Substantially all of our leases are for rental of office space used to conduct our business. In October 2018, we entered into a lease for executive, administrative, operations and sales offices in Boca Raton, Florida. The lease includes 56,212 rentable square feet, or the full premises, of which the lease on 7,561 square feet commenced in 2018 and the lease on the remaining 48,651 square feet commenced in August 2019, or the full premises commencement date. The lease will expire 11 years after the full premises commencement date, unless

terminated earlier in accordance with the terms of the lease. We have the option to extend the term of the lease for two additional consecutive periods of five years. The extension option is not included in the determination of the lease term as it is not reasonably certain to be exercised. The term of the lease includes escalating rent and free rent periods. We are also responsible for certain other operating costs under the lease, including electricity and utility expenses. In June 2019, we entered into an agreement with the same lessors to lease additional 6,536 square feet of administrative office space in the same location, pursuant to an addendum to such lease, which commenced in May 2020. We are in the process of subleasing our headquarters as a result of shifting our business to become a license company and terminating our employees. We anticipate that sublease income will approximate the amounts due under our existing leases, therefore no impairment of the right of use asset was recorded in 2022.

For 2022, operating lease expense related to our real estate leases was $1.4 million and variable lease expense was $0.7 million. For 2021, operating lease expense related to our real estate leases was $2.1 million and variable lease expense was $0.7 million. In 2022, our rental income was $0.4 million on sublease of our two suites which were subleased following vitaCare transaction.

As of December 31, 2022, our remaining lease payments were as follows (in thousands):

Year ending December 31,
2023	$	1,443
2024		1,477
2025		1,513
2026		1,551
2027		1,590
Thereafter		4,294
Total undiscounted lease payments		11,868
Less: imputed interest		3,109
Present value of lease payments	$	8,759

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

	As of December 31,
	2022		2021
Assets:
Operating lease right-of-use assets	$	7,580	$	8,234

Liabilities:
Operating lease liabilities current (included in accrued expenses and other current liabilities)	$	1,390	$	1,361
Operating lease liabilities, non-current		7,369		8,063
Total operating lease liabilities	$	8,759	$	9,424

	2022			2021
Weighted average remaining term (years) - operating leases		7.7			8.7
Weighted average discount rate - operating leases		8.3	%		8.3	%
Cash paid for amounts included in the measurement of lease liabilities from operating lease (in thousands)	$	1,413		$	2,335
Right-of-use assets obtained in exchange for new operating lease obligations (non-cash in thousands)	$	—		$	—

Mayne Pharma paid us approximately $12.1 million at closing for the acquisition of net working capital, as determined in accordance with the Transaction Agreement, and is subject to certain adjustments for a period of up to two years following the Closing Date.

Pursuant to the Mayne License Agreement Amendment, Mayne Pharma also paid the Company approximately $1.0 million in prepaid royalties on the Closing Date. The prepaid royalties will reduce the first four quarterly payments that would have otherwise been payable pursuant to the Mayne License Agreement by an amount equal to $257,250 per quarterly royalty payment plus interest calculated at 19% per annum accruing from the Closing Date until the date such quarterly royalty payment is paid to the Company. In addition,

Mayne Pharma will reduce one quarterly royalty payment (other than the first quarterly royalty payment) otherwise payable to the Company by $1.5 million in consideration of Mayne Pharma assuming the Company’s obligations under a long-term services agreement, including the Company’s minimum payment obligations thereunder.

Under the terms of the Population Council License Agreement, we paid the Population Council a milestone payment of $20.0 million in 2018, which was within 30 days following the approval by the FDA of the NDA for ANNOVERA, and $20.0 million in 2019 following the first commercial batch release of ANNOVERA. The aggregate $40.0 million of milestone payments were recorded as license rights. The Population Council was also eligible to receive future payments upon the achievement of certain commercial sales milestones of ANNOVERA. On December 30, 3022, we assigned the ANNOVERA license to Mayne Pharma. The rights and obligations under the Population Council License Agreement have been transferred to Mayne Pharma and will revert back to us upon certain events.

The Population Council has agreed to perform and pay the costs and expenses associated with four post-approval studies required by the FDA for ANNOVERA, and we had agreed to perform and pay the costs and expenses associated with a post approval study required by the FDA to measure risk for venous thromboembolism, provided that if the costs and expenses associated with such post-approval study exceed $20.0 million, half of such excess was to be offset against royalties or other payments owed by us to the Population Council under the Population Council License Agreement. In July 2021, we received a letter from FDA indicating that the post-marketing commitment study being conducted by the Population Council for ANNOVERA to characterize the in vivo release rate of ANNOVERA was not fulfilled to FDA’s satisfaction. In addition, the final reports for the two post-marketing requirement studies being performed by the Population Council for ANNOVERA were not submitted by the initial listed submission deadline, which deadlines have since been extended by FDA. Our obligations to perform the post-approval study have been transferred to Mayne Pharma as part of the Mayne License Agreement. We believe that Mayne Pharma is working with Population Council to complete the post-marketing commitment study to FDA’s satisfaction and reduce the delay in submitting the post-marketing requirement final reports. To the extent that the Population Council does not fulfil these studies to FDA’s satisfaction, FDA may impose additional requirements and penalties against the NDA holder for ANNOVERA.

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

We had manufacturing and supply agreements whereby we were required to purchase from Catalent, Inc. (“Catalent”) a minimum number of units of BIJUVA and IMVEXXY softgels during each respective annual contract year. The annual contract period for BIJUVA and IMVEXXY ended each April and July, respectively. If the minimum order quantities of BIJUVA or IMVEXXY were not met, we were required to pay a minimum commitment fee equal to 50% or 60%, respectively, of the difference between the total amount we would have paid if the minimum requirement had been fulfilled and the total amount of purchases of BIJUVA or IMVEXXY during each product’s respective contract year.

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

On December 30, 2022, after granting an exclusive license to commercialize the Company’s IMVEXXY, BIJUVA, and prescription prenatal vitamin products sold under the BocaGreenMD and vitaMedMD brands and assigning the Company’s exclusive license to commercialize ANNOVERA to Mayne Pharma, the rights and obligations under the Catalent minimum manufacturing and supply agreements and other supply agreements have been transferred to Mayne Pharma.

In February 2020, we received a Paragraph IV certification notice letter (the “IMVEXXY Notice Letter”) regarding an Abbreviated New Drug Application (“ANDA”) submitted to the FDA by Teva Pharmaceuticals USA, Inc. (“Teva”). The ANDA seeks approval from the FDA to commercially manufacture, use, or sell a generic version of the 4 mcg and 10 mcg doses of IMVEXXY. In the IMVEXXY

Notice Letter, Teva alleges that TherapeuticsMD patents listed in the FDA’s Orange Book that claim compositions and methods of IMVEXXY (the “IMVEXXY Patents”) are invalid, unenforceable, and/or will not be infringed by Teva’s commercial manufacture, use, or sale of its proposed generic drug product. The IMVEXXY Patents identified in the IMVEXXY Notice Letter expire in 2032 or 2033. In April 2020, we filed a complaint for patent infringement against Teva in the United States District Court for the District of New Jersey arising from Teva’s ANDA filing with the FDA. We are seeking, among other relief, an order that the effective date of any FDA approval of Teva’s ANDA would be a date no earlier than the expiration of the IMVEXXY Patents and equitable relief enjoining Teva from infringing the IMVEXXY Patents. Teva has filed its answer and counterclaim to the complaint, alleging that the IMVEXXY Patents are invalid and not infringed. In July 2021, following a proposal by Teva, the District Court entered an order temporarily staying all proceedings in the IMVEXXY litigation, which order was filed under seal. In September 2021, the District Court made available a public version of the 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 the FDA from granting final approval of the ANDA for 30 months from the date of the IMVEXXY Notice Letter will be extended for the number of days that the stay of the IMVEXXY litigation is in place. The length of the stay of the IMVEXXY litigation is dependent on further action by Teva. As of December 31, 2022, for the IMVEXXY Paragraph IV legal proceeding, we have incurred and recorded legal costs amounting to $2.3 million in prepaid expenses and other current assets since we believe that we will successfully prevail in this legal proceeding. Upon the successful conclusion of the legal proceeding, the related capitalized legal costs will be reclassified to patents, in license rights and other intangible assets, net, in the accompanying consolidated balance sheets, and such costs will be amortized over the remaining useful life of the patents. If we are unsuccessful in this legal proceeding, then the related capitalized legal costs for this legal preceding and any unamortized IMVEXXY patent costs that were previously capitalized will be immediately expensed in the period in which we become aware of an unsuccessful legal proceeding.

In March 2020, we received a Paragraph IV certification notice letter (the “BIJUVA Notice Letter”) regarding an ANDA submitted to FDA by Amneal Pharmaceuticals (“Amneal”). In April 2020, we filed a complaint for patent infringement against Amneal in the United States District Court for the District of New Jersey arising from Amneal’s ANDA filing with FDA. In December 2021, we entered into a settlement agreement (the “Settlement Agreement”) with Amneal Pharmaceuticals, Inc., Amneal Pharmaceuticals, LLC and Amneal Pharmaceuticals of New York LLC (collectively “Amneal”) to resolve the litigation over our patents listed in FDA’s Orange Book that claim compositions and methods of BIJUVA (the “BIJUVA Patents”). Under the terms of the Settlement Agreement, the parties filed a consent judgment with the U.S. District Court for the District of New Jersey that enjoins Amneal from marketing a generic version of BIJUVA (1 mg estradiol and 100 mg progesterone) before the expiration of the patents-in-suit, except as provided in the Settlement Agreement, and the Company granted Amneal a non-exclusive, non-transferable, royalty-free license to commercialize Amneal’s generic formulation of BIJUVA in the U.S. commencing in May 2032 (180 days before the current expiration date in November 2032 for the last to expire of our BIJUVA Patents), or earlier under certain circumstances customary for settlement agreements of this nature. As of December 30, 2022 and per the license agreement, Mayne Pharma is responsible for all enforcement of our patents, including this litigation with Teva.

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

In January 2023, we received a deficiency letter (the “Notice”) from the Listing Qualifications Department of the Nasdaq Stock Market, LLC (“Nasdaq”) notifying us that we were not in compliance with the rules for continued listing as set forth in Nasdaq Listing Rule 5620(a) (the “Annual Meeting Rule”) due to our failure to hold an annual meeting of stockholders within 12 months after our fiscal year ended December 31, 2021. The Notice had no immediate effect on the listing of our Common Stock. We did not hold an annual meeting of stockholders during 2022 due to our then ongoing strategic processes.

The Notice stated that, under Nasdaq Listing Rule 5810(c)(2)(G), we had 45 calendar days, or until February 20, 2023, to submit a plan to regain compliance with the Annual Meeting Rule. We timely submitted such plan, and Nasdaq granted us an extension until June 29, 2023, to regain compliance. It is our intent to hold an annual meeting of stockholders in 2023 prior to such deadline and to fully regain compliance with all applicable Nasdaq listing standards.

As of December 31, 2022 and 2021 we had no off-balance sheet arrangements that have had or are reasonably likely to have current or future effects on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

In connection with the Company’s transformation into a pharmaceutical royalty company, the termination of our executive management team (except for Mr. Marlan Walker, our former General Counsel and current Chief Executive Officer) and all other employees was completed by December 31, 2022. Severance obligations for all employees other than executive officers were paid in full in the first quarter of 2023 and severance obligations for terminated executive officers will be paid in accordance with their employment agreements and separation agreements as previously disclosed. As of December 31, 2022, we have employed one full-time employee primarily engaged in executive position. We have engaged external consultants, including certain former members of our management team, who support our relationship with current partners and assist with certain financial, legal and regulatory matters and the continued wind-down of our historical business operations. The separation of our former Interim Co-Chief Executive Officers, former Interim Chief Financial Officer and other executives from the Company was a termination without “Good Cause,” as defined in their employment agreements. In the aggregate, in December 2022, we recorded severance expenses for executive termination obligations of $6.0 million, of which $1.1 million was related to share-based compensation recorded in connection with accelerated vesting of certain share-based payment awards.

On September 6, 2022, our Board appointed interim Co-Chief Executive Officers. The separation of our former chief executive officer from the Company was a termination without “Good Cause,” as defined in his employment agreement. Accordingly, our former chief executive officer received the separation benefits provided therein, and we recorded executive officer severance expenses of $4.8 million, of which $3.2 million was related to share-based compensation recorded in connection with accelerated vesting of certain share-based payment awards for the former chief executive officer. In connection with our former chief executive officer’s separation from the Company, he ceased to serve as a member of our Board.

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

We maintained a voluntary defined contribution 401(k) plan covering all eligible employees as defined in the plan documents. The plan provided for discretionary matching contribution, which is equal to up to four percent of each eligible contributing participant’s elective deferral not to exceed two thousand per year. Employees who elected to participate in the plan were generally fully vested in any existing matching contribution after five years of service with the Company. As part of termination of employees, all contributions made by the Company to each participant became 100% vested.

Contributions by the Company under the plan amounted to $0.5 million and $0.6 million for 2022 and 2021, respectively.