’s sole and absolute discretion either contemporaneously with the delivery of our financial statements for the quarterly period ended June 30, 2020 or at such earlier date as the Administrative Agent may have consented to. In the third quarter of 2020, the Administrative terminated the undrawn $50.0 million tranche under the Financing Agreement, therefore, such amount was no longer available to us to borrow.

In August 2020, we entered into Amendment No. 5 to the Financing Agreement (“Amendment No. 5”) pursuant to which, among other amendments, the covenant in the Financing Agreement regarding our achievement of minimum consolidated net revenue attributable to commercial sales of our IMVEXXY, BIJUVA and ANNOVERA products were adjusted in order to reflect the impact of COVID-19 on our business. In lieu of a cash amendment fee, we issued to the Administrative Agent and the lenders under the Financing Agreement warrants to purchase an aggregate of 4,752,116 shares of our common stock with an exercise price of $1.58 per share and a ten-year term (the “Lender Warrants”). The Lender Warrants were issued pursuant to an exemption from registration under the Securities Act of 1933,

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as amended, and no registration rights were issued. The estimated fair value of the Lender Warrants was $7.4 million, and was recorded as deferred financing cost since Amendment No. 5 was accounted for as a debt modification.

In November 2020, in connection with Amendment No. 6 to the Financing Agreement (“Amendment No. 6”), we amended the Lender Warrants to provide for an adjustment to the exercise price if we conduct certain dilutive issuances prior to December 31, 2020, or if the volume-weighted average price of our common stock for the fifteen trading days ending December 31, 2020 is lower than the then current exercise price. Also, in November 2020, we concluded an underwritten public offering of our common stock and received consideration of $1.19 per share, after deducting for underwriting discounts and commissions. This offering of our common stock automatically triggered the down round provision to the exercise price of the Lender Warrants, which lowered the exercise price from $1.58 to $1.19 per share. The estimated fair value of the adjustment to the exercise price of Lender Warrants was $0.2 million and was recorded as deferred financing cost since Amendment No. 6 was accounted for as a debt modification. No other amendment financing fees were paid.

In January 2021, we entered into Amendment No. 7 to the Financing Agreement (“Amendment No. 7”) pursuant to which, among other amendments, the minimum quarterly product net revenue requirements attributable to commercial sales of IMVEXXY, BIJUVA, and ANNOVERA for the fiscal quarters ending March 31, 2021 and June 30, 2021 were reduced, and we paid amendment financing fees of $5.0 million, which was recorded as deferred financing fees since Amendment No 7 was accounted for as debt modification. Additionally, in connection with entering into Amendment No. 7, the warrants issued to the Administrative Agent and the lenders under the Financing Agreement in August 2020 were further amended to provide for an additional adjustment to the exercise price if we conducted certain dilutive issuances prior to March 31, 2021. No adjustments were made to the exercise price of these warrants prior to the expiration of such period.

In March 2021, we entered into Amendment No. 8 to the Financing Agreement (“Amendment No. 8”) pursuant to which, among other amendments, the minimum quarterly product net revenue requirements attributable to commercial sales of IMVEXXY, BIJUVA, and ANNOVERA were revised, the amortization and prepayment terms of the borrowings under the Financing Agreement were revised, and the Administrative Agent consented to a framework for our potential disposition of our vitaCare business. In connection with Amendment No. 8, we (i) repaid $50.0 million in principal under the Financing Agreement during the three months ended March 31, 2021, plus a 5.0% prepayment fee and (ii) agreed to make additional quarterly principal repayments plus the prepayment fees as follows: (a) $5.0 million due in March 2022, June 2022 and September 2022; (b) $10.0 million due in December 2022 and March 2023; and (c) $41.25 million due in June 2023, September 2023, December 2023 and March 2024. Additionally, the prepayment fees on principal amounts being prepaid under the Financing Agreement were revised as follows: (i) 30.0% of the principal amount being repaid through March 31, 2022 (excluding the scheduled $5.0 million principal repayment on such date, which is subject to a 5.0% prepayment fee); (ii) 5.0% of the principal amount being repaid from April 2022 through March 2023; (iii) 3.0% of the principal amount being repaid from April 2023 through March 2024; and (iv) thereafter, none, in each case subject to certain limited exceptions, including with respect to a repayment in full of the obligations under the Financing Agreement. Based on the contractual quarterly principal repayments in Amendment No. 8, as of December 31, 2021, we recorded an accrual of $2.2 million related to future prepayment fee obligations, of which $1.3 million is included in accrued expenses and other current liabilities and $0.9 million is included in other non-current liabilities in the accompanying consolidated balance sheets.

In March 2022, we entered into Amendment No. 9 to the Financing Agreement (“Amendment No. 9”). See Note 17 – Subsequent events. In accordance with Amendment No. 9, the maturity date of the Financing Agreement was amended to June 1, 2022. Accordingly, the entire debt balance of $200.0 million as of December 31, 2021 will be due and payable in June 2022.

The Financing Agreement also includes other representations, warranties, indemnities, restrictions on the payment of dividends, and events of default that are customary for financings of this type, including an event of default relating to a change of control of the Company. Upon or after an event of default, the Administrative Agent and the lenders may declare all or a portion of our obligations under the Financing Agreement to be immediately due and payable and exercise other rights and remedies provided for under the Financing Agreement. The obligations of our company and its subsidiaries under the Financing Agreement are secured, subject to customary permitted liens and other agreed upon exceptions, by a first priority perfected security interest in all existing and after acquired assets of our company and its subsidiaries. The obligations under the Financing Agreement will be guaranteed by each of our future direct and indirect subsidiaries, subject to certain exceptions.

Since the inception of the Financing Agreement, we have incurred a total of $18.8 million in deferred financing fees related to the Financing Agreement. As of December 31, 2021, our unamortized deferred financing fees was $11.7 million, which will be entirely amortized upon the maturity of the Financing Agreement in 2022. Additionally, in connection with Amendment No. 9, we will pay financing fees of $30.0 million, which will be paid in kind (“PIK”) by being added to the principal balance of the Financing Agreement, and future prepayment fees were waived. Of the total PIK financing fees, $16.0 million will be waived if one of the two milestones specified in Amendment No. 9 is achieved.

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Debt covenants

The Financing Agreement contains customary restrictions and covenants applicable to us that are customary for financings of this type. Among other requirements, prior to execution of Amendment No. 9 in March 2022, we were required to achieve certain minimum quarterly consolidated net revenue amounts attributable to commercial sales of our IMVEXXY, BIJUVA and ANNOVERA products. We were not in compliance with our covenant to achieve certain minimum quarterly product net revenue requirements for the quarterly period ended December 31, 2021 of $26.5 million. In connection with Amendment No 9, this event of default was waived by the Administrative Agent and lenders, and the minimum product net revenue requirement for the quarterly period ending March 31, 2022, which is the final quarterly reporting period, was removed. The Financing Agreement also required us to maintain a minimum unrestricted cash balance. As of December 31, 2021, our cash balance was in excess of the required minimum balance. However, beginning on February 7, 2022, we did not maintain the required minimum unrestricted cash balance of $ 60.0 million. In connection with Amendment No. 9, this event of default was waived by the Administrative Agent and lenders, and the required minimum unrestricted cash balance was reduced.

Credit agreement

In April 2019, we terminated and repaid all amounts outstanding under a Credit and Security Agreement (the “Credit Agreement”), as amended, with MidCap Financial Trust, as agent and as lender and the additional lenders party thereto using a portion of the initial tranche of borrowing under the Financing Agreement. The aggregate amount paid of $81.7 million included a prepayment fee of 4%, a repayment fee of 4% and other fees and expenses payable to the lenders under the Credit Agreement. As a result of the termination of the Credit Agreement, we recorded a $10.1 million loss on extinguishment of debt in 2019.

Interest and financing costs

Interest expense and other financing costs consisted of the following (in thousands):

Prepayment fees 4,660 — —

9. Commitments and contingencies

Leases

Substantially all of our leases are for rental of office space used to conduct our business. In October 2018, we entered into a lease for executive, administrative, operations and sales offices in Boca Raton, Florida. The lease includes 56,212 rentable square feet, or the full premises, of which the lease on 7,561 square feet commenced in 2018 and the lease on the remaining 48,651 square feet commenced in August 2019, or the full premises commencement date. The lease will expire 11 years after the full premises commencement date, unless terminated earlier in accordance with the terms of the lease. We have the option to extend the term of the lease for two additional consecutive periods of five years. The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised. The term of the lease includes escalating rent and free rent periods. We are also responsible for certain other operating costs under the lease, including electricity and utility expenses. In June 2019, we entered into an agreement with the same lessors to lease additional 6,536 square feet of administrative office space in the same location, pursuant to an addendum to suchlease, which commenced in May 2020.

For 2021, operating lease expense related to our real estate leases was $2.1 million and variable lease expense was $0.7 million. For 2020, operating lease expense related to our real estate leases was $2.3 million and variable lease expense was $0.4 million. For 2019, operating lease expense related to our real estate leases was $1.6 million and variable lease expense was insignificant.

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As of December 31, 2021, our remaining lease payments were as follows (in thousands):

Year ending December 31,

Total undiscounted lease payments 13,280

Less: imputed interest 3,856

Present value of lease payments $ 9,424

The following table sets forth supplemental balance sheet information related to leases (in thousands):

As of December 31,

Assets:

Operating lease right-of-use assets $ 8,234 $ 9,566

Liabilities:

Operating lease liabilities, non-current 8,063 8,675

Total operating lease liabilities $ 9,424 $ 10,929

The following table presents other information related to leases:

Weighted average remaining term (years) - operating leases 8.7 9.0

Weighted average discount rate - operating leases 8.3 % 8.3 %

Population Council license agreement

Under the terms of the Population Council License Agreement, we paid the Population Council a milestone payment of $20.0 million in 2018, which was within 30 days following the approval by the FDA of the NDA for ANNOVERA, and $20.0 million in 2019 following the first commercial batch release of ANNOVERA. The aggregate $40.0 million of milestone payments were recorded as license rights, see “Note 6. License rights and other intangible assets” for additional information. The Population Council is also eligible to receive future payments upon the achievement of certain commercial sales milestones of ANNOVERA. We are required to pay the Population Council additional milestone payments of $40.0 million upon cumulative net sales of ANNOVERA in the U.S. by us and our affiliated and permitted sublicensees of each of $200.0 million, $400.0 million and $1.0 billion. We will record any future milestone payment as incremental license rights cost when incurred, and amortize such costs over the remaining useful life over which the license rights will contribute directly or indirectly to our cash flows based on when ANNOVERA became commercially available for use. Accordingly, if and when we incur the incremental license rights cost, we will immediately record an additional amortization amount that assumed the incremental cost was incurred when the first commercial batch of ANNOVERA was released in 2019.

The Population Council has agreed to perform and pay the costs and expenses associated with four post-approval studies required by the FDA for ANNOVERA, and we have agreed to perform and pay the costs and expenses associated with a post approval study required by the FDA to measure risk for venous thromboembolism, provided that if the costs and expenses associated with such post-approval study exceed $20.0 million, half of such excess will be offset against royalties or other payments owed by us to the Population Council under the Population Council License Agreement. To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against us, as we hold the NDA for ANNOVERA. In July 2021, we received a letter from FDA indicating that the post-marketing commitment study being conducted by the Population Council for ANNOVERA to characterize the in vivo release rate of ANNOVERA was not fulfilled to FDA’s satisfaction. In addition, the final reports

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for the two post-marketing requirement studies being performed by the Population Council for ANNOVERA were not submitted by the initial listed submission deadline, which deadlines have since been extended by FDA. We are working with Population Council to complete the post-marketing commitment study to FDA’s satisfaction and reduce the delay in submitting the post-marketing requirement final reports. To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against us, as we hold the NDA for ANNOVERA.

We and the Population Council have agreed to form a joint product committee responsible for overseeing activities under the Population Council License Agreement. We are responsible for all aspects of marketing, promotion, product positioning, pricing, education programs, publications, sales messages and any additional desired clinical studies for the one-year vaginal contraceptive system, subject to oversight and decisions made by the joint product committee.

We are also required to pay the Population Council, on a quarterly basis, step-based royalty payments based on our annual net sales of ANNOVERA as follows: (i) if annual net sales are less than or equal to $50.0 million, a royalty of 5% of net sales; (ii) for annual net sales greater than $50.0 million and less than or equal to $150.0 million, a royalty of 10% of such net sales; and (iii) for net sales greater than $150.0, a royalty of 15% of such net sales. The annual royalty rate will be reduced to 50% of the initial rate during the six-month period beginning on the date of the first arms-length commercial sale of a generic equivalent of the one-year vaginal contraceptive system that is launched by a third-party in the U.S., and thereafter will be reduced to 20% of the initial rate.

Unless earlier terminated, the Population Council License Agreement will remain in effect until the later of the expiration of the last-to-expire of the Population Council’s U.S. patents that are licensed to us, or the date following such expiration that follows a continuous period of six months during which we and our affiliates have not made a commercial sale of ANNOVERA in the U.S. The Population Council License Agreement may also be terminated for certain breach and bankruptcy-related events and by us on 180 days’ prior notice to the Population Council.

Purchase commitments

We have manufacturing and supply agreements whereby we are required to purchase from Catalent, Inc. (“Catalent”) a minimum number of units of BIJUVA and IMVEXXY softgels during each respective annual contract year. The annual contract period for BIJUVA and IMVEXXY ends each April and July, respectively. If the minimum order quantities of BIJUVA or IMVEXXY are not met, we are required to pay a minimum commitment fee equal to 50% or 60%, respectively, of the difference between the total amount we would have paid if the minimum requirement had been fulfilled and the total amount of purchases of BIJUVA or IMVEXXY during each product’s respective contract year. Our estimated minimum commitments for Catalent are as follows: $5.2 million for 2022, $3.9 million for 2023, $4.3 million for 2024, $4.7 million for 2025, $4.8 million for 2026, and $11.5 million thereafter.

Additionally, with another third-party manufacturer, we have a manufacturing and supply agreement, renewable annually, whereby we are required to purchase a minimum number of units of ANNOVERA during a contract year. The annual contract period for ANNOVERA ends each August. If the minimum order quantities of ANNOVERA are not met, we are required to pay a minimum commitment fee equal to the difference between the total amount we would have paid if the minimum requirement had been fulfilled and the total amount of purchases of ANNOVERA during the contract year. Our estimated minimum commitment for ANNOVERA is $2.1 million for 2022.

For each of the three annual contract years ending in 2021, we have met our minimum purchase number of units in all material respects. For annual contract years ending in 2022 and thereafter, we will continue to evaluate whether we will be able to meet each annual contract year’s respective minimum purchase commitment and will record a liability for estimated minimum commitment fees if we believe that we will not be able to reasonably meet the minimum purchase commitment. We believe that minimum commitment fees that we may pay, if any, will not have a material impact to our financial position and operating results.

Legal proceedings

In February 2020, we received a Paragraph IV certification notice letter (the “IMVEXXY Notice Letter”) regarding an Abbreviated New Drug Application (“ANDA”) submitted to FDA by Teva Pharmaceuticals USA, Inc. (“Teva”). The ANDA seeks approval from FDA to commercially manufacture, use, or sell a generic version of the 4 mcg and 10 mcg doses of IMVEXXY. In the IMVEXXY Notice Letter, Teva alleges that TherapeuticsMD patents listed in FDA’s Orange Book that claim compositions and methods of IMVEXXY (the “IMVEXXY Patents”), are invalid, unenforceable, and/or will not be infringed by Teva’s commercial manufacture, use, or sale of its proposed generic drug product. The IMVEXXY Patents identified in the IMVEXXY Notice Letter expire in 2032 or 2033. In April 2020, we filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva’s ANDA filing with the FDA. We are seeking, among other relief, an order that the effective date of any FDA approval of Teva’s ANDA would be a date no earlier than the expiration of the IMVEXXY Patents and equitable relief enjoining Teva from infringing the IMVEXXY Patents. Teva has filed its answer and counterclaim to the complaint, alleging that the IMVEXXY Patents are invalid and not infringed. In July 2021, following a proposal by Teva, the District Court entered an order temporarily staying all proceedings in the IMVEXXY litigation, which order was filed under seal. In September 2021, the District Court made available a public version of the

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order following the parties’ agreement to a consent motion to redact information Teva contended was confidential. The order provides that the statutory stay that prevents FDA from granting final approval of the ANDA for 30 months from the date of the Notice Letter will be extended for the number of days that the stay of the IMVEXXY litigation is in place. The length of the stay of the IMVEXXY litigation is dependent on further action by Teva.

In March 2020, we received a Paragraph IV certification notice letter (the “BIJUVA Notice Letter”) regarding an ANDA submitted to FDA by Amneal Pharmaceuticals (“Amneal”). In April 2020, we filed a complaint for patent infringement against Amneal in the United States District Court for the District of New Jersey arising from Amneal’s ANDA filing with FDA. In December 2021, we entered into a settlement agreement (the “Settlement Agreement”) with Amneal Pharmaceuticals, Inc., Amneal Pharmaceuticals, LLC and Amneal Pharmaceuticals of New York LLC (collectively “Amneal”) to resolve the litigation over our patents listed in FDA’s Orange Book that claim compositions and methods of BIJUVA (the “BIJUVA Patents”). Under the terms of the Settlement Agreement, the parties filed a consent judgment with the U.S. District Court for the District of New Jersey that enjoins Amneal from marketing a generic version of BIJUVA (1 mg estradiol and 100 mg progesterone) before the expiration of the patents-in-suit, except as provided in the Settlement Agreement, and the Company granted Amneal a non-exclusive, non-transferable, royalty-free license to commercialize Amneal’s generic formulation of BIJUVA in the U.S. commencing in May 2032 (180days before the current expiration date in November 2032 for the last to expire of our BIJUVA Patents), or earlier under certain circumstances customary for settlement agreements of this nature.

As of December 31, 2021, for the IMVEXXY paragraph IV legal proceeding, we have incurred and recorded legal costs amounting to $2.3 million in prepaid expenses and other current assets since we believe that we will successfully prevail in this legal proceeding. Upon the successful conclusion of the legal proceeding, the related capitalized legal costs will be reclassified to patents, in license rights and other intangible assets, net, in the accompanying consolidated balance sheets, and such costs will be amortized over the remaining useful of the patent. If we are unsuccessful in this legal proceeding, then the related capitalized legal costs for this legal preceding and any unamortized IMVEXXY patent costs that were previously capitalized will be immediately expensed in the period in which we become aware of unsuccessful legal proceeding.

From time to time, we are involved in other litigations and proceedings in the ordinary course of business. We are currently not involved in any other litigations and proceedings that we believe would have a material effect on our consolidated financial condition, results of operations, or cash flows.

Off-balance sheet arrangements

As of December 31, 2021, 2020 and 2019, we had no off-balance sheet arrangements that have had or are reasonably likely to have current or future effects on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Employment agreements

We have entered into employment agreements with certain of our executives that provide for compensation and certain other benefits. Under certain circumstances, including a change in control, some of these agreements provide for severance or other payments, if those circumstances occur during the term of the employment agreement.

In September 2021, our former Executive Vice President of Operations (“EVP of Operations”) and us mutually agreed that the EVP of Operations would separate from the company. The separation was for “Good Reason” under the employment agreement of the EVP of Operations; accordingly, he received the separation benefits provided therein. Then, in December 2021, our Board of Directors (the “Board”) appointed our current Chief Executive Officer (“CEO”). Our former CEO’s separation as CEO was a termination without “Cause,” as defined in his employment agreement. Accordingly, our former CEO received the separation benefits provided therein. Additionally, in 2021, three other senior executives separated from the Company, and they received separation benefits provided by their respective employment agreements.In the aggregate, for 2021, we recorded executive officer severance expenses of $12.4 million, of which $8.0 million was related to share-based compensation recorded in connection with accelerated vesting of certain share-based payment awards for the former senior executives.

Employee benefit plan

We maintain a voluntary defined contribution 401(k) plan covering all eligible employees as defined in the plan documents. The plan provides for discretionary matching contribution, which is equal to up to four percent of each eligible contributing participant’s elective deferral not to exceed two thousand per year. Employees who elect to participate in the plan are generally fully vested in any existing

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matching contribution after five years of service with the Company. Contributions by the Company under the plan amounted to $0.6 million for 2021, and $0.5 million for each of 2020 and 2019.

10. Stockholders’ deficit

Common stock

In March 2021, we entered into an at-the-market equity offering program (the “2021 ATM Program”) relating to shares of our common stock. The 2021 ATM Program permits us to offer and sell shares of our common stock having an aggregate offering price of up to $100.0 million from time to time through or to the sales agent under the 2021 ATM Program. Sales of our common stock may be made from time to time in at-the-market offerings as defined in Rule 415 of the Securities Act, including by means of ordinary broker’s transactions on The Nasdaq Stock Market LLC (“Nasdaq”) or otherwise at market prices prevailing at the time of sale, at prices related to prevailing market prices, or as otherwise agreed to with the sales agent. The sales agent will be entitled to compensation at a fixed commission rate of 3.0% of the aggregate gross sales price per share sold. The sales agent is not required to sell any specific number or dollar amounts of securities but will act as sales agent and use commercially reasonable efforts to sell on our behalf all the shares of common stock requested to be sold by us, consistent with its normal trading and sales practices, on mutually agreed terms between us and the sales agent. Through December 31, 2021, we have sold a total of 33,705,315 shares of our common stock under the 2021 ATM Program at an average sale price of $1.21 per share and we received estimated net proceeds of $39.4 million, after deducting discounts and commissions to the sales agent and estimated offering expenses. Subsequently, through the date of this 2021 10-K Report, we have not sold any additional shares of our common stock under the 2021 ATM Program. Future sales, if any, under the 2021 ATM Program will depend on a variety of factors, including among others, market conditions, the trading price of our common stock, determinations by us of the appropriate sources of funding, and potential uses of funding available to us.

TXMD US Equity

TXMD · 10-K · period ended 2021-12-31

Item 7.Management’s discussion and analysis of financial condition and results of operations

Item 7A. Quantitative and qualitative disclosures about market risk

Item 8. Financial statements and supplementary data

Item 9. Change in and disagreements with accountants on accounting and financial disclosure

Item 9A. Controls and procedures

Item 9B.Other information

Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections

Item 10. Directors, executive officers, and corporate governance

Item 11. Executive compensation

Item 12. Security ownership of certain beneficial owners and management and related stockholder matters

Item 13. Certain relationships and related transactions, and director independence

Item 14. Principal accountant fees and services

Item 15. Exhibits and financial statement schedules

Item 16.Form 10-K summary

TXMD US Equity☆

TXMD · 10-K · period ended 2021-12-31

Item 7.Management’s discussion and analysis of financial condition and results of operations

Item 7A. Quantitative and qualitative disclosures about market risk

Item 8. Financial statements and supplementary data

Item 9. Change in and disagreements with accountants on accounting and financial disclosure

Item 9A. Controls and procedures

Item 9B.Other information

Item 9C. Disclosure regarding foreign jurisdictions that prevent inspections

Item 10. Directors, executive officers, and corporate governance

Item 11. Executive compensation

Item 12. Security ownership of certain beneficial owners and management and related stockholder matters

Item 13. Certain relationships and related transactions, and director independence

Item 14. Principal accountant fees and services

Item 15. Exhibits and financial statement schedules

Item 16.Form 10-K summary

TXMD US Equity