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STOCKHOLDERS’ EQUITY | 12 Months Ended
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Dec. 31, 2019
Equity [Abstract] |
STOCKHOLDERS’ EQUITY | NOTE 9 – STOCKHOLDERS’ EQUITY Preferred Stock At December 31, 2019, we had 10,000,000 shares of Preferred Stock, par value $0.001, authorized for issuance, of which no shares of Preferred Stock were issued or outstanding. Common Stock At December 31, 2019, we had 350,000,000 shares of Common Stock authorized for issuance, of which 271,177,076 shares of Common Stock were issued and outstanding. Issuances During 2019 On October 24, 2019, we entered into an underwriting agreement with J.P. Morgan Securities LLC, as representative of the underwriters, relating to an underwritten public offering of 26,000,000 shares of our Common Stock at a public offering price of $2.75 per share. We granted the underwriters an option, exercisable for a period of 30 days, to purchase up to 3,900,000 additional shares of Common Stock, which was exercised in full. The net proceeds to us from the offering were approximately $77,031,000, after deducting the underwriting discount and offering expenses payable by us. The offering closed on October 29, 2019. During the year ended December 31, 2019, certain individuals exercised stock options to purchase an aggregate of 331,619 shares of Common Stock for $108,656 in cash. Also, during the year ended December 31, 2019, stock options to purchase an aggregate of 12,097 shares of Common Stock were exercised pursuant to the options’ cashless exercise provisions, which resulted in 11,834 shares of Common Stock being issued. Issuances During 2018 On August 1, 2018, we entered into an underwriting agreement with Goldman Sachs & Co. LLC, as representative of the underwriters, relating to an underwritten public offering of 12,745,098 shares of our Common Stock at a price of $5.10 per share. We granted the underwriters an option, exercisable for a period of 30 days, to purchase up to 1,911,764 additional shares of Common Stock. On August 2, 2018, the underwriters exercised the option in full. The net proceeds to us from the offering, including the exercise of the option to purchase additional shares, were approximately $69,908,000, after deducting the underwriting discount and offering expenses payable by us. The offering closed on August 6, 2018. In connection with the Knight License Agreement, on August 6, 2018, Knight entered into a subscription agreement with us, pursuant to which Knight purchased 3,921,568 of shares of our Common Stock concurrently with the closing of the underwritten public offering of Common Stock at a price of $5.10, for proceeds to us of $20,000,000. During the year ended December 31, 2018, certain individuals exercised stock options to purchase an aggregate of 5,444,526 shares of Common Stock for $1,666,208 in cash. Also, during the year ended December 31, 2018, stock options to purchase an aggregate of 10,000 shares of Common Stock were exercised pursuant to the options’ cashless exercise provisions, wherein 9,841 shares of Common Stock were issued. Issuances During 2017 On September 25, 2017, we entered into an underwriting agreement with J.P. Morgan Securities LLC relating to an underwritten public offering of 12,400,000 shares of our Common Stock at a price of $5.55 per share. The net proceeds to us from the offering were approximately $68,573,000, after deducting estimated offering expenses payable by us. The offering closed on September 28, 2017 and we issued 12,400,000 shares of Common Stock. During the year ended December 31, 2017, certain individuals exercised stock options to purchase an aggregate of 102,546 shares of Common Stock for $212,615 in cash. Warrants to Purchase Common Stock As of December 31, 2019, we had warrants outstanding to purchase an aggregate of 1,832,571 shares of Common Stock with a weighted-average contractual remaining life of approximately 1.95 years, and exercise prices ranging from $0.24 to $8.20 per share, resulting in a weighted average exercise price of $2.62 per share. The valuation methodology used to determine the fair value of our warrants is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions, including volatility of the stock price, the risk-free interest rate, dividend yield and the term of the warrant. During the year ended December 31, 2019, we granted warrants to purchase an aggregate of 75,000 shares of Common Stock to outside consultants which vest ratably over a 12-month period and have an expiration date of February 13, 2024. During the year ended December 31, 2018, we granted warrants to purchase an aggregate of 175,000 shares of Common Stock to outside consultants which vest ratably over a 12-month period and have an expiration date of March 15, 2023. During the year ended December 31, 2017, we granted warrants to purchase an aggregate of 125,000 shares of Common Stock to outside consultants which vest ratably over a 12-month period and have an expiration date of March 15, 2022. We recorded share-based compensation expense related to warrants previously issued of $254,970, $494,136, and $313,271 for the years ended December 31, 2019, 2018 and 2017, respectively, in the accompanying consolidated financial statements. At December 31, 2019, total unrecognized estimated compensation expense related to unvested warrants was approximately $26,446 which is expected to be recognized over weighted-average period of 0.1 years. Summary of our Warrant activity during the year ended December 31, 2019:
|  | Number of Shares Under Warrants |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life in Years |  |  | Aggregate Intrinsic Value |
Balance at December 31, 2018 |  |  | 3,007,571 |  |  | $ | 2.78 |  |  |  | 1.58 |  |  | $ | 4,826,403 |
Granted |  |  | 75,000 |  |  | $ | 5.63 |  |  |  |  |  |  |  |  |
Exercised |  |  | (1,250,000 | ) |  | $ | 3.20 |  |  |  |  |  |  | $ | 2,420,000 |
Expired |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |
Cancelled/Forfeited |  |  | — |  |  |  | — |  |  |  |  |  |  |  | — |
Balance at December 31, 2019 |  |  | 1,832,571 |  |  | $ | 2.62 |  |  |  | 1.95 |  |  | $ | 2,447,929 |
Vested and Exercisable at December 31, 2019 |  |  | 1,820,071 |  |  | $ | 2.60 |  |  |  | 1.90 |  |  | $ | 2,447,929 |
Unvested at December 31, 2019 |  |  | 12,500 |  |  | $ | 5.63 |  |  |  | 9.13 |  |  |  | — |
The weighted average fair value per share of warrants issued and the assumptions used in the Black-Scholes Model during the years ended December 31, 2019, 2018, and 2017 are set forth in the table below.
|  | 2019 |  |  | 2018 |  |  | 2017 |
Weighted average exercise price |  | $ | 5.63 |  |  | $ | 5.16 |  |  | $ | 6.83 |
Weighted average grant date fair value |  | $ | 3.00 |  |  | $ | 2.79 |  |  | $ | 3.67 |
Risk-free interest rate |  |  | 2.52 | % |  |  | 2.36 | % |  |  | 1.47 | %
Volatility |  |  | 60.8 | % |  |  | 62.12 | % |  |  | 63.24 | %
Term (in years) |  |  | 5 |  |  |  | 5 |  |  |  | 5 |
Dividend yield |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %
Warrant exercises During the year ended December 31, 2019, warrants to purchase an aggregate of 1,250,000 shares of Common Stock were exercised pursuant to the warrants’ cashless exercise provisions, which resulted in 471,184 shares of Common Stock being issued. During the year ended December 31, 2018, no warrants were exercised. During the year ended December 31, 2017, certain individuals exercised warrants to purchase an aggregate of 2,476,666 shares of Common Stock for $3,798,999 in cash. In addition, during the year ended December 31, 2017, certain individuals exercised warrants to purchase an aggregate of 6,590,000 shares of Common Stock pursuant to the warrants’ cashless exercise provisions, which resulted in 4,762,208 shares of Common Stock being issued. Options to Purchase Common Stock of the Company In 2009, we adopted the 2009 Long Term Incentive Compensation Plan, or the 2009 Plan, to provide financial incentives to employees, directors, advisers, and consultants of our company who are able to contribute towards the creation of or who have created stockholder value by providing them stock options and other stock and cash incentives, or the Awards. As of December 31, 2019, there were non-qualified stock options to purchase an aggregate of 15,017,759 shares of Common Stock outstanding under the 2009 Plan. Effective upon our adoption of the TherapeuticsMD, Inc. 2019 Stock Incentive Plan, or the 2019 Plan, on June 20, 2019, no future awards may be made under the 2009 Plan. In 2012, we adopted the 2012 Stock Incentive Plan, or the 2012 Plan, a non-qualified plan that was amended in August 2013. The 2012 Plan was designed to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. As of December 31, 2019, there were non-qualified stock options to purchase an aggregate of 6,316,474 shares of Common Stock outstanding and an aggregate of 1,040,000 restricted stock awards under the 2012 Plan. Effective upon our adoption of the 2019 Plan, no future awards may be made under the 2012 Plan. On June 20, 2019, we adopted the 2019 Plan to serve as an incentive for retaining qualified and competent key employees, officers, directors, and certain consultants and advisors of our company. The Awards available under the 2019 Plan consist of stock options, stock appreciation rights, restricted stock, restricted stock units, performance stock, performance units, and other stock or cash awards as described in the 2019 Plan. Generally, the options vest annually over four years or as determined by our board of directors, upon each option grant. Options may be exercised by paying the price for shares or on a cashless exercise basis after they have vested and prior to the specified expiration date provided and applicable exercise conditions are met, if any. The expiration date is generally ten years from the date the option is issued. As of December 31, 2019, there were 13,599,382 shares of Common Stock available for issuance under the 2019 Plan, consisting of (i) 11,103,999 new shares, (ii) 2,395,333 unallocated shares previously available for issuance under the 2012 Plan that were not then subject to outstanding “Awards” (as defined in the 2012 Plan), and (iii) 100,050 unallocated shares previously available for issuance under the 2009 Plan that were not then subject to outstanding “Awards” (as defined in the 2009 Plan). Any shares subject to outstanding options or other equity “Awards” under the 2019 Plan, the 2012 Plan and the 2009 Plan that are forfeited, expire or otherwise terminate without issuance of the underlying shares, or if any such Award is settled for cash or otherwise does not result in the issuance of all or a portion of the shares subject to such Award (other than shares tendered or withheld in connection with the exercise of an Award or the satisfaction of withholding tax liabilities), the shares to which those Awards were subject, shall, to the extent of such forfeiture, expiration, termination, cash settlement or non-issuance, again be available for delivery with respect to Awards under the 2019 Plan. As of December 31, 2019, there were non-qualified stock options to purchase 3,696,001 shares of Common Stock outstanding under the 2019 Plan and 200,000 restricted stock awards outstanding under the 2019 Plan. The valuation methodology used to determine the fair value of stock options is the Black-Scholes Model. The Black-Scholes Model requires the use of a number of assumptions including volatility of the stock price, the risk-free interest rate, and the expected life of the stock options. The ranges of assumptions used in the Black-Scholes Model during the years ended December 31, 2019, 2018, and 2017 are set forth in the table below.
|  | 2019 |  |  | 2018 |  |  | 2017 |
Weighted average exercise price |  | $ | 3.10 |  |  | $ | 5.45 |  |  | $ | 6.60 |
Weighted average grant date fair value |  | $ | 1.82 |  |  | $ | 3.24 |  |  | $ | 3.82 |
Risk-free interest rate |  |  | 1.64-2.54 | % |  |  | 2.38-2.89 | % |  |  | 1.84-2.05 | %
Volatility |  |  | 61.25-64.49 | % |  |  | 59.45-64.04 | % |  |  | 61.56-64.25 | %
Term (in years) |  |  | 5.5-6.5 |  |  |  | 5.1-6.25 |  |  |  | 5.5-6.25 |
Dividend yield |  |  | 0.00 | % |  |  | 0.00 | % |  |  | 0.00 | %
A summary of activity under the 2009, 2012 and 2019 Plans and related information during the year ended December 31, 2019 is as follows:
|  | Number of Shares Under Options |  |  | Weighted Average Exercise Price |  |  | Weighted Average Remaining Contractual Life in Years |  |  | Aggregate Intrinsic Value |
Balance at December 31, 2018 |  |  | 20,872,824 |  |  | $ | 4.93 |  |  |  | 5.94 |  |  | $ | 12,239,876 |
Granted |  |  | 4,620,501 |  |  | $ | 3.10 |  |  |  |  |  |  |  |  |
Exercised |  |  | (343,716 | ) |  | $ | 0.32 |  |  |  |  |  |  | $ | 1,426,828 |
Expired |  |  | (26,375 | ) |  | $ | 5.57 |  |  |  |  |  |  |  |  |
Cancelled/Forfeited |  |  | (93,000 | ) |  | $ | 5.16 |  |  |  |  |  |  |  |  |
Balance at December 31, 2019 |  |  | 25,030,234 |  |  | $ | 4.65 |  |  |  | 5.84 |  |  | $ | 3,668,171 |
Vested and Exercisable at December 31, 2019 |  |  | 18,025,819 |  |  | $ | 4.88 |  |  |  | 4.62 |  |  | $ | 3,319,621 |
Unvested at December 31, 2019 |  |  | 7,004,415 |  |  | $ | 4.05 |  |  |  | 8.96 |  |  | $ | 348,550 |
At December 31, 2019, our outstanding options had exercise prices ranging from $0.19 to $8.92 per share. Share-based compensation expense related to options recognized in our results of operations for the years ended December 31, 2019, 2018, and 2017 was approximately $8,798,707, $8,091,294, and $6,447,154, respectively, and it is based on awards vested. At December 31, 2019, total unrecognized estimated compensation expense related to unvested options was approximately $11,460,000, which may be adjusted for future changes in forfeitures. This cost is expected to be recognized over a weighted-average period of 2.4 years. No tax benefit was realized due to a continued pattern of operating losses. Restricted Stock Restricted stock awards granted under our 2009, 2012 and 2019 Plans entitle the holder to receive, at the end of vesting period, a specified number of shares of our Common Stock. Share-based compensation expense is measured by the market value of our Common Stock on the day of the grant. The shares vest ratably over the period specified in the grant. There is no partial vesting and any unvested portion is forfeited. On December 13, 2018, we granted an aggregate of 1,040,000 restricted stock units to certain executive employees which will vest at the end of the third year. The grant date fair value was $4.06 per unit. At December 31, 2019, 150,000 of those restricted stock units vested due to an employment termination. On July 30, 2019, we granted an aggregate of 200,000 restricted stock units to certain executive employees which will vest on January 31, 2022. The grant date fair value was $2.18 per unit. During the year ended December 31, 2019 and 2018, we recorded $1,628,407 and $73,132, respectively, in share-based compensation expense related to restricted stock units. At December 31, 2019, total unrecognized estimated compensation expense related to unvested restricted stock units was approximately $2,711,000, which may be adjusted for future changes in forfeitures. This cost is expected to be recognized over a weighted-average period of 2.0 years. At December 31, 2019, we had 1,240,000 restricted stock awards outstanding. Cash-Settled Stock Appreciation Rights (SARs) On July 1, 2018, we issued cash-settled SARs to certain consultants and employees. The SARs plan year began on July 1, 2018 and ended on or immediately following June 30, 2019. SARs were granted with a grant price equal to the market value of a share of our Common Stock on the date of grant. Cash-settled SARs provided for the cash payment of the excess of the fair market value of our Common Stock on June 30, 2019 over the grant price. Cash-settled SARs have no effect on dilutive shares or shares outstanding as any appreciation of our Common Stock over the grant price is paid in cash and not in Common Stock. Cash settled SARs were recorded in our consolidated balance sheets as a liability until the date of exercise. The fair value of each SAR award was estimated using the Black-Scholes valuation model. In accordance with ASC Topic 718, Stock Compensation, the fair value of each SAR award was recalculated at the end of each reporting period and the liability and expense adjusted based on the new fair value and the percent vested. At June 30, 2019, the fair market value of our Common Stock was lower than the grant price of the SARs and, as a result, the recorded liability was reversed and no cash payment was made.

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- Definition The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 505 -URI http://asc.fasb.org/topic&trid=2208762 + Details
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