QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification No.) |
|
| |
(Address of principal executive offices) |
(Zip Code) |
Title of each class |
Trading Symbol |
Name of each exchange on which registered | ||
Large Accelerated Filer | ☐ | Accelerated filer | ☐ | |||
☒ | Smaller reporting company | |||||
Emerging growth company |
Page |
||||||
Item. 1. |
Financial Statements (Unaudited) | |||||
Consolidated Balance Sheets | 1 | |||||
Consolidated Statements of Operations | 2 | |||||
Consolidated Statements of Stockholders’ Equity (Deficit) | 3 | |||||
Consolidated Statements of Cash Flows | 4 | |||||
Notes to Unaudited Consolidated Financial Statements | 5 | |||||
Item 2. |
Management’s Discussion and Analysis of Financial Condition and Results of Operations | 15 | ||||
Item 3. |
Quantitative and Qualitative Disclosures about Market Risk | 23 | ||||
Item 4. |
Controls and Procedures | 23 | ||||
| ||||||
Item 1. |
Legal Proceedings | 24 | ||||
Item 1A. |
Risk Factors | 24 | ||||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 24 | ||||
Item 3. |
Defaults Upon Senior Securities | 24 | ||||
Item 4. |
Mine Safety Disclosures | 24 | ||||
Item 5. |
Other Information | 24 | ||||
Item 6. |
Exhibits | 24 | ||||
26 |
March 31, 2021 |
December 2020 |
|||||||
(Unaudited) | ||||||||
Assets: |
||||||||
Current assets: |
||||||||
Cash |
$ | $ | ||||||
Accounts receivable, net of allowance of credit losses of $ |
||||||||
Inventory |
||||||||
Prepaid and other current assets |
||||||||
Total current assets |
||||||||
Fixed assets, net |
||||||||
License rights and other intangible assets, net |
||||||||
Right of use assets |
||||||||
Other non-current assets |
||||||||
Total assets |
$ | $ | ||||||
Liabilities and stockholders’ equity (deficit): |
||||||||
Current liabilities: |
||||||||
Current maturities of long-term debt |
$ | $ | — | |||||
Accounts payable |
||||||||
Accrued expenses and other current liabilities |
||||||||
Total current liabilities |
||||||||
Long-term debt, net |
||||||||
Operating lease liabilities |
||||||||
Total liabilities |
||||||||
Commitments and contingencies (Note 9) |
||||||||
Stockholders’ equity (deficit): |
||||||||
Preferred stock, par value $ |
||||||||
Common stock, par value $ and outstanding as of March 31, 2021 and December 31, 2020, respectively |
||||||||
Additional paid-in capital |
||||||||
Accumulated deficit |
( |
) | ( |
) | ||||
Total stockholders’ deficit |
( |
) | ( |
) | ||||
Total liabilities and stockholders’ equity (deficit) |
$ | $ | ||||||
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
Product revenue, net |
$ | $ | ||||||
License revenue |
— | |||||||
|
|
|
|
|||||
Total revenue, net |
||||||||
Cost of goods sold |
||||||||
|
|
|
|
|||||
Gross profit |
||||||||
|
|
|
|
|||||
Operating expenses: |
||||||||
Selling, general and administrative |
||||||||
Research and development |
||||||||
|
|
|
|
|||||
Total operating expenses |
||||||||
|
|
|
|
|||||
Loss from operations |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Other (expense) income: |
||||||||
Interest expense and other financing costs |
( |
) | ( |
) | ||||
Other income, net |
||||||||
|
|
|
|
|||||
Other (expense), net |
( |
) | ( |
) | ||||
|
|
|
|
|||||
Loss before income taxes |
( |
) | ( |
) | ||||
Provision for income taxes |
||||||||
|
|
|
|
|||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
|
|
|
|
|||||
Loss per common share, basic and diluted |
$ | ( |
$ | ( |
||||
|
|
|
|
|||||
Weighted average common shares, basic and diluted |
||||||||
|
|
|
|
Common Stock |
Additional Paid in Capital |
Accumulated Deficit |
||||||||||||||||||
Shares |
Amount |
Total |
||||||||||||||||||
Balance, January 1, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
Shares issued for sale of common stock, net of cost |
— | |||||||||||||||||||
Shares issued for exercise of warrants |
— | — | ||||||||||||||||||
Shares issued for vested restricted stock units |
— | — | — | — | ||||||||||||||||
Share-based compensation |
— | — | — | |||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, March 31, 2021 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, January 1, 2020 |
$ | $ | $ | ( |
) | $ | ||||||||||||||
Shares issued for exercise of options |
— | — | ||||||||||||||||||
Shares issued for vested restricted stock units |
— | — | — | — | ||||||||||||||||
Share-based compensation |
— | — | — | |||||||||||||||||
Net loss |
— | — | — | ( |
) | ( |
) | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Balance, March 31, 2020 |
$ | $ | $ | ( |
) | $ | ( |
) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
Cash flows from operating activities: |
||||||||
Net loss |
$ | ( |
) | $ | ( |
) | ||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||
Depreciation and amortization |
||||||||
Charges (credits) to provision for doubtful accounts |
( |
) | ||||||
Inventory charge |
||||||||
Debt financing fees |
||||||||
Non-cash operating lease expense |
||||||||
Share-based compensation |
||||||||
Changes in operating assets and liabilities |
||||||||
Accounts receivable |
( |
) | ||||||
Inventory |
( |
) | ||||||
Prepaid and other current assets |
( |
) | ||||||
Accounts payable |
( |
) | ||||||
Accrued expenses and other current liabilities |
( |
) | ||||||
Total adjustments |
||||||||
Net cash used in operating activities |
( |
) | ( |
) | ||||
Cash flows from investing activities: |
||||||||
Payment of patent related costs |
( |
) | ( |
) | ||||
Purchase of fixed assets |
( |
) | ( |
) | ||||
Net cash used in investing activities |
( |
) | ( |
) | ||||
Cash flows from financing activities: |
||||||||
Proceeds from sale of common stock, net of costs |
— | |||||||
Proceeds from exercise of options and warrants |
||||||||
Repayments of debt |
( |
) | — | |||||
Borrowings of debt |
— | |||||||
Payment of debt financing fees |
( |
) | ( |
) | ||||
Net cash provided by financing activities |
||||||||
Net increase in cash |
||||||||
Cash, beginning of period |
||||||||
Cash, end of period |
$ | $ | ||||||
Supplemental disclosure of cash flow information: |
||||||||
Interest paid |
$ | $ | ||||||
1. |
Basis of presentation and summary of significant accounting policies |
2. |
Accounts receivable |
Total | ||||
Balance as of January 1, 2021 |
$ | |||
Charges to provision for credit losses |
||||
Write-off of uncollectible receivables |
( |
) | ||
Balance as of March 31, 2021 |
$ | |||
3. |
Inventory |
March 31, 2021 |
December 31, 2020 |
|||||||
Raw materials |
$ | $ | ||||||
Work in process |
||||||||
Finished products |
||||||||
Inventory |
$ | $ | ||||||
4. |
Prepaid and other current assets |
March 31, 2021 |
December 31, 2020 |
|||||||
Insurance |
$ | $ | ||||||
Paragraph IV legal proceeding costs |
— | |||||||
Other |
||||||||
Prepaid and other current assets |
$ | $ | ||||||
5. |
Fixed assets, net |
March 31, 2021 |
December 31, 2020 |
|||||||
Furniture and fixtures |
$ | $ | ||||||
Computer and office equipment |
||||||||
Computer software |
||||||||
Leasehold improvements |
||||||||
Fixed assets |
||||||||
Less: accumulated depreciation and amortization |
||||||||
Fixed assets, net |
$ | $ | ||||||
6. |
License rights and other intangible assets, net |
March 31, 2021 |
December 31, 2020 |
|||||||||||||||||||||||
Gross Carrying Amount |
Accumulated Amortization |
Net |
Gross Carrying Amount |
Accumulated Amortization |
Net |
|||||||||||||||||||
Intangible assets subject to amortization |
||||||||||||||||||||||||
License rights agreement |
$ | $ | $ | $ | $ | $ | ||||||||||||||||||
Hormone therapy drug patents |
||||||||||||||||||||||||
Hormone therapy drug patents applied and pending approval |
— | — | ||||||||||||||||||||||
Intangible assets not subject to amortization Trademarks/trade name rights |
— | — | ||||||||||||||||||||||
$ | $ | $ | $ | $ | $ | |||||||||||||||||||
7. |
Accrued expenses and other current liabilities |
March 31, 2021 |
December 31, 2020 |
|||||||
Payroll and related costs |
$ | $ | ||||||
Rebates |
||||||||
Sales returns and coupons |
||||||||
Wholesale distributor fees |
||||||||
Professional fees |
||||||||
Other accrued expenses and current liabilities |
||||||||
Accrued expenses and other current liabilities |
$ | $ | ||||||
8. |
Debt |
March 2021 |
December 31, 2020 |
|||||||
Financing Agreement |
$ | $ | ||||||
Less: deferred financing fees |
||||||||
|
|
|
|
|||||
Debt, net |
||||||||
Current maturities of long-term debt |
— | |||||||
|
|
|
|
|||||
Long-term debt |
$ | $ | ||||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
Interest expense |
$ | $ | ||||||
Interest prepayment fees |
— | |||||||
Financing fees amortization |
||||||||
|
|
|
|
|||||
Interest expense and other financing costs |
$ | $ | ||||||
|
|
|
|
Year Ended December 31, |
||||
2021 (9 months) |
$ | |||
2022 |
||||
2023 |
||||
2024 |
||||
|
|
|||
$ | ||||
|
|
9. |
Commitments and contingencies |
10. |
Stockholders’ equity (deficit) |
11. |
Revenue |
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
ANNOVERA |
$ | $ | ||||||
IMVEXXY |
||||||||
BIJUVA |
||||||||
Prescription vitamin |
||||||||
|
|
|
|
|||||
Product revenue, net |
||||||||
License revenue |
||||||||
|
|
|
|
|||||
Total revenue, net |
$ | $ | ||||||
|
|
|
|
12. |
Operating expenses |
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
Compensation and employee benefits |
$ |
$ |
||||||
Selling and marketing |
||||||||
General and administrative |
||||||||
Research and development |
||||||||
|
|
|
|
|||||
Total operating expenses |
$ |
$ |
||||||
|
|
|
|
13. |
Income taxes |
14. |
Loss per common share |
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Numerator: |
||||||||
Net loss |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
|||||
Denominator: |
||||||||
Weighted average common shares for |
||||||||
basic loss per common share |
||||||||
Effect of dilutive securities |
||||||||
|
|
|
|
|||||
Weighted average common shares for |
||||||||
diluted loss per common share |
||||||||
|
|
|
|
|||||
Loss per common share, basic and diluted |
$ |
( |
) |
$ |
( |
) | ||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 |
2020 |
|||||||
Stock options |
||||||||
RSUs |
||||||||
PSUs |
||||||||
Warrants |
||||||||
|
|
|
|
|||||
|
|
|
|
15. |
Related parties |
16. |
Business concentrations |
Three Months Ended March 31, | ||||
2021 |
2020 | |||
Customer A |
||||
Customer B |
||||
Customer C |
||||
Customer D |
* |
* |
Less than |
|
March 31, 2021 |
December 31, 2020 | ||
Customer A |
||||
Customer B |
||||
Customer C |
||||
Customer D |
* |
* |
Balance was less than |
Three Months Ended March 31, | ||||
2021 |
2020 | |||
Catalent |
||||
Vendor A |
||||
Vendor B |
||||
Vendor C |
* | |||
|
|
|
|
|
* |
Less than |
|
March 31, 2021 |
December 31, 2020 | ||
Vendor D |
* | |||
Vendor E |
* | |||
Vendor F |
* | |||
Vendor G |
* |
* |
Balance was less than |
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
ANNOVERA |
$ | 8,750 | $ | 2,273 | ||||
IMVEXXY |
7,012 | 6,392 | ||||||
BIJUVA |
2,445 | 1,112 | ||||||
Prescription vitamin |
1,425 | 2,474 | ||||||
|
|
|
|
|||||
Product revenue, net |
19,632 | 12,251 | ||||||
License revenue |
234 | — | ||||||
|
|
|
|
|||||
Total revenue, net |
19,866 | 12,251 | ||||||
Cost of goods sold |
4,687 | 2,715 | ||||||
|
|
|
|
|||||
Gross profit |
$ | 15,179 | $ | 9,536 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
Compensation and employee benefits |
$ | 19,891 | $ | 18,018 | ||||
Selling and marketing |
13,865 | 29,742 | ||||||
General and administrative |
8,651 | 9,429 | ||||||
Research and development |
2,050 | 3,269 | ||||||
|
|
|
|
|||||
Total operating expenses |
$ | 44,457 | $ | 60,458 | ||||
|
|
|
|
Three Months Ended March 31, |
||||||||
2021 | 2020 | |||||||
Net cash used in operating activities |
$ | (38,380 | ) | $ | (39,111 | ) | ||
Net cash used in investing activities |
$ | (438 | ) | $ | (443 | ) | ||
Net cash provided by financing activities |
$ | 95,949 | $ | 48,822 |
Item 1. |
Legal Proceedings |
Item 1A. |
Risk Factors |
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds |
Item 3. |
Defaults Upon Senior Securities |
Item 4. |
Mine Safety Disclosures |
Item 5. |
Other Information |
Item 6. |
Exhibits |
Exhibit No. |
Description | |
10.4 | ||
10.5 | ||
10.6 | Controlled Equity OfferingSM Sales Agreement, dated March 3, 2021, by and between TherapeuticsMD, Inc. and Cantor Fitzgerald & Co.(6) | |
31.1* | ||
31.2* | Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) | |
32.1** | Section 1350 Certification of Chief Executive Officer | |
32.2** | Section 1350 Certification of Chief Executive Officer | |
101* | Inline XBRL Document Set for the condensed consolidated financial statements and accompanying notes in Part I, Item 1, “Financial Statements” of this Quarterly Report on Form 10-Q | |
104* | Inline XBRL for the cover page of this Quarterly Report on Form 10-Q, included in the Exhibit 101 Inline XBRL Document Set |
* | Filed herewith. |
** | Furnished herewith. |
(1) |
Filed as Exhibit 10.24 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 001-00100). |
(2) |
Filed as Exhibit 10.12 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 001-00100). |
(3) |
Filed as Exhibit 10.25 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 001-00100). |
(4) |
Filed as Exhibit 10.14 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 001-00100). |
(5) |
Filed as Exhibit 10.16 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2020 filed with the Securities and Exchange Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 001-00100). |
(6) |
Filed as Exhibit 1.2 to the Company’s Registration Statement on Form S-3 filed with the Securities and Exchange Commission on March 4, 2021 and incorporated herein by reference (SEC File No. 333-253851). |
Date: May 6, 2021 | TherapeuticsMD, Inc. | |||
/s/ Robert G. Finizio | ||||
Robert G. Finizio Chief Executive Officer | ||||
/s/ James C. D’Arecca | ||||
James C. D’Arecca Chief Financial Officer |