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Stockholders’ Deficit
 12 Months Ended
Dec. 31, 2021
Equity [Abstract]  
Stockholders’ Deficit

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.

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 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.

Also, in November 2020, we closed on an underwritten public offering of our common stock, pursuant to which we issued 26,953,125 shares of our common stock, which includes 3,515,625 shares issued for the exercise of an underwriter option, at an offering price of $1.28 per share, and we received net proceeds of $31.7 million, after deducting the underwriting discounts and commissions and estimated offering expenses.

Also, in October 2019, we closed on an underwritten public offering of our common stock, pursuant to which we issued 29,900,000 shares of our common stock, which includes 3,900,000 shares issued for the exercise of an underwriter option, at an offering price of $2.75 per share, and we received net proceeds of $77.0 million, after deducting the underwriting discounts and commissions and estimated offering expenses.

Warrants

As disclosed in “Note 8. Debt”, in 2020, 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. In 2019, we granted warrants to purchase an aggregate of 75,000 shares of our common stock to outside consultants.

The following table summarizes the status of our outstanding and exercisable warrants and related for each of the following years (in thousands, except weighed average exercise price and weighted average remaining contractual life data):

 

 

Warrants outstanding and exercisable

 

 

 

Warrants

 

 

Weighted

Average

Exercise

Price

 

 

Aggregate

Intrinsic

Value

 

 

Weighted

Average

Remaining

Contractual

Life

(in Years)

 

Balance, January 1, 2019

 

 

3,008

 

 

$

2.78

 

 

$

4,826

 

 

 

1.6

 

Issued/granted

 

 

75

 

 

 

5.63

 

 

 

 

 

 

 

 

 

Exercised

 

 

(1,250

)

 

 

3.20

 

 

 

2,263

 

 

 

 

 

Balance, December 31, 2019

 

 

1,833

 

 

 

2.62

 

 

 

2,448

 

 

 

2.0

 

Issued/granted

 

 

4,752

 

 

 

1.19

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(50

)

 

 

6.35

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

6,535

 

 

 

1.55

 

 

 

1,041

 

 

 

7.3

 

Exercised

 

 

(1,163

)

 

 

0.31

 

 

 

1,146

 

 

 

 

 

Expired

 

 

(245

)

 

 

7.90

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

 

5,127

 

 

$

1.52

 

 

$

—

 

 

 

8.3

 

 

We used the Black Scholes option pricing model to estimate the fair value of warrants issued. The weighted average fair value of the warrants issued in 2020 was $1.56 per warrant and the assumptions used to determine such fair value were as follows: expected term of 10 years, volatility of 68.8%, dividend yields of 0% and risk-free interest rates of 0.3%. The weighted average fair value of the warrants granted in 2019 was $3.00 per warrant and the assumptions used to determine such fair value were as follows: expected term of 5 years, volatility of 60.8%, dividend yields of 0% and risk-free interest rates of 2.5%.

Share-based payment award plans

Plan summary and description

In June 2019, our stockholders approved the TherapeuticsMD, Inc. 2019 Stock Incentive Plan, as amended (the “2019 Plan”), which replaced our previously adopted 2012 Stock Incentive Plan, as amended, and the 2009 Long-Term Incentive Compensation Plan (referred to collectively as the “Prior Plans”). Outstanding awards granted under the Prior Plans will remain subject to the terms and conditions in the Prior Plans.

The 2019 Plan is administered by the Compensation Committee of the Board. The purpose of the 2019 Plan is to provide a means for us and our subsidiaries and other designated affiliates (the “Related Entities”) to attract key personnel to provide services to us and the Related Entities, as well as to provide a means by which those key persons can acquire and maintain stock ownership, resulting in a strengthening of their commitment to our welfare and the welfare of the Related Entities and promoting the mutuality of interests between participants and our stockholders. A further purpose of the 2019 Stock Incentive Plan is to provide participants with additional incentive and reward opportunities designed to enhance our profitable growth and the profitable growth of the Related Entities, and provide participants with annual and long-term performance incentives to expend their maximum efforts in the creation of stockholder value. The persons eligible to receive awards under the 2019 Plan are our employees, officers, members of the Board, and consultants who provide services to us or any subsidiary.

The provisions of the 2019 Plan authorize the grant of (i) stock options, which can be “qualified” or “nonqualified” under the Internal Revenue Code of 1986, as amended, (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units (“RSUs”), (v) performance shares and performance units, such as performance stock units (“PSUs”), and (vi) other share-based awards. The 2019 Plan will terminate at the earliest of (i) such time as no shares remain available for issuance under the 2019 Stock Plan, (ii) termination of the 2019 by the Board, or (iii) the tenth anniversary of the effective date of the 2019 Stock Incentive Plan. Awards outstanding upon termination of the 2019 Plan will remain in effect until they have been exercised or terminated, or have expired. The term and vesting period of awards granted under the 2019 Plan are established on a per grant basis, and option expiration date is generally ten years from the date of grant.

Under the 2019 Plan, 37,475,000 shares of common stock are authorized for issuance, which includes 22,475,000 shares from the First Amendment to the 2019 Plan, which was approved by our stockholders in May 2021 plus any unallocated shares previously available for issuance under the Prior Plans that were not then subject to outstanding awards. Any shares subject to outstanding share-based payment awards under the 2019 Plan and Prior Plans 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.  

In August 2021, the Company hired a new President, who became our CEO in December 2021, and granted an “inducement grant” under Listing Rule 5635(c)(4) of Nasdaq of 2,750,000 RSUs (designated as “Time-Based Units”) and 2,750,000 PSUs (designated as “Performance Units”). In October 2021, the Company appointed a new Chief Business Officer and granted an “inducement grant” under Listing Rule 5635(c)(4) of Nasdaq of 660,000 RSUs (designated as “Time-Based Units”) and 260,000 PSUs (designated as “Performance Units”). The Time-Based Units and Performance Units were granted pursuant to certain Inducement Grant Restricted Stock Unit Agreement; accordingly, these equity awards were not counted against the shares of common stock available for issuance under the 2019 Plan.

As of December 31, 2021, 39,440,678 shares of common stock were subject to outstanding awards under our share-based payment award plans and inducement grants (calculated using the base number of PSUs that may vest). If we assume the maximum achievement of performance goals for PSUs, then 42,925,277 shares of common stock will be subject to outstanding awards under our share-based payment award plans and inducement grants.

The following table summarizes the outstanding awards issued pursuant to our share-based payment award plans and inducement grants as of December 31, 2021 and the remaining shares of common stock available for future issuance (in thousands):

Plan Name

 

Options

 

 

RSUs

 

 

PSUs (1)

 

 

Remaining shares of

common stock available

for future issuance (2)

 

2019 Plan (3)

 

 

3,332

 

 

 

10,174

 

 

 

5,193

 

 

 

13,054

 

2012 Plan (4)

 

 

4,601

 

 

 

—

 

 

 

—

 

 

 

—

 

2009 Plan (5)

 

 

9,722

 

 

 

—

 

 

 

—

 

 

 

—

 

2021 Inducement Grants (6)

 

 

—

 

 

 

3,410

 

 

 

3,010

 

 

 

—

 

 

 

(1)

The number of PSUs represents the base number of PSUs that may vest. The actual number of PSUs that will vest will be between zero and 11,687,530 depending on the Company’s achievement of certain performance goals.

 

(2)

The number of remaining shares of common stock available for future issuance is based on an assumption that the maximum performance goals for PSUs were achieved, where applicable.

 

(3)

As of December 31, 2021, outstanding options have exercise prices ranging from $1.07 to $2.73 and will expire between January 2022 and June 2030. Unvested RSUs will vest between January 2022 and December 2024. If and when certain performance goals are achieved, then unvested PSUs will vest between June 2022 and March 2024.

 

(4)

As of December 31, 2021, outstanding options have exercise prices ranging from $2.55 to $8.92 and will expire between March 2022 and February 2029.

 

(5)

As of December 31, 2021, outstanding options have exercise prices ranging from $1.80 to $8.92 and will expire between January 2022 and February 2029.

 

(6)

As of December 31, 2021, unvested RSUs will vest between August 2022 and October 2024 and unvested PSUs upon achievement of certain performance goals will vest between October 15, 2022 and August 2024.

2021 Exchange of eligible options for RSUs

In May 2021, our stockholders approved an Offer to Exchange Eligible Options for Restricted Stock Units (the “Exchange Offer”). The Exchange Offer allowed certain employee option holders, excluding the Company’s named executive officers, advisers, consultants, contractors, or present or past non-employee directors, to exchange some or all of their outstanding options to purchase shares of common stock that were granted before August 26, 2019, and had a per share exercise price equal to or greater than $5.01 (“Eligible Options”), for an award of RSUs of the Company (“New RSUs”), subject to specified conditions. In September 2021, following the expiration of the Exchange Offer, 69 eligible employees elected to exchange Eligible Options, and the Company accepted for cancellation Eligible Options to purchase an aggregate of 4,493,000 shares of common stock, representing approximately 91.5% of the total shares of common stock underlying the Eligible Options. Also, in September 2021, promptly following the expiration of the Exchange Offer, the Company granted 700,264 New RSUs in exchange for the cancellation of the tendered Eligible Options. The New RSUs vest in three equal annual installments beginning in September 2022, subject to the terms and conditions of the 2019 Plan.

Options

The following table summarizes the status of our outstanding and exercisable options and related transactions, including the Exchange Offer, for each for the following years (in thousands, except weighed average exercise price and weighted average remaining contractual life data):

 

 

Options awards outstanding

 

 

Options awards exercisable

 

 

 

Options

Awards

 

 

Weighted

Average

Exercise

Price

 

 

Aggregate

Intrinsic

Value

 

 

Weighted

Average

Remaining

Contractual

Life

(in Years)

 

 

Options

Awards

 

 

Weighted

Average

Exercise

Price

 

 

Aggregate

Intrinsic

Value

 

 

Weighted

Average

Remaining

Contractual

Life

(in Years)

 

Balance, January 1, 2019

 

 

20,873

 

 

$

4.93

 

 

$

12,240

 

 

 

5.9

 

 

 

16,069

 

 

$

4.61

 

 

$

12,240

 

 

 

5.1

 

Granted

 

 

4,620

 

 

 

3.10

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(344

)

 

 

0.32

 

 

 

1,427

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(93

)

 

 

5.16

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expired

 

 

(26

)

 

 

5.57

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

 

 

25,030

 

 

 

4.65

 

 

 

3,668

 

 

 

5.8

 

 

 

18,026

 

 

 

4.88

 

 

 

3,320

 

 

 

4.6

 

Granted

 

 

737

 

 

 

1.58

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(1,182

)

 

 

0.23

 

 

 

1,739

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(416

)

 

 

3.80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expired

 

 

(387

)

 

 

3.76

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

23,782

 

 

 

4.80

 

 

 

152

 

 

 

5.2

 

 

 

19,863

 

 

 

5.06

 

 

 

117

 

 

 

4.6

 

Granted

 

 

60

 

 

 

1.21

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Exercised

 

 

(111

)

 

 

0.03

 

 

 

61

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(5,048

)

 

 

6.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Expired

 

 

(1,028

)

 

 

4.02

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

 

17,655

 

 

$

4.52

 

 

$

—

 

 

 

3.8

 

 

 

16,776

 

 

$

4.62

 

 

$

—

 

 

 

3.6

 

We used the Black Scholes option pricing model to estimate the fair value of options granted. The weighted average fair value of the options granted in 2021 was $0.77 per option, and the assumptions used to determine such fair value were as follows: expected term of 6.9 years, volatility of 67.6%, dividend yields of 0% and risk-free interest rates of 1.1%. The weighted average fair value of the options granted in 2020 was $1.58 per option and the assumptions used to determine such fair value were as follows: expected term of 6.0 to 6.8 years, volatility of 63.5% to 67.9%, dividend yields of 0% and risk-free interest rates of 0.3% to 1.7%. The weighted average fair value of the options granted in 2019 was $3.10 per option and the assumptions used to determine such fair value were as follows: expected term of 5.5 to 6.5 years, volatility of 61.3% to 64.58%, dividend yields of 0% and risk-free interest rates of 1.6% to 2.5%.

Restricted stock units

The following table summarizes the status of our RSUs and related transactions, including the Exchange Offer, for each for the following years (in thousands, except weighed average grant date fair value):

 

 

RSUs awards outstanding

 

 

RSUs awards vested

and not settled

 

 

 

RSUs

 

 

Weighted

Average

Grant Date

Fair Value

 

 

Aggregate

Intrinsic

Value

 

 

RSUs

 

 

Weighted

Average

Grant Date

Fair Value

 

 

Aggregate

Intrinsic

Value

 

Balance, January 1, 2019

 

 

1,040

 

 

$

4.06

 

 

$

3,962

 

 

 

—

 

 

$

—

 

 

$

—

 

Granted

 

 

200

 

 

 

2.18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2019

 

 

1,240

 

 

 

3.56

 

 

 

3,001

 

 

 

150

 

 

 

4.06

 

 

 

363

 

Granted

 

 

6,153

 

 

 

1.39

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and settled

 

 

(301

)

 

 

1.78

 

 

 

479

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(31

)

 

 

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

7,061

 

 

 

1.76

 

 

 

8,544

 

 

 

—

 

 

 

—

 

 

 

—

 

Granted

 

 

12,977

 

 

 

1.05

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and settled

 

 

(5,126

)

 

 

1.57

 

 

 

4,021

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(1,328

)

 

 

1.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

 

13,584

 

 

$

1.16

 

 

$

4,890

 

 

 

1,573

 

 

$

2.11

 

 

$

566

 

 

 

Performance stock units

The following table summarizes the status of our PSUs and related transactions for each for the following years (in thousands, except weighed average grant date fair value):

 

 

PSUs awards outstanding

 

 

PSUs awards vested

and not settled

 

 

 

PSUs

 

 

 

Weighted

Average

Grant Date

Fair Value

 

 

Aggregate

Intrinsic

Value

 

 

PSUs

 

 

Weighted

Average

Grant Date

Fair Value

 

 

Aggregate

Intrinsic

Value

 

Balance, January 1, 2019

 

 

—

 

 

 

$

—

 

 

$

—

 

 

 

—

 

 

$

—

 

 

$

—

 

Granted

 

 

2,586

 

 

 

 

1.08

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and settled

 

 

(152

)

 

 

 

1.14

 

 

 

226

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(30

)

 

 

 

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2020

 

 

2,404

 

 

 

 

1.08

 

 

 

2,909

 

 

 

—

 

 

 

—

 

 

 

—

 

Granted

 

 

7,597

 

 

 

 

1.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Vested and settled

 

 

(1,680

)

 

 

 

1.16

 

 

 

1,057

 

 

 

 

 

 

 

 

 

 

 

 

 

Cancelled/Forfeited

 

 

(118

)

 

 

 

1.07

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance, December 31, 2021

 

 

8,203

 

(1)

 

$

1.03

 

 

$

2,953

 

 

 

1,968

 

 

$

1.18

 

 

$

709

 

 

 

(1)

The number of PSUs represents the base number of PSUs that may vest. The actual number of PSUs that will vest will be between zero and 11,687,530 depending on the Company’s achievement of certain performance goals.

Employee stock purchase plan

In June 2020, our stockholders approved the TherapeuticsMD, Inc. 2020 Employee Stock Purchase Plan (“ESPP”), which reserved 5,400,000 shares of our common stock for purchase by eligible employees. The ESPP permits eligible employees to purchase our common stock at a price per share which is equal to 85% of the lesser of (i) the fair market value of the shares on the offering date of the offering period or (ii) the fair market value of the shares on the purchase date. In 2021, 336,056 shares were sold under the ESPP at an average sale price of $0.69 per share and we received proceeds of $0.2 million.

Share-based payment compensation cost

Share-based payment compensation expense for PSUs is based on our current assessment of the most likely probability of the Company’s achievement of certain performance goals. We recorded share-based payment award compensation costs related to previously issued options, RSU and PSUs, as well as shares of common stock issued under the ESPP totaling $18.1 million for 2021, and $10.7 million for 2020 and 2019.

As of December 31, 2021, we had $16.2 million of unrecognized share-based payment award compensation cost related to unvested options, RSUs and PSUs as well as shares issuable under the ESPP, which may be adjusted if certain performance targets are achieved and for future changes in forfeitures and is included as additional paid-in capital in the accompanying consolidated balance sheets. No tax benefit was realized due to a continued pattern of net losses.

 

The unrecognized compensation cost as of December 31, 2021is expected to be recognized as share-based payment award compensation over a weighted average period of 2.1 years as follows (in thousands):

Year ending December 31,

 

 

 

 

2022

 

$

8,646

 

2023

 

 

5,199

 

2024

 

 

2,355

 

 

 

$

16,200