TXMD 10-K & 10-Q changes, risk factors and insider trading

We have incurred net losses in the past and theremay are no assurances we willnot be able to maintain or increase profitability in the future.

In the past, we have incurred recurring net losses, including net losses of $2.2$569 millionthousand and $10.3$2.2 million for 20242025 and 2023,2024, respectively. In 2022, we recognized net income of $112.0 million due to the net proceeds from the Mayne Transaction and divestiture of our former subsidiary vitaCare Prescription Services, Inc. (“vitaCare”) exceeding our costs and expenses. We utilized most of the net proceeds to repay borrowings and redeem our preferred stock. As of December 31, 2024,2025, our stockholders’ equity was $27.4$26.9 million. We have funded our operations to date primarily through revenue from licensed royalties, public offerings of our common stock and private placements of equity and debt securities and the transactions with Mayne Pharma. We may incur substantial additional losses over the next few years because of costs associated with the wind down of our historical business as well as the ongoing costs of being a public company. As a result, we may not maintain or increase profitability. If we continue to to incur substantial losses, because the royalties of our products are insufficient or otherwise, and are unable to secure additional financing, financing, we could be forced to discontinue or curtail our business operations, merge, consolidate, or combine with a company with greater financial financial resources in a transaction that might be unfavorable to us.

Our current liquidity position raises substantial doubt about our ability to continue as a going concern and Berkowitz Pollack Brant, Advisors + CPAs, LLP, our independent registered public accounting firm for the fiscal year ended December 31, 2024, has included an explanatory paragraph in their opinion that accompanies our audited consolidated financial statements as of and for the year ended December 31, 2024, indicating such. If Mayne Pharma’s sales of IMVEXXY, BIJUVA, or ANNOVERA grow more slowly than expected or decline, includingif as a result of Mayne Pharma Group’s pending sale to Cosette , if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than our current estimates, if we are unsuccessful with future financings or if the supply chains related to the third-party contract manufacturers are worse than we anticipate, our existing cash reserves may be insufficient to satisfy our liquidity requirements. Our ability to continue as a going concern may depend on our ability to obtain additional capital as well as our ability to minimize operational expenses, including any potential net working capital adjustments relating to the Mayne Transaction.capital. As substantial doubt about our ability to continue as a going concern exists, our ability to finance our operations through the sale and issuance of debt or equity securities or through bank or other financing could be impaired. Our ability to obtain financing on reasonable terms is subject to factors beyond the Company’s control, including general economic, political, and financial market conditions. The capital markets have in the past experienced, are currently experiencing, and may in the future experience, periods of upheaval that could impact the availability and cost of equity and debt financing and there can be no assurance that such financing willmay not be available on terms commercially acceptable to the Company, or at all. If we sellare unable to improve our liquidity position, we may be required to significantly reduce operating expenses, seek additional equity securities, convertible securities or otherdebt securitiesfinancing current investorsthat may be materially diluteddilutive, bysell subsequentassets, sales.enter into strategic transactions or pursue other alternatives, any of which may be unfavorable to our stockholders. If we are unable to improve ourimplement liquiditysuch position,measures, we may not be able to continue as a going concern.

Management transition is often difficult and inherently causes some loss of institutional knowledge, which could negatively affect the results of operations and financial condition. Our ability to execute our business strategies may be adversely affected by the uncertainty associated with these transitions and the time and attention of the board and management dedicated to management transitions could disrupt our business. Further, we cannot guarantee that we will not face similar turnover in the future. Although we generally enter into employment agreements with our executives, our executive officers may terminate their employment relationship with us at any time, and we cannotmay ensure that we willnot be able to retain the services of any of them. Our senior management’s knowledge of our business and industry could be difficult to replace, and management turnover could negatively affect our business, growth, financial conditions, results of operations and cash flows.

The ability of our licensees to commercialize ANNOVERA depends on coverage and reimbursement levels set by government healthcare programs and third-party private payers. Despite our licenseeslicensees’ coverage with commercial payers, there is no guarantee that our licensees will be able to retain ours or their agreements or obtain new agreements, or that they will be able to negotiate favorable reimbursement or pricing terms for our products in the future. Healthcare reform implementation, additional legislation or regulations, and other changes in government policy or regulation may affect our licensees’ reimbursement or impose additional coverage limitations and/or cost-sharing obligations on patients, any of which could have an adverse effect on coverage and reimbursement of our products, and our business, financial condition, results of operations, and prospects could be harmed.

We sublease partour of ourformer headquarters to third parties and intend to sublease the remainder to one or more third parties. In the event that we are unable to sublease our properties on favorable terms, or at all, or if we are able to sublease our properties but our subtenants fail to make lease payments to us or otherwise default on their obligations to us, we could incur unanticipated payment obligations. Our lease agreements may also expose us to liabilities, such as rent escalations, maintenance obligations, termination rights, or indemnification claims, that may negatively affect our operations and profitability.

We are currently and may in the future be a party to license agreements of importance to our business and to our products. Disputes have and may continue to arise between us and any of these counterparties regarding intellectual property subject to and each parties’ obligations under such agreements, including:

The majority ofAll our cash is held in accounts at U.S. banking institutions that we believe are of high quality. Cash held in depository accounts may exceed the $250 thousand Federal Deposit Insurance Corporation (“FDIC”) insurance limits. If such banking institutions were to fail, such as Silicon Valley Bank when the FDIC took control in March 2023, we could lose all or a portion of those amounts held in excess of such insurance limitations. In the future, our access to our cash in amounts adequate to finance our operations could be significantly impaired by the financial institutions with which we have arrangements directly facing liquidity constraints or failures. Any material loss that we may experience in the future could have a material adverse effect on our financial condition and could materially impact our ability to pay our operational expenses or make other payments.

There have been significant efforts by government officials and legislators to implement measureschanges in healthcare systems to regulate prices or payment for pharmaceutical products, including legislation on drug importation, which could adversely affect our royalty revenues. Federal and state laws have put considerable pressure on the pricing of pharmaceutical products, products.and additional reforms may further constrain pricing, reimbursement and access.

We are unable to predict the future course of federal or state healthcare legislation in the United States directed at broadening the availability of healthcare and containing or lowering the cost of healthcare. The PatientACA, Protectionthe IRA and Affordable Care Act (“ACA”) and any further changes in the law or regulatory frameworkframework, including additional drug pricing reform measures, could also have an adverse effect on our business, financial condition, and results of operations.

Further, if a federal government shutdown were to occur for a prolonged period, federal government payment obligations, including its obligations under Medicaid and Medicare, may be delayed. Similarly, if state government shutdowns were to occur, state payment obligations may be delayed. If the federal or state governments fail to make payments under these programs on a timely basis, the ability of our licensees to sell our products to government payers may be limited, thereby reducing anticipated revenuesnet sales and profitability.royalty revenues.

Recent governmentGovernment enforcementauthorities hascontinue targetedto pursue actions against pharmaceutical companies for violations of fraud, abuse and other laws.

We cannot ensure that oursOurs or our licensee’s compliance controls, policies, and procedures may willnot be sufficient to protect against acts of ours or their employees, business partners, licenses, or vendors that may violate federal or state fraud and abuse laws or other applicable requirements.

Although many of the ingredients in our dietary supplement products are vitamins, minerals, and other substances for which there is a long history of human consumption, they also contain innovative ingredients or combinations of ingredients. Furthermore, our hormone therapy or patient-controlled, long-acting contraceptive pharmaceutical products have been approved by the FDA based on its assessment of the safety and efficacy of these products. While we believe that all of these products and the combinations of ingredients in them are safe when taken as directed, the products could have certain undesirable side effects if not taken as directed or if taken by a consumer who has certain medical conditions. In addition, these products may not have the effect intended if they are not taken in accordance with certain instructions, which include certain dietary or other labeling restrictions. Furthermore, there can be no assurance that any of the products, even when used as directed, will may not have the effects intended or will not have harmful side effects in an unforeseen way or on an unforeseen cohort. If any of our products are shown to be harmful or generate negative publicity from perceived harmful effects, our business, financial condition, results of operations, and prospects could be harmed significantly.

Development and awareness of our products will depend largely upon our licensee’s success in increasing the consumer base for our products. The pharmaceutical and dietary supplement industries are intensely competitive and subject to rapid and significant technological change. Our products face intense competition, including from major multinational pharmaceutical and dietary supplement companies, established biotechnology companies, specialty pharmaceutical, and generic drug companies. Many of these companies have greater financial and other resources, such as larger R&D staffs and more experienced marketing and manufacturing organizations. As a result, these companies may obtain regulatory approval more rapidly and may be more effective in selling and marketing their products. They also may invest heavily to accelerate discovery and development of novel compounds or to in-license novel compounds that could make the products that we sell or develop obsolete. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large, established companies. If our licensees are unable to economically promote or maintain our brand, our business, results of operations and financial condition could be severely harmed. In addition, loss Loss of exclusivity may provide opportunity for competing products, particularly generics, to siphon off our consumers. In addition, under the Mayne License Agreement, the royalty rate is subject to a 2% reduction upon the earlier to occur of (i) the expiration or revocation of the last valid claim covering a Licensed Product, and (ii) a generic product launch (a “LOE”).

In February 2020, we received a Paragraph IV certification notice letter (the “IMVEXXY Notice Letter”) regarding an ANDA submitted to the FDA by Teva Pharmaceuticals USA, Inc. (“Teva”). seeking approval to market a generic version of IMVEXXY. See “If our efforts or the efforts of our licensees to protect the proprietary nature of the intellectual property covering our hormone therapy pharmaceutical products and other products are not adequate, we may not be able to compete effectively in our market” below for more information regarding the IMVEXXY Notice Letter. Additionally, onIn March 2020, we received a Paragraph IV certification notice letter (the “BIJUVA Notice Letter”) regarding an ANDA submitted to FDA by Amneal Pharmaceuticals. See Item 1. Business – Pharmaceutical Regulation – Regulatory Exclusivity for more information on the BIJUVA Notice Letter.

In the IMVEXXY Notice Letter, Teva alleges that IMVEXXY Patents listed in the FDA’s Orange Book that claim compositions and methods of IMVEXXY 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 September 2021, the District Court made available a public version of the 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. In November 2024, the court lifted the stay. As of December 31, 2025, the litigation remains ongoing and has progressed to claim construction, which the courts determine the meaning and scope of the asserted patent claims that will govern subsequent infringement and validity analysis.

We must rely on Mayne Pharma to file lawsuits or take other actions to protect or enforce our patents and therethey canmay be no assurance they willnot take such actions or be successful.

Competitors may infringe our patents or the patents of the ANNOVERA licensor. Following the Mayne Transaction, we no longer have the express right to enforce our intellectual property. To counter infringement or unauthorized use, we must rely on Mayne Pharma to file infringement claims, including with respect to Teva’s IMVEXXY Notice Letter. There can be no assurance that Mayne Pharma willmay not have sufficient financial or other resources to file and pursue such infringement claims in the United States, which typically last for years before they are concluded. In addition, the Mayne Lawsuits could adversely affect our working relationship and may reduce Mayne Pharma’s willingness or incentive to aggressively pursue infringement claims, to devote sufficient financial and managerial resources to patent enforcement and to coordinate litigation strategy with us. If Mayne Pharma were to decline to pursue, delay, settle on unfavorable terms, or otherwise inadequately prosecute infringement claims, our patent protection and the associated royalty revenues could be materially adversely affected. The legal systems of certain countries, particularly certain developing countries, do not favor the enforcement of patents and other intellectual property protection, particularly those relating to pharmaceuticals, which could make it difficult for us to stop the infringement of our patents or marketing of competing products in violation of our proprietary rights generally.

Our common stock is currently listed on the Nasdaq Global Select Market. We have no current plans to delist our common stock from Nasdaq. However, following the transaction with Mayne Pharma, when we changed our business to become a royalty company, we may be treated as a “public shell” company under the Nasdaq rules andrules, the Securities Act of 1933, as amended,amended (the “Securities Act”), or the Securities Act, or the Exchange Act.Act of 1934, as amended (the “Exchange Act”). Although Nasdaq evaluates whether a listed company is a public shell company based on a facts and circumstances determination, a Nasdaq-listed company with no or nominal operations and either no or nominal assets, assets consisting solely of cash and cash equivalents, or assets consisting of any amount of cash and cash equivalents and nominal other assets is generally considered to be a public shell company. Listed companies determined to be public shell companies by Nasdaq may be subject to delisting proceedings or additional and more stringent listing criteria. Additionally, we may be subject to delisting proceedings as a result of our failure to maintain compliance with additional continued listing requirements of Nasdaq.

As of December 31, 2024,2025, Rubric Capital Management LP (“Rubric”) and its affiliates beneficially owned approximately 25.6%25.5% of our common stock. Rubric may be able to largely determine the outcome of all matters requiring stockholder approval. For example, Rubric may be able to largely control elections of directors, amendments of our organizational documents, or approval of any merger, sale of assets, or other major corporate transaction.transactions. This may prevent or discourage unsolicited acquisition proposals or offers for our common stock that you may feel are in your best interest as one of our stockholders.

European Union member states and other foreign jurisdictions, including Switzerland, have adopted data protection laws and regulations which impose significant compliance obligations. Moreover, the collection and use of personal health data in the European Union,Union whichis was formerly governed by the provisions of the European Union Data Protection Directive, was replaced with the European Union General Data Protection Regulation the (“GDPR”) in May 2018. The GDPR, , which is wide-ranging in scope, imposes severalwide-ranging requirements relating toto, among other things, the consent of the individuals to whom the personal data relates, the information provided to the individuals, the security and confidentiality of the personal data, data breach notification and the use of third-party processors in connection with the processing of personal data. The GDPR also imposes strict rules on the transfer of personal data out of the European Union to the U.S., provides an enforcement authority and imposes large penalties for noncompliance, including the potential for fines of up to €20 million or 4% of the annual global revenues of the non-compliant company, whichever is greater. The implementation of the GDPR has increased our responsibility and liability in relation to personal data that we process, and we may in the future be required to put in place additional mechanisms to ensure compliance with the GDPR, which could divert management’s attention and increase our cost of doing business.

In July 2020, the Court of Justice of the European Union issued its long-awaited decision in the case Data Protection Commission v. Facebook Ireland, Schrems. The decision on this case invalidated the European Commission’s adequacy decision for the EU-U.S. Privacy Shield Framework, calling into question personal data transfers from the EU to the U.S. On October 7, 2022, President Biden introduced an Executive Order to facilitate a new Trans-Atlantic Data Privacy Framework (the “DPF”), and on July 10, 2023, the European Commission adopted its Final Implementing Decision granting the U.S. adequacy (Adequacy Decision) for EU-U.S. transfers of personal information for companies that self-certify to the DPF.Trans-Atlantic Data Privacy Framework (the “DPF”). While we have yet to determine the full impact of the DPF on our business, any transfers by us or our vendors or licensees of personal information subject to the GDPR may not comply with data protection law and may increase our exposure to the GDPR’s heightened sanctions for violations of its cross-border data transfer restrictions.

Each ofOur our employeesemployee and business partners isare responsible for the security of the information in our systems or under our control and to ensure that private and financial information is kept confidential. Should an employee or business partner not follow appropriate security measures, including those related to cyber threats or attacks or other tactics, as well as our privacy and security policies and procedures, the improper release of personal information, including PHI, or confidential business or financial information, or misappropriation of assets could result. The release of such information or misappropriation of assets could have an adverse effect on our business, financial condition, and results of operations.

We are exposed to the risk of employee fraud or other misconduct. Misconduct by employeesour employee could include intentional failures to comply with FDA regulations, to provide accurate information to the FDA, to comply with federal and state healthcare fraud and abuse laws and regulations, to report financial information or data accurately, or to disclose unauthorized activities to us. In particular, sales, marketing, and business arrangements in the healthcare industry are subject to extensive laws and regulations intended to prevent fraud, misconduct, kickbacks, self-dealing, and other abusive practices. These laws and regulations may restrict or prohibit a wide range of pricing, discounting, marketing and promotion, sales commission, customer incentive programs, and other business arrangements. We have adopted a Code of Conduct and Ethics, but it is not always possible to identify and deter employee misconduct, and the precautions we take to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with these laws or regulations. If any such actions are instituted against us or our licensees, and we are not successful in defending ourselves or asserting our rights, those actions could have a significant impact on our business, including the imposition of significant fines or other sanctions.

Our commercial success depends, in part, on our not infringing the patents and proprietary rights of other parties and not breaching any collaboration or other agreements we entered with regard to our technologies and products. We are aware of numerous third-party U.S. and non-U.S. issued patents and pending applications that exist in the technical areas of our pharmaceutical products, including compounds, formulations, treatment methods, and synthetic processes, which may be applied towards the synthesis of hormones, for example. Patent applications are confidential when filed and remain confidential until publication, approximately 18 months after initial filing, while some patent applications remain unpublished until issuance. As such, there may be other third-party patents and pending applications of which we are currently unaware with claims directed towards composition of matter, formulations, methods of manufacture, or methods for treatment related to the use or manufacture of our products or product candidates. Therefore, we cannot ever know with certainty the nature or existence of every third-party patent filing. We cannot provide assurances that our licensees or their partners will be free to manufacture or market our products as planned or that we or the ANNOVERA licensors’ and partners’ patents will not be opposed or litigated by third parties. If any third-party patent was held by a court of competent jurisdiction to cover aspects of our materials, formulations, methods of manufacture, or methods of treatment related to the use or manufacture of any of our products, the holders of any such patent may be able to block our ability to commercialize the applicable product unless we obtained a license or until such patent expires or is finally determined to be held invalid or unenforceable. We Theremay cannot be no assurances that we will be able to obtain a license to such patent on favorable terms or at all. Failure to obtain such license may have an adverse effect on our business.

Our stockholders may experience dilution upon future equity issuances, including convertible debt or equity securities we may issue in the future, the exercise of stock options to purchase common stock granted to our employees,employee, consultants and directors, including options to purchase common stock granted under our stock option and equity incentive plans or the issuance of common stock in settlement of previously issued awards under our stock option and equity incentive plans that may vest in the future.

Under the Mayne License Agreement, Mayne Pharma willagreed to pay us one-time milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma willagreed to pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80.0 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States. Mayne Pharma willagreed to pay us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below. Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

On the Closing Date, TherapeuticsMD and Mayne Pharma entered into Amendment No. 1 to the Mayne License Agreement (the “Mayne License Agreement Amendment”). Pursuant to the Mayne License Agreement Amendment, Mayne Pharma agreed to pay us approximately $1.0 million in prepaid royalties on the Closing Date. The prepaid royalties reduced the first four quarterly payments that would have otherwise been payable pursuant to the Mayne License Agreement by an amount equal to $257 thousand per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty payment was paid to us. We and Mayne Pharma settled the $1.5 million of consideration due to Mayne for the assumed obligations under a long-term services agreement, including our minimum payment obligations thereunder. As the parties agreed, during the second quarter of 2023, Mayne ParmaPharma held back our royalty payment of $0.6 million and we funded an additional $0.9 million in August 2023 to settle the original $1.5 million payable.

Selling, generalGeneral and administrative. Selling, generalGeneral and administrative administrative expenses for 20242025 were $4,744$6,852 thousand, aan decreaseincrease of $4,159$756 thousand, or 46.7%,12.4%, compared to the $8,903$6,096 thousand we had for 2023.2024. This decreaseincrease was primarily dueattributable to thehigher bonus expense and increased efficienciesinvestor realizedrelations yearcosts overin year and continued transition from a commercial business to a royalty-based business.2025.

Depreciation & amortization. Depreciation and amortization expense for 20242025 was $509$384 thousand, a decrease of $413$125 thousand, or 44.8%,24.6%, compared to the $922$509 thousand we had for 2023.2024. In the 2024 period, thisThis balance is entirely comprised of amortization of license rights and intangible assets.

Operating expenses. Total operating expenses for 20242025 were $6,521$7,412 thousand, a decrease of $3,304$461 thousand, or 33.6%,5.9%, compared to the $9,825$7,873 thousand we had for 2023.2024. ThisThe decrease was dueprimarily attributable to thelower impairment further optimizationcharges ofrecognized ourin business2025 throughcompared theto reduction2024, ofwhich was partially offset by higher bonus expense and increased costs and continued transition from a commercial business related to ainvestor royalty-based business.communications.

Loss from operations. For 2024,2025, we had a loss from operations of $4,760$4,390 thousand, a decrease in loss of $3,763$1,722 thousand, or 44.2%,28.2%, compared to loss from operations of $8,523$6,112 thousand for 2023.2024. This change reflects the increase in sales from licensed products and the increased efficiencies realized as a royalty-based business.

Benefit for income taxes. For 2025, no income tax benefits was recognized from continuing operations. In 2024, the weCompany recordedrecognized $31 thousand of income tax benefits from continuing operations. In 2023, the Company recognized $43 thousand of income tax benefits from continuing operations.

DiscontinuedNet Operations.loss from continuing operations. For 2024,2025, we had net income loss from discontinued continuing operations wasof $131$653 thousand, anor increase$0.06 per basic and diluted common share, a decrease in loss of $2,710$1,659 thousand, compared to net loss from discontinuedcontinuing operations of $2,579$2,312 thousandthousand, or $0.20 per basic and diluted common share, for 2023. 2024.

For additional information, see “Note 2 –2. Discontinued Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 20242025 10-K Report.Report for further details.

Pursuant to the Mayne License Agreement, Mayne Pharma willhas agreed to pay us one-time, milestone payments of each of (i) $5.0 million if aggregate net sales of all Products in the United States during a calendar year reach $100.0 million, (ii) $10.0 million if aggregate net sales of all Products in the United States during a calendar year reach $200.0 million and (iii) $15.0 million if aggregate net sales of all Products in the United States during a calendar year reach $300.0 million. Further, Mayne Pharma willhas agreed to pay us royalties on net sales of all Products in the United States at a royalty rate of 8.0% on the first $80 million in annual net sales and 7.5% on annual net sales above $80.0 million, subject to certain adjustments, for a period of 20 years following the Closing Date. The royalty rate will decrease to 2.0% on a Product-by-Product basis upon the earlier to occur of (i) the expiration or revocation of the last patent covering a Product and (ii) a generic version of a Product launching in the United States. Mayne Pharma willhas agreed to pay us minimum annual royalties of $3.0 million per year for 12 years, adjusted for inflation at an annual rate of 3%, subject to certain further adjustments, including as described below. Upon the expiry of the 20-year royalty term, the licenses granted to Mayne Pharma under the Mayne License Agreement will become a fully paid-up and royalty free license for the Licensed Products.

The initial draw downdraw-down occurred on June 29, 2023, consisting of a sale of 312,525 shares of Common Stock at a price per share equal to $3.6797. We received gross proceeds of $1.15 million from the drawdown, before expenses. On November 15, 2023, Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761. We received gross proceeds of $2.0 million from the drawdown,draw-down, before expenses. There were no draw downsdraw-downs in 2025 and 2024.

Operating Activities from continuing operations. Net cash provided by operating activities in 20242025 was $1,170$2,454 thousand, an increase of $24,251 $1,284 thousand, compared to net cash usedprovided in operating activities of $23,081$1,170 thousand for 2023.2024. This changeincrease was primarily driven dueby tothe asignificant $5,387 thousand decreasereduction in our net loss from continuing operations combinedand withfavorable thechanges pay-downin ofaccrued expenses and other current liabilitiesliabilities, partially offset by lower non-cash adjustments such decreased long-lived asset impairment charges in the prior-year period.2025.

Financing Activities from continuing operations. For 2024, there There was no cash received from financing activities, compared to net cash received from financing activities of $3,151 thousand for 2023,both reflecting2025 theand sale of common stock during 2023.2024.

Discontinued Net cash used in discontinued operations. Net cash used in discontinued operations for 20242025 was $438$30 thousand, a decrease of $24,622$408 thousand, as compared to net cash used in discontinued operations of $25,060$438 thousand for 2023.2024. This change relates primarily to a decreasedecreased in expenses incurred and the paymentlevel of current liabilitiesactivities associated with our transitiondiscontinued from a manufacturing and commercialization business to a royalty-based business.operations.

Receivable from Mayne Pharma. On December 30, 2022, Mayne Pharma acquired our accounts receivable balance of approximately $29.3 million which is subject to certain working capital adjustments. As of December 31, 2024,2025, and 2023,2024, we had a royalty receivable of $3,562$3,159 thousand and $3,090$3,327 thousand, respectively, relating to the short-term portion of royalty receivable from Mayne Pharma and $16,010$13,713 thousand and $18,484$16,010 thousand, respectively,respectively relating to the long-term portion of royalty receivable which includes royalties recognized from the Minimum Annual Royalty. See “Note 1 Business, basis of presentation, new accounting standards and summary of significant accounting policies (Revenue Recognition)” to the consolidated financial statements included in this 2024 2025 10-K Report.

Discontinued operations comprise activities that were disposed of at the end of the period, represent a separate major line of business that can be clearly distinguished for operational and financial reporting purposes and represent a business shift having a major effect on the Company’s operations and financial results according to Accounting Standard Codification (“ASC”) Topic 205, Presentation of Financial Statements. In 2022, we started classifying commercial activities as discontinued operations due to the cessation of these operations. For additional information, see “Note 22. –Discontinued Discontinued Operations”, in the notes to the consolidated financial statements appearing elsewhere in this 20242025 10-K Report.

In February 2024, the Companywe received Mayne Pharma’s calculation calculation of the net working capital allowances for payer rebates and wholesale distributor fees pursuant to the Transaction Agreement, which differed significantly from the Company’sour estimate of the allowances. TheWe Company continuescontinue to believe itsour estimated allowances for payer rebates and wholesale distributor fees are reasonablereasonable. In August 2024 and intends to resolve this matter through the processes permitted in theFebruary Transaction Agreement.2025, Thewe outcomealso ofreceived thisinformation matter is uncertain at this point. As a result, the Company cannot reasonably estimate a range of loss, and accordingly, the Company has not accrued any additional liability associated withfrom Mayne Pharma’sPharma allowance calculation for payerpertaining rebates and wholesale distributor fees, particularly as the Company believes the outcome of this matter to be intertwined with the resolution of the net working capital allowance for returns.returns that differs significantly from our estimate of the allowance.

In August 2024, the Company received information from Mayne Pharma pertaining to the net working capital allowance for returns that differs significantly from the Company’s estimate of the allowance. As of December 31, 2024,2025, thewe Companyalso believed no additional accrual was required for amounts that may be owed for the allowance for returns under the Transaction Agreement. TheWe Company hashave not recorded any contingent gains or receivables for any such allowances. Management continues to monitor the unresolved and pending net working capital items as changes to estimated amounts owed or amounts due from Mayne Pharma may be material.

For additional discussion on revenue, see “I. 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 20242025 10-K Report.

On April 8, 2025, we filed a lawsuit against Mayne Pharma in the United States District Court for the District of Delaware (the “Mayne Lawsuit”) seeking damages for breach of contract, breach of the implied covenant of good faith and fair dealing, fraudulent inducement, and unjust enrichment related to Mayne Pharma’s actions in relation to the License Agreement and the Transaction Agreement, primarily relating to the net working capital allowances and certain actions or inactions by Mayne Pharma relating thereto. On June 20, 2025, we filed an amended complaint against Mayne Pharma and on July 22, 2025, Mayne Pharma filed a motion to dismiss the Mayne Lawsuit. On March 23, 2026, a magistrate judge recommended that the court grant-in-part and deny-in-part Mayne Pharma’s motion to dismiss. The magistrate judge recommended granting Mayne’s motion to dismiss our claims for breach of the covenant of good faith and fair dealing, certain of our breach of contract claims and our claim for fraudulent inducement, but recommended the court grant us leave to amend the fraudulent inducement claim. The magistrate judge recommended denying Mayne’s motion to dismiss our other claims. The magistrate judge further recommended the court stay the Mayne Lawsuit while the parties submit the net working capital claims to a dispute resolution process. On April 6, 2026, we filed objections to certain of the magistrate judge’s recommendations. On May 20, 2026, the court overruled our objections and ordered the parties to submit the net working capital claims to a dispute resolution process set forth in the Transaction Agreement while the case is stayed pending the expert determination of the dispute resolution process.

On May 30, 2025, Mayne Pharma filed the Mayne Countersuit seeking damages for breach of contract and fraudulent inducement related to the Transaction Agreement. As part of the Mayne Countersuit, Mayne Pharma also made certain indemnification demands under the Transaction Agreement, which we dispute. On July 28, 2025, we filed a motion to dismiss the fraudulent inducement claim in the Mayne Countersuit. On March 23, 2026, a magistrate judge recommended that the court grant our motion to dismiss Mayne Pharma’s claim for fraudulent inducement, but recommended the court deny our motion to dismiss Mayne Pharma’s other claims. As of MarchJune 31,30, 2026, we believed no additional accrual was required for such claims, as we could not reasonably estimate a range of loss.

As of MarchJune 31,30, 2026, we also believed no additional accrual was required for amounts that may be owed for the allowance for returns under the Transaction Agreement. We have not recorded any contingent gains or receivables for any such allowances. Management continues to monitor the unresolved and pending net working capital items as changes to estimated amounts owed or amounts due from Mayne Pharma may be material.

Mayne Pharma has also made certain indemnification demands under the Transaction Agreement, which we dispute. As of MarchJune 31,30, 2026, we believed no additional accrual was required for such claims, as we could not reasonably estimate a range of loss.

If Mayne Pharma’s sales of Licensed Products grow more slowly than expected or decline, including as a result of Mayne Pharma Group’s potential sale to Cosette Pharmaceuticals, Inc., if the net working capital settlement with Mayne Pharma under the Transaction Agreement is greater than our current estimates, if the outcome of the Mayne Lawsuits is worse than we anticipate, if we are unsuccessful with future financings or the supply chains related to the third-party contract manufacturers are worse than we anticipate, our existing cash reserves may be insufficient to satisfy our liquidity requirements. The potential impact of these factors in conjunction with the uncertainty of the capital markets raiseraises substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

Three months ended MarchJune 31,30, 2026 compared with three months ended March 31,June 30, 2025

Revenue. We recorded $724$869 thousand in license revenue for the firstsecond quarter of 2026, ana increasedecrease of $331$83 thousand, compared to $393$952 thousand in license revenue for the firstsecond quarter of 2025. The increasedecrease is attributable to changes in sales of licensed products.

General and administrative. General and administrative expenses were $1,353$1,577 thousand for the first second quarter of 2026, aan decreaseincrease of $138$26 thousand or 9.3%,1.7%, compared to $1,491$1,551 thousand for 2025. The decreaseincrease is primarily attributable to lower professionalhigher feesrent expenses and share-basedpress compensationreleases costs.

Write-off of patents. We haverecorded noa write-off of $13 thousand for abandoned patents forin the firstsecond quarter of 2026, compared to anno $88 thousand written off for abandoned pending patentswrite-off in the firstsecond quarter of 2025.

Depreciation and amortization. Depreciation and amortization expense was $94$95 thousand for the firstsecond quarter of 2026, compared to $95$96 thousand for the firstsecond quarter of 2025. This balance is entirely comprised of amortization of license rights and intangible assets.

Operating expenses. Total operating expenses for the firstsecond quarter of 2026 were $1,447$1,685 thousand, aan decreaseincrease of $227$38 thousand, or 13.6%,2.3%, compared to $1,674$1,647 thousand for the firstsecond quarter of 2025. The decrease increase is primarily attributable to thehigher absencerent of write-off expense recognized in 2025 as well as lower professional feesexpenses and share-basedpress compensation releases costs.

Loss from operations. In the firstsecond quarter of 2026, we had a loss from operations of $723$816 thousand, as compared to a loss from operations of $1,281$695 thousand for the firstsecond quarter of 2025. This change reflects the increasedecrease in revenue from licensed product sales, the absenceincrease ofin write-offrent expense recognized,expenses, and lowerhigher professionalpress fees.release expenses.

Other income, net. During the firstsecond quarter of 2026, we had other income of $826$980 thousand compared to other income of $613$1,240 thousand in the firstsecond quarter of 2025, reflecting ana increasedecrease in sublease income and higher other income pertaining to Mayne’s royalty sales of ANNOVERA and amounts received in theMay first2025 quarterin connection with a settlement related to trademark infringement by a third party of 2026.certain trademarks owned by us, partially offset by higher sublease income.

Income (loss) from continuing operations. For the firstsecond quarter of 2026, we had net income of $103$164 thousand, or $0.01 per basic and diluted common share compared to a net lossincome of $636$545 thousandthousand, or $0.05 per basic and diluted common share for the firstsecond quarter of 2025.

Discontinued Operations – Net loss from discontinued operations was $8$9 thousand for the firstsecond quarter of 2026, compared to aan lossincome from discontinued operations of $17$6 thousand for the first second quarter of 2025.

Our primary use of cash is to fund our continued operations. We have funded our operations primarily through revenue from licensed royalties, public offerings of our common stock and private placements of equity and debt securities, and the transactions with Mayne Pharma. As of MarchJune 31,30, 2026, we had cash and cash equivalents totaling $8,419 $9,189 thousand. We maintain cash at financial institutions that at times may exceed the Federal Deposit Insurance Corporation insured limits of $250 thousand per bank. We have never experienced any losses related to these funds.

The initial drawdown occurred on June 29, 2023 consisting of a sale of 312,525 shares of Common Stock at a price per share equal to $3.6797. We received gross proceeds of $1.15 million from the drawdown, before expenses. On November 15, 2023 Rubric drew down an additional 877,192 shares of Common Stock at a price per share equal to $2.2761. We received gross proceeds of $2.0 million from the drawdown, before expenses. There were no drawdowns in the first quartersix months of 2026 and 2025.

See “Going Concern” above for further discussion related to our ability to generate and obtain adequate amounts of cash to meet our liquidity needs and our plans to satisfy our such needs in the short-term and in the long-term. As a result, there is substantial doubt about our ability to continue as a going concern for the next twelve months from the issuance of these financial statements.

Operating Activities from continuing operations. For the first quartersix months of 2026, net cash provided by operating activities was $944$1,723 thousand, compared to net cash provided by operating activities of $699$1,080 thousand for the first quartersix months of 2025. The increase was primarily driven by cash received from royalty receivable, partially offset by a larger use of cash for outstanding accounts payable, and the absence of the prior-year write-off of abandoned patents.receivable.

Net cash used in discontinued operations. Net cash used in discontinued operations for the first threesix months of 2026 was $8$17 thousand as compared to net cash used in operating activities from discontinued operations of $13$70 thousand for the first threesix months of 2025. This change relates primarily to a decreased level of activities associated with our discontinued operations.

Receivable from Mayne Pharma. On December 30, 2022, Mayne Pharma acquired our accounts receivable balance of approximately $29.3 million which is subject to certain working capital adjustments. As of MarchJune 31,30, 2026, we had a royalty receivable of $2,731$3,014 thousand relating to the short-term portion of royalty receivable from Mayne Pharma and $13,170$12,626 thousand relating to the long-term portion of royalty receivable which includes royalties recognized from the Minimum Annual Royalty. See “Note 1 Business, basis of presentation, new accounting standards and summary of significant accounting policies (Revenue Recognition)” to the consolidated financial statements included in our 2025 10-K/A Report.

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. Pursuant to these agreements, we agree to indemnify, hold harmless, and reimburse indemnified parties for losses suffered, for which there may or may not be limitations on potential damages. The maximum potential amount of future payments we could be required to make under these indemnification provisions is sometimes unlimited. As a result, the estimated fair value of liabilities relating to these provisions is minimal. Accordingly, we had no liabilities recorded for these provisions as of MarchJune 31,30, 2026 and December 31, 2025.