veru20251231

veru20251231_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2025

☐	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission File Number 1-13602

Veru Inc.

(Exact Name of Registrant as Specified in its Charter)


Wisconsin	39-1144397
(State of Incorporation)	(I.R.S. Employer Identification No.)

2916 N. Miami Avenue, Suite 1000, Miami, FL	33127
(Address of Principal Executive Offices)	(Zip Code)

305-509-6897

(Registrant’s Telephone Number, Including Area Code)

N/A

(Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $0.01 par value per share	VERU	Nasdaq Capital Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☐		Accelerated filer ☐
Non-accelerated filer ☒		Smaller reporting company☒
		Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as determined by Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

As of February 6, 2026, the registrant had 16,050,320 shares of $0.01 par value common stock outstanding.

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VERU INC.

INDEX

	PAGE

Forward Looking Statements	3

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements	5

Unaudited Condensed Consolidated Balance Sheets	5

Unaudited Condensed Consolidated Statements of Operations	6

Unaudited Condensed Consolidated Statements of Stockholders’ Equity	7

Unaudited Condensed Consolidated Statements of Cash Flows	8

Notes to Unaudited Condensed Consolidated Financial Statements	9

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	25

Item 3. Quantitative and Qualitative Disclosures About Market Risk	35

Item 4. Controls and Procedures	35

PART II. OTHER INFORMATION

Item 1. Legal Proceedings	36

Item 1A. Risk Factors	36

Item 6. Exhibits	37

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FORWARD LOOKING STATEMENTS

Certain statements included in this quarterly report on Form 10-Q which are not statements of historical fact are intended to be, and are hereby identified as, “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements include, but are not limited to, statements about our financial condition or business, our development and commercialization plans relating to our product candidates and products, including any potential development or commercialization of enobosarm as a drug candidate that preserves muscle mass and augments fat loss in patients receiving a glucagon-like peptide-1 receptor agonist (“GLP-1 RA”) for greater amount and higher quality weight loss for the treatment of obesity and sabizabulin to treat cardiovascular atherosclerotic disease to reduce major cardiovascular events, future financial and operating results, plans, objectives, expectations and intentions, costs and expenses, royalty payments, outcome of litigation and other contingencies, financial condition, results of operations, liquidity, cost savings, our ability to continue as a going concern, objectives of management, business strategies, clinical trial timing, plans and results, the achievement of clinical and commercial milestones, the advancement of our technologies and our products and drug candidates, our intellectual property strategy and whether any products may be patented, and other statements that are not historical facts. Forward-looking statements can be identified by the use of forward-looking words or phrases such as “anticipate,” “believe,” “could,” “expect,” “intend,” “may,” “opportunity,” “plan,” “predict,” “potential,” “estimate,” “should,” “will,” “would” or the negative of these terms or other words of similar meaning. These statements are based upon the Company’s current plans and strategies and reflect the Company’s current assessment of the risks and uncertainties related to its business and are made as of the date of this report. These statements are inherently subject to known and unknown risks and uncertainties. You should read these statements carefully because they discuss our future expectations or state other “forward-looking” information. There may be events in the future that we are not able to accurately predict or control and our actual results may differ materially from the expectations we describe in our forward-looking statements. Factors that could cause actual results to differ materially from those currently anticipated include the following:

●

potential delays in the timing of and results from clinical trials and studies, including potential delays in the recruitment of patients and their ability to effectively participate in such trials and studies, the potential suspension or termination of any such trials or studies, and the risk that such results will not support marketing approval or commercialization in the United States or in any foreign country;

●

potential delays in the timing of any submission to the U.S. Food and Drug Administration (the “FDA”) or any other regulatory authority around the world and potential delays in, or failure to obtain, from any such regulatory authority approval of products under development, including the risk of a delay or failure in reaching agreement with the FDA on the design of any clinical trial, including any post-approval or post-authorization study, or in obtaining authorization to commence a clinical trial or commercialize a product candidate in the U.S. or elsewhere, and the risk that the terms of any regulatory approval may limit the drug’s commercial potential;

●

although we have sought and received feedback from the FDA on the designs of our clinical trials and intend to continue to do so, the FDA may ultimately disagree that our trials support approval;

●

potential delays in the timing of approval by the FDA or any other regulatory authority of the release of manufactured lots of approved products;

●

clinical trial results supporting any potential regulatory approval or authorization of any of our products, including enobosarm initially as a treatment to augment fat loss and to prevent muscle loss in sarcopenic obese or overweight elderly patients receiving a GLP-1 RA who are at-risk for developing muscle weakness and sabizabulin to treat cardiovascular atherosclerotic disease to reduce major cardiovascular events, may not be replicated in clinical practice;

●

clinical results or early data from clinical trials may not be replicated or continue to occur in additional trials or may not otherwise support further development in the specified product candidate or at all;

●

risks that our business could be negatively impacted by disruptions at the FDA or other government agencies, including as a result of a shutdown of the U.S. government;

●

risks related to our ability to obtain sufficient financing on acceptable terms when needed to fund product development and our operations and to enable us to continue as a going concern;

●

we may not receive any additional funds upon the exercise of outstanding warrants;

●

our ability to maintain compliance with the continued listing requirements of the Nasdaq Stock Market LLC (“Nasdaq”);

●

we need to secure significant funding to advance our drug candidates, including government grants, pharmaceutical company partnerships, or similar external sources to advance the development of sabizabulin as a treatment for slowing progression of or promoting regression of atherosclerosis disease;

●

risks related to the development of our product portfolio, including clinical trials, regulatory approvals and time and cost to bring any of our product candidates to market, and risks related to efforts of our collaborators;

●

product demand and market acceptance of our products in development, if approved;

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●

risks related to our ability to obtain insurance reimbursement from private payors or government payors, including Medicare and Medicaid, and similar risks relating to market or political acceptance of any potential or actual pricing for any of our product candidates that, if approved, we attempt to commercialize;

●

all of our products are in development and we may fail to obtain regulatory approval for or successfully commercialize such products;

●

risks related to intellectual property, including the uncertainty of obtaining intellectual property protections and in enforcing them, the possibility of infringing a third party’s intellectual property, and licensing risks, and the Company’s ability to fund any enforcement or defense of its intellectual property rights;

●

competition from existing and new competitors with respect to our products in development, if approved, including the potential for reduced sales, pressure on pricing, and increased spending on marketing;

●

risks related to compliance and regulatory matters, including costs and delays resulting from extensive government regulation and reimbursement and coverage under healthcare insurance and regulation as well as potential healthcare reform measures;

●

the risk that we will be affected by regulatory and legal developments;

●

risks inherent in doing business on an international level, including currency risks, tariffs, regulatory requirements, political risks, export restrictions and other trade barriers, and including restrictions on the importation or sale of drug products;

●

the risk of disruption of production at facilities of third parties on which we rely and/or of our ability to obtain supply product due to raw material shortages, labor shortages, manufacturing partner business changes, physical damage to third parties’ facilities, product testing, transportation delays or regulatory or other governmental actions, and the duration and impact of any such disruptions;

●

risks related to our growth strategy;

●

our continued ability to attract and retain highly skilled and qualified personnel;

●

risks relating to the restatement of our unaudited condensed consolidated financial statements as of and for the three and nine months ended June 30, 2023 and the restatement of our audited consolidated financial statements as of and for the years ended September 30, 2023 and 2022;

●

risks relating to our history of losses and the fact we currently have no commercial revenue and may never generate revenue or become profitable;

●

the costs and other effects of litigation, governmental investigations, legal and administrative cases and proceedings, settlements and investigations, and other claims against us;

●

the risk that we may identify material weaknesses or other deficiencies in our internal control over financial reporting in the future or otherwise fail to maintain an effective system of internal controls;

●

we are subject to cybersecurity risks and the information technology systems on which we rely may be subject to data security or privacy incidents;

●

our ability to identify, successfully negotiate and complete suitable acquisitions, out-licensing transactions, in-licensing transactions or other strategic initiatives and to realize any potential benefits of such transactions or initiatives; and

●

our ability to successfully integrate acquired businesses, technologies or products.

These factors are not exhaustive. All forward-looking statements in this report should be considered in the context of the risks and other factors described above and in Part I, Item 1A, “Risk Factors”, in the Company’s Annual Report on Form 10-K for the fiscal year ended September 30, 2025. Additional factors that we do not yet know of or that we currently think are immaterial may also impair our business operations, and new risk factors may emerge from time to time. It is not possible to predict all such risk factors, nor can the Company assess the impact of all such risk factors on its business or the extent to which any factor or combination of factors may cause actual results to differ materially from those contained in any forward-looking statements. Forward-looking statements are not guarantees of performance. You should not put undue reliance on these statements, which speak only as of the date hereof. All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by the foregoing cautionary statements. The Company undertakes no obligation to make any revisions to the forward-looking statements contained in this report or to update them to reflect events or circumstances occurring after the date of this report except as required by applicable law.

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

VERU INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

	December 31,			September 30,
	2025			2025
Assets
Current assets:
Cash, cash equivalents, and restricted cash	$	32,991,417		$	15,794,562
Investments in equity securities		2,405,227			2,525,305
Prepaid expenses and other current assets		1,410,072			595,251
Total current assets		36,806,716			18,915,118
Property and equipment, net		336,615			364,808
Operating lease right-of-use assets		2,613,920			2,746,014
Goodwill		6,878,932			6,878,932
Other assets		930,847			930,847
Total assets	$	47,567,030		$	29,835,719

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	1,516,138		$	3,121,448
Accrued compensation		4,546,621			3,510,237
Accrued expenses and other current liabilities		300,351			394,529
Operating lease liability, short-term portion		764,590			758,946
Total current liabilities		7,127,700			7,785,160
Operating lease liability, long-term portion		2,212,767			2,358,018
Other liabilities		1,102,522			1,359,871
Total liabilities		10,442,989			11,503,049

Commitments and contingencies (Note 12)

Stockholders' equity:
Preferred stock; no shares issued and outstanding at December 31, 2025 and September 30, 2025		—			—
Common stock, par value $0.01 per share; 308,000,000 shares authorized, 16,268,690 and 14,868,690 shares issued and 16,050,320 and 14,650,320 shares outstanding at December 31, 2025 and September 30, 2025, respectively		162,687			148,687
Additional paid-in-capital		367,396,452			343,286,502
Accumulated other comprehensive loss		—			—
Accumulated deficit		(322,628,493	)		(317,295,914	)
Treasury stock, 218,370 shares, at cost		(7,806,605	)		(7,806,605	)
Total stockholders' equity		37,124,041			18,332,670
Total liabilities and stockholders' equity	$	47,567,030		$	29,835,719

See notes to unaudited condensed consolidated financial statements.

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VERU INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

	*Three Months Ended*
	*December 31,*
	*2025*			*2024*
Operating expenses:
Research and development	$	1,344,182		$	5,716,830
General and administrative		4,079,833			5,227,113
Total operating expenses		5,424,015			10,943,943

Gain on sale of ENTADFI® assets		—			695,216

Operating loss from continuing operations		(5,424,015	)		(10,248,727	)

Non-operating income (expenses):
Gain on extinguishment of debt		—			8,624,778
Change in fair value of equity securities		(120,078	)		(349,078	)
Other income, net		211,514			163,124
Total non-operating income		91,436			8,438,824

Net loss from continuing operations		(5,332,579	)		(1,809,903	)
Net loss from discontinued operations, net of taxes		—			(7,135,444	)
Net loss	$	(5,332,579	)	$	(8,945,347	)

Net loss from continuing operations per basic and diluted common shares and pre-funded warrants outstanding	$	(0.26	)	$	(0.12	)
Net loss from discontinued operations per basic and diluted common shares and pre-funded warrants outstanding	$	0.00		$	(0.49	)
Net loss per basic and diluted common shares and pre-funded warrants outstanding	$	(0.26	)	$	(0.61	)

Basic and diluted weighted average common shares and pre-funded warrants outstanding		20,311,190			14,638,392

See notes to unaudited condensed consolidated financial statements.

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VERU INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

							*Accumulated*
					*Additional*		*Other*					*Treasury*
	*Common Stock*				*Paid-in*		*Comprehensive*		*Accumulated*			*Stock,*
	*Shares*		*Amount*		*Capital*		*Loss*		*Deficit*			*at Cost*			*Total*

Balance at September 30, 2025		14,868,690	$	148,687	$	343,286,502	$	—	$	(317,295,914	)	$	(7,806,605	)	$	18,332,670
Share-based compensation		—		—		757,605		—		—			—			757,605
Shares issued in connection with public offering of common stock, warrants, and pre-funded warrants, net of fees and costs		1,400,000		14,000		23,352,345		—		—			—			23,366,345
Net loss		—		—		—		—		(5,332,579	)		—			(5,332,579	)
Balance at December 31, 2025		16,268,690	$	162,687	$	367,396,452	$	—	$	(322,628,493	)	$	(7,806,605	)	$	37,124,041


Balance at September 30, 2024	14,856,762	$	148,568	$	335,125,903	$	(581,519	)	$	(294,569,635	)	$	(7,806,605	)	$	32,316,712
Share-based compensation	—		—		2,674,105		—			—			—			2,674,105
Release of cumulative foreign currency translation adjustment to discontinued operations	—		—		—		581,519			—			—			581,519
Net loss	—		—		—		—			(8,945,347	)		—			(8,945,347	)
Balance at December 31, 2024	14,856,762	$	148,568	$	337,800,008	$	—		$	(303,514,982	)	$	(7,806,605	)	$	26,626,989

See notes to unaudited condensed consolidated financial statements.

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VERU INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

	*Three Months Ended*
	*December 31,*
	*2025*			*2024*
OPERATING ACTIVITIES
Net loss	$	(5,332,579	)	$	(8,945,347	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		28,193			64,870
Noncash change in right-of-use assets		132,094			199,580
Noncash interest expense, net of interest paid		—			(168,556	)
Gain on extinguishment of debt		—			(8,624,778	)
Loss on sale of FC2 business		—			4,204,435
Gain on sale of ENTADFI® assets		—			(695,216	)
Share-based compensation		757,605			2,674,105
Deferred income taxes		—			(1,915	)
Change in fair value of derivative liabilities		—			3,138,316
Change in fair value of equity securities		120,078			349,078
Other		—			(72,831	)
Changes in current assets and liabilities:
Increase in accounts receivable		—			(657,253	)
Decrease in inventories		—			863,928
Increase in prepaid expenses and other assets		(814,821	)		(511,038	)
Decrease in accounts payable		(1,862,659	)		(1,282,454	)
Increase (decrease) in accrued expenses and other liabilities		942,206			(1,643,235	)
Decrease in operating lease liabilities		(139,607	)		(224,676	)
Net cash used in operating activities		(6,169,490	)		(11,332,987	)

INVESTING ACTIVITIES
Proceeds from sale of FC2 business, net of costs		—			16,157,965
Cash proceeds from sale of ENTADFI® assets		—			695,216
Proceeds from sale of equity securities		—			393,217
Capital expenditures		—			(1,083	)
Net cash provided by investing activities		—			17,245,315

FINANCING ACTIVITIES
Payment on extinguishment of residual royalty agreement liabilities		—			(4,221,611	)
Proceeds from sale of shares in public offering, net of commissions and costs		23,366,345			—
Net cash provided by (used in) financing activities		23,366,345			(4,221,611	)

Net increase in cash, cash equivalents, and restricted cash		17,196,855			1,690,717
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT BEGINNING OF PERIOD		15,794,562			24,916,285
CASH, CASH EQUIVALENTS, AND RESTRICTED CASH AT END OF PERIOD	$	32,991,417		$	26,607,002

Supplemental disclosure of cash flow information:
Cash paid for interest	$	—		$	332,826

See notes to unaudited condensed consolidated financial statements.

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VERU INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

Note 1 – Basis of Presentation and Significant Accounting Policies

The accompanying unaudited interim condensed consolidated financial statements for Veru Inc. (“we,” “our,” “us,” “Veru” or the “Company”) have been prepared pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”) for reporting of interim financial information. Pursuant to these rules and regulations, certain information and footnote disclosures normally included in annual financial statements prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) have been condensed or omitted, although the Company believes that the disclosures made are adequate to make the information not misleading. Accordingly, these statements do not include all the disclosures normally required by U.S. GAAP for annual financial statements and should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations contained in this report and the audited financial statements and notes thereto included in our Annual Report on Form 10-K for the fiscal year ended September 30, 2025. The accompanying condensed consolidated balance sheet as of September 30, 2025 has been derived from our audited financial statements. The unaudited condensed consolidated statements of operations and cash flows for the three months ended December 31, 2025 are not necessarily indicative of the results to be expected for any future period or for the fiscal year ending September 30, 2026.

The preparation of our unaudited interim condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting periods. Actual results could differ from those estimates.

In the opinion of management, the accompanying unaudited interim condensed consolidated financial statements contain all adjustments (consisting of only normally recurring adjustments) necessary to present fairly the financial position and results of operations as of the dates and for the periods presented.

Principles of consolidation and nature of operations: Veru Inc. is referred to in these notes collectively with its subsidiaries as “we,” “our,” “us,” “Veru” or the “Company.” The consolidated financial statements include the accounts of Veru and its wholly owned subsidiaries, Aspen Park Pharmaceuticals, Inc. (APP) and PCHC Limited (formerly known as The Female Health Company Limited). PCHC Limited sold the stock of its wholly owned subsidiary, The Female Health Company (UK) plc effective December 30, 2024, as part of the FC2 Business Sale (see Note 3 for additional information). The Female Health Company (UK) plc and The Female Health Company (UK) plc’s wholly owned subsidiary, The Female Health Company (M) SDN.BHD (the “Malaysia subsidiary”) were included in the consolidated financial statements through December 30, 2024. Veru International Holdco Inc. was a wholly owned subsidiary of the Company and was dissolved in December 2025. Veru International Holdco Inc. did not have any impact on the Company’s operations during the quarter ended December 31, 2025. Veru International Holdco Inc.’s wholly owned subsidiaries, Veru Biopharma Netherlands B.V., Veru Biopharma UK Limited, and Veru Biopharma Europe Limited were dissolved during fiscal 2024 and were included in the consolidated financial statements through the date of dissolution. All significant intercompany transactions and accounts have been eliminated in consolidation. The Company is a late clinical stage biopharmaceutical company focused on developing novel medicines for the treatment of cardiometabolic and inflammatory diseases. Our drug development program includes enobosarm, an oral selective androgen receptor modulator, which is being developed as a next generation drug that makes weight reduction by GLP-1 RA drugs more tissue selective for loss of fat and preservation of lean mass, and sabizabulin, a microtubule disruptor, which is being developed for the treatment of inflammation in atherosclerotic cardiovascular disease. On December 30, 2024, the Company sold substantially all of the assets relating to its FDA-approved commercial product, the FC2 Female Condom® (Internal Condom). See Note 3 for additional information. The Company also had ENTADFI® (finasteride and tadalafil) capsules for oral use (ENTADFI), a new treatment for benign prostatic hyperplasia that was approved by the FDA in December 2021. We sold substantially all of the assets related to ENTADFI on April 19, 2023. See Note 15 for additional information. All of the Company’s net revenues during the three months ended December 31, 2024 were derived from sales of FC2 and are included within discontinued operations. The Company had no net revenues during the three months ended December 31, 2025.

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Reverse stock split: As described more fully in Note 9, effective August 8, 2025, the Company effected a 1-for-10 reverse stock split for all of its issued and outstanding shares of common stock. All share and per share amounts presented in these consolidated financial statements and accompanying notes and elsewhere in this Quarterly Report on Form 10-Q, including but not limited to shares issued and outstanding, loss per share, and stock options and stock appreciation rights, as well as the dollar amounts of common stock and paid-in-capital, have been retroactively adjusted for all periods presented. There was no change to the total number of shares authorized or par value per share as a result of this reverse stock split.

Other comprehensive loss: Accounting principles generally require that recognized revenue, expenses, gains and losses be included in net loss. Although certain changes in assets and liabilities, such as foreign currency translation adjustments, are reported as a separate component of the equity section of the accompanying unaudited condensed consolidated balance sheets, these items, along with net loss, are components of other comprehensive loss. For the three months ended December 31, 2025 and 2024, comprehensive loss is equivalent to the reported net loss.

Recent accounting pronouncements not yet adopted: In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures, which includes amendments that further enhance income tax disclosures, primarily through standardization and disaggregation of rate reconciliation categories and income taxes paid by jurisdiction. ASU 2023-09 is effective for the Company’s annual periods beginning with the fiscal year ending September 30, 2026, with early adoption permitted, and should be applied either prospectively or retrospectively. The Company is currently evaluating the impact of adopting ASU 2023-09 on its disclosures.

In November 2024, the FASB issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Disaggregation of Income Statement Expenses, which requires more detailed disclosures about specified categories of expenses (including employee compensation, deprecation, and selling expenses) included in certain expense captions presented on the face of the statement of operations. In January 2025, the FASB issued ASU 2025-01 to clarify the effective date of ASU 2024-03. ASU 2024-03 is effective for the Company's annual reporting periods beginning with the fiscal year ending September 30, 2028, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2024-03 on its consolidated financial statements and disclosures.

In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements, which improves the guidance in Topic 270 by improving the navigability of the required interim disclosures and clarifying when that guidance is applicable. The amendments also provide additional guidance on what disclosures should be provided in interim reporting periods and adds to Topic 270 a principle that requires entities to disclose events since the end of the last annual reporting period that have a material impact on the entity. ASU 2025-11 is effective for interim reporting periods within the Company’s fiscal year ending September 30, 2029, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU 2025-11 on its disclosures.

We have reviewed all other recently issued accounting pronouncements and have determined that such standards that are not yet effective will not have a material impact on our financial statements or do not otherwise apply to our operations.

Note 2 – Going Concern

The Company is not profitable and has had negative cash flow from operations. We will need substantial capital to support our drug development and any related commercialization efforts for our drug candidates. Based upon the Company’s current operating plan, it estimates that its cash and cash equivalents as of the issuance date of these financial statements are insufficient for the Company to fund operating, investing and financing cash flow needs for the twelve months subsequent to the issuance date of these financial statements. To obtain the capital necessary to fund our operations, we expect to finance our cash needs through public or private equity offerings, debt financing transactions and/or other capital sources. Additional capital may not be available at such times and in such amounts as needed by us to fund our activities on a timely basis.

These uncertainties raise substantial doubt regarding our ability to continue as a going concern for a period of twelve months subsequent to the issuance date of these financial statements. Certain elements of our operating plan to alleviate the conditions that raise substantial doubt, including but not limited to our ability to secure equity financing or other financing alternatives, are outside of our control and cannot be included in management’s evaluation under the requirement of ASC 205-40, Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern. Accordingly, we have concluded that substantial doubt exists about our ability to continue as a going concern for a period of at least twelve months subsequent to the issuance date of these financial statements.

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Note 3 – Discontinued Operations

On December 30, 2024, the Company and PCHC Limited (collectively, the “Sellers”) entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) with Clear Future, Inc. (the “Purchaser”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Purchaser purchased substantially all of the assets (the “FC2 Business Sale”) related to the Company’s FC2 business, including the stock of The Female Health Company (UK) plc and the Malaysia subsidiary. The Purchaser assumed certain liabilities relating to the FC2 business that are specified in the Purchase Agreement. The transaction closed on December 30, 2024. The Sellers and the Purchaser made customary representations and warranties, and agreed to certain customary covenants, in the Purchase Agreement. Subject to certain exceptions and limitations, each party agreed to indemnify the other for breaches of representations, warranties and covenants and for certain other matters. The Purchase Agreement also specifies that, subject to a $54,000 retention amount, a representations and warranties insurance policy issued to the Purchaser would be the sole and exclusive remedy for breach of representations and warranties (other than certain specified representations and warranties) by the Sellers except in the case of fraud. Pursuant to an Escrow Agreement entered into under the terms of the Purchase Agreement, the $54,000 retention amount is being held in escrow as of December 31, 2025 and is classified as restricted cash, included within cash, cash equivalents, and restricted cash on the accompanying condense consolidated balance sheet.

The purchase price for the FC2 Business Sale was $18.0 million in cash, subject to adjustment as set forth in the Purchase Agreement, which included a customary working capital adjustment subsequent to closing based on the amount by which certain working capital items at closing are greater or less than a target set forth in the Purchase Agreement. Net proceeds from the FC2 Business Sale were $16.5 million, which is the $18.0 million purchase price per the Purchase Agreement, net of costs incurred of $1.4 million, and amounts allocated to the related transition services agreement of $150,000 but excluding the change of control payment pursuant to the Residual Royalty Agreement of $4.2 million (see Note 8 for additional information). The loss on sale of the FC2 business was $4.1 million, which is the difference between net proceeds of $16.5 million and the total carrying value of the FC2 business of $20.6 million. The carrying value of the FC2 business at December 30, 2024 primarily included deferred income tax assets of $12.3 million, accounts receivable of $4.6 million, and inventory of $3.4 million, partially offset by accrued expenses and other current liabilities of $1.5 million.

The Purchase Agreement contains a provision for an adjustment to the purchase price, including an adjustment based on the working capital of the FC2 business as of the closing date. The Purchaser was required to deliver its purchase price adjustment calculation within 90 days after the closing date. The Purchaser delivered its calculation in April 2025 and we disputed the calculation. This dispute was submitted to an accounting firm for binding resolution, and in September 2025 the accounting firm delivered its final determination, resolving all disputed matters in favor of the Company. As a result of the final determination, the Purchaser paid additional purchase price of approximately $150,000 to us and approximately $300,000 was released from escrow.

The FC2 Business Sale represented a strategic shift, which had a major effect on our operations and financial results. We classified all direct revenues, costs and expenses related to the FC2 business within loss from discontinued operations, net of tax, in the condensed consolidated statements of operations for the three months ended December 31, 2024. We did not allocate any amounts for shared general and administrative operating support expense to discontinued operations. We did not have any discontinued operations during the three months ended December 31, 2025. The assets and liabilities sold as part of the FC2 Business Sale were written off upon the closing of the FC2 Business Sale, and therefore there are no assets and liabilities of discontinued operations in our condensed consolidated balance sheets as of December 31, 2025 or September 30, 2025.

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The following table presents results of discontinued operations for the three months ended December 31, 2024. There are no amounts included in discontinued operations during the three months ended December 31, 2025.

	*Three Months Ended*
	*December 31,*
	*2025*		*2024*

Net revenues	$	—	$	4,484,591

Cost of sales		—		2,900,514

Gross profit		—		1,584,077

Operating expenses		—		1,101,987

Loss on sale of FC2 business		—		(4,204,435	)

Operating loss		—		(3,722,345	)

Non-operating expenses:
Interest expense		—		(164,270	)
Change in fair value of derivative liabilities		—		(3,138,316	)
Other expense, net		—		(31,960	)
Total non-operating expenses		—		(3,334,546	)

Loss before income taxes		—		(7,056,891	)

Income tax expense		—		78,553

Net loss from discontinued operations, net of taxes	$	—	$	(7,135,444	)

The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total operating and investing cash flows, which includes net proceeds from the sale of FC2, from discontinued operations for the three months ended December 31, 2025 and 2024 are comprised of the following:

	*Three Months Ended*
	*December 31,*
	*2025*		*2024*

Total net cash used in operating activities from discontinued operations	$	—	$	(325,454	)
Total net cash provided by investing activities from discontinued operations	$	—	$	16,156,882

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Note 4 – Fair Value Measurements

ASC 820 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques are observable or unobservable. Observable inputs reflect market data obtained from independent sources, while unobservable inputs reflect market assumptions. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement).

The three levels of the fair value hierarchy are as follows:

Level 1 – Quoted prices for identical instruments in active markets.

Level 2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Instruments with primarily unobservable value drivers.

As of December 31, 2025 and September 30, 2025, the Company has investments in equity securities consisting of 3,125 shares of Series D Convertible Preferred Stock (the “ONCO Series D Preferred Stock”) of Onconetix, Inc. (“ONCO”) and a warrant to purchase 846,975 shares of common stock of ONCO (the “ONCO Warrant”). The ONCO Series D Preferred Stock and the ONCO Warrant were received on September 22, 2025 as a settlement of the ONCO Promissory Notes. See Note 15 for additional information. The Company has elected to measure the ONCO Series D Preferred Stock and the ONCO Warrant at fair value in accordance with ASC 825. The investments in the ONCO Series D Preferred Stock and the ONCO Warrant are classified within Level 3 of the fair value hierarchy because there is no market for these types of securities and the fair value is determined using significant unobservable inputs. The fair value of the ONCO Series D Preferred Stock and the ONCO Warrant have been determined using a Monte Carlo simulation model. This valuation model incorporates the contractual terms of the instruments and assumptions including the stock price of ONCO Common Stock, expected volatility, and a selected discount rate. Additionally, the ONCO Series D Preferred Stock and the ONCO Warrant were issued by ONCO as part of a Securities Purchase Agreement, which included the sale of 16,099 shares of Series D convertible preferred stock and warrants to purchase 4,362,827 shares of ONCO Common Stock to eleven institutional investors, for an aggregate purchase price of $12.9 million. The valuation of the ONCO Series D Preferred Stock and ONCO Warrant includes a calibration discount to the proceeds of the original transaction, which was done at arms’ length. The assumptions used in calculating the fair value of the financial instruments represent the Company’s best estimates, but these estimates involve inherent uncertainties and the application of management judgment. As a result, the use of different estimates or assumptions would result in a higher or lower fair value and different amounts being recorded in the Company’s financial statements. Material changes in any of these inputs could result in a significantly higher or lower fair value measurement at future reporting dates, which could have a material effect on our results of operations. The following table summarizes the significant unobservable inputs used in the Monte Carlo Simulations as of December 31, 2025 and September 30, 2025:

Significant Unobservable Input	*December 31, 2025*			*September 30, 2025*
ONCO Series D Preferred Stock
Simulation Term (Years)		1.2			1.5
Expected Volatility		68.5	%		72.5	%
Discount Rate		25.0	%		25.0	%
Calibration Discount		40.6	%		48.6	%
ONCO Warrant
Simulation Term (Years)		2.7			3.0
Equity Volatility		70.7	%		68.6	%
Calibration Discount		40.6	%		48.6	%

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The following table provides a reconciliation of the beginning and ending balance associated with the ONCO Series D Preferred Stock and the ONCO Warrant measured at fair value for the three months ended December 31, 2025 and 2024, which are presented as investments in equity securities on the accompanying consolidated balance sheet:

	*Three Months Ended*
	*December 31,*
	*2025*			*2024*
ONCO Series D Preferred Stock
Beginning balance	$	1,764,318		$	—
Additions		—			—
Change in fair value of equity securities		205,097			—
Ending balance	$	1,969,415		$	—
ONCO Warrant
Beginning balance	$	760,987		$	—
Additions		—			—
Change in fair value of equity securities		(325,175	)		—
Ending balance	$	435,812		$	—

The Company also had an investment in equity securities consisting of 142,749 shares of common stock of ONCO (the “ONCO Common Stock”), which were sold during the three months ended December 31, 2024 for net proceeds of $0.4 million. The Company recognized a loss from the change in fair value of equity securities related to the ONCO Common Stock of $0.3 million during the three months ended December 31, 2024.

Note 5 – Accounts Receivable

All of the Company's accounts receivables were included in the assets sold as part of the FC2 Business Sale, except for the Company's accounts receivables due from The Pill Club. The Company has an allowance for credit losses of $3.9 million related to the total amount of receivables due from The Pill Club due to The Pill Club’s Chapter 11 bankruptcy, filed on April 18, 2023. The Company has an open claim with The Pill Club bankruptcy estate for these receivables but the timing and amount of recovery, if any, are unknown at this time.

Note 6 – Fixed Assets

We record equipment, furniture and fixtures, and leasehold improvements at historical cost. Expenditures for maintenance and repairs are recorded to expense. Depreciation and amortization are primarily computed using the straight-line method. Depreciation and amortization are computed over the estimated useful lives of the respective assets. Leasehold improvements are depreciated on a straight-line basis over the lesser of the remaining lease term or the estimated useful lives of the improvements.

Property and equipment consisted of the following at December 31, 2025 and September 30, 2025:

	Estimated		December 31,		September 30,
	Useful Life (in years)		2025		2025
Property and equipment:
Office equipment, furniture and fixtures		3 - 7	$	765,911	$	765,911
Leasehold improvements		8		199,532		199,532

SEC Form 10-Q filed by Veru Inc.