TherapeuticsMD 10-K


Exhibit
10.23


TherapeuticsMD,
Inc. (the “Company”)


AUDIT
COMMITTEE CHARTER


Purpose


The
purpose of the Audit Committee (the “Committee”) shall be as follows:


		1.	To
                                                              oversee the accounting and financial reporting processes of the
                                                              Company and audits of the financial statements of the Company.



		2.	To
                                                              provide assistance to the Board of Directors with respect to its
                                                              oversight of the following:



(a)            
The integrity of the Company’s financial statements.


(b)           
The Company’s compliance with legal and regulatory requirements.


(c)            
The independent auditor’s qualifications and independence.


		(d)	The
                                                                 performance of the Company’s internal audit function, if
                                                                 any, and independent auditor.



		3.	To
                                                              prepare the report that the Securities and Exchange Commission (the
                                                              “SEC”) rules require be included in the Company’s
                                                              annual proxy statement.



Composition


The
Committee shall consist of three or more members of the Board of Directors, each of whom is determined by the Board of Directors
to be “independent” under the rules of the NYSE MKT and Rule 10A-3(b)(1) under the Securities Exchange Act of 1934
adopted pursuant to the Sarbanes-Oxley Act and each of whom must not have participated in the preparation of the financial statements
of the Company or any current subsidiary of the Company during the previous three-year period.


Under
exceptional and limited circumstances, however, one director who is not independent as defined in the rules and regulations of
the NYSE MKT and who satisfies the requirements of Rule 10A-3(b)(1) under the Securities Exchange Act of 1934 may serve as a member
of the Committee, subject to the following:


		·	the
                                                                                                           director, other than
                                                                                                           in his or her capacity
                                                                                                           as a member of the
                                                                                                           Committee, the Board
                                                                                                           of Directors, or any
                                                                                                           other Board committee,
                                                                                                           does not accept directly
                                                                                                           or indirectly any consulting,
                                                                                                           advisory, or other
                                                                                                           compensatory fee from
                                                                                                           the Company or any
                                                                                                           of its subsidiaries
                                                                                                           other than the receipt
                                                                                                           of fixed amounts of
                                                                                                           compensation under
                                                                                                           a retirement plan (including
                                                                                                           deferred compensation)
                                                                                                           for prior service with
                                                                                                           the Company so long
                                                                                                           as such compensation
                                                                                                           is not contingent in
                                                                                                           any way on continued
                                                                                                           service;





    	 



    	 



    
		·	the
                                                                                                           director is not an
                                                                                                           affiliated person of
                                                                                                           the Company or any
                                                                                                           of its subsidiaries;



		·	the
                                                                                                           director is not a current
                                                                                                           officer or employee
                                                                                                           of the Company or an
                                                                                                           immediate family member
                                                                                                           of such officer or
                                                                                                           employee;



		·	the
                                                                                                           Board determines, under
                                                                                                           exceptional and limited
                                                                                                           circumstances, that
                                                                                                           membership by the individual
                                                                                                           on the Committee is
                                                                                                           required by the best
                                                                                                           interests of the Company
                                                                                                           and its shareholders; 



 


		·	the
                                                                                                           Company discloses in
                                                                                                           the next annual proxy
                                                                                                           statement subsequent
                                                                                                           to such determination
                                                                                                           (or the Form 10-K or
                                                                                                           its equivalent if an
                                                                                                           annual proxy statement
                                                                                                           is not filed), the
                                                                                                           nature of the relationship
                                                                                                           and the reasons for
                                                                                                           that determination;



		·	no
                                                                                                           such person may serve
                                                                                                           as the Chairman of
                                                                                                           the Committee; and



		·	no
                                                                                                           such person may serve
                                                                                                           on the Committee for
                                                                                                           more than two consecutive
                                                                                                           years.



No
member of the Committee shall receive directly or indirectly any consulting, advisory, or other compensatory fees from the Company
or any of its subsidiaries other than (1) director’s fees for service as a director of the Company, including reasonable
compensation for serving on Board committees and regular benefits that other directors receive; and (2) fixed amounts of compensation
under a retirement plan (including deferred compensation) for prior service with the Company, provided that such compensation
is not contingent in any way on continued service. Indirect compensation includes acceptance of fees (1) by a spouse, a minor
child or stepchild, or a child or stepchild sharing a home with the director or (2) by an entity in which the director is a partner,
member, an executive officer, or an officer that occupies a similar position and which provides accounting, consulting, legal,
investment banking or financial advisory services to the Company or any subsidiary. In addition, no member of the Committee may
be an affiliate of the Company or any subsidiary of the Company whether by being an executive officer of or a director who is
employed by the Company.


Qualifications


All
members of the Committee shall be able to read and understand fundamental financial statements (including a company’s balance
sheet, income statement, and cash flow statement) and at least one member must either have past employment experience in finance
or accounting, requisite professional certification in accounting, or any other comparable experience or background that results
in the member’s financial sophistication (including being or having been a chief executive officer, chief financial officer,
or other senior officer with financial oversight responsibilities) or be an “audit committee financial expert” under
the requirements of the SEC. Committee members may enhance their familiarity with finance and accounting by participating in educational
programs conducted by the Company or by an outside organization.


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Appointment and Removal


The
members of the Committee shall be appointed by the Board of Directors. A member shall serve until such member’s successor
is duly elected and qualified or until such member’s earlier resignation or removal. The members of the Committee may be
removed, with or without cause, by a majority vote of the Board of Directors.


Chairman


Unless
a Chairman is elected by the full Board of Directors, the members of the Committee shall designate a Chairman by the majority
vote of the full Committee membership. The Chairman will chair all regular sessions of the Committee and set the agendas for Committee
meetings.


Delegation to Subcommittees


In
fulfilling its responsibilities, the Committee shall be entitled to delegate any or all of its responsibilities to a subcommittee
of the Committee.


Meetings


The
Committee shall meet as frequently as circumstances dictate, but at least on a quarterly basis. The Chairman of the Committee
or a majority of the members of the Committee may call meetings of the Committee. Any one or more of the members of the Committee
may participate in a meeting of the Committee by means of conference call or similar communication device by means of which all
persons participating in the meeting can hear each other.


All
non-management directors who are not members of the Committee may attend meetings of the Committee, but may not vote. In addition,
the Committee may invite to its meetings any director, member of management of the Company, and such other persons as it deems
appropriate in order to carry out its responsibilities. The Committee may also exclude from its meetings any persons it deems
appropriate.


As
part of its goal to foster open communication, the Committee shall periodically meet separately with each of management, the director
of the internal auditing department, if any, and the independent auditor to discuss any matters that the Committee, the independent
auditor, or the internal auditor, if any, believe would be appropriate to discuss privately. In addition, the Committee should
meet with the independent auditor and management periodically to review the Company’s financial statements in a manner consistent
with that outlined in this Charter.


Duties and Responsibilities


The
Committee shall carry out the duties and responsibilities set forth below. These functions should serve as a guide with the understanding
that the Committee may determine to carry out additional functions and adopt additional policies and procedures as may be appropriate
in light of changing business, legislative, regulatory, legal, or other conditions. The Committee shall also carry out any other
duties and responsibilities delegated to it by the Board of Directors from time to time related to the purposes of the Committee
outlined in this Charter. The Committee may perform any functions it deems appropriate under applicable law, rules, or regulations,
the Company’s by-laws, and the resolutions or other directives of the Board, including review of any certification required
to be reviewed in accordance with applicable law or regulations of the SEC.


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In
discharging its oversight role, the Committee is empowered to study or investigate any matter of interest or concern that the
Committee deems appropriate. In this regard and as it otherwise deems appropriate, the Committee shall have the authority, without
seeking Board approval, to engage and obtain advice and assistance from independent legal and other advisors as it deems necessary
to carry out its duties. The Committee also shall have the authority to receive appropriate funding, as determined by the Committee,
in its capacity as a committee of the Board of Directors, from the Company for the payment of compensation to any accounting firm
engaged for the purpose of preparing or issuing an audit report or performing other audit, review, or attest services for the
Company; to compensate any independent legal or other advisors engaged by the Committee; and to pay the ordinary administrative
expenses of the Committee that are necessary or appropriate in carrying out its duties.


The
Committee shall be given full access to the Company’s internal audit group, if any, Board of Directors, corporate executives,
and independent auditor as necessary to carry out these responsibilities. While acting within the scope of its stated purpose,
the Committee shall have all the authority of the Board of Directors, except as otherwise limited by applicable law.


Notwithstanding
the foregoing, the Committee is not responsible for certifying the Company’s financial statements or guaranteeing the independent
auditor’s report. The fundamental responsibility for the Company’s financial statements and disclosures rests with
management and the independent auditor. It also is the job of the Chief Executive Officer and senior management, rather than that
of the Committee, to assess and manage the Company’s exposure to risk.


Documents/Reports Review


		1.	Discuss
                                                          with management and the independent auditor, prior to public dissemination,
                                                          the Company’s annual audited financial statements and quarterly
                                                          financial statements, including the Company’s disclosures under
                                                          “Management’s Discussion and Analysis of Financial Condition
                                                          and Results of Operations” and discuss with the independent auditor
                                                          the matters required to be discussed by Statement of Auditing Standards
                                                          No. 61.



		2.	Discuss
                                                          with management and the independent auditor, prior to the Company’s
                                                          filing of any quarterly or annual report, (a) whether any significant
                                                          deficiencies in the design or operation of internal control over financial
                                                          reporting exist that could adversely affect the Company’s ability
                                                          to record, process, summarize, and report financial data; (b) the existence
                                                          of any material weaknesses in the Company’s internal control over
                                                          financial reporting; and (c) the existence of any fraud, whether or
                                                          not material, that involves management or other employees who have a
                                                          significant role in the Company’s internal control over financial
                                                          reporting.




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		3.	Discuss
                                                          with management and the independent auditor the Company’s earnings
                                                          press releases (paying particular attention to the use of any “pro
                                                          forma” or “adjusted” non-GAAP information), as well
                                                          as financial information and earnings guidance provided and the type
                                                          of presentations made to analysts and rating agencies.






		4.	Discuss
                                                          with management and the independent auditor the Company’s major
                                                          financial risk exposures, the guidelines and policies by which risk
                                                          assessment and management is undertaken, and the steps management has
                                                          taken to monitor and control risk exposure.



Independent Auditors


		5.	Appoint,
                                                          retain, compensate, evaluate, and terminate any accounting firm engaged
                                                          by the Company for the purpose of preparing or issuing an audit report
                                                          or performing other audit, review, or attest services for the Company
                                                          and, in its sole authority, approve all audit engagement fees and terms
                                                          as well as all non-audit engagements with such accounting firm.



		6.	Oversee
                                                          the work of any accounting firm engaged by the Company for the purpose
                                                          of preparing or issuing an audit report or performing other audit, review,
                                                          or attest services for the Company, including resolving any disagreements
                                                          between management and the independent auditor regarding financial reporting.



		7.	Pre-approve,
                                                          or adopt procedures to pre-approve, all audit, audit related, tax, and
                                                          other services permitted by law or applicable SEC regulations (including
                                                          fee and cost ranges) to be performed by the independent auditor. Any
                                                          pre-approved services that will involve fees or costs exceeding pre-approved
                                                          levels will also require specific pre-approval by the Committee. Unless
                                                          otherwise specified by the Committee in pre-approving a service, the
                                                          pre-approval will be effective for the 12-month period following pre-approval.
                                                          The Committee will not approve any non-audit services prohibited by
                                                          applicable SEC regulations or any services in connection with a transaction
                                                          initially recommended by the independent auditor, the purpose of which
                                                          may be tax avoidance and the tax treatment of which may not be supported
                                                          by the Internal Revenue Code and related regulations.



		8.	To the
                                                          extent it deems it appropriate, delegate pre-approval authority to the
                                                          Chairman of the Committee or any one or more other members of the Committee
                                                          provided that any member of the Committee who has exercised any such
                                                          delegation must report any such pre-approval decision to the Committee
                                                          at its next scheduled meeting. The Committee will not delegate the pre-approval
                                                          of services to be performed by the independent auditor to management.



		9.	Require
                                                          that the independent auditor, in conjunction with the Chief Financial
                                                          Officer, be responsible for seeking pre-approval for providing services
                                                          to the Company and that any request for pre-approval must inform the
                                                          Committee about each service to be provided and must provide detail
                                                          as to the particular service to be provided.



		10.	Inform
                                                           each accounting firm engaged for the purpose of preparing or issuing
                                                           an audit report or to perform audit, review, or attest services for
                                                           the Company that such firm shall report directly to the Committee.




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		11.	Review,
                                                           at least annually, the qualifications, performance, and independence
                                                           of the independent auditor, including the lead audit partner. In conducting
                                                           its review and evaluation, the Committee should do the following:






		(a)	At
                                                             least annually, obtain and review a report by the Company’s
                                                             independent auditor describing (i) the auditing firm’s internal
                                                             quality-control procedures; (ii) any material issues raised by the
                                                             most recent internal quality-control review, or peer review, of the
                                                             auditing firm, or by any inquiry or investigation by governmental
                                                             or professional authorities, within the preceding five years, respecting
                                                             one or more independent audits carried out by the auditing firm,
                                                             and any steps taken to deal with any such issues; and (iii) all relationships
                                                             between the independent auditor and the Company.



		(b)	Ensure
                                                             the receipt from the independent auditor of a formal written statement
                                                             delineating all relationships between the auditor and the Company,
                                                             consistent with Independence Standards Board Standard No. 1.



		(c)	Actively
                                                             engage in a dialogue with the independent auditor with respect to
                                                             any disclosed relationships or services that may impact the objectivity
                                                             and independence of the auditor.



		(d)	Take,
                                                             or recommend that the full Board of Directors take, appropriate action
                                                             to oversee the independence of the independent auditor.



		(e)	Ensure
                                                             the rotation of the lead (or coordinating) audit partner at least
                                                             every five years, and consider whether there should be regular rotation
                                                             of the audit firm itself.



		(f)	Confirm
                                                             with the independent auditor that the lead (or coordinating) audit
                                                             partner, the concurring (or reviewing) audit partner, and each other
                                                             active audit engagement team partner satisfies the rotation requirements
                                                             of Rule 2-01(c)(6) of Regulation S-X.



		(g)	Take
                                                             into account the opinions of management and the Company’s internal
                                                             auditor (or other personnel responsible for the internal audit function),
                                                             if any, in assessing the qualifications, performance, and independence
                                                             of the independent auditor.



Financial Reporting Process


		12.	In consultation
                                                           with the independent auditor, management, and the internal auditor,
                                                           if any, review the integrity of the Company’s financial reporting
                                                           processes, both internal and external. In that connection, the Committee
                                                           should obtain and discuss with management and the independent auditor
                                                           reports from management and the independent auditor regarding (a) all
                                                           critical accounting policies and practices to be used by the Company
                                                           and the related disclosure of those critical accounting policies under
                                                           “Management’s Discussion and Analysis of Financial Condition
                                                           and Results of Operations”; (b) analyses prepared by management
                                                           and/or the independent auditor setting forth significant financial
                                                           reporting issues and judgments made in connection with the preparation
                                                           of the financial statements; (c) all alternative treatments of financial
                                                           information within generally accepted accounting principles that have
                                                           been discussed with the Company’s management, the ramifications
                                                           of the use of the alternative disclosures and treatments, and the treatment
                                                           preferred by the independent auditor; (d) major issues regarding accounting
                                                           principles and financial statement presentations, including any significant
                                                           changes in the Company’s selection or application of accounting
                                                           principles; (e) major issues as to the adequacy of the Company’s
                                                           internal controls and any specific audit steps adopted in light of
                                                           material control deficiencies; (f) issues with respect to the design
                                                           and effectiveness of the Company’s disclosure controls and procedures,
                                                           management’s evaluation of those controls and procedures, and
                                                           any issues relating to such controls and procedures during the most
                                                           recent reporting period; (g) the effect of regulatory and accounting
                                                           initiatives, as well as off-balance sheet structures, on the financial
                                                           statements of the Company; (h) any significant matters arising from
                                                           any audit, including any audit problems or difficulties, whether raised
                                                           by management, the internal auditor, if any, or the independent auditor,
                                                           relating to the Company’s financial statements; and (i) any other
                                                           material written communications between the independent auditor and
                                                           the Company’s management, including any “management”
                                                           letter or schedule of unadjusted differences.




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		13.	Review
                                                           periodically the effect of regulatory and accounting initiatives, as
                                                           well as off-balance sheet structures, on the financial statements of
                                                           the Company.






		14.	Review
                                                           with the independent auditor any audit problems or difficulties encountered
                                                           and management’s response thereto. In this regard, the Committee
                                                           will regularly review with the independent auditor (a) any audit problems
                                                           or other difficulties encountered by the auditor in the course of the
                                                           audit work, including any restrictions on the scope of the independent
                                                           auditor’s activities or on access to requested information, and
                                                           any significant disagreements with management and (b) management’s
                                                           responses to such matters. Without excluding other possibilities, the
                                                           Committee may review with the independent auditor (i) any accounting
                                                           adjustments that were noted or proposed by the auditor but were “passed”
                                                           (as immaterial or otherwise), (ii) any communications between the audit
                                                           team and the audit firm’s national office respecting auditing
                                                           or accounting issues presented by the engagement, and (iii) any “management”
                                                           or “internal control” letter issued, or proposed to be
                                                           issued, by the independent auditor to the Company.



		15.	Advise
                                                           management, the internal audit department, and the independent auditor
                                                           that they are expected to provide the Committee a timely analysis of
                                                           any significant financial reporting issues and practices.



		16.	Obtain
                                                           from the independent auditor assurance that the audit of the Company’s
                                                           financial statements was conducted in a manner consistent with Section
                                                           10A of the Securities Exchange Act of 1934, which sets forth procedures
                                                           to be followed in any audit of financial statements required under
                                                           the Securities Exchange Act of 1934.




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		17.	Request
                                                           the internal auditor, if any, to provide the Committee with summaries
                                                           and, as appropriate, the significant reports to management prepared
                                                           by the internal auditor and any management responses thereto.






		18.	Discuss
                                                           the scope of the annual audit and review the form of the opinion the
                                                           independent auditor proposes to issue.






		19.	Review
                                                           and discuss with management and the independent auditor the responsibilities,
                                                           budget, and staffing of the Company’s internal audit function,
                                                           if any.






Legal Compliance/General


		20.	Review
                                                           periodically, with the Company’s legal counsel, any significant
                                                           legal, compliance, or regulatory matters that may have a material effect
                                                           on the Company’s financial statements or the Company’s
                                                           business or compliance policies, including material notices to or inquiries
                                                           received from governmental agencies.






		21.	Discuss
                                                           with management and the independent auditor the Company’s guidelines
                                                           and policies with respect to risk assessment and risk management. The
                                                           Committee will discuss the Company’s major financial risk exposures
                                                           and the steps management has taken to monitor and control such exposures.






		22.	Set clear
                                                           hiring policies for employees or former employees of the independent
                                                           auditor. At a minimum, these policies will provide that any public
                                                           accounting firm may not provide audit services to the Company if the
                                                           Chief Executive Officer, Chief Financial Officer, Chief Accounting
                                                           Officer, Controller, or any person serving in an equivalent position
                                                           for the Company was employed by the audit firm and participated in
                                                           any capacity in the audit of the Company within one year of the initiation
                                                           of the current audit.






		23.	Establish
                                                           procedures for (a) the receipt, retention, and treatment of complaints
                                                           received by the Company regarding accounting, internal accounting controls,
                                                           or auditing matters; and (b) the confidential, anonymous submission
                                                           by employees of the Company of concerns regarding questionable accounting
                                                           or auditing matters.






		24.	Unless
                                                           specifically delegated by the Board of Directors to the Compensation
                                                           Committee of the Board of Directors, review and approve all related
                                                           party transactions (as specified in Item 404 of Regulation S-K) and
                                                           review and make recommendations to the full Board of Directors, or
                                                           approve, any contracts or other transactions with current or former
                                                           executive officers of the Company, including consulting arrangements,
                                                           employment contracts, change-in-control agreements, termination arrangements,
                                                           and loans to employees made or guaranteed by the Company.



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		25.	Review
                                                           and reassess the adequacy of this Charter on an annual basis and recommend
                                                           any changes to the Board of Directors.






Reports


		26.	Prepare all reports required to be
                                                           included in the Company’s proxy statement, pursuant to and in
                                                           accordance with applicable rules and regulations of the SEC.



		27.	Report
                                                           regularly to the full Board of Directors. In this regard, the Committee
                                                           will review with the full Board any issues that arise with respect
                                                           to the quality or integrity of the Company’s financial statements,
                                                           the Company’s compliance with legal or regulatory requirements,
                                                           the performance and independence of the Company’s independent
                                                           auditor, and the performance of the internal audit function, if any.



		28.	The Committee
                                                           shall provide such recommendations as the Committee may deem appropriate.
                                                           The report to the Board of Directors may take the form of an oral report
                                                           by the Chairman or any other member of the Committee designated by
                                                           the Committee to make such report.



		29.	Maintain minutes or other records
                                                           of meetings and activities of the Committee.



Limitation of Audit Committee’s
Role


With
respect to the foregoing responsibilities and processes, the Committee recognizes that the Company’s financial management,
including the internal audit staff, if any, as well as the independent auditor have more time, knowledge, and detailed information
regarding the Company than do Committee members. Consequently, in discharging its oversight responsibilities, the Committee will
not provide or be deemed to provide any expertise or special assurance as to the Company’s financial statements or any professional
certification as to the independent auditor’s work.


While
the Committee has the responsibilities and powers set forth in this Charter, it is not the duty of the Committee to plan or conduct
audits or to determine that the Company’s financial statements and disclosures are complete and accurate and are in accordance
with generally accepted accounting principles and applicable rules and regulations. These are the responsibilities of management
and the independent auditor. It also is not the duty of the Committee to conduct investigations or to assure compliance with laws
and regulations and the Company’s internal policies and procedures.


 




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